Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Royal DSM — H1 2017 Earnings Presentation
43 slides from Dsm-firmenich's earnings presentation, 2017
Slide 1: Presentation to Investors H1 2017 results
Presentation to Investors H1 2017 results ROYAL DSM HEALTH NUTRITION MATERIALS
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 rea
Slide 3: Highlights H1 2017
Highlights H1 2017 § Continued good performance in Q2 concludes very strong H1 § Sales up 11% to €4,320m, with 8% organic growth § Adjusted EBITDA up 16% to €721m, driven by both Nutrition and Materials § ROCE up 170 bps to 12.2% § Net profit up 42% to €312m § Interim dividend of €0.58 per ordinary
Slide 4: Highlights Q2 2017
Highlights Q2 2017 § DSM reports a very good Q2 § Sales up 8% to €2,161m, with 6% organic growth § Adjusted EBITDA up 15% to €376m § Nutrition: 4% organic sales growth; Adjusted EBITDA up 14% § Materials: 4% volume growth; Adjusted EBITDA up 9% Page 3
Slide 5: Quote from CEO Feike Sijbesma
Quote from CEO Feike Sijbesma § DSM maintained its positive momentum with a very strong first half-year performance. The second quarter was another very good quarter. Halfway through Strategy 2018, we are well ahead of our targets. All businesses are delivering on their growth initiatives, helping u
Slide 6: Group | Key financials
Group | Key financials in € million H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change Sales 4,320 3,907 11% 2,161 1,994 8% Adjusted EBITDA 721 624 16% 376 328 15% Adjusted EBITDA margin 16.7% 16.0% 17.4% 16.4% ROCE (%) 12.2% 10.5% Adjusted net profit 338 244 39% 175 135 30% Net profit - Total DSM 31
Slide 7: Group | Net sales development
Group | Net sales development in € million H1 2017 H1 2016 % Change Volume Price/mix FX Other Sales 4,320 3,907 11% 6% 2% 3% 0% Nutrition 2,778 2,545 9% 5% 1% 3% 0% Materials 1,426 1,240 15% 8% 5% 1% 1% Innovation Center 84 83 1% 6% -6% 1% 0% Corporate Activities 32 39 in € million Q2 2017 Q2 2016 %
Slide 8: Group | EBITDA development
Group | EBITDA development in € million H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change Adjusted EBITDA 721 624 16% 376 328 15% Nutrition 528 462 14% 271 237 14% Materials 241 212 14% 128 117 9% Innovation Center 1 1 0 0 Corporate Activities -49 -51 -23 -26 Page 7
Slide 9: Nutrition | Sales overview
Nutrition | Sales overview Sales bridge | H1 2016 to H1 2017 Sales bridge | Q2 2016 to Q2 2017 2,778 1,380 0% 0% 3% 3% 1% 0% 5% 4% 2,545 1,295 H1 2016 Volume Price/mix FX Other H1 2017 Q2 2016 Volume Price/mix FX Other Q2 2017 § Nutrition is well on track towards its aspirations as outlined in Strat
Slide 10: Nutrition | Key financials
Nutrition | Key financials in € million H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change Sales 2,778 2,545 9% 1,380 1,295 7% Adjusted EBITDA 528 462 14% 271 237 14% Adjusted EBITDA margin (%) 19.0% 18.2% 19.6% 18.3% Adjusted EBIT 383 326 17% 198 165 20% Capital Employed 5,431 5,391 Average Capital
Slide 11: Animal Nutrition & Health | Sales overview
Animal Nutrition & Health | Sales overview Sales bridge | H1 2016 to H1 2017 Sales bridge | Q2 2016 to Q2 2017 1,263 629 0% 0% 4% 3% 3% 0% 4% 2% 1,138 598 H1 2016 Volume Price/mix FX Other H1 2017 Q2 2016 Volume Price/mix FX Other Q2 2017 § Animal Nutrition continued to make good progress with its g
Slide 12: Human Nutrition & Health | Sales overview
Human Nutrition & Health | Sales overview Sales bridge | H1 2016 to H1 2017 Sales bridge | Q2 2016 to Q2 2017 1,019 507 0% 0% 3% 2% -1% -1% 7% 7% 934 467 H1 2016 Volume Price/mix FX Other H1 2017 Q2 2016 Volume Price/mix FX Other Q2 2017 § The initiatives undertaken at Human Nutrition over the last
Slide 13: Materials | Sales overview
Materials | Sales overview Sales bridge | H1 2016 to H1 2017 Sales bridge | Q2 2016 to Q2 2017 1,426 725 1% 1% 1% 1% 5% 7% 8% 4% 1,240 640 H1 2016 Volume Price/mix FX Other H1 2017 Q2 2016 Volume Price/mix FX Other Q2 2017 § Materials continued to make solid progress in executing its strategy in H1
Slide 14: Materials | Sales overview (cont’d)
Materials | Sales overview (cont’d) § DSM Engineering Plastics showed strong sales growth in its high-performance specialty plastics – Good demand in automotive in Europe and Asia, while automotive in the US showed some signs of weakening in the second quarter – Demand in electrical & electronics wa
Slide 15: Materials | Key financials
Materials | Key financials in € million H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change Sales 1,426 1,240 15% 725 640 13% Adjusted EBITDA 241 212 14% 128 117 9% Adjusted EBITDA margin (%) 16.9% 17.1% 17.7% 18.3% Adjusted EBIT 177 148 20% 96 86 12% Capital Employed 1,807 1,775 Average Capital Emplo
Slide 16: Innovation | Key financials
Innovation | Key financials in € million H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change Sales 84 83 1% 41 40 3% Adjusted EBITDA 1 1 0 0 Adjusted EBIT -12 -10 -7 -5 Capital Employed 592 559 § DSM Biomedical reported stable H1 sales when compared to the same period last year – The comparison is imp
Slide 17: Corporate Activities | Key financials
Corporate Activities | Key financials in € million H1 2017 H1 2016 Q2 2017 Q2 2016 Sales 32 39 15 19 Adjusted EBITDA -49 -51 -23 -26 Adjusted EBIT -70 -68 -31 -35 § H1 Adjusted EBITDA slightly improved compared to H1 2016, as a result of the progress in cost savings being implemented Page 16
Slide 18: Key joint ventures/associates | Financial overview
Key joint ventures/associates | Financial overview in € million, based on 100% H1 2017 H1 2016 % Change Q2 2017 Q2 2016 % Change DSM Sinochem Sales 217 226 -4% 107 114 -6% Adjusted EBITDA% 15% 15% 14% 14% ChemicaInvest Sales 996 892 12% 461 437 5% Adjusted EBITDA% 8% 2% 7% 0% § DSM Sinochem Pharmace
Slide 19: Joint ventures/associates | Net result contribution
Joint ventures/associates | Net result contribution in € million H1 2017 H1 2016 Q2 2017 Q2 2016 DSM Sinochem (50%) 4 4 1 1 Patheon (33.5%) 1 9 -21 2 -9 ChemicaInvest (35%) 0 -10 0 -7 Other associates / joint ventures -14 -9 -10 -4 Total share of the profit of -1 -36 -7 -19 associates/joint ventures
Slide 20: Cash flow and Working Capital | Overview
Cash flow and Working Capital | Overview Cash Flow, Capital Expenditures and Financing Average Working Capital % 40% YTD YTD H1 2016 H1 2017 in € million H1 2017 H1 2016 Q2 2017 Q2 2016 30% 27.8% 27.6% Cash from Operating Activities 329 319 133 182 Total Working Capital 1,591 1,481 18.9% 20% 18.3% T
Slide 21: Net debt and ROCE | Overview
Net debt and ROCE | Overview Net debt ROCE 3,000 25% H1 2016 H1 2017 2,466 19.5% 2,205 20% 16.9% 2,000 13.9% 15% 12.2% 12.3% 10.5% 10% 1,000 5% 0 0% H1 2016 H1 2017 Total DSM Nutrition Materials § Net debt amounted to €2,205 million compared to €2,466m end of June 2016 – The decrease of €261 million
Slide 22: Interim dividend proposal
Interim dividend proposal | DSM will pay an interim dividend of €0.58 per ordinary share for 2017 § Dividend policy “stable and preferably rising” Dividend per ordinary share - € § DSM will pay an interim dividend of €0.58 per ordinary share for 2017 2.00 6.0% 1.75 – As usual, this represents one th
Slide 23: Update on Strategy 2018 | Driving Profitable Growth
Update on Strategy 2018 | Driving Profitable Growth ROYAL DSM HEALTH NUTRITION MATERIALS
Slide 24: Strategy 2018 | Summary and 2016 achievements
Strategy 2018 | Summary and 2016 achievements Two headline High single-digit percentage High double-digit basis point financial targets annual Adjusted EBITDA growth annual ROCE growth Achievements to date: § 2016: 17% § 2016: 280 bps § H1 2017: 16% § H1 2017: 170 bps1 Clear actions identified to Bu
Slide 25: Nutrition | Essential nutritional ingredients for animal feed & human food
Nutrition | Essential nutritional ingredients for animal feed & human food Nutrition | Value proposition Nutrition | Strategy 2018 § Increase the nutritional content of feed and food § Enable feeding a growing global population with the scarce natural resources available New products & § Reduce the
Slide 26: Nutrition | ‘Sustainable solutions’ drive ‘above market growth’ aspiration
Nutrition | ‘Sustainable solutions’ for food and feed drive ‘above market growth’ aspiration People § Feeding a growing more urban, global population § Ensuring healthier food, promote well-being at all ages and avoid diseases § End hunger, combat malnutrition Planet Profit § Addressing scarcity of
Slide 27: Nutrition | Sustainable solutions in Animal Nutrition
Nutrition | Outpacing market growth through sustainable solutions in Animal Nutrition In line with Nutrition Strategy 2018, Animal Nutrition is growing profitably by expanding its core, creating new products and solutions, by growing in underpenetrated categories/ regions, and by accessing new segme
Slide 28: Nutrition | Sustainable solutions in Human Nutrition
Nutrition | Outpacing market growth through sustainable solutions in Human Nutrition In line with Nutrition Strategy 2018, Human Nutrition is growing profitably by expanding its core, creating new products and solutions, by growing in underpenetrated categories/ regions, and by accessing new segment
Slide 29: Materials | High quality, specialty materials portfolio
Materials | High quality, specialty materials portfolio Materials | Value proposition Materials | Strategy 2018 § Replacing existing materials (e.g metals, hazardous materials) with sustainable alternatives offering better performance in combination with reduced ECO footprint – Offering innovative l
Slide 30: Materials | Driving substitution growth with sustainable specialty products
Materials | Driving substitution growth with higher-value, more sustainable specialty products People § Safer, responsible production, handling, application § Addressing high demanding customer needs § Providing highest performance Planet Profit § Reducing water and energy use § Sustained mid-single
Slide 31: Materials | Sustainable solutions in Materials
Materials | Outpacing market growth through sustainable solutions in Materials § DSM Engineering Plastics § DSM Dyneema – Next generation high-temperature polyamides – Lighter ropes, slings, cargo nets and fishing nets for and high-performance thermoplastics for fuel efficiency better, smarter, safe
Slide 32: Materials | Sustainable solutions in Materials (cont’d)
Materials | Outpacing market growth through sustainable solutions in Materials (cont’d) § DSM Resins & Functional Materials § DSM Biomedical – Leading the substitution push from solvent to – Biomedical materials that speed up recovery, water and other sustainable coatings shorten hospital stays, and
Slide 33: Sustainable solutions will continue to drive earnings growth beyond 2018
Sustainable solutions will continue to drive earnings growth beyond 2018 § DSM has set itself strategic targets for the period to 2018. At the same time, we are also preparing for further longer- term growth § Range of key business and innovation projects across the clusters will drive earnings grow
Slide 34: Cost savings & efficiency | Cost reduction and efficiency programs
Cost savings & efficiency | Driving profitable growth supported by cost reduction and efficiency improvement programs Cost savings: total €250-300m by 2018 Timing of cumulative cost savings ~€m Realized Forecast Nutrition 400 Program €130-150m 300 DSM-wide (by 2018) support 200 functions ~110 €125-1
Slide 35: Cost savings & efficiency | FTE reduction on track
Cost savings & efficiency | FTE reduction on track and one-time costs within budget Cumulative FTE reduction1 One-time costs ~€m ~€m 5,000 Realized Forecast Realized Forecast ~4,400 250 4,000 200 3,000 150 2,000 100 ~80 ~80 ~70 900-1,100 1,000 ~840 50 0 0 Total FTE in Support H1 2017 Reduction targe
Slide 36: Cost savings | Support functions & staff costs efficiency program
Cost savings & efficiency | DSM-wide support functions & staff costs efficiency program continues to run on track, near end of the program Savings: €125-150m1 Progress (%) Remarks Achieved by end of H1 2017 Remaining 2017/ Run Rate EoY § Shared Services Improvement Plan completed, incl. shift of mos
Slide 37: Cost savings | Nutrition-specific improvement program
Cost savings & efficiency | Nutrition-specific improvement program running well: purchasing savings ahead of plan and cost-reductions on track Savings: €130-150m1 Cost improvements Work streams closely monitored and on track Current status as per end H1 2017: Actions Financial benefits Purchasing §
Slide 38: Capital efficiency | Disciplined approach to capital allocation
Capital efficiency | Disciplined approach to capital allocation § Capital efficiency is a key driver of cash generation; in 2016 we undertook a number of improvement projects in this area throughout DSM – One of these has been to take a more integrated approach to business planning, in particular in
Slide 39: DSM’s strategy aligned with UN Sustainable Development Goals
DSM’s strategy is well aligned with the UN Sustainable Development Goals: Identified 5 SDGs on which we believe can be most influential Page 38
Slide 40: Stepping-up sustainability aspirations on our own operations
Stepping-up sustainability aspirations on our own operations § Sustainability actions in DSM’s own operations – uniformly applied to our operations around the globe – result improved eco footprint and in lower risks and lower cost Leader in Sustainalytics 1. Relative improvement as compared to basel
Slide 41: Sustainability agenda is core to DSM’s business strategy
As a result, sustainability agenda is core to DSM’s business strategy1 Key sustainability focus areas Climate & Circular & bio- Nutrition energy based economy Sustainability as business growth driver Brighter Living Solutions: ECO+ and People+1 H1 2017 ECO+ People+ § Profitable solutions better for
Slide 42: DSM Investor Seminar 2017
DSM Investor Seminar 2017 Delft/The Hague - 25 September 2017 ROYAL DSM HEALTH NUTRITION MATERIALS
Slide 43: Page 42
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