DAVY VIEW

DSM’s Q2 performance reflects strong organic growth in its Human Nutrition division as the dietary supplements business benefited from growing demand in immunity-related products. While at-home consumption patterns boosted Animal Nutrition sales in the first half, FX-related pricing and input price pass-through drove most of the price/mix growth in Q2. Some destocking is expected to continue into Q3 for Animal Nutrition. DSM has reaffirmed its guidance for FY20, which calls for Nutrition EBITDA growth of at least mid-single-digits, with underlying momentum and M&A in Nutrition being offset by FX headwinds (€30-40m in H2). Materials is expected to sequentially improve through the second half. The business remains well positioned ahead of the launch of its Capital Markets Day in November. We envisage no material change to forecasts.