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Dsm-firmenich — Royal DSM — Shareholder Meeting (April 2016)

40 slides from Dsm-firmenich's shareholder meeting presentation, Apr 29, 2016

  1. Slide 1: Driving Profitable Growth

    Driving Profitable Growth through science-based, sustainable solutions Annual Results 2015 Feike Sijbesma, CEO/Chairman Managing Board Royal DSM Annual General Meeting, April 29 2016 ROYAL DSM HEALTH NUTRITION MATERIALS

  2. Slide 2: Safe harbor statement

    Safe harbor statement This presentation 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. DSM cautions reade

  3. Slide 3: Contents

    SECRET Contents 1 DSM – Introduction 2 Our businesses  Unique, broad, global business in Nutrition  High quality, specialty Materials portfolio  Strong innovation platforms 3 2015 Financial Results 4 Strategy 2018 – Driving profitable growth 5 Q1 Results 2016 Page 2

  4. Slide 4: DSM History - Continued transformation resulted in good platform for growth

    DSM History-Continued transformation resulted in good platform for growth Significant portfolio transformation (in % of DSM sales) Innovation 100%  Built a broad, deep and global  Petrochems  Petrochems  Base  Energy  Energy Chemicals& Pharma Nutrition business Materials  Engineering  Engine

  5. Slide 5: DSM Today – A broad, deep and global Nutrition business and a focused Materials portfolio

    DSM Today – A broad, deep and global Nutrition business and a focused, high-quality, specialty Materials portfolio Sales EBITDA EBITDA% ROCE + JV Sales/EBITDA €7.7bn €1,075m 13.9% 7.6% €1.9 bn/€0.25bn(Pro-rata) Nutrition Materials Animal Human Food Personal Engineering Dyneema Resins & Nutrition Nut

  6. Slide 6: DSM Today - A well balanced and diversified portfolio

    DSM Today - A well balanced and diversified portfolio with global leadership positions in food, feed and specialty materials Net sales by destination (%) Net sales by end-use market (%)1 3% 4% 8% Nutrition – 66% 9% 7% 2% 3% 24% 32% 5% 1% 12% 7% 6% 6% 14% 2% 7% 23% 25% The Netherlands China Nutrition

  7. Slide 7: DSM also expects to extract significant value from exiting its partnerships

    DSM also expects to extract significant value from exiting its partnerships in coming years - DSM share Sizeable Joint Ventures total ~€4bn in FY 2015 sales (~€1.9bn pro-rata), ~€245m FY 2015 EBITDA (pro-rata) while employing ~6,000 people 50% 49% 35% DSM Sinochem Pharmaceuticals Patheon Pharma Chem

  8. Slide 8: Unique, broad and global business in Nutrition

    SECRET Unique, broad and global business in Nutrition Page 7

  9. Slide 9: Nutrition's broad portfolio is providing resilience

    Nutrition’s broad portfolio is providing resilience with limited exposure to single product lines or customer Portfolio of ingredients Sales split over value chain steps Fat soluble vitamins (e.g. A,D,E) Water soluble vitamins (e.g. B,C) Carotenoids Active ingredients Marine PUFAs Microbial PUFAs Fo

  10. Slide 10: Animal Nutrition has a complete portfolio of targeted feed ingredients

    Animal Nutrition has a complete portfolio of targeted feed ingredients and has further growth opportunities beyond the historical core area of poultry Page 9

  11. Slide 11: Human Nutrition is leading in nutritional ingredients

    Human Nutrition is leading in nutritional ingredients and has ample opportunities to further expand in a diversified application landscape 1 Total specialty food ingredients market, excluding ~€20bn of commodity ingredients, e.g., soy proteins 2 Breakdown of targeted markets, excluding Food Specialt

  12. Slide 12: High quality, specialty Materials portfolio

    SECRET High quality, specialty Materials portfolio Page 11

  13. Slide 13: Materials end market segments offer growth options

    Materials end market segments offer growth options enhanced by substitution based on application development capabilities Personal Com. Marine High Perf. Sustainable Automotive Electronics Protection & Sport Textiles Coatings (B&C)2 Replace metals & hazardous materials Replace steel/aluminum & arami

  14. Slide 14: Differentiated approach has led to a more attractive Materials portfolio

    Differentiated approach has led to a more attractive Materials portfolio, with a higher growth and returns profile Low Page 13

  15. Slide 15: Strong innovation platforms

    SECRET Strong innovation platforms Page 14

  16. Slide 16: Innovation Center supports innovation in core businesses and new Emerging Business Areas

    Innovation Center supports innovation in core businesses and develops new Emerging Business Areas Innovation Center Aspirations underpinning Group targets Core Business Support and Growth  Support innovation in core businesses to facilitate earnings growth beyond 2018 Center of Venturing Incubator

  17. Slide 17: Financial Results 2015

    Financial Results 2015 ROYAL DSM HEALTH NUTRITION MATERIALS

  18. Slide 18: Financial Highlights 2015

    Financial Highlights 2015  Solid performance with  Group net sales of €7,722 million up 10% vs 2014 and EBITDA up 4% to €1,075 million  Strong 6% organic growth in Nutrition despite lower Vitamin E prices and strengthened CHF  Performance Materials continued showed a 19% higher EBITDA, driven by

  19. Slide 19: Key financials | Full Year 2015

    Key financials | Full Year 2015 in € million FY 2015 FY 2014 % Change Sales - Continuing Operations 7,722 7,051 10% EBITDA - Continuing Operations 1,075 1,038 4% EBITDA margin - Continuing operations 13.9% 14.7% ROCE - Continuing Operations (%) 1 7.6% 8.2% Profit for the period, before exceptional i

  20. Slide 20: EBITDA development | Full Year 2015

    EBITDA development | Full Year 2015 in € million FY 2015 FY 2014 % Change EBITDA - Continuing Operations 1,075 1,038 4% Nutrition 822 850 -3% Performance Materials 384 323 19% Innovation Center -9 -18 Corporate Activities -122 -117 Discontinued Operations 95 128 Page 19

  21. Slide 21: Dividend proposal to AGM: stable at €1.65

    Dividend proposal to AGM: stable at € 1.65 Dividend overview – 2010-15  Dividend policy “stable and preferably rising” € 1.75  Proposal to AGM on 29 April 2016: Maintain the dividend of €1.65 per ordinary share: – €0.55 interim dividend (paid in August 2015) € 1.50 – €1.10 final dividend (payable

  22. Slide 22: Strategy 2018 – Driving profitable growth

    SECRET Strategy 2018 – Driving profitable growth Page 21

  23. Slide 23: Strategy 2018 – Driving Profitable Growth through science-based, sustainable solutions

    Strategy 2018 – Driving Profitable Growth through science-based, sustainable solutions Climate & IMPROVING 2018 TARGETS Energy FINANCIAL RESULTS Global shifts & Health & Digitization Wellness Growth annual EBITDA growth: high single-digit Cost & Productivity --- annual ROCE growth: Capital high doub

  24. Slide 24: Well-identified initiatives to drive Strategy 2018 targets

    Well-identified initiatives to drive Strategy 2018 targets  DSM is confident it has the right business strategies in place to meet the needs of its customers and succeed in its markets, providing innovative and sustainable solutions  Aim to accelerate growth and outpace market growth in all its ke

  25. Slide 25: Driving profitable growth supported by cost reduction and efficiency improvement programs

    Driving profitable growth supported by cost reduction and efficiency improvement programs  Cost reduction/ efficiency improvement programs target overall savings of €250-300m by 2018 (of which €25m was achieved in 2015)  Enhance financial performance through consistent improvements in capital effi

  26. Slide 26: DSM wide savings in support functions & staff

    DSM wide savings in support functions & staff | Structural savings of €125-150 million to be fully achieved by the end of 2017 Breakdown by function Breakdown by cluster Aim of the program  External benchmark identified savings potential  New organizational/operating model: – Strong business and m

  27. Slide 27: Nutrition improvement program

    Nutrition improvement program Cost savings & efficiency improvements in Nutrition €130-150m by 2018 Breakdown by category Aim of the program  Purchasing savings related to direct raw materials sourcing, energy, intermediates and indirect spend  Fixed costs reduction, including ~100 FTE  Efficienc

  28. Slide 28: Drive growth in Nutrition

    Drive growth in Nutrition Global products and local solutions Capitalizing on every step in the value chain Aspirations 2018 underpinning Group targets  Global leader in nutrition, with broadest  Annual EBITDA growth: portfolio of specialty nutritional ingredients high single-digit  Unparalleled

  29. Slide 29: Growth 2016-2018 in Animal Nutrition

    Growth 2016-2018 in Animal Nutrition | Continued outperformance Animal Nutrition Key actions driving profitable growth  Double-digit growth from feed enzymes and eubiotics solutions, tailored to local conditions / requirements  Growth in underpenetrated species (aqua, pet, dairy)  Leverage Tortug

  30. Slide 30: Growth 2016-2018 in Human Nutrition

    Growth 2016-2018 in Human Nutrition | Step-up to above market growth Human Nutrition Key actions driving profitable growth  Repair growth in North-America, returning Dietary Supplements (Vitamins, Omega-3) and F&B to growth  Continued double-digit growth of i-Health business  Accelerating forward

  31. Slide 31: Materials expects to grow sales above market growth

    Materials expects to grow sales above market growth1 Materials1 Aspirations 2018 underpinning Group targets  Annual EBITDA growth: high single-digit  Annual ROCE growth: high double-digit bps  EBITDA margins: >15% over the period  Above-market sales growth (at stable prices) 1 CAGR % Page 30

  32. Slide 32: Stepping up DSM's sustainability aspirations

    Stepping up DSM’s sustainability aspirations Global sustainability agenda linked to DSM businesses / competences Sustainability aspirations 2010 20151 2020 Malnutrition Climate Change & Energy Dow Jones Sustainability Gold Gold Gold Index Class Class Class  Addressing Deficiencies  Circular Econom

  33. Slide 33: Rewarding partnerships to fight malnutrition around the world

    Rewarding partnerships to fight malnutrition around the world  DSM - UN World Food Program partnership strengthened to combat global malnutrition: double number of beneficiaries to >25m per year  DSM and Unicef collaborate to support micronutrient programs in Nigeria and Madagascar. The partnershi

  34. Slide 34: Rewarding partnerships: We can't be successful in a world that fails

    Rewarding partnerships: “We can’t be successful in a world that fails” Page 33

  35. Slide 35: Rewarding partnerships to compete in the low carbon economy

    Rewarding partnerships to compete in the low carbon economy  Spearheading a group of 80 World Economic Forum CEOs highly supportive of climate action (i.e. statements in FT and NY Times)  Advocating carbon pricing as a key instrument for an orderly transition to a low (fossil) carbon economy. Co-c

  36. Slide 36: Royal DSM CEO co-chair of World Bank Carbon Pricing Coalition

    Royal DSM CEO co-chair of World Bank Carbon Pricing Coalition together with Ségolène Royal, Minister of Ecology, Sustainable Development and Energy of France Page 35

  37. Slide 37: Wrap up

    Wrap up DSM is:  A broad, deep and global Nutrition business and a focused, high-quality, specialty Materials portfolio  Well balanced and diversified portfolio with global leadership positions  Strong innovation platform Committed to Committed to Drive Value Strong balance sheet  Above market g

  38. Slide 38: Q1 2016 Results

    SECRET Q1 2016 Results ROYAL DSM HEALTH NUTRITION MATERIALS

  39. Slide 39: Highlights Q1 2016

    Highlights Q1 2016  DSM reports a strong first quarter  Group net sales up at €1,913 million, with 2% organic growth  Group EBITDA up 19% to €296 million  Nutrition: 6% organic sales growth, EBITDA up 15% and EBITDA margin of 18%  Materials: EBITDA up 10%, supported by low input costs  Group R

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Royal DSM — Shareholder Meeting (April 2016) on 6ix