PARIS – DSM-Firmenich intends to spin off its animal nutrition and health business in order to focus fully on nutrition, health and beauty.
Carving out the activity allows the group to minimize its exposure to volatility in the vitamins market, which has been faced with unprecedented cyclical pressure on pricing in the animal segment, and decrease capital intensity in line with the group’s long-term strategy. All separation options will be considered, it said.
DSM-Firmenich’s Veramaris and Bovaer businesses are to remain within the company.
The market smiled on the news, with DSM-Firmenich trading in Amsterdam up 13 percent to 105.20 euros at 12:15 p.m. CET.
“Our purpose at DSM-Firmenich is to bring progress to life, as we boost innovation in premium, high-growth and resilient segments,” Dimitri de Vreeze, chief executive officer of the company, said in a statement. “ANH is a fantastic business that over the years we have built to be a true leader in the industry. This is a difficult moment, but we strongly believe that a separation would be better for both businesses and their employees, and ultimately generate better value for all our stakeholders.”
Kaiseraugst, Switzerland-based ANH generated more than 3 billion euros in revenues last year. It counts about 6,000 employees.
DSM-Firmenich plans to focus on its perfume and beauty, taste, texture and health, and health, nutrition and care activities, and develop further its scientific research, technology and manufacturing.
“Full focus on these businesses is expected to enhance their commercial potential and synergies, supporting an attractive and consistent growth outlook alongside robust margins,” the company said.
DSM-Firmenich said it remains confident that cost reduction can contribute 100 million euros in adjusted EBITDA this year, and that it will realize the full benefit of 200 million euros in 2025.
The company also on Thursday reported its full-year 2023 results. DSM-Firmenich net profit rose 26 percent to 2.15 billion euros on sales that grew 27 percent to 10.63 billion euros.
Firmenich and DSM merged in May 2023 to become the leading fragrance, beauty, well-being and nutrition supplier.
Source: WWD