(Bloomberg) -- DSM-Firmenich AG raised its profit outlook for the year as the faltering vitamin market started to recover and demand for its perfumery business gained momentum. The shares jumped.
The chemicals group expects full-year adjusted earnings before interest, taxes, depreciation and amortization at around €2 billion ($2.2 billion), compared to at least €1.9 billion previously. That beat analyst expectations in a Bloomberg survey.
The company sees its cost-efficiency and vitamin transformation programs contributing €200 million to its full-year profit. The shares rose as much as 5% to €116 apiece in Amsterdam, the biggest intra-day move since April.
“We have seen that vitamins are normalizing and prices are going up a bit,” Chief Executive Officer Dimitri de Vreeze said in an interview after the company published its first-half results on Tuesday. “It always takes a bit more than a quarter or two quarters before that impacts our results,” he said.
Last year, DSM-Firmenich launched a restructuring program in the face of a downturn in the global vitamins market, as “the Chinese demand was completely falling away,” De Vreeze said. In February, the company said it’s considering the sale of its animal nutrition and health unit, which had €795 million sales in the second quarter, in a bid to reduce its exposure to a deteriorating vitamin market.
DSM-Firmenich has selected a team to execute the separation “so that we can present the organization for any new buyer as of 2025,” De Vreeze said.
The company reported an adjusted Ebitda of €513 million in the second quarter, beating analyst estimates of €491 million in a Bloomberg survey. Its net sales jumped 6.5% from a year earlier to €3.23 billion in the period. Perfumery and beauty sales rose 13%, making up for roughly one third of the revenue.
DSM-Firmenich was born last year after chemicals company Royal DSM NV and Swiss ingredients maker Firmenich International SA completed a merger to create one of the world’s largest producers of nutrition, health, and beauty products.
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