DSM rules out large M&A deals in 2014
Shares in DSM slid on Tuesday, as the head of the Dutch food and chemicals group warned of unfavorable foreign exchange rates, and ruled out any large-scale acquisitions in 2014.
Feike Sijbesma, CEO of DSM -- whose products are used to make a range of goods including dietary supplements, textiles and pharmaceuticals -- said the company had faced increasing currency headwinds over the last year.
The euro strengthened significantly against the dollar and other currencies in 2013, making Europe's exports more expensive for foreign buyers.
Shares in DSM closed down over 10 percent on Tuesday.
(Read more: DSM CFO: More price hikes in 2014 possible)
Sijbesma said the group planned to try to improve its business performance to offset currency exchange rate effects in 2014 – assuming exchange rates would remain at the unfavorable level they were today.
He added that the company planned to continue with its growth programs over the year, but stressed that large mergers and acquisitions were off the table.
"We will continue with… organic growth, profit improvement programs – not so much growth by new acquisitions. Maybe some small add-ons, but (not) big acquisitions in 2014," he said.
In its preliminary results, published Tuesday, DSM said full-year EBITDA (earnings before interest, tax, depreciation and amortization) for 2013 was expected to come in around 20 percent higher than the previous year, at 1.3 billion euros ($1.76 billion).
This is, however, below the 1.4 billion euros it said it was targeting when it reported third-quarter earnings in November 2013.
Sijbesma was quick to stress that the economic environment remained difficult.
"Europe is more or less flat. The U.S. has some modest growth, and growth in emerging economies is slowing down somewhat," he said. "So let's be realistic, the economic environment next to the currencies… is still challenging."
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