[PPT] - The acquisition of Tortuga Strengthening our animal nutrition PowerPoint Presentation

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8 August, 2012 Invest or Relat ions

The acquisition of Tortuga

Strengthening our animal nutrition business

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Overview

Tortuga at a glance
Acquisition rationale

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DSM to acquire Tortuga in an all-cash transaction

Execution of Nutrition cluster strategy “ continued value growth”
St rengthens DSM in t he highly at t ract ive animal nut rit ion market in Latin America
Extends DSM’s nut rit ional ingredient s range wit h organic t race minerals portfolio
Allows DS

M to become a full animal nutrition solution provider

Acquisit ion consist ent wit h DSM’s st rat egic focus on High Growth Economies

Strategic fit

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Total ent erprise value ~ € 465m(*) in cash
2012 expectations: net sales ~ € 385m and EBITDA ~ € 60m
Value creat ing acquisition; immediately EPS

accret ive

Acquisition

*: Depending on the actual 2012 EBITDA, an adj ustment in the purchase price up to a maximum enterprise value of ~ €490 million can be made, based on the same

EBITDA-multiple

Int roducing DSM ingredients int o Tort uga’s product range and distribut ion channels
Leveraging Tortuga’s know-how and strong position in ruminant supplements globally
Introduction of Tortuga's trace mineral products to other market segment s worldwide

(e.g. swine, poult ry)

Growth

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Tortuga, leader in supplements for ruminants

Financials

2012 expectat ions:

Net sales ~ €385m and EBITDA ~ €60m Privately held Brazilian company

Leading company in nut rit ional supplements wit h

focus on past ure raised beef and dairy catt le

HQ in S

ao Paulo, 1200 employees

3 product ion locat ions
Vast and exclusive agent net work (>1000)

Market positions

Global market leader in nutritional supplements

t o ruminant / beef cat t le wit h ~12% market share globally(~30% in Lat in America)

Int egrat ed product ion of key act ive ingredient s:

– #2 globally in organic trace minerals (minerals bound t o chelat ing agent ) –

Di-Calcium Phosphat es (DCP’ s) for captive use

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trong technology, application and performance knowhow

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Tortuga locations in Brazil

HQ Production

São Vincent e Pecém Mairinque S ão Paulo

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Ruminant in feedlot vs pasture based

DS

M’ s current feed act ivit ies for ruminant s are focusing on ruminants in feedlot

Pasture based ruminant s, where Tort uga is

focusing on, is a relat ively new market t o DS M Free Choice Nutritional Supplements

Ruminant s in past ures oft en lack:

– Minerals (Ca, Mg, Na, Zn and organic trace minerals) – Phosphorous, sulfur and nit rogen sources – specialt y micronut rient s

Supplement ation improves t he

product ivit y and decreases mort alit y

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upplements are provided, mostly as powders, freely available t o t he cat t le: ‘ free choice nut rit ional supplement s’ formulat ions

Supplements for pasture based ruminants

Freely available t o the cattle Free Choice Nutritional Supplements

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Tortuga is recognized for its premium brand

Fosbovi, “at the top of the farmer’s mind” in Latin America

Specific supplements for regions (e.g. low mineral cont ent areas) or season (e.g.

rain or dry season).

Product s for various life stages (e.g. beef calves lactat ing, growing phase)
Increasing reproduct ive performance of breeders
Covering a wide range of animal market s (ruminant s, poultry, swine)

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Global supplements market for ruminants

Total size est imat ed well in access of

€ 4bn globally

Brazil is #2 market
Global market growt h ~3%

(Brazil: ~4-5% ) Organic trace minerals

Current market size > € 0.3bn wit h st rong

growt h pot ent ial bot h for ruminant s as well as swine and poult ry

7-10%

growt h per year expect ed, globally Di-Calcium Phosphates

Overall use in animal nut rit ion is

est imat ed ~ 1200 kt per year;

Tortuga DCP production is 100%

captive for it s supplement product ion

Supplying highly attractive markets

Brazil is one of the largest markets

(Tot al Cat t le numbers in millions)

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* S

urce: http:/ / www.indexmundi.com/ agriculture/

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Overview

Tortuga at a glance
Acquisition rationale

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Total acquisitions now reaching € 2.2bn*

Nutrition

Martek (microbial DHA/ ARA)
Vitatene (natural carotenoids),
Premix plant s (Rumania, Italia)
Food enzymes business and

t echnology (Verenium)

Ocean Nut rit ion Canada

(fish derived Omega-3)

Tortuga (animal diet ary supplements)

Innovation center

Kensey Nash (biomedical materials)
C5 company (cellulosic bioet hanol)

Performance Materials

ICD China; High performance fibers
AGI Taiwan; UV resins

Pharma

DSM Sinochem Pharmaceuticals

Innovation center

JV POET; cellulosic bioet hanol
JV Actamax; biomedical materials

PARTNERSHIPS ACQUISITIONS

Performance Materials

KuibyeshevAzot Russia; P

A6

JV Kemrock India; composit e resins

€ ~1.8bn € ~0.3bn € ~0.1bn Nutrition

Premix plant Russia

* S ince S eptember 2010 S lide 8

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Strategic progress

Expanded offering t hrough M&A

activit ies

Expanded to 55 premix facilities
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uccessful process developments; improving cost position

Asset s opt imizat ion/ rest ruct uring

Nutrition: Continued value growth

Continuous profit increase Aspiration by 2015

Growth GDP + 2%
EBITDA margin >20 - 23%

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Animal feed: customer value through efficacy

Feed efficacy (“ feed t o prot ein” ) largely det ermined by premix and supplement

Vit amin St raight s Vitamin forms Premix Macro Premix / supplements Prot ein Concent rat e S upplement ary Feed Complete Feed S traight Vitamins (f.e. vitamin A, E) Vit amin forms (f.e. concent rates, dry mixes, on carrier) Other additives (eubiotics, amino acids, etc.) Macro Element s (salt s, Ca, P via DCP, Na, Mg, et c.), Trace elements delivered through organic trace minerals S ingle Animal or Vegetable Protein Various Protein Components (S

ya, sunflower meal, et c.)

Grains

Animal feed composit ion Different iat ion by feed conversion know-how

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St rengt hens DS

M’s presence in nut rit ional supplements and addit ives for ruminant s

St rengt hens presence in Brazil, t he

leading global beef producer and export er wit h at t ract ive growt h

Broadens DSM’s port folio wit h t he

unique organic trace minerals portfolio of products

Tort uga is considered an aut horit y

in t he ruminant market Key elements of Nutrition strategy

Next step in Nutrition’s value growth strategy

Acquisition of Tortuga

Cont inued st rengt hening of t he

core of the business

Increased leveraging of t he

clust er’s unique full value chain position

Use innovation headroom for

furt her different iat ion

Est ablishment of new growt h

platforms in adj acent areas

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Sales synergies

Int roducing DS

M ingredient s int o Tort uga’ s product range and dist ribut ion channels

Leveraging Tort uga’ s know-how and st rong posit ion in ruminant supplement s globally
Int roduct ion of Tort uga's t race mineral product s t o ot her market segment s

worldwide (e.g. swine, poult ry)

St rengt hens DS

M in t he highly at t ract ive animal nut rit ion market in Lat in America

Allows DSM t o become a full animal nut rit ion solut ion provider

Cost synergies

Optimization of DS

M asset s in Brazil

Cust omary operat ional efficiencies

The acquisition offers value creating synergies

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Tortuga complements value chain presence

DSM production

Vitamins
Carotenoids
Enzymes
Eubiot ics

Tortuga production

Di-Calcium Phosphate
Organic trace minerals

Sourced by DSM

Di-Calcium Phosphate
Organic trace minerals

Sourced by Tortuga

Vitamins

Forms Premix Active ingredients Supplements Complete feed

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Financial impact

2012 expectat ions:

Net sales ~ €385m and EBITDA ~ €60m

Immediately EPS

accretive

Predominantly sales synergies, some cost

synergies Expectations by 2015

Sales growt h above Nut rit ion clust er

aspiration (GDP +2% )

Increasing EBITDA%

margin

Subj ect t o cust omary condit ons, t he

transaction is expect ed to close in Q1 2013

Value creating, EPS accretive from the start

The Wall St reet Bull

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Fully support s DSM’ s growt h st rat egy “ DSM in mot ion: driving focused growth”
Good st rat egic fit wit h Nut rit ion clust er st rat egy
Acquisit ion st rengt hens and complement s DS

M’ s animal nut rit ion & healt h business

Capt ure value from DS

M’ s ext ended value chain presence wit h a broad port folio

f nut rit ional ingredient s for animal nut rit ion, while leveraging it s st rong

int ernat ional foot print

Value creat ing acquisit ion; immediat ely EPS

accret ive

Assuming no furt her det eriorat ion of t he economic condit ions, and based on it s

st rat egy, financial st rengt h, and t he addit ional act ions now t aken, DS M will move t owards t he 2013 strat egic target s.

Conclusion

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This document may contain forward-looking statements with respect to DS

M’ s future (financial) performance and

position. S

uch statements are based on current expectations, estimates and proj ections of DS M and information currently available to the company.

Examples of forward-looking st at ements include st at ements made or implied about t he company’ s st rategy, est imat es
f sales growth, financial results, cost savings and future developments in its existing business as well as the impact
f future acquisitions, and the company’ s financial position. These statements can be management estimates based
n information provided by specialized agencies or advisors.
DS

M 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 the company’ s actual performance and position to differ materially from these statements.

These factors include, but are not limited to, macro-economic, market and business trends and conditions, (low-cost)

competition, legal claims, the ability to protect intellectual property, changes in legislation, changes in exchange and interest rates, changes in tax rates, pension costs, raw material and energy prices, employee costs, the implementation of the company’ s strategy, the company’ s ability to identify and complete acquisitions and to successfully integrate acquired companies, the company’ s ability to realize planned disposals, savings, restructuring

r benefit s, t he company’ s ability t o identify, develop and successfully commercialize new products, markets or

technologies, economic and/ or political changes and other developments in countries and markets in which DS M

perates.
As a result, DS

M’ s actual future performance, position and/ or financial results may differ materially from the plans, goals and expectations set forth in such forward-looking statements.

DS

M has no obligation to update the statements contained in this document, unless required by law. The English language version of this document is leading.

A more comprehensive discussion of the risk factors affecting DS

M’ s business can be found in the company’ s latest Annual Report, a copy of which can be found on the company’ s corporate website, www.dsm.com

Disclaimer

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