The company's Life Sciences businesses maintained a strong performance in the 2009 first quarter (Q1), while most of its Materials Sciences businesses were severely impacted by the downturn. DSM Resins (which includes the DSM Composite Resins business unit) and DSM Engineering Plastics both posted a loss.
In the Performance Materials cluster, which comprises DSM Resins, DSM Engineering Plastics and DSM Dyneema, net sales for Q1 2009 were €395 million, down from €601 million for the 2008 quarter. The cluster posted an operating loss of €17 million, down from €80 million in the 2008 first quarter but better than the 2008 fourth quarter.
Both DSM Engineering Plastics and DSM Resins experienced very substantial sales declines in the 2009 first quarter and both units have taken measures to reduce costs on a structural basis and production capacity on a temporary basis.
| Q1 2009 | Q1 2008 | +/- | |
| Operating profit (EBIT): | |||
| Nutrition | 141 | 79 | 78% |
| Pharma | 11 | 8 | 38% |
| Performance Materials | -17 | 80 | |
| Polymer Intermediates | -30 | 40 | |
| Base Chemicals & Materials | -12 | 49 | |
| Other activities | -36 | -19 | |
| Total | 57 | 237 | -76% |
| Net sales | 1,837 | 2,358 | -22% |
| Net profit | 13 | 162 | -92% |
Cost cutting
In December 2008 DSM announced a number of structural cost-saving actions to address the effects of the economic downturn and to strengthen its competitive position. Implementation of these actions is underway and DSM now expects to exceed the targeted cost savings of €100 million and also the targeted reduction in workforce of 1000 positions by approximately 25%. The cost savings will be fully achieved by 2010. The company says it is also preparing contingency plans that would result in a further reduction in costs and workforce should business conditions not improve in the second half of the year. In terms of its capital expenditure DSM is prioritising projects focused on future growth while other projects are being postponed or delayed. Capital expenditure in 2009 will be lower than in 2008.