Financial policy

Given the dynamic nature of DSM’s markets, it has always been important for the company to have a strong financial position. This gives DSM the financial resilience to continue pursuing its strategic goals even during economic downturns. DSM aims for a net debt which is less than 40% of group equity plus net debt and an operating profit before amortization and depreciation (EBITDA) which is at least 8.5 times the balance of financial income and expense. This underlines the company´s aim of maintaining its ’A’ long-term credit rating. DSM aims to achieve a cash flow return on investment (CFROI) which is higher than the weighted average cost of capital (WACC).

As part of the acceleration of the Vision 2010 – Building on Strengths strategy, DSM announced a new dividend policy. This policy reflects the transformation of DSM’s portfolio and consequently the increased profit stability. DSM aims to provide a stable and preferably rising dividend. A 20% dividend increase to EUR 1.20 per ordinary share will be proposed. An interim dividend of EUR 0.33 per ordinary share having been paid in August 2007, the final dividend would amount to EUR 0.87 per ordinary share. Dividends are paid entirely in cash.

The Annual General Meeting of shareholders decides on the final dividend. The dividend record date is the third business day after the AGM and the ex-dividend date is the second business day after the AGM. Dividends are paid entirely in cash.

Barring unforeseen circumstances DSM pays an interim dividend to holders of ordinary shares after the results of the first half year have been published. This interim dividend is set at one third of the total dividend over the previous year and gives no indication for the total dividend to be paid over the running year. The ex-interim dividend date is the first business day after the publication of the H1 results and the interim dividend record date is the third business day after the publication of the H1 results. Interim-dividends are paid entirely in cash.

An important element of DSM´s financial strategy is the allocation of cash flow. DSM primarily uses cash flow for investments aimed at strengthening its business positions and for the payment of dividend to its shareholders. The cash flow is further used for strengthening the Life Science Products and Performance Materials clusters by means of acquisitions. The company may also choose to buy back shares if there is sufficient cash flow available for this after the primary cash flow expenditures have been made.

An important acquisition criterion is that the business concerned should be compatible with DSM in terms of technological and/or market competencies. With effect from 2000, DSM’s policy has been to capitalize goodwill paid in the case of acquisitions and to amortize it over a maximum period of 20 years. Under the IFRS this will be replaced by an annual impairment test on goodwill. Acquired companies are in principle required to contribute to DSM’s profit from the very beginning and to meet the companys profitability requirements. In some cases this requirement may be relaxed somewhat.

Herewith DSM confirms that the Annual Report and Accounts 2007 and all other information published by DSM in 2007 has been made available on this website.

The primary task of the DSM Investor Relations Team is to maintain good contacts with current and potential shareholders of DSM and with analysts who advise shareholders. The policy of DSM Investor Relations is to provide quality information to investors and analysts about developments at DSM, ensuring that relevant information is equally and simultaneously provided and accessible to all interested parties.

From the last day of each quarter until the publication of the results of that quarter, DSM will be in a silent period. During this time we will not hold meetings with analysts or investors, make presentations at financial conferences, or hold discussions/conference calls with investors and analysts.