Life Sciences and Material Sciences

Transcription

1 Life Sciences and Material Sciences Stephan B. Tanda Member Managing Board Royal DSM Volkert Claassen VP White Biotechnolgy Royal DSM Carnegie Bank, Denmark, 1 May

2 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 readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this presentation, unless required by law. The English language version of this document is leading. A more comprehensive discussion of the risk factors affecting DSM s business can be found in the company s latest Annual Report, which can be found on the company's corporate website, 1

3 DSM is everywhere 2

4 Agenda Operational performance Q Vision 2010 update Biobased businesses 3

5 Highlights Q DSM reports profitable Q1 despite difficult economic conditions Q1 operating profit down to EUR 57 million Continuing strong performance from Life Sciences businesses Most Materials Sciences businesses severely impacted by downturn Continued strong cash performance, EUR 166 million cash from operating activities No quantitative outlook provided for 2009 in view of uncertain economic conditions 4

6 Q1 Results Key figures ( million) Q1-09 Q1-08 % before exceptional: Net Sales 1,837 2,358-22% EBITDA % EBIT % Net Profit % EPS % including exceptional items: Net Profit % EPS % 5

7 Agenda Operational performance Q Vision 2010 update Biobased businesses 6

8 Focus on Life Sciences and Material Sciences Climate and Energy Health and Wellness Functionality and Performance Emerging Economies Life Sciences Materials Sciences Nutrition Pharma EBAs Performance Materials Polymer Intermediates Exploiting strong market positions and technology platforms 7

9 Balanced portfolio in economic downturn 2008 Sales per Cluster 2008 Sales per end-market Nutrition Pharma 10% Performance Materials Other 19% 14% Food 31% 26% Fibers/ Textiles 8% 15% Feed 20% Base Chemicals and Materials 13% Polymer Intermediates Electrical & Electronics Transportation/ Automotive 4% 8% Building & Construction 9% Pharma 4% 10% 9% Agriculture Packaging Nutrition, Pharma and DSM Dyneema relatively unaffected 8

10 Actions addressing the economic downturn Good progress with implementation of saving actions All projects identified Savings expected to clearly exceed 100m Workforce reduction of more than 1000 positions Full savings will be achieved in 2010 Capex expected to be lower than 2008, focused on future growth (e.g. DSM Dyneema) Contingency plans prepared in case conditions do not improve DSM remains committed to customers, innovation and sustainability Total savings expected to exceed 100m by approx. 25% 9

11 Commitment to innovation Core Businesses Life Sciences Materials Sciences Additional innovation expenditure Managing the pipeline Intrinsically Innovative Company Accelerated Growth Areas Emerging Business Areas NBD Acquisitions > 75m p/a Venturing 60m 200m Top 50 projects Best practices Business opportunities Investments Management To ~ 1bn by 2010 from 600m in 2008 Intrinsically innovative company 10

12 Innovation sales growth towards 1bn in 2010 million m 1.0bn m m m Nutrition Performance Materials Pharma/Others All clusters Sales m, 1bn target in

13 Summary Q profitable despite difficult economic conditions Half of the portfolio relatively unaffected Total savings expected to exceed 100m by approx 25%, Contingency plans in preparation in case conditions do not improve Successful cash generation due to focus Strong balance sheet and financial flexibility DSM remains committed to sustainability DSM is Staying the course 12

14 Agenda Operational performance Q Vision 2010 update Biobased businesses 13

15 Unique position in bio-based businesses Life Sciences Material Sciences New platforms Food, Feed + additives Biofuels Bio Food, Feed + additives New cases ~ 1.5 billion Biomedical Thermoplastics Dyneema Pharma Bio Pharma Biochemicals Active packaging Thermosets/ Resins BioPerformance Materials Approx. 1.5 billion sales and ample innovation opportunities 14

16 Understanding the emerging new value chain Feedstock Provision Feedstock Processing Primary Conversion Secondary Conversion Bio Compounds & formulation Converters Farming Storage Distribution Grain seed milling Biomass pretreatment - enzymatic conversion Fermentation Chemical conversion Enzymatic conversion Polymerization Chemical Synthesis Compounding Formulation Reactive Extrusion Moulding Film extrusion Food & Feed Bio Medical Coatings Automotive Life Sciences Material Sciences Pharma Personal Care Electrical Know how on end-markets needs and capabilities to make it happen 15

17 Four multi-billion US$ market opportunities Biofuels Bio Chemical/ Materials Biomedical Materials Biopharma Ingredients US$ 50bn (> 15%) Estimated market size 2010 and growth US$ 20bn (> 15%) US$ 2bn (10-15%) US$ 14bn (> 15%) Portfolio enables crossover innovation in high potential markets 16

18 Exciting developments in biomedical materials BIOSTABILITY BIOCOMPATIBILITY BIO-INTERACTIVE US$ 1.2bn market 10-15% growth High margins US$ 0.9bn market 15-20% growth Very high margins US$ 30-60m market 40-60% growth High margins Coatings and Implants Coatings Polymer enabled anddrug Implants delivery Coatings Polymer Regenerative enabled anddrug Medicine Implants delivery DSM: Leadership position in biomedical materials 17

19 Replicating the natural function of the human disc Axiomed lumbar disc with DSM PTG polymer for replacement of body parts Treating degenerative disc disease Aims to restore natural function of the spine In clinical trial phase Market growth (US): US$ 55m ( 07) to US$ 440m (2013) Nutrition Pharma Performance Chemical Biotech Material Materials Synthesis Sciences 18

20 Novel polymer drug delivery platform Trancerta Treatment of vascular and ophthalmic diseases For customized drug delivery systems Contract manufacturing services through DPP In pre-clinical development phase Accelerating time to market through an exclusive world-wide license from Medivas Nutrition Pharma Performance Chemical Biotech Material Materials Synthesis Sciences 19

21 DSM s current biotechnology markets Biospecialties Food ingredients Pharmaceuticals Fine chemicals Biomaterials Agricultural (by)products Chemo-physical treatment and/or enzymes Sugars Biochemicals : Cell factory: Biocatalysis - or Micro-organisms Biofuels Ethanol Hydrogen 20

22 DSM s future in white biotechnology Biospecialties Food ingredients Pharmaceuticals Fine chemicals Biomaterials Agricultural (by)products Chemo-physical treatment and/or enzymes Sugars Biochemicals : Cell factory: Biocatalysis - or Micro-organisms Biofuels Ethanol Hydrogen Expansion in biobased endmarkets 21

23 DSM track record in modern biotechnology Maxiren for cheese industry Arachidonic acid for infant nutrition Cephalosporin Vitamin B2 Aldolases for cholesterol lowering drug Strong innovation record as a basis for further growth 22

24 Food/feed/pharma products via biotechnology Carbo hydrates Fermentation organism Enzymes Food / Feed Pharma Cargill ADM Abengoa Roquette Novozymes Danisco BASF LeSaffre Lallemand DSM DSM frontrunner in chemical sector in implementing biotechnology 23

25 Biofuels builds on existing knowledge Carbo hydrates Enzymes Yeast Biofuels Cargill ADM Abengoa Roquette Novozymes Danisco Verenium DSM LeSaffre Lallemand DSM Yeasts are crucial for the conversion of sugars into biofuels 24

26 Biofuels from 1 st to 2 nd generation First generation Second generation Need for new and sustainable energy resources 25

27 Innovation challenges 2 nd generation biofuels Pre-treatment Enzymatic Hydrolysis Yeast Fermentation C6/C5 Yeast Cellulosic material Pulp Sugars Biofuels New enzymes and yeasts will be necessary to convert plant residuals 26

28 Replacing chemistry by biotech an example Old Route New Route Penicillium Sugar Sugar chrysogenum Traditional Fermentation Metabolic Engineering 13 chemical steps 2 enzymatic steps 27

29 Replacing chemistry by biotech an example Old Route New Route Penicillium Sugar Sugar chrysogenum Traditional Fermentation 13 chemical steps Metabolic replaced Engineering by: 1 fermentation + 2 enzymatic steps 65% less energy and materials 50% lower cost 13 chemical steps 2 enzymatic steps 28

30 Replacing chemistry by biotechnology Carbo hydrates Enzymes Yeast Bio-fuels Oil Chemistry Polymerization Materials 29

31 New opportunities from the combination Carbo hydrates Enzymes Fermentation organism Bio-fuels Bio-fuels BioChemicals BioPolymers Chemistry/ Enzymology Chemistry Polymerization Polymerization BioMaterials Materials Resulting in a broad range of innovative bio-based businesses 30

32 Succinic acid production at DSM DSM produces succinic acid chemically in Linz Austria Global production succinic acid (derivatives): ~ T/Y Succinic acid used in: Food (acidulant, flavor) Coatings (car finish) Coolant (engines) Pharmaceuticals (building block) 31

33 Why bio succinic acid? Producing succinic acid via biological routes has several advantages: 1. Lower environmental impact 1. No use of fossil fuels (crude oil), bio-renewable feedstocks 2. Absorbs instead of emits CO 2 3. Cost proposition allows for high volume green chemicals and materials 2. New biobased & biodegradable applications feasible 1. Production of green plastics like PBS (for a.o. agricultural films) 2. Biobased fibers for clothing 3. Biobased resins (e.g. polymer of bio-succinic acid and isosorbide]) Nutrition Pharma Performance Chemical Biotech Material Materials Synthesis Sciences 32

34 A new era for the chemical industry Stanyl Pipeline PHA PLA PBS(X) NOP PA APC UPR PTT Epoxy Propanediol Succinic Acid Lactic Acid Vegetable oils Hydroxy Alkanoates Isosorbide other Biobased will take a significant part of oil based chemistry 33

35 Example: biodegradable plastics No need to remove from land Fishes injured by old non-degradable nets Waste in seas is risk for shipping (e.g. nets in screw propellers) Biomaterials as accelerator for sustainable solutions 34

36 Succinic acid demonstration plant Operational end of

37 Contact: DSM P.O. Box 6500, 6401 JH Heerlen, The Netherlands ' (+31) (+31) investor.relations@dsm.com internet: visiting address: Het Overloon 1, Heerlen, The Netherlands 36