5 Net sales and costs
Net sales
2019 | 2018 | |
Goods sold | 8,833 | 9,091 |
Services rendered | 159 | 164 |
Royalties | 18 | 12 |
Total | 9,010 | 9,267 |
Fulfillment of the performance obligations related to goods sold is measured using the commercial shipment terms as an indicator for the transfer of control. Fulfillment of the performance obligations for services rendered is identified according to the individual contract. The payment terms are determined per business segment on a customer basis. DSM has neither specific obligations for returns or refunds, nor specific warranties or other related obligations.
Disaggregation of net sales
2019 | 2018 | |
Nutrition | ||
|---|---|---|
DSM Nutritional Products: | ||
| 2,892 | 3,134 |
| 2,046 | 2,019 |
| 425 | 382 |
| 93 | 112 |
5,456 | 5,647 | |
DSM Food Specialties | 572 | 490 |
Total | 6,028 | 6,137 |
Materials | ||
DSM Engineering Plastics | 1,406 | 1,516 |
DSM Dyneema | 338 | 344 |
DSM Resins & Functional Materials | 1,002 | 1,053 |
Total | 2,746 | 2,913 |
Innovation Center | 194 | 172 |
Corporate Activities | 42 | 45 |
Total | 9,010 | 9,267 |
Total costs
In 2019, total operating costs amounted to €8.1 billion, €0.1 billion higher than in 2018, when these costs stood at €8.0 billion. Total operating costs in 2019 included Cost of sales amounting to €6.0 billion (2018: €5.9 billion); gross margin as a percentage of net sales stood at 34% (2018: 37%).
Employee benefit costs
2019 | 2018 | |
Wages and salaries | 1,474 | 1,433 |
Social security costs | 187 | 185 |
Pension costs (see also Note 24) | 116 | 110 |
Share-based compensation (see also Note 27) | 34 | 25 |
Total | 1,811 | 1,753 |
Depreciation, amortization and impairments
2019 | 2018 | |
Amortization of intangible assets | 175 | 149 |
Depreciation of property, plant and equipment | 347 | 320 |
Depreciation of right-of-use assets | 50 | - |
Impairment losses | 60 | 40 |
Total | 632 | 509 |
Other operating income
2019 | 2018 | |
Release of provisions | 6 | 8 |
Gain on sale of assets and activities | 7 | 25 |
Insurance benefits | 16 | 18 |
Amendments/settlements to pension plans | 16 | 11 |
Earn-out payments and other settlements | 48 | 10 |
Release translation reserve | 11 | - |
Legal settlements | 8 | 2 |
Sundry | 34 | 30 |
Total | 146 | 104 |
Other operating expense
2019 | 2018 | |
Additions to provisions | 67 | 36 |
Exchange differences | 10 | 7 |
Acquisitions/Disposals | 11 | 7 |
Earn-out Amyris Brasil | - | 11 |
Sundry | 20 | 22 |
Total | 108 | 83 |