Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Royal DSM — FY2020 Earnings Presentation
58 slides from Dsm-firmenich's earnings presentation, February 2021
Slide 1: Presentation to Investors: Full year 2020 results
Presentation to Inve Full year 2020 results DSM BRIGHT SCIENCE. BRIGHTER LIVING.
Slide 2: Content
Content = Q4 & Full Year 2020 results Presentation to Investors = Annex: v¥ Summary Key Financials Q4 and Full Year 2020 Y The strategic journey continues - new growth opportunities
Slide 3: Co-CEOs statement
Slide 4: Full year 2020 financial highlights | Solid results
Full year 2020 financial highlights | Solid results Solid results, led by good results in Nutrition and with a strong recovery in Materials in Q4 Continuing operations: reagetest Recents onetting = Solid results in a challenging COVI D-19 environment €8,106m €1,534m Fee (eatery = Group sales of €8,1
Slide 5: Q4 2020 highlights | A good Q4 despite significant negative FX
Q4 2020 highlights | A good Q4 despite significant negative FX Continuing operations: Adj. Net = DSM reports a good Q4 despite significant negative FX effects Net Sales* Adj. EBITDA* Operating €2,080m €390m Free Cash Flow = Group sales +8% and Adjusted EBITDA +5%: ? €316m Y Nutrition: sales +10%, or
Slide 6: Outlook 2021
Outlook 2021 DSM expects to deliver an Adjusted EBITDA increase in Nutrition at the upper end of its mid-term strategic ambition of high single digit growth Together with continued recovery in Materials, DSM expects an Adjusted EBITDA growth rate for the Group moving into double digits, with a conti
Slide 7: Nutrition
Nutrition
Slide 8: Nutrition | progress in 2020
Nutrition | progress in 2020 ashen @osm Oo “ee cS fm Completing a change program (‘Fit for Growth’) Y Positioned DSM closer to its customers v Further reducing internal costs and complexities Suc = Expanding portfolio of specialty nutrition activities through 3 acquisitions for a combined outlay of
Slide 9: Nutrition FY 2020 | Highlights
Nutrition FY 2020 | Highlights Full year 2020 Sales = Good performance in 2020 = Slightly positive impact from COVID-19 overall Adj. EBITDA = Strong increase in demand for immunity-optimizing products in Net Sales Adj. EBITDA margin Human Nutrition €6,365m €1,338m 21.0% = Good demand for packaged fo
Slide 10: Nutrition Q4 2020 | Highlights
Nutrition Q4 2020 | Highlights Q4 2020 sales = Continued strong demand in Dietary Supplements and Pharma in Human Nutrition ‘Adj. EBITDA = Resumption of good demand after destocking of Q2 and Q3 in Net Sales Adj. EBITDA margin Animal Nutrition €1,594m €324m 20.3% = Food Specialties had a strong fini
Slide 11: Animal Nutrition FY 2020 | Highlights
Animal Nutrition FY 2020 | Highlights Net Sales €3,025m 45% total sales growth Organic growth +8% Acquisition of Erber’s Biomin and Romer Labs =Biomin= sie Naturally ahead omer Lan Volumes +4% Price/mix +4% FX -6% M&A +3% 11 Full year 2020 organic sales Q1 saw a strong COVID-19 accelerated purchasin
Slide 12: Animal Nutrition Q4 2020 | Highlights
Animal Nutrition Q4 2020 | Highlights Net Sales €802m +9% total sales growth Organic growth +7% Closing acquisition of Erber’s Biomin and Romer Labs Volumes +5% Price/mix +2% FX -9% M&A +11% 12 Q4 2020 organic sales With the destocking completed in Q3, DSM saw strong demand in poultry and swine and
Slide 13: Erber/Biomin acquisition consolidated from October 2020
was consolidated from 1 October 2020 Strong contribution in its first quarter within DSM (Q4 2020) realizing €81 million sales, with a total Adjusted EBITDA of €18 million Erber acquisition: Gives DSM market leadership in Consolidates its position as one of the world’s largest and most innovative Ex
Slide 14: Human Nutrition FY 2020 | Highlights
Human Nutrition FY 2020 | Highlights Net Sales €2,143m +5% total sales growth Organic growth +5% Acquisition of global leader in HMO’s Glycom Volumes +7% Price/mix -2% FX -2% M&A +2% Full year 2020 organic sales = Dietary Supplements and Pharma recorded a very strong performance throughout 2020, as
Slide 15: Human Nutrition FY 2020 | Highlights
Human Nutrition FY 2020 | Highlights = Acquisition of Glycom, the world’s largest developer and producer of human milk oligosaccharides (HMOs) Y Consolidated as from 1 April 2020, delivered €43 million sales and Adjusted EBITDA of €21 million (Q2-Q4) vIn Q4, Glycom delivered €14 million sales and Ad
Slide 16: Human Nutrition Q4 2020 | Highlights
Human Nutrition Q4 2020 | Highlights Q4 2020 organic sales = Strong results in Dietary Supplements and Pharma = Performance in Food & Beverages was solid Net Sales Organic growth Strong demand = Early Life Nutrition was weak for solutions : wo. : . tet 7 €479m +9% optimizing = Prices significantly i
Slide 17: DSM sales from immunity optimizing ingredients
i DSM sales from -immdnity optimizing ‘== Ingredients are alfeady more than 1 billion’ euros in 2020 @osm
Slide 18: Other Nutrition activities FY 2020 | Highlights
Other Nutrition activities FY 2020 | Highlights Full year 2020 organic sales = DSM’s other Nutrition activities (Food Specialties and Personal Care & Aroma Ingredients) delivered +3% organic growth in 2020 ¥ Good performance in Food Specialties and Aroma Ingredients Other Nutrition Food Personal Car
Slide 19: Other Nutrition activities FY 2020 | Highlights
Other Nutrition activities FY 2020 | Highlights On December 30, 2019 DSM completed the acquisition of specialty dairy solutions provider Koninklijke CSK Food Enrichment C.V. (“CSK”) v_ Highly complementary combination of DSM’s dairy business and CSK’s business greatly strengthens DSM’s ability to se
Slide 20: Materials
Slide 21: Materials | Progress in 2020
Materials | Progress in 2020 In response to the sudden drop in demand at the end of Q1 owing to the pandemic, DSM acted promptly to minimize capex and operating costs After the summer a new costs savings program started, part of an ongoing wider structuring initiative to leverage synergies and incre
Slide 22: Materials FY 2020 | Highlights (continuing operations)
Materials FY 2020 | Highlights (continuing operations) Full year 2020 sales development = Performance was significantly impacted by COVID-19 = Demand deteriorated abruptly at the end of Q1. Following a slow Adj. EBITDA recovery over the summer, Materials saw a strong improvement Net Sales Adj. EBITD
Slide 23: Materials Q4 2020 | Highlights (continuing operations)
Materials Q4 2020 | Highlights (continuing operations) Q4 2020 sales development = Engineering Materials reported an exceptionally strong quarter with +17% volume growth owing to a strong return in global car : builds and stocking through the automotive value chain. ’ Adj. EBITDA Electronics continu
Slide 24: Innovation Center | Highlights (continuing operations)
Innovation Center | Highlights (continuing operations) = In 2020, the Innovation Center continued to support the creation of innovation-based opportunities for future earnings growth throughout DSM = Full year sales were in line with the previous year. DSM Biomedical delivered a solid performance ev
Slide 25: Strong Cash generation & reduction Working Capital in 2020
Strong Cash generation & reduction Working Capital in 2020 Adj. Net Operating Free Cash Flow* €872m +18% Adj. Net Operating FCF growth * Continuing Operations Total Working Capital /sales* end of 2020 19.0% 350bps improvement vs end of 2019 Net Debt €2,577m Up (€1,144m end of 2019) Adjusted Net Oper
Slide 26: DSM fully committed to its sustainability ambitions
_psM fully. committed: to. _its ‘sustainability. ree ons “ ae
Slide 27: Full year 2020 sustainability highlights
Full year 2020 sustainability highlights DSM well on track achieving its sustainability ambitions 2021/2030 ambition Purchased Employee renewable engagement exaavey ap ill ae aaa vs 2016 cu) 2030 by 2020 Energy efficiency Safety Female SFRI index executives <0.25 25% by 2021 by 2021 GHG reduction -3
Slide 28: Introducing Team DSM: Being the best we can be
Slide 29: Summary Key Financials
Slide 30: Key financials (continuing operations)
Key financials (continuing operations) in € million 2020 2019. % Change Q4 2020 Q42019 % Change Sales 8,106 7,998 1% 2,080 1,934 8% Adj. EBITDA 1,534 1,551 -1% 390 373 5% Adj. EBITDA margin 18.9% 19.4% 18.8% 19.3% EBITDA 1,368 1,457 348 324 ROCE (%) 10.4% 12.3% Effective tax rate’ 18.5% 19.1% Adjust
Slide 31: FY 2020 and Q4 2020 Sales & Adj. EBITDA (margin)
FY 2020 and Q4 2020 Sales & Adj. EBITDA (margin) — (continuing operations) Full year Full year in € million 2020 2019 % Change Volume _Price/mix FX Other Sales 8,106 7,998 1% 3% -1% -3% 2% Nutrition 6,365, 6,028 6% 5% 1% -3% 3% Materials 1,518 1,744 -13% -6% -6% -1% 0% Adj. EBITDA 1,534 1,551 -1% Nu
Slide 32: Financial details by cluster
Financial details by cluster DSM Nutrition in € million 2020 2019 % Change Q4 2020 _Q42019 _% change Sales 6,365 6,028 6% 1,594 1,455, 10% ‘Adj. EBITDA 1,338 1,250 7% 324 294 10% Adj. EBITDA margin (%) 21.0% 20.7% 20.3% 20.2% Adj. EBIT 919 881 4% 202 194 4% Capital Employed 8,308 6,731 Average Capit
Slide 33: Financial details
Financial details Innovation Center (continuing operations) in € million 2020 2019 Q4 2020 _Q42019 Sales 184 184 51 51 Adjusted EBITDA 2 26 5 7 Adjusted EBIT 7 -12 4 5 Capital Employed 436 599 Corporate Activities in € million 2020 2019 Q4 2020 _Q4 2019 Sales 39 42 9 1 Adjusted EBITDA -97 -97 “2h -2
Slide 34: Cash Flow, Working Capital and ROCE%
Cash Flow, Working Capital and ROCE% Condensed Cash Flow statement and (Operating) Working Capital Average Total Working Capitalas % of Sales © ROCE (% in € million 2020 2019 _Q4 2020 Q4 2019 30 Cash provided by Operating Activities 1,360 1,265 454 400 750 = 2019 = 2020 . Cash from APM adjustments 8
Slide 35: Proposed Total Dividend for 2020: stable at €2.40 per ordinary share
Proposed Total Dividend for 2020: stable at €2.40 per ordinary share = Interim Dividend € m Final Dividend € 2.40 2.40 45 1.65 1.65 1.65 1.75 1.45 1.50 1.35 1.20 1.20 1.20 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 35 @osm
Slide 36: The strategic journey continues
‘i mer press World Recourses Institute: C OM : 00M people “one of the 10 breakthrough = loz] technologies that can help feed the world without destroying it” The stravegicy U journey continues. ST dairy -12% greenhouse print for dairy ~0.5% total GHG. emissions in California UTRITIONSS HEAL IL i Pe
Slide 37: Royal DSM @ a glance (2020)
Royal DSM @ a glance* (2020) Materials Food Specialties Personal Care & Aroma Human Nutrition *continuing operations only Animal Nutrition History: Sales: Global: Workforce: Innovation: Sustainability: Founded in 1902 (Netherlands) €8.1bn Sales, >80% in Nutrition ~ 35% of sales to the Americas ~ 35%
Slide 38: DSM's global presence
DSM’s global presence* Well balanced across the globe Sales by Origin (2020) Chi 1%, Netherlands 19% Netherlands 5% Asia 4% Latin America 8% Switzerland 27% North America 171% . Rest of Latin Europe America 13% 13% *continuing operations only 38 aa <4 DSM
Slide 39: DSM's Strategy - Growth & Value
DSM’s Strategy - Growth & Value Our Purpose led, Performance driven strategy stands firm Our competences > provide growth > creating a growth and purpose... opportunities in company... our focus domains... Our key competences + a science-based company addressing megatrends and active in Nutrition, H
Slide 40: DSM's unique and successful business model in Nutrition
DSM’s unique and successful business model in Nutrition Broad, global portfolio in nutritional ingredients & local solutions Natural Preservatives Colorants Ca Is Other Food/Feed Ingredients Clean Cow Veramaris Mycotoxin Risk Management Sweeteners 40 Market Segments Lo cal Solutions Regions N-AM L-A
Slide 41: We have built a unique & successful Nutrition business
We have built a unique & successful Nutrition business +6% / +10% / +4008p8) Za Za ~Z= Organic sales growth Adj. EBITDA growth EBITDA% improvement CAGR 2015-20" CAGR 2015-20" 2015 vs. 2020! 1 Underlying business a @osm
Slide 42: Drivers Animal Nutrition
Drivers Animal Nutrition Global population growth & sustainability drive mid-single digit growth wW - | a > te Sales Poultry Swine Ruminants Aqua Pet Onelerboy 45% 20% 20% 10% 5% Growing Population Ensure enough food for everyone within planetary boundaries g Pop s' y p y @eee HELPING TACKLE REDUCIN
Slide 43: Drivers Human Nutrition (incl Food Specialties and PCA)
Drivers Human Nutrition (incl Food Specialties and PCA) Health solutions & end-market focus driving mid-single digit growth ¢ = ® uli 8 s Mm tay il cl Early Life Food & Dietary Pharma / Medical Personal Care Nutrition Beverage Supplements Nutrition & Aroma Sales (€3 Bn) €0.5 Bn €0.9 Bn €0.8 Bn €0.3
Slide 44: Acquisitions and innovations strengthen our value propositions
Acquisitions and innovations strengthen our value propositions Acquisitions aalen CSK GLYCQM \ =Biomin= Naturally ahead p> 4h Global Products Local Solutions Regions N-AM L-AM EMEA APAC CHINA , = te) =z Ss 25 a SQ—__——_—- =z = — EE 5S 2 Sp Innovation projects @veramaris Co sae Bovaer® Balancius® Can
Slide 45: Health through Nutrition — developments in science & technology
Health through Nutrition — developments in science & technology opening up exciting new opportunities in Nutrition Trends and societal challenges Lifesciences & technology breakthroughs Consumer Society Environment Biotechnology Data & Digital Precision & breakthroughs Personalization @osm
Slide 46: Growth platforms support our innovation
Growth platforms support our innovation Providing focus to our deep innovation pipeline nabled busin Prevention Prevent health issues, boost immunity Healthy solutions provided by nature Proteins Driving adoption of sustainable proteins to feed the population Pathways Sustainable (biotech-based) ing
Slide 47: Continuing to advance our innovation projects
Continuing to advance our innovation projects While expanding its innovation pipeline with new programs Veramaris We are uniquely positioned to create the m value for odf IMMUNITY Boost
Slide 48: Next frontier for Nutrition: Precision & Personalization
Next frontier for Nutrition: Precision & Personalization Adding new dimension to business model Powered by Data & Bioscience as a know-how Customer relevance multiplier & Reach Broad regional network for Local Solutions Science & Scale Unique portfolio of Global Products 48
Slide 49: Adding new opportunities in 'Health through Nutrition'
Adding new opportunities in ‘Health through Nutrition Precision feeding in animal nutrition and personalization in human nutrition Precision Farming -You can only act oy wl what you measure New DSM i - sustainability service creates transparency on environmental footprint for farmers aAva™ Personali
Slide 50: Nutrition - Attractive market delivering strong performance
Nutrition - Attractive market delivering strong performance via “Health through Nutrition” Mid single i Attractive market + Unique position Precision & Personalization organic sale voit >20% adjusted EBITDA margin 2 ae = —,' Global Products Local Solutions Wosm High single aig % ani adjusted EBITDA
Slide 51: Trends: DSM Materials ideally positioned to benefit
Trends: DSM Materials ideally positioned to benefit from this trend:
Slide 52: Materials | Accelerating Profitable Growth
Materials | Accelerating Profitable Growth Accelerating our Mid single digit % + >20% adjusted — High single digit % profitable growth organic sales EBITDA margin annual adjuste growth EBITDA growth .. with continued R commitment to our iy MISSIONZERO500 business strategies... Powered by You .. will
Slide 53: DSM Group | Strategic priorities and key path forward
DSM Group | Strategic priorities and key path forward Deliver on current performance expectations... Uiraintain strong purpose led performance and be partner of choice for customers , Deliver on our innovation promise Synergize recent M&A Align organization to future needs 7 Yosm
Slide 54: DSM Group | Financial policies
DSM Group | Financial policies wy — ~50-60% focused on growth 2) qth _d _—_ TY \> Stable, Prudent & To be considered preferably disciplined, in the absence of rising value creation value-creating is key M&A y, y, J Mid-term capital structure: 1.5-2.5x net debt / Adj. EBITDA Committed to maintaining
Slide 55: DSM is fully committed to its long-term sustainability ambitions
DSM is fully committed to its long-term sustainability ambitions Energy Purchased Safet Female efficiency Renew. Employee y executives oA SFRI >1% avg. p/yr. electricity elie azemen’ 25% till 2030 75% by >75% by 2021 J <0.25 by 2021 by 2021 2030 55 @osm
Slide 56: For more information, please visit our Factbook online
For more information on DSM’s portfolio, products & Ee ON strategy, please visit our Factbook online MATERIALS, GU ’ ENGINEERING MATERIALS ALL COMBINED. dy
Slide 57: Safe harbor
Safe harbor This presentation may contain forward-looking statements with respect to DSM’s future performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statement
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