DSM Integrated Annual Report 2024
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Table of Contents
REPORT BY THE MANAGING BOARD ..............................4
Our company.........................................................................4
About DSM ...................................................................................................... 4
Science & Research ................................................................................. 5
Business ..................................................................................6
Taste, Texture & Health - DSM ........................................................ 6
Health, Nutrition & Care - DSM ...................................................... 8
Animal Nutrition & Health ................................................................. 10
Corporate activities ................................................................................ 12
Financial performance .......................................................................... 13
Non-financial information .............................................. 16
EU Taxonomy ................................................................................................ 16
Governance and risk management............................. 21
Governance and governance framework .............................. 21
Risk management ................................................................................... 23
Group structure and shares ........................................................... 28
Supervisory Board and Managing Board DSM B.V. ....... 29
Auditors .......................................................................................................... 34
FINANCIAL STATEMENTS ................................................ 35
Consolidated financial statements ........................... 35
Notes to the consolidated financial statements .......... 42
Parent company financial statements ................... 108
Notes to the parent company financial statements . 110
OTHER INFORMATION .................................................... 120
Profit appropriation............................................................................. 120
Independent auditor’s report ....................................................... 121
DSM Integrated Annual Report 2024
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Forward-looking statements
This Integrated Annual Report may contain forward-looking statements with respect to DSM’s future (financial)
performance and position. Such statements are based on current expectations, estimates and projections of DSM and
information currently available to the company. DSM cautions readers that such statements involve certain risks and
uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual
performance and position to differ materially from these statements. The information provided in this Integrated Annual
Report is provided as of the date of its issue. DSM does not assume any obligation to update any information or forward-
looking statement provided in this Integrated Annual Report unless required by law. This Integrated Annual Report
contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse
Regulation. The English language version of this Integrated Annual Report prevails over other language versions.
DSM Integrated Annual Report 2024
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REPORT BY THE MANAGING BOARD
Our company
About DSM
DSM is a company organized under Dutch law with its statutory seat in Maastricht, the Netherlands. DSM is part of the
dsm-firmenich Group. As part of dsm-firmenich, we are innovators in nutrition and health. We reinvent, manufacture, and
combine vital nutrients and flavors to help the world’s growing population thrive sustainably.
Our Business Units
Our three Business Units are Taste, Texture & Health – DSM; Health, Nutrition & Care – DSM; and Animal Nutrition &
Health. These Business Units each strive to address the latest consumer needs and wants in a sustainable way. We are
uniquely positioned to help our customers realize their ambitions and address evolving consumer trends. We do this by
creatively applying proven science and drawing on our data-driven innovation capabilities as well as our exceptional
standards of operational excellence. Our Business Units are supported by Group Business Partners such as Science &
Research, Finance, Human Resources, Sustainability, Procurement, Legal, Regulatory, Risk & Compliance, Safety, Health and
Environment, and Digital & Tech.
Our strategy
DSM’s strategy is aligned with the strategy of dsm-firmenich.
After a challenging 2023, we took decisive action and completed a strategic business and portfolio review. We launched a
€200 million vitamin transformation program and accelerated the delivery of our synergies, which are expected to
contribute approximately €350 million to Adjusted EBITDA. Furthermore, we have recognized that the ANH business
would thrive better under different ownership, leading to the announcement in February 2024 to separate this Business
Unit from the dsm-firmenich Group including the DSM Group. Our strategic review also led us to sell our marine lipids and
yeast extracts in the course of 2024. On February 11, 2025, we announced the sale of our stake in the Feed Enzymes
Alliance for €1.5 billion to our equal partner Novonesis.
After the divestment of our ANH business, which is planned for 2025, and the finalization of the portfolio tuning, dsm-
firmenich will fully focus on strengthening its position in nutrition and health.
Our company - Science & Research
DSM Integrated Annual Report 2024
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Science & Research
Our approach to Science & Research
Our global Science & Research team ensures innovation is aligned with the needs of our businesses by continuously
refining its innovation portfolio to maximize value. This involves delivering existing priority projects that have a direct
impact on business, as well as reviewing and investing in capabilities to future-proof innovation delivery. Our global
innovation portfolio effectively addresses both current and future needs. This is boosted further through investments
made by our Venturing unit in startups developing cutting-edge innovations. With our track record of world-class
scientific leadership and uniquely broad portfolio of ingredients, we apply creative expertise and proven science to
improve health and well-being and address the global challenges of sustainable delivery.
IP and licensing
Our intellectual property (IP) professionals maximize the value of our innovations and brands by strategically defending
patents and trademark rights in key markets. The IP team acts as a differentiator in joint developments, technology
licensing (in/out), and IP asset acquisitions or sales.
Pushing the boundaries
By combining all our science capabilities, our Science & Research team strives to pioneer solutions that help shape the
future of nutrition and health. In 2024, we launched an array of innovations across a range of markets. For example, our
Sprinkle It Technology™ makes it easy to increase the nutritional value of food, our Novasense® solutions improve the
perception of alcohol in no- or low-alcohol drinks, and our TastePRINT® technology is ushering in a new generation of
affordable and sustainable sweetness. We also launched exciting new solutions in our ocean-friendly life’s®OMEGA range,
which boosts sustainability by making use of omega-3 derived from microalgae rather than from fish; our new
ProAct360™ solution is improving livestock performance through enhanced protein digestion; and much more.
DSM Integrated Annual Report 2024
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Business
Taste, Texture & Health - DSM
About Taste, Texture & Health - DSM
Taste, Texture & Health - DSM (TTH-DSM) tackles some of society’s biggest challenges: providing nutritious, healthy, and
sustainable food and beverages; accelerating diet transformation with products that offer appealing taste and texture;
and nourishing the rapidly growing global population while minimizing food loss and waste. To achieve these goals, we use
creative processes involving our customers. Our passion for the science and emotion of food extends along the value
chain from discovery to application to the end-consumer experience. This includes drinks with little or no sugar; dairy
products with consumer-preferred mouthfeel; succulent savory bites; and nutritious plant-based alternatives.
Our markets
Key market trends
The global food and beverage market is growing at a compound annual growth rate (CAGR) of 2.4%. This diverse market is
built on local tastes and traditions, with global, regional, and local players. In 2024, it was shaped by these trends:
•
Health as a key consumer need – with a focus on reduced sugar, salt, and fat, and on increased protein content,
nutritional value, and health benefits (although taste remains the key driver in purchasing decisions)
•
Alongside new products, food industry players are focusing on reformulating and optimizing recipes to respond to
fluctuations in the market for raw materials
•
Two-thirds of projected volume growth over the next five years will be attributable to Asia-Pacific, the Middle East
and Africa
•
Regulations focus on food safety, health, and sustainability – the latter supported by growing consumer concerns
about climate
Key performance figures
in € million
2024
2023
Sales
1,501
1,435
EBITDA
257
213
The year in review
Strategic priorities
In June 2024, during our Capital Markets Day, we presented our ‘TTH Strategic Priorities '28’ outlining our focus on high-
growth, high-margin product groups and how we aim to outpace the market by growing our divisions and leveraging
merger synergies. The divestment of our yeast extracts business, with annual sales of about €120 million, to Lesaffre was
a direct result of our strategic review. The divestment was completed on 1 October 2024.
Business - Taste, Texture & Health - DSM
DSM Integrated Annual Report 2024
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Investment in facilities
To maintain market leadership and grow with our customers, we continued to invest in our regional presence, including:
•
Making great progress with the construction of our state-of-the-art TTH-DSM headquarters and application
laboratories at the Biotech Campus Delft (Netherlands) which is expected to be operational by mid-2025
Innovation
Developing new food and beverage solutions increasingly depends on the effective use of advanced digital technologies,
machine learning and AI for fermentation, laboratory automation, and receptor technologies.
In 2024, at the world’s largest annual food and beverage tradeshow, Gulfood Manufacturing, we won the Digital
Transformation Innovation of the Decade Award for Delvo®ONE. Our Delvo®ONE portfolio of all-in-one functional cultures
for fermented milk products not only simplifies culture selection through AI-driven technology, but also optimizes taste,
texture, and shelf life, delivering enhanced sensory and functional benefits for dairy producers.
Partnerships
Yili Group
In 2023, we signed an agreement with Chinese dairy producer Yili Group to cooperate in research, innovation, and
sustainability. In 2024, we followed this by signing a Global Strategic Cooperation Memorandum focused on taste
innovations in dairy and health. In the highly competitive Chinese market, our combined capabilities are particularly
attractive to Yili.
Business - Health, Nutrition & Care - DSM
DSM Integrated Annual Report 2024
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Health, Nutrition & Care - DSM
About Health, Nutrition & Care - DSM
Health, Nutrition & Care - DSM (HNC-DSM) helps people improve their health by supplementing their diet with critical
nutrients. Working across segments like Early Life Nutrition, Dietary Supplements, Pharmaceuticals, Medical Nutrition, and
Biomedical materials, we drive nutrition science and medical innovation forward, optimizing immunity, accelerating
recovery, and enhancing quality of life.
At HNC, we elevate global patient and consumer health at every life stage by creating and delivering next-generation
products, customized solutions, and expert services. As an end-to-end partner, we work closely with our customers from
product conception to launch, providing unique consumer insights, a broad portfolio of nutritional ingredients, and
innovative solutions. This year, we added an array of delivery systems and masking and flavor capabilities to support
solutions specifically for our market applications.
Our markets
Key market trends
•
There is a gap of almost a decade between life span and health span – meaning that almost a decade of people’s
lives is impacted by poor health
•
Growing awareness around preventative and holistic approaches to health management (e.g., the
interconnectedness of gut health, cognitive function, and overall well-being) is fueling demand for innovative self-
care health products
•
Consumers are seeking sustainable and evidence-based solutions; focusing on the environmental impact of
producing ingredients, on which forms are better for them, and on how absorption of active ingredients impacts
effectiveness
•
Small, disruptive new brands, especially in the dietary supplements category, are enjoying strong growth
Key performance figures
in € million
2024
2023
Sales
2,835
2,806
EBITDA
443
489
The year in review
Accelerating the algal shift
In October 2024, we transferred the majority of our MEG-3® fish oil business to KD Pharma Group. This allows us to focus
on growing our algal omega-3 life’s®OMEGA portfolio, which is backed by our world-leading IP, scientifically-proven
nutritional equivalency to fish oil, secured supply, and sustainability data. In 2024, life’s®OMEGA O3020 – the first algal-
based lipid with high EPA content – became available in the EU and USA for use in the category ‘Food for Special Medical
Purposes’, and we launched a variety of life’s®OMEGA products tailored to the requirements of individual customers.
Business - Health, Nutrition & Care - DSM
DSM Integrated Annual Report 2024
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Innovation
We defined key strategic innovation priorities based on consumer trends and needs across all business segments. These
include providing novel ingredient solutions as well as novel premix and market-ready solutions that deliver nutritional
support in segments such as gut health, healthy aging, and women’s health. In 2024, we accelerated the shift from fish oil
to algal sources with the launch of our life’s®OMEGA portfolio, led the market in infant nutrition innovation in HMOs, and
significantly expanded our Humiome® gut health portfolio.
Other notable innovation achievements included:
•
VAP 250, a new form of dry vitamin A – as a stable, clean-label solution for combating malnutrition and widespread
nutrient deficiency through flour fortification
•
CBtru™, a premium formulated CBD drug intermediate and patented solution enhancing patient compliance,
increasing API loading and optimizing bioavailability for superior therapeutic outcomes
•
The launch in Japan’s pharmaceutical market of Sprinkle It Technology™ (SIT™), our patented multi-layered
micronutrient granules designed to address nutritional insufficiencies among seniors, in support of healthy aging
Business - Animal Nutrition & Health
DSM Integrated Annual Report 2024
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Animal Nutrition & Health
About Animal Nutrition & Health
Animal Nutrition & Health (ANH) helps to deliver healthy animal proteins efficiently, while harnessing the power of data to
make animal farming practices more sustainable, productive, and transparent.
We are a leading provider of vitamins, advanced feed additives (Performance Solutions), and premixes, empowered by
cutting-edge AI-driven Precision Services. We enhance livestock health and performance, improve feed efficiency and
safety, reduce emissions and antibiotic use, and enable data-driven decision-making. Our solutions help animal farmers
face a range of challenges in meeting growing global demand for healthy and sustainable proteins, including:
In 2024, it was recognized that our ANH business would thrive better under different ownership. This led to the
announcement in February 2024 to separate our Business Unit from the dsm-firmenich Group including the DSM Group.
Our markets
Key market trends
Poultry market conditions remained positive in 2024, with lower feed costs and firm demand supporting higher supply.
The pork industry continues to face significant pressure, with animal protein demand in China remaining weak. The
ruminant business saw good growth due to higher beef exports from Latin America. In addition, in the fourth quarter, the
vitamin business benefited from the additional temporary vitamin price effect related to a supply disruption in the
vitamin market, especially impacting the contract price for vitamins A and E in the fourth quarter.
Key performance figures
in € million
2024
2023
Sales
3,324
3,223
EBITDA
301
(30)
The year in review
Step-up in profitability of vitamins
Our vitamin business saw a continued improvement, reflected both in customer demand and normalization of
profitability. The vitamin transformation program, launched in mid-2023, was implemented according to plan, with the
cost of goods reduced, savings delivered, and inventory optimized.
Enhancing future growth and global reach
The inauguration of two new premix plants represented important milestones pointing to further progress and growth.
Our new plant in Sete Lagoas in the State of Minas Gerais (Brazil) will produce supplements to support the nutrition and
health of beef and dairy cattle, underscoring the importance of Brazil’s agribusiness. Our new plant in Sadat City (Egypt)
will serve customers in Egypt, the wider Middle East, Southern Europe, and Africa. It reflects our commitment to meeting
the increasing demand from mid-range and large livestock farms and feed millers for premixes and innovative feed
additives.
Business - Animal Nutrition & Health
DSM Integrated Annual Report 2024
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Innovation
We further strengthened our position as an innovation leader in our industry with our Precision Services and Performance
Solutions. This involved the launch of additions to our portfolio as well as the continued development of existing offerings.
•
Sustell™ expanded into the beef and shrimp industries with modules to meet their respective environmental foot
printing needs
•
FarmTell™, our complete software suite for data-driven decision-making, added its first AI for livestock management,
using Lore™’s cutting-edge technology platform
•
In Europe, we launched three advanced feed additives: ProAct 360™, our new enzyme technology developed jointly
with Novozymes to drive feed efficiency; Hy-D®, our specific vitamin D3 metabolite to provide animals with a fast
track to a strong skeleton and better performance; and HiPhorius™, our complete phytase to enable precision
nutrition, improve animal performance, reduce feed costs, and minimize environmental impact. On 11 February 2025,
dsm-firmenich announced the sale of its stake in the Feed Enzymes Alliance to its equal partner Novonesis, a global
leader in biosolutions, for €1.5 billion
•
FUMzyme® sol, the only enzyme designed to target fumonisin mycotoxins, was launched for use in distiller dried
grains
•
Our Verax™ DBS analytics tool offers users an easy-to-use, non-invasive way to assess vitamin D3 status
Business - Corporate activities
DSM Integrated Annual Report 2024
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Corporate activities
Any consolidated activities within continuing operations that are outside the three Business Units are reported as
Corporate activities. These comprise operating and service activities, including the recharge of the corporate service
costs to related parties, as well as a number of costs that cannot be allocated directly to the Business Units. While this
segment reports net sales from its service units, it normally has a negative operating result.
Corporate activities include various holding companies, regional holdings, and corporate overheads. The most significant
cost elements are corporate departments and the share-based compensation, see Note 27 Share-based
compensation to the consolidated financial statements.
During 2024 the captive insurance business was demerged from DSM to its ultimate shareholder DSM-Firmenich AG.
Business - Financial performance
DSM Integrated Annual Report 2024
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Financial performance
Financial results
Taste, Texture & Health - DSM (TTH-DSM) recorded a very strong performance. Better business conditions led to a solid
performance of Health, Nutrition & Care - DSM (HNC-DSM) through the second half of the year. Animal Nutrition & Health
delivered a significant step-up in financial results.
In 2024, net sales were €7,803 million, which was 3% higher than in 2023. Business conditions markedly improved during
the year.
EBITDA was up to 60% owing to the good organic sales growth, and the contributions from the synergies following the
merger, the vitamin transformation program and the temporary vitamin price effect in Q4.
Income statement and key data
in € million
2024
2023
Change
Continuing operations
Sales
7,803
7,590
3%
EBITDA
961
532
81%
Operating profit (loss)
110
(412)
-127%
Net profit (loss)
(19)
(463)
-96%
EBITDA margin (in %)
12.3
7.0
DSM
Net profit (loss) for the period
(19)
2,326
-101%
Net profit (loss)
Net loss from continuing operations of €19 million was 96% lower compared to the net loss from continuing operations of
€463 million posted in 2023. The increase in the net result of continuing operations for the year is mainly attributable to
an increase in net sales of €213 million (3%) to €7,803 million in 2024 combined with lower total operating costs of €309
million and higher income tax (€114 million).
Financial income and expense of continuing operations decreased by €30 million year on year to a net expense of €28
million, which was caused by a decrease of unwinding of discounted payables of €19 million and more favorable fair value
changes of derivatives of €33 million partly offset by lower interest income from third parties.
The total tax expense for continuing operations in 2024 amounted to €98 million versus a tax income of €16 million in
the reference year. The increase of the income tax expense and herewith the effective income tax rate as compared to
2023 is mainly due to the combination of the geographical spread of the results within the group and non-deductible
expenses in 2024.
The total net result from continuing and discontinued operations decreased by €2,345 million to -€19 million. This
decrease was mainly a result of the net book profit of €2,790 million on the sale of DSM Engineering Materials (DEM) in
2023.
Business - Financial performance
DSM Integrated Annual Report 2024
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Balance sheet
The balance sheet total (total assets) increased to €15.8 billion at year-end (2023: €15.7 billion). Equity decreased by
-€0.8 billion, which was attributable to dividend payments of -€0.7 billion, deemed dividend of -€0.3 billion, the net loss
of -€0.0 billion, and the effect of exchange rate differences of +€0.2 billion. Equity as a percentage of total assets
decreased from 57% to 51%.
Capital expenditure on intangible assets and property, plant and equipment amounted to €579 million for continuing
operations in 2024 (€533 million on a cash basis). Including new leases, the additions to intangible assets and property,
plant and equipment amounted to €677 million, whereas amortization, depreciation and impairments amounted to €851
million.
Cash and cash equivalents amounted to €2,469 million at the end of the year, an increase of €288 million. This increase
resulted from cash inflows from operating activities of €801 million, offset by cash outflows from investing activities
amounting to -€423 million and from financing activities of -€108 million.
The increase in other non-current assets of €310 million is mainly caused by a higher deferred tax asset by €69 million,
and an increase of €185 million in the share in associates and joint ventures. The latter is predominantly related to the
minority stake of 29% in KD Pharma's parent company MidCo Omega following the divestment of the Marine Lipids
business in the reporting year.
Other non-current liabilities increased by €500 million, mainly attributable to higher borrowings. Bonds are €297 million
higher (issuance of a €800 million bond versus redemption of a €500 million bond). A borrowing to the insurance
captive company DSM Re Switzerland AG in the amount of €230 million, previously recognized as an intercompany
borrowing, was reclassified to a related party borrowing.
Other current liabilities were €375 million higher, due to higher trade payables by €96 million and a higher related party
cash pool by €179 million.
Balance sheet profile
2024
2023
in € million
in %
in € million
in %
Goodwill and intangible assets
4,984
32
5,210
33
Property, plant and equipment
3,542
22
3,492
22
Other non-current assets
809
5
499
3
Cash and cash equivalents
2,469
16
2,181
14
Other current assets
4,023
25
4,360
28
Total assets
15,827
100
15,742
100
Equity
8,117
51
8,923
57
Provisions
127
1
111
1
Other non-current liabilities
3,863
24
3,363
21
Other current liabilities
3,720
24
3,345
21
Total equity and liabilities
15,827
100
15,742
100
Management expects that DSM will be able to continue as a going concern.
Business - Financial performance
DSM Integrated Annual Report 2024
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Subsequent events
On 11 February 2025, dsm-firmenich announced the sale of its Feed Enzymes business to Novonesis, a global leader in
biosolutions, for €1.5 billion.
On 19 February 2025, dsm-firmenich announced the successful launch of a €750 million bond with an 11-year maturity
due in 2036, at a coupon of 3.375%. The bond is issued by DSM B.V. and is guaranteed by DSM-Firmenich AG pursuant to
the previously established cross-guarantee structure.
On 3 April 2025, DSM expanded its investment in Yantai DSM Andre Pectin Company Limited (‘Andre Pectin’), increasing
its shareholding from 75% to 90.5%.
See also Note 30 Events after the balance sheet date to the consolidated financial statements.
DSM Integrated Annual Report 2024
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Non-financial information
EU Taxonomy
Regulation
The EU Taxonomy Regulation (EU 2020/852) entered into force on 12 July 2020, establishing criteria for environmentally
sustainable economic activities related to six environmental objectives:
•
Climate change mitigation (CCM)
•
Climate change adaptation (CCA)
•
Sustainable use and protection of water and marine resources (WTR)
•
Transition to a circular economy (CE)
•
Pollution prevention and control (PPC)
•
Protection and restoration of biodiversity and ecosystems (BIO)
The Taxonomy Regulation requires companies subject to the obligation to publish non-financial information under the EU
Accounting Directive to disclose the proportion of their activities that qualify as environmentally sustainable.
Supplementing the Taxonomy regulation, the first delegated act concerning the technical screening criteria for economic
activities with substantial contribution to climate change mitigation and adaptation (the Climate Delegated Act) was
formally adopted on 4 June 2021. A delegated act specifying the content and presentation of information to be disclosed
by companies in scope of the EU Taxonomy was formally adopted on 6 July 2021. A delegated act amending the Climate
Delegated Act (covering the environmental objectives of climate change mitigation and adaptation) and an
Environmental Delegated Act addressing the remaining four environmental objectives were published in 2023.
We welcome the implementation of the EU Taxonomy and have assessed its impact on our company in line with its
overall objectives, albeit accepting that parts of the Taxonomy regulation are subject to interpretation, which may lead to
variability in its application. Considering the level of complexity as well as the evolving character of the framework, we
expect that Taxonomy reporting will develop over time. As such, we shall apply a conservative approach to, and
interpretation of, the Taxonomy legislation until we believe it has sufficiently matured. We will periodically revalidate our
methodology and our reported KPIs based on the evolution of the regulations and forthcoming guidance from, among
others, the European Commission and the European Securities and Markets Authority (ESMA).
Disclosures
Under the Taxonomy regulation, DSM is required to report on how much Turnover, Capital Expenditure (‘CapEx’) and
Operating Expenses (‘OpEx’) are in scope of the Taxonomy Regulation (i.e., ‘Taxonomy-eligible activities’), and how much
are aligned with the Taxonomy regulation (i.e., ‘Taxonomy-aligned activities’). In 2024, the required disclosures apply in
full to all six environmental objectives. In this assessment, potential double-counting in the KPIs has been considered. In
addition, as DSM does not carry out nuclear and fossil gas related activities, the standard template on the disclosure of
these activities is not provided.
Non-financial information - EU Taxonomy
DSM Integrated Annual Report 2024
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Turnover
Total turnover, as defined by the Taxonomy regulation, corresponds to the sales from continuing operations as reported
on the basis of the income statements in the consolidated financial statements. In line with 2023, DSM again only
identified the Pharma business (part of HNC-DSM) as an eligible activity under the environmental objective pollution
prevention and control in 2024.
Taxonomy-eligible turnover amounted to €363 million, or 4.7% of total turnover. Given the Pharma business is not
considered material to DSM’s business as well as a lack of evidence for alignment, no alignment was established for the
taxonomy-eligible turnover and, hence, we disclose 0% alignment.
CapEx
Total CapEx is determined based on the 2024 additions to, and acquisitions of, property, plant and equipment, intangible
assets, and additions to right-of-use assets. More specifically, it includes the following items that can also be found in
the consolidated financial statements:
•
Changes in the carrying amount of intangible assets (excluding goodwill) from ‘Capital expenditure’ and ‘Acquisitions’
(see also Note 8 Goodwill and intangible assets to the consolidated financial statements)
•
Changes in the carrying amount of items of property, plant & equipment from ‘Capital expenditure’ and ‘Acquisitions’
(see also Note 9 Property, plant and equipment to the consolidated financial statements)
•
Changes in the carrying amount of right-of-use assets from ‘New leases / terminations’ (see Note 9 Property, plant
and equipment to the consolidated financial statements)
In 2024, DSM made no acquisitions. While we did not identify any CapEx related to the Pharma business, which was
identified as an eligible activity, Taxonomy-eligible CapEx also includes expenditures related to the purchase of output
from Taxonomy-aligned economic activities and individual measures enabling the target activities to become low-carbon
or to lead to greenhouse gas reductions, primarily relating to our office buildings. Taxonomy-eligible CapEx amounted to
€122 million, or 18.0% of total CapEx. In 2024, DSM did not establish alignment for the eligible CapEx, as the relevant
activities are not considered material to DSM’s total business as well as the lack of evidence for alignment. Therefore,
DSM discloses 0% alignment with respect to the CapEx KPI.
OpEx
Total OpEx, as defined by the Taxonomy regulation, includes direct non-capitalized costs that relate to research and
development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures
relating to the day-to-day servicing of assets. Applying this definition to dsm-firmenich, total OpEx consists of
maintenance (including building renovations) and direct R&D costs, excluding costs and income related to bad debts,
government grants, depreciation and amortization, and own work capitalized. This definition has been applied to the
calculation of both numerator and denominator.
Taking into consideration the assessment of the limited contribution of the Pharma business to both the turnover KPI and
the CapEx KPI, the eligible OpEx related to this business within dsm-firmenich’s business model is considered immaterial
from an EU Taxonomy perspective. In addition, no other eligible activities have been identified for the OpEx KPI. As such,
the numerator reflecting the eligible OpEx attributable to this business is considered negligible and dsm-firmenich
discloses 0% eligible and aligned OpEx.
Non-financial information - EU Taxonomy
DSM Integrated Annual Report 2024
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Turnover
Non-financial information - EU Taxonomy
DSM Integrated Annual Report 2024
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CapEx
Non-financial information - EU Taxonomy
DSM Integrated Annual Report 2024
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OpEx
DSM Integrated Annual Report 2024
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Governance and risk management
Governance and governance framework
Governance
DSM B.V. is a direct and wholly owned affiliate of DSM-Firmenich AG. It is managed by a Managing Board and supervised
by a Supervisory Board. Members of the Managing Board and the Supervisory Board are appointed by the General
Meeting of Shareholders.
DSM B.V. is governed by Dutch law and by its Articles of Association, which can be consulted on the Company website.
DSM is part of the dsm-firmenich Group and is organized in three distinct high-performing Business Units. These
Business Units are supported by Group Business Partners. More details about the organization can be found in the About
DSM section.
Diversity
As part of dsm-firmenich, we strongly value diversity, and we endeavor to reflect this in our Board memberships. The
Supervisory Board has formulated diversity policies for the Supervisory Board and the Managing Board. These policies
seek a balanced composition of these bodies, taking into account gender, age, knowledge, experience, and nationality /
cultural background. In addition, for the composition of the Supervisory Board, the tenure structure is taken into
consideration.
In terms of gender diversity, we aim for at least 30% of the positions in our Supervisory Board and Managing Board to be
held by women and at least 30% by men. To ensure a balanced composition in terms of nationality / cultural background,
our aim is to have not more than 50% of the members of our Supervisory Board drawn from a single nationality. While a
diverse composition in terms of nationality / cultural background is also taken into account in the composition of the
Managing Board, no quantitative target is set here, given the small number of Managing Board members.
Our diversity policies are implemented by applying them to nominations for (re)appointments of Supervisory Board and
Managing Board members.
In 2024, the Supervisory Board consisted of 33% women, which is in line with Dutch legislation on gender diversity and
with the Company’s own diversity policy. Furthermore, the composition of our Supervisory Board is in line with our target
of having not more than 50% of the members drawn from a single nationality.
The Managing Board comprised 100% men in 2024. On 5 August 2024, Dimitri de Vreeze, CEO of dsm-firmenich, stepped
down as member of the Managing Board of DSM B.V. As of the same date, Joris de Beer (country leader for the
Netherlands) and Ivo Nelissen (Senior Vice-President Group Tax) were appointed as members of the Managing Board of
DSM B.V.
Governance and risk management - Governance and governance framework
DSM Integrated Annual Report 2024
22
Governance framework
The figure below depicts DSM B.V.’s governance framework and the most important governance elements and regulations
at each level.
Its internal corporate governance framework is based
on its Articles of Association (the ‘Articles of
Association’). The Regulations of the Supervisory Board
and the Managing Board further clarify the duties,
powers and regulations of the governing bodies of DSM
B.V.
Governance and risk management - Risk management
DSM Integrated Annual Report 2024
23
Risk management
Our risk management framework is based on the COSO Enterprise Risk Management model. It supports DSM’s Group,
Business Unit and Business Partner functions in managing risks that might prevent us from achieving our strategic,
financial, and operational objectives and in protecting company assets, including reputation. It also supports compliance
with laws and regulations, as well as reliable financial and non-financial reporting.
Our approach to risk management
With the creation of dsm-firmenich, enterprise risk management for DSM has become part of dsm-firmenich’s risk
management activities. The Managing Board continues to be accountable for risk management within DSM as part of
their responsibilities within dsm-firmenich. The risk management framework of dsm-firmenich - described in the below
sections - also applies to DSM as part of the dsm-firmenich Group.
Risk management framework
The building-blocks of our risk management framework are shown in the diagram. Governance and culture form the
foundation, on which the pillars of the risk management process – strategy & objective-setting, risk identification &
assessment, risk mitigation & control activities, monitoring & improvement – stand to protect our value & integrity.
Communication & reporting ensures the connection between the pillars and the sharing of adequate information with
internal and external stakeholders. The building-blocks are summarized in the paragraphs below.
Risk management framework
Governance & culture
As part of the dsm-firmenich Group, the DSM Group applies the Operating Model Framework that was determined by the
Executive Committee of DSM-Firmenich AG, with the approval of the Board of Directors of DSM-Firmenich AG. The
Operating Model Framework functions as guidance for the operations of, and cooperation within, the Group, the Business
Units and Business Partners, who are therefore jointly responsible for achieving our objectives and managing the
associated risks.
Strategy & objective-setting
Our Group strategy and objectives are determined by the Board of Directors of DSM-Firmenich AG, supported by the
Executive Committee of DSM-Firmenich AG. The DSM Group strategy and objectives are translated into specific plans
and priorities for Business Unit and Business Partner leadership and are elaborated in further detail for lower levels in the
organization.
Governance and risk management - Risk management
DSM Integrated Annual Report 2024
24
Risk identification & assessment
The realization of an ambitious strategy will always entail risks. To enable informed decision-making, these risks are
identified and assessed at all levels in the organization. Risk assessments may focus on various topics (e.g., Safety, Health
and Environment (SHE), security, climate) and are regularly updated.
Risk mitigation & control activities
Mitigating actions and controls are defined and implemented for the most relevant risks. Controls include policies,
standards, Segregation of Duties (SoD) management, business continuity management, and business performance
reviews. Control activities, which can be preventive or detective, are integrated into our business processes and are
executed by the first line.
Monitoring & improvement
The Internal Control department within Legal, Regulatory, Risk & Compliance owns the Internal Control Framework. It
defines the standard set of key controls that must be performed by the first line, and it aims to ensure reliable financial
reporting, mitigate fraud risks, and safeguard our assets. The effectiveness of the key controls is independently tested by
the Internal Control department.
Communication & reporting
Reviewing of risks and incidents takes place via structured processes, and if needed on an ad-hoc basis.
Governance and risk management - Risk management
DSM Integrated Annual Report 2024
25
Material risks and uncertainties
Within the framework of the dsm-firmenich risk management process, risk assessments are performed at all levels in the
DSM organization and can focus on varying topics. Material risks for our Business Units and Business Partner functions are
reported to our CEO twice a year via the Risk & Incident Report.
Our risk profile
The below table details the five most important short-term risks that might have material impact within three years and
have the potential to prevent us from successfully implementing our strategy and achieving our targets, despite the
mitigations in place.
Top risks, descriptions, and mitigations
Data management and digital transformation
Risk description
Poor data governance and data management carry the
risk of data breaches, resulting in failure to maintain
data confidentiality and/or unauthorized access to
sensitive information, leading in turn to financial losses
and reputational damage. Data management forms the
backbone of our digitalization roadmap. The successful
execution of our roadmap is important for delivering
on our strategic and financial targets.
The implementation of this roadmap remains complex.
This, in combination with certain resource constraints,
means there is a risk that the digital transformation
roadmap may not be implemented according to plan
or may not deliver targeted benefits in full.
Mitigations
dsm-firmenich including DSM, established a governance
structure around data management, under the oversight
of our Data Council. A data governance policy was
launched and Data Domain owners have been identified
for priority data domains. Data leaders from the Data and
AI unit have been appointed to enhance governance
across all business platforms and data domains. A data
governance roadmap is in place to measure progress.
In dsm-firmenich’s operating model including DSM,
Business Partners allocate dedicated resources to drive
digitally-enabled process excellence. Furthermore, our
capacity and capability in Digital & Tech are continually
strengthened.
All key projects are subject to quality reviews by an
independent, multi-disciplinary team of experts at
specific moments throughout project implementation.
Geopolitical instability
Risk description
We operate globally and could therefore be affected
by geopolitical instability and related economic
decline, such as:
•
Trade restrictions, raw material and energy
shortages, and supply disruptions, hampering our
ability to supply our customers
•
Lower economic growth and declining disposable
income, impacting demand for our products
•
Inflation, putting pressure on our margins
Mitigations
Our business continuity management governance and
processes are key components of the operating model
within dsm-firmenich including DSM. To reduce the
impact of possible disruptions, preventive actions are
taken, such as reducing single-source positions,
qualifying back-up manufacturing sites, and optimizing
safety stocks.
Governance and risk management - Risk management
DSM Integrated Annual Report 2024
26
Continuous monitoring of possible disruptions in our
supply chains enables us to act with speed as and when
needed.
We hedge part of our exposure to purchasing price
fluctuations and currency fluctuations.
Commodity markets
Risk description
We operate in highly competitive markets. There is a
risk that some competitors may benefit from a lower
cost position and where we cannot differentiate
ourselves sufficiently, this could impact our sales
volumes and margins.
Mitigations
We prioritize high-growth and higher-margin market
segments and we monitor the competitive landscape. To
address the needs of customers and end-consumers in
these segments, we develop innovative products and
services and offer differentiating value propositions. We
make full use of our wide-ranging expertise, our
scientific, technical and data-driven innovation
capabilities, and our portfolio of natural and renewable
ingredients.
In all our Business Units, we focus on maximizing
operational performance.
In 2024, we continued the vitamin transformation
program launched in 2023 to improve profitability,
structurally reduce our exposure to price fluctuations,
and deliver significant savings.
Talent availability
Risk description
Our success depends on our employees, including –
but not limited to – scientists, researchers, flavorists,
and experts in digital and data science.
In view of the tight labor market and the ongoing
challenges of the macro-economic environment, there
is a risk that we may be not able to attract, retain,
develop, and engage the people with the required
expertise, experience, and mindset needed for the
implementation of our strategy.
Mitigations
We operate a range of company-wide initiatives
addressing topics such as integrated rewards, people
development, well-being, engagement, and Diversity,
Equity & Inclusion.
We monitor retention rates as well as employee
engagement, taking appropriate action as and when
needed.
We frequently connect with our employees to update
them on the company's performance, its position in the
various markets we serve, and the challenges and
opportunities before us.
Governance and risk management - Risk management
DSM Integrated Annual Report 2024
27
Cyber security
Risk description
As external cyber threats remain high, we are exposed
to the risk of cyber attacks. This could lead to
discontinuity of operations and loss of integrity or
confidentiality of information.
Mitigations
We invest in our information security systems to
strengthen our security. We have a single cyber security
framework covering IT, operations technology, and R&D
laboratory systems.
Since the ‘human firewall’ remains critically important, we
have intensified our phishing tests to keep employee
awareness high.
To mitigate the impact of a potential cyber attack, we
have developed robust business continuity and disaster
recovery plans.
Other important risks
There are also other business risks, such as innovation, business continuity, product quality, tax, changing regulations,
increasing non-financial reporting requirements, and the separation of our Animal Nutrition & Health business. Our risk
management framework is set up to adequately monitor and respond to these risks.
All relevant risks are considered in the preparation of our financial statements.
Governance and risk management - Group structure and shares
DSM Integrated Annual Report 2024
28
Group structure and shares
Group structure
DSM B.V. and Group companies
DSM B.V. (formerly Koninklijke DSM N.V.) is the parent company of the DSM Group and a direct and wholly owned affiliate
of DSM-Firmenich AG. DSM B.V. is a company organized under Dutch law with its statutory seat in Maastricht and its
registered office at Wilhelminasingel 39, 6227 BE Maastricht, the Netherlands.
Delisting ordinary shares Koninklijke DSM N.V. and buy-out
In 2024, the statutory buy-out procedure was completed; DSM-Firmenich AG acquired the remaining 3.9% of the DSM
ordinary shares.
The last trading date of the DSM ordinary shares was 30 May 2023. The delisting of the DSM ordinary shares was
effective on 31 May 2023. In 2023, DSM-Firmenich AG commenced the statutory buy-out procedure in accordance with
Articles 2:359c DCC and 2:201a DCC to acquire the DSM ordinary shares that were not tendered in the Exchange Offer
(the Buy-Out) (or otherwise acquired by DSM-Firmenich AG). End of the year 2023, DSM-Firmenich AG held a total of
167,321,557 DSM B.V. shares, representing approximately 96.1% of DSM's aggregate issued and outstanding share capital.
The remaining 3.9% of DSM’s shares (6,696,477) were acquired in 2024 via the buy-out procedure, which was completed
on 5 July 2024. The buy-out price excluding interest amounted to €93.42 per share.
Former bearer shares
Former DSM bearer shares are subject to the Buy-Out scenario. In 2019, an amendment was made to Article 2:82 of the
Dutch Civil Code stating that DSM shareholders who have not handed in their bearer share certificates will lose any
entitlement to exchange their certificates for a replacement share as of 2 January 2026. Further information can be found
in the dsm-firmenich Offering Circular dated 22 November 2022; see paragraph 14.27.
Governance and risk management - Supervisory Board and Managing Board DSM B.V.
DSM Integrated Annual Report 2024
29
Supervisory Board and Managing Board DSM B.V.
Supervisory Board
The Supervisory Board is composed of the following three members.
Thomas Leysen, Chairman of the Supervisory Board,
Chairman of the Board of Directors of DSM-Firmenich AG
and Member of its Compensation Committee since 2023
Thomas Leysen has spent a large part of his career at Umicore, which was
transformed under his leadership from a metals producer to a materials technology
group with leading positions in battery materials, automotive catalysts, and precious
metals recycling. He was CEO of the company until 2008, after which he became
Chairman of the Supervisory Board. He has been Chairman of the Board of
Mediahuis, a European media company, since its formation in 2013.
He has long been committed to the promotion of sustainability development, and
was the founding chair of The Shift, a coalition of businesses and non-governmental
organizations in Belgium. He was Chairman of the Federation of Enterprises in
Belgium between 2008 and 2011. Between 2011 and 2020, he was Chairman of the
Board of KBC Group, a banking and insurance group with activities mainly in Belgium,
Central Europe and Ireland. He was Member of the Supervisory Board of Koninklijke
DSM N.V. as of 2020 and served as its Chairman from 2021 to 2023, until DSM and
Firmenich merged.
Nationality
Belgian
Year of Birth
1960
Education
Master’s degree, Law, Katholieke Universiteit Leuven (Belgium)
Listed Company Boards
•
Umicore: Non-Executive Chair of the Supervisory Board
Non-Listed Company Boards
•
Mediahuis: Non-Executive Chair of the Board
Other Memberships
•
Myriad USA and Myriad Canada: Chair of the Foundation
•
Mayer van den Bergh Museum: Chair of the Board of Trustees
•
World Wildlife Fund (WWF) Belgium: Chair of the Board (starting 1 January 2025)
Governance and risk management - Supervisory Board and Managing Board DSM B.V.
DSM Integrated Annual Report 2024
30
John Ramsay, Member of the Supervisory Board, Member of
the Board of Directors of DSM-Firmenich AG and Chairman
of its Audit & Risk Committee since 2023
John Ramsay started his career at KPMG before entering the corporate world in
1984, when he joined ICI. He held several, increasingly senior, accounting and finance
positions within ICI, which would later become AstraZeneca. John Ramsay played a
leading role in planning and executing the merger of AstraZeneca’s agribusiness with
Novartis, including the integration and disposal of various businesses post-merger.
He also played a leading role in the formation and stock exchange listing of the
Syngenta business and became its Group Controller in 2001. In that role, he had to
build up the group’s finance function from scratch, establishing the organization and
reporting systems after the IPO. His last executive position was Chief Financial
Officer (CFO) and Interim CEO of Syngenta AG, which he held until 2016. He has
served as Non-Executive Board Member of G4S and was a was a Member of the
Supervisory Board of Koninklijke DSM N.V. during a six-year tenure, until DSM and
Firmenich merged in 2023.
Nationality
British
Year of Birth
1957
Education
Chartered Accountant
Listed Company Boards
•
RHI Magnesita N.V.: Non-Executive Director
•
Croda International PLC: Non-Executive Director (stepping down effective 1
March 2025)
•
Babcock International PLC: Non-Executive Director
Non-Listed Company Boards
N/A
Other Memberships
N/A
Governance and risk management - Supervisory Board and Managing Board DSM B.V.
DSM Integrated Annual Report 2024
31
Corien Wortmann, Member of the Supervisory Board,
Member of the Board of Directors of DSM-Firmenich AG,
Member of its Sustainability Committee and Member of its
Audit & Risk Commmittee since 2023
Corien Wortmann served as Chair of the Board of ABP Pension Fund, a world leader
in responsible investing, from 2015 to 2022. She was a Member of the European
Parliament for the European People’s Party from (EPP) 2004 to 2014, and the EPP’s
Vice President Economy, Finance and Environment. She is currently a Non-Executive
Member and Vice Chair of the Board of Directors of Aegon Ltd, Member of the
Capital Market Advisory Board of the AFM, Board Member of the Impact Economy
Foundation, and Chair of the Supervisory Board of Netspar, a scientific network on
pensions.
In 2024, she was appointed Member of the Supervisory Board of Deloitte
Netherlands. She has served as Chair of the Supervisory Board of Save the Children
(Netherlands), as Jury Member of the Business Woman of the Year Prize at Veuve
Clicquot, as Co-Chair of the European High Level Expert Group Next CMU. She was a
Member of the Supervisory Board of Koninklijke DSM N.V. during a two-year tenure,
until DSM and Firmenich merged in 2023. She was a member of the Capital Markets
Advisory Board of the Dutch Financial Markets Authority until 2024.
Nationality
Dutch
Year of Birth
1959
Education
Master’s Degree in Political Science and Economics, Vrije Universiteit Amsterdam
(Netherlands)
Listed Company Boards
Aegon LtD: Non-Executive Vice-Chair of the Board
Non-Listed Company Boards
Deloitte Netherlands: Member of the Supervisory Board
Other Memberships
•
Impact Economy Foundation: Advisory Board Member
•
Netspar: Chair of the Supervisory Board
•
Koninklijke Hollandsche Maatschappij der Wetenschappen: Member
•
Planet Bio: Member of the Supervisory Board
Governance and risk management - Supervisory Board and Managing Board DSM B.V.
DSM Integrated Annual Report 2024
32
Managing Board
The Managing Board is composed of the following three members.
Ralf Schmeitz, Chief Financial Officer (CFO), member of the
Managing Board since 2023
Ralf Schmeitz was appointed as Managing Board member of DSM B.V. and CFO of dsm-
firmenich in September 2023, marking a significant milestone in his journey with the
company. He initially joined DSM in 2006 , and his path has been marked by outstanding
achievements and a track record of strong performance.
Ralf Schmeitz has played a pivotal role in propelling the transformation of the Finance
function and in navigating substantial portfolio changes. Prior to his CFO role, he held the
position of Head of Group Finance, overseeing Finance & Control, Treasury and Taxation. In
his previous role at DSM, he held the position of Group Controller, spearheading both the
Business Controlling and Accounting teams. Ralf began his career at PwC, laying strong
foundations and building financial and strategic acumen, and then moved to Hewlett
Packard, where he assumed diverse leadership responsibilities in Finance.
Nationality
Dutch
Year of Birth
1972
Education
•
Master’s degree, Economics, Maastricht University (Netherlands)
•
Master’s degree, Accountancy, Maastricht University (Netherlands)
•
Master’s degree in Business Valuation, Erasmus University, Rotterdam (Netherlands)
Joris de Beer, Vice-President DSM Netherlands B.V., member of
the Managing Board since 2024
Joris de Beer was appointed as Managing Board member of DSM B.V. in August 2024.
Initially, Joris joined DSM in 1987 and held several, increasingly senior, international
business positions. May 2022, Joris was appointed as president of DSM Netherlands B.V.
Joris de Beer has developed into a seasoned manager with extensive expertise in general
management, business development, marketing and sales and mergers and acquisitions.
His career spans various roles both domestically and internationally, demonstrating his
adaptability and global perspective. He is recognized for exceptional ability to navigate
and manage multi-stakeholder environments.
Nationality
Dutch
Year of Birth
1958
Education
•
Master’s degree, Business Economics, Vrije Universiteit Amsterdam (Netherlands)
Governance and risk management - Supervisory Board and Managing Board DSM B.V.
DSM Integrated Annual Report 2024
33
Ivo Nelissen, Senior Vice-President & Global Head of Group Tax,
member of the Managing Board since 2024
Ivo Nelissen was appointed Global Head of Group Tax of dsm-firmenich in September
2020 and as Managing Board member of DSM B.V. in August 2024.
He initially joined DSM in 2008 in the tax department responsible for different regions,
business, and corporate departments. Since he joined DSM, he played an important role in
the many transformative M&A projects up to and including the merger with Firmenich. Ivo
started his career at Deloitte as a Tax Lawyer, laying a strong foundation in Legal and Tax
structuring, M&A, Enterprise Modelling and Finance.
Nationality
Dutch
Year of Birth
1978
Education
•
Master’s degree in Dutch Tax Law, Maastricht University (Netherlands)
•
Master’s degree in European and International Tax Law, Maastricht University
(Netherlands)
Listed Company Boards
•
N/A
Non-Listed Company Boards
•
PDN Pension Fund: Director
•
Limburg Ventures: Member of the Supervisory Board
•
Chemelot Ventures: Member of the Supervisory Board
Other Memberships
•
N/A
Governance and risk management - Auditors
DSM Integrated Annual Report 2024
34
Auditors
Mandate and term of office
KPMG was appointed as Group and statutory auditors of DSM B.V. for the financial year 2024. The Supervisory Board
reconsiders on an annual basis whether the external auditors should be proposed to the Annual General Meeting for re-
election.
Assurance fees
The assurance fees paid to KPMG in its capacity as statutory and Group auditor for the 2024 consolidated financial
statements, the fees for any other audit services, non-audit tax services, as well as for other non-audit services can be
found in Note 29 Service fees paid to external auditors to the consolidated financial statements. The scope of the audit
of the 2024 Consolidated financial statements was approved by the Supervisory Board and defined in an engagement
and fee letter signed by the CEO and the CFO.
Auditor Rotation
The General Meeting of Shareholders adopted the resolution to appoint PricewaterhouseCoopers Accountants N.V. as
external auditor of DSM for the financial year 2025 at its Annual General Meeting of 29 May 2024. The external auditor will
be Ennèl van Eeden.
DSM Integrated Annual Report 2024
35
FINANCIAL STATEMENTS
Consolidated financial statements
The financial statements of DSM include the consolidated financial statements and the parent company financial
statements. DSM (the ‘Company’ or the ‘Group’) is the former Koninklijke (or Royal) DSM Group, a sub-group of the dsm-
firmenich Group, a new group following the merger between DSM and Firmenich that took place on 8 May 2023.
The parent company of the sub-group DSM is DSM B.V., domiciled in Maastricht (Netherlands). Its shareholder is DSM-
Firmenich AG, listed on the Euronext Amsterdam stock exchange.
These consolidated financial statements comprise DSM B.V. and its subsidiaries (the ‘Group’). A list of main participations
of the Group can be downloaded from the company website.
The financial year 2024 covers the period from 1 January 2024 to 31 December 2024.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
DSM Integrated Annual Report 2024
36
Consolidated income statement
in € million
Notes
2024
2023
Continuing operations
Net sales
5
7,803
7,590
Cost of sales
5
(5,992)
(6,021)
Gross profit
1,811
1,569
Marketing & Sales
5
(1,030)
(1,051)
Research & Development
5
(304)
(352)
General & Administrative
5
(403)
(619)
Other operating income
5
86
155
Other operating expense
5
(50)
(114)
Operating profit (loss)
110
(412)
Finance income
6
106
129
Finance expense
6
(134)
(187)
Profit (loss) before tax
82
(470)
Income tax expense
7
(98)
16
Share of net profit of associates and joint ventures
10
(8)
(8)
Other results related to associates and joint ventures
10
5
(1)
Net profit (loss) from continuing operations
(19)
(463)
Net profit from discontinued operations
3
-
2,789
Net profit (loss) for the period
(19)
2,326
Attributable to:
- Holders of shares parent company
16
(43)
2,312
- Dividend on cumulative preference shares
-
6
- Non-controlling interests
17
24
8
Consolidated financial statements
DSM Integrated Annual Report 2024
37
Consolidated statement of comprehensive income
in € million
Notes
2024
2023
Net profit (loss) for the period
(19)
2,326
Other comprehensive income
Remeasurements of defined benefit liability
24
7
(35)
Fair value changes in other participating interests and other financial
instruments
11
(20)
(37)
Related tax
(3)
9
Items that will not be reclassified to profit or loss
(16)
(63)
Exchange differences on translation of foreign operations
16
- Change for the period
161
(101)
- Reclassified to the income statement on loss of significant influence
10
-
Hedging reserve
16
- Change for the period
(28)
27
- Reclassified to the income statement
-
-
Equity accounted investees – share of other comprehensive income
-
(1)
Related tax
6
(2)
Items that may subsequently be reclassified to profit or loss
149
(77)
Total other comprehensive income
133
(140)
Total comprehensive income for the period, net of tax
114
2,186
Attributable to:
- Holders of shares parent company
16
88
2,184
- Non-controlling interests
17
26
2
Consolidated financial statements
DSM Integrated Annual Report 2024
38
Consolidated balance sheet at 31 December
in € million
Notes
2024
2023
Assets
Goodwill and intangible assets
8
4,984
5,210
Property, plant and equipment
9
3,542
3,492
Deferred tax assets
7
238
169
Prepaid pension costs
24
20
15
Share in associates and joint ventures
10
240
55
Derivatives
23
50
46
Other non-current assets
11
261
214
Non-current assets
9,335
9,201
Inventories
12
2,201
2,318
Trade receivables
13
1,565
1,535
Income tax receivables
13
51
79
Other current receivables
13
144
286
Derivatives
23
42
35
Financial investments
14
20
101
Cash and cash equivalents
15
2,469
2,181
Assets held for sale
3
-
6
Current assets
6,492
6,541
Total assets
15,827
15,742
Equity and liabilities
Shareholders' equity
7,959
8,814
Non-controlling interests
17
158
109
Equity
16
8,117
8,923
Deferred tax liabilities
7
411
454
Employee benefit liabilities
24
271
289
Provisions
18
65
77
Borrowings
19
3,085
2,487
Derivatives
23
1
3
Other non-current liabilities
20
95
130
Non-current liabilities
3,928
3,440
Employee benefit liabilities
24
3
2
Provisions
18
62
34
Borrowings
19
672
631
Derivatives
23
54
28
Trade payables
21
1,460
1,364
Income tax payables
21
142
133
Other current liabilities
21
1,389
1,179
Liabilities held for sale
3
-
8
Current liabilities
3,782
3,379
Total equity and liabilities
15,827
15,742
Consolidated financial statements
DSM Integrated Annual Report 2024
39
Consolidated statement of changes in equity (Note 16)
x € million
Share capital
Share
premium
Treasury
shares
Other
reserves
Retained
earnings
Shareholders'
equity
Non-
controlling
interests
Total
Equity
Balance at 1
January 2023
328
471
(196)
363
9,777
10,743
102
10,845
Net profit (loss)
for the period
-
-
-
-
2,318
2,318
8
2,326
Other
comprehensive
income
-
-
-
(108)
(26)
(134)
(6)
(140)
Total
comprehensive
income
-
-
-
(108)
2,292
2,184
2
2,186
Dividend
-
-
-
-
(3,935)
(3,935)
-
(3,935)
Options /
performance
shares granted
-
-
-
23
-
23
-
23
Options /
performance
shares vested /
canceled
-
-
-
(23)
23
-
-
-
Reissued shares
-
-
63
-
(39)
24
-
24
Repurchase of
shares
-
-
(256)
-
-
(256)
-
(256)
Cancellation of
shares
(67)
(2)
345
-
(276)
-
-
-
Divestment of
subsidiary with
NCI
-
-
-
-
-
-
(4)
(4)
Transfer
-
-
44
(5)
(4)
35
9
44
Other changes
-
-
-
-
(4)
(4)
-
(4)
Balance at 31
December
2023
261
469
-
250
7,834
8,814
109
8,923
Net profit (loss)
for the period
-
-
-
-
(43)
(43)
24
(19)
Other
comprehensive
income
-
-
-
126
5
131
2
133
Total
comprehensive
income
-
-
-
126
(38)
88
26
114
Dividend
-
-
-
-
(673)
(673)
-
(673)
Deemed
dividend¹
-
-
-
-
(282)
(282)
-
(282)
Options /
performance
shares granted
-
-
-
31
-
31
-
31
Options /
performance
shares vested /
canceled
-
-
-
(27)
27
-
-
-
Divestment of
subsidiary with
NCI
-
-
-
-
-
-
4
4
Transfer
-
-
-
191
(210)
(19)
19
-
Other changes
-
-
-
-
-
-
-
-
Balance at 31
December
2024
261
469
-
571
6,658
7,959
158
8,117
1 The in-substance demerger of DSM Re Switzerland AG resulted in a deemed dividend amounting to €282 million
Consolidated financial statements
DSM Integrated Annual Report 2024
40
Consolidated cash flow statement (Note 26)
in € million
2024
2023
Operating activities
Net profit (loss) from continuing operations
(19)
(463)
Net profit from discontinued operations
-
2,789
Net profit for the period
(19)
2,326
Share of profit of associates and joint ventures (including discontinued operations)¹
3
9
Income tax expenses (including discontinued operations)¹
98
21
Profit before tax (including discontinued operations)¹
82
2,356
Finance income and expense (including discontinued operations)¹
28
59
Operating profit (including discontinued operations)¹
110
2,415
Depreciation, amortization and impairments (including discontinued operations)¹
851
944
EBITDA (including discontinued operations)¹
961
3,359
- (Gain) or loss from disposals
(59)
(2,770)
- Changes in provisions
(24)
10
- Changes in employee benefits
(23)
(34)
- Share-based compensation
24
23
- Income taxes paid / received
(131)
(107)
- Other non-cash items
2
97
Operating cash flow before changes in working capital
750
578
Changes in:
Inventories
5
58
Trade receivables
(130)
46
Trade payables
123
(66)
Changes in operating working capital
(2)
38
Changes in non-operating working capital
53
(40)
Changes in working capital
51
(2)
Cash provided by operating activities
801
576
1
The consolidated cash flow statement includes an analysis of all cash flows in total, therefore including both continuing and discontinued operations. For
the amounts related to discontinued operations split by activities and a reconciliation of profit from continuing operations to total, including
discontinued operations, see Note 3 Change in the scope of the consolidation to the consolidated financial statements.
Consolidated financial statements
DSM Integrated Annual Report 2024
41
Consolidated cash flow statement (Note 26) continued
in € million
2024
2023
Cash provided by operating activities
801
576
Investing activities
Capital expenditure for intangible assets
(83)
(103)
Capital expenditure for property, plant and equipment
(450)
(439)
Proceeds from disposal of property, plant and equipment
18
20
Payments regarding drawing rights
-
(8)
Acquisition of subsidiaries
(5)
(389)
Disposal of subsidiaries
29
3,533
Payments for short-term financial investments
-
(150)
Proceeds from short-term financial investments
53
187
Other financial assets (incl. associates):
- Dividends received
8
4
- Capital payments and acquisitions
(59)
(15)
- Proceeds from disposals
72
26
- Additions to loans granted
(87)
(35)
- Repayment of loans granted
58
31
Interest received
23
49
Cash from / (used in) investing activities
(423)
2,711
Financing activities
Contributions from non-controlling interests
-
-
Proceeds from borrowings
807
2
Repayment of borrowings
(548)
(21)
Payments of lease liabilities
(65)
(52)
Change in debt to credit institutions
37
(1)
Proceeds from re-issued treasury shares
-
8
Repurchase of shares
-
(256)
Dividend paid
(673)
(3,935)
Interest paid
(28)
(14)
Funding cash pool
362
425
Other
-
(8)
Cash (used in) / from financing activities
(108)
(3,852)
Cash and cash equivalents at the beginning of the period
2,181
2,755
Net increase / (decrease) in cash and cash equivalents
270
(565)
Effect of movements in exchange rates on cash held
18
(9)
Cash and cash equivalents at the end of the period
2,469
2,181
See Note 26 Notes to the cash flow statements to the consolidated financial statements for selected comments on
statement of cash flow.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
42
Notes to the consolidated financial statements
1 General information
Basis of preparation
DSM’s consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and the provisions of section 362-8 of Book 2 of the Dutch Civil
Code.
In the following notes, all amounts are shown in millions of euros (€), unless otherwise stated.
Changes in accounting policies
With effect from 1 January 2024, DSM has applied the amendments, as stipulated in Supplier Finance Arrangements
(Amendments to IAS 7 and IFRS 7), which require additional disclosures about its supplier finance arrangements. See also
Note 21 Current liabilities for the corresponding disclosures.
On 9 April 2024, the International Accounting Standards Board (IASB) issued IFRS 18 Presentation and Disclosure in
Financial Statements, which becomes effective from 1 January 2027. IFRS 18 includes requirements on the presentation of
new defined subtotals in the consolidated income statement, the disclosure of management-defined performance
measures, and enhanced requirements for the aggregation and disaggregation of information. While DSM has started to
perform preliminary impact assessments, it is too early to elaborate on the impact of IFRS 18 on the Group’s consolidated
financial statements.
Other new or amended standards that are effective from 1 January 2024 do not have a material effect on DSM's
consolidated financial statements. In addition, other new or amended standards effective after 1 January 2025 were
neither adopted early, nor expected to have significant impact.
Group material accounting policies
The below information outlines the general Group material accounting policies. Other specific material accounting
policies that management considers to be the most important for the presentation of the financial position and results of
DSM’s operations are included in the relevant notes and applied throughout the consolidated financial statements.
Principles of consolidation
As a parent company, DSM is exposed, or has a right, to the variable returns from its involvement with its subsidiaries and
has the ability to affect the returns through its power over the subsidiaries. The financial data of subsidiaries are fully
consolidated. Non-controlling interests in the Group's equity and profit and loss are stated separately. Subsidiaries are
consolidated from the acquisition date until the date on which DSM ceases to have control. From the acquisition date
onwards, all intra-group balances and transactions and unrealized profits or losses from intra-group transactions are
eliminated.
A joint arrangement is an entity in which DSM holds an interest and which is jointly controlled by DSM and one or more
other venturers under a contractual arrangement. A joint arrangement can either be a joint venture whereby DSM and the
other partner(s) have rights to the net assets of the arrangement, or a joint operation where DSM and the partner(s) have
rights to the assets and obligations for the liabilities of the arrangement. For joint ventures, the investment in the net
assets is recognized and accounted for in accordance with the equity method, see also Note 10 Associates and joint
arrangements. For a joint operation, assets, liabilities, revenues, and expenses are recognized in the financial statements
of DSM in accordance with the contractual entitlement or obligations of DSM.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
43
Foreign currencies
The Group's presentation currency is the euro (€), which is also the parent company's functional currency.
Each entity of the Group records transactions and balance sheet items in its functional currency. Transactions
denominated in a currency other than the functional currency are recorded at the spot exchange rates prevailing at the
date of the transactions.
Monetary assets and liabilities denominated in a currency other than the functional currency of the entity are translated
at the closing rates. Exchange differences resulting from the settlement of these transactions and from the translation of
monetary items are recognized in the income statement. Non-monetary items that are measured on the basis of
historical costs denominated in a currency other than the functional currency continue to be translated against the rate
at initial recognition and will not result in exchange differences.
On consolidation, the balance sheets of subsidiaries that do not have the euro as their functional currency are translated
into euros at the closing rate. The income statements of these entities are translated into euros at the average rates for
the relevant period. The functional currency in which goodwill paid on acquisition is recorded is based on the business
case underlying the corresponding business combination. Exchange differences arising from the translation of the net
investment in entities with a functional currency other than the euro are recorded in Other comprehensive income. The
same applies to exchange differences arising from borrowings and other financial instruments insofar as those
instruments hedge the currency risk related to the net investment. On disposal of an entity with a functional currency
other than the euro, the cumulative exchange differences relating to the translation of the net investment are recognized
in profit or loss.
The currency exchange rates that were used in preparing the consolidated financial statements are listed below for the
most important currencies.
1 euro =
Exchange rate at
31 December
Average exchange rate
2024
2023
2024
2023
US dollar
1.04
1.11
1.08
1.08
Swiss franc
0.94
0.93
0.95
0.97
Brazilian real
6.43
5.36
5.83
5.40
Chinese renminbi
7.58
7.85
7.79
7.66
Emission rights
DSM is subject to legislation encouraging reductions in greenhouse gas emissions and has been awarded emission rights
(principally CO2 emission rights) in a number of jurisdictions. Emission rights are reserved for meeting delivery obligations
and are recognized at cost. Income is recognized when surplus emission rights are sold to third parties. When actual
emissions exceed the emission rights available to DSM, a liability is recognized for the expected additional costs.
Significant accounting estimates and judgments
The preparation of the consolidated financial statements requires management to make estimates that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses, disclosure of
contingent assets and liabilities at the date of the financial statements. Actual outcomes could differ from those
estimates. The estimates are based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances.
Furthermore, the application of the Group’s accounting policies may require management to make judgments, apart from
those involving estimates, that can have a significant effect on the amounts recognized in the financial statements.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
44
Areas of management estimates and judgments that have the most significant effect on the amounts recognized in the
financial statements are disclosed along with the material accounting policies in the relevant notes.
Presentation of Consolidated income statement
DSM presents expenses in the Consolidated income statement in accordance with their function. This allows the
presentation of gross profit on the face of the income statement, which is a widely used performance measure in the
industry. The composition of the costs allocated to the individual functions is explained below.
Cost of sales encompasses all manufacturing costs (including raw materials, employee benefits, and depreciation and
amortization) related to goods and services captured in net sales. These are measured at their actual cost based on
weighted average cost, or FIFO.
Marketing & Sales relates to the selling and marketing of goods and services, and also includes all costs that are directly
related to the sale of goods but are not originated by the manufacturing of the goods (e.g., outbound freight).
Research & Development consists of:
•
Research, which is defined as original and planned investigation undertaken with the prospect of gaining new
scientific or technical knowledge and understanding
•
Development, which is defined as the application of research findings or other knowledge to a plan or design for
the production of new or substantially improved materials, devices, products, processes, systems or services
before the start of commercial production or use that do not meet the accounting requirements for
capitalization
General & Administrative relates to the strategic and governance role of the general management of the company as
well as the representation of DSM as a whole in the financial, political, or business community. It also relates to business
support activities of staff departments that are not directly related to the other functional areas.
2 Alternative performance measures
Accounting policy
In monitoring the financial performance of DSM, management uses EBITDA as an Alternative performance measure (APM)
not defined by IFRS. An APM should not be viewed in isolation as an alternative to the equivalent IFRS measure and
should be used as supplementary information in conjunction with the most directly comparable IFRS measure. An APM
does not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by
other companies.
In line with common industry practice, EBITDA is used as a metric to review DSM’s financial performance.
Earnings before interest, tax, depreciation and amortization (EBITDA) is defined as the IFRS metric operating profit
plus depreciation, amortization, and impairments.
Reconciliation of Alternative performance measures (continuing operations)
2024
2023
Operating profit (loss)
110
(412)
Depreciation, amortization and impairments
851
944
EBITDA
961
532
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
45
3 Change in the scope of consolidation
Accounting policy
Business combinations
Business combinations are accounted for using the acquisition method from the moment control is transferred to the
Group. The cost of an acquisition is measured as the aggregate of the consideration transferred, including assets
transferred, shares issued, and liabilities incurred, measured at acquisition date fair value. Acquisition-related costs
incurred are expensed, except if related to the issue of debt or equity securities.
As of the acquisition date, identifiable assets acquired, liabilities assumed, and any non-controlling interest in the
acquiree are recognized separately from goodwill. Identifiable assets acquired and the liabilities assumed are measured
at acquisition date fair value. For each business combination, DSM elects whether it measures the non-controlling
interest in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Any contingent
consideration payable is measured at fair value at the acquisition date; subsequent changes in the fair value of the
contingent consideration resulting from events after the acquisition date are recognized in profit or loss.
For business combinations with the acquisition date in the prior reporting period, comparative information is revised in
case adjustments are made during the measurement period to the provisional amounts, determined as part of the
purchase price allocation (PPA), based on information available at the acquisition date.
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups (assets and liabilities relating to an activity that is to be sold) are classified as
‘held for sale’ if their carrying amount is to be recovered principally through a sales transaction rather than through
continuing use. The reclassification takes place when the assets are available for immediate sale and the sale is highly
probable. These conditions are usually met as from the date on which a letter of intent or agreement to sell is ready for
signing. Non-current assets and disposal groups held for sale are measured at the lower of carrying amount and fair value
less costs to sell. Non-current assets held for sale are not depreciated or amortized.
Discontinued operations
Discontinued operations comprise those activities that were disposed of during the period or which were classified as
held for sale at the end of the period and represent a separate major line of business or geographical area that can be
clearly distinguished for operational and financial reporting purposes. Classification as a discontinued operation occurs
when the operation meets the criteria to be classified as held for sale.
Estimates and judgments
Key estimates DSM makes in the accounting for changes in the scope of consolidation relate to the determination of fair
values for assets acquired and liabilities assumed in business combinations. These estimates are based on historical
quoted market prices plus past experience, and are validated by external valuation specialists where deemed necessary
by management.
Acquisitions
In 2024, DSM did not acquire any business (in 2023: €292 million).
Finalization of Adare Biome PPA
The Purchase Price Allocation (PPA) related to the acquisition of Adare Biome in France in 2023 was finalized without any
changes in relation to the purchase price allocation as disclosed in the annual report of 2023.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
46
Divestments
Jiangshan
At the end of 2023, DSM committed to the sale of its vitamin C business in Jiangshan (China) and therefore classified the
assets and liabilities as held for sale at the end of the reference year. On 8 March 2024, DSM completed the sale and
transfer of its 100% equity interest in DSM Jiangshan Pharmaceutical Co., Ltd. to Jingjiang Cosfocus Health Technology
Co., Ltd. Besides the derecognition of the assets and liabilities held for sale, the liability that was recognized in 2023
toward the buyer was settled at closing of the transaction.
CanolaPRO®
On 15 February 2024, DSM and Avril entered into an Implementation Agreement setting out certain amendments to the
Olatein joint arrangement, leading to a change of DSM's share from a controlling stake of 75% into a 50/50 joint-control
partnership with Avril. As a consequence, DSM has deconsolidated the CanolaPRO® business and accounts for its
interest in Olatein as a joint venture applying the equity method. The fair value of the remaining share in the joint venture
at the date when control was lost amounted to €30 million.
Marine lipids
On 30 September 2024, the company completed the divestment of its MEG-3® fish oil business to KD Pharma Group SA,
a contract development and manufacturing organization (CDMO) active in pharmaceutical and nutritional lipids. As part
of the transaction, DSM has obtained a minority stake of 29% in KD Pharma's parent company MidCo Omega GmbH. The
fish-oil business was part of the Business Unit Health, Nutrition & Care, and represented approximately €170 million sales
in 2023, with approximately 200 employees who were transferred to KD Pharma.
Yeast extracts
On 1 October 2024, the company completed the divestment of its yeast extract business to Lesaffre, a key global player
in fermentation and micro-organisms. Yeast extracts was part of DSM Business Unit Taste, Texture & Health, with annual
sales of about €120 million. After the completion of the deal, DSM will continue to supply yeast extracts produced in Delft
to Lesaffre until the end of 2025, after which point the production of yeast extracts in Delft will be discontinued. Upon
divestment, DSM recognized a provision for onerous contracts and severance payments amounting to €50 million. See
also Note 18 Provisions.
As these businesses were not considered a major line of business, the results of these businesses (the ‘disposal groups’)
were not reclassified to discontinued operations.
Summary of divestments in 2024
See below table for the book result and the impact on the cash flow statement of the divestments and deconsolidation
that took place in the reporting year.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
47
MEG-3
fish oil
Yeast
extract
Jiangshan
Vitamin C
Olatein
Other
divestments
Total
Assets
Goodwill and intangible assets
(28)
-
-
(22)
(1)
(51)
Property, plant and equipment
(64)
(73)
-
(50)
-
(187)
Other non-current assets
-
-
-
5
-
5
Inventories
(117)
(5)
1
(1)
-
(122)
Receivables and other current assets
(4)
-
(9)
13
-
-
Cash and cash equivalents
(10)
-
(3)
-
-
(13)
Total assets
(223)
(78)
(11)
(55)
(1)
(368)
Non-controlling interests and liabilities
Provisions
-
50
-
-
-
50
Non-current liabilities
-
-
-
(42)
-
(42)
Current liabilities
(5)
8
(57)
(6)
-
(60)
Total liabilities
(5)
58
(57)
(48)
-
(52)
Net assets
(218)
(136)
46
(7)
(1)
(316)
Non-controlling interest
4
4
Net assets dsm-firmenich shareholders
(218)
(136)
46
(11)
(1)
(320)
Consideration
(net of selling costs, translation differences and
net debt)
156
157
(65)
9
7
264
Book result 2024
(62)
21
(19)
(2)
6
(56)
Income tax
5
(5)
-
(3)
(2)
(5)
Net book result
(57)
16
(19)
(5)
4
(61)
Impact on the cash flow statement
Consideration (net of selling costs, translation
differences and net debt)
156
157
(65)
9
7
264
Of which via an equity stake in target company
(159)
-
-
(30)
-
(189)
Of which deferred payments, non-cash and internal
financing
(3)
(13)
14
21
(1)
18
Consideration in cash
(6)
144
(51)
-
6
93
Cash in divested company
(10)
-
(3)
-
-
(13)
Other divestment-related cash-in/(out)
-
-
-
-
(51)
(51)
Total cash-in/(out) related to disposals
(16)
144
(54)
-
(45)
29
Discontinued operations
In 2024, no business was classified as discontinued operations.
Assets and liabilities held for sale
End of 2024, DSM is not committed to the sale of any of its businesses, and therefore has not classified assets and
liabilities as held for sale.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
48
Breakdown net profit into continuing and discontinued operations
2024
2023
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Net sales
7,803
-
7,803
7,590
388
7,978
EBITDA
961
-
961
532
2,827
3,359
Total expenses
7,693
-
7,693
8,272
(2,439)
5,833
Operating profit
110
-
110
(412)
2,827
2,415
Financial income
and expense
(28)
-
(28)
(58)
(1)
(59)
Profit (loss)
before income
tax expense
82
-
82
(470)
2,826
2,356
Income tax expense
(98)
-
(98)
16
(37)
(21)
Results related to
associates and joint
ventures
(3)
-
(3)
(9)
-
(9)
Net profit
(loss) for the
year
(19)
-
(19)
(463)
2,789
2,326
Of which:
- Attributable to
non-controlling
interests
24
-
24
8
-
8
- Dividend on
Cumulative
Preference Shares
-
-
-
6
-
6
- Available to
holders of ordinary
shares
(43)
-
(43)
(477)
2,789
2,312
Impact on cash flow statement (discontinued operations)
2024
2023
Net cash provided by / (used in):
- Operating activities
-
70
- Investing activities
-
3,517
Net change in cash and cash equivalents
-
3,587
Demerger
Captive insurances
On 10 June 2024, DSM demerged its re-insurance company DSM Re Switzerland AG to its main shareholder DSM-
Firmenich AG. This in-substance demerger of DSM Re Switzerland AG and transfer of its shares to DSM B.V.'s parent
company DSM-Firmenich AG is accounted for applying a book-value method. The difference between the nominal
consideration and the book values transferred is treated as a distribution to DSM-Firmenich AG (deemed dividend). The
corresponding release of the translation reserve is recognized in equity.
More specifically, DSM B.V. received a cash consideration of CHF 8 million (€8 million) based on the historical capital
contribution. The IFRS book value of its investee amounted to €290 million, consisting of other non-current assets (€230
million), receivables and other current assets (€218 million), provisions (€5 million) and current liabilities (€153 million).
The loss on this transaction amounting to €282 million is considered deemed dividend and is deducted from equity. The
related foreign currency translation reserve amounting to €110 million has been recycled to retained earnings.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
49
4 Segment information
Accounting policy
DSM has segmented its operations by business activity from which revenues are earned and expenses incurred. These
operating results are regularly reviewed by the Managing Board, DSM’s Chief Operating Decision Maker (CODM), to make
decisions about resources to be allocated to the operating segments and assess their performance. DSM uses EBITDA as
the main indicator to evaluate the consolidated performance as well as the performance per operating segment. Discrete
financial information is available for each identified operating segment. DSM has determined that Taste, Texture & Health
- DSM (TTH-DSM), Health, Nutrition & Care - DSM (HNC-DSM), and Animal Nutrition & Health (ANH) represent reportable
operating segments in addition to the reportable segment Corporate Activities.
The same accounting policies that are applied for the consolidated financial statements of DSM are also applied for the
operating segments. Prices for transactions between segments are determined on an arm’s length basis at market-based
prices. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
reasonably and consistently be allocated. Interest income, interest expense, and income tax expense or income are not
allocated to segments as these amounts are not included in the measure of segment profit or loss reviewed by the
Managing Board.
Selected information on a country and regional basis is provided in addition to the information about operating
segments.
Operating segments
DSM is organized into three Business Units:
•
Taste, Texture & Health - DSM (TTH-DSM) helps customers create food and beverage products that are
delicious, nutritious, affordable, and sustainable. This Business Unit provides enjoyment and nourishment for
consumers, business success for customers, and better health for people and planet This Business Unit mainly
consists of the Ingredients Solutions business
•
Health, Nutrition & Care - DSM (HNC-DSM) provides people solutions to help them look after their health by
adding critical nutrients to diet. This Business Unit drives medical innovation forward, helping to accelerate
recovery times and enhancing quality of life. This Business Unit mainly consists of DSM’s former Health, Nutrition
& Care business, including the Personal Care & Aroma Ingredients business
•
Animal Nutrition & Health (ANH) delivers healthy animal proteins efficiently and sustainably, harnessing the
power of data to make animal farming practices more sustainable, productive, and transparent
For 2024, these Business Units have been identified as the reportable operating segments of DSM.
Any consolidated activities outside the three reportable operating segments above are reported as the reportable
segment ‘Corporate Activities’. These consist of corporate operating and service activities that are not further allocated
to the operating segments.
DSM does not have a single external customer that represents 10% or more of total sales.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
50
Geographical information
Nether-
lands
Switzer-
land
Rest of
EMEA
North
America
Latin
America
China
Rest of
Asia
Total
2024
Net sales (by destination)
In € millions
356
297
2,152
1,773
1,354
699
1,172
7,803
In %
5
3
28
23
17
9
15
100
.
Workforce at period-end (headcount)
1,776
2,275
4,218
2,262
2,444
2,455
1,751
17,181
Intangible assets and property, plant and equipment at
period-end (carrying amount)
1,618
1,822
2,251
2,005
337
405
88
8,526
.
2023
Net sales (by destination)
In € millions²
384
218
2,051
1,701
1,318
773
1,145
7,590
In %²
5
3
28
22
17
10
15
100
.
Workforce at year-end (headcount)¹
1,783
2,274
4,274
2,447
2,555
3,785
1,737
18,855
Intangible assets and property, plant and equipment at
year-end (carrying amount)
1,665
1,950
2,220
1,937
422
423
85
8,702
1
Refers to total Group, including discontinued operations."
2 Restated for comparative purposes
Reportable segments
Taste,
Texture &
Health - DSM
Health,
Nutrition &
Care - DSM
Animal
Nutrition &
Health
Corporate
Activities
Total
continuing
operations
Discontinued
operations
TOTAL
2024
Net sales
1,501
2,835
3,324
143
7,803
-
7,803
EBITDA1
257
443
301
(40)
961
-
961
Operating profit
55
34
81
(60)
110
-
110
.
2023
Net sales
1,435
2,806
3,223
126
7,590
388
7,978
EBITDA1
213
411²
48²
(140)
532
2,827
3,359
Operating profit
85
(8)²
(285)²
(204)
(412)
2,827
2,415
.
1
See Note 2 Alternative performance measures to the consolidated financial statements for the reconciliation to IFRS performance measures.
2 Restated for comparative purposes
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
51
5 Net sales and costs
Accounting policy
Revenue from contracts with customers is recognized by identifying the contract and its performance obligations as well
as determination and allocation of the transaction price to these performance obligations. Net sales represent the
invoice value less estimated rebates, cash discounts, and indirect taxes. No element of financing is deemed present as
sales are made with a short-term credit term.
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.
Sale of goods
At DSM, revenue related to the sale of goods is recognized in the income statement when the performance obligation is
satisfied. This is at the point in time when transfer of control of the goods passes to the buyer. Fulfilment of the
performance obligations related to goods sold is measured using the commercial shipment terms as an indicator for the
transfer of control. Revenue recognized is measured at the fair value of the contractual transaction price allocated to the
performance obligation that is satisfied.
Rendering of services
Income coming from the rendering of services is recognized when the service, i.e., the performance obligation, has been
performed. Fulfillment of the performance obligations for services rendered is identified according to the individual
contract. The revenue recognized is measured at the fair value of the contractual transaction price allocated to the
performance obligation that is satisfied.
Licensing (royalties)
Income related to the sale or licensing of technologies or technological expertise is recognized in the income statement
either at a point in time or over time, depending on when the contractually identified performance obligations are
satisfied. Performance obligations related to license income include the transfer of rights and obligations associated with
those technologies. License income is reported in Net sales as it is part of the ordinary and recurring activities of the
business.
Net sales
2024
2023
Goods sold
7,514
7,325
Services rendered
283
253
Royalties
6
12
Total
7,803
7,590
Services rendered also include recharges of corporate service costs to related parties.
See also Note 28 Related parties.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
52
Disaggregation of net sales
2024
2023
Taste, Texture & Health - DSM (TTH-DSM)
1,496
1,435
Health, Nutrition & Care - DSM (HNC-DSM)
2,840
2,806
- Dietary supplements and I-Health
991
1,017
- Early life nutrition
413
411
- Biomedical solutions
208
204
- Personal care
618
588
- Other
610
586
Animal Nutrition & Health (ANH)
3,324
3,223
- Essential Products
2,469
2,434
- Performance Solutions
855
789
Corporate Activities
143
126
Total
7,803
7,590
Total costs
In 2024, total operating costs (the total costs included in operating profit) amounted to €7.7 billion, €0.3 billion lower
than in 2023, when these costs stood at €8.0 billion. Total operating costs in 2024 included Cost of sales amounting to
€6.0 billion (2023: €6.0 billion); gross profit as a percentage of net sales stood at 23% (2023: 21%).
Employee benefit costs
2024
2023
Wages and salaries
1,416
1,426
Social security costs
181
181
Pension costs (see also Note 24)
98
96
Share-based compensation (see also Note 27)
29
23
Total
1,724
1,726
Depreciation, amortization and impairments
2024
2023
Amortization of intangible assets
248
245
Depreciation of property, plant and equipment owned
315
340
Depreciation of right-of-use assets
57
51
Impairment losses
231
308
Total
851
944
Impairment losses of PPE, goodwill and intangible assets of €231 million are mainly related to the intangible assets of €54
million concerning specific molecule technologies, for which the supply rights were transferred, to the impairment of the
Marine Lipids business of €62 million, and the manufacturing facility of €73 million, following the divestment of the Yeast
Extract business.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
53
Other operating income
2024
2023
Release of provisions
2
-
Gain on sale of assets and activities
39
23
Insurance benefits
4
22
Amendments / settlements to pension plans
-
1
Earn-out payments and other settlements
21
57
Lease income
-
4
Royalties
-
2
Sale of emission rights
-
8
Sundry
20
38
Total
86
155
Other operating expense
2024
2023
Additions to provisions
5
22
Exchange differences
9
13
Acquisitions / disposals / demerger
19
56
Sundry
17
23
Total
50
114
6 Finance income and expense
2024
2023
Finance income
Interest income from third parties
62
93
Interest income from related parties
22
25
Fair value change in derivatives
15
6
Sundry
7
5
Total finance income
106
129
Finance expense
Interest expense from third parties
(81)
(91)
Interest expense from related parties
(30)
(20)
Interest relating to lease liabilities
(10)
(5)
Interest relating to defined benefit plans
(7)
(7)
Fair value change in derivatives
-
(33)
Capitalized interest during construction
6
4
Exchange differences
(5)
(8)
Unwinding of discounted payables
(3)
(22)
Sundry
(4)
(5)
Total finance expense
(134)
(187)
Total finance income and expense
(28)
(58)
In 2024, the interest rate applied in the capitalization of interest during construction was 2.5% (same as in 2023).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
54
7 Income tax
Accounting policy
Income tax expense is recognized in the income statement except to the extent that it relates to an item recognized
directly in Other comprehensive income or Shareholders’ equity.
Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted at the
balance sheet date, and any adjustment to tax payable with respect to previous years. The current tax position also
reflects any uncertainty related to income taxes. Current tax assets and liabilities are offset only if certain criteria are
met.
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between
the carrying amount of assets and liabilities and their tax base. Deferred tax assets and liabilities are measured at the tax
rates that have been enacted or substantially enacted at the balance sheet date, and reflect any uncertainty related to
income taxes and are expected to apply when the related deferred tax assets are realized or the deferred tax liabilities
are settled. Deferred tax assets, including assets arising from losses carried forward and tax credits, are reassessed over
time and recognized to the extent that it is probable that future taxable profits will be available against which the
deductible temporary differences and unused tax losses can be utilized. Deferred tax assets and liabilities are stated at
nominal value.
Deferred taxes are not recognized for the following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax assets
and deferred tax liabilities are offset and presented net when there is a legally enforceable right to offset, and the assets
and liabilities relate to income taxes levied by the same taxation authority.
Estimates and judgments
Key estimates for income tax generally relate to uncertain tax positions that could result from different interpretation of
tax legislation by local tax authorities in the countries where DSM operates. For the measurement of the uncertainty, DSM
uses the most likely amount or the expected value method to estimate the underlying risk. This requires judgements and
final outcome may deviate from the estimates.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
55
Income tax
The income tax expense on continuing operations was €98 million. The breakdown of the income tax expense is as
follows.
2024
2023
Current tax (expense) / benefit:
- Current year
(199)
(121)
- Prior-year adjustments
-
8
- Tax credits compensated
11
10
- Non-recoverable withholding tax
(1)
(4)
Total current tax (expense) / benefit
(189)
(107)
Deferred tax (expense) / benefit:
- Originating from temporary differences and their reversal
86
139
- Prior-year adjustments
(1)
4
- Change in tax rate
(1)
4
- Changes arising from write-down of deferred tax assets
(6)
(33)
- Changes in previously and newly recognized tax losses and tax credits
13
9
Total deferred tax (expense) / benefit
91
123
Total tax (expense) / benefit
(98)
16
The increase of the income tax expense and herewith the effective income tax rate as compared to 2023 is mainly due
to the combination of the geographical spread of the results within the group and non-deductible expenses in 2024. The
relationship between the income tax expense based on the nominal tax rate in the Netherlands and the actual income
tax expense is explained in the table below.
In € million
2024
2023
Profit (loss) before tax
82
(470)
Tax reconciliation
Tax calculation on Profit before tax based on nominal Dutch corporate income tax
rate (25.8%)
(21)
121
Income tax effects of:
-
-
- Deviating rates
(95)
(104)
- Change in tax rates
(1)
4
- Tax-exempt income and non-deductible expenses
24
25
- Other effects
(5)
(30)
Income tax income (expense)
(98)
16
Pillar Two legislation has been enacted in several jurisdictions in which DSM operates. DSM applies the temporary relief
from deferred tax accounting for the impacts of the top-up tax and accounts for it as current tax when it is incurred. The
income tax expense relating to Pillar Two legislation was less than €1 million in 2024 because of the geographical spread
of the business results. As Pillar Two legislation was not yet enacted in the countries in which DSM operated in 2023,
there was no income tax expense relating to Pillar Two in that year.
The balance of the deferred tax assets and deferred tax liabilities decreased by €112 million owing to the changes
presented in the following table.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
56
Deferred tax assets and liabilities
2024
2023
Balance at 1 January
Deferred tax assets
169
95
Deferred tax liabilities
(454)
(476)
Total
(285)
(381)
Changes:
- Income tax income / (expense) in income statement
91
106
- Income tax: change in tax percentage
-
4
Total income statement
91
110
- Income tax expense in OCI
3
7
- Acquisitions and disposals
-
(44)
- Exchange differences
11
3
- Transfer
7
20
Balance at 31 December
(173)
(285)
Of which:
- Deferred tax assets
238
169
- Deferred tax liabilities
(411)
(454)
In various countries, DSM has taken standpoints regarding its tax position which may at any time be challenged, or have
already been challenged, by the tax authorities, because the authorities in question interpret the law differently. For
particular tax treatments whose acceptance by the relevant tax authorities is uncertain, DSM either recognizes a liability
or reflects the uncertainty in the recognition and measurement of its current and deferred tax assets and liabilities.
The deferred tax assets and liabilities relate to the following balance sheet items.
Deferred tax assets and liabilities by balance sheet item
2024
2023
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
Intangible assets
12
(341)
11
(378)
Property, plant and equipment
30
(161)
29
(167)
Right-of-use assets
1
(42)
-
(24)
Financial assets
33
(7)
35
(14)
Inventories
101
(8)
59
(7)
Receivables
9
(19)
7
(13)
Lease liabilities non-current
35
-
18
-
Other non-current liabilities
-
(1)
1
(2)
Non-current provisions
50
-
49
-
Other current liabilities
61
(4)
45
(2)
Lease liabilities current
10
-
9
-
342
(583)
263
(607)
Tax losses carried forward and credits
68
-
59
-
Set-off
(172)
172
(153)
153
Total
238
(411)
169
(454)
No deferred tax assets were recognized for loss carryforwards amounting to €159 million (2023: €188 million).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
57
Unrecognized loss carryforwards amounting to €53 million will expire in the years up to and including 2029 (2023: €78
million up to and including 2028), nil losses between 2030 and 2034 (2023: €1 million between 2029 and 2033) and the
remaining €106 million in 2035 and beyond (2023: €110 million between 2034 and beyond). In addition, an amount of €15
million (2023: €9 million) of withholding taxes was unrecognized.
No deferred tax liability is recognized on temporary differences relating to unremitted retained earnings of subsidiaries
as the Group is able to control the timings of the reversal of these temporary differences and it is probable that they will
not reverse in the foreseeable future. The amount of unremitted retained earnings on which no deferred tax liability has
been provided for represents €1,011 million (2023: €592 million).
The valuation of deferred tax assets depends on the probability of the reversal of temporary differences and the
utilization of tax loss carryforwards, tax credits and withholding tax. Deferred tax assets are recognized for future tax
benefits arising from temporary differences and for tax loss carryforwards to the extent that the tax benefits are
probable. DSM has to assess the likelihood that deferred tax assets will be recovered from future taxable profits. Deferred
tax assets are reduced if, and to the extent that, it is not probable that all or some portion of the deferred tax assets will
be realized. In the event that actual future results differ from estimates and depending on tax strategies that DSM may be
able to implement, changes to the measurement of deferred taxes could be required, which could have an impact on the
company's financial position and profit for the year.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
58
8 GoodwilI and intangible assets
Accounting policy
Goodwill
Goodwill represents the excess of the cost of an acquisition over DSM’s share in the net fair value of the identifiable
assets and liabilities in a business combination. Goodwill paid on acquisition of a business is included in intangible
assets. Goodwill paid on acquisition of joint ventures or associates is included in the carrying amount of these entities.
Goodwill recognized as an intangible asset is tested for impairment annually, and when there are indications that the
carrying amount may exceed the recoverable amount. A gain or loss on the disposal of an operation includes the goodwill
allocated to the operation sold.
Intangible assets acquired as part of a business combination
Intangible assets acquired in a business combination are recognized at fair value on the date of acquisition and
subsequently amortized on a straight-line basis over their expected useful lives. The expected useful lives vary from 4 to
20 years.
Separately acquired intangible assets
Separately acquired licenses, patents, application software and other purchased rights are carried at historical cost less
straight-line amortization and less any impairment losses. The expected useful lives vary from 4 to 20 years.
Capital expenditure that is directly related to the development of application software is recognized as an intangible
asset and amortized over its estimated useful life (5 to 8 years). Costs of software maintenance are expensed when
incurred.
Internally generated intangible assets
Research costs are expensed when incurred. Development expenditure is capitalized if the recognition criteria are met
and if it is demonstrated that it is technically feasible to complete the asset; that the entity intends to complete the
asset; that the entity is able to sell the asset; that the asset is capable of generating future economic benefits; that
adequate resources are available to complete the asset; and that the expenditure attributable to the asset can be
reliably measured. Development expenditure that meets the recognition criteria is amortized over the asset’s useful life
on a straight-line basis. As long as internally generated intangible assets are under construction, they are not amortized
as they are not yet available for use. Instead, they are subject to a review for impairment annually, or more frequently if
events or circumstances indicate this is necessary. Any impairment is charged to the income statement as it arises.
Impairment of non-financial assets
When there are indications that the carrying amount of a non-financial asset (goodwill, an intangible asset, or an item of
property, plant and equipment) may exceed the estimated recoverable amount (the higher of its value in use and fair
value less costs of disposal), the possible existence of an impairment loss is investigated. If an asset does not generate
largely independent cash flows, the recoverable amount is determined for the cash generating unit (CGU) to which the
asset belongs. In assessing the value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market interest rates and the risks specific to the asset or CGU. When the
recoverable amount of a non-financial asset or a CGU is less than its carrying amount, the carrying amount is impaired to
its recoverable amount and an impairment charge is recognized in profit or loss. An impairment loss is reversed when
there has been a change in estimate that is relevant for the determination of the asset’s recoverable amount since the
last impairment loss was recognized. Impairment losses for goodwill are never reversed.
Estimates and judgments
Key estimates and judgments DSM makes in the accounting for goodwill and intangible assets relate to:
•
The amortization period of intangible assets, which depends on their useful lives
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
59
•
The determination of CGUs, which depends on the capacity of the asset or group of assets to generate independent
cash flows
•
The estimation and allocation of future cash flows, growth rates, discount rates and fair values minus costs of
disposal for the impairment testing of goodwill and intangible assets. These estimates are based on historical and
current market rates, quoted prices, experience, current business outlooks, and are validated by external valuation
specialists, where deemed necessary by management.
Goodwill and intangible assets
Goodwill
Customer
base
Brands and
trademarks
Technology
and formulas
Software,
licenses
and
patents
Internally
generated
Other
Total
Balance at 1 January 2023
Cost
2,989
1,249
124
1,005
612
576
270
6,825
Amortization and impairment
losses
5
596
62
270
363
186
196
1,678
Carrying amount
2,984
653
62
735
249
390
74
5,147
Changes in carrying amount:
- Capital expenditure
-
1
-
-
2
98
2
103
- Put into operation
-
2
2
1
57
(62)
-
-
- Acquisitions
147
45
11
105
-
-
1
309
- Amortization
-
(61)
(8)
(63)
(66)
(38)
(9)
(245)
- Impairment losses
(28)
(3)
-
(13)
(1)
(13)
(7)
(65)
- Exchange differences
(63)
5
-
4
7
11
(4)
(40)
- Reclassification to held for
sale
-
-
-
-
-
2
-
2
- Transfers
-
3
20
12
(5)
(12)
(11)
7
- Other
-
-
-
-
-
-
(8)
(8)
56
(8)
25
46
(6)
(14)
(36)
63
Balance at 31 December 2023
Cost
3,061
1,305
158
1,127
673
612
258
7,194
Amortization and impairment
losses
21
660
71
346
430
236
220
1,984
Carrying amount
3,040
645
87
781
243
376
38
5,210
- Of which acquisition related
3,040
645
87
781
-
-
13
4,566
Changes in carrying amount:
- Capital expenditure
-
-
-
-
1
79
3
83
- Put into operation
-
(1)
3
11
53
(68)
2
-
- Amortization
-
(65)
(14)
(60)
(78)
(25)
(6)
(248)
- Impairment losses
(37)
(1)
(4)
(54)
(1)
(6)
-
(103)
- Exchange differences
63
1
(1)
1
(1)
(4)
1
60
- Transfers
-
(15)
(17)
(1)
32
(1)
6
4
- Other consolidation changes
(11)
-
-
-
-
(11)
-
(22)
15
(81)
(33)
(103)
6
(36)
6
(226)
Balance at 31 December
2024
Cost
3,097
1,148
176
994
904
569
191
7,079
Amortization and impairment
losses
42
584
122
316
655
229
147
2,095
Carrying amount
3,055
564
54
678
249
340
44
4,984
- Of which acquisition-related
3,055
564
54
678
-
-
11
4,362
The amortization and impairment losses of goodwill and intangible assets are included in Cost of sales, Marketing & Sales,
Research & Development, and General & Administrative expenses.
Where DSM acquired entities in business combinations, they were accounted for by the acquisition method, resulting in
recognition of mainly goodwill, customer- and marketing-related, and technology-based intangible assets.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
60
Other significant intangibles were mainly obtained during the acquisitions of Erber Group and Glycom in 2020, and F&F
Amyris and First Choice Ingredients in 2021. Intangible assets are amortized on a straight-line basis and subject to
impairment trigger testing.
There are no intangible assets with an indefinite useful life (same as in 2023). The carrying amount of the internally
generated intangible assets includes €137 million (2023: €133 million) that relates mainly to strategic projects which are
not being amortized yet. The recoverable amount of these projects was estimated based on the present value of the
future cash flows expected to be derived from the projects (value-in-use).
Goodwill
The CGUs DSM identified in 2024 were Taste, Texture & Health – DSM (TTH-DSM), Health, Nutrition & Care (HNC-DSM),
and Animal Nutrition & Health (ANH).
Goodwill per Cash generating unit
2024
2023
Taste, Texture & Health - DSM (TTH-DSM)
582
577
Health, Nutrition & Care - DSM (HNC-DSM)
1,490
1,480
Animal Nutrition & Health (ANH)
983
983
Total
3,055
3,040
The annual impairment tests of goodwill are performed in the fourth quarter. The recoverable amount of the CGUs is
based on a value-in-use calculation.
The cash flow projections are derived from dsm-firmenich’s overall business plan as DSM does not operate in isolation
from the dsm-firmenich Group. DSM’s derived business plan is adopted by the Managing Board. The DSM specific cash
flow projections are based on the derived budget for 2025, as approved by DSM’s management, which is extrapolated
throughout the remainder of the forecast period using management’s internal forecasts. The key assumptions in the cash
flow projections relate to the market growth for the CGUs and the related revenue projections, EBITDA developments, and
the rates used for discounting cash flows. For the CGUs HNC-DSM and ANH, which are considered mature businesses, a
forecast period of five years is applied before they come to a terminal value. For TTH-DSM, an initial forecast period of
ten years was applied, reflecting the extended period of time during which the identified synergies arising from the
merger are expected to contribute to the growth of this CGU. The terminal value growth rate is determined with the
assumption of inflationary growth.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
61
Key assumptions for goodwill impairment tests
2024
2023
Forecast period (years)
- Mature business
5
5
- Emerging business
10
10
Terminal value growth
2.0%
2.0%
Pre-tax discount rate
Taste, Texture & Health - DSM (TTH-DSM)
8.5%
8.3%
Health, Nutrition & Care - DSM (HNC-DSM)
8.6%
7.9%
Animal Nutrition & Health (ANH)
9.6%
9.2%
Organic sales growth (year 1–5)
Taste, Texture & Health - DSM (TTH-DSM)
0%–6%
3%–8%
Health, Nutrition & Care - DSM (HNC-DSM)
0%–7%
6%–7%
Animal Nutrition & Health (ANH)
4%–13%
4%–8%
For ANH and HNC-DSM, the growth assumptions are based on the growth of the global food and feed markets, and the
vitamin transformation program; for TTH-DSM, on the growth assumptions of the global food and beverage markets.
A sensitivity test was performed on the impairment tests of the CGUs and showed that the conclusions of these tests
would not have been different if a reasonable possible adverse change in key parameters had been assumed.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
62
9 Property, plant and equipment
Accounting policy
Property, plant and equipment owned
Items of Property, plant and equipment owned are measured at cost less depreciation calculated on a straight-line basis
over their estimated useful lives and less any impairment losses. Borrowing costs during construction are capitalized
when the underlying asset under construction meets the recognition criteria of a qualifying asset.
Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the item
will flow to the Group. Expenditures relating to major scheduled turnarounds are capitalized and depreciated over the
period up to the next turnaround.
The estimated remaining lives of assets are reviewed every year, taking account of commercial and technological
obsolescence as well as normal wear and tear. The initially assumed expected useful lives are in principle as follows:
•
Buildings 10–50 years
•
Plant and equipment 4–15 years
•
Land is not depreciated
An item of property, plant and equipment owned is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use or the sale of the asset. Any gain or loss arising on derecognition of the asset is
recorded in profit or loss.
Right-of-use assets (leases)
DSM mainly leases offices, warehouses, vehicles, machinery, and other equipment.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are
measured at cost less any depreciation on a straight-line basis over the expected lease term, less any impairment losses,
and adjusted for remeasurements of the lease liability. In line with the initially assumed expected useful life of the
corresponding asset class within Property, plant and equipment, the minimum expected lease term for building leases is
in principle 10 years. However, the contractual terms or specific circumstances could require applying the shorter non-
cancellable period in determining the expected lease term. For vehicle leases, the expected lease term is set equal to the
contractual term (4–5 years).
Impairment of Property, plant and equipment
If there is an indication of impairment, the carrying amount of an item of Property, plant and equipment or the cash
generating unit (CGU) to which it belongs is reviewed and the recoverable amount of the asset or the CGU is estimated.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. An
impairment loss is reversed when there has been a change in estimate that is relevant for the determination of the
asset’s recoverable amount since the last impairment loss was recognized.
Estimates and judgments
Key estimates and judgments DSM makes in the accounting for items of property, plant and equipment relate to:
•
The depreciation period of items of property, plant and equipment, which depend on their useful lives
•
The determination of the lease term for lease contracts based on assessment of available renewal options. Estimates
are based on the underlying asset class, past practices and current business outlooks
•
The estimation and allocation of future cash flows, growth rates, discount rates and fair values minus costs of
disposal for the impairment testing of items of property, plant and equipment. These estimates are based on
historical and current market rates, experience, and current business outlooks
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
63
Composition of Property, plant and equipment
2024
2023
Property, plant and equipment owned
3,242
3,266
Right-of-use assets
300
226
Total
3,542
3,492
Property, plant and equipment owned
Land and
buildings
Plant and
equipment
Under
construction
Not used for
operating
activities
Total
Balance at 1 January 2023
Cost
1,929
4,625
572
6
7,132
Depreciation and impairments
839
2,891
-
-
3,730
Carrying amount at 1 January 2023
1,090
1,734
572
6
3,402
Changes in carrying amount:
- Capital expenditure
7
42
394
-
443
- Put into operation
38
259
(297)
-
-
- Acquisitions
6
7
3
-
16
- Disposals and deconsolidations
(3)
(2)
-
-
(5)
- Depreciation
(71)
(269)
-
-
(340)
- Impairment losses
(64)
(187)
8
-
(243)
- Exchange differences
4
(11)
3
-
(4)
- Other reclassifications
13
72
(88)
-
(3)
(70)
(89)
23
-
(136)
Balance at 31 December 2023
Cost
1,937
4,965
595
6
7,503
Depreciation and impairments
917
3,320
-
-
4,237
Carrying amount at 31 December 2023
1,020
1,645
595
6
3,266
.
Changes in carrying amount:
- Capital expenditure
4
47
445
-
496
- Put into operation
33
140
(173)
-
-
- Disposals and deconsolidations
(41)
(52)
(2)
-
(95)
- Depreciation
(63)
(252)
-
-
(315)
- Impairment losses
(35)
(90)
(3)
-
(128)
- Exchange differences
1
10
11
-
22
- Other reclassifications
15
193
(212)
-
(4)
- Other changes
-
-
-
-
-
(86)
(4)
66
-
(24)
Balance at 31 December 2024
Cost
1,774
4,840
663
6
7,283
Depreciation and impairments
840
3,199
2
-
4,041
Carrying amount at 31 December 2024
934
1,641
661
6
3,242
In 2024, impairment losses of €128 million (2023: €243 million) were recognized on Property, plant and equipment,
mainly following the divestment of the Yeast Extract business (€73 million) and the Marine Lipids business (€38 million).
For acquisitions, see Note 3 Change in the scope of consolidation.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
64
Right-of-use assets
Land and
buildings
Plant and
equipment
Total
Balance at 1 January 2023
119
55
174
Changes in carrying amount:
Acquisition
1
-
1
New leases / terminations
92
13
105
Depreciation
(34)
(17)
(51)
Exchange rate differences
(4)
1
(3)
55
(3)
52
Balance at 31 December 2023
Cost
289
95
384
Depreciation and impairments
115
43
158
Carrying amount at 31 December 2023
174
52
226
Changes in carrying amount:
New leases / terminations
86
12
98
Remeasurements
27
6
33
Depreciation
(39)
(18)
(57)
Exchange rate differences
-
-
-
74
-
74
Balance at 31 December 2024
Cost
390
92
482
Depreciation and impairments
142
40
182
Carrying amount at 31 December 2024
248
52
300
For the disclosures on the lease liabilities that correspond with the right-of-use assets, see Note 19 Borrowings.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
65
10 Associates and joint arrangements
Accounting policy
An associate is an entity over which DSM has significant influence but no control or joint control, usually evidenced by a
shareholding that entitles DSM to between 20% and 50% of the voting rights. A joint venture is an entity over which DSM
has joint control and is entitled to its share of the net assets and liabilities.
Investments in associates and joint ventures are initially recognized at cost, including transaction costs. Subsequent to
initial recognition, these investments are accounted for by the equity method, which involves recognition in the income
statement of DSM’s share of the associate’s or joint venture’s profit or loss for the year determined in accordance with
the accounting policies of DSM. Any other results at DSM in relation to associated companies are recognized under Other
results related to associates and joint ventures. DSM’s interest in an associate or joint venture is carried in the balance
sheet at its share in the net assets of the associate or joint venture together with goodwill paid on acquisition, less any
impairment loss.
When DSM’s share in the loss of an associate or joint venture exceeds the carrying amount of that entity, the carrying
amount is reduced to zero. No further losses are recognized unless DSM has responsibility for obligations relating to the
entity.
Associates and joint ventures
The following table analyses, in aggregate, the carrying amount and share of profit of associates and joint ventures. For
acquisitions and divestments, see Note 3 Change in the scope of consolidation.
2024
2023
MidCo
Omega
Other
associates
Joint
Ventures
Total
Total
Balance at 1 January
-
46
9
55
61
- Share of the profit of associates and joint ventures
(3)
2
(12)
(13)
(8)
- Other comprehensive income
-
-
-
-
(2)
- Capital payments
-
11
6
17
5
- Dividends received
-
(8)
-
(8)
(1)
- Other consolidation change
159
(4)
30
185
-
- Other
3
1
-
4
-
Balance at 31 December
159
48
33
240
55
The other consolidation change reflects MidCo Omega which relates to the divestment of the Marine Lipids business to
the KD Pharma group. As part of that transaction, DSM has obtained a minority stake of 29% in KD Pharma's parent
company MidCo Omega GmbH.
See below table for the key figures of the main associate MidCo Omega on a 100% basis.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
66
MidCo Omega
2024
2023
Current assets
325
-
Non-current assets
395
-
Current liabilities
71
-
Non-current liabilities
249
-
Net assets (100% basis)
400
-
of which Non-controlling interest
1
-
Attributable to investee's shareholders
399
-
Summarized statement of profit or loss
Revenue (net sales)
31
-
Profit for the year (continuing
operations)
(9)
-
Other comprehensive income
-
-
Total comprehensive income
(9)
-
of which Non-controlling interest
-
-
Attributable to investee's shareholders
(9)
-
Joint operations
The operations Veramaris® and Avansya are accounted for in accordance with IFRS 11 for joint operations. DSM therefore
recognizes their amounts for the assets, liabilities, revenues, and expenses in accordance with the contractual
entitlement and obligations of DSM, see also Note 1 General Information.
11 Other non-current assets
Accounting policy
Other non-current assets comprise loans to associates and joint ventures, other participating interests and other long-
term investments and receivables.
Other participating interests comprise equity interests in entities in which DSM has no significant influence. We generally
apply the irrevocable election upon initial recognition to present subsequent changes in the fair values of these interests
in Other comprehensive income (OCI) as these represent investments that DSM intends to hold for a longer term for
strategic purposes. Fair value changes in OCI will not be recycled through profit and loss upon disposal of the interest. All
dividends received will be presented in profit or loss.
DSM’s business model objective for loans granted is ‘held-to-collect contractual cash flows only’. Held to collect loans,
other receivables and other deferred items, for which the contractual cash flows consist solely of principal and interest,
are measured at amortized cost, using the effective interest method, which generally corresponds to the nominal value,
less an adjustment for expected credit loss. Upon disposal of these assets, the gain or loss is recognized in profit or loss.
Other long-term investments and receivables, for which the contractual cash flows are not solely principal and interest,
are recognized at fair value, with changes in fair value recognized in profit or loss.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
67
Loans associates
and joint
ventures
Other
participating
interests
Other receivables
Other
Total
Balance at 1
January 2023
2
125
158
10
295
Changes:
- Charged to the
income statement
-
-
(1)
-
(1)
- Acquisitions
-
-
-
-
-
- Disposals
-
(10)
-
-
(10)
- Capital
payments
-
10
-
-
10
- Loans granted /
prepayments
3
-
13
-
16
- Repayments /
(receipts)
-
-
-
(4)
(4)
- Exchange
differences
-
-
(1)
(1)
(2)
- Transfer shares
held in DSM-
Firmenich AG from
treasury shares
-
44
-
-
44
- Other transfers
-
-
(24)
4
(20)
- Changes in fair
value through OCI
-
(37)
-
-
(37)
- Other changes
(1)
7
(82)
(1)
(77)
Balance at 31
December 2023
4
139
63
8
214
.
Changes:
- Charged to the
income statement
-
-
8
-
8
- Acquisitions
-
52
-
-
52
- Disposals
-
(8)
-
-
(8)
- Capital
payments
-
6
-
-
6
- Loans granted /
prepayments
47
-
55
-
102
- Repayments /
(receipts)
-
-
(47)
-
(47)
- Exchange
differences
-
-
(3)
-
(3)
- Re-issuance of
shares held in
DSM-Firmenich
AG
-
(21)
-
-
(21)
- Sale shares held
in DSM-Firmenich
AG to DSM
Firmenich AG
-
(40)
-
-
(40)
- Other transfers
(3)
11
54
1
63
- Changes in fair
value through OCI
-
(21)
-
-
(21)
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
68
- Expected credit
loss (ECL)
adjustment and
impairments
(1)
-
(45)
-
(46)
- Other changes
(1)
1
2
2
Balance at 31
December 2024
46
119
87
9
261
The shares held by DSM B.V. in the parent company DSM-Firmenich AG are recognized in Other participating interests. In
the reporting year, 500,000 shares were acquired for the amount of €52 million and 488,387 shares were re-issued to
the stock market (-€21 million). The value adjustment of the shares held in DSM-Firmenich AG reported under Changes in
fair value through OCI amounts to -€27 million (2023: -€8 million). At the end of 2024, the 404,185 shares held by DSM
B.V. in the parent company DSM-Firmenich AG were sold to DSM-Firmenich AG at fair value, amounting to €40 million.
The 'Expected credit loss (ECL) adjustment and impairment' of €45 million relates to the loan that was waived as part of
the Jiangshan divestment (see also Note 3 Change in the scope of consolidation).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
69
12 Inventories
Accounting policy
Inventories are stated at the lower of cost and net realizable value. The cost of intermediates, work-in-progress and
finished goods includes directly attributable costs and related production overhead expenses.
Net realizable value is determined as the estimated selling price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary to make the sale. Products whose manufacturing cost cannot be
calculated because of joint cost components are stated at net realizable value after deduction of a margin for selling and
distribution efforts. Value adjustments for slow-moving and obsolete inventories are made.
Cost is generally determined using the weighted average cost formula, unless the nature of the inventories warrants the
use of the first in, first out (FIFO) method of valuation.
2024
2023
Raw materials and consumables
610
676
Intermediates and finished goods
1,666
1,716
2,276
2,392
Adjustments to lower net realizable value
(75)
(74)
Total
2,201
2,318
Changes in the adjustment to net realizable value
2024
2023
Balance at 1 January
(74)
(66)
Additions charged to income statement
(26)
(29)
Utilization / reversals
24
21
Exchange differences
-
1
Disposal
2
28
Transfer
(1)
(2)
Reclassification to held for sale
-
(27)
Balance at 31 December
(75)
(74)
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
70
13 Current receivables
Accounting policy
Current receivables, for which the contractual cash flows are solely principal and interest, are initially recognized at fair
value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortized
cost, which generally corresponds to their nominal, non-discounted value, less an adjustment for expected credit loss.
Loss allowances for trade receivables are always measured at lifetime expected credit loss – see also Note 23 Financial
Instruments and risks.
2024
2023
Trade receivables
Trade accounts receivable
1,238
1,183
Other trade receivables
225
231
Other receivables from related parties
71
101
Deferred items
39
38
Receivables from associates
3
-
1,576
1,553
Expected credit loss
(11)
(18)
Total Trade receivables
1,565
1,535
Income tax receivable
51
79
Other current receivables
Other taxes and social security contributions
10
17
Related party cash pool
68
178
Employee-related receivables
3
7
Acquisition-/disposal-related receivables
9
5
Loans
23
69
Other receivables
30
9
Deferred items
1
1
Total Other current receivables
144
286
Total current receivables
1,760
1,900
Information about the expected credit loss that relates to trade accounts receivable resulting in a loss allowance is
included under Credit risk in Note 23 Financial instruments and risks.
Deferred items comprised €40 million (2023: €39 million) in prepaid expenses that include advance payments for any
expenditure that would have otherwise been made during the next 12 months.
Related party cash pool relates to the receivables from DSM Finance B.V., the dsm-firmenich finance entity, with entities
of the dsm-firmenich Group. See Note 26 Notes to the cash flow statements.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
71
14 Financial investments
Accounting policy
Financial investments are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, they are measured at amortized cost using the effective interest method.
Deposits with banks with a maturity between three and twelve months are classified as current financial investments.
2024
2023
Fixed term deposits
20
101
Total
20
101
All fixed-term deposits have been placed with institutions with a high credit rating in line with our counterparty policy.
The purpose of the deposits is either to meet short-term cash commitments, or to manage liquidity to such extent that
yields are optimized while allowing DSM sufficient freedom in fulfilling its (strategic) goals.
For more information regarding the counterparty policy, see Note 23 Financial instruments and risks.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
72
15 Cash and cash equivalents
Accounting policy
Cash and cash equivalents comprise cash at banks and in hand and deposits held at call with banks with a maturity of
less than three months at inception.
Deposits will be classified as ‘cash equivalent’ if held at banks with a maturity of less than three months at inception.
Deposits will be classified as ‘current investments’ if the maturity is more than three months but less than or equal to
one year. Bank overdrafts are included in current liabilities. Included in cash and cash equivalents are investments in
money-market funds that do not meet the SPPI (Solely Payments of Principal & Interest) criterion but are held to meet
short-term cash demand and have a maturity of less than three months at inception. Money-market fund investments
have been placed with institutions with a high credit rating in line with our counterparty policy.
Cash and cash equivalents are measured at amortized cost, or at fair value through profit and loss.
Composition of cash and cash equivalents
2024
2023
Deposits
610
284
Money-market funds
504
931
Cash at bank and in hand
1,351
964
Payments in transit
4
2
Total
2,469
2,181
For DSM, the purpose of holding cash in deposits and money-market funds is to meet short-term cash commitments
and to manage liquidity to such an extent that yields are optimized, while allowing DSM sufficient freedom in fulfilling its
(strategic) goals.
Cash at year-end 2024 was not being used as collateral and therefore was not restricted (same as in 2023).
In a few countries, DSM faces cross-border foreign exchange controls and/or other legal restrictions that limit its ability to
make these balances available at short notice for general use by the Group. The amount of cash held in these countries
was €142 million at year-end 2024 (2023: €64 million). The cash will generally be invested or held in the relevant country
and, given the other liquidity resources available to the Group, does not significantly affect the ability of the Group to
meet its obligations.
For more information regarding the counterparty policy, see Note 23 Financial instruments and risks.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
73
16 Equity
Accounting policy
DSM classifies ordinary shares and other financial instruments, for which settlement of the contractual obligations is at
the sole discretion of DSM, as equity.
The price paid for repurchased DSM shares (treasury shares) is deducted from DSM shareholders’ equity until the shares
are reissued. Treasury shares are presented in the treasury share reserve. When treasury shares are sold or reissued, the
amount received is recognized as an increase in equity.
Dividend to be distributed to holders of ordinary shares is recognized as a liability when the Annual General Meeting of
Shareholders approves the profit appropriation.
Movements in equity
2024
2023
Balance at 1 January
8,923
10,845
Net profit for the year
(19)
2,326
Other comprehensive income
133
(140)
Options / share units granted
31
23
Dividend
(673)
(3,935)
Deemed dividend¹
(282)
-
Proceeds from reissue of ordinary shares
-
24
Acquisition of NCI without a change in control
4
-
Acquisition (divestment) of subsidiary with NCI
-
(4)
Repurchase of shares
-
(256)
Transfer
-
44
Other changes
-
(4)
Balance at 31 December
8,117
8,923
1
The in-substance demerger of DSM Re Switzerland AG resulted in a deemed dividend amounting to €282 million. The related translation reserve
amounting to €110 million has been released to retained earnings.
Share capital
On 31 December 2024, the capital amounted to €261 million, consisting of 174 million ordinary shares, all held by its
parent DSM-Firmenich AG. All shares have a nominal value of €1.50 each. The outstanding shares provide an entitlement
of one vote per share at the General Meeting of Shareholders. All rights attached to the company’s shares held by the
Group (treasury shares) are suspended until those shares are reissued.
The changes in the number of issued and outstanding shares in 2023 and 2024 are shown in the table on the next page.
Share premium
The share premium did not change in the reporting year.
Treasury shares
DSM B.V. did not own treasury shares in 2024.
The DSM-Firmenich AG shares held by DSM are recognized in Other participating interests (OPI). End of 2024, the shares
were sold to DSM-Firmenich AG.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
74
Development issued and outstanding shares of DSM B.V. (Koninklijke DSM N.V. until 31 May 2023)
Issued
shares
Issued
shares
Treasury
shares
Ordinary
Cumprefs A
Ordinary
Balance at 1 January 2023
174,786,029
44,040,000
1,710,632
Reissue of shares in connection with share-based payments
(280,021)
Treasury shares DSM N.V. swapped to DSM-Firmenich AG shares
-
(662,616)
Cancellation of shares
(767,995)
(44,040,000)
(767,995)
Balance at 31 December 2023
174,018,034
-
-
Number of treasury shares at 31 December 2023
-
Number of shares outstanding at 31 December 2023
174,018,034
-
.
Balance at 1 January 2024
174,018,034
-
-
Other changes
-
-
Balance at 31 December 2024
174,018,034
-
-
Number of treasury shares at 31 December 2024
-
Number of shares outstanding at 31 December 2024
174,018,034
-
Other reserves in Shareholders equity
Translation
reserve
Hedging
reserve
Reserve for
share-based
compensation
Fair value
reserve
Total
Balance at 1 January 2023
424
(33)
44
(72)
363
Changes:
Fair-value changes of derivatives
-
27
-
-
27
Fair-value changes of other financial assets
-
-
-
(37)
(37)
Exchange differences
(96)
-
-
-
(96)
Options and performance shares granted
-
-
23
-
23
Options and performance shares
exercised/canceled
-
-
(23)
-
(23)
Transfer to retained earnings
-
-
-
(5)
(5)
Income tax
(1)
(1)
-
-
(2)
Total changes
(97)
26
-
(42)
(113)
Balance at 31 December 2023
327
(7)
44
(114)
250
.
Changes:
Fair-value changes of derivatives
-
(28)
-
-
(28)
Fair-value changes of other financial assets
-
-
-
(20)
(20)
Exchange differences
168
-
-
-
168
Stock options and share units granted
-
-
31
-
31
Stock options and share units
exercised/canceled
-
-
(27)
-
(27)
Transfer to retained earnings
110
-
-
81
191
Income tax
-
6
-
-
6
Total changes
278
(22)
4
61
321
Balance at 31 December 2024
605
(29)
48
(53)
571
For information on the reserves, see Note 6 Shareholders’ equity to the parent company financial statements.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
75
Dividend
Dividend distribution in the reporting year
2024
2023
Shareholders DSM B.V. (formerly Koninklijke DSM N.V.)
Per cumulative preference share A: - (2023: €0.14)
-
6
Per ordinary share:
Final dividend listed ordinary shares: - (2023: €1.66)
-
11
Final dividend ordinary shares held by DSM-Firmenich AG: €3.87 (2023: €1.66)
673
278
Special dividend listed ordinary shares: - (2023: €20.92)
-
140
Special dividend ordinary shares held by DSM-Firmenich AG: - (2023: €20.92)
-
3,500
Total
673
3,935
This dividend distribution is excluding the deemed dividend of €282 million that was posted following the in-substance
demerger of DSM Re Switzerland AG and transfer of its shares to DSM B.V.'s parent company DSM-Firmenich AG. See also
Note 3 Change in the scope of consolidation.
17 Non-controlling interests
Accounting policy
Non-controlling interests in subsidiaries are measured at the proportionate share of the subsidiaries’ identifiable net
assets.
2024
2023
Andre
Pectin
Yimante
Other
Total
% of non-controlling interest
25%
25%
Balance at 1 January
48
61
-
109
102
Changes:
- Share of profit/charged to income statement
4
18
2
24
8
- Divestments
-
-
4
4
(4)
- Transfers
-
19
-
19
9
- Exchange differences
2
3
(3)
2
(6)
Total changes
6
40
3
49
7
Balance at 31 December
54
101
3
158
109
The shareholding by DSM in Yimante Health Ingredients (Jingzhou) Company Ltd. is 75%. The profit will be distributed in a
50:50 proportion. The impact of this arrangement has led to a transfer of €19 million (2023: €9 million) within equity
from shareholders’ equity to non-controlling interest.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
76
Not fully-owned subsidiaries on a 100% basis
2024
2023
Andre Pectin
Yimante
Other
Total
Assets
Intangible assets
37
19
-
56
74
Property, plant and equipment
38
121
-
159
215
Other non-current assets
2
40
15
57
76
Inventories
51
10
-
61
61
Receivables
31
111
-
142
96
Current investments
7
-
-
7
51
Cash and cash equivalents
73
9
-
82
12
Total assets
239
310
15
564
585
.
Liabilities
Provisions (non-current)
10
1
-
11
11
Borrowings (non-current)
-
13
-
13
74
Other non-current liabilities
-
1
-
1
2
Borrowings and derivatives (current)
-
13
-
13
66
Other current liabilities
10
32
-
42
69
Total liabilities
20
60
-
80
222
Net assets (100% basis)
219
250
15
484
363
Net sales
96
277
1
374
339
Net profit for the year
19
74
-
93
33
Cash provided by / (used in) operating activities
27
71
1
99
63
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
77
18 Provisions
Accounting policy
Provisions are recognized when there is a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount
can be made. The underlying assumptions in the recognition of provisions are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
In cases where the effect of the time value of money is material, provisions are measured at the present value of the
expenditures expected to be required to settle the obligation. Where discounting is used, the increase in the provision
due to the passage of time is recognized as financial expense.
Differences between the final obligations and the initial estimates are recognized in the consolidated income statement
in the period in which such determination is made.
Estimates and judgments
Key estimates made in the accounting for provisions relate to the estimates made in determining the likelihood and
timing of potential cash flows included in their measurement.
Restructuring
costs and
termination
benefits
Environmental
costs
Other
provisions
Total
Balance at 1 January 2023
41
29
25
95
Of which current
39
2
4
45
Changes:
- Additions
48
4
24
76
- Releases
(9)
-
-
(9)
- Uses
(41)
(3)
(7)
(51)
- Other change
-
3
(3)
-
Total changes
(2)
4
14
16
Balance at 31 December 2023
39
33
39
111
Of which current
25
3
6
34
.
Changes:
- Additions
35
-
61
96
- Releases
(3)
-
(18)
(21)
- Uses
(38)
(3)
(13)
(54)
- Disposals
(5)
(5)
- Other change
-
-
-
-
Total changes
(6)
(3)
25
16
Balance at 31 December 2024
33
30
64
127
Of which current
12
3
47
62
The rate used for discounting decreased from 3.5% to 3.4%. Depending on the risk profile, the discount rates used at the
end of 2024 vary from 3.4% to 5.3% (2023: 3.5% to 5.7%). The balance of provisions measured at present value increased
by less than €2 million in 2024 in view of the passage of time (similar to 2023). Provisions for restructuring costs and
termination benefits mainly relate to the costs of redundancy schemes connected to the dismissal of employees and
costs of termination of contracts. These provisions generally have a term of one to three years.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
78
Regarding the provisions for restructuring costs and termination benefits, the additions related mainly to an addition of
€4 million to the existing provisions in relation to the merger and integration, and the creation of a provision for an
amount of €21 million in connection with the closure of a plant following the divestment of the Yeast Extract business.
The usage of these provisions mainly related to the existing provisions for the merger and integration (€17 million) and
the restructuring of the vitamin asset footprint (€10 million).
Other additions to provisions for restructuring costs and termination benefits in 2024 relate mainly to the various smaller
restructuring projects (same as in 2023). The provisions for environmental costs relate to soil clean-up obligations,
among other things and have an average life of around 30 years.
Several items have been combined under Other provisions, e.g., demolition costs, onerous contracts and legal claims.
These provisions have an average life of one to 10 years. Following the divestments in 2024, provisions for onerous
contracts amounting to €32 million were created.
19 Borrowings
Accounting policy
Borrowings
Borrowings, including bonds, are not held for trading and are initially recognized at fair value of the proceeds received, net
of transaction costs. Subsequently, borrowings are stated at amortized cost using the effective interest method, with any
discount or premium on the borrowing amortized over the applicable term. The corresponding interest expenses are
recorded as financial expense in profit or loss.
Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined,
the Group’s incremental borrowing rate. Generally, DSM uses its incremental borrowing rate as the discount rate. In
determining the incremental borrowing rate, DSM applies the practical expedient to use a single discount rate to
portfolios of leases with reasonably similar characteristics, as reflected in the contractual currency and expected lease
term of these contracts.
In general, DSM splits the contractual consideration into a lease and a non-lease component based on their relative
stand-alone prices. For vehicle leases, however, DSM applies the practical expedient not to make this split but rather
accounts for the fixed consideration as a single lease component.
Over time, the lease liability is increased by the interest expense related to the unwinding of the lease liability and
decreased by the lease payments made. The lease liability is remeasured to reflect any reassessment of or modification
to the contractual terms and conditions of the lease, including indexation.
Payments related to short-term leases (leases with a term shorter than 12 months) are recognized on a straight-line basis
in profit or loss.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
79
Borrowings
2024
2023
Total
Of which
current
Total
Of which
current
Bonds
3,040
500
2,743
500
Related party
borrowings
300
40
-
-
Private loans
35
14
108
56
Lease liabilities
317
53
240
48
Credit institutions
65
65
27
27
Total
3,757
672
3,118
631
At 31 December 2024, there was €1,561 million in borrowings outstanding with a remaining term of more than 5 years (at
31 December 2023, €617 million).
In agreements governing loans with a residual amount at year-end 2024 of €3,340 million (31 December 2023: €2,743
million), negative pledge clauses have been included that restrict the provision of security.
Related party borrowings relate to the borrowings from DSM Finance B.V., the dsm-firmenich finance entity, with entities
of the dsm-firmenich Group.
The schedule of repayment of borrowings is as follows.
Borrowings by maturity
2024
2023
Less than one year
672
631
One to two years
794
538
Two to three years
66
788
Three to four years
593
27
Four to five years
71
517
More than five years
1,561
617
Total
3,757
3,118
A breakdown by currency is given in the following table.
Borrowings by currency
2024
2023
EUR
3,444
2,843
CNY
34
50
USD
110
78
CHF
101
99
BRL
24
16
Other
44
32
Total
3,757
3,118
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
80
On balance, total borrowings increased by €639 million due to the following changes.
Movements of borrowings
2024
2023
Balance at 1 January
3,118
3,064
Loans taken up
807
-
Repayments
(548)
(33)
Unwinding (interest)
12
6
Consolidation changes
230
-
Related party loans taken up
70
-
Transfers
-
28
Disposals
(39)
-
Reclassification to held for sale
-
-
Changes in debt to credit institutions
37
-
New lease arrangements (incl. remeasurements)
132
102
Payment of lease liabilities
(65)
(49)
Exchange differences
3
-
Balance at 31 December
3,757
3,118
DSM redeemed in full the 2.375% EUR bond 2014–2024 of €500 million on the maturity date of 3 April 2024.
On 2 July 2024, DSM B.V. issued a 10-year €800 million bond. The bond is guaranteed by DSM-Firmenich AG, has a
coupon of 3.625% and matures on 2 July 2034.
As a result of a dsm-firmenich group restructuring, the DSM Re Switzerland AG (insurance captive) became a related
party. Therefore, a borrowing in the amount of €230 million, previously recognized as an intercompany borrowing was
reclassified to a related party borrowing. For more information, see see Note 3 Change in the scope of the
consolidation.
A breakdown of bonds is given below.
Bonds
Nominal amount
2024
2023
EUR loan
2.38%
2014—2024
500
-
500
EUR loan
1.00%
2015—2025
500
500
500
EUR loan
0.75%
2016—2026
750
750
749
EUR loan
0.25%
2020—2028
500
499
498
EUR loan
0.63%
2020—2032
500
498
496
EUR loan
3.63%
2024—2034
800
793
-
Total
3,550
3,040
2,743
The bonds issued by DSM B.V. have a fixed interest rate. The bonds issued in the period 2015-2020 are listed on the AEX.
The bond issued in 2024 is listed on the Luxembourg Stock Exchange.
•
The 2.375% EUR bond 2014–2024 of €500 million was pre-hedged by means of forward starting swaps, resulting in
an effective interest rate for this bond of 3.97%, including the settlement of the pre-hedge
•
The 1% EUR bond 2015–2025 of €500 million was pre-hedged by means of forward starting swaps, resulting in an
effective interest rate for this bond at 3.65%, including the settlement of the pre-hedge
•
The 0.75% EUR bond 2016–2026 of €750 million was pre-hedged by means of a collar, resulting in an effective
interest rate for this bond of 1.08%, including the settlement of the pre-hedge
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
81
•
The 0.25% EUR bond 2020–2028 of €500 million has an effective interest rate of 0.29%
•
The 0.625% EUR bond 2020–2032 of €500 million has an effective interest rate of 0.70%
•
The 3.625% EUR bond 2024-2034 of €800 million has an effective interest rate of 3.691%
A breakdown of private loans is given below.
Private loans
2024
2023
CNY loan
14
39
Other loans
21
69
Total
35
108
A breakdown of the lease liabilities is given below.
Lease liabilities by maturity
2024
2023
Less than one year
54
49
One to two years
45
37
Two to three years
35
29
Three to four years
26
22
Four to five years
23
17
More than five years
212
140
Total undiscounted lease liabilities at 31 December
395
294
Lease liabilities included in the Balance Sheet at 31 December
317
240
Current
53
48
Non-current
264
192
In addition to the contractual lease commitments, DSM has identified explicit renewal options available to DSM, which are
currently not reasonably certain to be exercised and are therefore not included in the measurement of the lease. The
associated future lease payments which are uncommitted and optional for DSM, are estimated around €196 million
(undiscounted; 2023: €181 million). The interest expense on the lease liabilities was €10 million (2023: €5 million) and the
total repayments of the lease liabilities amounted to €65 million in 2024 (2023: €52 million). These cash flows are
reported as financing cash flows. DSM’s policy regarding financial risk management is described in Note 23 Financial
instruments and risks.
20 Other non-current liabilities
Accounting policy
Other liabilities are measured at amortized cost, which generally corresponds to the nominal value, or at fair value
through profit and loss. The latter is mainly applied to acquisition-related liabilities.
Government grants are recognized at their fair value if there is reasonable assurance that the grant will be received and
that all related conditions will be complied with. Cost grants, which are grants that compensate DSM for expenses
incurred, are recognized as income over the periods necessary to match the grant on a systematic basis to the cost that
it is intended to compensate. If the grant is an investment grant, its fair value is initially recognized as deferred income in
Other non-current liabilities and then released to profit or loss over the expected useful life of the relevant asset.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
82
2024
2023
Investment grants / customer funding
48
54
Deferred items
35
30
Acquisition-/divestment-related liabilities
10
45
Other
2
1
Total
95
130
The decrease in the Other non-current liabilities is mainly caused by the transfer to current liabilities.
21 Current liabilities
Accounting policy
Other liabilities are measured at amortized cost, which generally corresponds to the nominal value, or at fair value
through profit and loss. The latter is mainly applied to acquisition-related liabilities.
2024
2023
Trade payables
Received in advance
5
8
Trade accounts payable third parties¹
1,387
1,337
Trade accounts payable related parties¹
64
19
Notes and cheques due
4
-
Total Trade payables
1,460
1,364
Income tax payable
142
133
Other current liabilities
Other taxes and social security contributions
53
56
Interest
26
20
Pensions
-
1
Investment creditors
145
117
Employee-related liabilities
263
218
Payables associates and joint ventures relating to cash facility
4
3
Related party cash pool
870
691
Acquisition-/divestment-related liabilities
28
73
Total Other current liabilities
1,389
1,179
Total current liabilities
2,991
2,676
1
The 2023 numbers have been restated for comparative purposes
Related party cash pool relates to the payable of DSM Finance B.V., the DSM finance entity within the dsm-firmenich
group. See Note 26 Notes to the cash flow statements.
Included in trade accounts payable are amounts due to suppliers which could be part of a supply chain finance
arrangement between the supplier and a third-party bank. Our suppliers can enter into such arrangements with third-
party banks, and access earlier payment on terms linked to our investment grade credit rating. If a supplier participates,
this does not impact classification of the trade payable, as arrangements are concluded between them and banks and do
not alter payment conditions between the supplier and us. Additionally, DSM does not incur any additional interest
toward the bank on the amounts due to the suppliers. Therefore, these amounts remain classified as trade payables and
the related payments are included in operating cash flows. DSM applied transitional relief available under Supplier
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
83
Finance Arrangements – Amendments to IAS 7 and IFRS 7 and has not provided comparative information in the first year
of adoption.
Supplier finance arrangements
2024
Carrying amount of liabilities
Presented within trade and other payables (beginning of the period)
189
Presented within trade and other payables (end of the period)
200
- Of which suppliers have received payment (by a third-party bank)
165
Range of payment due dates
Liabilities that are part of supplier finance arrangements
30-120 days after invoice date
Comparable trade payables that are not part of a supplier finance arrangement
0-120 days
after invoice date
22 Contingent liabilities and other financial obligations
The contingent liabilities and other financial obligations in the following table are not recognized in the balance sheet.
2024
2023
Guarantee obligations on behalf of related parties and third parties
173
170
Other
51
76
Total
224
246
Guarantee obligations are principally related to VAT and duties on the one hand and to financing obligations of
associated companies or related third parties on the other. Guarantee obligations will only lead to a cash outflow when
called upon. At year-end, no obligations had been called upon. Other relates mainly to contingent liabilities in contracts
for catalysts.
Guarantees issued to related parties and third parties in favor of Group companies amount to €173 million.
In 2024, DSM-Firmenich AG, DSM B.V., and Firmenich International SA signed a cross-guarantee agreement to mitigate
structural subordination in the Group. The cross-guarantee agreement includes downstream guarantees from DSM-
Firmenich AG to DSM B.V. and Firmenich International SA. In addition, there are also upstream guarantees from these two
subsidiaries to the ultimate parent DSM-Firmenich AG. The guarantees are irrevocable and unconditional and cover
existing and future senior unsecured debt instruments across these entities, including dsm-firmenich’s existing senior
unsecured debt instruments. Under this cross-guarantee agreement, DSM-Firmenich AG acts as guarantor for the €800
million bond issued on 2 July 2024 by DSM B.V., and for the credit facilities concluded in 2024 by DSM B.V. comprising the
€1.8 billion revolving credit facility (RCF) and the €1.0 billion bridge facility.
Litigation
DSM has a process in place to monitor legal claims periodically and systematically. DSM is involved in several legal
proceedings, most of which are related to the ordinary course of business. DSM does not expect these proceedings to
result in liabilities that have a material effect on the company's financial position. In cases where it is probable that the
outcome of the proceedings will be unfavorable, and the financial outcome can be measured reliably, a provision has
been recognized in the financial statements and disclosed in Note 18 Provisions.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
84
In 2015, an award was issued against DSM Sinochem Pharmaceuticals India Private Ltd. (DSP India) in a protracted
arbitration case in India going back to 2004 involving a joint venture that DSP India had formed with Hindustan
Antibiotics Ltd., which suspended its operations in 2003. DSP India (renamed to Centrient Pharmaceuticals after
divestment by former DSM in 2018) is covered by an indemnity from DSM B.V. for this case. In 2015, DSP India made an
application with the Civil Court in Pune (India) to set aside the arbitral award. The award amounts to INR 127.5 crore (€14
million as at year-end 2024) excluding interest of 12% per year as of 2004. DSM provided the Pune Court a bank
guarantee of INR 410 crore (€45 million as at year-end 2024). At the end of 2024, application proceedings were still
pending. DSM views this case as unfounded and is of the opinion that the likelihood of the award being ultimately set
aside is high. Therefore, no liability is recognized in respect of this case.
In 2019, Brazilian tax authorities disagreed with certain tax treatment as applied by the company in 2014–2016, which
would have an effect on such prior year income tax returns of around BRL 134 million (€21 million as at year-end 2024),
including penalties and interest. DSM views this case as unfounded and considers that the possibility of winning this case
is high, as confirmed by external legal counsel. Therefore, no liability relating to this case is recognized. Currently certain
elements are subject to appeal at the Superior Chamber. In the event that DSM receives an unfavorable decision, the
case can still be taken to the Judicial Court.
23 Financial instruments and risks
Policies on financial risks
As an international company, DSM is exposed to financial risks in the normal course of business. A major objective of the
company is to minimize the impact of market, liquidity and credit risk on the value of the company and its profitability. In
order to achieve this, a systematic financial and risk management system has been established. Furthermore, an internal
control framework is in place, and the controls are monitored and tested periodically.
The derivatives contracts used by DSM are entered into exclusively in connection with the corresponding underlying
transaction (hedged item) relating to normal operating business. The instruments used are customary products, such as
currency swaps, cross-currency interest rate swaps, collars, forward exchange contracts and interest rate swaps.
An important element of DSM’s capital management is the allocation of cash flow. DSM primarily allocates cash flow to
investments aimed at strengthening its business positions and securing the payment of dividends to its shareholders.
The remaining cash flow is further used for acquisitions and partnerships that strengthen DSM’s competences and
market positions. The net debt to equity ratio (gearing) is 13.3 (2023: 8.1), see also Note 25 Net debt.
Liquidity risk
Liquidity risk is the financial risk that an entity does not have and/or cannot access enough liquid cash and/or assets to
meet its obligations. This can happen if the entity’s credit rating falls, or when it experiences sudden unexpected cash
outflows or an unexpected drop in cash inflows, or some other event that causes counterparties to avoid trading with or
lending to the entity. Additionally, an entity can be indirectly exposed to market liquidity risk if the financial markets on
which it depends are subject to loss of liquidity.
The primary objective of liquidity management is to optimize the corporate cash position, among other means by
securing availability of sufficient liquidity for execution of payments by DSM entities, at the right time and in the right
place.
At 31 December 2024, DSM had cash and cash equivalents of €2,469 million (2023: €2,181 million).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
85
During 2024 DSM concluded a new €1.8 billion revolving credit facility (RCF) to replace existing RCF arrangements which
would have expired in 2025: DSM’s €1 billion RCF and Firmenich’s CHF 750 million RCF. The syndicated facility, which DSM
entered into with a group of 15 banks, has a tenor of five years and two one-year extension options. On 15 November
2024, DSM entered into a €100 million bilateral revolving credit facility with the same commercial terms and maturity to
provide additional financial flexibility. The agreements for the newly arranged committed credit facilities neither contain
financial covenants nor material adverse change clauses. At year-end 2024, no loans had been taken up under the
committed credit facilities.
In 2023, a bridge financing facility amounting to €1.0 billion was contracted by DSM B.V. The issuance by dsm-firmenich
of an €800 million bond on 2 July 2024 reduced the undrawn amount of the bridge financing facility to €200 million. The
remaining undrawn amount was canceled on 18 October 2024.
On 13 December 2024, DSM concluded a €1.0 billion bridge facility to provide additional financial flexibility in light of
upcoming bond maturities. The agreement neither contains financial covenants nor material adverse change clauses. At
year-end 2024, no loans had been taken up under the bridge facilities.
Furthermore, DSM has a commercial paper program amounting to €2.0 billion (2023: €2.0 billion). At 31 December 2024,
there was no ECP outstanding (same as 2023).
DSM has no derivative contracts to manage currency risk or interest rate risk outstanding under which margin calls by the
counterparty would be permitted.
Floating-rate and fixed-rate borrowings and monetary liabilities analyzed by maturity are summarized in the following
table. Borrowings excluding credit institutions are shown after taking into account related interest rate derivatives in
designated hedging relationships. DSM manages financial liabilities and related derivative contracts on the basis of the
remaining contractual maturities of these instruments. The remaining maturities presented in the following table provide
an overview of the timing of the cash flows related to these instruments.
Liquidity risk of financial liabilities
Carrying
amount
Within 1
year
1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
After 5
years
2023
Borrowings
3,118
631
538
788
17
527
617
Monetary liabilities
2,739
2,682
35
6
3
3
10
Guarantees
170
18
1
4
-
-
147
Derivatives
30
27
-
3
-
-
-
Interest payments
78
29
18
10
4
4
13
Cash at redemption¹
7
2
1
1
1
1
1
Total
6,142
3,389
593
812
25
535
788
.
2024
Borrowings
3,757
672
794
66
593
71
1,561
Monetary liabilities
3,084
3,074
2
-
-
-
8
Guarantees
173
84
2
-
-
-
87
Derivatives
55
54
1
-
-
-
-
Interest payments
336
44
39
33
34
32
154
Cash at redemption¹
12
2
2
2
1
1
4
Total
7,417
3,930
840
101
628
104
1,814
1
Difference between nominal redemption and amortized costs.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
86
The following table reflects the exposure of the derivatives to liquidity risk. It contains the cash flows from derivatives
with positive fair values and from derivatives with negative fair values to provide a complete overview of the derivative-
related cash flows. The amounts are gross and undiscounted.
Derivatives cash flow
2024
2025
2026
2027
2028
2029
Total
2023
Inflow
2,407
23
13
5
-
-
2,448
Outflow
(2,396)
(23)
(16)
(4)
-
-
(2,439)
2024
Inflow
3,447
24
5
1
11
3,488
Outflow
(3,460)
(25)
(5)
(1)
(11)
(3,502)
Market risk
Market risk can be subdivided into interest rate risk, currency risk and price risk.
Interest rate risk
Interest rate risk is the risk that adverse movements of interest rates lead to high costs on interest-bearing debt or
assets, which negatively impact our ability to honor our commitments. The aim is to minimize the interest rate risks
associated with the financing of the company and thus at the same time optimizing the net interest costs. This translates
into a certain desired profile of fixed-interest and floating-interest positions, including cash and cash equivalents, with
the floating-interest position not exceeding 60% of net debt.
There were no outstanding fixed-floating interest rate swaps (end of 2023 none).
The following analysis of the sensitivity of borrowings, assets and related derivatives to interest rate movements assumes
an instantaneous 1% change in interest rates for all maturities from their level on 31 December 2024, with all other
variables held constant. A 1% reduction in interest rates would result in a €21 million pre-tax loss in the income statement
and equity on the basis of the composition of financial instruments on 31 December 2024, as floating-rate borrowings are
more than compensated for by floating-rate assets (mainly cash). The opposite applies in the case of a 1% increase in
interest rates.
For more information regarding fixed or floating interest, see Note 19 Borrowings to the consolidated financial
statements.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
87
Sensitivity to change in interest rate
2024
2023
Carrying
amount
Sensitivity
Carrying
amount
Sensitivity
+1%
(1%)
+1%
(1%)
Loans to
associates and
joint ventures
46
-
-
4
-
-
Financial
investments
20
-
-
101
1
(1)
Cash and cash
equivalents
2,469
25
(25)
2,181
22
(22)
Short-term
borrowings
(672)
(1)
1
(631)
(1)
1
Long-term
borrowings
(3,085)
(3)
3
(2,487)
(1)
1
Currency risk
Adverse movements of foreign currencies negatively impact the results of operations and our financial condition, e.g. due
to losses on assets or liabilities in foreign currencies. The aim is to hedge risks resulting from sales and purchases at the
moment of recognition of the receivables and payables. This is done by transferring at spot rates the respective
exposures to the Group, which are, then (on a netted basis), hedged externally.
Companies may opt to hedge currency risks from firm commitments and forecast transactions. The currencies involved
are primarily USD and CHF.
CNY has significant exposure for the Group. However, it does not meet the threshold for cash flow hedging. We use
currency forward contracts, spot contracts, and average-rate currency forwards and options to hedge exposure to
fluctuations in foreign exchange rates. At year-end, these instruments had remaining maturities of less than one year. For
the hedging of currency risks from firm commitments and forecast transaction cash flows, hedge accounting is applied.
Hedge accounting is not applied for hedges of recognized trade receivables and payables hedged with short-term
derivatives. To hedge intercompany loans, receivables, and payables denominated in currencies other than the functional
currency of the subsidiaries, we use currency swaps or forward contracts. The following table assumes a 10% change in
all foreign currency rates against the euro from their level on 31 December 2024, with all other variables constant. A +10%
change indicates a strengthening of the foreign currencies against the euro, and vice-versa.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
88
Sensitivity to change in exchange rate
2024
2023
Carrying
amount
Sensitivity
Carrying
amount
Sensitivity
+10%
(10%)
+10%
(10%)
Loans to
associates and
joint ventures
46
-
-
4
-
-
Current
investments
20
1
(1)
101
7
(7)
Cash and cash
equivalents
2,469
29
(29)
2,181
21
(21)
Short-term
borrowings
(excluding
lease liabilities)
(619)
(7)
7
(583)
(9)
9
Long-term
borrowings
(excluding
lease liabilities)
(2,821)
(2)
2
(2,295)
(1)
1
Lease liabilities
(317)
(22)
22
(240)
(19)
19
Currency
forward
contracts
11
1
(1)
(19)
(36)
36
Average-rate
forwards used
for economic
hedging¹
(23)
(2)
2
25
(5)
5
Other
derivatives
50
2
(2)
44
(6)
6
1
Fair-value change reported in Hedging reserve.
Sensitivity changes on these positions will generally be recognized in profit or loss or in the translation reserve in equity,
except for the instruments for which cash flow hedge accounting or net-investment hedge accounting is applied.
In case of a strengthening or weakening of the euro against USD, CHF and CNY (being the key currencies), this would
affect the translation of financial instruments denominated in these currencies taking into account the effect of hedge
accounting and assuming all other variables being constant.
Profit or loss
Equity
Strengthening
Weakening
Strengthening
Weakening
EUR
USD (10% movement)
(14)
14
(297)
297
CHF (10% movement)
12
(12)
(138)
138
CNY (10% movement)
(29)
29
(72)
72
Price risk
Financial instruments that are subject to changes in stock exchange prices or indexes are subject to a price risk. At year-
end 2024, mainly other participating interests are subject to price risks.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
89
Credit risk
Credit risk is the risk that a (commercial or financial) counterparty may not be able to honor a financial commitment
according to the contractual agreement with DSM. The company manages the credit risk to which it is exposed by
applying credit limits per institution and by dealing exclusively with institutions that have a high credit rating.
At the balance sheet date, there were no significant concentrations of credit risks.
For all financial assets measured at amortized cost, the estimation of the loss allowance for doubtful accounts receivable
is based on an expected credit loss (ECL) model.
For trade receivables, DSM uses an allowance matrix to measure the lifetime ECL for trade receivables. The loss rates
depend among other things on the specified aging categories and are based on historical write-off percentages, taking
market developments into account.
For other financial assets, DSM applies an ECL model that reflects the size and significance of DSM’s exposure to credit
loss. The ECL is based on the allocation of a credit risk grade which is based on data that is determined to be predictive
of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and
cash flow projections and available press information about customers) and applying experienced credit judgement.
Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are
aligned to external credit rating definitions from Moody’s.
Risk of default is herewith considered as the risk of bankruptcy, or any legal impediment to the timely payment of either
interest and/or principal, as well as missed or delayed disbursement of either interest and/or principal.
The loss allowance on non-current financial assets taken into consideration at the end of 2024 was €2 million (2023: €0
million).
With regard to treasury activities (for example cash, cash equivalents and derivatives held with banks or financial
institutions) it is ensured that financial transactions are only concluded with counterparties that have at least a Moody’s
credit rating of A3 for long-term instruments. At Business Unit level, outstanding receivables are continuously monitored
by management. Appropriate allowances are made for any credit risks that have been identified in line with the expected
credit loss policy.
The development of the outstanding trade accounts receivable per aging category is as follows.
2024
2023
Neither past due nor impaired
1,099
1,090
1–29 days overdue
69
56
30–89 days overdue
40
16
90 days or more overdue
30
21
Total
1,238
1,183
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
90
The table below provides information about the credit risk exposure per aging category and the ECL for trade accounts
receivable of €11 million at 31 December 2024 (31 December 2023: €18 million), see Note 13 Current receivables to the
consolidated financial statements.
2024
2023
Weighted
average loss
rate
Gross
carrying
amount
Expected
credit loss
Weighted
average loss
rate
Gross
carrying
amount
Expected
credit loss
Neither past due nor
impaired
0.0%
1,099
-
0.2%
1,090
(2)
1–29 days overdue
0.2%
69
-
0.0%
56
-
30–89 days overdue
0.8%
40
-
0.0%
16
-
90 days or more overdue
33.2%
30
(11)
76.2%
21
(16)
Total
1,238
(11)
1,183
(18)
The changes in the expected credit loss for trade accounts receivable are as follows.
2024
2023
Balance at 1 January
(18)
(12)
Net remeasurement of expected credit loss
4
(7)
Deductions
-
1
Disposals
3
-
Exchange differences
-
-
Balance at 31 December
(11)
(18)
The maximum exposure to credit risk is represented by the carrying amounts of financial assets that are recognized in
the balance sheet, including derivative financial instruments. DSM has International Swaps and Derivatives Association
(ISDA) agreements in place with its financial counterparties that allow for the netting of exposures in case of a default of
either party, but do not meet the criteria for offsetting in the balance sheet. The following table presents the carrying
amounts of the derivative financial instruments subject to these agreements. No significant agreements or financial
instruments were available at the reporting date that would reduce the maximum exposure to credit risk.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
91
Exposure to credit risk related to derivatives
2024
2023
Receivables from derivatives presented in the balance sheet
92
81
Related amounts not offset in the balance sheet
(19)
(12)
Net amount
73
69
Liabilities from derivatives presented in the balance sheet
(55)
(31)
Related amounts not offset in the balance sheet
18
12
Net amount
(37)
(19)
Notional value of derivative financial instruments
2024
2023
Non-
current
Current
Total
Non-
current
Current
Total
Cross-currency interest rate
swaps
(13)
-
(13)
(25)
(31)
(56)
Forward exchange contracts,
currency options, currency swaps
-
(2,070)
(2,070)
(2)
(761)
(763)
Other derivatives
-
-
-
-
-
-
Total
(13)
(2,070)
(2,083)
(27)
(792)
(819)
Information about financial assets is presented in Note 10 Associates and joint arrangements, Note 11 Other financial
assets, Note 13 Current receivables, Note 14 Current investments and Note 15 Cash and cash equivalents to the
consolidated financial statements.
DSM may grant corporate guarantees for credit support of subsidiaries and associates, to get access to credit facilities
which are necessary for their operating working capital needs and which cannot be funded by the corporate cash pools
and/or for bank guarantees needed for local governmental requirements. Information on guarantees is presented in Note
22 Contingent liabilities and other financial obligations.
Hedge accounting
DSM uses derivative financial instruments to manage financial risks relating to business operations and does not enter
into speculative derivative positions.
The purpose of cash flow hedges is to minimize the risk of volatility of future cash flows. These may result from a
recognized asset or liability or a forecast transaction that is considered highly probable (firm commitment). DSM
determines the existence of an economic relationship between the hedging instrument and hedging item based on
currency, amount, and timing of their respective cash-flows.
The purpose of a hedge of a net investment is to reduce the foreign currency translation risk of an investment in a
company whose functional currency is not the euro. Changes in fair value are recognized in Other comprehensive income
(Translation reserve), and ineffectiveness will be recognized in the income statement. The amount recognized in Other
comprehensive income will be reclassified to the income statement, upon divestment of the respective foreign
subsidiary.
The purpose of a fair value hedge is to hedge the fair value of assets or liabilities reflected on the balance sheet. Changes
of fair value in hedging instruments, as well as hedged items, will be recognized in the income statement.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
92
Cash flow hedges
In 2024, DSM hedged USD 1,129 million (2023: USD 498 million) of its 2025 projected net cash flow in USD against the EUR
by means of average-rate currency forward contracts at an average exchange rate of USD 1.091 per EUR for the four
quarters of 2025. Each quarter, the relevant hedges for that quarter will be settled and recognized in the income
statement.
In 2024, DSM also hedged JPY 1,850 million (2023: JPY 7,535 million) of its 2025 projected net cash flow in JPY against
the EUR by means of average-rate currency forward contracts at an average exchange rate of JPY 154.4 per EUR for the
four quarters of 2025. dsm-firmenich also hedged the projected CHF obligations against the EUR, namely CHF 380
million (2023: CHF 393 million) at an average exchange rate of CHF 0.937 per EUR. These hedges have fixed the exchange
rate for part of the USD and JPY receipts and CHF payments in 2025. Cash flow hedge accounting is applied for these
hedges. In 2024, €4 million loss was recognized in the operating profit of the segments involved in accordance with the
realization of the expected cash flows. There was no ineffectiveness in relation to these hedges. As of the second quarter
of 2024, the Group no longer hedges forecast JPY cash flows as the exposure is no longer deemed material.
Cash flow hedges foreign currency risk
Inventory purchases
Other
2023
Nominal amount hedged item
12
108
Carrying amount assets
1
25
Carrying amount liabilities
-
(1)
Line item balance sheet
Derivatives
Derivatives
Change in the value of the hedging
instrument
-
(6)
Costs of hedging recognized in OCI
-
(30)
Reclassified from hedging reserve to
income statement
2
(24)
Line item income statement
Cost of sales
Sales
.
2024
Nominal amount hedged item
10
667
Carrying amount assets
1
6
Carrying amount liabilities
-
(41)
Line item balance sheet
Derivatives
Derivatives
Change in the value of the hedging
instrument
-
59
Costs of hedging recognized in OCI
-
63
Reclassified from hedging reserve to
income statement
(1)
4
Line item income statement
Cost of sales
Sales
Fair value of financial instruments
The fair value of derivatives and long-term instruments are based on calculations, quoted market prices or quotes
obtained from intermediaries.
The portfolio of derivatives consists of average-rate forward contracts that are valued against average foreign exchange
forward rates obtained from Bloomberg and other derivatives that are valued using a discounted cash flow model,
applicable market yield curves and foreign exchange spot rates. Inputs for the fair value calculations represent
observable market data that are obtained from external sources that are deemed to be independent and reliable.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
93
We use the following hierarchy for determining the fair value of financial instruments:
•
Level 1: quoted prices in active markets for identical assets or liabilities
•
Level 2: other techniques for which all inputs that have a significant effect on the fair value are observable, either
directly or indirectly
•
Level 3: techniques that use inputs that have a significant effect on the fair value that are not based on
observable market data
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value information for the financial assets and financial liabilities
measured at amortized cost if the carrying amount is a reasonable approximation of the fair value.
Fair value of financial instruments
Carrying amount
Fair Value
Amort.
Cost
Fair value
hedging
instr.
FVTPL
FVOCI
Total
Level 1
Level 2
Level 3
Total
Assets 2023
Non-current derivatives
-
2
44
-
46
-
46
-
46
Other participating interests
-
-
-
139
139
38
78
23
139
Non-current loans to associates
and JVs
4
-
-
-
4
Other non-current receivables
63
-
-
-
63
Trade receivables
1,535
-
-
-
1,535
Other current receivables
286
-
-
-
286
Current derivatives
-
35
-
-
35
-
35
-
35
Financial investments
101
-
-
-
101
Cash and cash equivalents
1,250
-
931
-
2,181
931
-
-
931
Liabilities 2023
Non-current borrowings
(2,487)
-
-
-
(2,487)
(2,065)
-
-
(2,065)
Non-current derivatives
-
(3)
-
-
(3)
-
(3)
-
(3)
Other non-current liabilities
(85)
-
(45)
-
(130)
-
-
(45)
(45)
Current borrowings
(631)
-
-
-
(631)
(498)
-
-
(498)
Current derivatives
-
(28)
-
-
(28)
-
(28)
-
(28)
Trade payables
(1,364)
-
-
-
(1,364)
Other current liabilities
(1,179)
-
-
-
(1,179)
.
Assets 2024
Non-current derivatives
-
1
49
-
50
-
50
-
50
Other participating interests
-
-
-
119
119
2
93
24
119
Non-current loans to associates
and JVs
46
-
-
-
46
-
Other non-current receivables
87
-
-
-
87
-
Trade receivables
1,565
-
-
-
1,565
-
Other current receivables
144
-
-
-
144
-
Current derivatives
-
42
-
-
42
-
42
-
42
Financial investments
20
-
-
-
20
Cash and cash equivalents
1,965
-
504
-
2,469
504
-
-
504
Liabilities 2024
Non-current borrowings
(3,085)
-
-
-
(3,085)
(2,436)
-
-
(2,436)
Non-current derivatives
-
(1)
-
-
(1)
-
5
(6)
(1)
Other non-current liabilities
(85)
-
(10)
-
(95)
-
-
(10)
(10)
Current borrowings
(672)
-
-
-
(672)
(493)
-
-
(493)
Current derivatives
-
(54)
-
-
(54)
-
(54)
-
(54)
Trade payables
(1,460)
-
-
-
(1,460)
Other current liabilities
(1,389)
-
-
-
(1,389)
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
94
24 Employee benefits
Accounting policy
Short-term employee benefits
Short-term employee benefits are generally recognized as an expense in the period the employee renders services to
DSM.
Post-employment benefits: Defined contribution plans
For DSM’s defined contribution plans, the obligations are limited to the payment of contributions, which are recognized
as employee benefit costs.
Post-employment benefits: Defined benefit plans
For defined benefit plans, the aggregate of the value of the defined benefit obligation and the fair value of plan assets for
each plan is recognized as a net defined benefit liability or asset. Defined benefit obligations are determined using the
projected unit credit method. Plan assets are recognized at fair value. If the fair value of plan assets exceeds the present
value of the defined benefit obligation, a net asset is only recognized to the extent that the asset is available for refunds
to the employer or for reductions in future contributions to the plan. Defined benefit pension costs consist of three
elements: service costs, net interest, and remeasurements. Service costs are part of employee benefit costs and consist
of current service costs. Past service costs and results of plan settlements are included in Other operating income or
expenses. Net interest is part of Finance income and expenses and is determined on the basis of the value of the net
defined benefit asset or liability at the start of the year, and on the interest on high-quality corporate bonds.
Remeasurements are actuarial gains and losses, the return (or interest cost) on net plan assets (or liabilities) excluding
amounts included in net interest and changes in the effect of the asset ceiling. These remeasurements are recognized in
Other comprehensive income as they occur and are not recycled through profit or loss at a later stage.
Post-employment defined benefit plans include pension plans and other post-employment benefits
Other employee benefits
The service cost, the net interest on the net defined liability (asset) and remeasurements of the net defined liability
(asset) related to other long-term employee benefits, such as jubilee and incentive plans, are recognized in profit or loss.
Estimates and judgments
Management makes assumptions regarding variables such as discount rate, future salary increases, life expectancy, and
future healthcare costs. Management consults with external actuaries regarding these assumptions at least annually for
significant plans. Changes in these key assumptions can have a significant impact on the projected defined benefit
obligations, funding requirements and periodic costs incurred.
The Employee benefit liabilities of €274million (2023: €291 million) consist of €247 million related to pensions (2023:
€249 million), €3 million related to other post-employment benefits (2023: €20 million) and €23 million related to other
employee benefits (2023: €22 million). See also the table below.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
95
2024
2023
Employee benefit liabilities
Pension plans and other post-employment benefits
251
269
Other employee benefits
23
22
Total
274
291
Of which current
3
2
The Group operates a number of defined benefit plans and defined contribution plans throughout the world, the assets
of which are generally held in separately administered funds. The pension plans are generally funded by payments from
employees and from the relevant Group companies. The Group also provides certain additional healthcare benefits to
retired employees in the US and Switzerland.
Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits)
that are payable after the completion of employment. Post-employment benefit accounting is intended to reflect the
recognition of post-employment benefits over the employee’s approximate service period, based on the terms of the
plans and the investment and funding.
The charges for post-employment benefit costs recognized in the income statement (Note 5 Net sales and costs) relate
to the following.
Post-employment benefit costs
2024
2023
Defined benefit plans:
- Current service costs pension plans
36
30
- Other post-employment benefits
1
3
Defined contribution plans
61
63
Total pension costs included in employee benefit costs
98
96
- Pension costs included in Other operating (income) / expense
-
(1)
Total in operating profit, continuing operations
98
95
Pension costs included in Financial income and expense
7
7
Total continuing operations
105
102
Discontinued operations
-
4
Total
105
106
Of which:
- Defined contribution plans
61
65
- Defined benefit plans
44
41
For 2025, costs for the defined benefit plans relating to pensions are expected to be €45 million.
Changes in net liabilities of the post-employment benefits recognized in the balance sheet are shown in the following
overview.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
96
Funded and
unfunded
defined
benefit
obligations
Fair value of plan
assets
Impact of
minimum
funding
requirement/
asset ceiling
Net liabilities/
(assets)
recognized in
the
balance sheet
Balance at 1 January 2023
1,708
(1,593)
129
244
Included in income statement:
- Current service cost
35
-
-
35
- Interest expense / (income)
49
(45)
3
7
Total included in income statement
84
(45)
3
42
Included in other comprehensive income:
- Loss / (gain) from change in demographic assumptions
(3)
-
-
(3)
- Loss / (gain) from change in financial assumptions
112
-
-
112
- Experience loss / (gain)
26
-
-
26
- Return on plan assets excluding interest income
-
(43)
-
(43)
- Asset ceiling change, excluding movement through income statement
-
-
(58)
(58)
Total included in other comprehensive income
135
(43)
(58)
34
Other
- Benefits paid (including transfers in and out)
(90)
67
-
(23)
- Contributions by plan participants
20
(20)
-
-
- Employer contributions
-
(46)
-
(46)
- Settlements
(190)
186
-
(4)
- Balance sheet transfer
4
-
-
4
- Acquisition / disposals
3
-
-
3
- Currency translation adjustment and other
79
(84)
5
-
Total other
(174)
103
5
(66)
Balance at 31 December 2023
1,753
(1,578)
79
254
.
Net defined benefit assets
(15)
Net defined benefit liabilities
269
Total
254
.
- Current service cost
36
-
-
36
- Plan administration expenses
1
-
-
1
- Interest (expense) / income
31
(25)
1
7
Total included in income statement
68
(25)
1
44
Included in other comprehensive income:
- Loss / (gain) from change in financial assumptions
25
-
-
25
- Experience loss / (gain)
44
-
-
44
- Return on plan assets excluding interest income
-
(73)
-
(73)
- Asset ceiling change, excluding movement through income statement
-
-
(1)
(1)
- Other changes
-
(2)
-
(2)
Total included in other comprehensive income
69
(75)
(1)
(7)
Other
- Benefits paid (including transfers in and out)
(80)
63
-
(17)
- Contributions by plan participants
21
(21)
-
-
- Employer contributions
-
(45)
-
(45)
- Currency translation adjustment and other
(13)
16
(1)
2
Total other
(72)
13
(1)
(60)
.
Balance at 31 December 2024
1,818
(1,665)
78
231
.
Net defined benefit assets
(20)
Net defined benefit liabilities
251
Total
231
The fair value of the plan assets consists of 93% of quoted assets (2023: 93%).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
97
Pension-plan assets by category
2024
2023
Equities
500
445
Bonds
590
606
Property
384
362
Insurance policies
3
2
Other
140
140
Cash and bank deposits
48
22
Total plan assets
1,665
1,577
The pension-plan assets include neither ordinary DSM shares nor property occupied by DSM.
The countries with the most significant defined benefit obligations for DSM are specified in the following table.
Defined benefit plans in core countries
Switzerland
United
States of
America
United
Kingdom
Germany
Other
countries
Total
Defined benefit plans 2023
Funded and unfunded defined benefit
obligations
1,320
9
164
244
16
1,753
Fair value of plan assets
(1,407)
(6)
(154)
(11)
-
(1,578)
Net excess of liabilities/(assets) over
obligations
(87)
3
10
233
16
175
Unrecognized assets due to asset ceiling
79
-
-
-
-
79
Net excess of liabilities/(assets) over
obligations recognized
(8)
3
10
233
16
254
.
Composed of
Net defined benefit assets
(9)
(6)
-
-
-
(15)
Net defined benefit liabilities
1
9
10
233
16
269
Total changes
(8)
3
10
233
16
254
.
Defined benefit plans 2024
Funded and unfunded defined benefit
obligations
1,410
9
151
231
17
1,818
Fair value of plan assets
(1,500)
(8)
(145)
(12)
-
(1,665)
Net excess of liabilities/(assets) over
obligations
(90)
1
6
219
17
153
Unrecognized assets due to asset ceiling
78
-
-
-
-
78
Net excess of liabilities/(assets) over
obligations recognized
(12)
1
6
219
17
231
.
Composed of
Net defined benefit assets
(12)
(8)
-
-
-
(20)
Net defined benefit liabilities
-
9
6
219
17
251
Total changes
(12)
1
6
219
17
231
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
98
The main actuarial assumptions for the year (weighted averages) are:
Actuarial assumptions for major plans
Switzerland
United States of
America
United Kingdom
Germany
2023
Discount rate
1.30%
5.00%
4.50%
3.20%
Salary increase
2.25%
3.00%
0.00%
2.80%
Pension increase
0.00%
0.00%
3.00%
2.20%
.
2024
Discount rate
0.90%
5.50%
5.50%
3.40%
Salary increase
2.25%
3.00%
0.00%
2.60%
Pension increase
0.00%
0.00%
3.05%
2.00%
The above-mentioned actuarial assumptions are harmonized for all defined benefit plans in a country.
Sensitivities of significant actuarial assumptions
The discount rate, the future increase in wages and salaries and the pension increase rate were identified as significant
actuarial assumptions. The following impacts on the defined benefit obligation are to be expected.
•
A 0.25% increase/decrease in the discount rate would lead to a decrease/increase of 3.1% (2023: 2.6%) in the
defined benefit obligation
•
A 0.25% increase/decrease in the expected increase in salaries/wages would lead to an increase/decrease of
0.3% (2023: 0.3%) in the defined benefit obligation
•
A 0.25% increase/decrease in the expected rate of pension increase would lead to an increase/decrease of less
than 1.4% (2023: 1.4%) in the defined benefit obligation
The sensitivity analysis is based on realistically possible changes as at the end of the reporting year. Each change in a
significant actuarial assumption was analyzed separately as part of the test. Interdependencies were not taken into
account.
Main defined benefit plans description
The DSM Group companies have various pension plans, which are geared to the local regulations and practices in the
countries in which they operate. As these plans are designed to comply with the statutory framework, tax legislation,
local customs, and economic situation of the countries concerned, it follows that the nature of the plans varies from
country to country. The plans are based on local legal and contractual obligations.
DSM‘s current policy is to offer defined contribution retirement benefit plans to new employees wherever possible.
However, DSM still has a (small) number of defined benefit pension and healthcare schemes from the past or in countries
where legislation does not allow us to offer a defined contribution scheme. Generally, these schemes have been funded
through external trusts or foundations, where DSM faces the potential risk of funding shortfalls.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
99
The most significant defined benefit schemes are:
•
DSM Nutritional Products (DNP) AG Pension Plan in Switzerland (DNP AG)
•
DSM UK Pension Scheme in the UK
•
Pension Plan at DSM Nutritional Products GmbH in Germany (DNP GmbH)
For each plan, the following characteristics are relevant:
DNP AG Pension Plan in Switzerland
The DNP AG Pension Plan is a typical Swiss Cash Balance plan. For accounting purposes, this plan is qualified as a defined
benefit plan. It is a contribution-based plan, with no promise of indexation for on-going pensions. The Swiss state minimal
requirements for occupational benefit plans have however to be respected.
The purpose of the plan is to protect the (legacy) DSM employees against the economic consequences of retirement,
disability and death. The employer and employees pay contributions to the pension plan at rates set out in the pension
plans rules based on a percentage of salary. The amount of the retirement account can be taken by the employee at
retirement in the form of pension or capital.
The weighted average duration of the defined benefit obligation is 13.9 years (2023: 13.5 years) which could be seen as an
indication of the maturity profile of the scheme.
According to the Swiss Federal Law on Occupational Retirement, Survivors and Disability (LPP/BVG), the Swiss Pension
plans are managed by independent and legally autonomous entities which have the legal structure of foundation. The
Pension Board is composed of equal numbers of employee and employer representatives. Each year, the Pension Board
decides the level of interest, if any, to apply to the retirement accounts in accordance with the pension policy.
The Pension Board is also responsible for the investment of the assets and defining the investment strategy for long-term
returns with an acceptable level of risk. The plan assets are collectively invested (no individual investment choice).
DSM UK Pension Scheme
The DSM UK Pension Scheme was closed as of 30 September 2016 for all pension accruals. An unconditional indexation
policy is applicable for the vested pension rights.
The weighted average duration of the defined benefit obligation is 12.9 years (2023: 13.9 years), which could be seen as an
indication of the maturity profile of the scheme.
The pension plan is managed and controlled by a DSM company pension fund. The Board of Trustees consists of
representatives of the employer and the employees who have an independent role.
There is a long-term de-risking strategy for the DSM UK Pension Scheme in place with the objective to align the
company’s intentions and the Trustees responsibility with respect to this plan.
DNP GmbH Pension Plan in Germany
The DNP GmbH Pension Plan in Germany has been closed to new entrants as of 31 December 2008. The accrual is still
applicable for employees who have been participating in the plan since 2008. The pension plan is a final-pay pension
plan (averaged over the last 12 months prior to retirement) and service-related benefit.
The liability is on the balance sheet of DSM Nutritional Products GmbH. No assets are allocated to this liability. All
reimbursements will be paid out by the local company.
The weighted average duration of the defined benefit obligation is 11.4 years (2023: 12.0 years), which could be seen as an
indication of the maturity profile of the scheme.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
100
Other employee benefits
Other employee benefits comprise jubilees, long-term incentive (LTI) plans to senior management and deferred
compensation liabilities. The changes in other employee benefits are listed below.
Other employee benefits
Balance at 1 January 2023
29
Of which current
5
Changes:
- Additions
2
- Releases
(2)
- Uses
(7)
- Other change
-
Total changes
(7)
Balance at 31 December 2023
22
Of which current
2
.
Changes:
- Additions
5
- Uses
(3)
- Other change
-
Total changes
2
Balance at 31 December 2024
24
Of which current
2
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
101
25 Net debt
The development of the components of net debt is as follows.
Cash and
cash
equivalents
Current
investments
Non-
current
borrowings
Current
borrowings
Derivatives
Total
Balance at 1 January 2023
2,755
125
(2,978)
(86)
97
(87)
Change from operating activities
576
-
-
-
(51)
525
Change from investing activities
2,711
(24)
-
(13)
-
2,674
Reclassification from non-current to
current
-
-
544
(544)
-
-
Transfers
(73)
-
57
12
4
-
Dividend to shareholders on AEX
(3,935)
-
-
-
- (3,935)
Interest
(14)
-
(2)
-
-
(16)
Proceeds from reissued shares
8
-
-
-
-
8
New/unwinding leases
-
-
(108)
-
-
(108)
Repurchase of shares
(256)
-
-
-
-
(256)
Funding cash pool¹
425
-
-
-
-
425
Other
(7)
-
-
-
-
(7)
Change from financing activities
(3,852)
-
491
(532)
4 (3,889)
Exchange differences
(9)
-
-
-
-
(9)
Total changes
(574)
(24)
491
(545)
(47)
(699)
Balance at 31 December 2023
2,181
101
(2,487)
(631)
50
(786)
.
Change from operating activities
801
-
-
-
(13)
788
Change from investing activities
(423)
(83)
(151)
(38)
-
(695)
Reclassification from non-current to
current
-
-
575
(575)
-
-
Transfers
232
-
(808)
576
-
-
Dividend to shareholders
(673)
-
-
-
-
(673)
Interest
(28)
-
(12)
-
-
(40)
New leases and remeasurements
-
-
(132)
-
-
(132)
Funding cash pool¹
362
-
(70)
-
-
292
Other
(1)
-
-
-
-
(1)
Change from financing activities
(108)
-
(447)
1
-
(554)
Exchange differences
18
2
(4)
16
Total changes
288
(81)
(598)
(41)
(13)
(445)
Balance at 31 December 2024
2,469
20
(3,085)
(672)
37
(1,231)
1
For the explanation of change related to Funding cash pool, see Note 26 Notes to the cash flow statement.
In 2024, the gearing (net debt / equity plus net debt) was 13.2% (in 2023: 8.1%).
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
102
26 Notes to the cash flow statement
The cash flow statement explains the changes in cash and cash equivalents. It is prepared via a comparison of the
balance sheets at 1 January and 31 December. Changes that do not involve cash flows, such as changes in exchange rates,
amortization, depreciation, impairment losses, and transfers to other balance sheet items, are eliminated.
Changes in working capital due to the acquisition or disposal of consolidated companies are included under Investing
activities.
The consolidated cash flow statement includes an analysis of all cash flows in total, including continuing and
discontinued operations. For amounts related to discontinued operations split by activities and a reconciliation of results
from continuing operations to total, see Note 3 Change in the scope of the consolidation.
Most of the changes in the cash flow statement can be traced back to the detailed statements of changes for the
balance sheet items concerned.
The cash flow relating to acquisitions (-€5 million) is limited in 2024. The disposal of businesses of €29 million consists
of the cash-related part of the consideration (€93 million) minus the cash in the divested companies (€13 million) and
the divestment-related costs and tax settlements (€51 million). See also. See also Note 3 Change in the scope of the
consolidation.
Funding Cash pool
Funding cash pool relates to Group cash management facility within the dsm-firmenich Group. Cash balances of the
dsm-firmenich Group are pooled and transferred to a centralized treasury function within DSM to the extent legally and
fiscally possible. Cash balances of dsm-firmenich subsidiaries are swept daily to bank accounts centrally held by DSM
Finance B.V., to the extent legally possible, which as such result in a receivable balance on or payable balance to DSM
Finance B.V.
27 Share-based compensation
Accounting policy
Share-based compensation at DSM consists of the granting of Performance Share Units (PSUs) and Restricted Share
Units (RSUs), and stock option plans to eligible employees.
PSUs and RSUs generally vest after three years on the achievement of predefined vesting conditions. The cost of PSUs
and RSUs is measured by reference to the fair value of the DSM-Firmenich AG and former Koninklijke DSM N.V. shares on
the date on which the PSUs and RSUs were granted or modified. The cost is recognized in profit or loss (Employee benefit
costs) during the vesting period, together with a corresponding increase in equity. The transaction is classified as an
equity-settled transaction because DSM has no obligation to settle the transaction with its eligible employees. The
obligation to settle was transferred to DSM-Firmenich AG (the parent and issuing entity) following the swap of shares
after the merger in 2023. Vesting conditions other than market conditions are considered by adjusting the number of
equity instruments, so that the amount recognized during the vesting period in employee benefit costs is based on the
number of share units that eventually vest.
Estimates and judgments
Key estimates related to share-based compensation costs for PSUs and RSUs are the estimation of fair values of the
shares on the grant or modification date, and the number of shares that will vest. An independent third party conducts
the fair value calculation as far as vesting is tied to market conditions, using the Monte Carlo method.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
103
Restricted- and Performance Share Unit Plan
The DSM and dsm-firmenich Restricted- and Performance Share Unit Plans provide rules for the grant of RSUs and/or
PSUs to eligible employees. Considering the plan rules that allow multiple grant dates, best practice is to effectuate the
grant of share units on the last trading day at the Amsterdam Stock Exchange in March. In principle PSUs will be granted;
RSUs may be granted in specific circumstances.
The number of share units to be granted is based on job level, contribution, and the face value of the dsm-firmenich
share over a reference period. As a result, the number of share units to be granted annually will fluctuate with the share
price development.
RSUs and PSUs are subject to a vesting period of 3 years starting at the grant date. Vesting of RSUs is subject to
continued employment until the vesting date (‘time vesting’). In addition, vesting of PSUs is also subject to the
achievement of predefined performance targets at the end of the performance period.
The 2024 grant of PSUs under the dsm-firmenich Restricted- and Performance Share Unit Plan to eligible employees is
based on the at-target level; in 2024 this concerned 161,243 (2023: 156,299) share units.
At DSM, grants to the eligible employees is based on the ‘at-target’ grant level. This ‘at-target’ grant level includes RSUs
as well as PSUs. The 2021 grant vested 31 March 2024. The vesting percentage for the Managing Board / Executive
Committee was 123.75% of the at target grant (or 82.5% of the maximum to vest i.e., the number initially granted). For
other eligible employees, all outstanding RSUs vested the vesting date, while the vesting % for the PSUs was 160% of the
at target grant. In total 87,703 share units of this series vested.
Overview of share units eligible employees from DSM
Year of grant Outstanding
at
31 Dec. 2023
In 2024
Outstanding
at
31 Dec. 2024
Share price
at date of
grant (€)
Expiry date
Granted
Vested¹
Forfeited/
expired
2021
70,093
18,010
(87,703)
(400)
-
144.30
31 Mar 2024
2022
75,479
763
(10,344)
(5,213)
60,685
162.50
31 Mar 2025
2023
151,709
434
(9,003)
(18,022)
125,118
97.67
31 Mar 2026
2024
-
161,243
(729)
(12,095)
148,419
106.32
28 Mar 2027
2024 Total
297,281
180,450
(107,779)
(35,730)
334,222
at
31 Dec. 2022
at
31 Dec. 2023
2023 Total
266,804
171,061
(134,346)
(6,238)
297,281
1
Restricted- and Performance Share Units may partly vest upon termination of employment in connection with, for example, divestments, retirement or
early retirement.
In September 2022, a group of senior key employees (excluding the Co-CEOs) at DSM received an RSU grant, which was
subject to completion of the merger between DSM and Firmenich. As the merger was completed, the RSUs were finally
granted. Upon vesting, the respective grant will be settled in cash. These cash-settled RSUs vest in September 2025 and
have a fair value on 31 December 2024 of €97.72 (2023: €92.00).
Overview of cash-settled RSUs
Year of grant Outstanding
at
31 Dec. 2023
In 2024
Outstanding
at
31 Dec. 2024
Share price
at date of
grant (€)
Expiry date
Granted
Vested
Forfeited/
expired
2022
84,784
(11,860)
(5,823)
67,101
117.45 30 Sep 2025
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
104
Measurement of fair value
The following assumptions were used to determine the fair value of the equity-settled share units at grant date.
Assumptions equity-settled share units
2024
2023
Share units granted to certain executives
Risk-free rate¹
2.53%
2.79%
Expected share life in years
3
3
Nominal share life in years
3
3
Share price in €¹
105.40
100.50
Expected dividend in €
2.50
1.00
Fair value of share granted in €
98.30
97.67
1
The differences in the risk-free rate and share price are due to different grant dates.
Share-based compensation
An amount of €29 million is included in the costs for wages and salaries for share-based compensation (2023: €23
million). The following table specifies the share-based compensation.
Share-based compensation
2024
2023
Equity-settled share units and stock options
25
18
Cash-settled share units
4
5
Total expense
29
23
28 Related parties
Accounting policy
DSM has identified its key management personnel, the other entities from the dsm-firmenich Group and its associates
and joint ventures as related parties. For associates and joint ventures, see also Note 10 Associates and joint
arrangements.
Key management personnel are those persons having authority and responsibility for planning, directing, and controlling
the activities of the entity, directly or indirectly, as defined by IAS 24 ‘Related Parties’. IAS 24 requires the disclosure of
the remuneration of key management personnel divided into: short-term employee benefits (salary and short-term
incentive), post-employment (pension expenditure) and other long-term benefits, termination benefits, and share-based
payment cost (share-based compensation)
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
105
Transactions with related parties
2024
2023
DSM-Firmenich AG (equity holder)
Sales to
2
17
Receivables from
3
51
Payables to
34
18
In-house cash receivables from
68
-
In-house cash payables to
-
691
Interest from
1
4
Other dsm-firmenich entities outside of the DSM B.V. Group
Sales to
169
62
Receivables from
68
46
Payables to
30
-
In-house cash receivables from
-
177
In-house cash payables to
870
-
Borrowings from
300
-
Associates and joint ventures
Sales to
19
8
Purchases from
108
96
Loans to
47
4
Receivables from
23
16
Payables to
14
3
Interest from
1
-
Commitments to
12
6
On 10 June 2024, DSM demerged its re-insurance company DSM Re Switzerland AG to its main shareholder DSM-
Firmenich AG. For further details on this transaction, see Note 3 Change in the scope of consolidation.
In 2024, DSM issued dividends to DSM-Firmenich AG for the amount of €673 million (2023: €278 million regular and
€3,500 million special dividend). This dividend distribution is excluding the deemed dividend of €282 million that was
posted following the in-substance demerger of DSM Re Switzerland AG and transfer of its shares to DSM B.V.'s parent
company DSM-Firmenich AG. See also Note 3 Change in the scope of consolidation.
DSM recharged to DSM-Firmenich AG €3 million (2023: €14 million) and to other related parties €83 million (2023: €33
million) of corporate service costs.
DSM may issue guarantees as credit enhancement of associates to acquire bank facilities for these associates. DSM has
provided guarantees to third parties for debts of associates for an amount of €21 million (2023: €28 million). Expected
credit losses for receivables from related parties amount to zero (same as 2023).
Other related-parties disclosures relate entirely to key management of DSM, being represented by the company’s
management. For further details about their remuneration, see below.
Key management personnel
The remuneration of key personnel concerns the Supervisory Board and the Managing Board DSM B.V. (and also the
Executive Committee until 18 April 2023). The members of the Supervisory Board as well as the members of the
Managing Board (and Executive Committee until 18 April 2023) of DSM B.V. did not receive any remuneration for that
assignment at DSM B.V. Included herein is the remuneration paid to them in view of other positions within the DSM Group.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
106
Remuneration expenses Supervisory Board, Managing Board, and Executive Committee of DSM awarded
to members of the Supervisory Board, Managing Board and Executive Committee of DSM appointed in
that capacity
in € thousand
2024
2023
Base salary / Supervisory Board fees
477
2,391
Employer pension contribution
95
471
Short-Term Incentive¹
267
869
Share-based compensation²
178
2,518
Other³
134
16,562
Total
1,151
22,811
1
Short-Term Incentive based on target level minus weight of EBITDA target.
2 Represents the expenses of Performance Share Units (PSUs) awarded according to IFRS rules. These costs are considered over the vesting period and
therefore cover several years.
3 Includes benefits, severance payments for Executive Committee members that left the Company because of the merger, special payments as included
in the Offering Circular (issued 22 November 2022) related to the merger, settlement DSM STI Deferral and Matching Plan, social security contributions
and obligations following Article 32bb of the Dutch Wage Tax Act (1964).
29 Service fees paid to external auditors
The service fees recognized in the financial statements 2024 for the services of KPMG amounted to €6.7 million (2023:
€6.4 million). The amounts per service category are shown in the following table.
Total service fee
Of which
KPMG
KPMG
KPMG NL
KPMG NL
2024
2023
2024
2023
Audit of the Group financial statements
5.7
5.5
4.1
3.7
Audit of other (statutory) financial statements
0.8
0.7
-
-
Other assurance services
0.1
0.1
0.1
0.1
Permitted non-assurance services
0.1
0.1
0.1
0.1
Total assurance services charged to DSM
6.7
6.4
4.3
3.9
The service fees mentioned in the table for the audit of the financial statements 2024 (2023) relate to the total fees for
the audit of the financial statements 2024 (2023), irrespective of whether the activities were performed during the
financial year 2024 (2023).
The other assurance services rendered by KPMG in 2024 mainly relate to a comfort letter and audits of capital reduction.
KPMG provided permitted non-assurance services related to regulatory filings and agreed-upon procedures.
30 Events after the balance sheet date
On 11 February 2025, dsm-firmenich announced the sale of its Feed Enzymes business to Novonesis, a global leader in
biosolutions, for €1.5 billion. At DSM, the feed enzymes business is currently part of the Animal Nutrition & Health
Business Unit, which itself will be separated from the Group to operate under new ownership, as announced in February
2024, and represented approximately €300 million in total annual net sales in 2024. DSM expects to receive
approximately €1.4 billion net in cash, after transaction costs and capital gains tax, and anticipates a book profit on the
transaction to be recognized upon closing. This transaction is expected to be completed in the course of 2025, subject
to customary conditions and regulatory approvals. The held-for-sale conditions are only met after the reporting date and
therefore do not impact the DSM's consolidated financial statements at year-end 2024.
Consolidated financial statements - Notes to the consolidated financial statements
DSM Integrated Annual Report 2024
107
On 25 February 2025, DSM successfully launched a €750 million bond with an 11-year maturity due in 2036, at a coupon
of 3.375%. The bond is issued by DSM B.V. and is guaranteed by DSM-Firmenich AG pursuant to the previously
established cross-guarantee structure (see also Note 9 Contingent liabilities to the parent company financial
statements). The proceeds of the new bond will be used for general corporate purposes, including the refinancing of
existing indebtedness.
The re-offer price for the 11-year bond tranche was 98.875%. Based on this price, the yield is 3.500%. The bonds are
listed on the Luxembourg Stock Exchange. As a consequence of the bond issuance the undrawn amount of €1.0 billion
bridge facility will be reduced to €250 million (see also Note 23 Financial instruments and risks).
On 3 April 2025, DSM expanded its investment in Yantai DSM Andre Pectin Company Limited (‘Andre Pectin’), increasing
its shareholding from 75% to 90.5%.
DSM Integrated Annual Report 2024
108
Parent company financial
statements
Balance sheet of DSM B.V. at 31 December before profit appropriation
x € million
Notes
2024
2023
Assets
Intangible assets
2
468
469
Financial assets
3
12,112
13,110
Deferred tax assets
4
67
53
Other deferred items
4
2
Non-current assets
12,651
13,634
Receivables
5
116
81
Cash and cash equivalents
-
-
Current assets
116
81
Total
12,767
13,715
.
Shareholders' equity and liabilities
Share capital
6
261
261
Share premium
6
469
469
Treasury shares
6
-
-
Legal reserves1
6
888
746
Other reserves, incl. retained earnings
6
6,384
5,020
Undistributed results:
6
- Net profit for the year
6
(43)
2,318
Shareholders' equity
6
7,959
8,814
Borrowings
7
2,540
2,243
Other non-current liabilities
7
8
Non-current liabilities
2,547
2,251
Current liabilities
Borrowings
7
500
500
Other current liabilities
8
1,761
2,150
Current liabilities
2,261
2,650
Total
12,767
13,715
1
2023 restated for comparison purposes
The accompanying notes are an integral part of these parent company financial statements.
Parent company financial statements
DSM Integrated Annual Report 2024
109
Income statement of DSM B.V.
x € million
Notes
2024
2023
Other income
1
2
1
Cost of outsourced work and other external costs
(8)
(1)
Wages and salaries
10
-
(4)
Other operating expense
-
(1)
Total operating expenses
(8)
(6)
Operating profit (loss)
(6)
(5)
Financial income
11
89
83
Financial expense
11
(262)
(229)
Profit (loss) before income tax
(179)
(151)
Income tax
4
49
44
Share of the profit (loss) of subsidiaries
3
87
2,425
Net profit (loss) available to equity holders of DSM B.V.
(43)
2,318
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
110
Notes to the parent company financial statements
1 General
Unless stated otherwise, all amounts are in € million.
Summary of the accounting policies
These separate financial statements have been prepared in accordance with Title 9, Book 2 of the Dutch Civil Code. The
accounting policies used are the same as those used in the consolidated EU-IFRS financial statements, in accordance
with the provisions of article 362-8 of Book 2 of the Dutch Civil Code.
In these separate financial statements, investments in subsidiaries are accounted for using the equity method. Results on
transactions involving the transfer of assets and liabilities between the Company and its participating interests and
mutually between participating interests themselves are eliminated to the extent that they can be considered as not
realized. For an appropriate interpretation of these statutory financial statements, the separate financial statements
should be read in conjunction with the consolidated financial statements.
To the extent that there is no legal or constructive obligation, participating interests with a negative equity value are
valued at nil. This measurement also considers any receivables provided to the participating interests that are, in
substance, an extension of the net investment. In particular, this relates to loans for which settlement is neither planned
nor likely to occur in the foreseeable future. A share in the profits of the participating interest in subsequent years will
only be recognized if and to the extent that the cumulative unrecognized share of loss has been absorbed. If the
Company fully or partially guarantees the debts of the relevant participating interest, or if has the constructive obligation
to enable the participating interest to pay its debts (for its share therein), then a provision is recognized accordingly to
the amount of the estimated payments by the Company on behalf of the participating interest.
Information on the use of financial instruments and on related risks for the group is provided in Note 23 Financial
instruments and risks to the consolidated financial statements. The Company makes use of the option to eliminate
intragroup expected credit losses against the book value of loans and receivables from the Company to participating
interests, instead of elimination against the equity value / net asset value of the participating interests.
Statutory and fiscal seat
The statutory seat of DSM B.V. is Maastricht (Netherlands). A list of DSM B.V.’s participations has been filed with the
Chamber of Commerce (Netherlands) and is available from the company upon request. DSM is registered in the Dutch
Commercial Register under number 14022069.
The company forms a fiscal unity for corporate income tax and VAT purposes together with the group companies in the
Netherlands. Each of the companies recognizes the portion of corporate income tax that the relevant company would
owe as an independent tax payer, taking into account tax liabilities applicable to the company, as well as the tax position
of the fiscal unity.
2 Intangible assets
The carrying amount of intangible assets comprises goodwill on the acquisition of the Erber Group in 2020 (€423
million), Pentapharm in 2007 (€35 million) and Crina in 2006 (€10 million). For full information on these assets including
the discussion of the related impairment tests, see Note 8 Goodwill and intangible assets to the consolidated financial
statements.
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
111
Intangible assets
Total
Balance at 1 January 2023
Cost
471
Amortization and impairment losses
5
Carrying amount
466
Changes in carrying amount:
- Exchange rate difference
3
Balance at 31 December 2023
Cost
475
Amortization and impairment losses
6
Carrying amount
469
Changes in carrying amount:
- Exchange rate difference
(1)
Balance at 31 December 2024
Cost
474
Amortization and impairment losses
6
Carrying amount
468
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
112
3 Financial assets
Share in
Subsidiaries
Other
participating
interests
Total
Balance at 1 January 2023
15,627
7
15,634
Changes:
- Share in profit
2,425
-
2,425
- Capital payments
1,089
-
1,089
- Dividend received
(5,540)
-
(5,540)
- Disposal of subsidiaries
(411)
-
(411)
- Net actuarial gains/(losses)
(25)
-
(25)
- Change in Fair value reserve
(34)
(8)
(42)
- Change in Hedging reserve
26
-
26
- Exchange differences
(87)
-
(87)
- Transfer
-
44
44
- Other
(3)
-
(3)
Balance at 31 December 2023
13,067
43
13,110
.
Changes:
- Share in profit
87
-
87
- Capital payments
331
52
383
- Capital refunds
(251)
-
(251)
- Dividend received
(1,001)
-
(1,001)
- Deemed dividend
(282)
-
(282)
- Disposal of business
-
(61)
(61)
- Net actuarial gains/(losses)
4
-
4
- Change in Fair value reserve
7
(28)
(21)
- Change in Hedging reserve
(22)
-
(22)
- Exchange differences
165
1
166
Balance at 31 December 2024
12,105
7
12,112
The deemed dividend relates to the de-merger of captive insurances. See also Note 3 Change in the scope of
consolidation of the consolidated financial statement.
The exchange differences in 2024 include the balance of the translation reserve that was released due to the demerger
of the captive insurance entity to DSM-Firmenich AG.
A list of DSM participations can be downloaded from the company website.
4 Deferred tax assets and income tax
The deferred tax asset of €67 million (2023: €53 million) relates to net operating losses and temporary differences in the
Dutch fiscal unity. The effective tax rate in 2024 was 27% (2023: 29%).
The variation in the effective tax rate arises due to changes in the result in combination with among others changes in tax
exempt income, tax positions and non-deductible expenses.
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
113
5 Receivables
2024
2023
Receivables from subsidiaries
103
75
Other receivables
13
6
Total
116
81
The carrying values of the receivables are a reasonable approximation of their respective fair values, given the short
maturities of the positions and the fact that allowances for doubtful debts have been recognized, if necessary. All
receivables have an estimated maturity shorter than one year.
The Receivables from subsidiaries of €103 million (2023: €75 million) mainly include receivables relating to the Dutch
fiscal unity. Other receivables amounting to €13 million (2023: €6 million) mainly consist of VAT and other tax receivables.
6 Shareholders’ equity
x € million
Share
capital
Share
prem.
Treas.
shares
Legal reserves
Other reserves
Undistributed
results
Total
share-
holder
equity
Trans-
lation
reserve
Capital
dev.
costs
Part.
inte-
rest
Reval.
reserve
Hedg.
reserve
Fair
value
reserve
Share-
based
comp.
Ret.
Earn.
Balance at 31
December 2022
328
471
(196)
424
256
182
-
(33)
(72)
44
7,802
1,537
10,743
Added to other
reserves
-
-
-
-
-
-
-
-
-
-
1,537
(1,537)
-
Net profit
-
-
-
-
-
-
-
-
-
-
-
2,318
2,318
Dividend
-
-
-
-
-
-
-
-
-
-
(3,935)
-
(3,935)
Reissued shares
-
-
63
-
-
-
-
-
-
-
(39)
-
24
Repurchase of
shares
-
-
(256)
-
-
-
-
-
-
-
-
-
(256)
Cancellation of
shares
(67)
(2)
345
-
-
-
-
-
-
-
(276)
-
-
Fair value changes
of derivatives
-
-
-
-
-
-
-
27
-
-
-
-
27
Release to income
statement
-
-
-
6
-
-
-
-
-
-
-
-
6
Fair value changes
of other financial
assets
-
-
-
-
-
-
-
-
(37)
-
-
-
(37)
Exchange
differences
-
-
-
(102)
-
-
-
-
-
-
(1)
-
(103)
Options and
performance shares
granted
-
-
-
-
-
-
-
-
-
23
-
-
23
Options and
performance shares
exercised/canceled
-
-
-
-
-
-
-
-
-
(23)
23
-
-
Transfer to other
participating
interests
-
-
44
-
-
-
-
-
-
-
-
-
44
Transfer to retained
earnings¹
-
-
-
-
(17)
5
-
-
(5)
-
17
-
-
Changes in joint
ventures and
associates
-
-
-
-
-
-
-
-
-
-
(9)
-
(9)
Income tax
-
-
-
(1)
-
-
-
(1)
-
-
9
-
7
Remeasurements of
defined benefit
pension plans
-
-
-
-
-
-
-
-
-
-
(34)
-
(34)
Other
-
-
-
-
-
-
-
-
-
-
(4)
-
(4)
Balance at 31
December 2023
261
469
-
327
239
187
-
(7)
(114)
44
5,090
2,318
8,814
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
114
1
2023 Legal reserves participating interests restated for comparison purposes
For details see the consolidated statement of changes in Note 16 Equity to the consolidated financial statements.
Legal reserves
In Shareholders’ equity, a total amount of €888 million (2023: €746 million) is included for legal reserves required by
Dutch law. The translation reserve relates to exchange gains and losses arising from the translation of the functional
currency of foreign operations to the reporting currency of DSM B.V. Further, a legal reserve is recorded for capitalized
development costs. The legal reserve for participating interests is recorded to the extent that there are limitations for
DSM B.V. to arrange profit distributions from its participating interests. The hedging reserve relates to cash flow hedge
accounting. The negative hedge reserve of -€29 million (2023: -€7 million) as part of the legal reserve should be
deducted from the freely distributable reserve. In addition, a revaluation reserve has been included for fair value changes
of unquoted equity instruments of participating interests with no frequent notations owned by DSM; debit balances are
recorded as part of Other reserves, which are considered freely distributable reserves.
Other reserves
The Other reserves comprise a Fair value reserve for fair value changes of unquoted equity instruments of participating
interests with frequent notations, debit balances of the legal reserve for fair value changes of unquoted equity
instruments of participating interests owned by DSM, and a Reserve for share-based compensation.
In the ‘Consolidated financial statements’, the Other reserves consist of the Translation reserve, Fair value reserve,
Hedging reserve and Reserve for share-based compensation. See Note 16 Equity to the consolidated financial
statements.
.
Added to other
reserves
-
-
-
-
-
-
-
-
-
-
2,318
(2,318)
-
Net profit
-
-
-
-
-
-
-
-
-
-
-
(43)
(43)
Dividend
-
-
-
-
-
-
-
-
-
-
(673)
-
(673)
Deemed dividend
-
-
-
-
-
-
-
-
-
-
(282)
-
(282)
Fair value changes
of derivatives
-
-
-
-
-
-
-
(28)
-
-
-
-
(28)
Release to income
statement
-
-
-
10
-
-
-
-
-
-
-
-
10
Fair value changes
of other financial
assets
-
-
-
-
-
-
-
-
(20)
-
-
-
(20)
Exchange
differences
-
-
-
158
-
-
-
-
-
-
-
-
158
Options and
performance shares
granted
-
-
-
-
-
-
-
-
-
31
-
-
31
Options and
performance shares
exercised/canceled
-
-
-
-
-
-
-
-
-
(27)
27
-
-
Transfer to retained
earnings
-
-
-
110
(27)
(87)
-
-
81
-
(77)
-
-
Changes in joint
ventures and
associates
-
-
-
-
-
-
-
-
-
-
(19)
-
(19)
Income tax
-
-
-
-
-
-
-
6
-
-
(3)
-
3
Remeasurements of
defined benefit
pension plans
-
-
-
-
-
-
-
-
-
-
7
-
7
Other
-
-
-
-
-
-
-
-
-
-
1
-
1
Balance at 31
December 2024
261
469
-
605
212
100
-
(29)
(53)
48
6,389
(43)
7,959
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
115
Profit appropriation
According to article 23 of the Articles of Association of DSM B.V. and with the approval of the Supervisory Board, every
year the Managing Board determines the portion of the net profit to be appropriated to the reserves. For the year 2024,
the net loss is €43 million (2023: €2,318 million profit). The amount of €354 million will be withdrawn from the reserves
(in 2023, €1,645 million was appropriated to the reserves).
The remaining undistributed amount of €311 million (2023: €673 million after distribution of dividends on the Cumulative
Preference Shares A) will be put at the disposal of the Annual General Meeting of Shareholders in accordance with the
provisions of Article 32, section 5 of the Articles of Association.
No interim dividend for the year 2024 was paid.
If the Annual General Meeting of Shareholders decides in accordance with the proposal, the net result will be
appropriated as follows.
Profit appropriation
in € million
2024
2023
Net profit (loss) for the year
(43)
2,318
Profit appropriation:
- To be added to (withdrawn from) the reserves
(354)
1,645
- Final dividend distributable on ordinary shares
311
673
7 Borrowings
2024
2023
Total
Of which current
Total
Of which current
Bonds
3,040
500
2,743
500
Total
3,040
500
2,743
500
At 31 December 2024, there were five bonds (€3,040 million, maturing in 2025, 2026, 2028 and from 2032 through
2034). The repayment schedule for borrowings is as follows.
Borrowings by maturity
2024
2023
Less than one year
500
500
One to two years
750
500
Two to three years
-
749
Three to four years
499
-
Four to five years
-
498
More than five years
1,291
496
Total
3,040
2,743
In agreements governing loans with a residual amount at year-end 2024 of €3,040 million (31 December 2023: €2,743
million), clauses have been included which restrict the provision of security. More information on borrowings is provided
in Note 19 Borrowings to the consolidated financial statements.
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
116
8 Other current liabilities
2024
2023
Liabilities to subsidiaries
1,701
2,109
Other liabilities
60
41
Total
1,761
2,150
The Liabilities to subsidiaries concern mainly the current account toward the DSM internal financing company. These
liabilities carry a short-term maturity and are interest-bearing. The decrease of this current account in 2024 is mainly
caused by changing financing needs.
The carrying values of the recorded liabilities are a reasonable approximation of their respective fair values, given the
short maturities of the positions. All liabilities have an estimated maturity shorter than one year.
9 Contingent liabilities
Guarantee obligations on behalf of affiliated companies and third parties amounted to €533 million (31 December 2023:
€569 million). DSM B.V. has declared in writing that it accepts several liabilities for debts arising from acts in law of a
number of consolidated companies (including relating to the Dutch fiscal unity for income tax and VAT). These debts are
included in the consolidated balance sheet.
In 2024, DSM B.V., DSM-Firmenich AG and Firmenich International SA signed a cross-guarantee agreement to mitigate
structural subordination in the Group. The cross-guarantee agreement includes downstream guarantees from DSM-
Firmenich AG to DSM B.V. and Firmenich International SA. In addition, there are also upstream guarantees from these two
subsidiaries to DSM-Firmenich AG. The guarantees are irrevocable and unconditional and cover existing and future senior
unsecured debt instruments across these entities, including the existing senior unsecured bonds throughout the dsm-
firmenich group.
Under this cross-guarantee agreement, DSM-Firmenich AG acts as guarantor for the €800 million bond issued on 2 July
2024 by DSM B.V., and for the credit facilities concluded in 2024 by DSM B.V. comprising the €1.8 billion revolving credit
facility (RCF) and the €1.0 billion bridge facility.
10 Personnel
During the 2024 financial year there was no staff employed by DSM B.V. (2023: 2 employees).
11 Financial income and expense
Financial income of €89 million (2023: €83 million) consists of interest income on outstanding in-house cash balances;
financial expense of €262 million (2023: €229 million) mainly consists of the interest expense on debit in-house cash
balances (€200 million) and interest costs on bonds issued and the counterpart of the net investment hedge (€62
million). See also Note 19 Borrowings and Note 23 Financial instruments and risks to the consolidated financial
statements.
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
117
12 Remuneration of key personnel
Remuneration of members of the Supervisory Board and the Managing Board of DSM B.V. in 2024
For 2024, the remuneration of key personnel concerns the Supervisory Board and the Managing Board DSM B.V. The
members of the Supervisory Board as well as the members of the Managing Board DSM B.V. did not receive any
remuneration in 2024 for their position at DSM B.V. Included herein is the remuneration paid to them in view of other
positions within the dsm-firmenich group as far as not reported in the 2024 Integrated Annual Report of DSM-Firmenich
AG.
Remuneration of members of the Supervisory Board, Managing Board and Executive Committee in 2023
The remuneration policy for the Supervisory Board and the Managing Board as approved by the 2019 Annual General
Meeting of Royal DSM applied.
The remuneration awarded to members of the Supervisory Board and the Executive Committee (including the Managing
Board) of Royal DSM, insofar as their appointment in such capacity relates to the period from 1 January 2023 until 18 April
2023 concerns:
•
The remuneration of the members of the Supervisory Board of DSM who transferred to the Board of Directors of
DSM-Firmenich AG on 18 April 2023 (the remuneration awarded by DSM-Firmenich AG for the period after 18 April
2023 was reported by DSM-Firmenich AG)
•
The remuneration of the members of the Managing Board and Executive Committee of DSM who transferred to the
Executive Committee of DSM-Firmenich AG on 18 April 2023 (the remuneration awarded by DSM-Firmenich AG was
reported by DSM-Firmenich AG)
•
The remuneration for members of the Executive Committee of DSM who remained employed by DSM-Firmenich AG
in another capacity and who no longer met the criteria of key personnel as of 18 April 2023
Remuneration expenses incurred in financial year 2023 for members of the Supervisory Board or the Executive
Committee of DSM who were not appointed as a member of the Board of Directors or Executive Committee DSM-
Firmenich AG nor in another capacity and who left the organization after and due to the merger were considered.
No remuneration was awarded to members of the Supervisory Board and the Managing Board of DSM B.V. appointed in
that capacity for the period from 18 April 2023 to 31 December 2023.
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
118
Remuneration of members of the Supervisory Board and the Managing Board of DSM B.V. in 2024 and
2023
The below table provides an overview of the remuneration paid to members the Supervisory Board and the Managing
Board of DSM B.V. considering the above remarks.
Total remuneration expenses awarded to members of the Supervisory Board, Managing Board and Executive
Committee of DSM
In 1,000 €
2024
2023
Base salary/Supervisory Board fees
477
2,391
Pension contributions
95
471
Short-Term Incentive¹
267
869
Share-based compensation²
178
2,518
Other³
134
16,562
Total remuneration
1,151
22,811
Of which Managing Board remuneration
1,151
3,613
Of which Supervisory Board remuneration
-
243
1
For 2024: STI accrued in the reporting year based on performance in the reporting year, payable in 2025. For 2023: Short-Term Incentive (STI) based on
at-target level minus the weight of EBITDA target pro-rated for the period 1 January to 1 April 2023 or at target pay-out over the period of employment.
2 Represents the expenses according to IFRS rules of Restricted Share Units (RSUs) and/or Performance Share Units (PSUs) awarded in the respective
year. These costs are considered over the vesting period and therefore cover several years
3 Includes for 2023:
(i) Settlement of the STI Deferral and Matching scheme (€4.6m) and special bonus payments (€3.5 million) as included in the Offering Circular (issued
22 November 2022) related to the merger
(ii) Severance payments for ExCo members that left the Company because of the merger (€1.8 million); payments in lieu of notice (€1.3 million) and
obligations following Article 32bb of the Dutch Wage Tax Act (1964) (€2.2 million)
(iii) Social security contributions (€0.6 million) and contractual items related to International Assignment arrangements (€1.6 million)
(iv) Other (€1.0m)
Includes for 2024: Benefits, company car, special bonuses or allowances and social security contributions
Parent company financial statements - Notes to the parent company financial statements
DSM Integrated Annual Report 2024
119
Maastricht, 15 April 2025
Maastricht, 15 April 2025
Managing Board,
Supervisory Board,
Ralf Schmeitz, CFO
Thomas Leysen, Chair
Joris de Beer
John Ramsay, Deputy Chair
Ivo Nelissen
Corien Wortmann
DSM Integrated Annual Report 2024
120
OTHER INFORMATION
Profit appropriation
For the statutory rules of the profit appropriation, please refer to Note 6 to the parent company financial statements.
Other information - Independent auditor’s report
DSM Integrated Annual Report 2024
121
Independent auditor’s report
To: the General Meeting of Shareholders and the Supervisory Board of DSM B.V.
Report on the audit of the financial statements 2024 included in
the annual report
Our opinion
In our opinion:
•
the accompanying consolidated financial statements give a true and fair view of the financial position of DSM B.V.
as at 31 December 2024 and of its result and its cash flows for the year then ended, in accordance with IFRS
Accounting Standards as endorsed by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil
Code.
•
the accompanying parent company financial statements give a true and fair view of the financial position of DSM
B.V. as at 31 December 2024 and of its result for the year then ended in accordance with Part 9 of Book 2 of the
Dutch Civil Code.
What we have audited
We have audited the financial statements 2024 of DSM B.V. (the ‘Company’ or ‘DSM’) based in Maastricht. The financial
statements include the consolidated financial statements and the parent company financial statements.
The consolidated financial statements comprise:
1.
the consolidated balance sheet at 31 December 2024;
2.
the following consolidated statements for 2024: the income statement, the statements of
comprehensive income and changes in equity, and the cash flow statement; and
3.
the notes comprising group material accounting policies and other explanatory information.
The parent company financial statements comprise:
1.
the parent company balance sheet at 31 December 2024;
2.
the parent company income statement for 2024; and
3.
the notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities
under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section
of our report.
We are independent of DSM in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij
assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence)
and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening
gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our
opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations,
climate and the key audit matters was addressed in this context, and we do not provide a separate opinion or conclusion
on these matters.
Other information - Independent auditor’s report
DSM Integrated Annual Report 2024
122
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
Summary
Materiality
•
Materiality of EUR 30 million
•
3.3% of the 5-years’ averaged earnings before interest, taxes, depreciation and amortization
Group audit
•
Performed substantive procedures for 76% of total assets
•
Performed substantive procedures for 75% of revenue
Risk of material misstatements related to Fraud, NOCLAR, Going concern and Climate risks
•
Fraud risks: presumed risk of management override of controls, presumed risk of revenue recognition
and goodwill impairment testing Animal Nutrition & Health identified and further described in the
section ‘Audit response to the risk of fraud and non-compliance with laws and regulations’.
•
Non-compliance with laws and regulations (NOCLAR) risks: no reportable risk of material
misstatements related to NOCLAR risks identified.
•
Going concern risks: no going concern risks identified.
•
Climate risks: We have considered the impact of climate-related risks on the financial statements and
described our approach and observations in the section ‘Audit response to climate-related risks’.
Key audit matters
•
Goodwill impairment testing Animal Nutrition & Health
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 30
million (2023: EUR 30 million). The materiality is determined with reference to the 5-years’ averaged earnings before
interest, taxes, depreciation and amortization (‘EBITDA’) to reflect the volatility in the vitamins market. We consider
EBITDA the most suitable metric to assess the Company’s performance. Materiality as a percentage of the 5-years’
averaged EBITDA is 3.3%. We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that misstatements identified during our audit in excess of EUR 1.5 million would
be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
Scope of the group audit
DSM is at the head of a group of components (hereafter “Group”). The financial information of this group is included in
the financial statements of DSM.
This year, we applied the revised group auditing standard in our audit of the financial statements. The revised standard
emphasizes the role and responsibilities of the group auditor. The revised standard contains new requirements for the
identification and classification of components, scoping, and the design and performance of audit procedures across the
group. As a result, we determine coverage differently and comparisons to prior period coverage figures are not
meaningful.
Other information - Independent auditor’s report
DSM Integrated Annual Report 2024
123
We performed risk assessment procedures throughout our audit to determine which of the Group’s components are
likely to include risks of material misstatement to the Group financial statements. To appropriately respond to those
assessed risks, we planned and performed further audit procedures, either at component level or centrally. We identified
30 components associated with a risk of material misstatement. For 22 out of these 30 components we involved
component auditors. We as group auditor audited the remaining components. We set component performance
materiality levels considering the component’s size and risk profile.
We have performed substantive procedures for 75% of Group revenue and 76% of Group total assets. At group level, we
assessed the aggregation risk in the remaining financial information and concluded that there is less than a reasonable
possibility of a material misstatement.
In supervising and directing our component auditors, we:
•
Held risk assessment discussions with the component auditors to obtain their input to identify matters relevant to
the group audit.
•
Issued group audit instructions to component auditors on the scope, nature and timing of their work, and received
written communication about the results of the work they performed.
•
Held meetings with 7 component auditors in person and/or virtually to discuss relevant developments, understand
and evaluate their work and attend meetings with local management.
•
Inspected the work performed by 6 component auditors and evaluated the appropriateness of audit procedures
performed and conclusions drawn from the audit evidence obtained, and the relation between communicated
findings and work performed. In our inspection we mainly focused on significant risks and key judgement areas.
We consider that the scope of our group audit forms an appropriate basis for our audit opinion. Through performing the
procedures mentioned above we obtained sufficient and appropriate audit evidence about the Group’s financial
information to provide an opinion on the financial statements as a whole.
Audit response to the risk of fraud and non-compliance with laws and
regulations
As part of our audit, we have gained insights into DSM’s business environment and DSM’s risk management in relation to
fraud and non-compliance. Our procedures included, among other things, assessing the code of business ethics, alert
cases (whistleblowing procedures), compliance policies and its procedures to investigate indications of possible fraud
and non-compliance. Furthermore, we performed relevant inquiries with the Managing Board, Supervisory Board and
other relevant functions, such as Group Audit department, Legal Counsel and Fraud Response Team and evaluated
correspondence with relevant supervisory authorities and regulators. We have also incorporated elements of
unpredictability in our audit, such as: changes in the scope of the group audit, additional procedures on the valuation of
goodwill and we selected additional transactions related to the risk of management override.
As a result from our risk assessment, we identified the following laws and regulations as those most likely to have a
material effect on the financial statements in case of non-compliance:
•
Health and safety regulation (reflecting the nature of DSM’s production and distribution processes);
•
Environmental regulation (reflecting the environmental clean-up responsibilities related to mainly DSM’s former
production and distribution processes);
•
Anti-Competition legislation (reflecting DSM’s operations across the world and potential investigations by national
competition authorities);
•
Consumer product law relating to product safety (reflecting the nature of DSM’s diverse product base);
•
Anti-bribery and corruption (reflecting DSM’s significant operations in jurisdictions with high perceived levels of
public sector corruption).
Other information - Independent auditor’s report
DSM Integrated Annual Report 2024
124
As a result of our risk assessment, we identified a fraud risk with respect to the valuation of goodwill for Animal Nutrition
& Health, which is described in the key audit matter. Furthermore, the presumed fraud risks laid down in the auditing
standards are responded to as follows:
Management override of controls (a presumed risk)
Risk:
-
Management is in a unique position to manipulate accounting records and prepare fraudulent financial
statements by overriding controls that otherwise appear to be operating effectively.
Responses:
-
We evaluated the design and the implementation of internal controls that mitigate fraud risks, such as controls
related to journal entries.
-
We performed a data analysis of high-risk journal entries and evaluated key estimates and judgments for bias by
management, including retrospective reviews of prior years’ estimates such as with respect to impairment
testing of goodwill, acquisition-related intangibles and employee benefit liabilities. Where we identified instances
of unexpected journal entries or other risks through our data analytics, we performed additional audit
procedures to address each identified risk, including testing of transactions back to source information.
Revenue recognition (a presumed risk)
Risk:
-
We identified a fraud risk in relation to the recognition of revenue of goods sold. This risk inherently includes the
fraud risk that management deliberately overstates revenue in the cut-off period, as management may feel
pressure to achieve planned results for the current year.
Responses:
-
We evaluated the design and the implementation of internal controls that mitigate fraud risks with respect to
revenue recognition.
-
To assess if the risk is applicable before or after year-end we considered potential incentives for management
based on the financial results. We evaluated the fraud risk with respect to revenue recognition specifically
applicable to sales cut-off before year-end. This was also confirmed by the risk assessment of our component
auditors based on an assessment of local facts and circumstances.
-
To assess whether revenue was recognized in the appropriate period, for selected sales transactions recognized
before year-end we inspected agreements with the customers and shipping documents.
-
Further, we inspected selected credit notes issued after year-end to assess whether revenue was recognized
appropriately.
-
We performed journal entry testing, specifically taking into account high risk criteria in relation to revenues.
Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are
considered material for our audit. Our evaluation of procedures performed related to fraud did not result in any other key
audit matters.
We communicated our risk assessment, audit responses and results to the Managing Board and the Supervisory Board.
Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are
considered material for our audit.
Audit response to going concern
The managing board has performed its going concern assessment and has not identified any going concern risks. To
assess the management board’s assessment, we have performed, among other things, the following procedures:
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•
we considered whether the Managing Board’s assessment of the going concern risks includes all relevant
information of which we are aware as a result of our audit;
•
we inspected the financing agreements for terms or conditions that could lead to significant going concern risks;
•
we analyzed the operating results forecast and the related cash flows compared to the actual results of 2024,
developments in the business sector, macro-economic developments and any information of which we are aware
as a result of our audit;
•
we analyzed the company’s financial position as at year-end and compared it to the previous financial year in
terms of indicators that could identify significant going concern risks.
The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on
management’s going concern assessment.
Audit response to climate-related risks
Management prepared the financial statements, including considering whether the implications from climate related risks
and commitments have been appropriately accounted for and disclosed, in accordance with the applicable financial
reporting framework. The climate-related risks are managed by DSM B.V. as part of its regular risk management process
and as such are taken into account in the preparation of the financial statements.
As part of our audit we performed a risk assessment of the impact of climate-related risk and the commitments and
ambitions made by DSM B.V. in respect of climate change on the 2024 financial statements and our audit approach.
Based on the procedures performed we considered whether there is a risk of material misstatement specific to climate
relative to the going concern assumption and valuation of long-lived assets. Considering the risk assessment work
performed, we did not identify a risk of material misstatement specific to climate and thus no further audit response was
considered necessary.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are
not a comprehensive reflection of all matters discussed.
Compared to last year the key audit matter with respect to the Vitamins transformation program is not included as the
impairments resulting from the program specifically relate to the financial year 2023.
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Goodwill impairment testing Animal Nutrition & Health
Description
As of 31 December 2024, the consolidated financial statements included goodwill amounting to EUR 3,055 million of
which EUR 983 million is allocated to the Animal Nutrition and Health (‘ANH’) cash generating unit.
Goodwill is assessed for impairment by management at least annually by determining the recoverable amount (the
higher of its value in use and fair value less costs of disposal), which is then compared to the carrying amount.
Management applies judgment in assessing the cash flow projections of the (groups of) cash generating units at which
level goodwill is allocated and determining the relevant valuation assumptions.
Valuation of goodwill is a key audit matter because the impairment test process is complex. It involves a high degree
of management judgment and assumptions, such as cash flow forecasts, growth rates and discount rates of the CGU,
being used in the Group’s impairment tests.
Our response
We obtained and documented our understanding of the impairment testing process, the sensitivity analysis and
tested the design and implementation of the relevant controls therein.
We assessed the determination of the CGUs taking into account the IFRS accounting standards and our knowledge of
the organisation, structure and governance of the DSM Group.
We assessed the Group’s ability to accurately prepare cash flow projections for their CGUs by comparing the actual
financial performance to the projections made earlier.
We evaluated the accuracy of impairment test, the reasonableness of the key assumptions used to determine the
recoverable amounts – including long term growth rates and discount rates based on our understanding of the related
CGUs’ cash flow projections – and the methodology used by management to prepare its cash flow forecasts.
We involved our in-house valuation specialists with specialized skills and knowledge who assisted in assessing the
reasonableness of the discount rates and long term growth rates through testing the source information underlying
their determination, and in developing a range of independent estimates and comparing those to the discount and
long term growth rates applied by management.
We inquired and challenged BU management on their initiatives to realize sales and margin growth.
We also considered the adequacy of the disclosures on impairment testing and sensitivity tests in the consolidated
financial statements.
Our observation
We consider that the outcome of management’s impairment testing of the ANH cash generating unit is appropriate
and adequately disclosed in Note 8 to the financial statements.
Report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report contains other information.
Based on the following procedures performed, we conclude that the other information:
•
is consistent with the financial statements and does not contain material misstatements; and
•
contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and
other information.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the
financial statements or otherwise, we have considered whether the other information contains material misstatements.
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By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the
Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of
the financial statements.
The Managing Board is responsible for the preparation of the other information, including the information as required by
Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Engagement
We were initially appointed by the Annual General Meeting of Shareholders as auditor of DSM on 7 May 2014 (at that time
Royal DSM N.V.), as of the audit for the year 2015 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific
requirements regarding statutory audits of public-interest entities.
Description of responsibilities regarding the financial statements
Responsibilities of the Managing Board and the Supervisory Board for the
financial statements
The Managing Board is responsible for the preparation and fair presentation of the financial statements in accordance
with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Managing Board is responsible for such
internal control as management determines is necessary to enable the preparation of the financial statements that are
free from material misstatement, whether due to fraud or error. In that respect the Managing Board, under supervision of
the Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with laws and
regulations, including determining measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, the Managing Board is responsible for assessing DSM’s ability to
continue as a going concern. Based on the financial reporting frameworks mentioned, the Managing Board should prepare
the financial statements using the going concern basis of accounting unless the Managing Board either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Managing Board should
disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going
concern in the financial statements.
The Supervisory Board is responsible for overseeing DSM’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and
appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all
material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
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A further description of our responsibilities for the audit of the financial statements is included in the appendix of this
auditor’s report. This description forms part of our auditor’s report.
Amstelveen, 15 April 2025
KPMG Accountants N.V.
P.J. Groenland – van der Linden RA
Appendix:
Description of our responsibilities for the audit of the financial statements
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Appendix
Description of our responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in
accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included
among others:
•
identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or
error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control;
•
obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
DSM’s internal control;
•
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Managing Board;
•
concluding on the appropriateness of Managing Board’s use of the going concern basis of accounting, and based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on DSM’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a
company to cease to continue as a going concern;
•
evaluating the overall presentation, structure and content of the financial statements, including the disclosures;
and
•
evaluating whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We are responsible for planning and performing the group audit to obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business units within the group as a basis for forming an opinion on the
financial statements. We are also responsible for the direction, supervision and review of the audit work performed for
purposes of the group audit. We bear the full responsibility for the auditor’s report.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant findings in internal control that we identify during our audit. In this
respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on
specific requirements regarding statutory audits of public-interest entities. The information included in this additional
report is consistent with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that
were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not
communicating the matter is in the public interest.
Other information – Abbreviations
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