Strategy 2018: Driving Profitable Growth

DSM has been transformed into a truly global company that provides innovative, sustainable solutions in health, nutrition and materials. After a period of significant portfolio changes, in late 2015 DSM launched Strategy 2018: Driving Profitable Growth focused on capturing the full potential of the business portfolio that has been created and translating this into improved financial results. In the period 2016-2018, our aim is to step up our financial performance while pursuing our ambitions in the area of sustainability and expanding our positive impact on the world around us.

New Strategy

Sustainability is what our business is all about. This is what we do. The world is looking for sustainable solutions and that is why we are growing.

Philip Eykerman, DSM Executive Committee

Read more about DSM's Strategy 2018

Strategic targets & progress 2017

Building on these trends, and combined with disciplined focus on performance, we established and implemented our three-year strategic plan for the period 2016-2018 called Strategy 2018: Driving Profitable Growth with two headline financial targets: high single-digit percentage annual Adjusted EBITDA growth and high double-digit basis point annual ROCE growth.

Financial targets 2016-2018

DSM delivered excellent financial results in 2017. Adjusted EBITDA grew by 15% to €1,445 million, far ahead of the high single-digit growth target we originally set with Strategy 2018. Overall Adjusted EBITDA margin (Adjusted operating profit before depreciation and amortization as a percentage of net sales) was 16.7%, an increase of 80 basis points versus the 15.9% of 2016. In the first two years of Strategy 2018, we have increased our Adjusted EBITDA by €370 million or 34%.

Return on Capital Employed (ROCE) was also well ahead of target, up 190 basis points to 12.3% in 2017 versus 10.4% in 2016. Since we kicked off our successful Strategy 2018, ROCE is up 470 basis points versus the end of 2015.

Financial targets 2016-2018
High single-digit percentage annual adjusted EBITDA growth
High double-digit bps annual ROCE growth
190 bps
280 bps

Sustainability aspirations 2020

Sustainability is our core value. We continue to further embed sustainability across all of our business activities, both in recognition of our responsibility to reduce our environmental footprint and to help our supply chain, customers and partners do the same. We especially focus on the areas of nutrition, climate and energy, and the circular and bio-based economy.

Sustainability aspirations 2020
Realization 2017
Dow Jones Sustainability World Index
Top ranking (RobecoSAM Gold Class)
Gold class
Brighter Living Solutions
65% ECO+/People+ (running business)
GHG Efficiency Improvement
40-45% (2008-2025)
Energy efficiency improvement
>10% (2015-2020)
Purchased electricity from renewables
50% by 2025
Employee Engagement Index
Toward 75% favorable
0.25 Frequency Index of Recordable Injuries
25% Female executives
60% Executives from under-represented nationalities

Read more about DSM's strategic progress in 2017

How DSM creates value

DSM’s strategy is aimed at driving profitable growth through science-based, sustainable solutions based on the defining megatrends of our time. By using its unique competences in health, nutrition and materials, DSM is fostering economic prosperity, environmental progress and social advances to create value for all stakeholders simultaneously.

Value Creation Model

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    • Employees
    • Training & development
    • Stakeholder engagement & Public-Private Partnerships
    • Philanthropy & sponsoring
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    • Raw materials (including renewables)
    • Energy (including renewables)
    • Water
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    • Shareholder equity
    • Borrowings
    • Partnerships & open innovation
    • Purchased goods & services
    • Manufacturing asset base
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    • Safety & health
    • Brighter Living Solutions
    • Engaged workforce
    • Skills & employability
    • Employee benefits
    • Improved nutrition
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    • Reduced environmental footprint
    • Brighter Living Solutions
    • Enabling transition to (bio-) renewable & circular economy
    • Safer ingredients & materials
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    • Financial performance (Adjusted EBITDA & ROCE growth)
    • Dividend
    • Contribution to business success for customers & suppliers
    • Contribution to civil society via tax
    • Patents & royalties
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    • Better fed & healthier individuals and communities
    • More prosperous and resilient employees for the company and in its value chain
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    • More sustainable use of resources, for the company and in its value chain
    • Products that contribute to safer, healthier working & living environments
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    • Driving Profitable Growth through science-based sustainable solutions
    • Sustainable returns to investors
    • Positive contribution to economic growth in the countries & markets in which DSM operates

Human capital

DSM employs skilled and talented people from diverse backgrounds. DSM strives to provide employees with a safe and inspiring workplace as well as with the tools and training they need to be effective and to develop their abilities. DSM rewards employees with competitive benefit packages.

Societal & relationship capital

DSM engages with various stakeholders to ensure close alignment between the company’s aims and societal needs. DSM generates value for stakeholders outside its direct value chains of employees, suppliers, customers and end-users; these include employees’ families, governments, local communities and civil society.

Natural capital

DSM recognizes that the world is an interconnected system of resources. For DSM this represents a responsibility and a business opportunity. DSM aims to reduce the environmental impact of its supply chain, operations and products and services, while developing innovative solutions that deliver sustainability benefits to customers and beyond.

Financial capital

Providers of capital – shareholders and bondholders, banks and the financial markets – supply funds that DSM uses in its business to create value, driving growth and delivering sustainable returns.

Intellectual capital

DSM manufactures and distributes high-quality products and services safely, efficiently and responsibly and strives to develop valuable, collaborative and long-term relationships with customers and suppliers. DSM pursues open innovation, connecting and collaborating with partners and investing in start-ups.

Manufactured capital

DSM has unique competences in life sciences and materials sciences and connects these to deliver innovative solutions that nourish, protect and improve performance.

Read more about how DSM engages with stakeholders