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DSM N.V. : DSM reports Q1 2015 results

* Sales of €1,886 million, up 11%, including 2% organic sales growth
* EBITDA up 4% to €248 million
* Nutrition delivered good organic growth of 4%, driven by volumes in animal
* Performance Materials continued to improve EBITDA through higher volumes
and margins
* Cash from continuing operating activities improved to €84 million (Q1 2014:
€11 million)
* Non-cash impairment of €130 million (after tax) related to the partnership
for Polymer Intermediates and Composite Resins announced in March, leading
to a net loss after exceptional items
* Outlook 2015 updated for positive foreign exchange developments

Royal DSM, the Life Sciences and Materials Sciences company, today reported
its results for Q1 2015. DSM reported sales of €1,886 million, an 11%
increase versus Q1 2014, due to 3% higher volumes, 1% lower prices and 9%
foreign exchange effects. DSM delivered an incre
ased EBITDA of €248 million compared to €239 million in Q1 2014. The increase
in operating working capital of
€199 million
to €2,102 million at the end of Q1 2015 was entirely due to the foreign
exchange translation effect.
Cash operating working capital remained flat, contrary to usual seasonality.

Commenting on the results,Feike Sijbesma, CEO/Chairman of the DSM Managing
Board, said:

"DSM delivered higher results in Q1 2015 compared to prior year, driven by
higher volumes in both Nutrition and Performance Materials. Nutrition
delivered mixed results with good volume growth in animal nutrition, partly
offset by low prices in vitamin E and weak performance in human nutrition.
Performance Materials had another strong quarter with higher volumes and
margins. The mix of foreign currencies had an overall positive impact on both

In Q1 we announced a partnership with CVC Capital Partners for Polymer
Intermediates and Composite Resins, a significant step in further optimizing
our portfolio and reducing our cyclicality. This strategic action will enable
us to focus fully on improving the operational performance of our core
businesses while capitalizing on the longer term potential for value creation
of our various partnerships.

We are progressing well with setting up a number of efficiency improvement and
cost reduction programs especially in Nutrition and in all support functions
across the company.

DSM aims to deliver an EBITDA in 2015 ahead of 2014, the increase mainly
driven by positive foreign exchange effects."

Sales, EBITDA, operating working capital and cash flow refer to continuing

Key figures
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 as well as DSM Fibre Intermediates and DSM
Composite Resins up to and including Q1 2015;
* 'Core net profit' is the net profit from continuing operations before
exceptional items and before acquisition related (intangible) asset

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

in the first quarter increased by 15% compared to Q1 2014. Organic sales
growth was 4% compared to Q1 2014 as a result of 3% higher volumes and 1%
higher prices. Good volume growth in animal nutrition was partly offset by
lower vitamin E prices and by weakness in human nutrition. Currencies had an
11% positive impact on sales.

for Q1 was €195 million, down 4% from Q1 2014. Higher volumes in animal
nutrition were offset by lower vitamin E prices, lower volumes in human
nutrition, intensified marketing and sales activities as well as actions to
reduce inventory levels. These factors and the relative higher share of
animal nutrition impacted the EBITDA margin. Positive effects of foreign
exchange rates, especially the US dollar, were partly offset by the negative
impact of the Swiss franc.

Animal Nutrition and Health
net sales were €574 million in Q1, a 23% increase versus the €467 million in
Q1 2014. Organic sales growth in Q1 was 14%, entirely driven by higher
volumes. This development reflects the continued positive growth momentum
throughout 2014 versus a slow start in Q1 2014. Premixes showed strong growth
and Tortuga continued to develop well and delivered a strong quarter.

Vitamin E prices were significantly lower compared to Q1 2014. This negative
price effect of more than €20 million was compensated by higher prices for
other ingredients. However, as a substantial part of these other ingredients
are in-sourced for DSM's premix activities and as such these increased prices
only have a limited EBITDA effect.

Human Nutrition&Health
net sales increased by 7% to €452 million versus €422 million in Q1 2014.
Volumes declined 6% and prices were flat while currencies had a positive
effect of 13%. However, compared to Q4 2014, Q1 showed a positive organic
sales growth of 7%, breaking the trend of successive sales declines over the
last three quarters of 2014.

The weakness in volumes was broadly across expected product categories, in
particular low sales in fish oil based Omega 3 dietary supplements in the US.
DSM is addressing organic growth in human nutrition with intensified
marketing and sales activities and organizational changes.

Food&Beverage markets in developed economies as well as retail sales of
vitamin-based dietary supplements in the US showed early signs of
improvement. Volume growth in infant nutrition has normalized since Q4 2014,
albeit at lower than historic growth rates. I-Health enjoyed strong sales

DSM Food Specialties
delivered a solid performance in Q1, with good organic growth in enzymes and
cultures. Issues around manufacturing performance in savory ingredients and
cultures reported in Q4 2014 have been resolved.
Performance Materials

development in Q1 amounted to -1% compared to Q1 2014 as a result of 3% volume
growth and 4% lower prices reflecting lower raw materials costs. Sales
benefited from positive currency effects of 8%.

DSM Engineering Plastics showed good volume growth. Sales were further
supported by a substantial FX effect, which more than compensated for lower
prices in the polyamide 6 value chain.

Business conditions in DSM Dyneema remained favorable, although organic sales
in the quarter were flat due to timing of orders.

In DSM Resins and Functional Materials volumes were flat. Higher volumes in
coating resins were offset by lower volumes in functional materials. Positive
FX effects were partly offset by slightly negative price effect, driven by
lower raw materials costs and some mix effects.

in Performance Materials for the quarter increased 21% compared to Q1 2014.
Higher margins were achieved in all businesses, resulting from positive
foreign exchange effects and lower raw material costs. The EBITDA-margin
increased significantly to 13.6%, now in line with the 2015 target range of

EBITDA of DSM Engineering Plastics was substantially up compared to previous
year as a result of good volume growth in combination with increased margins.
DSM Dyneema delivered solid EBITDA growth. EBITDA of DSM Resins&Functional
Materials was slightly up; growth in coating resins was offset by lower
results in functional materials.

Innovation Center
Net sales in Q1 2015 were 6% higher compared to Q1 2014. DSM Biomedical
benefited from a stronger US dollar. Volumes in DSM Biomedical were lower
compared to Q1 2014, mainly due to destocking at a major customer.
Furthermore, Q1 2014 still included the St. Jude royalty revenues, which
ended in April 2014.

EBITDA in Q1 2015 improved versus Q1 2014 supported by positive currency
developments, despite the lower royalty income.

Corporate Activities
in Q1 2015 was in line with the same period in previous year.

Pharma activities and other associates
Total Q1 2015 sales of joint control entities amounted to €128 million on a
100% basis (Q1 2014: €105 million) of which €117 million from DSM Sinochem
Pharmaceuticals (Q1 2014: €98 million).

DPx holdings (49% DSM) realized total sales (100%) of €433 million, from
November 2014 up to and including January 2015, with a corresponding EBITDA
margin of 17%. The net result of DPx was negatively impacted by €24 million
exceptional items (before tax) related to restructuring, integration and
realizing synergies of the company.

Discontinued operations
Polymer Intermediates
and Composite Resins
Net sales amounted to €506 million, positively impacted by currency effects of
7% and EBITDA amounted to €38 million. The activities currently in
discontinued operations showed an increase in EBITDA. Polymer Intermediates
(higher volumes and margins) and DSM Composite Resins (higher volumes) both
contributed to the increase. The Q1 2014 discontinued operations also
included DSM Pharmaceutical Products (€102 million sales, -€2 million
EBITDA) which is now part of the DPx joint venture.

Financial overview

Exceptional items
Totalexceptional items
in the first quarter amounted to a loss of €163 million before tax (€145
million after tax). This includes €137 million (€130 million after tax) due
to the impairment following the announced partnership for Polymer
Intermediates and Composite Resins businesses and €26 million restructuring
and related expenses.

Net profit
Financial income and expense
in Q1 2015 amounted to -€52 million compared to -€19 million in Q1 2014. The
main reason for these higher costs were unfavorable hedge results amongst
others due to a downward shift in the interest curve of the Swiss franc.

The effective tax rate
in Q1 2015 was 18%, in line with the full year 2014.

Net profit, continuing operations before exceptional items
in Q1 2015 decreased by €22 million compared to Q1 2014 and stood at €69

Net earnings per ordinary share (continuing operations, before exceptional
) amounted to €0.39 in Q1 2015 compared to €0.52 in Q1 2014.

Cash flow, capital expenditure and financing
Cash provided by operating activities from continuing operations
in Q1 2015 was €84 million (Q1 2014: €11 million).

Operating working capital, continuing operations
expressed as a percentage of annualized sales amounted to 27.9% compared to
26.3% at year-end 2014. The operating working capital increased by €199
million from €1,903 million at year-end of 2014 to €2,102 million at the end
of Q1 2015. This was entirely due to the foreign exchange translation effect.
Cash operating working capital from continuing operations remained flat,
contrary to usual seasonalit...

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