Royal DSM NV has launched a comprehensive profit improvement program for DSM Nutritional Products that, through a mix of cost savings and increased profits from higher revenues, is expected to deliver an annual minimum of €100 million of improved profitability.
The program will commence in the second half of 2007 and run through 2008 and
2009, enabling the Nutrition business to achieve the targeted gross profit
(EBITDA) margin level of at least 18% as set out in Vision 2010.
For 2008, the first full year of the
program, it is expected that benefits will offset the negative impact of the
expiration of the contracts made in conjunction with the acquisition of Roche Vitamins.
One time costs of the
program are estimated at some € 40 million after tax, the majority of which are
expected to be accounted for in 2008.
In addition, DSM Nutritional
Products will also invest in further optimizing its business processes,
including the replacement of numerous legacy systems with an integrated SAP ERP system.
Vision 2010, Aspire to
Win
The profit improvement plan, ‘Aspire to Win’, is based on three main
pillars: