Introduction by the Chair
Our realization of our company purpose was taken to new heights in 2018.
Rob Routs, Chair of the Supervisory Board
As my colleagues and I on the Supervisory Board look back on 2018, we do so with a feeling of pride in what our company achieved during the strategic period 2016–2018 and how we are now positioned to enter the next strategic phase of DSM's development.
During the discussions that were to result in the updated Strategy 2021: Growth & Value - Purpose led, Performance driven, we were delighted to conclude that we had been so successful in combining doing well with doing good that we can now explicitly state that DSM is a purpose-led company. Our realization of our company purpose — focusing on improving our own approach, enabling others, and advocating change to better serve the needs of people and planet — was taken to new heights in 2018.
In terms of DSM's impact on the wider world, we were greatly encouraged by the success of our first Supplier Partnership Day, at which sustainability was a key topic, as well as by the provision of a €1 billion Revolving Credit Facility, where the interest rate is linked to our reduction of greenhouse gas emissions. Projects such as Project Clean Cow, Veramaris®, Niaga® and Avansya, all of which will come to fruition in the near future, are a testimony to the way we enable our business partners to create a brighter world. In the Supervisory Board, we regularly review these projects to ensure that we remain on course to achieve our ambitions.
It would not be possible in the limited pages of this Report to list all the opportunities our company takes and creates to advocate positive actions for people and planet. But all the recognition that DSM and its people received once more in 2018 strengthen us in our belief that we are on the right track.
The Supervisory Board is very pleased with the success of the ambitious Strategy 2018, which sought to optimize the performance of the group's portfolio of businesses while delivering above-market growth. The accelerated progress made during 2016 and 2017, however, left a significant challenge during the final year of the strategic period — how to deliver once again on the annual targets from a far higher base than had been assumed in the original plans. Nevertheless, a determined focus was maintained throughout the company, delivering above-market organic sales growth, double-digit increase in EBITDA in the underlying business, and an improvement in ROCE of more than 100 bps. Furthermore, the company continued to deliver on a key strategic promise by realizing significant value in the non-core joint ventures, through exiting DSM Sinochem Pharmaceuticals and the Fibrant business of ChemicaInvest.
Besides Sustainability, another core value at DSM is Safety. We were deeply saddened by the tragic death of a contractor at our Pecém site in Brazil in 2018, and have further intensified our efforts to ensure permanent adherence to our company safety standards worldwide. This tragic event demonstrates how we must be fully committed, both individually and collectively, to the continuous raising of our safety standards at all times and in all places at DSM, as well as in our own private lives. Reflecting this commitment, the Supervisory Board now commences every meeting with an update on the company's safety performance. I am pleased to report that during this year's visit to India — where DSM has a track record of no recordable incidents for the fourth consecutive year — it was clear that safety was top of the company's agenda.
On behalf of my colleagues on the Supervisory Board, I would like to thank our employees and leadership for the energy and commitment that they brought to their work in 2018. Our thanks also go to the many stakeholders who continue to place their trust in our company. 2018 was a good year for DSM. It has established a strong and resilient portfolio that helped the company perform above its own targets and above market, but also positions it well to face the challenges that might lie ahead.