DSM Integrated Annual Report 2020

How we create value for our stakeholders

Our Value Creation model is based on the Integrated Reporting <IR>  framework and gives an overview of how we create value for our stakeholders based on six capital inputs: Human capital, Societal & relationship capital, Natural capital, Financial capital, Intellectual capital and Manufactured capital. We cluster these six capitals into People, Planet and Profit.

We transform our capital inputs into value and positive impact through taking advantage of the opportunities and minimizing the risks around the relevant megatrends in our business. A key part of our strategy, aside from our financial targets, is to continuously strengthen our commitment to sustainability. Through our business model, business strategy and purpose, we aim to have a positive impact for People, Planet and Profit, and deliver our share toward the Sustainable Development Goals (SDGs).

More information on how our Value Creation model and the definitions of the six capital, are provided in Explanation of some concepts and ratios.

Capital Inputs1


Our employees represent more than 120 nationalities in almost 50 countries. We engage with our stakeholders and partners to achieve our Purpose.




Gender ratio (f:m)

  • Employees
  • Training & development
  • Stakeholder engagement & Public-private partnerships
  • Philanthropy & sponsorship


We consume raw materials (including renewable and recyclable materials), energy from renewable and non-renewable sources and water.


Primary energy use (PJ)


Water withdrawal (non-once-through cooling, x 1,000 m3)

  • Raw materials (including bio-based and recycled-based materials)
  • Energy (including renewable sources)
  • Water


We employ shareholder equity and borrowings to invest in partnerships and innovation. We purchase goods and services that are used in our manufacturing assets.


Shareholders’ equity (million)


Borrowings (million)

  • Shareholders’ equity
  • Borrowings
  • Partnerships
  • Scientific environment and academic infrastructure
  • Purchased goods & services
  • Manufacturing footprint

Our Business Model

We are a purpose-led, performance-driven organization developing innovative solutions addressing Nutrition & Health, Climate & Energy, and Resources & Circularity. Our organizational and operating model is made up of market-facing business groups (clustered in three business segments) focused on the primary business functions, global support and functional excellence departments, and regional organizations. Our Brighter Living Solutions — solutions that are better than the mainstream reference solution for people and/or the planet — account for 63% of our net sales.

Percentage of net sales by end-use market (continuing operations)

Percentage of net sales by end-use market (continuing operations) (graphic)

Value Outcomes2


The safety of our employees is our highest priority. Investments in training and career development provides value for employees and stakeholders. We aspire to pay a living wage to all our employees. Our products support improved nutrition and a more sustainable food system.


Employee engagement


Employee engagement

  • Safety & health
  • Brighter Living Solutions
  • Engaged workforce
  • Skills & employability
  • Employee benefits
  • Improved nutrition


We work to reduce our environmental footprint and support the reduction of the footprints of our value chain partners. Our products enable the transition to a more circular economy and contain safer ingredients and materials.


Scope 1 + 2 + 3 emissions (million tons CO2eq)


Purchased renewable electricity

  • Reduced environmental footprint
  • Brighter Living Solutions
  • Enabling the transition to a more circular economy
  • Safer ingredients & materials


We aim to deliver a strong financial performance, enabling us to re-invest in our asset base, fund our purpose-driven innovations, pay stable (preferably rising) dividends and provide good returns to our bondholders. Our tax policy follows the letter and spirit of the law.


Adjusted EBITDA from continuing operations (million)


Adjusted net operating free cash flow (million)

  • Financial performance (Adjusted EBITDA and Adjusted net operating free cash flow)
  • Interest payments, capital gains / losses and return on investment
  • Total Shareholder Return, including dividend
  • Contribution to civil society via wages, taxes and social security including pensions
  • Contribution to business success for customers and suppliers

Impact and SDGs3


  • Better fed and healthier individuals and communities
  • More prosperous and resilient employees for our company and in our value chain


  • More sustainable use of resources, for our company and in our value chain
  • Products that contribute to safer, healthier working & living environments


  • We are purpose-led, performance-driven through science-based sustainable solutions
  • Sustainable returns to investors
  • Positive contributions to economic growth in the countries and markets in which we operate

1 All data presented in the People and Planet columns are subject to the non-financial reporting policy. Data presented in the Profit column relates to continuing operations.

2 All data presented in the People and Planet columns relate are subject to the non-financial reporting policy.

3 All data presented in the People and Planet columns are subject to the non-financial reporting policy. Data presented in the Profit column relates to continuing operations.

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.
Brighter Living Solutions

Brighter Living Solutions (BLS) is DSM’s program for the development of sustainable, innovative solutions with environmental and/or social benefits, creating shared value for our stakeholders. Brighter Living Solutions are products, services and technologies that, considered over their life cycle, offer a superior environmental impact (ECO+) and/or a superior social impact (People+) when compared to the mainstream alternative for the same application. The impact of Brighter Living Solutions can be realized at any stage of the product life cycle, from raw materials through the manufacturing process to potential re-use and end-of-life disposal.

Within the program, DSM conducts an annual ‘Product Category Sustainability Review’ for all product categories. This review identifies environmental and social impact differentiators and risks for each of our product categories and confirms the mainstream reference solution. To substantiate the identified differentiators DSM uses comparative Life Cycle Assessments (LCAs) and/or expert opinions to determine whether a product has a superior performance and can be identified as a Brighter Living Solution.

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.
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 development of the business.

Primary energy is energy that has not yet been subjected to a human engineered conversion process. It is the energy contained in unprocessed fuels.

Final (consumed) energy is the energy that is consumed by end-users. The difference between primary energy and final consumed energy is caused by the conversion process between the two as well as any transmission losses.

Financial capital (Profit)
Providers of capital – shareholders and bondholders, banks and the financial markets – supply funds that we use in our business to create value, driving growth and delivering sustainable returns.
Human capital (People)
We employ skilled and talented people from diverse backgrounds. We strive to provide employees with a safe and inspiring workplace as well as with the tools and training they need to be effective and to develop their abilities. We reward employees with competitive benefit packages.
Integrated Reporting <IR> Framework – Value Creation model
The Value Creation diagram is based on the International Integrated Reporting Council's Integrated Reporting <IR> framework and gives an overview of how we create value for our stakeholders based on six capital inputs.
Intellectual capital (Profit)
We manufacture and distribute high-quality products and services safely, efficiently and responsibly, and strive to develop valuable, collaborative and long-term relationships with customers and suppliers. We pursue open innovation, connecting and collaborating with partners and investing in start-ups.
Natural capital (Planet)
We recognize that the world is an interconnected system of resources. For us, this represents a responsibility and a business opportunity. We aim to improve the environmental impact of our supply chain, operations and products and services, while developing innovative solutions that deliver sustainability benefits to customers and beyond.
Societal & relationship capital (People)
We engage with various stakeholders to ensure close alignment between our aims and societal needs. We generate value for stakeholders outside our direct value chains of employees, suppliers, customers and end-users; these include employees’ families, governments, local communities and civil society.
Total shareholder return (TSR)
Total shareholder return is capital gain plus dividend paid.