#1DSM to add world-leading animal nutrition and health specialty businesses with acquisition of Erber Group Presentation to Investors 12 June 2020 DSM#2Acquisition Highlights (1/3) Transaction Strategic Fit Synergies • • • DSM to add world-leading animal nutrition and health specialty businesses with acquisition of Erber Group, for an enterprise value of €980 million EV/EBITDA multiple of about 14x the 2020 EBITDA (fiscal year ending September 2020) 2021 EPS contribution expected to be about €0.15 2 small units, Sanphar and EFB (representing 7% of Erber Group's total sales) are not included in the transaction The transaction, which is subject to customary conditions, is expected to close in Q4 2020 The acquisition will be debt financed, with DSM's balance sheet remaining strong Enhances DSM's animal health and nutrition solutions for farm productivity and sustainability, with an emphasis on animal welfare, emissions reduction, feed efficiency, tackling antimicrobial resistance and better use of water and land: Adds a new specialty feed ingredients segment with mycotoxin risk management Enhances DSM's position in eubiotics ✓ Enlarges DSM's global premix network Gives DSM access to feed and food diagnostics activities With mycotoxin risk management, DSM expands its portfolio of specialty feed ingredients. Mycotoxin risk management (enzymes, microbials, binders) have a strong strategic fit with DSM's advanced solutions offering Strengthens DSM's science-based gut health/eubiotics platform with additional pro- and prebiotics, acids, phytogenics Strengthens DSM's animal premix position in Central & Eastern Europe Animal and human diagnostic services are synergetic with DSM's precision nutrition developments in animal and its existing diagnostic activities in human nutrition & health Cross-selling, R&D and cost synergies after integration 2 DSM#33 Acquisition Highlights (2/3) Key Data Acquired . • • The acquired businesses have combined sales of €330m and an Adjusted EBITDA margin above 20% for the twelve months to the end of March 2020, with a high single-digit organic sales growth rate over the past 5 years Biomin: 85% of sales (mycotoxin risk management, gut health/eubiotics, premix). Romer 15% of sales (feed & food testing) Sales well split between Europe, Asia, and the Americas. Low customer concentration (top-20: ~30% of sales) businesses ⚫ 12 manufacturing sites/ 15 R&D sites globally; ~1,200 employees Mycotoxin risk management - MTX • (Biomin) Eubiotics for Gut Health (Biomin) • • Strong innovation roots; Biomin Research Center in Tulln with strong connect to University and other leading academics + regional centers Mycotoxins are secondary metabolites produced by fungi developing on grains and other crops, that can contaminate feed and cause a toxic response when ingested in farm animals Biomin provides biotransformation and biodegradation solutions (through complex mixes of enzymes, microbials and binders) to detoxify feed Biomin has a strong position in terms of regulatory approvals and IP Mycotoxin detoxifiers are a €700m market, growing at 5%; Biomin growing high-single digit in MTX due to its leadership position in the premium segments Eubiotics improve health and performance in farm animals by maintaining an optimal balance of microflora in the gastrointestinal tract. Eubiotics types include probiotics, prebiotics, organic acids and essential oils/ phytogenics The eubiotics market is estimated to be ~€2bn, expected to grow at an 8-10% CAGR over the next 5-10 years, driven mainly by the shift to 'antibiotics-free' and preventive health solutions Biomin has a strong IP and sales position in the fastest growing Eubiotics segment of Probiotics; Biomin growth in eubiotics has been double digit over the last five years DSM#4Acquisition Highlights (3/3) Premix (Biomin) Erber Group adds 3 premix facilities to DSM's global premix network Austrian state-of-the-art premix plant supports growth in Central & Eastern Europe Feed and Food Diagnostics (Romer Labs) Romer Labs is active in the attractive market for diagnostic solutions for food and feed safety primarily as a kit manufacturer but also has several reference labs and the ability to consult Romer is focusing on testing of mycotoxins, allergens, microbiology & pathogens, GMO and veterinary drug residues Food & feed safety testing is a €4bn market, growing high-single digit Romer Labs has annual sales of €50 million, growing double digit DSM in Animal Nutrition & Health • Animal Nutrition & Health (ANH) is DSM's largest business with ~€2.9bn sales (2019) DSM is the #1 in this industry with the largest product portfolio and largest global premix network, supplying solutions for all species, with a strong focus on innovation ANH delivered a 7% organic sales CAGR over the last 5 years, well above market DSM#5Erber Group Mycotoxin risk management Eubiotics/ Gut health Premix Feed and Food Diagnostics =Biomin= =Biomin= Romer LabsⓇ Sanphar Solutions Think Ahead! DSM BRIGHT SCIENCE. BRIGHTER LIVING. EFB#6Erber Group's animal nutrition & health specialty businesses Sales by Region, FY19A1 (%) . • Privately held Austrian innovation-led company, founded in 1983. Biomin and Romer Labs together have: ✓ Combined sales of €330m and an Adjusted EBITDA margin above 20% for the twelve months to the end of March 2020 ~1,200 employees ✓ Global footprint with 12 production sites and 15 R&D sites ✓ Sales in 130 countries; Specialty sales force of ~200 people across 40 countries Sanphar and EFB (two very small divisions of Erber Group are not included in above numbers; will be carved out before closing) Leader in mycotoxin risk management solutions, as the pioneer in the field supported by scientific claims, strong position in gut health/ eubiotics as well as in premix and diagnostics for feed and food ✓ international focus and their in-house research and development department are key elements of their success and have contributed to growth & sustainability for more than 30 years ✓ Strong IP protection; patents and trade marks ✓ Long-standing global customer base with customized solutions for key accounts ROMER Romer Labs 6 1. Across acquired perimeter (Biomin and Romer only). Europe Asia North America South America Sales by Segment, FY19A1 (€m) =Tiomine Naturally ahead Mycotoxin risk mgmt Gut health/eubiotics Premix Other (trade) Food and feed testing (Romer Labs) DSM#7Erber Group: a global company with 12 production sites around the world 7 =Biomin= Stadtoldendorf, Germany (acquired 2012) Blomin Herzogenburg, Austria (1990) Haag, Austria (under construction, 2020) Newark, USA (Romer) Germany Stadtoldendorf USA Newark Austria Tulln (1) Zell a.d. Pram Haag am Hausruck Herzogenburg Stöttera Panama • Arraijan Brazil Piracicaba China Wuxi Wuxi, China (2017) Vietnam • Hanoi Singa- Binh Duong pore (2) Binh Duong, Vietnam (2013) Woodlands, Singapore (1996) DSM#88 Mycotoxin risk management Mycotoxins are secondary metabolites produced by filamentous fungi developing on grains and other crop plants. Fungal growth can occur: ✓ On the field depending on weather conditions ✓ During harvest depending on conditions ✓ During storage (improper storage conditions) Different fungi can be involved ✓ Field - e.g. Fusarium (and Aspergillus) ✓ Storage - e.g. Penicillium and Aspergillus Mycotoxins can cause a toxic response (mycotoxicosis) when ingested in farm animals or a reduced performance Distinct regional trends with climate as key determinant; as a consequence of climate change, mycotoxins are increasingly occurring Mycofix Proven protection. =Bomin- Mycofix® EBiomin= Naturally ahead Mycofix EU registered With Mycofa Secure and Biomin BBSH 797, Mycofix" is the first and only product approved by the EU for its efficacy against mycotoxins Mycofa is the s the solution for mycotoxin risk management mycobiomin.net =Biomin= 0000000000000000000000 DSM#9Mycotoxin risk management Biomin is the leader in the Premium and Advanced segments of the mycotoxin detoxifiers market Premium ~€300m (growing 7%/yr) Advanced ~€300m (growing 4%/yr) Simple ~€100m (growing 2%/yr) Market description Complex combinations of biodegrading/ bio-transforming agents (microbes and enzymes) and binders, capable of selectively neutralizing a wide array of toxins while preserving the nutritional quality of feed. High & increasing barriers-to-entry (regulatory, IP) Combinations of binders and absorbers or micronutrients, usually targeting more than one mycotoxin Simple binding agents (typically clays). Usually only binding 1-3 mycotoxins, at the risk of also binding useful micronutrients Key Players Biomin (#1), Alltech Biomin (#1), Alltech, Kemin, EWN Bayer, AmLan, Cargill 9 Total mycotoxin detoxifiers market of ~€700m growing around 5%/yr; Biomin sales of ~€150m growing high-single digit DSM#10Mycotoxin risk management Biomin with strong innovation roots and a well protected position in Mycotoxin Risk Management • Industry thought leadership/ strong innovation roots 37 inventions, covered by 262 granted patents + 100 filed patent applications in 50 countries • 84 peer-reviewed scientific publications in the last 5 years Biomin Research Center in Tulln with strong connect to University and other leading academics + regional centers Biomin worldwide leadership position MYCOTO RISK • • First and only company with EU- registration (US-registration underway) Company led the creation of new functional regulation group 3 key ingredient groups covered Allows Biomin to use stronger product efficacy claims than competitors 10 Sophisticated mycotoxin testing for customers Provided through Romer Labs MANAGEME Global Mycotoxin Risk Monitor Longest running and most comprehensive of its kind, showing incidence of 6 most present mycotoxins 726 Samples from 32 Staten 72% 3% 10% 8% DSM#11Eubiotics for gut health Support the phasing out of antibiotic growth promoters 11 AMR report prompts further calls to curb use of antibiotics in farming By Jane Byme 23-Feb-2017 Last updated on 23 Feb 2017 at 11.68 CMT Professor Leo den Hartog Ra Nutrition: 'Thia raport is yet an in animal husbandry. We kno antimicrobial resistance. Redu Related tags: Carbapenems, EF Antimicrobials, FSA Multi-drug resistance in Salmo critically important antimicrob remains low, finds a report by Post a comment Antibiotics: U.S. Veterinary Feed Directives (VFDS) Effective on January 1 Source: Feedinfo News Service (dated 29/11/2016) 29 November 2016 - be enacted in the U dramatically change i Medically important fee authorization from the operation, assume resp veterinarian's directions The most common dru ionophores, babermycir (Rumensin/Tylan). VFD veterinary feed directive SCIENTIFIC REPORT ADOPTED: 26 January 2017 doi: 10.2903/j.efsa.2017.4694 Frans Timmermans @TimmermansEU Oct 8, 2019 In the first 100 days of the @vonderleyen Commission we have a collective responsibility to frame this right for the next five years, and beyond. This will be a team effort. Clean Air and Water Actos Pus Transition to a Circular Economy Preserving Europe's A zero pollution Europe natural capital ecocej EUROPEAN CENTRE FOR DISEASE PREVENTION AND CONTROL News 19 Sep 2016 6733 views EFSA NEWS McDonald's, Subway and KFC fail to respond to worldwide antibiotic resistance health risk 25 Apr 2016 Consumers International (CI) has today launched a new report highlighting the failure of global fast food chains to confront the challenge posed by antibiotic resistant bacteria. FAO releases action plan for antibiotic resistance FAO will help countries develop strategies for tackling the spread of antimicrobial resistance in their food supply chains. #Antibiotics OffTheMenu Antibiotic free chicken production: Tyson The Food and Agricultural Organization released this statement just bef Foods shifts up a gear level UN event on September 21st in New York, where the UN General A: discuss the significant risk to human health posed by 'antimicrobial resistance' (AMR) and its connection to and impact on agriculture. By Aerin Einstein-Curtis 23-Feb-2017 Last updated on 24-Feb-2017 at 11:31 GMT PoultryStar® Hatchery Healthy gut - strong chick! Blomin Post a comment 3 GOOD HEALTH +100 with the AND WELL-BEING grute Sustainable Transport Farm to Fork Farm to Fork Strang Revising 2030 Cme arts Achieving Climate Neutrality C European Green Deal The transformation of agriculture and rural areas Carbon Border T Clean, Reliable and Affordable energy Towards a modemised and simplified CAP CAP 12 RESPONSIBLE CONSUMPTION AND PRODUCTION QO Review Energy Legslabo Framework for g Tation directive 35 Green Fan Financing the transition 197 Leave no one behind (Just Transition) • Trainment, including the Train Mainstreaming the at Transition in the M 310 iStock Related tags: Tyson, Antibiotic use, Perdue, Sanderson Farms, Antibiotic resistance, Poultry production Tyson Foods is set to switch its retail line of company-branded chicken products to birds raised without any antibiotics. Total market for eubiotics for gut health is currently ~€2bn; Potential of >€3bn by 2025 Digestarom DC The Feed Convertor NEW! =Blomin VevoVitall® + CRINA POULTRY PLUS DSM#12Enhances DSM's portfolio in eubiotics Eubiotic type Probiotics Nature of products Micro-organisms, direct feed microbials: live bacteria and live yeast Effects Colonizing the gut with healthy bacteria, production of specific antibacterial substances Key Players Chr. Hansen, DuPont, Calpis, Alltech, Biomin, DSM 12 Prebiotics Organic Acids Essential oils/ Phytogenics Dead yeasts, yeast extracts, oligosaccharides Organic acids such as benzoic, butyric, fumaric, citric, formic acid, lactic, sorbic acids Ingredients present in various plants and spices Feeding the intestinal bacteria and thereby stimulate activity which contribute to health and performance Reduction of gut pH. Modulation of intestinal microbiota, increases pepsin activity and reduces diarrhea Modulation of intestinal microbiota, stimulating endogenous enzyme excretion Total Biomin's eubiotics sales of ~€65m, growing double digit Diamond V, Lesaffre, Lallemand, Alltech, Biomin and many others BASF, Perstorp, Eastman, FF Chemicals, Norel, Novus, Biomin, DSM Delacon, ADM, Adisseo, Phytosynthese, Biomin, DSM DSM#13Romer Labs is an internationally leading supplier of diagnostic solutions for food and feed safety 13 • • • Market size: €4bn globally (of which >€2bn in testing services, €0.7bn in testing kits, and remainder in equipment hardware, certification and consulting). Market growing around 7% per year Romer Labs is primarily a kit manufacturer but also has several reference labs and the ability to consult Romer Labs is active in mycotoxins, allergens, microbiology & pathogens, GMO and veterinary drug residues testing Main competitors and their main focus include ✓ Neogen (food and feed testing unit, mycotoxin testing, allergens) ✓ Charm Sciences (dairy testing) ✓ R-Biopharm (pathogen detection and clinical diagnostics) ✓ EnviroLogix (GMO and environmental testing) Romer Labs has an excellent reputation and is known for problem-solving and technical support capabilities Romer Lab Sales by customer segment (FY19A, %) • DSM Food Specialties is active in antibiotic residue testing in dairy www.romerlabs.com Total Romer Labs sales of ~€50 growing double digit Food industries Labs, consulting, R&D Animal feed Pet food DSM#14DSM's position in Animal Nutrition & Health DSM BRIGHT SCIENCE. BRIGHTER LIVING.#15DSM in Animal Nutrition: active over the full value chain €2.9bn sales (2019) diversified across species, geographies, and channels 15 Feed value chain 25% AN&H Sales 65% AN&H Sales 10% AN&H Sales Direct to Farm Agricultural Commodities Application-based formulations Specialty (Premix) Solutions Feed producers Farmers and Processors Sales by ingredient (%) Fat soluble vitamins Water soluble vitamins Carotenoids Enzymes Eubiotics Minerals Other blending ingredients Sales by species (%) Aqua Pet Swine Poultry Ruminant Sales by region (%) Europe North America Latin America Asia (excl China) China Rest of World DSM#16DSM uniquely positioned versus competition With the biggest portfolio of specialty feed ingredients and premix solutions Agricultural BŪNGE Compound Feed €200bn 16 Commodities (soy, corn, etc.) €140bn Cargill ADM Specialty Feed Ingredients ~€13bn Farmers/Processors >€1,200bn Tyson nutreco BRF BRASIL FOODS KEMIN EVONIK DSM NHU 新和成 ~50 premix sites INDUSTRIES QU PONT =Biomin= Naturally ahead Alltech® BRF BRASIL FOODS D-BASF The Chemical Company CP Feeds Farmers the total feed business Tyson Premix Solutions | DSM ~€11bn CP Fed Feeds Snutreco Cargill provimi ADM 7% CAGR in last 5 years, well above market growth BRF BRASIL FOODS Fonterra (JBS Friesland Campina nin LINGA LAKS DSM#17In an attractive market Productivity & sustainability drive specialty feed ingredients Higher inclusion rates driven by: Index (Base 100 = 2015) 170 17 HELPING TACKLE ANTIMICROBIAL RESISTANCE REDUCING OUR RELIANCE ON MARINE RESOURCES CH CO₂ N20 160 Feed ingredients Compound feed 150 Meat consumption MAKING EFFICIENT 140 USE OF NATURAL RESOURCES 130 120 Market Market '15-'19 '20-'25 110 IMPROVING THE QUALITY REDUCING EMISSIONS FROM LIVESTOCK IMPROVING LIFETIME PERFORMANCE OF OF MEAT, MILK, FISH FARM ANIMALS AND EGGS, WHILE REDUCING FOOD LOSS & WASTE 100 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CAGR CAGR 5% 4-6% The acquisition further enhances DSM's animal health and nutrition solutions for farm productivity and sustainability, with an emphasis on animal welfare, emissions reduction, feed efficiency, tackling antimicrobial resistance and better use of water and land DSM#18DSM leading in sustainability, health and digital solutions Global food systems need to be transformed and made more sustainable, with increased productivity and circularity, and decreased loss and waste. There is a clear need to extract more nutrition from less livestock feed, ensuring that animals perform to their best potential throughout their lifespans. DSM makes this possible; with its current unique portfolio and its science-based innovation programs Clean Cow Reduction of methane ("Clean Cow"), ammonia, nitrate Veramaris Algae-based omega-3 fatty acids as replacement and/or enrichment of fish oil Balancius Enzymes for gut health/ supporting antibiotic replacement Spearhead Data-driven nutrition optimization business model 18 2 < > Recommendation Peer Reviewed Scientific Literature Status and Recommendations Engine DSM#19Erber Group enhances DSM's specialty animal nutrition offering DSM NUTRITION HEALTH SUSTAINABLE LIVING BRIGHT SCIENCE. BRIGHTER LIVING.#20Gives DSM access to feed and food diagnostics activities Creates big-data-driven Farm-to-Fork food safety Erber strengthens DSM's unique business model in Animal Nutrition Adding to our portfolio of specialty feed ingredients and solutions Eliomin= Naturally ahead Global Products Adds mycotoxin risk management Мусо- toxin risk mgmt Eubiotics Enhances DSM's Vitamins Eubiotics position in eubiotics Minerals 20 20 ROMER Romer Labs platform Functionalities Natural Preservatives Colorants Carotenoids Bovaer - CleanCow Omega's Veramaris Other Feed Ingredients Sourced Ingredients Feed Enzymes Functionalities + Local Solutions Regions N-AM L-AM EME sia ROW =Biomin= Naturally ahead Enlarges DSM's global premix network Adds to markets, regions, species Adds to DSM innovation/ R&D power > # tit Market Segments DSM#21Commercial, R&D & Cost synergies Integration to take 18-24 months Accelerate development of Specialty Feed Additive Solutions engine Grow share in Premix Central Europe Combining food & feed testing Cost synergies . Cross-selling: ✓ DSM will be able to sell its enzymes, eubiotics and Hy-D products through the Erber Group specialty salesforce ✓ DSM can leverage its global (premix) network to grow mycotoxin risk management (MTX) Science & Innovation: ✓ Combining R&D in animal nutrition & health including gut health/ eubiotics and precision nutrition platforms The new Biomin Austrian premix facility can support growing DSM's share in Central Europe Fast growing food & feed quality diagnostic solutions has synergies with DSM Food Specialties' testing business (DelvoTest) for food & beverages Synergies in overhead/ support functions and purchasing 21 DSM#22Integration approach and timeline Clear ambition to maintain and scale the Biomin Specialty Feed Additive engine Biomin specialty set-up as the nucleus to create industry leading global Specialty Feed ingredients engine Bring Biomin Premix operations (3 sites) into DSM global Premix Network (~50 sites) Romer Labs as a stand- alone organization Full integration of support functions into DSM set-up Integrate the DSM ANH global specialty sales team and the Biomin Specialty Feed ingredients team ✓ Maintain close-knit ties between innovation and product management ✓ Integrate gut health innovation platforms Region-by-region integration of the marketing & sales teams • Integration into DSM ANH premix network Romer Labs will be kept intact as an organization. In due time, DSM's antibiotics residue testing business (Food Specialties' DelvoPro) to be integrated into Romer Labs organization Full integration of the Erber Group support functions (FIN, P&O, IT, corporate staff) in the DSM staff & support function organization Transaction expected to be closed in Q4 2020 Integration planned to take 18-24 months ■ Dedicated Integration Management team (DSM + Erber Group) 22 22 DSM#2323 A wonderful addition to DSM People at Erber Group share DSM's purpose-led mission • . Enables DSM to further accelerate its growth in Animal Nutrition & Health Makes DSM the undisputed, science-based, customer-centric global specialty feed solutions leader in fast growing attractive market segments • Adds #1 position in mycotoxin risk management . Enhances DSM's position in eubiotics for gut health • Expands our global premix network with a state-of-the-art premix plant in Central-Europe Gives DSM access to feed and food diagnostics activities via Romer Labs with potential to become data-driven Farm-to-Fork food safety data platform Strong cultural fit, combined with organizational and cost synergies baming Mik TopStart Mycofix MycofixⓇ COTDAIN RISK More protective. "ANAGEME ETOUK شرکت افزودنیهای ایتوک فردا (سهامی خاص) Naturally ahead =Biomin= GUT MANCE SEMENT MANAG RBER Group =Biomin= =Promine DSM Labs ROME#24Financial Strength Strong balance sheet supports Erber Group acquisition Balance sheet DSM continues to benefit from a strong balance sheet, with Q1 2020 Net Debt to EBITDA of 0.8x (1.2x after settlement of the Glycom acquisition in April), supported by strong cash generation As a prudent measure given the current Covid-19 environment and given the acquisition of Erber Group, DSM has decided to cancel the remainder of its €1bn share buy-back program which was first announced on 14 February 2019. The total number of shares repurchased to date under this program is 6.6 million shares for a total consideration of €745 million Available liquidity . • . • DSM has strong available liquidity, supported by committed, undrawn revolving credit facilities of €1.5 billion. DSM's banking facilities, comprised of a €1 billion revolving credit facility maturing in 2025 and €500 million new revolving credit facilities concluded in April 2020, are not subject to any financial covenants or a MAC clause Furthermore, the company has no bond maturities in 2020 and 2021 Financing Erber Group acquisition 24 Acquisition of Erber will be debt financed, with committed bridge financing in place DSM's balance sheet remains strong post acquisition Furthermore, DSM remains committed to maintaining a strong investment-grade credit profile DSM#25Disclaimer This presentation 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 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. DSM has no obligation to update the statements in this presentation, unless required by law A more comprehensive discussion of the risk factors affecting DSM's business can be found in the company's latest Annual Report, which can be found on the company's corporate website, www.dsm.com 25 25 DSM BRIGHT SCIENCE. BRIGHTER LIVING.#26BRIGHT SCIENCE. BRIGHTER LIVINGT