Roche vitamins results uninspiring for new owner

Sales at the Roche vitamins and fine chemicals division fell even lower in the third quarter, the Swiss firm reported yesterday, releasing its final set of figures for the unit now owned by Dutch ingredients firm DSM.

Nine-month sales in the division reached SF2,263 million, down by 12 per cent, or 5 per cent in local currencies. Roche said that sales volumes remained stable but the difficult market conditions prevented a return on sales.

Sales had already dropped by 9 per cent in the first half and while business has been affected by the weaker dollar, growth has clearly not been targeted over recent months. Sales in Roche's core pharmaceuticals meanwhile have risen significantly this year, suggesting that the divestment will pay off for the Swiss firm.

DSM​ also believes the deal can bring it financial benefits. The company recently said it had identified over €150 million improvement potential in the acquisition, to be renamed DSM Nutritional Products, in addition to more than €75 million in savings expected from restructuring programmes that will lead to loss of around 600 jobs.

The unit is expected to have an immediate impact on earnings before interest and taxation (EBIT), forecast at €150 million in 2004, resulting in an earnings per share increase for DSM of around €0.70 in the first year, with a further improvement expected in 2005. This however is based on an expected market upturn, which had also been anticipated for this year, but so far has failed to materialise and continues to affect the industry.