DSM-Firmenich ANH separation to sharpen focus

Investors reacted positively to the announced separation of the Animal Nutrition & Health (ANH) business. We also believe a divestment makes sense, as it will reduce earnings volatility and sharpen the company's activity profile. Based upon savings capture and some improvement of market conditions, we deem a potential valuation of € 3.0-3.5bn for ANH to be possible, which would give the remaining dsm-firmenich group again a net cash position it might use for further portfolio building within its core consumer-oriented businesses. Overall, we still appreciate dsm-firmenich for its broad portfolio and market leading positions and maintain our Accumulate rating and € 120 target price.