Slide 1: Presentation to Investors – Annual Results 2012
Annual Results 2012 Presentation to Investors Life Sciences and Materials Sciences Address: DSM Investor Relations P.O. Box 6500, 6401 JH Heerlen The Netherlands Phone: +31 45 5782864 Fax: +31 10 45 90275 Email: investor.relations@dsm.com www.dsm.com
Slide 2: DSM – Bright Science. Brighter Living.
DSM – Bright Science. Brighter Living.™ Koninklijke DSM N.V. is a global science-based company active in health, nutrition and materials. By connecting its unique competences in Life Sciences and Materials Sciences DSM is driving economic prosperity, environmental progress and social advances to cre
Slide 3: 2013 Outlook
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 2013 Outlook • Nutrition is expected to show clearly higher results than in 2012 due to organic growth moving towards the target of 2% above GDP and the acquisitions DSM inconditions • Business motion: in Pharmadriving focused are likely
Slide 4: Overview
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Overview • Q4 2012 Operational performance • 2012 Progress on strategy • 2012 Progress per cluster • Business conditions and outlook Page 2 1
Slide 5: Highlights Q4 2012
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Highlights Q4 2012 DSM is positioned for strong EBITDA growth and increases dividend • DSM reports a solid Q4 with EBITDA of €243 million • EBITDA full year 2012 of €1,109 million with growth in all clusters, except for caprolactam • Robu
Slide 6: Quote from Feike Sijbesma
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Quote from Feike Sijbesma “In the context of challenging macro-economic conditions, DSM delivered growth across all clusters in 2012, excluding caprolactam. Nutrition now represents more than 70% of total EBITDA and has become a high valu
Slide 7: Results Q4 2012 - Key figures
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Results Q4 2012 - Key figures Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% Continuing operations before exceptional items: 2,269 2,227 2% Net Sales 9,131 9,048 +1% 243 293 -17% EBITDA 1,109 1,296 -14% 120 166 -28% EBIT 635 866 -27% 0
Slide 8: EBITDA – DSM continuing business
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 EBITDA – DSM continuing business EBITDA (€ million) 2012 2011 2010 2009* 2008* Nutrition 793 735 684 655 585 Pharma 39 36 61 91 150 Performance Materials 280 293 283 174 266 Polymer Intermediates 129 380 223 36 43 Innovation Center* -38 -
Slide 9: Net sales growth Q4 2012 versus Q4 2011
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Net sales growth Q4 2012 versus Q4 2011 (€ million) Q4 2012 Q4 2011 Diff. Volume Price FX Other Nutrition 923 865 7% 4% -3% 1% 5% Pharma 197 165 19% 6% 0% 2% 11% Performance Materials 655 627 4% 6% -4% 2% Polymer Intermediates 393 467 -16
Slide 10: Net sales growth FY 2012 versus FY 2011
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Net sales growth FY 2012 versus FY 2011 (€ million) FY 2012 FY 2011 Diff. Volume Price FX Other Nutrition 3,667 3,370 9% 2% 0% 3% 4% Pharma 726 677 7% 8% 1% 2% -4% Performance Materials 2,772 2,752 1% -3% -1% 4% 1% Polymer Intermediates 1
Slide 11: Nutrition
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Nutrition Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% 923 865 +7% Net Sales 3,667 3,370 +9% 204 193 +6% EBITDA 793 735 +8% 157 149 +5% EBIT 613 577 +6% 22.1% 22.3% EBITDA margin 21.6% 21.8% • Fourth quarter organic sales growth was
Slide 12: Nutrition - cont
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Nutrition - cont • Human Nutrition & Health sales were up due to slightly higher prices and good volume growth. Premixes and Nutritional Lipids recorded double digit growth. Ocean Nutrition Canada showed strong sales momentum with the fir
Slide 13: Pharma
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Pharma Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% 197 165 +19% Net Sales 726 677 +7% 13 11 +18% EBITDA 39 36 +8% 1 -1 EBIT -19 -8 6.6% 6.7% EBITDA margin 5.4% 5.3% • In the fourth quarter, net organic sales growth was 6% compared t
Slide 14: Performance Materials
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Performance Materials Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% 655 627 +4% Net Sales 2,772 2,752 1% 52 43 21% EBITDA 280 293 -4% 17 0 EBIT 146 162 -10% 7.9% 6.9% EBITDA margin 10.1% 10.6% • Fourth quarter organic sales growth was
Slide 15: Polymer Intermediates
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Polymer Intermediates Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% 393 467 -16% Net Sales 1,596 1,820 -12% 14 79 -82% EBITDA 129 380 -66% 6 67 -91% EBIT 97 339 -71% 3.6% 16.9% EBITDA margin 8.1% 20.9% • Fourth quarter organic sales d
Slide 16: Innovation Center
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Innovation Center Q4-2012 Q4-2011 '% (€ million) FY-2012 FY-2011 '% 33 17 +94% Net Sales 102 60 +70% -9 -17 EBITDA -38 -57 -18 -21 EBIT -63 -69 - - EBITDA margin - - • In the fourth quarter, DSM Biomedical showed further improvement mainl
Slide 17: Cash flow
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Cash flow Cash Flow OWC development Q1’09 – Q4’12 FY ’12 FY ’11 (€ million) Cash from operating 730 882 activities Cash from investing -1,933 -741 activities* Free cash flow from -1,203 141 operations Balance sheet YE 2012 YE 2011 (€ mill
Slide 18: Dividend to increase for the 3rd consecutive year
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Dividend to increase for the 3rd consecutive year • Dividend policy “stable and preferably Dividend per ordinary share (€) rising” • Proposal to AGM (May 2013) to increase the dividend by €0.05 to €1.50 per ordinary share – € 0.48 interim
Slide 19: Solid and flexible financial base
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Solid and flexible financial base Debt maturity profile (€ m) • More efficient capital structure, with gearing of 22% • Total long term debt ~€2 bn, no covenants in outstanding bonds • Single A credit rating by Moody’s (A3) and S&P (A) •
Slide 20: Profit Improvement Program extended
Confidential / PtI Annual Results 2012 / IR / 8 February 2013 Profit Improvement Program extended • Company-wide programs to support mid-term strategic targets • Expected structural annual benefits: – DSM Resins: € 30m by 2013 – PIP: € 150m by 2014 – PIP Extension € 50-100m by 2015 • PIP one-off cas
Slide 21: Overview
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Overview • Q4 2012 Operational performance • 2012 Progress on strategy • 2012 Progress per cluster • Business conditions and outlook Page Page1918
Slide 22: DSM in motion: driving focused growth
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 DSM in motion: driving focused growth Page Page2019
Slide 23: Good 2012 progress on DSM's growth drivers
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Good 2012 progress on DSM’s growth drivers From From From From reaching out building the machine responsibility portfolio transformation To To To To becoming truly global doubling the output business driver growth High Growth Innovation S
Slide 24: Major acquisitions done in 2012
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Major acquisitions done in 2012 Acquisition of Kensey Nash EV ~€ 275m; 2010/11 • Making DSM biomedical a leading medical device sales ~US$ 72m, EBITDA ~US$ 29m materials supplier in regenerative medicine Acquisition of Ocean Nutrition Can
Slide 25: Building unique value chain position in Nutrition
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Building unique value chain position in Nutrition Portfolio broadened, value chain extended and global presence increased Page Page2322
Slide 26: Since 2010 strong progress in Acquisitions & Partnerships
Confidential / PtI Annual Results 2012 / IR / 8 February 2013 Since 2010 strong progress in Acquisitions & Partnerships ACQUISITIONS PARTNERSHIPS ~ €2.4bn Nutrition Nutrition • Premix plant Russia • Martek (microbial DHA/ARA) • Vitatene (natural carotenoids), • Premix plants (Romania, Italy) Pharma
Slide 27: Enhancing the quality of DSM's earnings profile
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Enhancing the quality of DSM’s earnings profile *: 2012 EBITDA is including annualized proforma EBITDA of acquisitions Page Page2524
Slide 28: 2012 progress in High Growth Economies
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 2012 progress in High Growth Economies Sales • Sales to High Growth Economies accounted for 38% of total sales • Good growth in Nutrition and Performance Materials with ~10% growth • Polymer Intermediates sales declined due to lower capro
Slide 29: Investing in innovation
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Investing in innovation • Innovation Sales at DSM is 18% of sales • 319 Patents added to portfolio • R&D expenditure in 2012: € 490m (5.4% of sales) • New investments in R&D facilities: – Biotech in Delft – Materials Sciences in Geleen an
Slide 30: Progress in EBA Bio-based Products & Services
Confidential / PtI Annual Results 2012 / IR / 8 February 2013 Progress in EBA Bio-based Products & Services • In cellulosic bio-ethanol: • Advanced C5 yeast and enzymes for cellulosic ethanol commercialized • Construction of POET-DSM 20-25m gallon cellulosic bio- ethanol facility (Iowa), start up be
Slide 31: Milestones in EBA's Biomedical and Advanced Surfaces
Confidential / PtI Annual Results 2012 / IR / 8 February 2013 Milestones in EBA’s Biomedical and Advanced Surfaces • In DSM Biomedical: • Acquisition of Kensey Nash making DSM a leading medical device materials supplier • DSM expanded its capabilities for manufacturing metal • orthopedic products •
Slide 32: Sustainability as business driver
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Sustainability as business driver • DSM was once again among the leaders in the Dow Jones Sustainability World Index. Since 2004 DSM held the top position six times o • ECO+ solutions as % of running business increased to % 43%, ECO+ solu
Slide 33: Partnerships to combat malnutrition
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Partnerships to combat malnutrition Offering tailored nutritional solutions to fight hunger and malnutrition around the world • DSM and United Nations World Food Programme have strengthened their partnership to combat global malnutrition:
Slide 34: Overview
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Overview • Q4 2012 Operational performance • 2012 Progress on strategy • 2012 Progress per cluster • Business conditions and outlook Page Page3231
Slide 35: Nutrition: Continued value growth
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Nutrition: Continued value growth 2012 progress: portfolio broadened, value chain extended and global presence increased DSM’s Global Nutrition network • Continued EBITDA growth driven by advanced forms, premixes, nutritional lipids and c
Slide 36: Pharma: Leveraging partnerships for growth
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Pharma: Leveraging partnerships for growth 2012 progress • Business conditions remained challenging but good progress was made • 6-APA (6-aminopenicillanic acid) plant started up • SSC (Semi-Synthetic Cephalosporin) plant finalized • Mamm
Slide 37: PM: Growing via innovative sustainable solutions
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 PM: Growing via innovative sustainable solutions 2012 progress • At DSM Engineering Plastics: • Strong underlying improvements in specialty polymers were partly offset by the weakness in PA-6 chain • Investments in capacities for Arnite®
Slide 38: PI: Strengthening backward integration for DEP
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 PI: Strengthening backward integration for DEP 2012 progress • Significantly lower results: high benzene prices, new capacities in market, combined with weak end-use markets in fibers caused a sharp deterioration of margins • 2nd 200kt li
Slide 39: Overview
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Overview • Q4 2012 Operational performance • 2012 Progress on strategy • 2012 Progress per cluster • Business conditions and outlook Page Page3736
Slide 40: Business Conditions
Confidential / PtI Annual Results 2012 / IR / 8 February 2013 Business Conditions Nutrition - Feed Nutrition - Food Pharma • Improving business • Sustained good business • Challenging market conditions, impact of high conditions conditions grain prices on demand • Usual uneven delivery • Nutritional
Slide 41: 2013 Outlook
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 2013 Outlook • Nutrition is expected to show clearly higher results than in 2012 due to organic growth moving towards the target of 2% above GDP and the acquisitions • Business conditions in Pharma are likely to remain challenging though
Slide 42: Wrap up
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Wrap up • Solid results in challenging market conditions: – Nutrition performed well, now representing >70% of Q4 EBITDA – 2012 results negatively impacted by caprolactam: €100 million in Q4 and ~ €300 million FY • Dividend has been incre
Slide 43: Press release: DSM is positioned for strong EBITDA growth
DSM BRIGHT SCIENCE. BRIGHTER LIVING. DSM, Corporate Communications P ress Re lease email media.relations@dsm.com Heerlen (NL), 20 February 2013 02E DSM is positioned for strong EBITDA growth and increases dividend DSM reports a solid Q4 with EBITDA of €243 million EBITDA full year 2012 of €1,109 mil
Slide 44: Press release: financial summary
DSM BRIGHT SCIENCE. BRIGHTER LIVING. fourth quarter full year 2012 2011 +/- in € million 2012 2011 +/- Continuing operations 2,269 2,227 2% Net sales 9,131 9,048 1% Operating profit before depreciation and 243 293 -17% amortization (EBITDA) 1,109 1,296 -14% 204 193 - Nutrition 793 735 13 11 - Pharma
Slide 45: Overview
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Overview Despite ongoing global economic headwinds, DSM continued to deliver solid operational results in Q4, generating €243 million in EBITDA, despite a €100 million lower contribution from its caprolactam activities compared to Q4 2011. For the full year EBITD
Slide 46: Nutrition
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Nutrition fourth quarter — in € million full year 2012 2011 2012 2011 923 865 Net sales 3,667 3,370 204 193 EBITDA 793 735 157 149 EBIT 613 577 22.1% 22.3% EBITDA margin 21.6% 21.8% Fourth quarter organic sales growth was 1% compared to Q4 2011 with volume growth
Slide 47: Pharma and Performance Materials
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Full year organic sales growth was 9%. EBITDA for the full year slightly increased due to improved volumes at DSM Pharmaceutical Products and somewhat higher prices at DSM Sinochem Pharmaceuticals. This more than offset the higher costs partly associated with the
Slide 48: Polymer Intermediates and Innovation Center
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Full year organic sales development was -16% due to 6% lower volumes as a result of the turnarounds and 10% lower prices. EBITDA was significantly lower. High benzene prices could not be passed on to the market due to weaker demand for caprolactam in combination
Slide 49: Exceptional items and net profit
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Exceptional items Total exceptional items in the fourth quarter amounted to €76 million before tax (€54 million after tax) including a charge of €44 million related to the Profit Improvement Program and €18 million in acquisition related costs. Full year exceptio
Slide 50: Dividend, cash flow and financing
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Dividend DSM’s dividend policy is to provide a stable and preferably rising dividend. DSM proposes to increase the dividend by €0.05 to €1.50 per ordinary share. This will be proposed to the Annual General Meeting of Shareholders to be held on 3 May 2013. An inte
Slide 51: Profit Improvement Program
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Profit Improvement Program In Q2 2012 DSM launched a company-wide Profit Improvement Program (on top of the previously announced program in DSM Resins & Functional Materials), mainly focused on cost reductions and efficiency improvements, but also on sales growth
Slide 52: DSM in motion: driving focused growth
DSM BRIGHT SCIENCE. BRIGHTER LIVING. DSM in motion: driving focused growth DSM in motion: driving focused growth is the strategy that the company embarked on in September 2010. It marks the shift from an era of intensive portfolio transformation to a strategy of maximizing sustainable and profitable
Slide 53: People+ and Acquisitions & Partnerships
DSM BRIGHT SCIENCE. BRIGHTER LIVING. DSM is developing a People+ strategy for measurably improving the lives of consumers, workers and communities across the value chains in which the company is active. People+ will do for the ‘people’ dimension of People, Planet and Profit what ECO+ has done for ‘p
Slide 54: Employee engagement and People+
DSM BRIGHT SCIENCE. BRIGHTER LIVING. e In 2012 DSM executed its fifth worldwide Employee Engagement Survey. The main element in the survey is the measurement of DSM’s Employee Engagement Index, the percentage of employees scoring favorable on a combination of four attributes: commitment, pride, advo
Slide 55: Outlook
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Outlook The challenging macro-economic environment experienced during Q4 2012 has continued into 2013, with low growth in Europe. Asia continues to show good levels of economic activity whilst the US has maintained a modest rate of recovery. The Profit Improvemen
Slide 56: Condensed consolidated statement of income for the fourth quarter
Condensed consolidated statement of income for the fourth quarter fourth quarter 2012 in € million DSM BRIGHT SCIENCE. BRIGHTER LIVING. fourth quarter 2011 before excep- total excep- tional before excep- total excep- tional tional items tional items items items 2,269 2,269 net sales 2,227 2,227 243
Slide 57: Condensed consolidated statement of income for full year
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Condensed consolidated statement of income for full year full year 2012 in € million full year 2011 before excep- total before excep- total excep- tional excep- tional tional items tional items items items 9,131 9,131 net sales 9,193 9,193 1,109 -168 941 EBITDA f
Slide 58: Consolidated balance sheet: assets
Consolidated balance sheet: assets DSM BRIGHT SCIENCE. BRIGHTER LIVING. in € million year-end 2012 year-end 2011 intangible assets property, plant and equipment deferred tax assets associates other financial assets non-current assets inventories trade receivables other receivables financial derivati
Slide 59: Consolidated balance sheet: equity and liabilities
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Consolidated balance sheet: equity and liabilities in € million year-end 2012 year-end 2011 shareholders’ equity 5,874 5,784 non-controlling interest 168 190 equity 6,042 5,974 deferred tax liability 236 192 employee benefits liabilities 388 322 provisions 125 11
Slide 60: Condensed consolidated cash flow statement
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Condensed consolidated cash flow statement full year in € million 2012 2011 cash, cash equivalents and current investments at beginning of period 2,147 2,290 current investments at beginning of period 89 837 cash and cash equivalents at beginning of period 2,058
Slide 61: Statement of comprehensive income and changes in equity
Condensed consolidated statement of comprehensive income DSM BRIGHT SCIENCE. BRIGHTER LIVING. in € million exchange differences on translation of foreign operations actuarial gains and losses and asset ceiling change in fair value reserve change in hedging reserve income tax expense other comprehens
Slide 62: Condensed report business segments
Condensed report business segments full year 2012 (in € million) DSM BRIGHT SCIENCE. BRIGHTER LIVING. continuing operations Discon- Elimi- Total Nutrition Pharma Performance Polymer Innovation Corporate Elimi- Total _ tinued nation Materials Intermediates Center Activities nation continuing operatio
Slide 63: Geographical information (continuing operations)
Geographical information (continuing operations) DSM BRIGHT SCIENCE. BRIGHTER LIVING. The Restof Eastern North Latin China India Japan Rest of Rest of Total Nether- Western Europe America America Asia the full year 2012 lands _ Europe world net sales by origin in € million 3,046 2,655 119 1,628 309
Slide 64: Notes to the financial statements
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Notes to the financial statements The full financial statements of DSM are included in the Integrated Annual Report 2012 that is available on www.dsm.com as of today. Accounting policies The consolidated financial statements of DSM for the year ended 31 December
Slide 65: Important dates
DSM BRIGHT SCIENCE. BRIGHTER LIVING. Important dates Report for the first quarter 2013 Thursday, 2 May 2013 Annual General Meeting of Shareholders Friday, 3 May 2013 Report for the second quarter 2013 Tuesday, 6 August 2013 Report for the third quarter 2013 Tuesday, 5 November 2013 DSM - Bright Scie
Slide 66: Financial Overview Q4 2012
Financial Overview Q4 2012 in million of : Pharma Performance Polymer Innovation Corporate Euros Materials Intermediates Cente Activities Continuing operations Q4'12 | Q4'11 | Chg.% | Q4'12 | Q4'11 |Chg.% Q4'12| Q4'11 | Chg.% | Q4'12 | Q4'11 |Chg.%/Q4'12) Q4'11 | Chg.% |Q4'12 |Q4'11| Chg.% | Q4'12 |
Slide 67: Financial Overview FY 2012
Financial Overview FY 2012 in million of Pharma Performance Polymer Innovation Corporate Euros Materials Intermediates Center Activities Continuing operations FY'12) FY'11 | Chg.% | FY'12|FY'11 | Chg.% | FY'12 | FY'11 | Chg.% | FY'12 | FY'11 |Chg.% FY'12 | FY'11 | Chg.% | FY'12 | FY'11 Chg.% | FY'12
Slide 68: Disclaimer
Confidential / PtI Annual Results 2012 / IR / 6 February 2013 Disclaimer • This document 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 curre
Slide 69: Contact: DSM
Contact: DSM BRIGHT SCIENCE. BRIGHTER LIVING. www.dsm.com —— visiting address: HEALTH * NUTRITION » MATERIALS
Slide 70: Presentation to Investors
Annual Results 2012 Presentation to Investors Life Sciences and Materials Sciences Address: DSM Investor Relations P.O. Box 6500, 6401 JH Heerlen The Netherlands Phone: +31 45 5782864 Fax: +31 10 45 90275 Email: investor.relations@dsm.com www.dsm.com