Explanation of some concepts and ratios


Brighter Living Solutions

See below, Planet — Brighter Living Solutions.


The general term 'Eubiotics', is related to the Greek term 'Eubiosis' and relates to feed ingredients that support an optimal balance of microbiota in the gastrointestinal tract of livestock animals. They promote efficient gut performance so as to produce well-nourished animals that get the most from their feed, while at the same time sustaining their health and welfare and protecting the environment.

Frequency Index (FI)

The Frequency Index is a way to measure safety performance. The number of accidents of a particular category per 100 employees per year.

Inclusion Index

The Inclusion Index is a subset of items in the Employee Engagement (Pulse) Survey to specifically measure Inclusion. Inclusion is: "A working environment where all employees are a full and equal member of a team; wherediverse perspectives are valued, and investment is made in their development; where people are respected and able to contribute as they are and not having to conform; where they can reach their potential, and where they can speak up without fear of retribution."

LWC-rate DSM own

The Lost Workday Case (LWC)-rate DSM own is the number of lost workday cases per 100 DSM employees in the past 12 months:
LWC-rate = 100 * (number of LWCs (past 12 months) / average effective manpower (past 12 months)).

Lives Reached

Lives Reached is a measure of consumers already reached through consumer products of third parties containing DSM products and solutions. This measure addresses key end-markets representing approximately 25% of DSM's total sales. In this first version of Lives Reached, these end markets are in Human Nutrition & Health and Personal Care, with the other businesses currently considered out of scope. These will be added over time.

The number of Lives Reached is calculated for each market separately and then aggregated. As a business-to-business company, our products reach end-consumers via third parties, so calculations per market are performed at global level. Consumer touch points are assumed to be unrelated, and overlap is eliminated using statistical methods (De Morgan's Law and Probability Theory – Independence). The actual overlap may be larger or smaller than calculated based on this assumption.

Key assumptions are used to perform these calculations and include DSM's market share, total consumer markets, share of wallet and consumer consumption behavior. These assumptions are made based on external market data where available, supplemented with market and business intelligence insights.

For more information on Lives Reached, see the company website.

Occupational Health Case

This refers to any abnormal condition or disorder requiring medical treatment – other than one resulting directly from an accident – caused by, or mainly caused by, repeated exposure to work-related factors.

PSI rate

The PSI rate is the number of Process Safety Incidents per 100 DSM employees and contractor employees in the past 12 months: PSI rate = 100 * (number of PSIs (past 12 months) / average effective manpower including contractor employees (past 12 months)).

REC-rate DSM all

The REC-rate DSM all is the number of recordable injuries per 100 DSM employees and contractor employees in the past 12 months: REC-rate = 100 * (number of RECs (past 12 months) / average effective manpower including contractor employees (past 12 months)).

Safety, Health and Environment (SHE)

DSM's policy is to maintain business activities and produce products that do not adversely affect safety or health, and that fit with the concept of sustainable development. The company does this by setting the following objectives: to provide an injury-free and incident-free workplace; to prevent all work-related disabilities or health problems; to control and minimize the risks associated with DSM's products for their whole life cycle and to choose production processes and products such that the use of raw materials and energy is minimized; to evaluate and improve DSM's practices, processes and products continuously in order to make them safe and acceptable to its employees, the customers, the public and the environment.

United Nations Global Compact

A strategic policy initiative for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, environment and anti-corruption.

United Nations' Universal Declaration of Human Rights

On 10 December 1948, the General Assembly of the United Nations adopted and proclaimed the Universal Declaration of Human Rights. Following this historic act, the Assembly called upon all Member countries to publicize the text of the Declaration and "to cause it to be disseminated, displayed, read and expounded principally in schools and other educational institutions, without distinction based on the political status of countries or territories."



A fuel which is derived from renewable organic resources, as distinct from one which is derived from non-renewable resources such as crude oil and natural gas.

Brighter Living Solutions

Brighter Living Solutions (BLS) are products and services that, when considered over the product life cycle, offer an environmental benefit (ECO+) and/or a social benefit (People+) compared to mainstream reference solutions.

ECO+ qualifications are made based on comparative Eco Life Cycle Assessment (LCA). DSM is using the standard approach to evaluate environmental footprint as published by the WBCSD Chemical sector in 2014. Qualifications are also made based on documented expert opinion by business managers or relevant internal experts based on identified mainstream reference solutions and identified environmental differentiators.

The People+ qualifications are made based on DSM People LCA method or expert opinions, similar as for ECO+. The People LCA method helps to identify social impacts of products on the dimensions health, comfort and well-being, working conditions, and community development. This methodology is developed by DSM based on internal standards and external stakeholder dialogues.

More information and definitions can be found on the company website.

Carbon footprint

The total set of direct and indirect greenhouse gas emissions expressed as CO2eq.

Carbon price

The price that is paid to emit one ton CO2eq into the atmosphere. DSM implements an internal carbon price of €50/t CO2eq.

Circular economy

Circular economy refers to an economy that is restorative and in which materials flows are of two types: biological nutrients, designed to re-enter the biosphere safely, and technical nutrients, which are designed to circulate at high quality without entering the biosphere throughout their entire lifecycle.


Carbon dioxide, a gas that naturally occurs in the atmosphere. It is part of the natural carbon cycle through photosynthesis and respiration. It is also generated as a by-product of combustion. Carbon dioxide is a greenhouse gas.

Chemical Oxygen Demand (COD)

COD is an indicator of the degree of pollution of waste water by organic substances.


Eco-efficiency is a concept (created in 1992 by the WBCSD) that refers to the creation of more goods and services while using less resources and creating less waste and pollution throughout their entire life cycle. In the context of DSM's SHE targets, eco-efficiency relates specifically to the reduction of emissions and energy and water consumption, relative to the production volumes of DSM's plants.

Greenhouse gas emissions (GHGE)

Scope 1: Direct GHG emissions
Direct GHG emissions occur from sources that are owned or controlled by the company (i.e. emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.).

Scope 2: Indirect GHG emissions
Indirect GHG emissions relate to the generation of purchased energy (i.e. electricity, heat or cooling) consumed by the company. Purchased energy is defined as energy that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where the energy is generated.

Scope 3: Value chain emissions
Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

Location-based emissions
Reflects the average GHG emissions intensity of grids on which electricity consumption occurs (using mostly national grid-average emission factor data). Corresponding emission factor: in most cases, the country emission factor.

Market-based emissions
Reflects GHG emissions from electricity supplies that companies have purposely chosen (or their lack of choice) and contracted. Corresponding emission factors:

  • Supplier specific emission factor (provided by the supplier)
  • Residual emission factor (country-based grid factor, corrected for allocated purchased electricity from renewable resources)

Greenhouse gas emissions (GHGE) efficiency improvement

The GHGE efficiency improvement is the amount of GHG emissions per unit of output (specific emissions) in a given year compared to the specific emissions in the prior year. GHGE efficiency improvements are one of the ratios in the Long-Term Incentive part of the Managing Board remuneration and relate to a three-year period.


The Global Reporting Initiative (GRI) has developed Sustainability Reporting Guidelines that strive to increase the transparency and accountability of economic, environmental, and social performance. The GRI was established in 1997 in partnership with the UN Environment Programme. It is an international, multi-stakeholder and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organizations for reporting on the economic, environmental, and social dimensions of their activities, products and services.

Levelized Cost of Energy (LCOE)

LCOE is a figure used to compare the average cost of energy coming from different sources. It measures the cost of energy production over the lifetime of an asset like a photovoltaic panel.

Loss of Primary Containment (LOPC)

Loss of Primary Containment is an unplanned or uncontrolled release of material from the container that is in direct contact with the material.


Nitrogen oxides. These gases are released mainly during combustion and cause acidification.

Renewable resource

A natural resource which is replenished by natural processes at a rate comparable to, or faster than, its rate of consumption by humans or other users. The term covers perpetual resources such as solar radiation, tides, winds and hydroelectricity as well as fuels derived from organic matter (bio-based fuels).


Sulfur dioxide. This gas is formed during the combustion of fossil fuels and causes acidification.


Volatile organic compounds. The term covers a wide range of chemical compounds, such as organic solvents, some of which can be harmful.

Water use and water consumption

Water use includes water used for 'once-through cooling' that is returned to the original water source after use. Water consumption is the portion of water used that is not returned to the original water source after being withdrawn.



In calculating financial profitability ratios, use is made of the average of the opening and closing values of balance sheet items in the year under review.

The financial indicators per ordinary share are calculated on the basis of the average number of ordinary shares outstanding (average daily number). In calculating Shareholders' equity per ordinary share, however, the number of shares outstanding at year-end is used.

In calculating the figures per ordinary share and the 'net profit as a percentage of average Shareholders' equity available to holders of ordinary shares', the amounts available to the holders of cumulative preference shares are deducted from the profits and from Shareholders' equity.

Adjusted net operating free cash flow

The cash flow from operating activities, corrected for the cash flow of the APM adjustments, minus the cash flow of Capital expenditures and drawing rights.

Capital employed

The total of the carrying amount of intangible assets and property, plant and equipment, inventories, trade receivables and other receivables, less trade payables and other current liabilities.

Capital expenditure

This includes all investments in intangible assets and property, plant and equipment.


This includes the disposal of intangible assets and property, plant and equipment as well as the disposal of participating interests and other securities.

Earnings before interest, tax, depreciation and amortization (EBITDA)

EBITDA is the sum of operating profit plus depreciation and amortization. Adjusted EBITDA is the EBITDA adjusted for material items of profit or loss coming from acquisitions/divestments, restructuring and other circumstances that management deem it necessary to adjust in order to provide clear-reporting on the developments of the business.

Earnings per ordinary share

Net profit attributable to equity holders of Koninklijke DSM N.V. minus dividend on cumulative preference shares, divided by the average number of ordinary shares outstanding.

High-growth economies

High-growth economies relate to the following regions: Latin America, Middle East, Asia (excluding Japan) and Eastern Europe.

Innovation sales

Innovation sales are defined as sales from products and applications that have been introduced in the last five years.

Operating working capital

The total of inventories and trade receivables, less trade payables.

Organic sales growth

Organic sales growth is the total impact of volume and price / mix. Impact of acquisitions and divestments as well as currency impact are excluded.

Return on capital employed (ROCE)

Adjusted operating profit from continuing operations as a percentage of weighted average capital employed.

Temporary vitamin effect

DSM's best estimate of the effect on sales and Adjusted EBITDA of the exceptional supply disruptions in the industry that started toward the end of 2017 and ended in the third quarter of 2018, including derived measurements.

Total shareholder return (TSR)

Total shareholder return is capital gain plus dividend paid.

Underlying business

Sales and Adjusted EBITDA (including derived measurements), corrected for DSM's best estimate of the temporary vitamin effect.

Working capital

The total of inventories and current receivables, less current payables.