DSM - Strong start to 2018: vitamin pricing benefits drive increase in FY guidance

Davy Research
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DSM’s preliminary Q1 2018 results announcement indicates an impressive start to the year. A better-than-anticipated vitamin pricing environment and strong organic growth in Materials underpinned a 55% year-on-year (yoy) increase in adjusted EBITDA. This has led DSM to increase its FY 2018 outlook, with adjusted EBITDA expected to grow “towards 25%” (previously guided double-digit). While we recognise that the impact of vitamin pricing is temporary in nature, DSM’s organic growth trajectory and textbook execution continue to impress. We reiterate our ‘Outperform’ rating.