Dsm-firmenich Ag · EURONEXT:DSFIR

Dsm-firmenich — Royal DSM — Investor Day (November 2015)

44 slides from Dsm-firmenich's investor day presentation, Nov 4, 2015

  1. Slide 1: Driving Profitable Growth

    DSM STRATEGY 2018 Driving Profitable Growth through science-based, sustainable solutions Feike FEIKESijbesma SIJBESMA - CEO - CEO [Draft Version 29 (15.00 hour) - 10 -2015 ] Version 0; 21 September 2015 Presentation Geraldine Matchett, CFO [classification: secret] 4 November 2015 ROYAL DSM CAPITAL M

  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: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  4. Slide 4: Strategy 2010-15: Successful transformation

    Strategy 2010-15: Successful transformation  Finalized important transformation steps − 2010-11 Base Chemicals divestments − Partnerships for Pharma in 2012 (Antibiotics) and 2014 (Contract Manufacturing) − Partnership for Bulk Chemicals in 2015  Created a high-value portfolio − Built a broad, dee

  5. Slide 5: Business portfolio streamlined and simplified, creating good platform for growth

    Business portfolio streamlined and simplified, creating good platform for growth Sales split – 2010 vs. 15 (€m) EBITDA split – 2010 vs. 15 (€m)1 9,000 2 1,400 8,1762 1,161 5% Sizeable Joint Ventures 6%  Total sales 2015 (pro-rata) : ~€1.9bn3 2% 9% 18%  Total EBITDA 2015 (pro-rata) : ~€245m3 7,000

  6. Slide 6: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  7. Slide 7: Nutrition: built a unique, global and broad portfolio

    Nutrition: built a unique, global and broad portfolio in food / feed nutritional ingredients with increased solutions offering capabilities Trace Minerals Nutritional Textures Solutions Towards €5bn Marine 2015 PUFA Premixes Cultures Microbial Forms Vitamins PUFA & delivery €3.0bn Carotenoids system

  8. Slide 8: Nutrition EBITDA growth driven by successful acquisitions

    Nutrition EBITDA growth driven by successful acquisitions; Sales (€bn) EBITDA-margin (%) good volume growth in Animal Nutrition and Food Specialties Nutrition – EBITDA bridge 2010-15 (~€m) 900 9% annual 800 EBITDA 684 growth3 700 220 600 280 105 500 400 210 130 11% annual 300 EBITDA growth 200 on ac

  9. Slide 9: Successful acquisitions in Nutrition have strengthened the portfolio

    Successful acquisitions in Nutrition have strengthened the portfolio, boosted growth and made strong earnings contribution with further potential (2010) (2012) (2012) (2012) USDm CADm BRLm USDm 7% 4%2 10% 2% 8%1 16% 24% -6% Acq. 20153 Acq. 2015 3 Acq. 20153 Acq. 2015 3 Acq. 20153 Acq. 20153 Acq. 201

  10. Slide 10: Nutrition delivered good growth despite Vitamin E prices

    Nutrition delivered good growth despite Vitamin E prices and weak Human Nutrition in North America Nutrition – Organic growth CAGRs 2010-15 (rounded %) 5% 2% Animal Nutrition 9% 3% Human Nutrition 1% Animal Nutrition 5% Food Specialties 6% Human Nutrition 1% Food Specialties 6% Reported organic grow

  11. Slide 11: Nutrition portfolio is resilient with limited exposure to single product lines

    Nutrition portfolio is resilient with limited exposure to single product lines Top-10 represent < 40% of Nutrition profit in 2015  Product range includes ~100 product lines  Largest profit contributor less than 10% of Nutrition profit other product  Several products have a strong IP position line

  12. Slide 12: Nutrition EBITDA growth driven by successful acquisitions

    Nutrition EBITDA growth driven by successful acquisitions; Sales (€bn) EBITDA-margin (%) good volume growth in Animal Nutrition and Food Specialties Nutrition – EBITDA bridge 2010-15 (~€m) 900 9% annual 800 EBITDA 684 growth3 700 220 600 280 105 500 400 210 130 11% annual 300 EBITDA growth 200 on ac

  13. Slide 13: Performance Materials: high-quality portfolio created with strongly increased EBITDA

    Performance Materials: high-quality portfolio created with strongly increased EBITDA EBITDA margin: >€2.5bn >€350m ~15% 2015 2015 ROCE: ~14% 2015 ~€2.1bn €259m EBITDA margin: 2010 2010 12% ROCE: 10% 2010 Divested Divested ~€0.4bn1 ~€24m1 CAGR ~2.5% per annum EBITDA up almost 50% Strong progress marg

  14. Slide 14: Performance Materials has delivered strong financial performance improvement

    Performance Materials has delivered strong financial performance Sales (€bn) improvement in a slow economic environment EBITDA-margin (%) Performance Materials – EBITDA bridge 2010-15 (~€m) 450 400 350 50 300 2591 90 250 50 30 200 150 11% annual 100 EBITDA growth 50 0 EBITDA 2010 No Dyneema Vehicle

  15. Slide 15: Growth drivers well-balanced after Strategy 2010-15

    Growth drivers well-balanced after Strategy 2010-15 50 30 70 60 40 20 50 40 30 10 30 20 0 20 2010 2015 2015 2018 2010 2015 2015 2018 2010 2015 2015 2018 Aspirations Aspirations Aspirations % Sales to High Growth Economies % Sales from Innovation1 % ECO+ Sales2 1 Sales from products and applications

  16. Slide 16: Stepping up sustainability aspirations

    Stepping up sustainability aspirations Sustainability aspirations 2010 20151 2020 Dow Jones Sustainability Index Gold Class Gold Class Gold Class Brighter Living Solutions business Eco+ 39% 57% --- Eco+/People+ --- 60% 65% costs GHG efficiency improvements2 --- 20% 45% (2025) Employee engagement3 70

  17. Slide 17: Global sustainability agenda linked to DSM businesses / competences

    Global sustainability agenda linked to DSM businesses / competences Malnutrition Climate Change & Energy  Addressing Deficiencies (North/West),  Circular Economy & Bio-based e.g. Vitamin D renewables, e.g. bioplastics/fuels & Niaga  Addressing Hunger (South & East),  Climate Change & New Energie

  18. Slide 18: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  19. Slide 19: Strategy 2018 builds on Strategy 2010-15

    Strategy 2018 builds on Strategy 2010-15: Portfolio created offers profitable growth opportunities Strategy 2010-15 Review Strategy 2018  Portfolio provides  Shorter strategic period with profitable growth options focus on financial results  Strategy fueled by  Growth options & cost reductions m

  20. Slide 20: Strategy 2018: Driving profitable growth through science-based, sustainable solutions

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

  21. Slide 21: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  22. Slide 22: Well-identified initiatives will drive delivery of Strategy 2018 targets

    Well-identified initiatives will drive delivery of Strategy 2018 targets 2018 TARGETS ~€130-150m ~€100-125m Nutrition Inflation Sales above Support functions program annual EBITDA growth: & services program market growth high single-digit --- annual ROCE growth: 2015 2018 high double-digit bps EBITD

  23. Slide 23: Globally leveraged support functions at lower costs

    Globally leveraged support functions at lower costs Savings: €125-150m1 Breakdown by function Main levers Other functions  BGs focus on R&D and Innovation, Direct Sourcing, (Corporate / Business Services) Finance Manufacturing & Operations and Marketing & Sales  All support functions globally leve

  24. Slide 24: Nutrition improvement program focuses on productivity, growth and working capital

    Nutrition improvement program focuses on productivity, growth and working capital Cost improvements - €130-150m (vs. 2015) Sales stimulation program – (esp. Human Nutrition) EBITDA breakdown 2010-15  Simplification of the organizational/operating model Efficiency  More segment-specific set-up and

  25. Slide 25: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  26. Slide 26: Our Human Nutrition is leading in nutritional ingredients

    Our Human Nutrition is leading in nutritional ingredients and has ample opportunities to further expand in a diversified application landscape Specialty Food Ingredients market and growth by product Diversified application landscape2 (x) = Growth rate 2016-18 (CAGR, %) Color Preservation DSM market

  27. Slide 27: Our Animal Nutrition has a complete portfolio of targeted feed ingredients

    Our Animal Nutrition has a complete portfolio of targeted feed ingredients and has further growth opportunities beyond the historical core area of poultry Animal Nutrition market by product (excl. premix) Animal Nutrition application landscape1 (x) = Growth rate 2016-18 (CAGR, %) Carotenoids (2-3%)

  28. Slide 28: Nutrition: Sales growth opportunity in Human Nutrition

    Nutrition: Sales growth opportunity in Human Nutrition, while other segments will continue to benefit from continued good market growth momentum1 Overall Nutrition Animal Nutrition Human Nutrition Food Specialties 92 5-6 52 5 4 3 3 3 2-3 1 Market DSM Market DSM Market DSM Market DSM Market DSM Marke

  29. Slide 29: Nutrition Strategy 2018: global products and local solutions

    Nutrition Strategy 2018: global products and local solutions Drive growth in Nutrition Growth acceleration and Aspirations 2018 underpinning sustainable innovations Group targets 1 Expand the core  EBITDA margins: 2 Add new products & solutions 18-20% over the period 3 Expand in new segments/reg

  30. Slide 30: Performance Materials expects to grow sales above market growth

    Strategy 2018: Performance Materials expects to grow sales above market growth1 Overall Performance Engineering Plastics Dyneema Coating Resins Materials 4 4 42 3-4 3 32 2 1-2 1-2 -1 Market DSM Market DSM Market DSM Market DSM Market DSM Market DSM Market DSM Market DSM 2011-15 2016-18 2011-15 2016-

  31. Slide 31: Performance Materials Strategy 2018

    Performance Materials Strategy 2018 Engineering Drive EBITDA growth and Aspirations 2018 underpinning Plastics cash generation Group targets  Cost and capital discipline: build on successful Profit Improvement Program 2011-15;  EBITDA margins: Dyneema capturing further savings and >15% over the pe

  32. Slide 32: Differentiated approach has led to a more attractive Performance Materials portfolio

    Differentiated approach has led to a more attractive Performance Materials portfolio, with a higher growth and returns profile High Accelerated Functional growth Materials High-Performance Growth PA6 Plastics Solar Compounds Biomedical Maximize Specialty Coating Dyneema® Fiber Market growth PA6 retu

  33. Slide 33: Performance Materials end market segments offer growth options

    Performance 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/alum

  34. Slide 34: Strategy 2018 Emerging Business Areas: develop and extract value

    Strategy 2018 Emerging Business Areas: develop and extract value Biomedical Bio-based Products & Services Advanced Surfaces Innovative medical devices materials Enzymes/yeast for biomass conversion Efficiency-increasing solar coatings  Drive organic growth by focus on high  Prove POET/DSM bio-etha

  35. Slide 35: Strategy 2018 Innovation Center supports innovation in our core businesses

    Strategy 2018 Innovation Center supports innovation in our core businesses and develops new Emerging Business Areas Activities Innovation Center Financial Aspirations  Center of Excellence strengthens innovation power / speed  Cost of Innovation Support: of our core businesses - €15-20m EBITDA/yea

  36. Slide 36: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  37. Slide 37: Organizational adjustments to deliver

    Organizational adjustments to deliver  A new -strengthened- top structure: Executive Committee aligns finance, business, innovation, strategy & people, enabling faster strategic alignment & operational execution  A new operating model: Business Groups: focus on M&S, Operations, Sourcing, R&D Suppo

  38. Slide 38: A mindset & culture focused to deliver

    A mindset & culture focused to deliver Results Organization Behavior Mindset Top/bottom line growth Focus & Leverage ONE DSM Culture Trust/Support Talent development Accountability/Speed Leadership model Can do ONE DSM Culture Agenda DSM Leadership Model deliver shape develop External Accountability

  39. Slide 39: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  40. Slide 40: Key business/innovation projects driving earnings growth beyond 2018

    Key business/innovation projects driving earnings growth beyond 2018 Human Nutrition/Food Animal Nutrition Materials  Vitamers (high-potency vitamins)  Eubiotics (cultures)  ForTii (HPPO polymer)  New infant ingredients  New enzymes  Niaga (recycle carpets)  New bio colorants (blue/red)  Cle

  41. Slide 41: 'Smart exits' Pharma and Bulk Chemicals resulted in cash-in

    ‘Smart exits’ Pharma and Bulk Chemicals resulted in cash-in and will create further financial headroom in the coming years DSM share – 50% DSM share – 49% DSM share – 35% DSM Sinochem Patheon Pharma ChemicaInvest Pharmaceuticals Contract Bulk Chemicals Antibiotics Manufacturing LTM LTM LTM €m at 100

  42. Slide 42: Agenda

    Agenda 1 Strategy 2010-15 − Successful transformation − Good growth platform created •2 Strategy 2018 − Improve financial results, through • Organic growth & business strategies • Cost reduction & productivity improvements • Capital efficiency • Organization and culture − Build for further future gr

  43. Slide 43: Driving profitable growth

    Driving profitable growth Value creation 2016-18 will be driven by: €  EBITDA & ROCE growth  Extract value from Pharma & Bulk Chemicals ventures  Via higher growth at lower costs, with strengthened organization Slide 42

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