Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Koninklijke DSM — Investor Day (2013)
26 slides from Dsm-firmenich's investor day presentation, 2013
Slide 1: Driving focused growth
Rolf-Dieter Schwalb, CFO / Member of the Managing Board Driving focused growth DSM Capital Markets Day 2013 Page
Slide 2: Overview
Overview • What has been achieved since 2010 • Mid-term review outcome • Financial policies and metrics to steer the business • Way forward Page
Slide 3: What we have delivered so far
What we have delivered so far Profitability targets 2013 2013 expectation EBITDA € 1.4 - 1.6bn Towards € 1.4bn ROCE >15% 9-10% Sales targets 2015 2013 H1 realization Organic sales growth 5% - 7% annually 1% China sales from US$ 1.5bn to >US$ 3bn US$ 0.8bn High Growth Economies sales from ~32% toward
Slide 4: Overview
Overview • What has been achieved since 2010 • Mid-term review outcome • Financial policies and metrics to steer the business • Way forward Page
Slide 5: Updated 2015 targets
Updated 2015 targets Profit targets 2015 • EBITDA margin (%) 14% -15% • ROCE 11% -12% Sales target 2015 • Organic sales growth 5%-7% annually • China sales towards US$ 3bn • High Growth Economies sales about 45% of total sales • Innovation sales 20% of total sales • ECO+ sales towards 50% of total s
Slide 6: Profit Improvement Program on track
Profit Improvement Program on track Cumulative Benefits (€ million) €250-280m 300 €200-220m €160m 200 PIP Extension PIP 100 DSM Resins 0 2013 2014 2015 • Expected structural annual benefits of €250-280 million by 2015; several programs will continue thereafter • PIP one-off costs in 2013 will be ~ €
Slide 7: Examples of broad range of projects started
Examples of broad range of projects started • The restructuring of DNP sites (Grenzach, Dalry) is progressing as planned • Restructuring of Pharma Chemicals in Linz, Austria has started and will Life Sciences continue to run until 2015. Biosolutions in Capua, Italy is nearly completed • Closure of a
Slide 8: Savings to be fully effective by 2015
Savings to be fully effective by 2015 Annual Savings Provisions / Provisions / by 2015 Impairments 2012 Impairments 2013e Life Sciences ~ €90-100m ~ €70m ~ €25m Materials ~ €110-120m ~ €40m ~ €10m Sciences Corporate ~ €50-60m ~ €40m ~ €45m Activities Total ~ €250-280m ~ €150m ~ €80m DSM Page
Slide 9: Overview
Overview • What has been achieved since 2010 • Mid-term review outcome • Financial policies and metrics to steer the business • Way forward Page
Slide 10: Financial policies clearly defined and unchanged
Thi s im Financial policies clearly defined and unchanged • Priorities for cash allocation unchanged: 1. Capex for organic growth 2. Dividend 3. Acquisitions 4. Cash return to shareholders • Dividend policy “stable and preferably rising dividend” • Commitment to Single A rating • Systematic, risk-ma
Slide 11: Dividend paid to shareholders
Thi s im Dividend paid to shareholders • Dividend policy “stable and preferably Dividend per ordinary share (€) rising” €€1.75 1,75 • Since the announcement of the CSD in 2010, dividend has been increased by 25% from €€1.50 1,50 €1.20 to €1.50 €€1.25 1,25 • Payable in cash or ordinary shares €€1.00
Slide 12: Supportive uptake of stock dividend
Thi s im Supportive uptake of stock dividend 60% % Stock dividend pay out • Of the interim dividend paid on August 28, 49.5% was paid as stock dividend 50% 40% • Current number of treasury shares are sufficient to pay stock dividend until the FY dividend for 2015 30% 20% • In Q4 2013, DSM expects to
Slide 13: Solid financial base, committed to Single A
Thi s im Solid financial base, committed to Single A Debt maturity profile (€ m) • Total long term debt ~€2bn, no covenants 1000 in outstanding bonds • Single A credit rating by Moody’s (A3) and 800 S&P (A) • Committed credit facilities of €1bn, fully undrawn 600 • Updated €4bn EMTN program 400 • Co
Slide 14: OWC development reflects changes in portfolio
Thi s im OWC development reflects changes in portfolio OWC per cluster (in € m) 2500 2000 1500 1000 500 0 2008 2009 2010 2011 2012 2013e Nutrition Pharma PM PI Innovation Base Chem • The move to higher value/specialties business and away from typical chemical commodities has not lead to a relevant c
Slide 15: OWC needs further improvement
Thi s im OWC needs further improvement OWC/sales per cluster 2008-2013e OWC in AR%, AP%, Inventory% 2008-2013e 22% 35% 30% 20% 25% 18% 20% 16% 15% 14% 10% 5% 12% 0% 10% 2008 2009 2010 2011 2012 2013e 2008 2009 2010 2011 2012 2013e Nutrition Pharma PM PI Group Accounts Receivable Accounts Payable Inv
Slide 16: CAPEX
Thi s im CAPEX Cash capex per cluster (€ m) 2008-2012 800 • After a period of low capex, some 686 ~700 700 special projects impacted the overall 592 600 477 spending levels in 2012/2013: 500 457 416 • New ammonium sulfate plant 400 • Second line CPL Nanjing 300 200 • 2G Biofuel POET 100 0 2008 2009
Slide 17: Capex mainly driven by growth ambitions
Thi s im Capex mainly driven by growth ambitions 800 1,6 1.6 700 1.4 1,4 600 1,2 1.2 500 1,0 1.0 Capex Capex/DA DA 400 0.8 0,8 300 0,6 0.6 200 0.4 0,4 100 0,2 0.2 0 0.0 0,0 2008 2009 2010 2011 2012 2013e
Slide 18: Towards an increase in ROCE
Thi s im Towards an increase in ROCE ROCE (%) 20% • Exceptional returns at Polymer Intermediates combined with low capital employed inflated 16% ROCE in 2010/2011 • Over the mid term, the target remains to 12% reach at least 15% ROCE 8% 4% 2009 2010 2011 2012 2015e
Slide 19: Nutrition ROCE impacted by M&A effects
Thi s im Nutrition ROCE impacted by M&A effects 30% 25% 20% ROCE Nutrition cluster ROCE Nutrition before acquisitions 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013e • The Nutrition business before acquisitions continues to realize strong ROCE above 20%, despite the strengthening of CHF in 2011 affecti
Slide 20: Overview
Overview • What has been achieved since 2010 • Mid-term review outcome • Financial policies and metrics to steer the business • Way forward Page
Slide 21: Changes in accounting policy
Thi s im Changes in accounting policy • From 2014 onwards DSM will have to apply IFRS 11 Joint Arrangements • IFRS 11 changes the accounting for entities that are under joint control. This will have an impact on the financial reporting of DSM: Current reporting of JVs JV reporting as of 2014 P&L Pro
Slide 22: High level estimate of IFRS 11 impact
Thi s im High level estimate of IFRS 11 impact • Restated comparative figures for 2013 (per cluster) will be published prior to the Q1 2014 earnings announcement • Information on proportionately consolidated JVs is available in the Integrated Annual Report 2012 (page 202) • The table below presents
Slide 23: Information on joint ventures in future periods
Thi s im Information on joint ventures in future periods • In the annual report: – Mandatory disclosure: Summarized balance sheet and profit and loss accounts for significant joint ventures individually and for all joint ventures in total – Based on the current evaluation, the only joint venture tha
Slide 24: 2013 Outlook
2013 Outlook • Nutrition is expected to show clearly higher results than in 2012 due to organic growth moving towards the target of 2% above GDP and the acquisitions made, with EBITDA margins well within the 20-23% range. However, the recovery in animal protein markets remains fragile, currently lea
Slide 25: Contact
Contact: DSM Investor Relations P.O. Box 6500, 6401 JH Heerlen, The Netherlands (+31) 45 578 2864 e-mail: investor.relations@dsm.com internet: www.dsm.com visiting address: Het Overloon 1, Heerlen, The Netherlands Page
Slide 26: Disclaimer
DISCLAIMER This document may contain forward-looking statements with respect to DSM's future(financial) performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. Examples of forward-looking statem