dsm capital markets day 2018...jun 20, 2018 · 2010 -2015 2016-2018 ~1% ~5% 2010 2015 2016-2018...
TRANSCRIPT
ROYAL DSM CAPITAL MARKETS DAY | LONDON (UK) 20 JUNE 2018
DSM Capital Markets Day 2018NutritionChris Goppelsroeder | President & CEO DSM Nutritional Products
Safe harbor statement
Page 1
▪ 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
▪ 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, www.dsm.com
Further enhanced our Nutrition portfolio through
5 major acquisitions
Started a new comprehensive Nutrition
Improvement Program accelerating growth &
providing a step-up in EBITDA
Leveraging the power of Nutrition’s unique
business model
✓
✓
✓
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How did we enter the 2016-18 strategic period?
Outperforming our Strategy 2018 targets on organic sales and
Adj. EBITDA growth from underlying business
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Strategy 2018 Targets (2016-2018)
+5%
High single-digit %
Organic Sales Growth per year
Annual Adjusted EBITDA growth in %
18-20%
Adj. EBITDA margin
822 931 1,0530%
50000%
100000%
2015 2016 2017 2018
~12%CAGR1
2016-18
~17% ~18% ~19%Adj. EBITDA %
Underlying
business
Temporary
vitamin
benefitNutrition
Adj. EBITDA (€m)
1
5.0 5.2 5.60%
200%
400%
600%
800%
1000%
2015 2016 2017 2018
~7%CAGR1
2016-18
Underlying
business
Temporary
vitamin
benefitNutrition
Sales (€bn)
1
1. Approximation using 2018E, based on underlying business corrected for best estimate of the temporary vitamin effect
Outperforming ROCE target, but high OWC (inventory) reduced EBITDA-to-
cash conversion
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10.3% 12.0% 14.1%0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2015 2016 2017 2018
~180Avg. bps2016-182
Underlying
business
Temporary
vitamin
benefit
1
Outperforming ROCE targets(high-double digit basis points annual ROCE growth)
Slipping EBITDA-to-cash conversion2
75%65%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016 2017 2018
1. Approximation avg. annual growth using 2018E, based on underlying business corrected for best estimate of the temporary vitamin effect
2. Cash = EBITDA - ∆ OWC - CAPEX
ROCE (%)
1
Cash as % of
EBITDA2
100%
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Animal Nutrition & HealthHuman Nutrition & Health
Organic growth (CAGR)
Main levers(amongst others)
2010-2015 2016-2018
~5%~1%
2010-2015 2016-2018
~8%~5%
M&S Excellence + Invest in B2C Biz-model leverage + Auctus Strategy
Part 1 #1 global probiotic
supplement
Both businesses accelerated their underlying organic growth significantly,
but through different levers
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1. Approximation using 2018E, based on underlying business corrected for best estimate of the temporary vitamin effect
2017 2018
Vitamin E <10%2
Other
Vitamins
A & E
Underlying business
Temporary vitamin benefit
100%
Our overall Gross Margin today relies on many products and therefore
tends to be more resilient – Temporary vitamin benefit 2018 separated!
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GPx distribution by product1
1. Excluding mixing margin
2. Of Nutrition GPx; GPx is Gross Profit
Adj. EBITDA %:
~19%
The comprehensive Nutrition Improvement Program did mostly work …
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Integrated
Business Planning
~5% organic growth per year
1% OWC/Sales reduction/yr
Product Portfolio
~€300m capex per year
Operations
€130-150m savings
Innovation
Major impact beyond 2018
Human Nutrition
Spider in the web
For existing
and new products
Strategy
2018
Nutrition
Adj. EBITDA
back to range
of 18-20%
Staffs & Support functions
Staff & Services
DSM-wide
savings of
€125-150m
Raw materials purchasing
Fixed costs
Max. throughput
Yield & energy
ACT(DICI/PIP)
More focused
portfolio …
… and higher
speed to market
Animal Nutrition
Projects
Platforms
✓ ~ ✓ ✓ ✓
Spider in the web
For existing
and new products
Raw materials purchasing
Fixed cost
Max. throughput
Yield & energy
ACT(DICI/PIP)
More focused
portfolio …
… and higher
speed to market
Projects
Platforms
… and will be followed up by an ambitious phase-2
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~5% organic growth per year
Economies of scale Major impactStrategy
2021
Nutrition
High single-digit
Adj. EBITDA
growth
Staff &
Services
Operating Cash Flow growth > EBITDA growth
End-to-end customer experience
Delivery of
large
innovation
projects
Supply Chain
& Inventory
Management
M&S
excellence
incl.
Customer
Centricity
Continuous
cost
improvement
End-to-end customer experience
Product
portfolio
Operations InnovationIntegrated business
planning
Animal
Nutrition
Human
Nutrition
Five key macro-trends - Two have a disruptive impact on strategy
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Animal Nutrition & HealthHealth & Wellness
Value Chain Shifts
Macro Economy
Sustainability
Growth & Productivity
Human Nutrition & Health
Forward
integration
opportunities
More integrated
application-based
offers
New Market
Opportunities
▪ Antibiotic resistance
▪ Environmental footprint
▪ Overfishing
▪ Greenhouse gas
emissions
Food & Beverage
▪ Focus on M&S
▪ “Less of …”
strategy
Specialty Nutrition
▪ Personalization
▪ Vertical
integration
B2B
Ingredients ApplicationsB2C
Specia
lty N
utr
itio
n
Dietary
supplements
Early life &
Medical
Nutrition
Pharma
- Organic - Organic/ inorganic
Food
&
Beverage
Distinct organic & inorganic growth drivers per business for 2019 - 2021
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Animal Nutrition & HealthHuman Nutrition & Health
M&S
Excellence Part 2
Strategic
Growth
fields
Build out Food Ingredient
Solutions business
Expand & personalize
B2C business
Broaden
portfolio &
delivery
systems
Organic Sales growth
Adjusted EBITDA growth
Adjusted EBITDA margin
Ambitions for Nutrition underpinning DSM’s 2021 Targets
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~5%
High single-digit %
>20%