Bangladesh has reaffirmed its commitment to respect everyone’s religious and cultural sensitivity, conveying to the French government that no religion supports killings.
“It’s our long-standing policy to have respect for each other,” Foreign Minister Dr AK Abdul Momen said today, mentioning that he wrote a letter to his French counterpart Jean-Yves Le Drian.
Dr Momen said peace is needed across the world for sustainable development.
On Tuesday, Bangladesh urged all sides to exercise freedom of expression responsibly and not to hurt anyone’s religious sentiment in the name of freedom of expression.
Foreign Secretary Masud Bin Momen encouraged all to have patience instead of mixing religious issues with economic ones.
Commission Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 428/2009 by granting a Union General Export Authorisation for the export of certain dual-use items from the Union to the United… – EU Politics Today – EIN Presswire
The Joint Board of Appeal of the European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority) published today its decision in relation to an alleged non-application of Union law by six national competent authorities brought by Mr Howerton against the European Insurance and Occupational Pensions Authority (EIOPA). In its decision, the Board of Appeal dismisses the Appellant’s claim as inadmissible as the facts described do not seem to involve insurances and occupational pension funds or any other subject-matter within the remit of EIOPA nor of the Board of Appeal.
The Board of Appeal finds that Mr Howerton’s appeal merely reiterated the very same complaints which had been raised in the past by the Appellant towards the European Securities and Markets Authority (ESMA) and which the Board of Appeal determined to be inadmissible in that context. As in the ESMA Decision, the Board of Appeal fails to see how the facts described by the Appellant, and previously filed in a complaint directed to EIOPA, may involve insurances and occupational pension funds or any other subject-matter within the remit of EIOPA and of the Board of Appeal. In addition, the Board of Appeal notes that the Appellant, at the time of filing this new appeal, was fully aware of the reasons of inadmissibility of the appeal filed against ESMA. The Board of Appeal, therefore, considers the appeal as manifestly inadmissible and does not allow for any further consideration.
Background
On 18 august 2020, Mr. Howerton sent several requests to EIOPA to investigate six national competent authorities under Article 17 of Regulation (EU) No 1094/2010. EIOPA assessed the content of the requests to investigate and concluded that the facts were outside the scope of EIOPA’s remit because they did not fall under any of the Union acts referred to in Article 1(2) of Regulation (EU) No 1094/2010. The Appellant was informed of this conclusion by EIOPA on 30 September 2020. The appeal against EIOPA’s communication of 30 September 2020 was filed on 9 October 2020.
Pope Francis began his Wednesday General Audience noting that the event must “unfortunately” be held once again in the Vatican Apostolic Library without the presence of the faithful.
He called it a reminder of the importance of respecting the directives laid out by political and health authorities.
He also invited everyone to pray for those who are ill with Covid-19 and for the medical personnel working hard to treat them.
The Pope then continued his catechesis on Jesus’ example of prayer.
“Jesus’ prayer is a mysterious reality, of which we intuit only something, but which allows us to interpret His entire mission from the right perspective.”
Jesus, added the Pope, immersed Himself often in intimacy with God the Father, “in the Love that every soul thirsts for.”
Rudder that guides His course
Pope Francis focused his reflections on a passage in the Gospel of Mark (1:32,34-38), in which Jesus heals many sick people late one evening before rising early to pray in a deserted place alone.
After the disciples find Jesus to say the whole village of Capernaum is looking for Him, Jesus declares that He must preach to the other towns as well.
“Prayer is the rudder that guides Jesus’ course.”
This, said the Pope, means that Jesus lets God guide His path, and not the desires and adulation of others.
He went on to draw four lessons from Jesus’ witness of prayer.
Dawning of the day
Jesus, said Pope Francis, teaches us above all that prayer should be “the first desire of the day.”
“A day lived without prayer risks transforming into a bothersome or tedious experience: all that happens to us could turn into a badly endured and blind fate.”
However, Jesus demonstrates the need to be obedient and to listen, since prayer is first of all “an encounter with God.”
“The problems of everyday life, then, do not become obstacles, but appeals from God Himself to listen to and encounter those who are in front of us.”
Persistence
Secondly, said the Pope, Jesus teaches us that prayer is an art that must be practiced “with insistence.”
Though anyone can pray sporadically, Jesus reminds us that prayer requires discipline, practice, and constant effort.
“Consistent prayer produces a progressive transformation, makes us strong in times of tribulation, gives us the grace to be supported by Him who loves us and always protects us.”
Solitary and silent
Thirdly, Jesus’ prayer is always solitary.
“Those who pray do not escape from the world, but prefer deserted places.”
In the silence of prayer, said Pope Francis, our innermost desires and truths emerge into the light.
But most importantly, he added, silence is where God speaks. “Every person needs a space for him- or herself, to be able to cultivate the inner life, where actions find meaning.”
To and fro in God
Finally, Pope Francis said, prayer as taught by Jesus is the place where we find that “everything comes from God and returns to Him.”
He noted that prayer helps us to rediscover “the right dimension in our relationship with God, our Father, and with all creation.”
Peace and joy, concluded the Pope, is what we will find if we follow Jesus’ example of prayer.
Much has been said about Malta’s Individual Investor Programme (IIP), with negative and positive implications being touted by those for and against this programme. As things currently stand, and should the European Commission have its way, this programme’s days now seem to be numbered.
The European Commission has long been voicing its concerns and opposition in relation to this programme. Despite the recent amendments by the Maltese government to the programme as originally launched, the European Commission has now decided to launch infringement procedures against Malta in relation to this programme by issuing a letter of formal notice.
The IIP is marketed by Malta as a programme which allows for the grant of citizenship by a certificate of naturalisation to foreign individuals and their families who contribute to the economic development of Malta. In an effort to appease the EU Commission, a number of more stringent conditions which must be satisfied by those seeking to become Maltese citizens have recently been introduced. These range from the requirement for the main applicant to provide proof that he/she has been a resident of Malta for a period of at least 12 months preceding the day from the grant of citizenship to more onerous financial thresholds attached to investments which must be made by applicants.
Nonetheless, these changes have done little to allay the EU’s watchdog concerns that such ‘golden passport’ schemes flout the rules of EU membership and expose the union to risks in so far as security, money laundering, tax evasion and corruption are concerned.
Being part of the union is equivalent to forming part of any club, that is, adherence to the club’s rules is a prerequisite in order to benefit from membership. Hence, just as Malta has always welcomed with open arms any EU funding which comes its way and reaped from the benefits of forming part of a single market economy, it must also ensure that it plays fairly and in accordance with the rules of this club of which it forms part.
In its formal notice, the European Commission has highlighted a number of alleged breaches in relation to the operation of the Maltese IIP. The treaties which Malta signed upon membership make provision for the principle of sincere cooperation among all signatories of these treaties.
Article 4 (3) of the Treaty on European Union obliges member states to assist each other in carrying out the tasks entrusted to the EU by the treaties and to refrain from doing anything which might jeopardise the attainment of the EU’s objectives. One such objective, as enshrined in Article 3 of the Treaty on European Union, is that of offering its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime. The various secondary legislative measures adopted by the EU throughout the years are a living testament to the hard work being done at EU level to ensure the prevention of money laundering and other criminal action which might thwart the security both on a physical and an economical level to be enjoyed by EU citizens. Any action by any member state which might hinder such security is a clear breach of its obligation to not jeopardise the attainment of the EU’s objectives.
This can be explained better within the context of EU citizenship status as provided for in Article 20 of the Treaty on the Functioning of the European Union. When a member state awards nationality, the person concerned automatically becomes an EU citizen and enjoys all rights linked to this status, such as the right to move, reside and work freely within the EU, or the right to vote in municipal elections as well as elections to the European Parliament. This means that any investor citizenship schemes do not only leave their impact on the member state which is benefitting from them but also leave a ripple effect in their wake, impacting the entire EU territory. Due to the nature of EU citizenship, such schemes have implications for the union as a whole.
Hence, though citizenship matters do, as a rule, fall within the competence of each sovereign EU member state. The conditions for obtaining and forfeiting national citizenship are nonetheless subject to due respect for EU law.
Now that infringement proceedings have been launched by the commission, Malta has two months to reply to the letter of formal notice. If the replies are not satisfactory, the commission may issue a ‘reasoned opinion’ on the matter: a formal request to comply with EU law. It will also request the country to inform the commission of the measures taken to remedy the alleged breach, within a specified period, usually that of two months. If Malta refrains from complying, the commission may decide to refer the matter to the Court of Justice of the EU.
EU membership is clearly not something which can be used and abused at a state’s whim. Membership is not all about rights and opportunities but also about respecting the rules of the game and abiding by the commitments which the state pledges to undertake upon being admitted to the union.
Hence, any national measures or programmes implemented by member states at national level must respect the supremacy of EU law in its entirety.
Mariosa Vella Cardona is freelance legal consultant
Independent journalism costs money. Support Times of Malta for the price of a coffee.
Ahold Delhaize reports strong Q3 results; announces initiatives to solidify position as industry- leading local omnichannel retailer in 2021 and beyond – Book Publishing Industry Today – EIN Presswire
… over time through both organic investment and acquisitions. We … growth for the broader European portfolio returning in the … servicing hotels and restaurants and foodservice, food retail. And those … our vast cost structure into Eastern Europe, Mexico and Asia, …
Koninklijke DSM N.V. (OTCQX:RDSMY) Q3 2020 Earnings Conference Call November 3, 2020 3:00 AM ET
Company Participants
Dave Huizing – Vice President of Investor Relations
Geraldine Matchett – Co Chief Executive Officer and Member of the Managing Board
Dimitri de Vreeze – Co Chief Executive Officer and Member of the Managing Board
Conference Call Participants
Mutlu Gundogan – ABN AMRO
Matthew Yates – Bank of America
Chetan Udeshi – JPMorgan
Andrew Stott – UBS
Thomas Wrigglesworth – Citi
Reg Watson – ING
Operator
Good morning. Welcome to DSM’s conference call on the first nine months results of 2020. [Operator Instructions] At this moment, I would like to hand the call over to Mr. Huizing. Please go ahead, sir.
Dave Huizing
Yes. Thank you, operator. Good morning, everybody, and welcome to our third quarter conference call for investors. I’m joined on this call by our co-CEOs, Geraldine Matchett and Dimitri de Vreeze. Geraldine will give a short introduction, after which we will open the line for questions for about 30 minutes.
As always, I need to caution you that today’s conference call may contain forward-looking statements. You can find the disclaimers about forward-looking statements published in the press release and on our website. And with that, I hand over to Geraldine.
Geraldine Matchett
Thank you, Dave, and good morning, everyone. Given the ongoing challenges caused by COVID-19 in our everyday lives, I do hope that this call finds you and your families in good health.
As you can imagine, COVID-19 remains a daily topic for us as well at DSM, and we continue to prioritize our employees’ and our partners’ safety. And thanks to your ongoing commitment and dedication, we’ve actually been able to maintain uninterrupted supply for our customers.
Now before I get started, I have to say that we are – that we’re very lucky and really looking forward to having your undivided attention for the next two days. We view this morning’s call on our nine months results as part one. And part two starts right after this call. You will be able to access the virtual conference center from 10 a.m., and you will find in this venue a lot of background materials on our Nutrition growth platforms and related innovation. We have lots of videos and infographics and interviews. As for part three, that will be tomorrow with the virtual investor event.
Therefore, conscious of your time, we will keep our introduction today a bit shorter than usual and we will try to keep the Q&A, which is focused really on the year-to-date results, to about 30 minutes, as Dave just said. Strategy and other such topics are probably better covered tomorrow.
Finally, with regards to these introduction comments, please note that following the recent announcement of the divestment of Resins & Functional Materials, we now publish our results on a continuing operations basis as from today, unless indicated otherwise. We already provided earlier some key restated data and the full restatement will be published with the integrated annual report 2020 with the full year results.
Now let’s start with the financial highlights on Page 3. Year-to-date, we have delivered solid results, given the circumstances, with Nutrition performing well including a slight positive effect from COVID-19, whilst our Materials business faced, of course, a more challenging environment.
As for Q3, more specifically, our businesses performed in line with our expectations with good conditions in Nutrition and an improving momentum in Materials despite the stronger negative foreign exchange effect. Nutrition delivered a 5% organic sales growth with a 6% increase in EBITDA during the nine months despite the increasingly negative effects. Q3 saw similar rates in organic growth and EBITDA growth with continuation of good conditions in Human Nutrition, solid conditions in Animal Nutrition and a gradual recovery in Personal Care.
Materials saw a 13% decline in volumes with the nine months – in the nine-month period and a 33% fall in EBITDA. In Q3, volumes were down only 6% compared to a fall of 25% in Q2 with an improved momentum in September moving into October. Although given the restocking effects and the recent surge in COVID-19 cases, we believe it is too early to get excited yet. As for the EBITDA, we saw a drop of 31% in Q3 for Materials compared to prior year, but this should be compared with the minus 59% in Q2, reflecting the improving situation.
Free cash flow was strong for the nine-month period, up 16%, driven mainly by lower working capital and reduced CapEx. All of this leads me to confirm our unchanged full year outlook for 2020. Given the business condition outlined as above for Nutrition, we feel comfortable in our expectation of delivering an at least mid-single-digit increase in adjusted EBITDA.
And with regards to Materials, while we saw a good recovery in September and into October, the recent surge in COVID-19 has reduced visibility, and therefore, we think it’s appropriate to continue to withhold an outlook at this time.
Now let’s look in more details at our Nutrition business, starting on Page 10. Overall, Nutrition delivered a good volume-driven organic sales growth for the nine-month period, up 5%. Volumes were initially driven by Animal Nutrition in the first quarter and then by Human Nutrition in the second and third quarters.
Adjusted EBITDA in the first nine months increased 6%, with a 3% negative foreign exchange effect offsetting the positive contribution from the CSK and Glycom acquisitions. The adjusted EBITDA margin was slightly up at 21.3% versus 20.9% last year. The third quarter was actually quite similar overall to H1 with a 4% organic sales growth and a 7% increase in adjusted EBITDA, highlighting the continued good momentum in the business.
Now let’s move to Page 11 for Animal Nutrition. In the first nine months, Animal Nutrition delivered a good 8% organic growth, driven equally by volume and by price/mix. COVID-19 stocking effects impacted volumes in Q1, as you will remember, as feed producers initially accelerated purchases in anticipation of supply disruptions. These stocks were gradually unwound during the rest of the year, resulting in a 1% volume decline in Q3. By the end of the third quarter, however, this destocking is largely complete and we have seen signs of improving customer sentiment.
In addition, the negative effects of the African swine fever that impacted our results last year continued to unwind in China, and DSM is well positioned to benefit from the resulting professionalization of pork production. Although this was still a minor contributor in Q3, we expect this effect to become more meaningful going into the next year. The strong pricing, up 7% in Q2, continued into Q3 with the pricing up 5%, still driven in part by higher prices of externally sourced ingredients and foreign exchange-related price increases in Brazil.
Now moving to Human Nutrition, let’s go to Page 12. In the first nine months, Human Nutrition & Health delivered a 4% organic growth with volumes up 8% and prices down 4%. Total sales were up 5%, supported by the recent Glycom acquisition, contributing 2%, but partly offset by negative foreign exchange effect of minus 1%. The strong performance in the second quarter continued into the third quarter with an 8% organic sales growth, driven by 11% increase in volumes. Total sales in the quarter saw a 3% contribution from Glycom, offset by a minus 6% foreign exchange impact.
Food and beverage performed well with a strong country loading effect from the end of Q1 and throughout Q2, followed by continued good demand in Q3. Demand for immune-boosting solutions has meanwhile remained elevated since the start of the COVID pandemic, supporting Dietary Supplements and Pharma sales in particular, whilst Early Life Nutrition sales were down on weak market conditions in China.
Finally, our other Nutrition businesses delivered a good financial performance during the nine months, and you can find all the details on Page 15. And this, despite lower sales in Personal Care, especially the sun filters, which were affected by COVID-19, although we have seen some signs of recovery during Q3 there, too.
Pricing for the nine months, minus 8% and minus 4%, owing mainly due to the lower vitamin C prices and lower contractual prices in Early Life Nutrition. Q3 saw a slight improvement with a minus 3% on price as the negative price effect from vitamin C is now almost faded out, while Early Life Nutrition had the same negative price effect as in previous quarters. Q3 also saw a negative mix effect.
Moving to Materials, let’s move to Page 15. Following a solid start to the year, Materials saw an abrupt deterioration in business conditions at the end of Q1 and into Q2 as customer operations were disrupted and end-user demand declined as a result of COVID-19. We moved quickly to implement cost control measures and followed in September with additional actions as part of a wider set of restructuring initiatives aimed at improving business performance and deliver annualized recurring cost savings of about €10 million to €15 million. This figure now excludes the amount previously attributable to the Resins & Functional Materials activities.
With reference to Q3, momentum began to improve from Q2 exit rate of about minus 15% to a run rate of about minus 10% in July and August, and a sharp recovery in volumes in September. This has continued into October with a good order book for November, driven by restocking effects and a more positive end-user demand.
However, the resurgence of COVID-19 across the world in recent weeks has, again, reduced near-term visibility. As we saw in March, trading can deteriorate rapidly with lockdowns reemerging. In Q3, volumes declined 6%, reflecting the gradual improvement in engineering materials as demand from global automotive improved during the quarter. And in addition, Personal Protection saw a recovery in the quarter as orders under the typical large government contracts, which were postponed from the end of Q1 and into Q2 slowly restarted in Q3.
EBITDA for the third quarter fell 31% compared to an EBITDA drop in Q2 of minus 59%. This reflects the negative operating leverage caused by lower volumes in high-margin specialties, which recorded a very strong performance in the same period last year. And with this, I would like to open the floor for some Q&A.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question is from Mr. Mutlu Gundogan of ABN AMRO. Go ahead. Your line is open.
Mutlu Gundogan
Yes. Good morning and thanks for taking my questions. I’ll keep it short, I’ll have two. The first question is on Human on the price/mix, what were the negative mix effects? That’s the first question.
And then secondly is also Human on Glycom. So the six-month sales seem to be 22% lower year-on-year. Can you explain why that is and what your short-term outlook for that business is? And to add to that, was this known to you when you bought the business back in February? Thanks.
Dimitri de Vreeze
Okay. Yes. No, let me take that question. So on H&H, the price/mix effect has to do obviously with the portfolio. If you look at H&H, we have four key segments that were, Early Life Nutrition, Pharma medical, Dietary Supplements and food and bev and obviously also throughout the region. And what we’ve seen with the good growth in Q3, with volume plus 11%, you will do see mix effects because the categories in one category has a different pricing than the other. So that’s what we meant with the mix effect. I think it’s important to know that we also, like Geraldine noted, that the vitamin C impact has faded out. So this is purely the mix effect, which you see on Human Nutrition.
Then perhaps on Glycom. I think, on Glycom, we reported €14 million sales for Q3 with an €8 million EBITDA. That was – prior quarter, it was €15 million sales and €6 million EBITDA. So it’s nicely in line. You see some fluctuations throughout the quarter. We strongly feel that we are on track, the Glycom integration has started. And basically, we’ll finish around quarter two 2021. What we see is that we get some positive response from the Early Life Nutrition customers, although COVID is sometimes slowing down development a little bit as this is a high added value ingredient, which obviously needs to be back into the formulations.
We also see some traction outside the ELN space in pet food and in H&H. So I think we are on track with Glycom, and it’s running according to expectations. I think the link we give as a guidance is about €9 million EBITDA third quarter going forward, but let’s see how 2021 evolves.
Mutlu Gundogan
All right, thank you.
Operator
Our next question is from Mr. Matthew Yates of Bank of America. Go ahead please.
Matthew Yates
Just a couple of questions, please. The first is around Materials. I guess once the Resins sale is complete, it will have shrunk the business by about 1/3 in revenue terms. Are you also able to reduce the overheads proportionately? Or are there any kind of stranded costs that would stay with you, given the smaller size of the overall business?
The second question is around Nutrition and the 150 basis points of year-on-year margin expansion. I was wondering if you could just disaggregate that a little bit for us in terms of how much is coming from accretive acquisitions, the mix changes you’ve highlighted. Really just to get an idea if you’re thinking 22% is a sustainable sort of run rate to be looking forward.
Geraldine Matchett
Thanks, Matthew, and welcome. Maybe let me start with the stranded costs and I’ll hand over to Dimitri for the 22% margin. So when it comes to the carve-out, of course, we are busy doing that. Now we have been, as you know, as a company, quite used to changing the portfolio and how to manage that properly. Now in the first instance, there will, of course, be a lot of SLA support provided that goes with the business. And that gives us plenty of time to then adjust any sort of scale consideration that we may have.
You also have to realize that at the exact same time, we’re also integrating and onboarding the Nutrition acquisition. So if you think of all of the global functions, for example, we need to look at the net-net of how that is looking. So no major concerns. And of course, the work is ongoing as we speak.
Dimitri de Vreeze
Yes. And then maybe for me on the Nutrition margin. As you have seen, normally, we track around the 21%. Year-to-date, it’s about 21%. Q3, obviously, with good Human Nutrition performance, you will see the balancing. So you will see Human Nutrition being stronger, which is helping a little bit the EBITDA quality overall. We also need to take into account that we need to look at what the other bits and pieces do, we normally forget Food Specialties, hydrocolloids and Personal Care & Aroma. But 22% is on the high side of the range.
We’ve always said that it’s between 20% and 22%. So I think the year-to-date gives a better picture with the normalization also of the Animal Nutrition space, where we saw a hike in quarter one, with a bit of normalization and destocking in Q2 and Q3. So I think the 22% is on the high side, but we don’t give you any guidance on the quality of the portfolio. We give guidance on the EBITDA growth year-on-year.
Matthew Yates
Thank you, Dimitri.
Operator
Next question is from Mr. Chetan Udeshi of JPMorgan. Go ahead please.
Chetan Udeshi
Just coming back to your point about the destocking ending at the end of – or almost ending at the end of third quarter. So are we now looking at fourth quarter run rate to be more normalized in terms of volumes in Animal Nutrition? And second question, just quickly on the Animal Nutrition price/mix. Can you maybe help us understand how much is the underlying price change if you strip out the FX element and the pass-through of ingredients.
Geraldine Matchett
Yes. Chetan, let me take those. So indeed, maybe actually let me start with the pricing element. So what we saw is the plus 5% in Q3 and it’s made up of the similar 3 elements that we saw at the end of Q2. So to give you a bit of a rough idea, we’ve got about 2% related to pass-through ingredients that we sourced ourselves for the premixes. We’ve got about 1%, which is sort of related to the Brazilian real, in particular, where you sort of get this FX that goes into the price because of the reporting currency.
And then that leaves about 2%, which is linked to our own ingredients. So this is something, going forward, it’s very difficult to anticipate the pass-through and the FX, but you saw 1%, 2% in terms of our own ingredients is something that we find relatively normal in that sense. Now when it comes to the destocking, you’re absolutely right. So we saw that huge stocking effect in Q1 then the unwind in Q2 and Q3, which results in this minus 1% for Q3. And if I talk a bit to the business conditions in Animal Nutrition, what we’re seeing is a continued good condition in Western Europe, particularly with a lot of food coming out of the retail outlets and a lot of strong demand for those easy-to-prepare proteins, which are basically chicken and egg in Europe and in Western countries, generally. So that is strong.
What we are seeing a little bit of weakness potentially coming through is in the less affluent economies, and particularly in APAC, where with the household incomes being impacted by COVID, we are seeing potentially a bit less consumption coming into this. And of course, we need to watch out because with the second wave in Europe, at least, the second wave, but the continued issues around the world with COVID, we’re also seeing that the eating out-of-home categories are still a bit on the back foot. And here, you should think about beef and aqua being the categories that are not helped currently.
Having said that, I did also mention in my opening comments that the African swine fever dynamics are progressing very nicely. Now if you remember, this started really impacting our results as of H2 last year, and we are seeing a good progress in China in terms of rebuilding of the swineherd. And while for now the positive effect year-to-date is relatively small, we do think that this is a little bit the turning points and that should continue to be a nice supporting thing for us, particularly as it becomes more professionalized, which helps us address the market even better. And we are, I have to say, helped by the fact that Brazil is actually a strong exporter of beef right now because of the devaluation of the real. So that’s the flip side of the currency, and that is also helping. So a bit of a long answer to say that, broadly, we should be, given this backdrop, seeing a more normalized development for Animal Nutrition going forward.
Operator
Following question is from Mr. Andrew Stott of UBS.
Andrew Stott
Yes. Just a question on strategy. So I’m hoping I’m not going to misquote you, but I’m reading from Bloomberg. DSM has remaining Materials in its Fit sustainability focus and doesn’t imply an immediate Materials exit. I’m more interested in the former because I thought the Resins business was pretty much along with sustainability lines with waterborne, and of course, Niaga’s gone in that transaction. So why Engineering Plastics and Dyneema, why are they more sustainable for you? Why do they fit better than the business you’re selling?
Dimitri de Vreeze
Yes. Thank you, Andrew, and you need to be careful quoting from Bloomberg.
Andrew Stott
I did say. I said assuming it’s accurate.
Dimitri de Vreeze
Nevertheless, I think the question is a fair one. So let me, first of all, say that I think our Materials businesses overall are looking for sustainable living and sustainable trends. And it’s not that Resins is more sustainable than other business elements we have. So that is basically not the guiding principle. The guiding principle was that we’ve looked at Resins & Functional Materials and we found that with Covestro, they will be able to grow faster. And this market is consolidating, scale is needed and we were not willing to be part of that game. And therefore, I think you also need to be strategically sound and say, listen, then we need to find a good home where that business could grow faster.
So that was the reasoning, not whether it was less sustainable or more sustainable in itself. And you will see that the remaining business, it’s still a business, which is €1.7 billion in size with a very high quality of the portfolio and EBITDA percentage of about 20%, which nicely fits into the company which we’re trying to build Nutrition, Health and Sustainable Living and we’ll tell you more about that tomorrow. But that’s why we’ve decided for the divestment of DRF, not because it’s less or the other businesses are less sustainable. So I hope that gives a bit of context.
Andrew Stott
Yes. So bottom line, they are core assets or not?
Dimitri de Vreeze
Engineering Materials and Dyneema.
Andrew Stott
Yes.
Dimitri de Vreeze
Yes. Absolutely they’re part of our key to our strategy to build the Nutrition, Health and Sustainable Living company. Obviously, we’ll look at these businesses as we’ve always done within DSM, but our strategy is the Nutrition, Health and Sustainable Living company. And the remaining businesses have very high-quality normalized EBITDA above 20%. So in that sense, good quality businesses comparable with the EBITDA percentage you see at Nutrition.
Operator
Next question is from Mr. Thomas Wrigglesworth of Citi.
Thomas Wrigglesworth
First one, just kind of following on. Obviously, M&A activity, both acquiring and selling assets, has accelerated. Should we read something in that, in the ability to execute M&A? Is this – or is this a bit like London buses, they’ve all – just three have come along quite rapidly at once? And a second question is on the Early Life Nutrition volumes. I think you called those out as soft in China. China has been a bit choppy this year. Are we seeing – is there something structural in that market? Or can you identify the temporary factors that are driving slower volumes for us?
Geraldine Matchett
Yes. Thomas, and thanks…
Dimitri de Vreeze
Do you feel – do you want to do the buses, Geraldine?
A – Geraldine Matchett
I will do the buses. Having lived in London since we are talking, I can fully relate to that phenomena. And it’s actually a really nice way of putting it a little bit about our acquisitions as well. Now as you remember, when we announced our strategy, we said that after three years, where we deliberately put M&A on hold while we were getting ourselves stronger, we reopened the door to M&A, predominantly in Nutrition & Health, but that we were not in a hurry, and the strategy is predominantly an organic strategy.
Now when the opportunities do come along, though, we have to take them. And if I look at the dynamics, of course, over the last nine months, we’re very pleased to have been able to make those three acquisitions that fit very well into our Nutrition strategy. And I would even say that in an ideal world, would we have necessarily wanted to do Erber in the middle of the COVID crisis? Maybe not, for integration and other reasons. But when the bus comes along, you have to take that opportunity. So I would say that’s a good way of describing it. And Dimitri, do you want to take Early Life?
Dimitri de Vreeze
Yes, Early Life. Indeed, we are tracking lower and seeing lower birth rates. We’re tracking birth rates just to monitor how business is doing, especially in China, indeed. And China is about 1/3 of the Early Life Nutrition market. So we do see that happening, and that creates some pressure on the market. Also, Chinese producers, helped a little bit by local stimulus, are taking a bit of share. But what we all see is that if markets are a little bit under pressure, we do see that new developments, where it’s been looked at creating value, more than creating volume growth, we do see a very solid demand on the ingredients where we play in with ARA, DHA, HMOs now coming in. So we do see that value chain popping up.
Yes, I think it’s too early to say how this structurally will spell out. But the fundamentals of that business are still very strong. I think if you talk about infant nutrition, we talk about baby food. I think nobody wants to take any risk. And reliability, credibility is absolutely key. So in that sense, we are absolutely well positioned. So it’s too early to say how COVID and how the lower birth rates are spelling out. We also had a discussion just this morning where people were saying, well, Dimitri, I’m expecting a huge increase in quarter 1 for the Early Life Nutrition business because it’s nine months after COVID lockdown, March, April. Yes, I mean we need to see – I think I have a preference on the impact that I think that’s more speculation than anything else. So we will give you more insight on that in quarter 1. But overall, I think the fundamentals are still strong.
Operator
Our next question is from Mr. Reg Watson of ING.
Reg Watson
This question is – will be probably best directed at Geraldine. We’ve seen a number of companies reporting stronger EBITDA margins because they’ve been able to avoid costs such as travel. And with an organization as large as DSM and with your global reach, are you seeing any margin benefits from the COVID crisis in the way you’re now operating, particularly with work from home?
Geraldine Matchett
Yes. Thanks for the question. Now of course, in the mix of all of this, we’ve been watching our costs as well. Now when you have this kind of drop-off, particularly in our Materials businesses, then you need to take all the actions possible. And travel is one of the cost categories where currently we’re lower. And going forward, actually, the big discussion is what will be the new normal because that’s what we call it internally. So are we going to go back to as much travel as we used to do? Or is it going to be somewhere in the middle? And currently, we’re thinking somewhere in the middle. But to be honest, it’s all bundled into all sorts of cost measures that we were taking to make sure that we weather the storm in a good way. And it translates into this good cash performance, right, of 16% up versus last year.
Reg Watson
Okay. So your expectation going forward as we come out of the crisis is that you’ll be able to hang on to some of this, but not necessarily all of it? Is that my sort of…
Geraldine Matchett
Yes. Exactly. Exactly. I mean – and in the meantime, of course, we’ve also done a few more programs, right? So we have a number of – we’ve been trying to keep our organization as effective and as efficient as possible. So that will also be bearing fruit going forward. So for example, in the Materials cluster, we – as I mentioned in our opening comments, we’ve continued to adjust organization and that should bring some annualized savings. So if you put that all in the mix, I think we’re in a good place.
Operator
We have a question from Mr. Gunther Zechmann of Alliance Bernstein. My colleague is going to open his line. Mr. Zechmann, can you say something? Is your line open? [Operator Instructions]
Dave Huizing
Otherwise, operator, if we are the – if this is the end of the queue, give it a second. If that doesn’t work, then I think we are done with the Q&A session, and we can continue tomorrow happily. So then I would say let’s – yes, so this is the end of the queue? Yes. Okay. That brings us then to the end of the Q&A for today. Maybe, Dimitri, you can make some closing remarks before we close this call.
Dimitri de Vreeze
Yes. Thank you, Dave, indeed. So let me try to close. So DSM delivered a solid nine-month result in a highly dynamic environment. I think we’ve seen that every day with trading in Q3 developing in line with expectations we have communicated at Q2. Nutrition continues to do well with good condition in Human Nutrition and solid conditions in Animal Nutrition, together with an improving Personal Care.
And it confirms our long-term growth drivers. In Materials, we’ve seen improving momentum with a good order book in October, but recognized a limited new visibility caused by the recent resurgence of COVID-19. But let me say that I’m ever more convinced now about the quality of our Materials business, especially after the recent announcement of the divestment of our Resins & Functional Materials business. Now let me turn to our investor event. Like Geraldine said, we are excited to welcome you all tomorrow to our live virtual event. And given that this is the first time we’ve undertaken such a format, we have a sense of nervous anticipation. So we’re all ready. And we hope you will forgive us for any lapses, either technically or personally. But rest assured, we try to minimize them as much as we can.
From 2:00 Central European time, Geraldine and I will present our strategic progress, whilst our Nutrition and Innovation colleagues will present the key growth platforms and related innovation pipeline. And obviously, we will close with a Q&A session. However, you don’t have to wait until then. I really encourage you to visit our virtual conference venue. I’ve been there already. And it will be open for you today at 10:00 sharp, which showcases innovation-driven growth platforms in the Nutrition businesses. And you will find a variety of videos, interviews with business leaders, animation and more. I really think it’s worthwhile your time. And with that, back to you, Dave.
Dave Huizing
Thank you, Dimitri. So we are done with Part 1, as Geraldine called it, and that means we can conclude our today’s conference call. We’re looking forward to welcome you all to our virtual investor event. And as Dimitri said, it’s open as from 10:00, so please go there. If you have any issues, questions or whatever getting in or you have other questions, please don’t hesitate to reach out to us. So thank you. And with that, I hand it back to the operator.
Operator
Thank you, sir. Ladies and gentlemen, this concludes DSM’s conference call on the first nine months results of 2020. Thank you for your attending. You may now disconnect your lines.
Yesterday’s terrorist attack in Vienna, Austria has once again attested to the fact that in no way could the world community afford selective approaches in the fight against international terrorism, as it is the greatest menace to mankind in our times.
No state is immune to terrorism, and I believe terrorism must not be associated with any particular civilization, religion, nationality or ethnic group.
We express our deep sympathies and condolences to the families of victims of the terrorist attacks and wish the wounded speedy recovery.
It has been more than a month that in full view of the international community Artsakh became a target of terrorism, combating aspirations and attempts of Azerbaijan and Turkey to turn the South Caucasus into a new hotbed of international terrorism.
The Republic of Artsakh faces terrorism and crimes against humanity, suffering human and tangible material loss.
We strongly condemn any attempt whereby communities are subjected to terrorism, and the civilian population is targeted deliberately on the grounds of ethnic or religious belonging.
Any attempt to justify those encouraging, sponsoring or perpetrating terrorism and extremism, as well as those inciting hate crime and violence, should be unequivocally condemned.
The Republic of Artsakh remains committed to those principles and determined to contribute to the fight against terrorism, reinforcing international and regional security, and we will struggle to the end for our right to secure life and development.
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