The Muscle Mag
A statement released today (Feb 15th) by the firm announced the removal of the Animal Nutrition & Health (ANH) segment to reduce exposure to vitamins earnings volatility and capital intensity, following significant cyclical pressure on vitamin prices in animal markets.
This announcement coincides with the release of the firm’s 2023 full year results, which highlighted “unprecedented conditions with very low vitamin prices and a continued destocking cycle” necessitating a review of business segments.
Low prices in the cyclical stock market are influenced by economic trends, with prices increasing during times of economic growth and decreasing during recessions. Destocking in supply chain management involves reducing inventory-to-sales ratios to enhance efficiency, free up cash, and cut costs.
The ANH segment operates differently from the rest of the group and faced challenges in the vitamins market, prompting consideration of different ownership structures for optimal performance, with plans to separate in 2025.
CEO Dimitri de Vreeze emphasized the potential benefits of separating ANH, believing it would enhance value for stakeholders. The company aims to focus on Perfumery & Beauty, Taste, Texture & Health, and Health, Nutrition & Care to capitalize on commercial synergies.
Bovaer and Veramaris, key products for emission reduction in the dairy industry and omega-3 fish feed supplements, respectively, are expected to remain within the company.
2024 financial outlook
Following a vitamin transformation program launched in June 2023, the company continues to progress with cost reduction initiatives, aiming to achieve €100 million in adjusted EBITDA in 2024 and €200 million in 2025.
The firm remains cautious amid global uncertainties, basing its full-year outlook on controllable elements, targeting at least €1.9 billion in Adjusted EBITDA for FY 2024, with anticipated synergies of around €350 million per year.
The board of directors will propose a cash dividend of €2.50 per share for the financial year 2023 at the Annual General Meeting on May 7, 2024.
