DSM Reports Results

09 February 2001

DSM posted a record net sales figure of EUR 8.1 billion in 2000, up 28% on 1999. The profit on ordinary activities after taxation rose to a record level of EUR 571 million for 2000, which is about 50% higher than in 1999 (EUR 382 million). Peter Elverding, chairman of the DSM Managing Board, is very pleased: "2000 was not only a record year for DSM in financial terms, it was also a year in which we took a number of major steps towards the transformation of DSM into a specialties company. According to Elverding, it is still too early to make any forecasts for the whole of 2001. "It is clear, though, that the deteriorating economic conditions may well negatively affect the petrochemicals business. On the other hand, I expect the Life Science Products and Performance Materials clusters to continue to grow." Performance Materials: Sales for this cluster were 12% higher than in the corresponding period of 1999 in spite of divestments at DSM Composite Resins (an effect of -3%). The Performance Materials cluster once again showed a substantial improvement in sales and profits, the main contributors being DSM Engineering Plastics, DSM Coating Resins and DSM Engineering Plastic Products. All business groups contributed to autonomous volume growth, which totalled 12%. Selling prices were up, except at DSM Coating Resins. However, margins were under pressure as a result of much higher raw material prices. DSM High Performance Fibers, the producer of Dyneema superstrong fibre, saw its sales continue to grow strongly worldwide and in every market segment. In 2000 there was a strong increase in demand for the products of DSM Engineering Plastics. The Asian market showed strong growth, while market growth in Europe continued unabated. In the USA, however, there was a slight downturn in the growth that had characterized the first six months. In these market conditions, which were on the whole favourable, DSM Engineering Plastics succeeded in significantly strengthening its global market position. The business group's sales grew by more than 20%, which is considerably higher than overall market growth. DSM Composite Resins recorded a substantial sales volume growth as a result of strong demand and an effective marketing policy. Sales increased, despite the divestment of DSM Compounds in 2000. However, higher selling prices could not compensate for the extremely sharp increase in raw material prices, first for styrene and later for most of the other raw materials. This put margins under great pressure. The net effect of these developments was a considerably lower operating profit than in 1999. Sizings & Binders recovered well from the economic crisis in Southeast Asia and improved its business position considerably.

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