Shareholders' equity
|
2018
|
2017
|
|
|
Balance at 1 January
|
6,962
|
6,072
|
|---|---|---|
|
Net profit
|
1,077
|
1,769
|
|
Exchange differences, net of income tax
|
144
|
(637)
|
|
Net actuarial gains/(losses) on defined benefit obligations
|
(66)
|
74
|
|
Dividend
|
(365)
|
(320)
|
|
Repurchase of shares
|
(236)
|
(297)
|
|
Proceeds from reissue of ordinary shares
|
242
|
233
|
|
Other changes
|
24
|
68
|
|
Balance at 31 December
|
7,782
|
6,962
|
For details see the consolidated statement of changes in Equity (Note 16).
In 2018, an amount of €423 million was transferred from retained earnings to other reserves in order to apply a consistent treatment with the consolidated financial statements.
Legal reserve
In Shareholders' equity, an amount of €37 million (2017: -€107 million) is included for Translation reserve, -€166 million (2017: -€148 million) for Hedging reserve, €21 million (2017: €5 million) for Fair value reserve and €253 million (2017: €182 million) for intangible assets related to product development projects. In addition, a legal reserve of €108 million (2017: €126 million) is recognized for profits that cannot be distributed and received in the Netherlands.
Profit appropriation
According to article 32 of the Articles of Association of Koninklijke DSM N.V. and with the approval of the Supervisory Board, every year the Managing Board determines the portion of the net profit to be appropriated to the reserves. For the year 2018, the net profit is €1,077 million (2017: €1,769 million) and the amount to be appropriated to the reserves has been established at €665 million (2017: €1,438 million). From the subsequent balance of the net profit of €412 million (2017: €331 million), dividend is first distributed on the cumulative preference shares B. At the end of 2018 no cumprefs B were in issue (same as for 2017). Subsequently, a 3.26% (2017: 3.26%) dividend is distributed on the cumulative preference shares A, based on a share price of €5.29 (2017: €5.29) per cumulative preference share A. For 2018, this distribution amounts to €0.17 (2017: €0.17) per share, which is €8 million in total. An interim dividend of €0.06 per cumulative preference share A having been paid in August 2018, the final dividend will then amount to €0.11 per cumulative preference share A.
The profit remaining after distribution of these dividends on the cumulative preference shares A of €1,069 million (2017: €1,761 million) will be put at the disposal of the Annual General Meeting of Shareholders in accordance with the provisions of Article 32, section 5 of the Articles of Association.
The Managing Board proposes a dividend on ordinary shares outstanding for the year 2018 of €2.30 (2017: €1.85) per share. With an interim dividend of €0.77 (2017: €0.58) per ordinary share having been paid in August 2017, the final dividend would then amount to €1.53 (2017: €1.27) per ordinary share.
If the Annual General Meeting of Shareholders makes a decision in accordance with the proposal, the net profit will be appropriated as follows:
Profit appropriation
|
2018
|
2017
|
|
|
Net profit
|
1,077
|
1,769
|
|
Profit appropriation:
|
||
|
- To be added to the reserves
|
665
|
1,438
|
|
- Dividend on cumprefs A
|
8
|
8
|
|
- Interim dividend on ordinary shares
|
135
|
101
|
|
- Final dividend distributable on ordinary shares
|
269
|
222
|