2 Alternative performance measures

In presenting and discussing DSM’s financial position, operating results and net results, management uses certain Alternative performance measures not defined by IFRS. These Alternative performance measures (APMs) should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used as supplementary information in conjunction with the most directly comparable IFRS measures. Alternative performance measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies.

To provide clear reporting on the developments of the business, APM adjustments, which represent material items of income or expense, are made. These adjustments impact the EBIT(DA), operating profit, net profit, ROCE, cash provided by operating activities and EPS. A reconciliation of the Alternative performance measures to the most directly comparable IFRS measures can be found in the table Alternative performance measures.

The APM adjustments to net profit, as included in the APMs, can be specified as follows:

2020

The APM adjustments in 2020 are listed below:

• Acquisition and divestment costs of €52 million relate mainly to the acquisition of Glycom, CSK and Erber Group
• Restructuring costs of €103 million relate to restructuring projects (mainly Fit for Growth within Nutrition and Agile to grow within Materials) together with the redundancy schemes associated with the dismissal of employees and costs of termination of contracts
• Impairments of property, plant and equipment (PPE) and intangible assets of €101 million and the other APM adjustment of €11 million relates to an impairment of €56 million of DSM Bio-based Products & Services, owing to an expected subdued market outlook for biofuels which led to insufficient expected future cash flows and an impairment of €56 million relating to DSM Advanced Solar on its solar assets following the sale to Covestro AG
• APM adjustments to the result from associates and joint ventures of €41 million mainly relate to the joint venture POET-DSM, following the decision to mothball the second-generation bio-ethanol plant in Emmetsburg (Iowa, USA) and includes DSM’s equity-accounted share in the impairment loss recognized by the joint venture (€74 million), the impairment of the associated intangible assets (€11 million) and the related tax benefit (-€28 million)

2019

The APM adjustments in 2019 are listed below:

• Acquisition and divestment costs of €13 million relate mainly to the acquisition of Yimante, Andre Pectin and CSK
• Restructuring costs of €64 million relate to project costs of the restructuring projects together with the redundancy schemes associated with the dismissal of employees and costs of termination of contracts
• The other APM adjustment of €17 million relates to the provision for soil cleaning within Corporate Activities
• Impairments of property, plant and equipment (PPE) and intangible assets of €23 million relate mainly to a development project of DSM Nutritional Products and the impairment of an investment project within DSM Food Specialties
• APM adjustments to the result from associates and joint ventures of €28 million mainly relate to the step-up to the fair value of the associate Andre Pectin prior to the acquisition

Below table reflects the earnings per share (EPS) related to continuing operations and to total earnings including discontinued operations.