DSM 2002 Operating Profit from Ongoing Activities EUR 383 Million, up 14% from 2001 on a Comparable Basis.Business Editors HEERLEN Heerlen (hār`lən), city (1994 pop. 95,794), Limburg prov., SE Netherlands. It is an industrial and transportation center. Manufactures include textiles and food products. The city was a major coal-mining center from the late 19th cent. , Netherlands--(BUSINESS WIRE)--Feb. 12, 2003 DSM 1. DSM - Data Structure Manager. An object-oriented language by J.E. Rumbaugh and M.E. Loomis of GE, similar to C++. It is used in implementation of CAD/CAE software. DSM is written in DSM and C and produces C as output. (AEX AEX See: Amsterdam Exchange :DSMN DSMN Directory Service Manager for NetWare )
-- Q4 operating profit EUR 96 million, almost twice as high as in
weak Q4 2001 on a comparable basis.
-- Profit on ordinary activities after taxation in 2002 EUR 349
million (-5%); fourth quarter EUR 74 million (+32%).
-- 6% autonomous volume growth in 2002 compared with 2001.
-- Dividend unchanged: EUR 1.75 per ordinary share
---------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 +/- 2002 2001 +/-
---------------------------------------------------------------------
Ongoing activities:
------------------------------
1,454 1,386 5% Net sales 5,636 5,751 -2%
Operating profit plus
depreciation & amortization
193 149 30% (EBITDA) 767 741 4%
Operating profit before
amortization of goodwill
102 56 82% (EBITA)(a) 410 365 12%
60 55 9% - Life Science Products 232 230 1%
23 10 130% - Performance Materials 113 112 1%
31 8 288% - Industrial Chemicals 77 64 20%
-12 -17 - Other activities -12 -41
96 49 96% Operating profit (EBIT) 383 336 14%
---------------------------------------------------------------------
Discontinued activities (DSM
Petrochemicals and EBN):
------------------------------
- 438 Net sales 1,029 2,219
Operating profit plus
depreciation &
- 64 amortization (EBITDA) 125 301
- 33 Operating profit (EBIT) 67 185
----------------------------------------------------------------------
Total DSM:
------------------------------
1,454 1,824 Net sales 6,665 7,970
96 82 Total operating profit (EBIT) 450 521
Profit on ordinary activities
74 56 after taxation 349 369
Extraordinary profit after
- 975 taxation 840 1,045
73 1,031 Net profit 1,188 1,415
----------------------------------------------------------------------
Per ordinary share in EUR:
- profit on ordinary
0.70 0.53 activities after taxation 3.38 3.61
- same as above, before
0.77 0.61 amortization of goodwill 3.67 3.91
0.69 10.67 - net earnings 12.08 14.50
Average number of ordinary
96.6 96.1 shares (x million) 96.5 96.1
----------------------------------------------------------------------
(a) Including changes in presentation (see Q1 and Q2 2002 press
releases); these changes are also reflected in the pro forma
figures for 2001.
General In the fourth quarter of 2002 DSM posted an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 96 million, which is 96% higher, on a comparable basis*, than in the weak fourth quarter of 2001. The fourth-quarter profit on ordinary activities after taxation was EUR 74 million, up 32% from the figure for the fourth quarter of 2001, which included the profits of DSM Petrochemicals and Energie Energie can refer to:
A negotiable certificate that represents a company's publicly traded debt or equity. Depositary receipts are created when a company's shares or bonds are delivered to a depositary's custodian bank, which instructs the depositary to issue of Energie Beheer Nederland. For the whole year, DSM recorded an operating profit for its ongoing activities of EUR 383 million, which is 14% higher than in 2001 on a comparable basis. A major contributing factor was the decrease in fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). . DSM's profit on ordinary activities after taxation was EUR 349 million, down 5% on 2001 (EUR 369 million). The net profit was EUR 1,188 million, compared with EUR 1,415 million in 2001. In both years there were major extraordinary profits, namely from the sale of DSM Petrochemicals (2002) and Energie Beheer Nederland (2001). Commenting on the results, DSM Managing Board Chairman Peter Elverding said: "For DSM, 2002 was a special year in many respects. It was the year we celebrated our centennial and also a year in which we made great progress with the implementation of our Vision 2005 strategy. Despite the difficult conditions we faced in our main markets, our operating profit on ongoing activities in 2002 was 14% higher than in 2001, thanks in part to 6% autonomous volume growth and effective cost control. Although our profitability still needs to improve further, we are not dissatisfied dis·sat·is·fied adj. Feeling or exhibiting a lack of contentment or satisfaction. dis·sat  is·fied with the results we have achieved under these
difficult economic conditions.""The unusual combination of geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. and economic uncertainties and uncertain trading conditions in our end-use markets impels us to be cautious. It seems unlikely that an improvement will occur before the second half of 2003. Therefore, I do not want to make any forecast at present about the development of our results in 2003. However, DSM is so well-positioned that we will benefit from a recovery of market conditions the moment it occurs." Dividend The proposed dividend per ordinary share for 2002 amounts to EUR 1.75 per ordinary share, the same as in 2001. An interim dividend of EUR 0.58 per ordinary share having been paid in August 2002, the final dividend will amount to EUR 1.17 per ordinary share. The dividend will be paid out in cash. *) Operating profit comparisons with the corresponding periods of 2001 relate to the ongoing activities. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , a comparison is made with the operating profit excluding the profits of the activities that have been divested: DSM Petrochemicals and Energie Beheer Nederland. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight (ongoing activities)
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
574 575 Life Science Products 2,168 2,237
423 418 Performance Materials 1,767 1,855
352 299 Industrial Chemicals 1,268 1,302
105 94 Other activities 433 357
--------------------- ------------------
1,454 1,386 Total 5,636 5,751
---------------------------------------------------------------------
Net sales in the fourth quarter of 2002 amounted to more than EUR 1.4 billion, up 5% from the fourth quarter of 2001 on a comparable basis. Autonomous volume growth amounted to 12%. Selling prices were on average 1% higher. Sales decreased by 3% due to divestments and by another 5% due to exchange rate developments (in particular for the US dollar). Sales for the whole of 2002 amounted to EUR 5.6 billion, which is 2% lower than in 2001. Autonomous volume growth amounted to 6%. Selling prices were on average 4% lower. Sales decreased by 2% due to divestments and by another 2% due to exchange rate developments (in particular for the US dollar). Review by cluster cluster, in astronomy: see star cluster; galaxy. (1) Two or more systems working together. See clustering. (2) Also called an "allocation unit" or "file allocation unit," it is some number of disk sectors that are treated as a unit. Life Science Products
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
Net sales including intra-Group
596 584 supplies 2,240 2,304
Operating profit plus
98 93 depreciation and amortization 382 376
60 55 Operating profit 232 230
----------------------------------------------------------------------
Fourth-quarter sales of Life Science Products were slightly higher than in Q4 2001, despite the lower exchange rate for the dollar. The overall operating profit increased 9% due to higher sales volumes at DSM Anti-Infectives in particular. The results for DSM Fine Chemicals and DSM Pharmaceutical Products were at a level comparable to Q4 2001, while those of DSM Food Specialties and DSM Bakery Ingredients were lower due to one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs and a weaker US dollar. Sales for the whole of 2002 were down 3% from 2001, mainly as a result of divestments. The operating profit was slightly higher. The weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. of the US dollar had a negative effect on profits. DSM
Pharmaceutical Products felt the effect of delays in the introduction of
new products in the pharmaceutical industry. Aspartame aspartame: see sweetener, artificial. aspartame Synthetic organic compound (a dipeptide) of phenylalanine and aspartic acid. It is 150–200 times as sweet as cane sugar and is used as a nonnutritive tabletop sweetener and in low-calorie margins were under pressure. DSM Food Specialties and DSM Anti-Infectives once again saw their operating profits increase. Performance Materials
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
Net sales including intra-Group
425 436 supplies 1,795 1,935
Operating profit plus
45 32 depreciation and amortization 197 204
23 10 Operating profit 113 112
----------------------------------------------------------------------
Fourth-quarter sales of this cluster were slightly below the level of Q4 2001. Sales volumes were higher for DSM High Performance Fibers (Dyneema) in particular, but the effects of this for the whole cluster were offset by the effects of a lower exchange rate for the US dollar. However, the operating profit increased substantially due to the higher sales volumes of Dyneema and higher margins for DSM Engineering Plastics. The cluster posted a clear decrease in sales for the whole of 2002 due to lower sales volumes at DSM Desotech. However, the operating profit for the cluster remained at the 2001 level as all other units posted higher profits. Industrial Chemicals
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
Net sales including intra-Group
378 330 supplies 1,389 1,460
Operating profit plus
51 29 depreciation and amortization 158 155
31 8 Operating profit 77 64
----------------------------------------------------------------------
Sales of this cluster increased by 15% on balance compared with the fourth quarter of 2001 due to higher prices for fibre intermediates in particular and higher sales volumes at all units. As a result, the operating profit of the Industrial Chemicals cluster showed a very strong increase. DSM Agro For the video game character, see . Agro is a puppet character on Australian television, who describes himself as a 'talking bathmat'. He is operated by comedian Jamie Dunn. saw its operating profit decrease due to a margin squeeze Squeeze 1. In financial terms, a period of time when borrowing is difficult. 2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "squeeze" on profit margins. . Sales for the whole year decreased, while the operating profit increased due to lower costs and on average higher margins. The higher operating profit of DSM Fibre Intermediates was partly offset by lower sales volumes and margins for DSM Agro and a lower output for DSM Energy. DSM Melamine melamine (mĕl`əmēn'), common name for 2,4,6-triamino-1,3,5-triazine. Melamine is a trimer (see polymer) of cyanamide, H2NC≡N, and is synthesized from calcium carbide. performed at the same good level as in 2001. Other activities
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
Net sales including intra-Group
105 99 supplies 437 373
Operating profit plus
-1 -5 depreciation and amortization 30 6
-12 -17 Operating profit -12 -41
----------------------------------------------------------------------
Net sales increased as a result of the sales (mainly services) to SABIC SABIC Saudi Basic Industries Corporation SABIC Sample-Band Image Coding (currency counterfeit deterrence technique) . The non-core businesses (NGT NGT Night NGT National Grid Transco (UK gas transporter) NGT Nominal Group Technique NGT Not Greater Than NGT Next Generation Technology NGT Next Generation Telecom (China) NGT NASA Ground Terminal , ABS-tolling, SBR SBR - Spectral Band Replication ) saw their results improve strongly compared with 2001. The results of the service activities and DSM Venturing & Business Development and the corporate costs were negative on balance, but were at the same level as the year before. In the fourth quarter in particular, the result was adversely affected by non-recurring costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the reconstruction Reconstruction, 1865–77, in U.S. history, the period of readjustment following the Civil War. At the end of the Civil War, the defeated South was a ruined land. of the Geleen Geleen is a city of 33,960 inhabitants in Limburg, the Netherlands. It forms part of the municipality of Sittard-Geleen. The remains of the oldest prehistoric farms of the Netherlands were found here. site and a number of other projects, but these non-recurring costs were on balance lower than in 2001. Net profit Financial income and expense on balance resulted in an interest charge of EUR 14 million compared with EUR 97 million in 2001. This decrease was mainly related to the increase in financial income due to the investment of the revenues from the sale of DSM Petrochemicals and DSM's stake in Energie Beheer Nederland and to a lower interest rate. At 19%, the Effective tax rate in 2002 was higher than in 2001 (16%). The main reason for this was that DSM's profits no longer included tax-exempt income Tax-exempt income Dividends and interest not subject to federal and, in some cases, state and local income taxes. from Energie Beheer Nederland. The Profit from non-consolidated companies decreased from EUR 14 million in 2001 to EUR 3 million negative in 2002 due to the lower result of Methanor and a few other, smaller participations and the sale of the non-consolidated part of Energie Beheer Nederland. The Extraordinary profit after taxation amounted to EUR 840 million and consisted of the book profit on the sale of DSM Petrochemicals (EUR 936 million) less about EUR 96 million in provisions and impairments. The Net profit decreased from EUR 1,415 million in 2001 to EUR 1,188 million in 2002, mainly as a result of a decrease in extraordinary profit. Cash flow, capital expenditure and financing The cash flow (net profit plus depreciation and amortization) for the whole year was EUR 1,630 million, which is 16% less than in 2001. The decrease was due to a lower extraordinary profit. Capital expenditure on tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. and intangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → for ongoing activities amounted to EUR 463 million in 2002 (2001: EUR 561 million); capital expenditure on acquisitions amounted to EUR 33 million (2001: zero). The cash flow in the fourth quarter was EUR 170 million. Capital expenditure (including acquisitions) for the ongoing activities amounted to EUR 176 million, which is EUR 29 million lower than in Q4 2001. The decrease was due to the completion of a number of major projects. Balance sheet The difference between the balance sheet at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002 and the balance sheet at year-end 2001 is to a large extent due to the divestment divestment to strip one's investment from an entity. of DSM Petrochemicals. Net debt, which stood at EUR 867 million at year-end 2001, changed into a net surplus of EUR 1,038 million. The cash revenues from the sale of DSM Petrochemicals were invested in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. assets. Workforce The workforce decreased by 3,129, from 21,504 at year-end 2001 to 18,375 at year-end 2002. Divestments were responsible for a decrease of 2,374 (the main divestment being the sale of DSM Petrochemicals, as a result of which the workforce decreased by 2,283). The rest of the decrease (755) was due to restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). measures and attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: . Outlook The second half of 2002 did not bring the hoped-for adj. 1. expected and desired. Contrasted with Adj. 1. hoped-for - expected hopefully anticipated, awaited expected - considered likely or probable to happen or arrive; "prepared for the expected attack" upturn in the economic climate for the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. chemical industry, and trading conditions in important end-use markets did not improve. Moreover, a weakening US dollar put extra pressure on the results of European producers. The general economic outlook for 2003 is very uncertain. As a result of the combination of low economic growth, rising geopolitical tensions, high raw-material prices and a weak dollar, market conditions will remain hesitant hes·i·tant adj. Inclined or tending to hesitate. hes i·tant·ly adv. .In DSM's major markets, too, trading conditions are not expected to improve for the time being, also against the background of a clearly weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. US dollar. Given the delays in new drug approvals in
the pharmaceutical industry, the continued absence of a recovery in the
electronics and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industries and the rapid increase in
raw-material costs, market conditions are unlikely to improve
significantly before the second half of 2003.So far, market developments in 2003 seem to be more or less in line with the beginning of last year. The Life Science Products cluster is expected to post an operating profit for the whole of the year which, barring a strong further decrease in the dollar exchange rate, will be at the 2002 level, the expectation being that the second half of the year will be better than the first half. As for the other clusters, it is still very unclear what the influence of the economy and raw-material prices will be. Given this unusual combination of uncertainties, DSM does not want to make a forecast at present about the development of its operating profit. Heerlen, 12 February February: see month. 2003 The Managing Board of Directors
Important dates:
Annual General Meeting: Wednesday, 2 April 2003
Publication of first-quarter results: Monday, 28 April 2003
Publication of second-quarter results: Friday, 25 July 2003
Publication of third-quarter results: Monday, 27 October 2003
Annual report 2003: Wednesday, 11 February 2004
Annual General Meeting: Wednesday, 31 March 2004
Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements. These statements are based on current expectations, estimates and projections of DSM management and information currently available to the company. The statements involve certain risks and uncertainties that are difficult to predict and therefore DSM does not guarantee that its expectations will be realized. Furthermore, DSM has no obligation to update the statements contained in this press release.
Consolidated statement of income
----------------------------------------------------------------------
fourth quarter EUR million year
2002 2001 2002 2001
----------------------------------------------------------------------
1,454 1,824 net sales 6,665 7,970
----------------------------------------------------------------------
operating profit plus depreciation
193 213 and amortization (EBITDA) 892 1,042
operating profit before
102 89 amortization of goodwill (EBITA) 477 550
-6 -7 amortization of goodwill -27 -29
--------------------- ---------------
96 82 operating profit (EBIT) 450 521
balance of financial income and
4 -19 expense -14 -97
--------------------- ---------------
100 63 profit on ordinary activities 436 424
before taxation
taxes on profit on ordinary
-23 -5 activities -84 -69
profit from non-consolidated
-3 -2 companies -3 14
--------------------- ---------------
74 56 profit on ordinary activities 349 369
after taxation
extraordinary profit or loss after
- 975 taxation 840 1,045
--------------------- ---------------
74 1,031 group profit after taxation 1,189 1,414
-1 0 minority interests' share -1 1
--------------------- ---------------
73 1,031 net profit 1,188 1,415
======================================================================
73 1,031 net profit 1,188 1,415
dividend on cumulative preference
-5 -5 shares -22 -22
--------------------- ---------------
net profit available to holders of
68 1,026 ordinary shares 1,166 1,393
======================================================================
170 1,162 cash flow 1,630 1,936
amortization and depreciation,
97 100 ongoing activities 384 405
amortization and depreciation,
- 31 discontinued activities 58 116
capital expenditure (incl.
176 205 acquisitions), ongoing activities 496 561
capital expenditure, discontinued
- 48 activities 40 91
----------------------------------------------------------------------
per ordinary share in EUR(a):
- profit on ordinary activities
0.70 0.53 after taxation 3.38 3.61
- same as above, before
0.77 0.61 amortization of goodwill 3.67 3.91
0.69 10.67 - net earnings 12.08 14.50
1.70 12.04 - cash flow 16.67 19.92
average number of ordinary shares
96.6 96.1 (x million) 96.5 96.1
number of ordinary shares, end of
96.6 96.1 period (x million) 96.6 96.1
----------------------------------------------------------------------
workforce 18,375 21,504
of which in the Netherlands 8,302 10,285
----------------------------------------------------------------------
(a) After deduction of dividend on cumulative preference shares.
Consolidated balance sheet
----------------------------------------------------------------------
EUR million year-end 2002 year-end 2001
----------------------------------------------------------------------
fixed assets
intangible fixed assets 462 594
tangible fixed assets 2,885 3,607
financial fixed assets 292 241
-------- --------
3,639 4,442
current assets
inventories 944 1,171
receivables 1,439 1,814
cash / marketable securities 2,974 1,148
-------- --------
5,357 4,133
-------- ---------
Total 8,996 8,575
======================================================================
----------------------------------------------------------------------
EUR million year-end 2002 year-end 2001
----------------------------------------------------------------------
group equity
shareholders' equity 5,142 4,239
minority interests' share 44 59
-------- --------
5,186 4,298
equalization account 32 30
provisions 682 809
long-term liabilities 1,337 1,533
current liabilities
- interest-bearing 599 482
- non-interest-bearing 1,160 1,423
-------- --------
1,759 1,905
-------- ---------
Total 8,996 8,575
----------------------------------------------------------------------
capital employed 4,570 5,763
net debt -1,038 867
group equity / total assets 0.58 0.50
net debt / group equity plus
net debt -0.25 0.17
Statement of cash flows
---------------------------------------------------------------------
year
EUR million 2002 2001
----------------------------------------------------------------------
Cash at beginning of period 1,148 204
Operating activities:
- cash flow 1,630 1,936
- change in working capital 10 -58
- other changes -982 -1,114
-------- --------
Net cash provided by operating
activities 658 764
Investing activities:
- capital expenditure -536 -652
- divestments 2,037 1,465
- other changes -53 -9
-------- --------
Net cash provided by investing
activities 1,448 804
Dividend paid -191 -197
Net cash used in financing
activities -89 -433
Effects of changes in consolidation
and exchange
differences relating to cash held - 6
-------- ---------
Cash at end of period 2,974 1,148
----------------------------------------------------------------------
Statement of changes in Shareholders' equity
----------------------------------------------------------------------
year
EUR million 2002 2001
----------------------------------------------------------------------
Shareholders' equity at beginning of period 4,239 3,040
Changes:
- net profit 1,188 1,415
- dividend -191 -212
- exchange differences -108 3
- other 14 -7
-------- ---------
Shareholders' equity at end of period 5,142 4,239
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