Consolidated financial statements

Consolidated income statement

x € million
Notes
2017
2016
 
 
Continuing operations
Discontinued operations
Total
Continuing operations
Discontinued operations
Total
 
 
      
Net sales
8,632
-
8,632
7,920
-
7,920
Cost of sales
(5,699)
-
(5,699)
(5,262)
-
(5,262)
Gross margin
 
2,933
-
2,933
2,658
-
2,658
 
 
      
Marketing and sales
 
(1,221)
-
(1,221)
(1,132)
-
(1,132)
Research and development
 
(334)
-
(334)
(309)
-
(309)
General and administrative
 
(524)
-
(524)
(552)
-
(552)
Other operating income
 
104
-
104
109
-
109
Other operating expense
 
(112)
-
(112)
(89)
(28)
(117)
 
(2,087)
-
(2,087)
(1,973)
(28)
(2,001)
 
 
      
Operating profit
 
846
-
846
685
(28)
657
Financial income
35
-
35
23
-
23
Financial expense
(139)
-
(139)
(156)
-
(156)
 
 
      
Profit before income tax expense
 
742
-
742
552
(28)
524
Income tax expense
(115)
-
(115)
(89)
-
(89)
Share of the profit of associates and joint ventures
(83)
-
(83)
(38)
-
(38)
Other results related to associates and joint ventures
1,237
-
1,237
232
-
232
 
 
      
Profit for the year
 
1,781
-
1,781
657
(28)
629
 
 
      
Of which:
 
      
Profit attributable to non-controlling interests
12
-
12
8
-
8
Net profit attributable to equity holders of Koninklijke DSM N.V.
 
1,769
-
1,769
649
(28)
621
 
 
      
Dividend on cumulative preference shares
 
(8)
-
(8)
(4)
-
(4)
 
 
      
Net profit available to holders of ordinary shares
 
1,761
-
1,761
645
(28)
617
 
 
      
Earnings per share (EPS) (in €):
 
      
- Net basic EPS
10.07
-
10.07
3.68
(0.16)
3.52
- Net diluted EPS
10.04
-
10.04
3.67
(0.16)
3.51

Please refer to Note 2 'Alternative performance measures' for the reconciliation to Adjusted EBITDA of €1,445 million (2016: €1,262 million) and other adjusted IFRS performance measures.

Consolidated statement of comprehensive income

x € million
2017
2016
   
Items that will not be reclassified to profit or loss
  
Remeasurements of defined benefit pension plans
83
(8)
Exchange differences on translation of foreign operations relating to the non-controlling interests
(8)
-
Equity accounted investees - share of Other comprehensive income
-
(6)
   
Items that may subsequently be reclassified to profit or loss
  
Exchange differences on translation of foreign operations
  
- Change for the year
(610)
216
- Reclassification adjustment to the income statement related to discontinued operations
(14)
(19)
Fair value reserve
  
- Change for the year
(3)
7
Hedging reserve
  
- Change for the year
98
(52)
- Reclassification adjustment to the income statement
(39)
52
- Reclassification adjustment to deferred items
-
(4)
   
Equity accounted investees - share of Other comprehensive income
4
(1)
   
Other comprehensive income, before tax
(489)
185
   
Income tax (expense)/income relating to:
  
- Remeasurements of defined benefit plans
(9)
5
- Exchange differences on translation of foreign operations
(9)
1
- Hedging reserve
(7)
2
Total income tax (expense) / income
(25)
8
   
Other comprehensive income, net of tax
(514)
193
   
Profit for the year
1,781
629
   
Total comprehensive income
1,267
822
   
Of which:
  
- Attributable to non-controlling interests
4
8
- Attributable to equity holders of Koninklijke DSM N.V.
1,263
814

Consolidated balance sheet at 31 December

x € million
Notes
2017
20161
 
 
  
Assets
 
  
Non-current assets
 
  
Intangible assets
3,058
3,188
Property, plant and equipment
3,313
3,325
Deferred tax assets
281
355
Share in associates and joint ventures
227
586
Financial derivatives
16
-
Other financial assets
475
463
 
 
7,370
7,917
Current assets
 
  
Inventories
1,848
1,800
Trade receivables
1,542
1,504
Income tax receivables
55
62
Other current receivables
93
87
Financial derivatives
41
40
Current investments
954
944
Cash and cash equivalents
899
604
 
 
5,432
5,041
 
 
  
Total
 
12,802
12,958
 
 
  
Equity and liabilities
 
  
Equity
  
Shareholders' equity
 
6,962
6,072
Non-controlling interests
103
108
 
 
7,065
6,180
Non-current liabilities
 
  
Deferred tax liabilities
259
278
Employee benefits liabilities
356
490
Provisions
151
128
Borrowings
2,551
2,552
Financial derivatives
4
14
Other non-current liabilities
188
158
 
 
3,509
3,620
Current liabilities
 
  
Employee benefits liabilities
39
40
Provisions
53
54
Borrowings
77
853
Financial derivatives
20
239
Trade payables
1,452
1,376
Income tax payables
51
56
Other current liabilities
536
540
 
 
2,228
3,158
 
 
  
Total
 
12,802
12,958

1 Financial derivatives were previously assigned to Current assets and liabilities. These figures have now been distributed over Non-current and Current assets and liabilities, based on the contractual term.

Consolidated statement of changes in equity (Note 16)

x € million
Share
capital
Share
premium
Treasury
shares
Other
reserves
Retained earnings
Total
Non-controlling
interests
Total
equity
         
Balance at 1 January 2016
338
489
(319)
171
4,862
5,541
90
5,631
         
Dividend
-
-
-
-
(296)
(296)
(5)
(301)
Options / performance shares granted
-
-
-
32
-
32
-
32
Options / performance shares
exercised / canceled
-
-
-
(30)
30
-
-
-
Proceeds from reissued shares
-
-
253
-
-
253
-
253
Change in DSM's share in subsidiaries
-
-
-
-
-
-
15
15
Repurchase of shares
-
-
(273)
-
-
(273)
-
(273)
Reclassification
-
-
-
20
(20)
-
-
-
Other
-
-
-
-
1
1
-
1
         
Total comprehensive income
-
-
-
203
611
814
8
822
         
Balance at 31 December 2016
338
489
(339)
396
5,188
6,072
108
6,180
         
Dividend
-
-
-
-
(320)
(320)
(3)
(323)
Options / performance shares granted
-
-
-
26
-
26
-
26
Options / performance shares
exercised / canceled
-
-
-
(22)
22
-
-
-
Proceeds from reissued shares
-
-
238
-
(5)
233
-
233
Change in DSM's share in subsidiaries
-
-
-
-
-
-
(6)
(6)
Repurchase of shares
-
-
(297)
-
-
(297)
-
(297)
Reclassification
-
-
-
(18)
18
-
-
-
Other
-
-
-
-
(15)
(15)
-
(15)
         
Total comprehensive income
-
-
-
(581)
1,844
1,263
4
1,267
         
Balance at 31 December 2017
338
489
(398)
(199)
6,732
6,962
103
7,065

Consolidated cash flow statement (Note 26)

x € million
2017
2016
     
Operating activities
    
Profit for the year
 
1,781
 
629
Share of the profit of associates and joint ventures
 
(1,154)
 
(194)
Income tax
 
115
 
89
Profit before income tax expense
 
742
 
524
Financial income and expense
 
104
 
133
Operating profit1
 
846
 
657
Depreciation, amortization and impairments
 
502
 
489
Earnings before interest, tax, depreciation and amortization (EBITDA)1
 
1,348
 
1,146
Adjustments for:
    
- (Gain) or loss from disposals
(5)
 
(3)
 
- Acquisition/divestment related in EBITDA
2
 
15
 
- Change in provisions
(3)
 
20
 
- Defined benefit plans
(61)
 
(27)
 
 
(67)
 
5
 
Income tax received
15
 
7
 
Income tax paid
(81)
 
(84)
 
Other
18
 
33
 
Changes, excluding working capital
 
(115)
 
(39)
     
Operating cash flow before changes in working capital
 
1,233
 
1,107
Changes in operating working capital:
    
- Inventories
(201)
 
(138)
 
- Trade receivables
(121)
 
(115)
 
- Trade payables
127
 
195
 
 
(195)
 
(58)
 
Changes in other working capital
(42)
 
(31)
 
Changes in working capital
 
(237)
 
(89)
     
Cash provided by operating activities
 
996
 
1,018

1 Please refer to Note 2 'Alternative performance measures' for the reconciliation to Adjusted EBITDA of €1,445 million (2016: €1,262 million) and other adjusted IFRS performance measures.

Consolidated cash flow statement (Note 26) continued

x € million
2017
2016
     
Cash provided by operating activities
 
996
 
1,018
     
     
Investing activities
    
Capital expenditure for:1
    
- Intangible assets
(98)
 
(63)
 
- Property, plant and equipment
(449)
 
(413)
 
Payments regarding drawing rights
(8)
 
(19)
 
Proceeds from disposal of property, plant and equipment
11
 
4
 
Acquisition of subsidiaries and associates
(242)
 
4
 
Cash from net investment hedge
(21)
 
-
 
Disposal of subsidiaries, businesses and associates
1,525
 
80
 
Additions to fixed-term deposits
(1,319)
 
(936)
 
Withdrawal from fixed-term deposits
1,286
 
-
 
Interest received
30
 
40
 
Other financial assets:
    
- Capital payments and acquisitions
(98)
 
(35)
 
- Dividends received
4
 
152
 
- Additions to loans granted
(23)
 
(19)
 
- Repayment of loans granted
81
 
8
 
- Proceeds from disposals
10
 
3
 
     
Cash from/(used in) investing activities
 
689
 
(1,194)
     
Financing activities
    
Settlement derivatives internal loans
(28)
 
-
 
Capital payments from/to non-controlling interests
3
 
6
 
Loans taken up
14
 
749
 
Repayment of loans
(818)
 
(4)
 
Change in debt to credit institutions
10
 
(11)
 
Repayment of commercial paper
-
 
(150)
 
Dividend paid
(200)
 
(190)
 
Interest paid
(135)
 
(151)
 
Proceeds from reissued treasury shares
107
 
137
 
Repurchase of shares
(297)
 
(273)
 
     
Cash (used in)/from financing activities
 
(1,344)
 
113
     
Change in cash and cash equivalents
 
341
 
(63)
     
Cash and cash equivalents at 1 January
 
604
 
665
Exchange differences relating to cash held
 
(46)
 
2
     
Cash and cash equivalents at 31 December
 
899
 
604

1 An amount of €1 million included in capital expenditure was funded by customers (2016: €1 million).