Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Royal DSM — Investor Day (November 2014)
21 slides from Dsm-firmenich's investor day presentation, Nov 5, 2014
Slide 1: Life Sciences and Materials Sciences
Life Sciences and Materials Sciences Rolf-Dieter Schwalb, CFO Royal DSM Capital Markets Day, 5 November 2014 Page
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 • Portfolio changes achieved • Update on DPx • Capital allocation and operating efficiencies • Financial policies Page 2
Slide 4: DSM in motion: driving focused growth
DSM in motion: driving focused growth Page 3
Slide 5: Strong track record in portfolio transformation
Strong track record in portfolio transformation DIVESTMENTS in 2009-2011 ACQUISITIONS since 2011 PARTNERSHIPS since 2010 ~ €1.5bn Nutrition ~ €2.4bn • Energy Nutrition • Martek • Partnerships Russia (Tatarstan) • Urea Licensing • Vitatene • Andre Pectin (textures, China) • Agro • Melamine • Premix p
Slide 6: Strict acquisition criteria for focused growth
Strict acquisition criteria for focused growth Strategic Financial • Business fit • Value creation • Leadership position and • Sustain single A rating Innovation potential • Cash and EPS accretion • Geographic ambitions • Other financial targets • Sustainability drive Unchanged discipline in target
Slide 7: Value accretive acquisitions
Value accretive acquisitions • Key acquisitions (Martek, ONC, Fortitech, Tortuga and Kensey Nash): Earnings accretive in year 2 Aggregated, sales CAGR of 7% post acquisition • Value creation confirmed Martek/Fortitech/Tortuga: ~2.0x EV paid Ocean Nutrition Canada: ~1.5x EV paid • For now, focus on i
Slide 8: Mid-term ROCE ambition remains to be 15%
Mid-term ROCE ambition remains to be 15% ROCE (%) 16% • Exceptional returns at Polymer Intermediates combined with low capital employed inflated ROCE in 2010/2011 12% • 2011-2014 ROCE impacted by M&A related 8% intangibles and goodwill • Mid term ROCE ambition remains at 15% 4% EBIT growth driven by
Slide 9: Where we are versus 2015 targets
Where we are versus 2015 targets Profit targets 2015 YTD 2014 • EBITDA margin (%) 14% - 15% 13% • ROCE 11% - 12% 8-9% (FY14E) Sales target 2015 • Organic sales growth 5% - 7% annually 3% • China sales towards USD 3bn >USD 2.0bn (FY14E) • High Growth Economies sales about 45% of total sales 43% • Inn
Slide 10: Overview
Overview • Portfolio changes achieved • Update on DPx • Capital allocation and operating efficiencies • Financial policies Page 9
Slide 11: DPx Holdings off to an excellent start
DPx Holdings off to an excellent start Combination DPP/Patheon is leading pharma services company in CMO market (DSM 49%) • Post closing March 2014, the initial integration was executed at high speed and completed end October • First acquisition (Gallus Biologics) closed in September • Full year pro
Slide 12: DPx: strong value generation potential for DSM
DPx: strong value generation potential for DSM • Synergy harvesting and strong growth expected in 2015 • DPx to reach 2015 EBITDA margins close to industry leaders’ margins of 20%. EPS accretive in 2015 • Strong value generation momentum to continue beyond 2015 Solid market growth Industry leader wi
Slide 13: Overview
Overview • Portfolio changes achieved • Update on DPx • Capital allocation and operating efficiencies • Financial policies Page 12
Slide 14: Significant capital allocated to Nutrition
Significant capital allocated to Nutrition Cash Capex and M&A per cluster (€m) 2010-2014e 2500 1262 XXX M&A DSM 2000 686 929 XXX Cash capex DSM 477 509 1500 602 ~0 1000 0 ~600 416 500 0 2010 2011 2012 2013 restated 2014e Nutrition Nutrition M&A Pharma PM PI Other Innovation Innovation M&A • Capital
Slide 15: Extract efficiencies and reduce costs
Extract efficiencies and reduce costs • Standardization of processes (HR, sales & marketing, supply chain, sourcing, etc.) • Maximizing use of shared service platforms • Optimizing margins through pricing and margin management • Operational efficiencies and growth acceleration through innovation • A
Slide 16: Strong focus on OWC improvement
Strong focus on OWC improvement OWC/sales per cluster 2010-2014e OWC in AR%, AP%, Inventory% 2010-2014e 35% 22% 30% 20% 25% 18% 20% 16% 15% 10% 14% 5% 12% 0% 10% 2010 2011 2012 2013 2014e 2010 2011 2012 2013 2014e Nutrition Pharma PM PI Group Accounts Receivable Accounts Payable Inventory • Inventor
Slide 17: Overview
Overview • Portfolio changes achieved • Update on DPx • Capital allocation and operating efficiencies • Financial policies Page 16
Slide 18: Financial policies clearly defined
Financial policies clearly defined Cash sources 2010 – H1 2014 (in €bn) • Priorities for cash allocation unchanged: 1. Capex for organic growth 1.3 2. Dividend 3. Acquisitions 0.8 4.0 4. Cash return to shareholders • Dividend policy Cash from operations Debt Divestment “stable and preferably rising
Slide 19: Significant cash return for shareholders
Significant cash return for shareholders Dividend policy: “DSM aims to provide a stable and preferably rising dividend” Dividend per share increased 37.5% since 2010 (CAGR 8.3%) % Stock dividend pay out 60% 50% 50% 47% 45% 40% 42% 39% 39% 38% 37% 30% Fin Int Fin Int Fin Int Fin Int 2010 2011 2011 20
Slide 20: Wrap up
Wrap up • Attractive portfolio with high quality, Nutrition and Performance Materials businesses Innovation Center with a good growth and return profile • Focused strategy to improve financial performance and consolidate portfolio further: Drive improved performance of the Nutrition and Performance
Slide 21: BRIGHT SCIENCE. BRIGHTER LIVING
BRIGHT SCIENCE. BRIGHTER LIVING”