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DSM sets Strategy 2018

Heerlen, NL, 04 Nov 2015 07:15 CET

Royal DSM, a global science-based company active in health, nutrition and materials, today presents its updated corporate strategy, “Driving Profitable Growth” at its annual Capital Markets Day in Amsterdam (Netherlands).

Highlights of Strategy 2018

  • After a period of transformation, DSM will focus on improving its financial results through organic growth, reducing costs and strict capital allocation
  • The Nutrition and Performance Materials businesses offer great potential for growth through sustainable innovative solutions capturing opportunities the global megatrends offer
  • DSM will execute cost reduction and efficiency improvement programs, which will result in combined savings of €250-300 million (to be fully achieved by the end of 2018) through the earlier announced program for the global support functions and a new program in Nutrition; the costs of these programs will amount to €200-250 million
  • DSM has set two targets for this three-year strategic period:
    • EBITDA growth – high single-digit annual percentage increase
    • Return On Capital Employed (ROCE) growth – high double-digit annual basis points increase
  • DSM is stepping-up its sustainability approach, as a business driver throughout the value chain while reducing its own footprint further
  • DSM is adjusting its organizational model and way of working to support the delivery of its targets
  • DSM will extract significant value from the Pharma and Bulk Chemicals joint ventures in the coming years
  • The targets of Strategy 2018 are based on current macro-economic conditions and exchange rates

Feike Sijbesma, CEO and Chairman of the DSM Managing Board, commented: “We have transformed the company successfully into a science-based company in health, nutrition and materials. The global megatrends that drive our business remain highly relevant. Our focus on the growth drivers High Growth Economies, Innovation and Sustainability has created DSM’s current platform for growth.

Organic growth, supported by cost reductions and strict capital allocation will enable us to improve our financial results. This is reflected in the two targets set for the strategic period: EBITDA and ROCE growth.

We will extract significant value from the Pharma and Bulk Chemicals joint ventures in the coming years, providing financial headroom. We do not expect to engage in large acquisitions in the near future as we continue to integrate recent acquisitions, which have made a strong contribution to earnings.

Having made important steps in the strategic period behind us, DSM is now a more global, innovative and sustainable company with a portfolio and strategy geared at improving financial results.”

Video-webcast and presentations

A conference call for the media was held at 09.00 (CET). A recording of this call can be found below. The DSM Capital Markets Day video webcast and presentations can be found below.