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dsm-firmenich reports full year 2023 results

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KAISERAUGST, Switzerland and HEERLEN, Netherlands, Feb. 15, 2024 /PRNewswire/ —

Management Report

2023 highlights

Successful creation of dsm-firmenich with integration well ahead of planMerger-related cost and sales synergies gaining tractionAnimal Nutrition & Health to be separated from the GroupSolid performance across the company, significantly impacted by unprecedented low vitamin pricesGood operating cash flow driven by a strong performance in the second halfStable dividend of €2.50 proposedSynergies and the vitamin transformation programs will deliver a significant earnings step-up in 2024 and beyondOutlook 2024: Adjusted EBITDA of at least €1.9 billion

Key figures

in € millions

Pro forma
FY 2023¹

Pro forma
FY 2022¹

% Change

Actual
Q4 2023

Pro forma
Q4 2022¹

% Change

Sales

12,310

13,238

(7)

3,112

3,295

(6)

Organic sales growth (%)

(5)

(3)

Adj. EBITDA

1,777

2,275

(22)

439

499

(12)

Adj. EBITDA margin (%)

14.4

17.2

14.1

15.1

Core adj. net profit

555

1,013

(45)

1 Represents the figures on a pro forma basis, including the Firmenich results as if the merger had occurred on January 1, 2022. The pro forma figures represent the results from continuing operations – please also refer to the section Definitions.

 

Key figures on an IFRS basis2

in € millions

FY 2023

FY 2022

% Change

Sales

10,627

8,390

27

Net profit from continuing operations

(636)

475

(234)

Net profit (total group)

2,153

1,715

26

2 Represents the figures on an IFRS basis, including the Firmenich results as of the merger date May 8, 2023.

Dimitri de Vreeze, CEO, commented: “We are proud that the company is already operating seamlessly with integration well ahead of plan, including the development of a common culture, as demonstrated in our recent employee engagement survey. Our employees have done a truly amazing job building momentum, positioning dsm-firmenich as a world leader in nutrition, health and beauty.

In light of the unprecedented conditions with very low vitamin prices and a continued destocking cycle, we took a number of immediate and effective actions. We accelerated our plans for driving through additional self-help measures and advanced the review of all our business segments. This led us to the initiation of a process to separate out the Animal Nutrition & Health business from the Group which we announced today. This should strongly reduce our exposure to vitamins earnings volatility and reduce our capital intensity in line with our long-term strategy. We believe that the full potential of the ANH business could be best realized through a different ownership structure.

Supported by our exciting innovation pipeline, all these actions would help us to prioritize and accelerate the company’s nutrition, health and beauty high-growth and higher-margin businesses, all of which is reflected in our mid-term financial targets.”

Outlook 2024

As the global political and economic environment remains uncertain, and given that it is early in the year, we feel it prudent to base our full year outlook for the entire company only on those elements which are under our control, namely a €200 million step-up in Adjusted EBITDA from a combination of synergy delivery and the vitamin transformation program. Considering that the full negative vitamin effect emerged only in Q2 2023, the effective Adjusted EBITDA run-rate in the period Q2-Q4 2023 on an annualized basis was about €1.7 billion, the company estimates for FY 2024 Adjusted EBITDA of at least €1.9 billion.

Strategy

The merger of DSM and Firmenich created a world-leader in nutrition, health and beauty, through which its highly integrated portfolio of nutritional, natural and renewable ingredients, together with complementary science capabilities and technologies, will deliver superior innovation-led growth.

By creatively applying proven science and drawing on data-driven innovation capabilities as well as exceptional standards of operational excellence, dsm-firmenich seeks to tackle the tension between what society needs, what people individually want, and what the planet demands in the areas of nutrition, health and beauty. By working closely together with customers to create what is essential for life as well as desirable for consumers yet simultaneously more sustainable for the planet, dsm-firmenich is poised to bring progress to life for billions of people around the world.

dsm-firmenich is a purpose-led company where people and planet as well as financial success are at the core of its strategy that is aimed at further enhancing its positive impact in the world, continually raising the bar to help tackle climate change, protect nature, and care for people all along the value chain.

Delivering synergies through integration

dsm-firmenich is on track to achieve its target synergies of approximately €350 million Adjusted EBITDA per year. Around half of this is expected to come from cost efficiencies, with the full run rate achieved by the end of year 3. Initial benefits of about €15 million were delivered in Q4. The remaining synergies are expected from incremental revenues of €500 million, generated by an acceleration of innovation with customers. There has been good early progress and the full run rate is still expected by the end of year 4. These revenue synergies are driven by complementary capabilities and realized in the three business units with the strongest strategic adjacency – Perfumery & Beauty (P&B); Taste, Texture & Health (TTH); and Health, Nutrition & Care (HNC) – with roughly the following balance:

60% in TTH business unit25% in HNC business unit15% in P&B business unit

Overall, we expect to see an Adjusted EBITDA contribution of about €100 million in 2024, coming mainly from cost synergies.

Separation of Animal Nutrition & Health from the Group

The Company initiates a process to carve-out and separate out the Animal Nutrition & Health (ANH) business from the Group. Full focus on nutrition, health, and beauty would enable dsm-firmenich to better drive superior innovation-led growth. Separating out Animal Nutrition & Health from the Group would minimize dsm-firmenich’s exposure to vitamins earnings volatility and reduce capital intensity in line with its long-term strategy. The Company believes that the full potential of the ANH business could be best realized through a different ownership structure for which all potential separation options will be considered. The Company would expect to be in a position to separate the business in the course of 2025.

Progressing the vitamin transformation program

In mid-2023 the company embarked on a major restructuring program in its vitamin activities to reduce costs and restore profitability. This program is expected to result in an estimated Adjusted EBITDA contribution of around €200 million per year with the full run rate to be reached by the end of 2024. These savings will be in addition to the previously announced €350 million Adjusted EBITDA synergies target. Neither of these targets will be disrupted by the separation of Animal Nutrition and Health.

dsm-firmenich has already made strong progress in executing the program through the closure of the Xinghuo vitamin B6 plant in China and shutting down the Jiangshan vitamin C production in China. The sales model now supports a ‘go-to-market’ approach which is simpler and more efficient in the current market environment.

In Q4 2023, the program generated an about €10 million savings contribution to Adjusted EBITDA. For 2024, dsm-firmenich expects to achieve an additional around €100 million Adjusted EBITDA contribution.

Stable dividend

At the Annual General Meeting on May 7, 2024, dsm-firmenich’s Board of Directors will propose a cash dividend of €2.50 per share for the financial year 2023.  

Key figures and indicators

in € millions

Pro forma
FY 2023¹

Pro forma
FY 2022¹

% Change

Actual
Q4 2023

Pro forma
Q4 2022¹

% Change

Net sales

12,310

13,238

(7)

3,112

3,295

(6)

P&B

3,709

3,792

(2)

914

916

(0)

TTH

3,038

3,174

(4)

768

806

(5)

HNC

2,270

2,418

(6)

581

587

(1)

ANH

3,227

3,784

(15)

833

971

(14)

Corporate

66

70

(6)

16

15

7

Adj. EBITDA 

1,777

2,275

(22)

439

499

(12)

P&B

783

748

5

192

166

16

TTH

556

549

1

133

137

(3)

HNC

389

533

(27)

94

121

(22)

ANH

128

524

(76)

32

95

(66)

Corporate

(79)

(79)

–

(12)

(20)

(40)

Adj. EBITDA margin (%)

14.4

17.2

14.1

15.1

P&B

21.1

19.7

21.0

18.1

TTH

18.3

17.3

17.3

17.0

HNC

17.1

22.0

16.2

20.6

ANH

4.0

13.8

3.8

9.8

Adj. EBIT

666

1,361

(51)

.

Core adj. EBIT

850

1,361

(38)

Core adj. net profit

555

1,013

(45)

.

Average number of shares (x millions)

265.1

264.5

Core adj. EPS

2.03

3.77

.

(Avg.) core capital employed

16,423

16,271

Core adj. ROCE (%)  

5.2

8.4

.

Operating working capital

3,872

4,021

Capital expenditures (cash)

734

775

Adj. gross operating free cash flow

999

918

1 Represents the figures on a pro forma basis, including the Firmenich results as if the merger had occurred on January 1, 2022. The pro forma figures represent the results from continuing operations – please also refer to the section Definitions.

 

Key figures and indicators on an IFRS basis2

in € millions

FY 2023

FY 2022

% Change

Net sales

10,627

8,390

27

EBITDA

810

1,304

(38)

EBITDA margin (%)

7.6

15.5

EBIT

(497)

682

(173)

Net profit (total group)

2,153

1,715

Net EPS (total group)

9.14

9.80

.

Effective tax rate (%)

2.8

20.9

Net debt

(2,215)

(87)

Workforce (headcount)               

29,367

20,6823 

2 Represents the figures on an IFRS basis, including the Firmenich results as of the merger date May 8, 2023

3 Refers to total group, including discontinued operations.

 

dsm-firmenich FY 2023 and Q4

in € millions

Pro forma
FY 2023¹

Pro forma
FY 2022¹

% Change

Actual
Q4 2023

Pro forma
Q4 2022¹

% Change

Sales

12,310

13,238

(7)

3,112

3,295

(6)

Organic sales growth (%)

(5)

(3)

Adj. EBITDA

1,777

2,275

(22)

439

499

(12)

Adj. EBITDA margin (%)

14.4

17.2

14.1

15.1

1 Represents the figures on a pro forma basis, including the Firmenich results as if the merger had occurred on January 1, 2022. The pro forma figures represent the results from continuing operations – please also refer to the section Definitions.

FY 2023

Good performance in Perfumery & Beauty (P&B)Solid performance in Taste, Texture & Health (TTH)Weak performance in Animal Nutrition & Health (ANH), and Health, Nutrition & Care (HNC) on exceptionally low vitamin prices and persistent de-stocking

The results for the full year were impacted by a combination of unprecedented market dynamics that led to very low vitamin prices, together with a deep destocking cycle.

Adjusted EBITDA, significantly impacted by the vitamin effect and foreign exchange was 22% lower than in the prior year, resulting in a 280bps margin decline. This includes a negative vitamin effect which is estimated at about €500 million. Without this effect, the Adjusted EBITDA would have been in line with prior year, despite a negative foreign exchange effect of about €90 million.

Q4 2023

Market conditions broadly unchangedFirst contribution from self-help initiatives materializedStrong cash flow generation, driven by disciplined action on inventory management

P&B continued to perform well, against a soft prior year comparable period, with TTH remaining resilient. ANH and HNC continued to see the same unprecedented market conditions. The quarter was notable by strong cashflow generation owing to a greater focus on, in particular, improving working capital through inventory reduction, together with the first benefits of cost synergies being realized.

Adjusted EBITDA was down 12%, owing mainly to the ongoing vitamin effect and destocking. The negative vitamin effect was estimated around €120 million and negative foreign exchange effect was slightly more than €20 million. Without this negative vitamin effect, Adjusted EBITDA would have been 24% higher than reported, despite a 5% negative FX effect. The quarter saw the initial contribution from the integration synergies of about €15 million and, in addition, savings of around €10 million from the vitamin transformation program.

Note for editors:

The full text of the press release is available here.
The presentation to investors is available here.

Financial calendar

February 22, 2024: North American Investor Event in Princeton, USA
May 2, 2024: Q1 2024 trading update
May 7, 2024: Annual General Meeting
June 3, 2024: Capital Markets Day in Paris
July 30, 2024: H1 2024 financial results
October 31, 2024: Q3 2024 trading update

Additional information

Today dsm-firmenich will hold a webcast for investors and analysts at 9:00 am CET. Details on how to access this call can be found on the dsm-firmenich website, www.dsm-firmenich.com.

For more information

Media relations 
Ingvild Van Lysebetten
tel. +41 (0)79 833 72 52
e-mail media@dsm-firmenich.com

Investor relations
Dave Huizing
tel. +31 (0)45 578 2864
e-mail investors@dsm-firmenich.com

About dsm-firmenich

As innovators in nutrition, health, and beauty, dsm-firmenich reinvents, manufactures, and combines vital nutrients, flavors, and fragrances for the world’s growing population to thrive. With our comprehensive range of solutions, with natural and renewable ingredients and renowned science and technology capabilities, we work to create what is essential for life, desirable for consumers, and more sustainable for the planet. dsm-firmenich is a Swiss-Dutch company, listed on the Euronext Amsterdam, with operations in almost 60 countries and revenues of more than €12 billion. With a diverse, worldwide team of nearly 30,000 employees, we bring progress to life™ every day, everywhere, for billions of people.
www.dsm-firmenich.com

Forward-looking statements
This press release may contain forward-looking statements with respect to dsm-firmenich’s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of dsm-firmenich and information currently available to the company. dsm-firmenich cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. dsm-firmenich has no obligation to update the statements contained in this press release, unless required by law. The English language version of this press release prevails over other language versions.

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Kidney Patients Back Bipartisan Bill to Expand Disability Employment

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U.S. Representatives Hoyer and Sessions Lead AbilityOne Modernization Bill

Kidney Disease and Jobs are Focus of National Disability Employment Month

WASHINGTON, Oct. 23, 2026 /PRNewswire/ — The American Association of Kidney Patients (AAKP), the nation’s oldest and largest independent kidney patient advocacy organization, today announced plans to accelerate national grassroots patient advocacy in support of bipartisan legislation that will modernize the federal AbilityOne program. The American Procurement Improvement Act (APIA), H.R. 10443, is championed by U.S. Representatives Pete Sessions (R-TX) and Steny Hoyer (D-MD). AAKP defines kidney disease as both an American healthcare and workforce issue and fights to expand career opportunities and job protections for all Americans impacted by kidney disease, disabilities, and chronic diseases.

The AbilityOne program creates private sector employment opportunities for over 41,000 Americans with severe vision and other disabilities, including nearly 3,000 American Veterans. In FY 2025, the program generated nearly 48 million direct labor hours, an 8 percent increase and a significant measure of disability employment growth, with workers working and working more hours. AbilityOne delivered more than $4.7 billion in products and services to the Federal government in FY 2025 and drew discouraged workers into the U.S. labor force while supporting greater workforce participation, increasing economic independence, and self-sufficiency. The AbilityOne mission taps the underutilized workforce of people with significant disabilities to deliver high-quality, mission-essential products and services to federal agencies, including the U.S. Department of Defense and the U.S. Department of Homeland Security.

The APIA legislation removes outdated statutory barriers to hiring, retention, advancement, and movement into careers of choice, including emerging fields and new lines of business. It also modernizes federal procurement by aligning AbilityOne with contemporary procurement practices and streamlines procurement processes so the program can respond faster to emerging federal agency priorities. The APIA legislation protects taxpayer interests, strengthens program accountability and stewardship by preserving oversight, transparency, and worker protections while modernizing AbilityOne Commission authorities. The legislation is seen as an opportunity to improve federal procurement and strengthen the federal government’s domestic supplier base.

Over 36 million Americans live with kidney disease, over 600,000 are on dialysis, and nearly 100,000 are awaiting a kidney transplant. Further, interrelated cardiovascular, kidney, and metabolic diseases have impacted more than 25% of the adult population and are a leading cause of death. More broadly, the American Heart Association estimates that 90% of U.S. adults, or about 240 million people, have some degree of interconnected cardiovascular, kidney, or metabolic health conditions. For kidney patients dependent upon status-quo, in-center hemodialysis, burdensome thrice-weekly dialysis sessions force many patients, against their own choosing, into unemployment, disability, and dependency. AAKP believes dialysis-related unemployment, and the associated costs borne by families and taxpayers, is one of the media’s least-reported stories in legacy kidney care. AAKP’s policy agenda focuses on transplant readiness, more opportunities for organ transplants, more flexible, patient-centered home dialysis solutions, and stronger job protections for both kidney patients and living organ donors.

AAKP President Edward V. Hickey, III, a chronic kidney disease patient, stated, “AAKP strongly endorses the American Procurement Improvement Act (APIA) and expresses our deepest gratitude to Representatives Steny Hoyer and Peter Sessions for their bipartisan leadership and commitment to Americans managing disabilities and their efforts to secure meaningful employment opportunities with solid wages. People impacted by disability and chronic diseases face tremendous hurdles to continued employment and return to the workforce – especially America’s proud Veterans. This legislation reflects consensus language among stakeholders, including advocates, employers, and organized labor, and sends a very positive message, amid national economic concerns, that the voices and needs of disabled Americans and their families are heard and not forgotten by the U.S. Congress. We encourage Congress to step up and pass this legislation before the close of the year.” Hickey is a U.S. Marine Corps Veteran, a former senior congressional aide, and has served in appointed roles in two presidential administrations, including the U.S. Department of Commerce (DOC) and the U.S. Office of Personnel Management (OPM). At OPM, he was heavily involved in policy issues related to federal Veterans preference in civil service hiring and expanded federal job opportunities. He currently serves on the American Board of Internal Medicine’s (ABIM) Nephrology Specialty Board and as the Chair of the AAKP Veterans Health Initiative, the largest kidney health outreach program outside of the U.S. Department of Veterans Affairs.

October is National Disability Employment Month, and AAKP and its allies remind elected and appointed government leaders to address health and employment concerns that impact patients, families, and communities. Through multiple partnerships, AAKP leads the kidney community in providing kidney patients and transplant recipients, including Veterans, access to virtual job fairs and employment skills training opportunities. AAKP is currently sponsoring virtual job fairs, in partnership with CareerEco, on January 13, 2027, and May 18, 2027, that will service Veterans and military families. AAKP’s past collaborations have included webinars with Idealist and virtual disability and Veteran hiring fairs with Bender Consulting.

AAKP Vice President and Chair of Policy and Global Affairs Paul T. Conway, a 49-year kidney patient and 29-year transplant recipient, stated, “The AbilityOne program has supported private sector employment for people managing disabilities and chronic diseases for nearly ninety years and reflects the exceptional American values of self-reliance and independence. Representatives Steny Hoyer and Pete Sessions have consistently shown respect for the creativity, talents, and skills of disabled citizens and have dedicated their public careers to expanding job opportunities in the workforce and across the federal supply chain. The American Procurement Improvement Act increases accountability for taxpayer funds and will result in more well-paying jobs for Americans whose desire and capacity to work and contribute are underappreciated.” Conway is a former Chief of Staff for both the U.S. Department of Labor and the U.S. Office of Personnel Management and a former Deputy Secretary for Health and Human Resources for the Commonwealth of Virginia. He has overseen multiple federal and state disability employment, workforce training, and health service programs throughout his public career. He is the past Chair of the U.S. Food and Drug Administration’s Patient Engagement Advisory Committee (PEAC) and serves on the Observational Study Monitoring Board of the Kidney Precision Medicine Program (KPMP) administered by the National Institutes of Health, National Institute of Diabetes, Digestive and Kidney Diseases (NIH/NIDDK).

To advance the APIA, AAKP is working with former U.S. Representative Tony Coelho, Chair of the Partnership to Improve Patient Care as well as the Alliance for Expanding America’s Workforce. Along with AAKP, APIA is endorsed by over 60 national patient and disability organizations, labor unions and employers including the American Association of People with Disabilities, SEIU, Bender Consulting, National Council of SourceAmerica Employers, CEO Commission for Disability Employment, the Arc of the United States, National Organization on Disability, National Down Syndrome Society, National Disability Rights Network, National Federation of the Blind, Melwood Inc., WORK Inc., ORC Industries, Employment Source, Opportunity Center, Inc., PARC, ACHIEVE Human Services, Inc., Human Technologies, InspiriTec, PORTCO Inc, PRIDE Industries, Phoenix, Pueblo Diversified Industries, and the Association of People Supporting EmploymentFirst (APSE).

AAKP, alongside a broad and diverse coalition of patient organizations, transplant experts, and Congressional allies, is also working to secure passage of the Living Donor Protection Act (LDPA), S. 1552/H.R. 4582 and H.R. 4583, in 2026. The bipartisan bill protects living organ donors from job and insurance discrimination based solely on their decision to donate a kidney to save another life, barriers cited most often by potential organ donors. The bipartisan legislation is led by Senator Tom Cotton (R-AK) and Senator Kirsten Gillibrand (D-NY). It was voted out of the Senate HELP Committee on February 26, 2026, with full bipartisan support, the endorsement of AAKP, the larger kidney community, and the American Council of Life Insurance (ACLI).

In 2018, with bipartisan support from Congress and the Trump Administration, AAKP and transplant professionals worked with the U.S. Department of Labor’s (DOL) legal team and the DOL Wage and Hour Division to have DOL issue Family and Medical Leave Act (FMLA) protections for living organ donors, based on the original intent of the FMLA’s Congressional co-sponsors (click here to read the letter and click here to watch the video). Congressional passage of the LDPA in 2026 will codify the DOL’s 2018 FMLA job protections and prohibit insurers from discriminating against living donors. Increased living organ donation, improved transplant readiness among kidney patients, and greater opportunities for transplantation have been national goals for decades and were reinforced in 2019 through the Executive Order on Advancing American Kidney Health.

Follow AAKP on social media at @kidneypatient on Facebook, @kidneypatients on X, and @kidneypatients on Instagram, and visit https://aakp.org/ for more information. AAKP patient advocates advance bipartisan kidney policy including: passage of the bipartisan law modernizing the Organ Procurement and Transplantation Network (OPTN) (2023); lifetime transplant drug coverage for kidney patients (2020); the historic Executive Order on Advancing American Kidney Health signed by President Donald Trump (2019); job protections for living organ donors under the Family Medical Leave Act (FMLA) via the U.S. Department of Labor (2018); and Congressional approval of HIV positive organ transplants for HIV positive patients (2013).

MEDIA CONTACT:
Brendan LaCivita
National and Medical Media Specialist
blacivita@aakp.org
(813) 906-7740

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SOURCE American Association of Kidney Patients

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BioVid Launches Mimetics™, AI Research Audiences Built on How Physicians Reason and Decide

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Modeling physician response patterns and behavior, showing an 80–90% match with real physicians on content, reasoning, and emotion. 

BRISTOL, Pa., Oct. 23, 2026 /PRNewswire/ — BioVid, a life science consultancy, today announced the launch of BioVid Mimetics™, a research platform that gives pharmaceutical teams mimetics: synthetic physician audiences modeled on how those audiences reason and decide. Its respondent models are grounded in BioVid’s proprietary MindSet Modeling™ program, large-scale, multi-specialty surveys of practicing physicians that measure the mindsets shaping how they process information, make judgments, and decide. The models are aligned with secondary data on clinical practice, moving beyond generic AI role-play to model the decision logic behind treatment choices.

Like a mimetic drug, each BioVid mimetic is tested against the original: real physicians.

Prescribing data shows what physicians choose, not why. Pharma teams now face more of those “why” questions than research budgets and timelines can absorb. BioVid Mimetics™ applies the social and behavioral science of clinical judgment to model how physicians interpret evidence, weigh benefit against risk, and decide when they know enough to act.

The name comes from pharmacology, where a mimetic earns trust by doing the work of the original molecule. Every BioVid mimetic is tested against that standard, bringing the firm’s long-standing commitment to science-based research to a new method.

“At BioVid, we’ve always believed that better commercial decisions start with a deeper understanding of human behavior,” said Peggy Hirtle, CEO of BioVid. “Our goal was never simply faster or cheaper respondents. It was to reflect how physicians actually reason, with the same scientific rigor clients already trust from BioVid. Mimetics is a new way to put human understanding to work, never a replacement for it.”

“A synthetic respondent can sound right and still reason wrong. The real test is whether it reasons the way the audience does,” said Marco Barcella, Executive Director, Product & Technology at BioVid. “Where the decision warrants, we run the same study with a human cohort and a mimetic cohort and compare the findings, the reasoning, and the mental and emotional responses directly. Clients see where mimetic findings hold and where human research should lead.”

In BioVid’s validation work to date, mimetic and human cohorts have shown an 80% to 90% match on content, reasoning, and emotion across thousands of parallel tests.

BioVid Mimetics™ is available off the shelf or tailored with a client’s own primary research. It supports message and concept testing, positioning, drivers and barriers, segmentation, and opportunity assessment, and includes:

Mimetic Respondents: Mimetic or hybrid studies, with mimetic fieldwork complete in one to two weeks after receipt of required inputs, followed by a full report and readout from BioVid’s research team.

Mimetic Segments App: Segments that client teams question directly, share materials with, and return to between research waves.

Client Customization: Models tailored with a client’s own research, segment profiles, and CRM data, exclusive to that client and firewalled from all others.

To learn more, visit www.biovid.com/mimetics. 

About BioVid

BioVid is a life science consultancy applying behavioral science and AI to commercial and market access strategy. Its offerings include the CIAIRA™ AI platform, Tumor Worlds™, and BioVid Mimetics™. BioVid is a recognized leader in new product demand estimation, commercial communication optimization, and customer and patient segmentation research.

Visit www.biovid.com.

Media Contact:
Sal Zerilli, PhD, Executive Director, Knowledge and Innovation, BioVid
szerilli@biovid.com | 267.201.4008

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SOURCE BioVid

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Egan-Jones Finds Steady CLO Credit Metrics as Interest Rates Turn Higher

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NEW YORK, Oct. 23, 2026 /PRNewswire/ — Egan-Jones released its monthly report on the collateralized loan obligation (CLO) market, finding that credit metrics across the deals it rates held steady even as interest rates and high-yield spreads moved higher in September. For investors, the publication sets these steadier portfolio measures against a tighter rate backdrop.

Among Egan-Jones’ measures, the weighted average rating score, a gauge of the default risk in a deal’s underlying loans where a lower score indicates stronger credit, has improved over the past year. The share of assets rated CCC+ or lower, the weakest tier of loan ratings, has been stable to slightly lower, with a median of 6.1%. As of September 2026, Egan-Jones rated 1,568 CLO deals.

The steadier metrics come as financing conditions shift. The 5-year Treasury yield rose 60 basis points to 5.09%, its highest close of 2026, and on September 16 the Federal Reserve raised rates by 25 basis points, its first increase since 2023. High-yield spreads widened to 312 basis points from their late-August low, while new CLO issuance totaled 91 deals ($38.2 billion), down 12.5% by count from a year earlier.

Higher rates cut both ways for CLOs, according to the analysis: coupons on the underlying loans reset upward, but so do the interest burdens of the borrowers. Egan-Jones points to rising loss severity on distressed exchanges and other selective defaults, and identifies software loans, pressured by concerns over disruption from artificial intelligence, as the weakest sector in CLO portfolios.

Egan-Jones also compares its ratings with those of other agencies across 20 deals, ranking the tranches where views differ most. On that comparison, Egan-Jones currently tends to take a more positive view of CLO credit quality than other credit rating agencies. A full sample rating report on MP CLO VIII, whose largest industry exposure is High Tech Industries at 15.9%, is included.

Taken together, the findings describe a market in which issuance has eased and borrowing costs are rising, while the credit profile of Egan-Jones-rated portfolios remains stable. Watching where pressures such as software exposure and loss severity are building may help investors assess CLO risk as the rate cycle turns.

About Egan-Jones Ratings
Egan-Jones, an NRSRO founded in 1995, offers timely and accurate credit ratings and proxy services.

Media Contact:
sales@egan-jones.com
+1 212 425 0460

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SOURCE Egan-Jones Ratings Co.

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