Segment information

DSM's operating segments are Nutrition, Materials and the Innovation Center. DSM has segmented its operations per business activity from which revenues are earned and expenses incurred. These operating results are regularly reviewed by the entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance. DSM uses Adjusted EBITDA as the main indicator to evaluate the consolidated performance as well as the performance per segment. Discrete financial information is available for each identified segment. The accounting policies of the operating segments are the same as those described in the Significant Accounting Policies. Transactions between segments are generally executed at market-based prices. Interest revenue, interest expense, and income tax expense or income are not allocated to segments as these amounts are not included in the measure of segment profit or loss reviewed by the CODM, or otherwise regularly provided to the CODM.

Nutrition serves the global industries for animal feed, food and beverages, pharmaceuticals, infant nutrition, dietary supplements, and personal care. It does so by the production of pure active ingredients, their incorporation into sophisticated forms, and the provision of tailored premixes and forward solutions.

Materials is a global player in specialty plastics, which are used in components for the electrical and electronics, automotive, flexible food-packaging, and consumer goods industries. Furthermore, Materials is a global player in providing innovative, sustainable resins solutions for paints and industrial and optical fiber coatings, as well as the fiber Dyneema®.

The Innovation Center focuses on innovation and growth of DSM's existing core business through adjacent technologies via its Corporate Research Program as well as through the company's venturing and licensing activities. Additionally, it identifies and invests in new and innovative growth options, initially through the DSM Business Incubator. The Innovation Center is responsible for developing and extracting value from DSMs Emerging Business Areas.

At DSM, any consolidated activities outside the three reported segments are reported as 'Corporate Activities'. These mainly comprise operating and service activities as well as a number of costs that cannot be allocated to the clusters.

DSM does not have a single external customer that represents 10% or more of total sales.

Business segments

2017
Continuing operations
Nutrition
Materials
Innovation Center
Corporate
Activities
Elimina-
tions
Total
Financial performance
      
Net sales
5,579
2,825
169
59
-
8,632
Supplies to other clusters
52
10
22
-
(84)
-
       
Supplies
5,631
2,835
191
59
(84)
8,632
       
Adjusted EBITDA
1,053
488
9
(105)
-
1,445
EBITDA
1,022
485
10
(169)
-
1,348
Adjusted operating profit
770
361
(30)
(144)
-
957
Operating profit
728
367
(40)
(209)
-
846
       
Depreciation and amortization
280
125
25
34
-
464
Impairments
14
(8)
26
6
-
38
- of which included in APM adjustments
11
(9)
11
1
-
14
Additions to provisions
17
-
6
71
-
94
Result related to associates and joint ventures
-
-
(103)
1,257
-
1,154
R&D costs1
127
112
63
32
-
334
Wages, salaries and social security costs
955
327
78
296
-
1,656
       
Financial position
      
Total assets
6,811
2,162
674
3,155
-
12,802
Total liabilities
1,900
696
70
3,071
-
5,737
Capital employed at year-end
5,420
1,786
562
(2)
-
7,766
Capital expenditure
407
124
43
12
-
586
Share in equity of associates and joint ventures
1
3
53
170
-
227
       
Adjusted EBITDA margin (in %)
18.9
17.3
   
16.7
       
Workforce
      
Average in FTE
13,243
4,472
639
2,179
-
20,533
Year-end (headcount)
13,676
4,635
685
2,058
-
21,054

1 R&D costs relate to the functional area Research and development and exclude R&D costs included in the functional areas Cost of sales and Marketing and sales as well as R&D expenditure capitalized.

Business segments

2016
Continuing operations
Nutrition
Materials
Innovation Center
Corporate
Activities
Elimina-
tions
Total
Financial performance
      
Net sales
5,169
2,513
167
71
-
7,920
Supplies to other clusters
55
7
23
-
(85)
-
       
Supplies
5,224
2,520
190
71
(85)
7,920
       
Adjusted EBITDA
931
435
1
(105)
-
1,262
EBITDA
934
419
(5)
(174)
-
1,174
Adjusted operating profit
645
311
(24)
(141)
-
791
Operating profit
648
285
(38)
(210)
-
685
       
Depreciation and amortization
278
124
24
34
-
460
Impairments
8
10
9
2
-
29
- of which included in APM adjustments
-
10
8
-
-
18
Additions to provisions
4
15
3
77
-
99
Result related to associates and joint ventures
-
7
(24)
211
-
194
R&D costs1
104
109
64
32
-
309
Wages, salaries and social security costs
902
332
78
309
-
1,621
       
Financial position
      
Total assets
6,935
2,207
826
2,990
-
12,958
Total liabilities
1,857
774
84
4,063
-
6,778
Capital employed at year-end
5,537
1,807
576
(31)
-
7,889
Capital expenditure
331
106
32
16
-
485
Share in equity of associates and joint ventures
1
2
133
450
-
586
       
Adjusted EBITDA margin (in %)
18.0
17.3
   
15.9
       
Workforce
      
Average in FTE
13,168
4,453
613
2,275
-
20,509
Year-end (headcount)
13,260
4,460
619
2,447
-
20,786

1 R&D costs relate to the functional area Research and development and exclude R&D costs included in the functional areas Cost of sales and Marketing and sales as well as R&D expenditure capitalized.

Geographical information

2016
Continuing operations
 
The Nether-lands
Rest of Western Europe
Eastern Europe
North America
Latin America
China
India
Japan
Rest of Asia
Rest of the world
Total
Net sales by origin
           
In € million
2,006
2,444
160
1,436
544
842
73
100
241
74
7,920
In %
25
31
2
18
7
11
1
1
3
1
100
            
Net sales by destination
           
In € million
303
1,877
494
1,795
989
989
178
264
787
244
7,920
In %
4
25
6
23
12
12
2
3
10
3
100
            
Workforce at year-end (headcount)
4,026
4,715
439
3,187
2,069
4,594
475
193
828
260
20,786
Average workforce (FTE)
3,944
4,575
435
3,153
2,065
4,581
498
163
823
272
20,509
            
Intangible assets and Property, plant and equipment
           
Capital expenditure
120
151
4
91
36
73
1
1
5
3
485
Carrying amount
1,587
1,703
31
2,104
376
523
18
42
104
25
6,513
            
Total assets (total DSM)
4,560
2,495
126
3,110
885
1,077
87
144
367
107
12,958
            
2017
Net sales by origin
           
In € million
2,193
2,560
182
1,430
669
1,023
82
123
286
84
8,632
In %
25
30
2
17
8
12
1
1
3
1
100
            
Net sales by destination
           
In € million
316
2,074
564
1,918
1,059
1,116
200
299
821
265
8,632
In %
4
24
7
22
12
13
2
3
10
3
100
            
Workforce at year-end (headcount)
3,831
4,905
504
3,264
2,078
4,593
537
195
870
277
21,054
Average workforce (FTE)
3,735
4,676
469
3,204
2,066
4,572
504
194
846
267
20,533
            
Intangible assets and Property, plant and equipment
           
Capital expenditure
134
209
4
126
45
53
4
2
6
3
586
Carrying amount
1,674
1,692
31
1,864
387
547
19
37
97
23
6,371
            
Total assets (total DSM)
4,656
2,530
141
2,739
877
1,110
104
139
403
103
12,802