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DSM accelerates itspurpose-led,performancedriven strategicjourneyGeraldine Matchett Co-CEODimitri de Vreeze Co-CEO14 September 2021
DSM accelerates its purpose-led, performance-drivenstrategic journeyGlobal food systems facemultiple challenges. DSMhas the capability andresponsibility to make ameaningful impact2Addressing these foodsystem challenges offerexciting new marketopportunities for DSMDSM will be a fullyfocused Health,Nutrition & Biosciencecompanyand realigns its globalorganization accordinglyWe align our organizationto this ambitionDSM isreviewing strategicoptions for the twoMaterials businesses
With a growing global population, the world is facingmultiple systemic and interconnected food systemchallenges that impact the health and wellbeing ofpeople, animals, and the planet3
Global food systems face multiple systemic interconnectedchallengesInequalityVitamin and mineraldeficienciesLoss of biodiversity,deforestation, lossecosystem on land and inthe oceanLacking basic needs such asfood, healthcare andeducationImmunity incl. anti-microbialresistanceFood loss & wasteDiet-related illnesses,overweight, obesityPeople4NH3Emissions from livestockGreen House Gasses (e.g.methane), nitrogen, ammonia,phosphorus(Hidden) Hunger andmalnutritionN 2OCH4PO4PlanetFarmers not able to generatea fair and stable income inthe value chainLivelihoods
Increased awareness of the critical role of food, supportedby the rapid developments in science & technologyTrends and societal challengesConsumerSocietyEnvironmentMarket opportunity for solutions that offerHealth and Nutrition5Bioscience & technology breakthroughsBiotechnologybreakthroughsData &DigitalPrecision &PersonalizationScience & technology enablingUnprecedented Precision
DSM has the capability and therefore theresponsibility to make a meaningful impact on theglobal food systems, while this also creates excitingnew market opportunitiesThis way we are staying true to our purpose ofcreating brighter lives for all6
More than 150 years of deep scientific heritage, with biotechfacilities around the world7 DSM is active in the major groups of microbial technologies, with bacteria, yeasts, fungi and microalgae Close to 50% of DSM’s current sales of nutritional ingredients is produced out of biobased or natural input materials
Enhanced leadership in Health, Nutrition & Biosciencethrough high quality M&A2011201220132014201520172018201920202021 Strengthened bioscience position by adding a/o algae & fungi-based fermentation Added new product categories, building the most comprehensive portfolio of nutritional ingredients Expanded global geographic reach, becoming a global player Build a unique business model with solutions/premix and expanded this business model in precision and personalization8
DSM has a rich innovation pipeline, predominantly biosciencebased9
DSM has created a unique business modelPrecision & PersonalizationDigitization & Bioscience as a know-how multiplierGlobal ProductsScience, Scale, Quality10Local SolutionsGlobal network offeringlocal (customized) solutions
DSM is well positioned to make a meaningful impacton the food system transformation, and to capturethe exciting growth opportunitiesTherefore, DSM will exclusively focus on Health,Nutrition & Bioscience11
Accelerate to a fully focused Health,Nutrition & Bioscience company Materials businesses managed largely on a standalone basis;reviewing strategic options, including a possible change ofownership New simplified Health, Nutrition & Bioscience organization through:– Creation of 3 Business Groups with strong market focus― Food & Beverage― Health, Nutrition & Care― Animal Nutrition & Health– Integration of innovation activities of DSM Innovation Center in 3 BusinessGroups: Fully equipped to drive impactful innovations– Alignment of global enabling functions and top structure12
DSM will realign its global organizational set up & reportingToday1 January 2022DSM lCare &Aroma13NutritionalProductsAnimalNutrition &HealthHumanNutrition &HealthInnovationCenterDSM GroupMaterialsFood &BeverageHealth,Nutrition &CareAnimalNutrition ialsEngineeringMaterials
Three BGs created with clear end-market orientationHealthy diets for allthrough nutritious,delicious andsustainable solutionsKeeping the world’sgrowing populationhealthyRadically moresustainable animalfarmingFood & Beverage 1.2bn*Health, Nutrition & Care 2.3bn*Animal Nutrition & Health 3.3bn** Based on 2 times H1 202114
Food & Beverage (F&B)Healthy diets for all through nutritious, delicious and sustainable solutionsSales 1.2bn*Dairy30%Baking,confectionary15%DSM offering broad range of ingredients Beverages20%20% holding a strong market position Split by ingredient categoryFood Enzymes 10% market shareVitamins Strong biotechnology competences Top 3 player in Food Enzymes and Cultures Market leader in food premixes Integrated solutions supply capabilitiesSavory & flavorsCulturesCarotenoidsProtection & testsTexturesOther15SavoryPlant-based,sugar reductionPet5%10% in attractive marketsFood &Beverage 3trillion(2020)Pet Food 90bn(2020)
The opportunity for F&BServing a growing global population with healthy nutrition with the right taste and texture,sustainably producedKey trendsOffering new opportunities Consumer awareness of health andsustainability impact Shift toplant-basedproteinsReduction ofsugar, saltand fat16Reductionof foodwasteFortification,digestive health andimmunityUse oflabel-friendlyingredientsTasteandtextureF&B companies seek new productsolutions for tasty and at the sametime healthier and sustainableproducts with fast time to marketNew innovative companiesdisrupting the market, e.g. withplant-based meat and dairyalternatives, seeking developmentpartners that can supply integratedsolutions for which DSM is uniquely positioned Ability to partner with customers to develophealthier products with the right taste andtexture through integrated solutions Based on a broad ingredient portfolio fortaste, texture and health, including newinnovations such as EverSweet sweetener andCanolaPro Fueled by strong expertise in nutrition, F&Bapplication, biotechnology, sustainability
Health, Nutrition & Care (HNC)Keeping the world’s growing population healthySales 2.3bnEarly LifeNutrition20%Nutritionalimprovement for themost vulnerable5%DSM offering broad range of ingredients Split by ingredient categoryFat soluble vitaminsWater soluble vitaminsLipids, HMOsAroma IntermediatesOther blending ingredients17Personal Care& AromaBiomedicalSolutions35%15%20%5% in attractive marketsScience leader in specialty nutritional and personalcare ingredients and biomedical materials focusingon immunity, gut, brain and skin health, andsolutions for orthopedics and cardiovascular 30% market share in attainable specialty markets Strong B2C business (i-Health) with globally leadingbrands (Culturelle , AZO , Estroven ) 40% of sales through solutions (premix, marketready solutions, personalized nutrition solutions andB2C products)Personal CareBiomedical solutionsPharma/ MedicalNutrition holding a strong market position Probiotics y Life/MedicalUS 100bn US 65bn(2020)(2020)Personal CareUS 300bn(2020)
The opportunity for HNCPopulation growth & need for preventative and affordable nutrition and health drive growthKey trendsOffering new opportunities Increasing consumer focus on health andwellbeing and need for total solutions Increased awarenessof importance ofhealth and wellbeingand the role of proactive eating/ livingThe power of naturalfermentation/ cleanlabel Emerging markets IncreasedpersonalizationB/C customers/ valuebrands/ e-commerceNeed fortotal solutions for which DSM is uniquely positionedIngredients and solutions for improvingimmunity, gut, brain and skin healthFermentative/ advanced biotechtechnologies for replicating nature atscale and affordable cost in asustainable wayAdvanced materials and provensolutions to improve orthopedic andcardiovascular interventionsOpportunities for broadening theportfolio horizontally and verticallyacross the value chainScience-based, data-drivenpersonalized nutrition & care solutions F&F ingredients18Broadest science-backed portfolio ofvitamins, lipids, pre- and probiotics,personal care & aroma ingredients, andnatural materials for medical devicesLeading player for fermentation/ advancedbiotech solutionsTruly global business and premixnetwork and global market-readysolutions capability across all activitiesNutritional improvement for mostvulnerable, supporting growth outsidetraditional markets (e.g., Africa)Personalized Nutrition (Hologram Science,Analytical/diagnostic services)
Animal Nutrition & Health (ANH)Global population growth & need for radically more sustainable animal farming drive sales growthSales 3.3bnPoultrySwineRuminantsAqua45%25%20%10%DSM offering broad range of ingredients Split by ingredient category holding a strong market position Fat soluble vitaminsWater soluble vitaminsCarotenoidsFeed enzymes 30% market share Unique global premix network, strongrepresentation in all regions in the worldEubiotics - probioticsMineralsMycotoxin Risk ManagementOther blending ingredients19 65% of sales as solutions in attractive markets
The opportunity for ANHProductivity & sustainability drive specialty feed ingredientsKey trendsOffering new opportunities Professionalization of farming and ensuringfarmers can earn a living Helping tackleantimicrobialresistanceCH4CH4Making efficientuse ofnatural resources Co2N2OCo2N2OReducingemissionsfrom livestock20Reducing ourreliance on marineresourcesImproving lifetimeperformance of farmanimalsImproving the quality ofmeat, milk, fish and eggswhile reducing food loss& wasteDigital: Advanced biotech― for which DSM is uniquely positionedPrecision farming, labeling―New sustainable solutions ―Alternative for antibiotics Gut health sciencesProfessionalization farming indeveloping countriesRadical more sustainable farming Sustell , Verax, Erber Diagnostics (RomerLabs)Veramaris, Balancius, Midori US Inc.Probiotics, Prebiotics, enzymes andeubiotics for gut healthGlobal network benefiting from higherinclusion rates. Strong position in LATAMand AsiaWe make this possible; with our currentunique portfolio and our science-basedinnovation program
We will underpin our HNB journey by takingresponsibility for our own footprint and people,and by taking care for the world throughcourageous food system commitmentsBy doing so, we will build a sustainable growthcompany21
Building a growth company that delivers long term,performance driven profitable growthFood systems face hugeenvironmental and societalchallenges and offeropportunitiesDSM uniquely positionedand has capabilitiesto capture theseopportunitiesThis creates long-termpurpose-led positive impacton people and planetResponsibility for our own footprintand peopleBuilding a growth companythat delivers long-term,performance-drivenprofitable growthAmbitious mid-termprofit targetsMSD % organic sales growthConsumerBiotechnologySocietyData &DigitalEnvironmentCaring for the world:Ambitious food systems commitmentsHealth forPeoplePrecision &PersonalizationGreat People, unique Culture22Health forPlanetHealthyLivelihoodsAdj. EBITDA margins 20%HSD % annual adj. EBITDAgrowth
Taking full responsibility for our OWN footprint and peopleSector LeaderA for Climate A- for WaterDSM top ranked in leading ESG-ratings23Top ranking
Accelerated our route to Net Zero by 2050DSM is committed to achieve Net Zero GHG emissions across operations and value chains by 2050NetZeroGHG by 2050 100Per ton CO2Internal Price on Carbon(was 50 per ton)2450%Scope 1&2absolute emissionsreductionfrom operationsby 2030 vs 2016 Validated science-based 2030 targets on Green House Gasemission reduction (scope 1&2) increased to 50% versusbaseline 2016 (was 30%) Renewable electricity target China at 60% by 2030 Increased internal price on carbon from 50 per mt of CO2 to 100 per mt, to further guide its investments and operationaldecisions towards carbon neutral operations Biodiversity/water - reduction target set on water in H1- 10% efficiency improvement on water-intake in our waterstress sites by 2030
Making positive impact on food systemsContributing to the achievement of the UN Sustainable Development GoalsHealth for PeopleHealth for PlanetHealthy LivelihoodsOur ambitionsOur ambitionsOur ambitions Support affordable, accessible, aspirationalhealthy nutrition for a growing global population Reduce greenhouse gas, ammonia and phosphorousemissions from livestock Support farmers to generate a fair and stableincome with sustainable farming practices Fight hunger and malnutrition worldwide Limit the use of natural resources, reduce pressureon biodiversity: on land and in the oceans, conserveforests and oceans Promote a healthy supply chain for food and feedproduction that provide welfare for the localcommunities in which they operate Drive sustainable animal proteins from within thelivestock sector whilst improving animal health andwelfare Promote education; equality; equity, human rights Provide for healthy diets and combat diet-relateddiseases such as type 2-diabetes and heart disease Support good health and immunity through goodnutrition via diets and supplementation Reduce the risk of anti-microbial resistanceOur commitments Closing the micronutrient gaps of 800 millionvulnerable people by 2030 Supporting immunity of half a billion peopleby 203025 Develop and enable alternatives for animalproteins, that are nutritious, tasty and sustainablyproducedOur commitments Double digits on-farm livestock emission reductionby 2030 by using our feed ingredients Reaching 150 million people with solutions fornutritious, sustainably produced plant- basedprotein foods by 2030Our commitments Supporting the livelihoods of 500,000 smallholder farmers across value chains by 2030
We are building a growth company that delivers longterm, performance-driven profitable growthAdj. EBITDA DSM Nutrition ( m)Ambitious mid-term profit targets:Mid-single digit % organic sales growthAdj. EBITDA margins 20%High-single digit % annual adjustedEBITDA 020*Underlying business
We are building a growth company that createsbrighter lives for all
Safe harborThis presentation may contain forward-looking statements with respect to DSM’s future performance and position. Suchstatements are based on current expectations, estimates and projections of DSM and information currently available tothe company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult topredict and therefore it should be understood that many factors can cause actual performance and position to differmaterially from these statements. DSM has no obligation to update the statements contained in this presentation, unlessrequired by lawA more comprehensive discussion of the risk factors affecting DSM’s business can be found in the company’s latestAnnual Report, which can be found on the company's corporate website, www.dsm.com28
DSM accelerates its purpose-led, performance-driven strategic journey. We align our organization to this ambition. Global food systems face multiple . challenges. DSM has the capability and responsibility to make a meaningful impact. Addressing these food system challenges offer exciting
