Full-year EBITDA was expected to be "roughly" 20 percent higher than the previous year, at 1.3 billion euros, while total sales for the year 2013 amounted to 2.38 billion euros for 2013, an increase of 3.1% compared to the 2.269 billion euros reported in 2012.
Nonetheless, although these are "solid results," they are not as good as projected by the company in November of last year, when it said it hoped to achieve a full-year EBITDA of 1.4 billion euro. As a result, the stock lost almost 10% in Amsterdam this morning.
Part of the trouble is still the economy, said DSM CEO Feike Sijbesma: "Europe is more or less flat. The U.S. has some modest growth, and growth in emerging economies is slowing down somewhat." All in all, a "challenging" environment, and one warranting "a prudent approach" in 2014, assuming moreover that foreign exchange rates are maintained at the current unfavorable levels for the year.
Performance materials DSM saw a fourth quarter organic sales growth of 5%, compared to the same period in 2012, said DSM. Overall sales were driven by good volume growth with somewhat lower prices. Volumes were also up versus same period last year, especially in the engineering plastics division, while the prices of DSM resins & functional materials dropped, "driven by the continued weak market conditions in building and construction in Europe."
Regarding 2014, the performance materials business will focus on accelerating growth and improving performance by upgrading its portfolio and leveraging opportunities arising from megatrends, implementing differentiated strategies for its business to capture profitable growth. At the same time it is implementing its profit improvement program to further offset macro-economic headwinds and actively manage its margins and costs.
The polymer intermediates business achieved organic sales growth in the fourth quarter of 2013 of approximately 2% compared to the same quarter last year, with higher volumes and lower prices. In 2014, the company will continue to look at options to reduce its exposure to the merchant caprolactam markets.
Commenting on these preliminary results, Feike Sijbesma, CEO and chairman of the DSM managing board, said: "We achieved significant strategic progress in 2013, also demonstrated by an approximately 20% increase in full year EBITDA. We were pleased with the strong performance in Materials Sciences in Q4.
We are and remain firmly on track to deliver on our strategy and to create sustainable value with all our clusters. In the short term our focus will continue on the operational performance of our businesses, supported by our Profit Improvement Program and intensified R&D and innovation programs."
DSM will announce its full, audited results for 2013 on February 26.