Sustainability driving profitable growth

Transcription

1 Sutainability driving profitable growth Rolf-Dieter Schwalb, CFO Royal DSM Nyenrode Buine Univerity, October 16, 2013

2 Safe harbor tatement Thi preentation may contain forward-looking tatement with repect to DSM future (financial) performance and poition. Such tatement are baed on current expectation, etate and projection of DSM and information currently available to the company. DSM caution reader that uch tatement involve certain rik and uncertaintie that are difficult to predict and therefore it hould be undertood that many factor can caue actual performance and poition to differ materially from thee tatement. DSM ha no obligation to update the tatement contained in thi preentation, unle required by law. A more comprehenive dicuion of the rik factor affecting DSM buine can be found in the company latet Annual Report, which can be found on the company' corporate webite, Page 1

3 Overview Sutainability anchored in DSM trategy ECO+ and People+ fueling Profit+ People-Planet-Profit driven remuneration Page 2

4 DSM at a glance (2012 number) Sale (*) per cluter Net ale 9,131m EBITDA 1,109m Net profit 437m ROCE 8.9% Capital employed 8,084m Capex incl acquiition 1,980m R&D 490m Workforce 23,498 Top ranking in Dow Jone Sutainability Index Innovation Center Polymer Intermediate Performance Material Polymer Intermediate Performance Material Pharma 18% 1% 31% 23% 3% 10% 8% 42% 64% Nutrition Pharma EBITDA (*) per cluter Nutrition * Corporate Activitie related ale & EBITDA over cluter weighted ditribution Page 3

5 Global ocietal trend drive DSM market Aging population Healthcare cot Population growth Urbanization Reource contraint Energy ecurity Food ecurity Wealth Sutainability Health Nutrition Material Page 4

6 DSM in motion: driving focued growth DSM utainable trategy: People - Planet - Profit: creating value along three denion Page 5

7 Ambitiou financial target et in 2010 Profitability target expectation EBITDA bn Toward 1.4bn ROCE >15% 9-10% Sale target H1 realization Organic ale growth 5% - 7% annually 1% China ale from US$ 1.5bn to >US$ 3bn US$ 0.8bn High Growth Economie ale from ~32% toward 50% of total ale ~40%* Innovation ale from ~12% to 20% of total ale 18% EBA apiration H1 realization EBA ale > 1bn ~ 75m * 40% in 2013 H1 i incl. pro forma ale Tortuga in Q Page 6

8 Supported by clear utainability apiration Sutainability apiration H Dow Jone Sutainability Index Top ranking ( SAM Gold Cla ) Gold cla Eco+ (innovation) at leat 80% of pipeline i ECO+ 93% Eco+ (running buine) from ~34% toward 50% 41% Energy efficiency Greenhoue Ga Emiion Employee Engagement Survey Diverity and People+ 20% provement in 2020, compared to % (abolute) by 2020, compared to 2008 toward High Performance Norm to be updated 14% provement 2012: 1% decreae 2012: 72% favorable Diverity apiration and People+ framework defined Page 7

9 Overview Sutainability anchored in DSM trategy ECO+ and People+ fueling Profit+ People-Planet-Profit driven remuneration Page 8

10 Eco+: Product olution that create more value with le environmental pact than competing alternative commercially available, fulfilling the ame function People+: Product olution that create a meaurable better pact on the live of people than competing alternative commercially available, fulfilling the ame function The utainability benefit can be created at any tage in upply-chain/lifecycle: from raw material, manufacturing, ue, to potential re-ue and end-of-life dipoal Page 9

11 ECO+ at DSM: more utainable & more profitable Share of ECO+ olution in running portfolio increaed from ~34% (CSD 2010) to 43% in 2012 ECO+ olution offer clear ecological benefit Data from DSM Engineering Platic and DSM Rein & Functional Material how for their buinee (period H1 2013): ECO+ ale have grown ~10%/year ince 2010, while non-eco+ ale lightly declined ECO+ ale have ~10% higher contribution margin veru non-eco+ ale ECO+ olution delivering higher growth and higher margin Page 10

12 Example of innovative ECO+ olution HEALTH I NUTRITION I MATERIALS Khepricoat anti-reflective coating for olar gla offer higher yield of olar panel. Higher eco-efficiency and renewable content - Palapreg ECO applied in compoite bridge. Higher eco-efficiency and downtream cot benefit with Brewer Clarex applied in beer. Page 11

13 ECO+ a buine driver in Anal Nutrition Feed 20kg/day Livetock are reponible for methane emiion, a GHG that caue global warming DSM i working on CleanCow, a feed additive() olution: 1. to reduce methane by 25-30% in vivo 2. with the potential for better performance (increaed milk yield, increaed body weight gain, etc.) CleanCow : reducing methane emiion from cattle Page 12

14 ECO+ a buine driver in Material Akulon : Oil Pan Trend Quet for low fuel conumption and thu lower CO 2 emiion Sytem cot optization Peugeot 508 with oil pan in Akulon PA6 Reducing weight, cot and CO2 reduction Bright Science More deign freedom (v teel and alu) Silar noie level (a ilent a teel) Le weight & lower ytem cot (v metal) Brighter Living Lower weight (v metal) = le fuel Conumption = lower (CO 2 ) emiion Better ECO/carbon footprint Page 13

15 Example of innovative People+ olution HEALTH I NUTRITION I MATERIALS FloraGLO Lutein: a natural ingredient for eye health dietary upplement. Surgeon profit from an effective barrier againt bacteria and virue with Arnitel VT ued in dipoable medical gown. BluCure cobalt-free Technology for compoite applied in boat and contruction elinate any expoure of worker to cobalt. Page 14

16 People+ a buine driver in Human Nutrition ~200 million women worldwide uffer from oteoporoi Worldwide, an oteoporotic fracture occur every 3 econd, a vertebral fracture every 22 econd Hip and vertebral fracture have cot-intene medical plication Optized vitamin-d reduce number of fracture by 20% The US a example: through vitamin D upplementation among all women over 55 year with oteoporoi, up to US$ 1.5 billion in aving per year could be realized, of which: US$ 1.9 billion in avoided healthcare cot (medical & therapeutical cot)* US$ 350 million required in upplementation cot (including vitamin D) People+ : Improving live & reducing cot with nutritional olution * Source: US Health Care Cot Page 15

17 People+: Partnerhip to combat malnutrition Offering tailored nutritional olution to fight hunger and malnutrition around the world DSM and United Nation World Food Programme have trengthened their partnerhip to combat global malnutrition: 3-year extenion to 2015; plan to double number of beneficiarie up to 30 million per year DSM i engaged in variou other nutrition partnerhip, including the Scaling Up Nutrition movement (SUN) the United State Agency for International Development (USAID) Mercy Corp food cart ocial enterprie KeBAL, World Viion International People, Planet, Profit: We can t be ucceful in a world that fail Page 16

18 Profit+: Sutainable innovation fuel growth & profit DSM well on track to deliver on it 20% Innovation ale target by 2015 Innovation trongly contribute to DSM ale growth and EBITDA growth with on average >5% higher gro margin Initially 4 new Emerging Buine Area were launched, of which 2 have been diveted. 1 new EBA ha been added, reulting in 3 exciting growth platform DSM now in McKiney Top Quartile benchmark on bet innovation practice Page 17

19 Overview Sutainability anchored in DSM trategy ECO+ and People+ fueling Profit+ People-Planet-Profit driven remuneration Page 18

20 Sutainability anchored in Short Term Incentive 50% Financial Goal 20% EBITDA 15% Gro Free Cah Flow 15% Net Sale Growth 50% Sutainability & Individual Goal 10% Eco+ product 10% Safety 10% Employee Engagement Index 20% Individual: Quantitative & Qualitative Meaure Financial Threhold Minum performance threhold for STI payout (et annually by Superviory Board) Page 19

21 A well a in Long Term Incentive Management 50% Financial Goal 25% Total Shareholder Return 25% Return on Capital Employed (ROCE) 50% Sutainability Goal 25% Green Houe-Ga Emiion (GHGE) reduction 25% Energy Efficiency Improvement (EEI) Page 20

22 Two quetion How doe utainability pact the profeion of the financial and control taff of DSM, for intance in integrated reporting non-financial indicator and KPI a different and Triple P radar-creen for the Board? What doe thi mean for the education of executive, control and accounting taff? Page 21

23 Wrap-up DSM growth trategy driven by megatrend Sutainability i anchored in DSM trategy Sutainability & utainable innovation are trongly contributing to DSM ale and profit growth: utainability a a profit driver Contribution to utainability (ECO+, People+) meaured over the total upply/value chain and life cycle Sutainability target included in management hort term and long term incentive Contributing to a brighter world, paionate & engaged employee, higher & utainable return and happy hareholder: what more can a CFO wih? Page 22

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