Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Royal DSM — Investor Day (June 2018)
36 slides from Dsm-firmenich's investor day presentation, Jun 20, 2018
Slide 1: DSM Capital Markets Day 2018
DSM Capital Markets Day 2018 Growth & Value – Purpose led, Performance driven. Feike Sijbesma | CEO ROYAL DSM CAPITAL MARKETS DAY | LONDON (UK) - 20 JUNE 2018
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: Agenda
Agenda 1 Strategy 2018: right strategy - successfully delivered 2 Purpose-led company created - ideally positioned for growth 3 Strategy Update | Growth & Value - Purpose led, Performance driven. Page 2
Slide 4: Successful transformation future-proofing DSM
Successful transformation future-proofing DSM Coal mining (Petro)chemicals Health, Nutrition, Materials 2018 1902 Page 3
Slide 5: Strategy 2018 to demonstrate value of growth platforms created in 2010-15
Strategy 2018 to demonstrate value of growth platforms created in 2010-15 Transformation | 2010-15 Demonstrating value | 2015–18: driving profitable growth Out Climate & Climate & IMPROVING 2018 TARGETS Energy FINANCIAL RESULTS Energy ▪ Melamine ▪ DSP (JV) Global shifts& Global shifts Health & Healt
Slide 6: Outlook Full Year 2018 re-confirmed
Outlook Full Year 2018 re-confirmed “DSM confirms its full year outlook 2018 as communicated with the Q1 pre-release on 12 April 2018, and expects an Adjusted EBITDA growth towards 25% and a related higher ROCE growth, based on: • low double-digit Adjusted EBITDA growth in the underlying business at
Slide 7: Nutrition's unique approach resulted in strong growth
Nutrition’s unique approach resulted in strong growth Above-market organic growth (>2-3%) ✓ Human Nutrition | Sales and growth Animal Nutrition | Sales and growth 250000% 350000% 300000% 200000% ~5% 250000% ~8% CAGR1 CAGR1 150000% 2016-18 200000% 2016-18 100000% 150000% 100000% 50000% 1% 5% CAGR 500
Slide 8: Materials successfully focused on higher growth, specialties segments
Materials successfully focused on higher growth, specialties segments Above-market organic growth (>2-3%) ✓ Materials | Sales and volume growth 350000% 300000% ~5% 250000% CAGR2 2016-18 200000% 150000% 100000% 2% 50000% CAGR 2011-151,2 2,528 2,513 2,825 0% €m 2015 1 2016 2017 2018 1. Continuing oper
Slide 9: Business performance supported by well-balanced growth drivers
Business performance supported by well-balanced growth drivers Well-balanced growth drivers sustained ✓ Ambitions1: ~45% ~20% ~65% Achievements (2017): 44% 21% 62% Sales from Sales from Sustainable High Growth Economies Innovation2 Brighter Living Solutions3 1. Strategy 2018 ambitions; as well as 20
Slide 10: Building a strong and focused innovation pipeline
Building a strong and focused innovation pipeline Large key programs Key innovation projects with significant potential ready for commercialization (2019/20) Increased focus on >20% sales from innovation (at higher margins) customer-driven innovation projects Full pipeline of (large) innovation proj
Slide 11: Clear initiatives further improved financial performance
Clear initiatives further improved financial performance Cost reduction and efficiency programs ✓ Consistent improvement in capital efficiency ✓ 18% Average working capital3 (in line with <20% aspiration) 6.4% (~€550m p.a.) Average capex as % of sales4 (within 6.5% guidance) ~€275m 5% Expected run-r
Slide 12: Organizational adjustments enabled a stronger results-oriented culture
Organizational adjustments enabled a stronger results-oriented culture Organization well positioned for (in)organic growth New top structure Businesses represented in Executive Committee Simplified structure Focus & Agility New operating model Businesses focused on prime functions Globally leveraged
Slide 13: DSM significantly outperformed its headline financial targets
DSM significantly outperformed its headline financial targets … High single-digit percentage annual Adjusted EBITDA growth ✓ High double-digit basis point annual ROCE growth ✓ Temporary Temporary 1,800 vitamin 16% vitamin benefit benefit 1,600 ~13% ~200 14% 1,400 12% 1,200 CAGR2 Avg. bps3 Underlying
Slide 14: … with all businesses outperforming
… with all businesses outperforming Adjusted EBITDA (€m) ROCE (%) Temporary Temporary vitamin 20% vitamin benefit benefit 100000% ~12% 15% ~180 Nutrition CAGR 10% Avg. bps 50000% 2016-182 2016-183 Underlying Underlying business 5% business 822 931 1,053 10.3% 12.0% 14.1% 0% 0% 2015 2016 2017 2018 2
Slide 15: Highly successful partnerships paying off
Highly successful partnerships paying off Value from partnerships enhanced and already substantially monetized ✓ Exit 50% 35% Joint Venture Value extracted ▪ Total proceeds: ~€2bn1 ✓ ▪ Total proceeds thus far: ~€535m3 ✓ Business ▪ Improved performance; EBITDA: from €57m (2015) ✓ ▪ AnQore & Aliancys
Slide 16: Agenda
Agenda 1 Strategy 2018: right strategy - successfully delivered 2 Purpose-led company created - ideally positioned for growth 3 Strategy Update | Growth & Value - Purpose led, Performance driven. Page 15
Slide 17: DSM creates value on People, Planet & Profit
DSM creates value on all three dimensions: People, Planet & Profit for all stakeholders: Customers, Employees, Shareholders & Society at large1 People Engaging people ✓ Planet Preserving our earth ✓ Profit Delivering profitable growth ✓ 75% 62% +15% of employees feel good Brighter Living Solutions A
Slide 18: Purpose-led company created: doing well by doing good
Purpose-led company created: doing well by doing good Good financial returns must Doing financially well go together with purpose can Doing well Focus on profit go together with doing well for the world or Doing good Improving the world 10 years ago Today 10 years from now Start DSM’s new/next DSM’s
Slide 19: Purpose drives performance: future-proofing by cost, growth & engagement
Purpose drives performance: future-proofing by cost, growth & engagement What we do: What we achieve: Improve More sustainability impact of our operations lower costs and risks Performance Purpose led driven Enable customers delivering sustainable More growth innovative sustainable solutions and hea
Slide 20: Purpose drives growth opportunities
Purpose drives growth opportunities DSM’s key competences … … provide growth opportunities in the focus-domains … Human Nutrition Stevia Clean Cow Animal Nutrition MixFit … creating a Biomedical Advanced Solar growth company … Future-proof Nutrition Climate & Health & Energy … addressing megatrends/
Slide 21: Agenda
Agenda 1 Strategy 2018: right strategy - successfully delivered 2 Purpose-led company created - ideally positioned for growth 3 Strategy Update | Growth & Value - Purpose led, Performance driven. Page 20
Slide 22: A Growth & Value strategy: Purpose led, Performance driven.
Scope A Growth & Value strategy: Purpose led, Performance driven. Organic Inorganic Enablers Health & Climate Nutrition & Energy ▪ Purpose sets scope for DSM’s further portfolio evolution: – Focus on growth in Nutrition, Health and Sustainable Living Resources & Circularity Focus ▪ Organic growth en
Slide 23: Scope | Purpose sets scope for growth and portfolio evolution
Scope Scope | Purpose sets scope for growth and portfolio evolution Organic Inorganic Enablers Clear direction set for growth and … offering significant business opportunities in further portfolio development in attractive market segments providing Nutrition, Health and Sustainable Living … Growth &
Slide 24: Scope | Focus impacts further business development
Scope Scope | Focus impacts further business development … Organic Inorganic Enablers … with growth in Nutrition, Health and Sustainable Living … Human Nutrition Animal Nutrition Materials ▪ Further build Food & ▪ Strengthen position in Capture opportunities in Beverages ingredients premixes and spe
Slide 25: Organic growth | Customer-led innovation in Nutrition
Scope Organic growth | Customer-led innovation in Nutrition led Organic Inorganic by strong product portfolio and science Enablers Global Products Local Solutions Regions N-Am L-AM EMEA Asia RoW Cultures Vitamins Probiotics Nutra- Market Segments Natural ceuticals & Preservatives Specialties Coloran
Slide 26: Organic growth | Segment-specific application development in Materials
Scope Organic growth | Segment-specific application development Organic Inorganic driven by customer needs in Materials Enablers Page 25
Slide 27: Organic growth | Customer Centricity enabling growth
Scope Organic growth | Customer Centricity enabling growth Organic Inorganic Enablers Next phase: global customer centricity & agility program enabling strong above-market growth Mindset People ▪ Top-line focus ▪ Businesses focus on prime functions ▪ Customer first ▪ New stronger leadership/ people/
Slide 28: Organic growth | Leveraging unique technology capabilities
Scope Organic growth | Leveraging unique technology capabilities Organic Inorganic for developing innovative sustainable solutions Enablers | Biological Sciences Bio- infor matics & Modeling | Nutritional Sciences Human Human Str ain Pr ocess ▪ Fundamental understanding of science Evidence Evidence
Slide 29: Organic growth | Supported by large innovation projects
Scope Organic growth | Supported by large innovation projects Organic Inorganic Enablers Recent market introductions New market introductions 2019-20 Market introductions 2021-25 ▪ Eubiotics/Gut Health (feed/food) ▪ Clean Cow ▪ Plant-based proteins (CanolaPRO) ▪ i-Health (B2C nutrients) ▪ Bio-agri (
Slide 30: Inorganic growth | M&A will further evolve DSM portfolio
Scope Inorganic growth | M&A will further evolve DSM portfolio Organic Inorganic Enablers ▪ Value creating M&A will further evolve and develop DSM’s portfolio ▪ Acquisitions will be predominately in Nutrition, given the: - growth potential and resilience - current and attainable strong global leader
Slide 31: Growth enablers | Organization, leadership & culture
Scope Growth enablers | Organization, leadership & culture Organic Inorganic enabling continued performance Enablers Organization DSM ▪ Keep cost discipline and further optimize support functions Business Support Groups Functions Organization ▪ Develop further customer-centric organization, (focus)
Slide 32: Growth enablers | Digitization drives growth and improves efficiency
Scope Growth enablers | Digitization drives growth and Organic Inorganic improves efficiency Enablers Customer intimacy Operational performance New business models ▪ Improve top-line results ▪ Reduce costs by automation & ▪ Digital entrepreneurship & AI data analytics – Customer data analytics – Inc
Slide 33: Growth enablers | Continued sustainability leadership step-up
Scope Growth enablers | Continued sustainability leadership step-up Organic Inorganic Enablers 2017 8% 3% 21% 75% 0.36 62% Realization1 ▪ GHG ▪ Energy ▪ Purchased ▪ Employee ▪ Safety ▪ Brighter efficiency efficiency renewable engagement Frequency Living improvement improvement electricity favorable
Slide 34: Strategy Update: Growth & Value - Purpose led, Performance driven.
Strategy Update: Growth & Value - Purpose led, Performance driven. Health & Climate Nutrition & Energy ▪ Purpose sets scope for DSM’s further portfolio evolution: 2021 Targets1 – Focus on growth in Nutrition, Health and Sustainable Living Resources & Circularity High single-digit focus percentage an
Slide 35: DSM Strategy: Growth & Value – Purpose led, Performance driven
DSM Strategy: Growth & Value – Purpose led, Performance driven DSM’s key competences … 2021 Targets: … provide growth opportunities in the focus-domains … … creating high single-digit % a growth annual increase Future-proof company … Adj. EBITDA Nutrition Climate & Health & Energy ~10% average Susta
Slide 36: Bright Science. Brighter Living.