080417 DSM - divesting one of its most profitable divisions? 080417 DSM - divesting one of its most profitable divisions?

Divesting one of its most profitable divisions?

160908 DSM | Sufficient fuel left in the tank 160908 DSM | Sufficient fuel left in the tank

No. pages 45

In this company report we will look in detail at the main contributors and dilutors to DSM's future profits and returns by presenting a sales growth and EBITDA framework. We will also benchmark DSM's recent achievements and its future goals versus a broad peer group and identify whether and where the company should lift the bar further. We will also look back how DSM has performed versus its previous strategic plans, its M&A history and the establishment of its JV's. With Patheon's recent IPO, DSM has started to monetize part of its non-consolidated interests. Obviously, related proceeds will further strengthen DSM's balance sheet also enabling a more acquisitive policy, sooner or later.

Although we realize DSM's share price has already enjoyed a strong increase, we do believe there is some fuel left in the tank. Top-line growth momentum and tailwinds (e.g. savings yet to be realized, support from Vitamin prices, monetization of minority stakes) in combination with a 10-20% discount versus peer group averages support that view, we argue.


1. Introduction: FY18E targets versus first achievements
2. Looking forward: The framework for FY16-2018E
3. Benchmarking DSM vis-a-vis a broad peer group
4. Extracting value from JV's will also support M&A
5. Looking back: One continuous transformation
6. Putting it all together: Still fuel left in the tank
7. Appendix
    P&L and key figures
    Balance sheet & Cash flow statement
    DCF and SOTP
    TSR DSM versus peers
    Valuation DSM versus peers

180829 DSM | ticking the boxes 180829 DSM | ticking the boxes

No. pages 45

Our new company report is a follow-up to our in-depth report of September 2016 in which we outlined our positive stance when DSM was half-way its strategic plan for FY16-18.

In this report we highlighted DSM's achievements as well as the goals and the ingredients of its new FY19-21 plan. We will also update our extensive benchmarking exercises which confirm that the goals set make full sense, but also show that there is still room for improvement and work to do. DSM has improved its ranking vis-à-vis peers, but it is not best in class (yet), at least not in all the KPI's we will monitor.


Items that we will highlight and detail in this report are:

  • 2018 targets met and exceeded; what is in store for FY19-21? 
  • Benchmarking DSM versus on TSE peers on selected KPI's
  • Strong innovation focus beneficial to sales and profit growth
  • DSM's progress shows sustainability theme offers growth opportunities
  • Still work to do to improve cash conversion and capital returns
  • Approaching net cash...enabling acquisitive strategy
  • Cash allocation priorities make sense
  • Is there is future for Materials in DSM's portfolio going forward?
  • Estimates, valuation and investment view 




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