DSM-Firmenich: Improving Fundamentals At A More Digestible Valuation

2025-02-28 17:37:54 ET

Summary

• DSM-Firmenich's FY 2024 results show promising growth and profitability, with 6% organic sales growth and 19% adjusted EBITDA increase, despite a challenging macroeconomic environment.
• The company is making progress on the promised synergies, targeting €350 million in total run-rate synergies by 2028.
• DSM-Firmenich's innovation capabilities, supported by over 2,000 R&D scientists and 16,000 patents, are driving new product launches and revenue synergies.
• Despite risks, DSM-Firmenich's reasonable valuation, strong innovation, and efficiency improvements create potential for healthy returns.

It has been difficult following DSM-Firmenich ( OTCQX:DSMFF ) the last few years, as it has been under constant transformation, disposing of businesses and then merging with privately owned Firmenich. In addition to muddling the financials, we have been waiting to see if the company could actually deliver on the promised synergies, cost reductions, and other portfolio optimization initiatives....

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