Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Royal DSM — Investor Day (September 2012)
37 slides from Dsm-firmenich's investor day presentation, Sep 27, 2012
Slide 1: DSM in motion: driving focused growth
DSM in motion: driving focused growth Feike Sijbesma CEO / Chairman Managing Board Capital Markets Days 2012
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
Slide 3: Overview
Overview • Building a higher value business • Achievements 2010-2012 • Confidence in targets
Slide 4: DSM in motion: driving focused growth
Thi s im DSM in motion: driving focused growth
Slide 5: Building a higher value business
Thi s im Building a higher value business … • Portfolio transformed; Sales* (€ m) DSM’s clusters significant presence in Nutrition • Further progress Pharma; improvements & partnership discussions • Solid development Performance Materials • Global, low cost leadership position Polymer Intermediates
Slide 6: …well positioned for further growth
Thi s im …well positioned for further growth EBITDA* (€ m) DSM’s clusters • 67%* EBITDA 2012 H1 from Nutrition • Synergistic acquisitions adding value • Strong balance sheet provides ability 67%* to pursue further growth opportunities * 2012 H1 including pro-forma EBITDA Kensey Nash, ONC and Tortuga
Slide 7: …shifting towards more resilient end-markets
…shifting towards more resilient end-markets Net sales 2011 by end-market • Growing majority of portfolio geared towards attractive end-markets with Others Health & low GDP sensitivity Building & Nutrition* Construction • Acquisitions such as Kensey Nash, Ocean Nutrition Canada and Tortuga Auto- fur
Slide 8: …in a truly global context
…in a truly global context 2012 H1* Sales • Better international spread, North capturing mega trend opportunities America High Growth • Moving towards 50% sales from Economies High Growth Economies by 2015 • On target to double sales in China to > US$ 3bn by 2015 (2012 H1: US$ 0.9bn - 15% of DSM sal
Slide 9: Overview
Thi s im Overview • Building a higher value business • Achievements 2010 - 2012 • Confidence in targets
Slide 10: Nutrition: continued sales & EBITDA growth
Thi s im Nutrition: continued sales & EBITDA growth Strong growth in Nutrition, organically and through € 1.8bn acquisitions since 2010: - broadening portfolio - extension value chain - increased global presence Sales development (€ m)* DSM’s Global Presence EBITDA development (€ m)* * 2012 H1 Sales
Slide 11: Nutrition: expanding portfolio & geo-spread
Thi s im Nutrition: expanding portfolio & geo-spread • Including Ocean Nutrition Canada and Expansion in food & feed (Sales € bn) Tortuga, Nutrition businesses will have: - ~ € 4.4bn in revenues - 20-23% EBITDA - ~ 67% of total DSM EBITDA(*) - 55 pre-mix plants • DSM created an unique position in nu
Slide 12: Nutrition: acquisitions fuel further growth
Thi s im Nutrition: acquisitions fuel further growth Acquisition Portfolio Key Region** Sales Growth*** EBITDA Omega 3 DHA Martek N-AM ~ € 350m* > 10% ~ € 100m Omega 6 ARA Omega 3 EPA ONC N-AM ~ € 150m > 10% ~ € 45m Omega 3 DHA Organic Trace Tortuga L-AM ~ € 385m > 10% ~ € 60m Minerals, Phosphorus V
Slide 13: …creating attractive shareholder value
Thi s im …creating attractive shareholder value Acquisition EV EBITDA EBITDA EV/ Full NPV* FCF Yield /Sales EBITDA‘12 (year 1) Martek ~ € 730m ~ € 100m ~ 30% 7.3 € 1.4bn ~7% ONC ~ € 420m ~ € 45m ~ 30% 9.0 € 850m ~ 8% Tortuga ~ € 465m ~ € 60m ~ 16% 7.8 not ~ 8-9% disclosed Other Total ~ € 1.8bn > € 2
Slide 14: DSM paying conservative multiples in Nutrition
Thi s im DSM paying conservative multiples in Nutrition DSM’s acquisitions Nutrition - Industry in Nutrition References* • Martek 7.3 • Chr.Hansen - IPO 12.6 • ONC 9.0 • Cognis 9.6 • Tortuga 7.8 • Danisco 14.9 • Provimi 10.3 Total EV/EBITDA < 8 Total EV/EBITDA ~ 9-15 * Multiple based on published EV
Slide 15: Nutrition: unique portfolio has been created
Thi s im Nutrition: unique portfolio has been created Organic Vitamin Caro- Enzymes Yeasts PUFAs Cultures Trace Premixes Forms tenoids Minerals Vitatene Verenium C5 Martek Romania DSM Microbia Cargill bio Comp ONC Cargill bio Tortuga Italy Tortuga BASF Cargill Chr. Hansen Dupont Danisco Novozymes Nu
Slide 16: Further enhancing our value chain positions
Thi s im Further enhancing our value chain positions Active Ingredients Formulations Vitamins Premixes From Carotenoids (2003) Enzymes 85% of vitamins sold as active ingredients Yeasts Active Ingredients Blends, Services Vitamins (Natural) Carotenoids Formulations To Enzymes Premixes Yeasts (55 Prem
Slide 17: Nutritional Lipids: a new growth platform
Thi s im Nutritional Lipids: a new growth platform 2012 Sales: ~ € 500m* Growth: double digit 2012 EBITDA: > € 145m* Omega-3 (DHA) & Omega-6 (ARA) Omega-3 (EPA/DHA) algae derived Fish derived DSM Nutritional Lipids: market leader in PUFAs; strong growth in Infant Nutrition - Dietary Supplements - Fo
Slide 18: Developing leading positions in food specialties
Thi s im Developing leading positions in food specialties 2012 Sales: > € 400m (DSM Food Specialties, incl. Verenium & Cargill bio-products) Growth: double digit Cargill Bio-products Oilseed processing enzymes Cultures & Enzymes Food enzymes licenses; Biodiversity libraries Expanding in highly attra
Slide 19: Making progress in anti-infectives
Thi s im Making progress in anti-infectives • DSM Sinochem Pharmaceuticals JV (anti-infectives) making progress DSM Sinochem • 6-APA plant being on stream • Global reach with • One of the biggest strong brand Chinese state- • Enzymatic biotechnology plant • Market leader owned chemical advanced anti
Slide 20: Development DSM Pharmaceutical Products
Thi s im Development DSM Pharmaceutical Products • Partnership strategy DSM Pharmaceutical Products being pursued • Own strength initiatives ongoing; including further restructurings • Organic growth improving: several new CMO agreements (incl. pipeline) • Good progress in DSM Biologics - Bio-pharma
Slide 21: Strong market positions Performance Materials
Thi s im Strong market positions Performance Materials • Sales/market share growth attractive markets Continued sales growth Sales (€ m) EBITDA (€ m) • Shift to higher-added value via innovative, sustainable (green/Eco+) solutions • Accelerated growth High Growth Economies a/o via M&A (AGI/Taiwan, I
Slide 22: Strong position Caprolactam via cost-leadership
Strong position Caprolactam via cost-leadership • Exceptional returns 2010/11 due to caprolactam supply shortages, driven by high growth in China • High benzene prices, combined with weak end-use market caused a sharp deterioration of CPL margins in Q2’12 • New capacities in China will bring the GUR
Slide 23: Two exciting new growth platforms established
Two exciting new growth platforms established Life Sciences Materials Sciences 2 new growth platforms DSM Bio-based DSM Biomedical Products & Services Biomedical coatings Bio-succinic acid Dyneema Purity® Cellulosic bio-ethanol Polyurethane Silicone Bio-based adipic acid Hydrogels (PTG) … Kensey Nas
Slide 24: Frontrunner in bio-based materials and fuels
Frontrunner in bio-based materials and fuels • Exciting partnerships established - Roquette: bio-succinic acid (10kt; start-up end ‘12) - POET: cellulosic bio-ethanol (~25 m gallon; start up end ‘13/early ‘14) (capex ~ US$ 250m) - BP: algae-based bio-diesel • Leading technology position: - Yeasts (i
Slide 25: Cellulosic bio-ethanol: very attractive opportunity
Cellulosic bio-ethanol: very attractive opportunity • Global cellulosic bio-ethanol market expected Market expectations* to grow to 18bn gallons in 2022 (~ US$ 50bn) cellulosic bio-ethanol (global demand in billion gallons) • Resulting in market value for enzymes & 20 yeasts of ~ US$ 3-5bn in 2022 •
Slide 26: Creating a leading biomedical business
Creating a leading biomedical business • DSM Biomedical has shown 19% CAGR over the last 3 years, building on PTG • In 2011, DSM and DuPont established the Actamax JV, which develops products for adhesion prevention, tissue sealing, hemostasis, and other surgical applications • The acquisition of Ke
Slide 27: Kensey Nash: leader in regenerative medicine
Kensey Nash: leader in regenerative medicine Revenues* Guidance (Kensey Nash Issued March 2012) • 2010/11: US$ 72m; Products: US$ 46m, Royalties: US$ 25.6m; Year* Revenues EBITDA EBITDA: US$ 29m (40% margin) 2011/12 US$ 88.5m US$ 30m 2012/13 US$ 100m US$ 36m Customers • Leading medical device compan
Slide 28: Overview
Thi s im Overview • Building a higher value business • Achievements 2010-2012 • Confidence in targets
Slide 29: Well positioned in current economic climate
Thi s im Well positioned in current economic climate • The global macro-economic outlook remains uncertain. However, DSM is well positioned to secure its growth and profitability: – our business portfolio is far more robust with Nutrition EBITDA (including pro-forma EBITDA of acquisitions) ~ 67% of
Slide 30: 2013 EBITDA target confirmed
2013 EBITDA target confirmed Profitability Targets Target 2013 Current Expectation • EBITDA € 1.4 - € 1.6bn ~ € 1.4bn • ROCE > 15% < 15% Organic EBITDA continued operations Acquisitions € 1.4bn Profit ~€250m Improvement € 1.1bn* Program -€130m ~€100m CHF * 2010 EBITDA was € 1,127m (IFRS pension adju
Slide 31: 2013 Targets: Profit Improvement Program
Thi s im 2013 Targets: Profit Improvement Program Profit Improvement Program 2013 2014 • Benefits of 2012 plan ~ € 75m ~€ 150m • Company-wide program: main focus on costs & efficiency Cost Reductions Efficiency • Expected structural annual benefits: € 150m Improvements • Reduction global headcount:
Slide 32: Well on track to achieve our 2015 sales targets
Well on track to achieve our 2015 sales targets Sales targets 2015 Target Current Expectation • Organic sales growth 5%-7% annually • China Sales from US$ 1.5bn to more than double > US$ 3bn • High Growth Economies from ~32% towards 50% of total sales • Innovation sales from ~12% to 20% of total sal
Slide 33: 2015 Cluster aspirations confirmed
2015 Cluster aspirations confirmed Cluster Aspirations 2015 Confirmed • Nutrition Sales growth 2% above GDP EBITDA margin >20% towards 23% • Pharma Leveraging partnership for growth EBITDA towards 15% - 20% range • Performance Materials Sales growth at double GDP level EBITDA margin > 17% • Polymer
Slide 34: Good progress toward sustainability aspirations
Good progress toward sustainability aspirations Sustainability aspirations 2011 - 2015 2011 On track No 1 Dow Jones Sustainability Index top ranking (“Gold”) Chemical sector ECO+ (innovation at least 80% of pipeline is ECO+ 94% pipeline) ECO+ (running business) from ~34% towards 50% 41% Energy effic
Slide 35: 2012 Outlook confirmed
Thi s im 2012 Outlook confirmed • In Nutrition, EBITDA is now expected to be clearly above 2011. Ocean Nutrition Canada will add about € 20 million EBITDA for remainder of the year • Pharma is expected to deliver a slightly improved EBITDA, despite the 50% deconsolidation of the anti-infectives busi
Slide 36: Wrap-up
Wrap-up • DSM has been transformed into a different company since 2010 • DSM has a higher quality of earnings, with a substantial part of earnings coming from a highly resilient, high margin, growing nutrition business • Materials Sciences highly leveraged to economic recovery • We have made good pr
Slide 37: 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