DSM will conduct further cost cutting at its Pharma business as part of a wider ‘profit improvement initiative’ that will see it cut 1,000 jobs over the next 18 months.
The programme – announced during DSM’s Q2 results presentation earlier today – is designed to cut costs, improve efficiency and deliver EBITDA benefits of €150m by 2014.
Details of the plan were not disclosed. However, DSM said that cost reductions are "ongoing in all other areas in the Pharma cluster."
Spokesman Raymond Franken told Outsourcing-pharma.com that: “We are indicating that the profit improvement programme will be applied to all areas of our business," but did not elaborate on how the programme will impact DSM’s pharmaceutical unit.
In the press statement DSM cites the recent changes enacted at Percivia, its biosimilars joint venture with J&J owned Crucell, as an example of cost cutting measures already enacted.
In April DSM announced that Percivia would cease all in-house development and instead focus on licensing its PER.C6 bioproduction cell line in a move that saw a number of redundancies.
Pharma Q2 performance
Total revenue for the second quarter was €2.26bn ($2.8bn) – flat compared with this time last year - while operating profit fell 14 per cent to €290m due – according to DSM – to the strong performance of its polymer intermediates unit in Q2 2011 relative to the reported period.
For its pharmaceutical business DSM reported a 2.2 per cent increase in sales to €182m, a 41 per cent hike in EBITDA to €17m and a three per cent improvement in margins to 9.3 per cent.
DSM said that: “Pharma had a relatively good quarter, partly supported by temporarily higher than usual deliveries in DSM Pharmaceutical Products,” stressing that revenue increase despite the deconsolidation of DSM Anti-infectives that accompanied the formation of the JV DSM Sinochem last year