Consolidated financial statements

Consolidated income statement

x € million

Notes

2019

2018

 
 
 
 

Net sales

5

9,010

9,267

Cost of sales

5

(5,957)

(5,862)

Gross margin

 

3,053

3,405

 
 
 
 

Marketing and sales

 

(1,263)

(1,303)

Research and development

 

(349)

(348)

General and administrative

 

(525)

(530)

Other operating income

 

146

104

Other operating expense

 

(108)

(83)

 

5

(2,099)

(2,160)

 
 
 
 

Operating profit

 

954

1,245

Financial income

6

30

18

Financial expense

6

(122)

(119)

 
 
 
 

Profit before income tax expense

 

862

1,144

Income tax expense

7

(152)

(194)

Share of the profit of associates and joint ventures

10

(9)

11

Other results related to associates and joint ventures

10

63

118

 
 
 
 

Profit for the year

 

764

1,079

 
 
 
 

Of which:

 
 
 

Profit attributable to non-controlling interests

17

6

2

Net profit attributable to equity holders of Koninklijke DSM N.V.

 

758

1,077

 
 
 
 

Dividend on cumulative preference shares

 

(8)

(8)

 
 
 
 

Net profit available to holders of ordinary shares

 

750

1,069

 
 
 
 

Earnings per share (EPS) (in €):

 
 
 

- Net basic EPS

2

4.27

6.10

- Net diluted EPS

2

4.24

6.06

See Note 2 'Alternative performance measures' for the reconciliation to Adjusted EBITDA of €1,684 million (2018: €1,822 million) and other adjusted IFRS performance measures.

Consolidated statement of comprehensive income

x € million

2019

2018

 
 
 

Items that will not be reclassified to profit or loss

 
 

Remeasurements of defined benefit pension plans

(24)

(77)

Fair value changes in Other participating interests

(21)

16

Transfer of fair value of other participating interests to retained earnings

4

-

Exchange differences on translation of foreign operations relating to the non-controlling interests

2

(1)

 
 
 

Items that may subsequently be reclassified to profit or loss

 
 

Exchange differences on translation of foreign operations

 
 

  • Change for the year

134

129

  • Reclassification adjustment to the income statement

(9)

14

Hedging reserve

 
 

  • Change for the year

(18)

(44)

  • Reclassification adjustment to the income statement

66

22

 
 
 

Equity accounted investees — share of Other comprehensive income

1

(4)

 
 
 

Other comprehensive income, before tax

135

55

 
 
 

Income tax (expense)/income relating to:

 
 

  • Remeasurements of defined benefit plans

9

11

  • Exchange differences on translation of foreign operations

-

2

  • Hedging reserve

(4)

7

Total income tax (expense) / income

5

20

 
 
 

Other comprehensive income, net of tax

140

75

 
 
 

Profit for the year

764

1,079

 
 
 

Total comprehensive income

904

1,154

 
 
 

Of which:

 
 

  • Attributable to non-controlling interests

8

1

  • Attributable to equity holders of Koninklijke DSM N.V.

896

1,153

Consolidated balance sheet at 31 December

x € million

Notes

2019

2018

 
 
 
 

Assets

 
 
 

Non-current assets

 
 
 

Intangible assets

8

3,515

3,090

Property, plant and equipment

9

4,040

3,511

Deferred tax assets

7

217

248

Share in associates and joint ventures

10

155

205

Financial derivatives

23

27

14

Other financial assets

11

265

263

 
 

8,219

7,331

Current assets

 
 
 

Inventories

12

2,019

1,993

Trade receivables

13

1,592

1,575

Income tax receivables

13

61

83

Other current receivables

13

45

80

Financial derivatives

23

19

21

Current investments

14

688

1,277

Cash and cash equivalents

15

800

1,281

 
 

5,224

6,310

 
 
 
 

Total

 

13,443

13,641

 
 
 
 

Equity and liabilities

 
 
 

Equity

16

 
 

Shareholders' equity

 

7,731

7,782

Non-controlling interests

17

104

33

 
 

7,835

7,815

Non-current liabilities

 
 
 

Deferred tax liabilities

7

296

254

Employee benefit liabilities

24

413

413

Provisions

18

120

116

Borrowings

19

2,464

2,272

Financial derivatives

23

7

3

Other non-current liabilities

20

145

197

 
 

3,445

3,255

Current liabilities

 
 
 

Employee benefit liabilities

24

43

46

Provisions

18

48

37

Borrowings

19

189

380

Financial derivatives

23

18

51

Trade payables

21

1,345

1,430

Income tax payables

21

42

100

Other current liabilities

21

478

527

 
 

2,163

2,571

 
 
 
 

Total

 

13,443

13,641

Consolidated statement of changes in equity (Note 16)

x € million

Share
capital

Share
premium

Treasury
shares

Other
reserves

Retained earnings

 

Total

Non-controlling
interests

Total
equity

 
 
 
 
 
 
 
 
 

Balance at 1 January 2018

338

489

(398)

(199)

6,732

6,962

103

7,065

 
 
 
 
 
 
 
 
 

Dividend

-

-

-

-

(365)

(365)

(3)

(368)

Options / performance shares granted

-

-

-

25

-

25

-

25

Options / performance shares
exercised / canceled

-

-

-

(23)

23

-

-

-

Reissued shares

-

-

263

-

(21)

242

-

242

Acquisition (divestment) of subsidiary with NCI

-

-

-

-

-

-

(67)

(67)

Repurchase of shares

-

-

(236)

-

-

(236)

-

(236)

Other

-

-

-

-

1

1

(1)

-

 
 
 
 
 
 
 
 
 

Total comprehensive income

-

-

-

142

1,011

1,153

1

1,154

 
 
 
 
 
 
 
 
 

Balance at 31 December 2018

338

489

(371)

(55)

7,381

7,782

33

7,815

 
 
 
 
 
 
 
 
 

Dividend

-

-

-

-

(414)

(414)

(4)

(418)

Options / performance shares granted

-

-

-

34

-

34

-

34

Options / performance shares
exercised / canceled

-

-

-

(36)

36

-

-

-

Reissued shares

-

-

335

-

(11)

324

-

324

Acquistion of NCI without a change in control

-

-

-

-

(13)

(13)

9

(4)

Acquisition (divestment) of subsidiary with NCI

-

-

-

-

-

-

57

57

Repurchase of shares

-

-

(869)

-

-

(869)

-

(869)

Other

-

-

-

1

(10)

(9)

1

(8)

 
 
 
 
 
 
 
 
 

Total comprehensive income

-

-

-

152

744

896

8

904

 
 
 
 
 
 
 
 
 

Balance at 31 December 2019

338

489

(905)

96

7,713

7,731

104

7,835

Consolidated cash flow statement (Note 26)

x € million

2019

2018

 
 
 
 
 

Operating activities

 
 
 
 

Profit for the year

 

764

 

1,079

Share of the profit of associates and joint ventures

 

(54)

 

(129)

Income tax

 

152

 

194

Profit before income tax expense

 

862

 

1,144

Financial income and expense

 

92

 

101

Operating profit1

 

954

 

1,245

Depreciation, amortization and impairments

 

632

 

509

Earnings before interest, tax, depreciation and amortization (EBITDA)1

 

1,586

 

1,754

Adjustments for:

 
 
 
 

  • (Gain) or loss from disposals

(4)

 

(22)

 

  • Acquisition/divestment related in EBITDA

13

 

16

 

  • Change in provisions

26

 

(41)

 

  • Defined benefit plans

(39)

 

(25)

 
 

(4)

 

(72)

 

Income tax received

9

 

15

 

Income tax paid

(149)

 

(122)

 

Share-based compensation

34

 

25

 

Contract settlements and other non-cash items

(70)

 

29

 

Other

(8)

 

-

 

Changes, excluding working capital

 

(188)

 

(125)

 
 
 
 
 

Operating cash flow before changes in working capital

 

1,398

 

1,629

Changes in operating working capital:

 
 
 
 

  • Inventories

114

 

(166)

 

  • Trade receivables

59

 

(74)

 

  • Trade payables

(121)

 

(6)

 
 

52

 

(246)

 

Changes in other working capital

(65)

 

8

 

Changes in working capital

 

(13)

 

(238)

 
 
 
 
 

Cash provided by operating activities

 

1,385

 

1,391

  1. See Note 2 'Alternative performance measures' for the reconciliation to Adjusted EBITDA of €1,684 million (2018: €1,822 million) and other adjusted IFRS performance measures.

Consolidated cash flow statement (Note 26) continued

x € million

2019

2018

 
 
 
 
 

Cash provided by operating activities

 

1,385

 

1,391

 
 
 
 
 
 
 
 
 
 

Investing activities

 
 
 
 

Capital expenditure for:1

 
 
 
 

  • Intangible assets

(107)

 

(108)

 

  • Property, plant and equipment

(520)

 

(565)

 

Payments regarding drawing rights

(14)

 

(20)

 

Proceeds from disposal of property, plant and equipment

6

 

18

 

Acquisition of subsidiaries and associates

(556)

 

(22)

 

Disposal of subsidiaries, businesses and associates

37

 

316

 

Additions to fixed-term deposits

(1,195)

 

(1,544)

 

Withdrawal from fixed-term deposits

1,783

 

1,222

 

Interest received

10

 

20

 

Other financial assets:

 
 
 
 

  • Capital payments and acquisitions

(53)

 

(77)

 

  • Dividends received

75

 

2

 

  • Additions to loans granted

(17)

 

(4)

 

  • Repayment of loans granted

25

 

156

 

  • Proceeds from disposals

1

 

1

 
 
 
 
 
 

Cash from/(used in) investing activities

 

(525)

 

(605)

 
 
 
 
 

Financing activities

 
 
 
 

Settlement derivatives from internal loans

(5)

 

1

 

Capital payments from/to non-controlling interests

1

 

-

 

Loans taken up

7

 

25

 

Repayment of loans

(302)

 

(12)

 

Payments of lease liabilities

(53)

 

(1)

 

Change in debt to credit institutions

57

 

9

 

Dividend paid

(291)

 

(225)

 

Interest paid

(57)

 

(59)

 

Proceeds from reissued treasury shares

180

 

97

 

Repurchase of shares

(869)

 

(236)

 
 
 
 
 
 

Cash (used in)/from financing activities

 

(1,332)

 

(401)

 
 
 
 
 

Change in cash and cash equivalents

 

(472)

 

385

 
 
 
 
 

Cash and cash equivalents at 1 January

 

1,281

 

899

Exchange differences relating to cash held

 

(9)

 

(3)

 
 
 
 
 

Cash and cash equivalents at 31 December

 

800

 

1,281

  1. An amount of €18 million included in capital expenditure was funded by customers (2018: €9 million) and in 2018 €18 million via financial lease (in 2019 all lease payments are recognized as cash used in financing activities).