DSM Slight miss in 3Q earnings, FY guidance lowered
DSM saw 3Q adj. EBITDA of the continuing operations grow by 3% which was slightly below the 4% growth expected by ourselves and consensus, while the company also lowered FY adjusted EBITDA growth guidance from high single digits to low single digits (vs KBCS & consensus at +6%). We lowered our FY22 forecast by c.2%. We remind that DSM is preparing to merge with Firmenich, which we consider to be a good strategic fit. The combination will enlarge the portfolio with a leading position in fragrances and strengthening the offering in food and beverages by adding ao Firmenich's expertise in taste. DSM-Firmenich will be a global powerhouse with a well-balanced portfolio and solid growth prospects. The gradual realization of € 350m adjusted EBITDA synergies should support earnings momentum in the coming years. We maintain our Accumulate rating with a € 160 target price.Royal DSM is engaged in the creation of products and services in Life Sciences and Materials Sciences. Co.'s products and services are used globally in range of markets and applications in healthcare, pharmaceutical automotive and chemicals sectors. End markets include human and animal nutrition and health, personal care, pharmaceuticals, automotive, coatings and paint, electrics and electronics, life protection and housing. The activities of Co. are grouped into four clusters: Nutrition, Pharma, Performance Materials and Polymer Intermediates.
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