DSM Reports Huge 2Q Results

HEERLEN, NetherlandsDSM released its financial results for the second quarter (2Q) and first half of 2010, with strong sales and operating profit; in fact, compared to 2Q09, operating profit almost tripled. The company reported net sales of 2.4 billion (US$3.18 billion) for 2Q10, a 23 percent rise in organic sales growth from continuing operations compared to 1.95 billion (US$2.59 billion) in 2Q09. DSM said there were several drivers behind the strong performance, including re-stocking, cost savings due to programs implemented in late 2008, and favorable currency developments.

The Nutrition division remained strong, with organic sales growth for the quarter of 4 percent compared to 2Q09, hitting 764 million (US$1 billion) in net sales and 158 million (US$209 million) in operating profit. The rise was primarily driven by volume growth in Human Nutrition & Health, related to supply chain re-stocking, and market recovery in the savory ingredients sector. Further, the operating profit for the division, which includes DSM Nutritional Products and DSM Food Specialties, benefitted from good market conditions, a favorable product mix and good cost control.

DSM has emerged from the recession as a stronger company and is now reaping the benefits, evidenced by robust results and a very strong balance sheet," said Feike Sijbesma, chairman of the DSM Managing Board. DSM is staying the coursefully committed to customers, innovation and sustainabilityand continues its transformation towards a Life Sciences and Materials Sciences company. DSM remains vigilant about the broader macro economic developments. Based on the current positive business environment we expect 2010 to be a strong year for DSM."

In addition, DSM commented on the progress of its strategic program, Vision 2010: Building on Strengths," originally announced in September 2007, focusing on delivering faster growth, higher margins and improved earnings quality. Key drivers behind the strategy are market-driven growth and innovation, increased presence in emerging economies and operational excellence. It has completed a significant proportion of its planned divestment program, selling its DSM Energy, DSM Agro and DSM Melamine businesses, and looking to divest DSM Special Products BV to Emerald Performance Materials. It also plans to sell off the remaining businesses in Base Chemicals and Materials, aiming to be a Life Sciences and Materials Sciences company.

As evidence of its presence in emerging economies, DSM noted its net sales increased 34 percent in 2Q10 in China compared to 2Q09; net sales for the first half grew by 64 percent to US$784 million. Overall, net sales in emerging economies as a percentage of total net sales grew from 30 percent in the first half of 2009 to 35 percent in the first half of 2010.