Continued value growth Leendert Staal CEO & President DSM Nutritional Products Capital Markets Days 2012
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Overview Nutrition: continued value growth Program of today
Continued value growth in Nutrition Strong growth has been realized both organically and through 1.8bn in acquisitions in 2011-2012 Kaiseraugst Including Ocean Nutrition Canada and Tortuga the Nutrition cluster will have: 4.4bn revenue with 20-23% EBITDA 10,000 people Sisseln Extended portfolio Increased global presence Extended value chain positions
Nutrition: strong increase in revenues and profit
Addressing fundamental needs Human Nutrition Animal Nutrition Health, wellness, longevity & healthy ageing through healthy nutrition. Efficient animal & marine protein production: feed conversion, growth, health & low mortality, lactation, fertility, minimize impact on the environment Personal care Protection and nourishment of skin and hair, slow-down & reversal of visible ageing, for wellness & positive selfawareness
Differentiation through Values and Scale Personal Care Human Nutrition Animal Nutrition Values Addressing real nutritional & health needs Building on science, technology and clinical evidence Delivering with utmost commitment to quality management Living sustainability Scale Presence, portfolio and people History, deep institutional know-how and broad IP Customers and partnerships Revenue > 4bn
Value creation and differentiation Active ingredients Delivery Systems Premix & Blends Broad product portfolio Vitamins One hundred ingredients Carotenoids Enzymes Nutritional Lipids Nutritional ingredients Personal care ingredients Several thousand forms Stability / Shelf Life Delivery / Solubility Bio-availability Powder / Flow Properties Tens of thousands of recipes Custom Formulation Dilution 3 rd party ingredients Quality, Reliability, Traceability, Sustainability Full Value Chain Player
Value chain: estimated incremental EBITDA Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services Estimated incremental EBITDA per step in the value chain (*) 12% 4% 4-8% 2-8% 2-6% Vitamins Carotenoids Enzymes Eubiotics Nutritional Lipids DCP Metal Chelates Amino acids Microencapsulates Beadlets Emulsions Adsorbates Vitamin concentrates Full premixes Complete feed Specialty feed: young animals milk Supplements Formulated products Human Health & well being Nutrient & feed composition Growth Disease prevention Fertility Estimated industry averages, for illustration purposes only
Our growth drivers Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services Estimated incremental EBITDA per step in the value chain (*) 12% 4% 4-8% 2-8% 2-6% Expand portfolio 1. Innovation 2. M&A 3. Partnership Cost management Improve ecofootprint Continuous differentiation: 1. Innovation 2. Application M&A Expand global footprint: 1. build 2. M&A Fit for market: 1. modular plants 2. Pharma, INF, DS, F&B Expand offering 1. focus on specialties 2. Create adjacencies M&A Nutritional science & advocacy Animal Nutrition Application Centers B2F M&A Estimated industry averages, for illustration purposes only
Positioning of typical industry players Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Tortuga Microbia Vitatene Martek ONC BASF Chinese VC players NHU, ZMC Chinese VB Lonza Fatrom Fortitech Cargill Provimi Nutreco De Heus Cilpaz
Rationale for recent acquisitions Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Tortuga Martek ONC
Nutritional Lipids: A new DSM growth platform DSM Nutritional Lipids, market leader in PUFAs Double digit growth business Sales ~ 500m* EBITDA > 145m* Omega-3 (DHA) and Omega-6 (ARA), algal derived Omega-3 (EPA/DHA), fish derived *including i-health
Tortuga, leader in supplements for ruminants Highly attractive business with excellent strategic fit Total enterprise value ~ 465m (*) in cash 2012 expectations: Sales ~ 385m, EBITDA ~ 60m Market leader in nutritional supplements with focus on pasture raised beef and dairy cattle Integrated production of key active ingredients, including organic trace minerals Strong technology, application and performance know-how Pecém São Paulo Mairinque São Vincente HQ Production *: Depending on the actual 2012 EBITDA, an adjustment in the purchase price up to a maximum enterprise value of ~ 490 million can be made, based on the same EBITDA-multiple
Rationale for recent acquisitions Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Martek ONC Leveraging the value chain
Rationale for recent acquisitions Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Martek ONC Leveraging global footprint
Rationale for recent acquisitions Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Tortuga Leveraging the value chain
Rationale for recent acquisitions Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Tortuga Leveraging global footprint
Recent acquisitions: new growth drivers Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services DSM Tortuga Martek ONC Leveraging the value chain Leveraging global footprint
Continued value growth: in conclusion Active ingredients Forms & delivery systems Premix Macro blends Nutritional consultancy & services Aspiration by 2015 Growth in ingredients & infrastructure Growth GDP + 2% EBITDA margin > 20-23% Strategy Continuous cost improvement Selectively broaden portfolio (innovation, M&A, partnership Differentiation through delivery technology Selective acquisitions which broaden/ enhance DSM s capabilities AND can leverage DSM s unique infrastructure / market access Production facilities Premix facility Main sales offices
Overview Continued value growth Program of today
Program of today 8.15 DSM Nutritional Products - Introduction Leendert Staal 8.35 Human Nutrition & Health (HNH) Rick Greubel 9.05 Nutritional Sciences HNH Manfred Eggersdorfer 9.25 Personal Care PC Ilona Haaijer 9.50 Animal Nutrition & Health ANH Antonio Ruy Freire 10.20 Nutritional Sciences ANH Gilbert Weber 10.45 Break 11.00 Q&A session 12.00 Transfer to Sisseln 12.30 Site introduction + Lunch buffet Rene Vroege 12.50 Visit to Vitamin E plant and Forms plant (small groups) 14.45 End of conference
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