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2014-05-06

DSM N.V. : DSM reports Q1 2014 results

* In Q1 2014 DSM delivered €272 million EBITDA from continuing operations, in
line with expectations
* Q1 2014 EBITDA from continuing operations was €29 million below Q1 2013, of
which about €23 million was due to adverse exchange rate developments
* The impact of the headwinds in Nutrition appear to have peaked in Q1
* In Performance Materials all business groups delivered good volume growth
* DSM maintains 2014 outlook, anticipating EBITDA improvements over the
coming quarters

Royal DSM, the Life Sciences and Materials Sciences company, today reported
first quarter EBITDA from continuing operations of €272 million compared to
€301 million in Q1 2013. This performance was delivered against significant
adverse foreign exchange rates. As expected, Nutrition experienced in Q1 the
continued impact of the market headwinds, which also affected Q4 2013.
Materials Sciences was impacted by lower results in caprolactam.

Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing
Board, said:
"DSM delivered results in line with expectations, despite further currency
deterioration during the quarter. We are pleased to report that market
conditions in Nutrition began to show some signs of improvement by the end of
the quarter. Our performance in Q1 demonstrates DSM's strength in Nutrition,
owing to our highly integrated and global business model, benefiting from the
structural megatrends of health and wellness. We also see a more positive
momentum in a number of Performance Materials end-markets."

"Through maintaining our focus on the operational performance of the business,
benefiting from the Profit Improvement Program, we continue to execute our
near term initiatives of protecting profitability and improving cash flow.
Therefore, we confirm our outlook given in January 2014, and anticipate to
deliver improving financial results in the coming quarters."

Key figures
--------------------------------------------------------------------------------------------------------------
| first quarter exch. rates |
|in € million 2014 2013 +/- volume price/mix other |
|Net sales 2,298 2,320 -1% 3% -3% -2% 1% |
|Nutrition 1,047 990 6% 4% -2% -3% 7% |
|Performance Materials 670 669 0% 4% -2% -2% 0% |
|Polymer Intermediates 405 437 -7% 2% -8% -1% |
|Innovation center 34 37 -8% -5% 0% -3% |
|Corporate Activities 40 55 |
|Total continuing operations 2,196 2,188 0% 3% -3% -3% 3% |
|Discontinued operations 102 132 -23% -2% -21% |
| |
| first quarter |
|in € million 2014 2013 +/- |
|EBITDA 270 308 -12% |
|Nutrition 203 215 -6% |
|Performance Materials 77 79 -3% |
|Polymer Intermediates 20 28 -29% |
|Innovation Center -6 -2 |
|Corporate Activities -22 -19 |
|Total continuing operations 272 301 -10% |
|Discontinued operations -2 7 |
| |
|Core net profit 114 132 -14% |
|Net profit before exceptional items, |
|continuing operations 99 125 -21% |
|Net profit after exceptional items, total DSM 81 119 -32% |
| |
|Core EPS (€/share) 0.66 0.78 -15% |
|Net EPS before exceptional items, |
|continuing operations (€/share) 0.57 0.71 -20% |
|Net EPS after exceptional items, total DSM (€/share) 0.45 0.69 -34% |
| |
|Cash flow from operations -37 -49 |
|Capital expenditures (cash) 151 152 |
|Net debt -2,161 -1,841 * |
|* year-end 2013 |
| |
--------------------------------------------------------------------------------------------------------------
In this report:

* 'Organic sales growth' is the total impact of volume and price/mix;
* 'Discontinued operations' comprises net sales and operating profit (before
depreciation and amortization) of DSM Pharmaceutical Products up to and
including 10 March 2014;
* 'Net profit' is the net profit attributable to equity holders of
Koninklijke DSM N.V.;
* 'Core net profit' is the net profit from continuing operations before
exceptional items and before acquisition related (intangible) asset
amortization;
* From 2014 onwards interest receipts and payments are no longer included in
operating activities in the cash flow statement but reported in investing
activities (interest received) and financing activities (interest paid).
2013 figures are restated accordingly;
* All 2013 figures are restated for the impact of the termination of
proportional consolidation for joint ventures as from 1 Jan 2014 onward.

Note:all tables are available in the attached Press release-PDF

Review by cluster

Nutrition
Sales
in the first quarter increased by 6% compared to Q1 2013. Organic sales growth
was 2% compared to Q1 2013, as a result of 4% higher volumes and 2% lower
prices. Currencies had a negative impact of 3%, while acquisitions (mainly
Tortuga) had a positive impact of 7%.

EBITDA
for Q1 was €203 million, down 6% from Q1 2013. The positive impact of the
organic growth and the contribution from acquisitions was offset by negative
foreign exchange developments, lower prices in some vitamins and a less
favorable business mix, resulting in an EBITDA margin slightly below DSM's
target range of 20-23%.

Human Nutrition&Health
net sales were €423 million in Q1. Organic sales declined by 1% compared to Q1
2013, with volumes flat and prices/mix down slightly. As expected, the US
dietary supplements markets (vitamins and fish oil based Omega 3) were down
significantly, while dietary supplements in Europe and Asia performed well.
Good growth was also realized in i-Health and in premixes. Western
food&beverage markets in general remained soft.

Compared to Q4 2013, prices were down 3% mainly due to a less favorable
product mix, while volumes were up almost 14%, due to seasonal effects and
some restocking.

Animal Nutrition and Health
net sales were €466 million in Q1. Organic sales growth in Q1 was 7% with
volumes up 10% compared to the weak Q1 2013 when the animal feed markets were
still being impacted by the high commodity prices resulting from the 2012
drought. Improving market conditions in animal feed drove volume growth,
albeit tempered by ongoing animal diseases in certain regions, with strong
performance in premix. Volumes for our key vitamins, especially vitamin E,
remained flat. Prices were down 3% from Q1 2013 due to lower vitamin prices,
especially vitamin E.

Compared to Q4 2013, volumes were down 6% mainly attributable to seasonality.
Overall, prices were slightly lower (-1%), with vitamin E prices stabilizing
in Q1. Higher vitamin spot prices in March had no significant impact on Q1
pricing, as DSM primarily supplies on a contract basis.

In Q1 2014, Tortuga delivered sales of €64 million and an EBITDA of €10
million.

DSM Food Specialties
delivered a solid performance in Q1 with good organic growth in enzymes and
cultures. The integration of Cargill and DSM's cultures businesses was
concluded according to plan. The combined businesses are generating value for
DSM's customers, resulting in significant growth opportunities.
Performance Materials

Organic sales
growth in Q1 2014 was 2% compared to Q1 2013 with 4% volume growth and 2%
lower prices. Adverse currency effects amounted to 2%. DSM Engineering
Plastics showed good volume growth, despite the negative impact of the severe
winter in the US on PA 6 production. Prices were slightly higher. DSM
Resins&Functional Materials saw good volume growth, while prices were down
due to price/mix effects. In DSM Dyneema, sales were supported predominantly
by higher volumes.

EBITDA
in Performance Materials for the quarter was 10% above the underlying result
of Q1 2013, as that quarter benefited from a €9 million book profit related
to the sale of distribution activities in DSM Resins&Functional Materials. In
DSM Engineering Plastics, EBITDA was up substantially from the previous year
as a result of good volume growth, slightly higher prices and the impact of
cost reductions, which were partly offset by negative exchange rates.
Underlying EBITDA at DSM Resins&Functional Materials was up, driven by good
volume growth and continued cost control. DSM Dyneema delivered a
substantially higher EBITDA than Q1 2013, owing to higher volumes and an
improved cost base.

Polymer Intermediates
Org...

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