dsm-firmenich remains cautious in 2024. The Dutch company partly dedicated to cosmetics, perfumery and fragrances has recently published its financial results for the financial year 2023. It shared important achievements and milestones throughout 2023, notably highlighting significant progress in its integration process, exceeding initial expectations, and announcing the strategic decision to separate its Animal Nutrition and Health division from the group.
Under the leadership of Dimitri de Vreeze, the company has experienced merger-related cost and sales synergies that are beginning to bear fruit, as well as reporting solid performance across all areas, despite the impact of pricing. The company also highlighted robust operating cash flow, driven by a strong performance in the second half of the year.
The vitamin transformation and synergy programmes are set to deliver significant revenue growth in 2024 and beyond. "We are proud that the company is already operating in an integrated way, exceeding the expectations of the plan, including the development of a common culture, as demonstrated by our recent employee engagement survey. Our employees have done a truly amazing job, positioning DSM-Firmenich as a global leader in nutrition, health and beauty," said de Vreeze.
In the face of unprecedented conditions, such as low vitamin prices and an ongoing cycle of divestment, the company has taken immediate and effective action, accelerating its plans for self-help measures and moving forward with a review of all its business segments. This has led to the initiation of a process to separate the group's Animal Nutrition and Health business, a move that aims to reduce exposure to vitamin revenue volatility and reduce capital intensity, aligning with the company's long-term strategy.
The company is supporting its growth by developing innovations, and these actions will help prioritise and accelerate the company's high-growth, higher-margin nutrition, health and beauty businesses, all of which are reflected in its medium-term financial targets.
Despite the uncertain global economic and political environment, DSM-Firmenich takes a cautious approach to its full-year outlook, based solely on elements within its control. The company forecasts an increase of €200 million in adjusted EBITDA, stemming from the delivery of synergies and the vitamin transformation programme. Considering that the full negative effect of vitamins only emerged in the second quarter of 2023, the company estimates adjusted EBITDA for FY2024 of at least €1.9 billion.
This announcement marks a significant step in DSM-Firmenich's evolution, underlining its commitment to innovation and sustainable growth, while strategically adapting to changing market dynamics.