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DSM reports H1 2018 results

Heerlen, NL, 01 Aug 2018 07:00 CEST

H1 Highlights

  • DSM reports a very good H1 with strong performance across all businesses
  • Continued strong organic sales growth in underlying business estimated at 10%
  • Adjusted EBITDA growth of underlying business estimated at 7%, despite significant FX headwind
  • ROCE of underlying business estimated at 13.8%, up 160 bps
  • Additional temporary vitamin price benefit estimated at €275m on Adjusted EBITDA
  • Total Adjusted EBITDA up 45% and Net profit up 103% to €633m
  • Cash from Operating Activities €503m up 53%
  • Interim dividend of €0.77, reflecting the proposed dividend increase of about 25% for 2018
  • Full year outlook reconfirmed

Key figures and indicators1

in € million H1 2018 H1 2017 % change
  Underlying business2 Temporary vitamin effect2 Total Group Reported  Underlying organic growth2 FX & ‘other’2 Underlying total growth2 Temporary vitamin effect2 Total Group
Sales 4,429 365 4,794 4,320 10% -7% 3% 8% 11%
Nutrition 2,840 365 3,205 2,778 10% -8% 2% 13% 15%
Materials 1,492   1,492 1,426 9% -4% 5%   5%
Adjusted EBITDA 771 275 1,046 721     7% 38% 45%
Nutrition 564 275 839 528     7% 52% 59%
Materials 261   261 241     8%   8%
Innovation 0   0 1          
Corporate -54   -54 -49          
EBITDA 754 275 1,029 689          
Adjusted EBITDA margin 17.4% 21.8% 16.7%            

1) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
2) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “Our ongoing focus on driving above market growth while pursuing efficiency initiatives and maintaining capital discipline, continues to drive our results. Following a strong start to the year, we are very pleased to report very good H1 results, with organic growth above market across all our businesses, and strong underlying Adjusted EBITDA growth despite significant foreign exchange headwinds. During the quarter, we also took another important step in monetizing our partnerships through announcing our exits from Fibrant and DSM Sinochem Pharmaceuticals. Our business conditions remain strong and we reiterate our full year 2018 outlook.

We are convinced our recent strategy update will create enhanced organic sales growth and continued EBITDA momentum, as DSM evolves further towards a purpose-led, science-based company in Nutrition, Health and Sustainable Living. The step-up in our dividend for 2018, already reflected in the interim dividend, demonstrates our confidence in our future earnings growth.”

Q2 Highlights

  • DSM reports a very good Q2 with strong performance across all businesses
  • Continued strong organic sales growth in underlying business estimated at 8%
  • Adjusted EBITDA growth of underlying business estimated at 6%, despite significant FX headwind
  • Nutrition: an estimated 8% underlying organic sales growth and Adjusted EBITDA growth of underlying business estimated at 6%
  • Materials: 7% organic sales growth and Adjusted EBITDA growth of 5%
  • Additional temporary vitamin price benefit estimated at €110m on Adjusted EBITDA
  • Total Adjusted EBITDA up 35%

Key figures and indicators1

in € million Q2 2018 Q2 2017 % change
  Underlying business2 Temporary vitamin effect2 Total Group Reported  Underlying organic growth2 FX & ‘other’2 Underlying total growth2 Temporary vitamin effect2 Total Group
Sales 2,214 145 2,359 2,161 8% -6% 2% 7% 9%
Nutrition 1,410 145 1,555 1,380 8% -6% 2% 11% 13%
Materials 754   754 725 7% -3% 4%   4%
Adjusted EBITDA 398 110 508 376     6% 29% 35%
Nutrition 287 110 397 271     6% 40% 46%
Materials 135   135 128     5%   5%
Innovation 1   1 0          
Corporate -25   -25 -23          
EBITDA 393 110 503 355          
Adjusted EBITDA margin 18.0% 21.5% 17.4%            

1) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
2) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.

Outlook 2018

DSM confirms its full year outlook 2018, as provided at Q1 2018, and expects an Adjusted EBITDA growth towards 25% and a related higher ROCE growth. This is based on:

  • a low double-digit Adjusted EBITDA growth in the underlying business at constant currencies,
  • a negative foreign exchange effect on Adjusted EBITDA of about €70 million, and
  • an additional Adjusted EBITDA benefit estimated at €275 million from a temporary exceptional vitamin pricing environment

Key figures and indicators1

in €
million
H1 2018 H1 2017 % change Volume Price/
mix
FX Other
Sales 4,794 4,320 11% 5% 13% -7% 0%
Nutrition 3,205 2,778 15% 5% 18% -9% 1%
Materials 1,492 1,426 5% 6% 3% -4% 0%
Innovation Center 75 84          
Corporate Activities 22 32          
in €
million
Q2 2018 Q2 2017 % change Volume Price/
mix
FX Other
Sales 2,359 2,161 9% 3% 12% -6% 0%
Nutrition 1,555 1,380 13% 2% 17% -7% 1%
Materials 754 725 4% 5% 2% -3% 0%
Innovation Center 39 41          
Corporate Activities 11 15          
in €
million
H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
Sales 4,794 4,320 11% 2,359 2,161 9%
Adjusted EBITDA 1,046 721 45% 508 376 35%
Nutrition 839 528 59% 397 271 46%
Materials 261 241 8% 135 128 5%
Innovation Center 0 1   1 0  
Corporate Activities -54 -49   -25 -23  
Adjusted EBITDA margin 21.8% 16.7%   21.5% 17.4%  
EBITDA 1,029 689   503 355  
Adjusted EBIT 817 478 71% 394 256 54%
EBIT 800 441   389 235  
Capital Employed 8,115 7,692        
Average Capital Employed   7,874 7,831        
ROCE (%)2 20.8% 12.2%        
Effective tax rate3 18.0% 18.0%        
Adjusted net profit4 643 338 90% 306 175 75%
Net profit - Total DSM4 633 312 103% 302 163 85%
Adjusted net EPS 3.64 1.90 92% 1.73 0.98 77%
Net EPS - Total DSM 3.58 1.75   1.70 0.91  
Operating Cash Flow 503 329 53% 193 133 45%
Capital Expenditures5 295 250   125 120  
Net debt 831 2,205        
Average number of ordinary shares 175.0 175.0   175.2 174.9  
Workforce (headcount end of period)
20,697 21,0546        

1) Including temporary vitamin effect
2) ROCE from underlying business H1 2018 is estimated at 13.8%
3) Over Adjusted taxable result
4) Including result attributed to non-controlling interest
5) Cash, net of customer funding, investment grants and excluding financial leases
6 )Year-end 2017

In this report:
‘Organic sales growth’ is the total impact of volume and price/mix;
‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’

Strategy 2015-18: Driving profitable growth

DSM’s Strategy 2015-18 has been highly successful. After transforming DSM over the period 2010-15, through various acquisitions and divestments, DSM delivered strong organic growth with greatly improved operational and financial performance and significant value creation in all its businesses. In addition, DSM took important steps to monetize its non-core Pharma and Bulk Chemicals joint ventures. DSM has become a growth company with ambitious sustainability efforts creating value for all stakeholders across the three dimensions of People, Planet and Profit:

  • Both Nutrition and Materials have been outpacing market growth and are expected to continue to grow at rates above the markets they operate in;
  • A strong and (re)focused innovation pipeline was created to enhance long-term growth;
  • The execution of the extensive cost-reduction and improvement programs is well on track to deliver run-rate cumulative savings of ~€275 million by the end of 2018 versus the 2014 baseline;
  • Consistent improvements in capital efficiency;
  • Significant value was extracted from partnerships with the sale of DSM’s holding in Patheon in 2017 as well as from the recently announced divestments of DSM's interest in Fibrant and DSM Sinochem Pharmaceuticals;
  • Organizational adjustments enabled a stronger results-oriented company and culture.

As a result, DSM is delivering significantly ahead of its two headline financial 2015-18 targets: high single-digit percentage annual Adjusted EBITDA growth and high double-digit basis point annual ROCE growth, with all businesses outperforming.

DSM strategy update: Growth & Value – Purpose led, Performance driven

On 20 June 2018, DSM presented its strategy update detailing how it will evolve further towards being a purpose-led, science-based company in Nutrition, Health and Sustainable Living. DSM’s strong growth platform, centered on developing innovative solutions addressing Nutrition & Health, Climate & Energy and Resources & Circularity, together with increased customer centricity and its large innovation projects, will drive above-market growth, while DSM will remain focused on cost control and operational excellence, allowing it to accelerate profit and cash generation. Organic growth will be complemented by acquisitions predominantly in Nutrition.

Two ambitious targets for profit growth and cash generation have been set for the period 2019-2021: high single-digit annual percentage increase in Adjusted EBITDA and about 10% average annual increase in adjusted net operating cash flow.

Purpose sets scope for further growth and evolution
With its unique science-based competences, DSM is ideally positioned to capture the growth opportunities offered by the global megatrends and Sustainable Development Goals (SDGs), with a particular focus on Nutrition & Health, Climate & Energy and Resources & Circularity. DSM will therefore evolve into a Nutrition, Health and Sustainable Living company:

  • DSM’s Nutrition business will focus on human nutrition (ingredients and solutions for food & beverages, as well as specialty nutrition, nutritional ingredients, consumer branded products and personalized nutrition), animal nutrition (covering all species with premix and specialty solutions) and personal care and aroma ingredients; while,
  • DSM’s Materials business will further develop into a high-growth, higher-margin specialty business and focus on health, bio/ green applications and new mobility & connectivity applications.

By improving the impact of its own operations, enabling sustainable solutions for its customers and advocating sustainable business, DSM can grow faster and reduce its cost and risk profile. DSM will further step-up its ambitions regarding the reduction of GHG emissions, energy efficiency and use of renewable energy.

Performance-driven to deliver growth and value
DSM has set two ambitious targets for profit growth and cash generation to drive value creation for the period 2019-2021:

  • High single-digit annual percentage increase in Adjusted EBITDA
  • About 10% average annual increase in adjusted net operating cash flow

These financial targets will be supported by an holistic value-creation approach.

DSM is committed to top-line growth ahead of market, resulting in about 5% organic growth, that will be supported by expanded solutions offerings, putting the customer even more in the center, and the delivery of large innovation projects. Approximately 45% of sales will come from high growth economies and 20% of sales will come from innovation. DSM continues to invest in differentiating science and technology with circa 5% of sales and harness digital capabilities to increase customer intimacy, improve productivity/efficiency and support new business models.

Greater efficiencies and an increased focus on higher-margin specialty solutions will enable new Adjusted EBITDA margin ambitions by 2021 for Nutrition (over 20%) and Materials (18-20%). Organic top-line growth combined with these enhanced margins will drive DSM’s high single-digit Adjusted EBITDA growth.

DSM aims to accelerate growth in adjusted net operating free cash flow of about 10% average annual increase. This results in the ambition to reduce working capital levels of around 50 bps annually to about 16% of sales (from 18.4% in 2017), a disciplined approach to capex with an overall level of approximately 6.5% of sales, and the ambition to drive improvements in organic ROCE of around 1% annually.

DSM’s overall deployment of capital is expected to drive Adjusted EPS growth ahead of Adjusted EBITDA growth.
DSM cash allocation policy remains unchanged and has a clear order of priority for cash deployment:

  • Disciplined capex for organic growth: about 6.5% of annual sales;
  • A stable, preferably rising dividend;
  • Disciplined M&A, predominantly in Nutrition;
  • In the absence of value-creating M&A, capital to be returned to shareholders.

DSM remains committed to maintaining a strong, investment grade credit rating.

While keeping its policy of a stable, preferably rising dividend unchanged, DSM will propose a dividend increase of about 25% to €2.30 per ordinary share over 2018, already reflected in the interim dividend over 2018 to be paid 24 August 2018. This step-up in dividend is linked to underlying earnings growth. In line with the targets set for the period 2019-21, DSM’s performance is expected to result in further dividend growth, which could lead to an expected average payout of 40-50% of adjusted (underlying) earnings.

DSM targets M&A predominantly in Nutrition given its growth potential, resilience, strong leadership position and value creation potential.

Review by Cluster

Nutrition

Underlying business

in €
million
H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
Sales 2,840 2,778 2% 1,410 1,380 2%
Adjusted EBITDA 564 528 7% 287 271 6%
Adjusted EBITDA margin (%) 19.9% 19.0%   20.4% 19.6%  
ROCE (%) 15.4% 13.9%        

Temporary vitamin effect

in € million
(estimated)
H1 2018 Q2 2018
Sales 365 145
Adjusted EBITDA 275 110

Total cluster

in €
million
H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
Sales 3,205 2,778 15% 1,555 1,380 13%
Adjusted EBITDA 839 528 59% 397 271 46%
Adjusted EBITDA margin (%) 26.2% 19.0%   25.5% 19.6%  
Adjusted EBIT 698 383 82% 328 198 66%
Capital Employed 5,689 5,431        
Average Capital Employed 5,505 5,508        
ROCE (%) 25.4% 13.9%        
Total Working Capital 1,669 1,548        
Average Total Working Capital as % of Sales 24.3% 27.6%        

Sales development (underlying business)
Nutrition continues to deliver on its above-market growth ambition through an expanding portfolio of higher-value feed and food solutions as well as through customer-led innovation and marketing & sales excellence.

H1 2018 organic sales growth in the underlying Nutrition business was an estimated 10%, driven by continued strong volume growth of 6%, well above market. 4% higher prices partly off-set 9% negative foreign currency effects and higher input costs.

Q2 2018 organic sales growth was an estimated 8% in the underlying Nutrition business. This was driven by 4% volume growth, with continued strong performance in both Animal and Human Nutrition. Furthermore, prices were up 4%, in line with Q1.

H1 2018 Adjusted EBITDA growth in the underlying business was estimated at 7%. This was mainly driven by volume growth and the contributions from the savings and efficiency improvement programs partly offset by negative foreign exchange effects. The estimated Adjusted EBITDA margin was 19.9%, up 90 bps.

Q2 2018 showed an estimated Adjusted EBITDA growth of 6% in the underlying business, despite significant negative foreign exchange effects. The estimated Adjusted EBITDA margin was 20.4%, a step-up of 80 bps versus Q2 2017.

Temporary vitamin effect
In addition, due to the exceptional supply disruptions in the industry, the first half year also benefited from an estimated €275 million additional Adjusted EBITDA contribution from an exceptional temporary vitamin price environment. This vitamin price effect was mainly related to animal nutrition with prices normalizing by the end of the quarter.

Animal Nutrition & Health (underlying business)
Sales development

Animal Nutrition continues to benefit from its strong position in higher growth, well diversified, premix solutions activities through its ability to address a wide range of species, as well as its diversified geographic presence. Covering all major growth areas in the world, while introducing innovative specialty ingredients, DSM continues to realize above-market growth.

H1 2018 organic sales growth was an estimated 14% in the underlying business. Volumes were up 8% driven by very strong premix solutions sales with strong business conditions in all regions, with the exception of Brazil, where the ongoing unrest continues to impact the local economy.

H1 2018 benefitted from an exceptionally strong first quarter as a result of customers focusing on security of supply, driven predominantly by the environmental ‘Blue Skies policies’ in China and the introduction of reformulated forms due to new European regulations. Markets normalized in Q2.

The 6% higher prices in the underlying business were driven by price initiatives to mitigate higher input costs and the impact of negative exchange rate developments, led by the weaker US dollar and the Brazilian real. Furthermore, prices were supported by the effects of the ‘Blue Skies policies’.

Q2 2018 organic sales growth in the underlying business was an estimated 9%. The reported 3% volume growth was negatively impacted by the trucker strikes in Brazil. Without this event, volume growth would have been 6%. Prices were up 6%, in line with Q1.

Human Nutrition & Health (underlying business)
Sales development

Human Nutrition continued to deliver on its strong growth trajectory, with all regions and segments contributing.

Food & beverage markets are being successfully addressed through tailored premix solutions while moving the business closer to regional and local customers.

Growth in dietary supplements is driven by sales excellence programs, the introduction of new multi-vitamins and omega-3 solutions and continued double-digit growth in i-Health which is benefitting from its ongoing expansion into China. DSM’s unique position in nutritional ingredients for Early Life Nutrition continues to provide a solid growth platform.

H1 2018 organic sales growth in the underlying business was an estimated 8%. In both Q1 and Q2 2018 volumes were up 5%, with well above market growth across all regions and market segments. Volume growth was specifically strong in premix solutions as well as in the i-Health business.

Prices were up 3% resulting from a combination of a favorable mix due to strong growth in premix and i-Health, as well as benefits from higher prices for premix and advanced formulations, supported by the effects of the ‘Blue Skies policies’ in China.

Other Nutrition activities
DSM’s other activities in Nutrition, which include Food Specialties, Personal Care, Aroma Ingredients and Hydrocolloids, delivered an overall strong performance in H1 2018 with a mid-single digit organic sales growth. DSM’s key innovation project for an advanced sweetener called AVANSYA Reb M™ (‘fermentative Stevia’) is well on track, introducing initial quantities to select customers in North America on a trial basis.

Materials

in €
million
H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
Sales 1,492 1,426 5% 754 725 4%
Adjusted EBITDA 261 241 8% 135 128 5%
Adjusted EBITDA margin (%) 17.5% 16.9%   17.9% 17.7%  
Adjusted EBIT 199 177 12% 104 96 8%
Capital Employed 1,901 1,807        
Average Capital Employed 1,837 1,815        
ROCE (%) 21.6% 19.5%        
Total Working Capital 417 353        
Average Total Working Capital as % of Sales 12.8% 12.2%        

Sales development
Materials continues its ongoing ‘silent transformation’, focusing strongly on higher growth, higher margin specialty materials, aimed at more sustainable, innovative, lightweight, environmentally friendlier, safer, and higher-performing solutions. By directing its unique segment-specific application development skills more towards customer-driven innovation in health, bio/ green applications and new mobility & connectivity applications, Materials aims to continue its above-market growth ambitions.

H1 2018 organic sales growth was 9%, with 6% higher volumes and 3% higher prices, reflecting price increases to offset higher raw material costs. Q2 2018 organic sales growth was 7%, with 5% higher volumes and 2% higher prices.

  • DSM Engineering Plastics delivered a very strong sales performance throughout H1, benefitting from its continued efforts to shift its portfolio towards higher-value, sustainable, specialty materials for the electrics & electronics and automotive industries. Strong growth was supported by the launch of new applications, as well as clean energy initiatives.
  • DSM Resins & Functional Materials had a strong start to the year, after which Q2 saw a moderation in the rate of sales growth. While Functional Materials continued to deliver strong growth, the coatings businesses showed a mixed picture: North America and Asia kept performing well, including continued strong demand in China for environmentally-friendly specialty resins solutions. In Europe, there is some uncertainty amongst the coating players in the chain on how the building and construction market will develop throughout the current high season period.
  • DSM Dyneema had a very strong performance throughout H1 driven by high demand in personal protection.

H1 2018 Adjusted EBITDA was up 8%, driven by good volume growth and its specialty portfolio. The Adjusted EBITDA margin was 17.5%, versus 16.9% in H1 2017.

Innovation Center

in €
million
H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
Sales 75 84 -11% 39 41 -5%
Adjusted EBITDA 0 1   1 0  
Adjusted EBIT -12 -12   -6 -7  
Capital Employed 589 592        

The Innovation Center ensures that DSM has a robust innovation and growth pipeline. It serves as a center of excellence to accelerate the innovation power of DSM’s core businesses. It is also responsible for developing DSM’s Emerging Business Areas, bringing long-term sustainable growth platforms in promising end-markets.

The Emerging Business Areas reported slightly lower organic sales in H1 2018 as a result of timing of orders at DSM Biomedical and a slowdown of sales at DSM Advanced Solar following a policy change by the Chinese government to reduce the number of subsidized solar parks to be installed. Nevertheless, DSM is progressing well with its innovation activities, creating the basis for good growth.

Corporate Activities

in €
million
H1 2018 H1 2017 Q2 2018 Q2 2017
Sales 22 32 11 15
Adjusted EBITDA -54 -49 -25 -23
Adjusted EBIT -68 -70 -32 -31

H1 2018 Adjusted EBITDA was slightly below H1 2017, mainly due to higher insurance claims at DSM’s captive insurance company.

Joint Ventures and Associates

in € million, based on 100% H1 2018 H1 2017 % change Q2 2018 Q2 2017 % change
DSM Sinochem            
Sales 239 217 10% 118 107 10%
Adjusted EBITDA% 16% 15%   15% 14%  
ChemicaInvest            
Sales
1,015 996 2% 483 461 5%
Adjusted EBITDA% 9% 8%   9% 7%  

On 17 May 2018 Fibrant Holding BV announced the proposed sale of Fibrant BV and 60% of the shares of Fibrant China to the Highsun Holdings Group Ltd. Through the joint venture Chemicalnvest, DSM indirectly owns 35% of the shares of Fibrant BV. The intended sale is subject to customary regulatory approvals and consultations. It is estimated that DSM will receive about €200 million in cash following the closing of the transaction with Highsun Holdings Group Ltd.

On 29 June 2018 DSM announced the sale of DSM Sinochem Pharmaceuticals to Bain Capital and has now classified its interest in this company as held for sale. The transaction is subject to customary regulatory approvals and consultations. DSM will receive about €250 million for its equity stake, excluding an earn-out (estimated at around €50 million) and transaction costs. DSM expects to receive approximately €275 million in cash following closing, including repayment of debt and after transaction costs.

Net result contribution of joint ventures / associates

in €
million
H1 2018 H1 2017 Q2 2018 Q2 2017
DSM Sinochem (50%) 7 4 3 1
Patheon1 0 7 0 -2
ChemicaInvest (35%)2 12 0 5 0
Other associates / joint ventures -11 -14 -5 -10
Total before APM adjustments
8 -3 3 -11
APM adjustments -1 2 -1 4
Share of the profit of associates / joint ventures 7 -1 2 -7

1) DSM completed the divestment of its share in Patheon on 29 August 2017.
2) DSM does not recognize losses below zero equity value as DSM has no obligation to fund beyond its net interest.

Condensed Cash Flow Statement and (Operating) Working Capital

in €
million
H1 2018 H1 2017 Q2 2018 Q2 2017
Cash provided by Operating Activities 503 329 193 133
Operating Working Capital 2,347 2,062    
Average Operating Working Capital as % of Sales 23.2% 23.9%    
Total Working Capital 1,807 1,591    
Total Working Capital as % of Sales 18.3% 18.9%    

Cash flow from operating activities amounted to €503 million in H1 2018 showing an increase of €174 million (+53%) compared to H1 2017.

Total Working Capital amounted to €1,807 million at the end of H1 2018 compared to €1,591 million at the end of H1 2017. Average Total Working capital as a percentage of sales amounted to 18.3%. The increase in Operating Working Capital was due to higher working capital in Nutrition following inventory built up in view of the scheduled maintenance stops in H2 2018 as well as higher receivables as a result of higher sales levels.

Dividend and equity

On 1 June 2018, the final dividend of €1.27 per share for the year 2017 was paid to holders of ordinary shares and a dividend of €0.11 per share was paid to holders of cumulative preference shares A. The total distribution to shareholders amounting to €227 million was recorded against retained earnings.

An interim dividend for 2018 of €0.77 per ordinary share and €0.06 for cumulative preference shares A was recognized as a liability in the second quarter of 2018. This distribution to shareholders amounting to €138 million will take place in Q3 2018. The interim dividend represents about one third of the total proposed dividend for 2018, which is an about 25% increase versus 2017. The interim dividend will be payable in cash or in the form of ordinary shares at the option of the shareholder, with a maximum of 40% of the total dividend amount available for stock dividend. If more than 40% of the total dividend is requested by the shareholders to be paid out in shares, those shareholders who have chosen to receive their dividend in shares will receive their stock dividend on a pro rata basis, the remainder being paid out in cash. Dividend in cash will be paid after deduction of 15% Dutch dividend withholding tax. The ex-dividend date is 3 August 2018. The interim dividend will be payable as from 24 August 2018.

In the first half of 2018, 2.4 million shares were released into circulation in connection with stock dividend, the exercise of options and delivery of performance shares. In the same period, 1.6 million shares were repurchased to cover existing option plans and stock dividends.

Overview of Alternative Performance Measures (APM) adjustments to EBIT(DA)

The following overview gives a summary of H1 2018 APM adjustments (for reconciliation see page 16 of PDF version).

Nutrition: EBITDA adjustments amounted to +€1 million (EBIT +€1 million) of which -€9 million costs regarding the profit improvement programs, -€1 million acquisition related costs and +€11 million profit following the deconsolidation of Yantai Andre Pectin and the subsequent revaluation of the equity interest to fair value.

Materials: EBITDA adjustments amounted to -€13 million (EBIT-€13 million) of which -€14 million related to restructuring programs and +€1 million due to the release of a provision.

Innovation: EBITDA adjustments amounted to -€1 million (EBIT-€1 million) all relating to restructuring programs.

Corporate Activities: EBITDA adjustments amounted to -€4 million (EBIT -€4 million) of which -€8 million relating to restructuring programs and +€4 million due to a received earn-out from a previous divestment.