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Investing.com -- Shares of DSM-Firmenich AG (SWX:DSFN) climbed 3% following the release of their fourth-quarter earnings report, which revealed a 1.8% rise in EBITDA to €601 million, surpassing Vara consensus estimates.
The increase was largely attributed to higher-than-expected EBITDA in the Animal Nutrition & Health (ANH) segment, which included an €85 million temporary effect, exceeding the guided approximate €80 million and consensus estimates of €163 million.
The company’s Health, Nutrition & Care (HNC) segment also performed well, with EBITDA slightly ahead of expectations, while the Perfumery & Beauty (P&B) segment met projections, supported by strong demand for Fine Fragrances and good demand for Consumer Fragrances.
However, the Beauty & Care sub-segment experienced a softer quarter due to lower demand for suncare products. The Taste, Texture & Health (TTH) segment’s Organic Sales Growth (OSG) of 4% in the fourth quarter was slightly below the consensus of 6%, with the company noting an exceptionally strong third quarter at 13%, which may indicate some phasing headwind.
Despite the slight miss in the TTH segment, DSM-Firmenich’s overall performance remained robust, with margin recovery in the HNC segment leading to an 18.1% margin, slightly ahead of the consensus forecast of 17.6%. The company’s 2025 outlook anticipates an EBITDA of at least €2.4 billion, which is slightly below the consensus of €2.45 billion.
However, this guidance includes an expected €100 million exceptional tailwind from a vitamin transformation program and further synergies, both of which are on track, reinforcing the total synergy target of €350 million, with €120 million already realized.
Barclays (LON:BARC) commented on the company’s financial outlook, stating, "The underlying EBITDA outlook for 2025 is constructive in our view and at least underpins consensus. The key positive surprise is the €1bn buyback and only niggle we can see is slightly softer TTH Q4 OSG."
Earlier in the week, DSM-Firmenich announced the sale of its Feed Enzymes Alliance to NSISb for €1.5 billion and the monetization of its stake in Robertet for €400 million.
The company also confirmed its intention to exit the remainder of the ANH segment by 2025, with the process of seeking transaction options set to begin next week. This strategic move is expected to streamline DSM-Firmenich’s operations and focus on core growth areas.
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