突发事件 - 帝斯曼的中国去风险计划取决于助推器

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Karen Kwok

LONDON, Feb 15 (Reuters Breakingviews) - DSM-Firmenich’s (DSFIR.AS) plan to break off its animal supplements business hinges on it receiving a much-needed booster shot. On Thursday, shares in the 28 billion euro Dutch chemicals group jumped 14% after it said it would separate its animal nutrition business. That’s logical given the unit has suffered from Chinese competitors driving down prices. But to get a decent price and justify investor enthusiasm, it will have to revive the business’s fortunes.

The market that provides vitamins for cattle is looking fallow. About 75% of global animal supplements come from China, which is enduring a prolonged economic slowdown. That has led to a surge in exports from the People’s Republic, which has depressed prices globally. Lower prices hit DSM hard in the past year and forced the Netherlands-listed company to close down plants to reduce costs. EBITDA generated in the animal nutrition and health unit, which makes animal vitamins, dropped 76% in 2023 to 128 million euros.

This weakness explains DSM’s decision to separate the animal nutrition unit in 2025. Selling or listing that business would drive up the group’s EBITDA margin to 18%, instead of the 14% DSM generated in 2023. Greater profitability could also help the remaining DSM businesses trade on a multiple closer to fragrance rival Givaudan (GIVN.S) . DSM is currently trading at 16 times its expected EBITDA for 2024, per Visible Alpha data, versus Givaudan’s 24 times.

Still, getting a decent valuation for an underperforming business will not be easy. DSM could sell the business to a private equity firm or a strategic buyer but it will have to boost its EBITDA. CEO Dimitri de Vreeze is banking on the success of a cost-cutting programme. Slashing overheads like closing down production plants could possibly bring the division’s EBITDA closer to 300 million euros by 2025 using UBS analysts’ estimate. If de Vreeze pulls it off, on the roughly 6 times EBITDA multiple as a mix of BASF (BASFn.DE) , Archer-Daniels-Midland (ADM.N) and China’s Zhejiang Nhu (002001.SZ) , the division could be worth 1.8 billion euros.

But de Vreeze needs vitamin prices to increase too. Thursday’s 14% share bump added some 3.2 billion euros to the Dutch company’s market value. Unless DSM proposes to unlock more value by further breakups of its business, the animal nutrition business’s EBITDA would have to reach 500 million euros to justify DSM’s new valuation of 30 billion euros including net debt. De Vreeze has the right idea, but his transition is still in its infancy.

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CONTEXT NEWS

Dutch-listed chemicals company DSM-Firmenich on Feb. 15 said it plans to separate its animal nutrition and health business in 2025.

The company, born out of a merger of Netherlands-based DSM and Swiss company Firmenich in May 2022, is also reviewing which parts of the animal nutrition and health division should be part of the separation. Revenue in the animal nutrition and health business fell 15% to 3.2 billion euros in 2023. This division accounted for a quarter of DSM-Firmenich’s 12.3 billion euros of total sales in 2023.

The company remains confident in achieving annual savings of around 200 million euros by the end of 2024 through a restructuring programme announced in June 2023.

Shares of DSM-Firmenich were up 11.6% by 0915 GMT on Feb. 15.

(Editing by Aimee Donnellan, Streisand Neto and Oliver Taslic)