Koninklijke DSM N.V.
Q4 2020 Earnings Call Transcript

Published:

  • Operator:
    Ladies and gentlemen, thank you for standing by. Welcome to DSM's Conference Call on the Full Year Results of 2020. . Now I would like to turn the call over to Mr. Huizing. Please go ahead.
  • Dave Huizing:
    Thank you, operator. Good morning, everyone, and welcome to DSM's Full Year 2020 Results Conference Call. I'm joined on this call by our co-CEOs, Geraldine Matchett and Dimitri de Vreeze. Geraldine will give a short introduction, after which we will open the line for questions.
  • Geraldine Matchett:
    Thank you, Dave. Good morning, everyone, and thank you for joining us today. We appreciate your continued interest in DSM. I will provide a few comments on the key slides of the investor presentation that we published this morning together with our press release, and then we will open the line for the Q&A session. And as a reminder, please note that following the announcements regarding the proposed divestment of our Resins & Functional Materials businesses, we published our results on a continuing operations basis for - since Q3 2020, and this is what we comment to unless otherwise indicated. The full restatement will be provided in the integrated annual report 2020, which will be published shortly. Now let's start with the financial highlights on Page 4. 2020 was an extraordinary year, as we all know, and one which presented significant operational challenges. Yet throughout, we were determined to keep on delivering for our customers, and we are proud that we were able to do this, thanks to the commitment and resourcefulness of our colleagues around the world. Against this backdrop and despite the strong negative foreign exchange effect, we delivered solid results. Nutrition performed well with a 6% organic growth and a 7% step-up in EBITDA, whilst our Materials businesses saw - were negatively impacted by the pandemic with volumes for the year down 6%. Altogether, our adjusted EBITDA was nearly flat at minus 1%, and our adjusted net operating free cash flow was strong, up 19%. Despite the operational challenges, we also continue to strengthen our long-term growth drivers through, amongst others, 3 specialty nutrition acquisitions and the refocusing of our innovation platforms. Looking more specifically at Q4 on Page 5. Our businesses performed in line with our expectations despite the increasingly negative foreign exchange effect. Nutrition saw very good conditions and delivered a 9% organic growth, with a 10% increase in EBITDA coming from Animal Nutrition, Human Nutrition & Food Specialties as well as a gradual recovery in Personal Care. Materials saw a strong recovery in the quarter with volumes up 13%, a clear sequential improvement from the minus 6% in volume in Q3. While we are, of course, pleased with this performance, it is too early to tell how much relates to stocking within the automotive value chain versus how much relates to sustainable improvement in global car build activity. As for the EBITDA for Materials, we saw a significant improvement with - from the minus 31% fall in Q3 to a minus 10% in Q4 versus prior year.
  • Operator:
    . First question is from Mr. Matthew Yates of Bank of America.
  • Matthew Yates:
    A couple of questions, please. The first one, about 1 year ago, I think, you announced the Fit for Growth initiatives. I wondered if you could just give us an update on whether that was fully implemented given the COVID disruption, and if so, what results you're seeing from that program so far. The second question is specifically around infant formula when the environment, I guess, where global birth rates are pretty low, and you talked in your introductory remarks about perhaps some delays in new product launches. I just wondered if you could talk a little bit about how you're budgeting that category in 2021. And can you remind me what your relative position is with the domestic Chinese brands versus the multinationals? My understanding is that the domestic players seem to be gaining share in the China market at the moment.
  • Geraldine Matchett:
    Matthew, thanks for joining the call. Sure. Let's see that. I'll start with the first one with Fit for Growth. So absolutely. If you remember, Fit for Growth, we started actually in the middle of 2019 looking at how do we improve our go-to-market structure within our Nutrition business after its big growth and the addition of acquisitions, et cetera. The actual execution and implementation of it took place in the first half of 2020. And although we were in lockdown circumstance, et cetera, we did push through and continued and completed the Fit for Growth program, which was as much reinvesting in our ability to grow, if you remember, than anything else. So Fit for Growth has been completed, and we are now pretty much operating under that new structure. And maybe, Dimitri, do you want to take the infants formula, Early Life Nutrition question?
  • Dimitri de Vreeze:
    Yes. Yes. Okay. Thanks, Matthew, for that question. Indeed, Early Life Nutrition, we see lower birth rates. It's magnified by COVID-19 and the uncertainties. But we'll certainly see that, that will go and that we will see normalized birth rates going forward. Overall, China, it is about 35% of the market, with Chinese, indeed, taking a bit of share supported by the government. But let's see how this plays out because the field itself is still a premiumization field. So this is not a volume game, this is really a value game where innovation is key and science is hardcore in that whole segment.
  • Matthew Yates:
    And so, Dimitri, are you fairly agnostic as to whether it's the multinationals or the domestic Chinese who capture that growth? Or are you biased one way or the other?
  • Dimitri de Vreeze:
    No. I think today, our position is relatively small. We look at where we play with our innovation card, the premiumization card, and we definitely will put on the radar screen on what is happening. For today, I think we basically, as an ingredient player, choose where we can and will play. And let's see after COVID-19 and when the uncertainty is gone how the birth rates will pick up. But all consumers look at premium quality materials. So innovation and also science backed up by that innovation is absolutely key for us.
  • Operator:
    Next question is from Mr. Mutlu Gundogan, ABN AMRO.
  • Mutlu Gundogan:
    Two questions. The first one is on Nutrition. Can you give us an update on Nenter? Where do we stand currently? Is the plant up and running? And what is the expected contribution to EBITDA in 2021? And then secondly on Materials. Obviously, a strong quarter in Q4 with benefits from restocking. And I understand that, that makes the outlook a little bit difficult. So perhaps, can you talk about the volume growth so far in 2021? Have you seen that come down following restocking?
  • Geraldine Matchett:
    Yes. Good morning, Mutlu. Thanks for joining. Yes. So Nenter, which is now Yimante, is progressing well. So if you remember, just looking back a bit, there was a bit of delay. We had to do the shutdown to upgrade the site, which, of course, got caught into the whole COVID situation, particularly whether - given it's not far from Wuhan. And there was also actually some flooding in the Yangtze river valley. But the good news is that it got completed. And in fact, production has started to get moving. So we expect to bring Materials to market from that site as of about Q2, and we will see exactly the timing. We will adapt according to the market demand the ramp-up, and we would see a contribution probably in the order - well, it depends again on the ramping up, but between maybe €10 million and €15 million for the year.
  • Dimitri de Vreeze:
    Yes. And then maybe the question on Materials for my side. Okay. Indeed, this is the hundred billion question. How much is restocking? How much it's picking up demand? It's difficult to judge. But what we have seen is that it's definitely a restocking ongoing after winding down the global production build rates in quarter two and in quarter three. And you've seen also that reflected in our volume with minus 21% in Q2 and minus 6% in Q3.
  • Operator:
    Next question is from Mr. Thomas Wrigglesworth, Citi.
  • Thomas Wrigglesworth:
    Ask a couple of questions. Just wanted to focus on Animal Nutrition. You called out higher premix sales driving prices in the fourth quarter. In the order books that you're seeing going forward - or actually in your guidance that you provided, should we be thinking this high crop price environment is going to drive poultry and pig farmers towards optimizing feed conversion efficiency maybe a bit faster than they have done in a lower crop price environment? If you could talk a little bit to that and your expectations around that, would be great. And secondly, innovation pipeline. Any updates there that have taken place through the end of the year? I know we discussed a lot about it in the Capital Markets Day, but very keen to hear how EverSweet is developing. And any updates to the time line for Clean Cow? I know the names have changed, so forgive me.
  • Geraldine Matchett:
    That's okay, Thomas. Sure. Let me maybe start with Animal Nutrition, and then I'll hand over to Dimi for Human. So yes, crop prices are clearly up. And I think you will remember that for our business, that tends to actually mean more focus on how to get the best out of the feed. So indeed, the conversion is important, which tends to then lead to higher ingredient inputs, such as enzymes in particular, but also eubiotics, probiotics. So we would see that the overall environment of higher crop prices to be supportive rather than a headwind. The other thing, of course, that will be a bit supportive this year is the continued positive development on the African swine fever front. Thomas, I think you saw that also in our highlights, where we're seeing the rebuilding of the herd progressing nicely. And combined with some new laws on banning antibiotics, et cetera, creates a favorable environment for Animal Nutrition going forward because effectively Q4, last in 2019, was the low point on the African swine fever part. And let me just wrap in a bit of news on, indeed, Bovaer, the new - the branded part of Clean Cow. So here, what we're seeing is the fact that we're progressing nicely with EFSA. Time line remains quite similar. So we expect to get registration, hopefully, in the second half of this year, which would open the path for commercialization as of 2022. And we've actually had some nice announcements to make around this, including a collaboration agreement with Fonterra that is launching some dairy products, which are carbon neutral and really looking at how to lower the carbon footprint of the dairy chain. So that's really nice because, as you know, New Zealand was always a country that was very interested in this, but it was taking a bit of time. So that's really great. Also, a collaboration agreement with VALIO, that's the leading dairy group in Finland, where we're also going into much more intensive trials. They're looking to basically bring their milk product - sector to carbon neutral. So carbon-neutral milk by 2035 is their target, and this year is being an important part to that. And then we also had a nice outcome of trials in The Netherlands recently, where they tested with different feed compositions, different inclusion levels. And that reconfirmed for the nth time the fact that the reduction in methanes were between 27% and 40%. So if I add to this a very large trial in Alberta on beef cattle, I mean, that was actually involving 15,000 cattle. That also confirmed very high reductions in methane. This continues to build what was already a very strong file in terms of the efficacy and effectiveness of Bovaer on methane. So very positive. And then, of course, what is helpful as well is the backdrop against this, against which Bovaer will come to market. If you look at the EU Green Deal, the climate law, now the change in administration in the U.S., with them stepping back into the Paris Agreement, we're seeing a very receptive environment. So now we really want to get that EFSA clearance done.
  • Dimitri de Vreeze:
    And then maybe to finalize the innovation part from Bovaer to Avansya, the EverSweet. Like we said, this is fermentation. Scale-up is going as planned, very successfully. We also said that we had a few launches being tested. I'm very happy to say that we've been successful at what we call the - they call it now seltzers, hard seltzers, which are basically sort of alcohol-free, alcohol-light possibility as an alternative to beer. So you see that beer companies are trying to enter that category. I think Heineken just launched it last week as being a key part. We've seen a few other beer companies. And Avansya and EverSweet is absolutely playing a key role there as a low-calorie sweetener. So that has been confirmed. I think there's market pull ongoing, together with the ramp-up on the scale. Remember, it is a unique setup with EverSweet having a sort of a neutral taste and confirmed scale up capability. So if you launched a brand, you want to make sure that if the launch is successful, that the materials can be delivered, the ingredients can be delivered. And we have both in place. So I think some successes last year, and we are definitely on the growth path. I think we've mentioned during the investor event that this is already a business of a few tens of millions, and we're looking forward for 2021 to continue on that front.
  • Operator:
    Next question is from Mr. Martin Roediger, Kepler Cheuvreux.
  • Martin Roediger:
    Yes. I have three financial questions. Number one is on basically Nutrition. You had a 10% top line growth and EBITDA growth over 10% in Q4. And therefore, the margin was up by 10 basis points year-over-year. Can you talk about the leverage in Nutrition? Because in the past, I remember that you had such a high top line growth and your EBITDA margin was expanding much stronger. Secondly, on the underlying depreciation and amortization charges. It's clear that the key driver for the sequential increase in D&A is the consolidation of Erber. But is there any other item which caused this sequential increase of €26 million in Q4 versus in Q3? And then finally, I see that you had significant write-downs or impairments in Q4 of €101 million. Can you explain what has caused that item?
  • Geraldine Matchett:
    Yes. Martin, let me start with the two finance ones, and then I'll come back to the Nutrition margin. That will probably be a bit - there's more pieces to that. So when it comes to depreciation and amortization, you're absolutely right, that we see a step-up in that expense. Now it's good to remember, of course, over prior years that we have IFRS 16 in there. But the step-up comes from the PPA. So - sorry, from - jargon, from purchase price allocation on acquisitions. So here, I think it's good to say that we're probably, including the PPA, looking now at about €165 million per quarter, reflecting about €20 million relating to those amortization of intangibles - acquired intangibles. So that is on depreciation and amortization. Now on the impairments, absolutely correct. So what we booked in Q4 are a couple of impairments. On the one hand, linked to the Resins & Functional Materials divestments, what we had is within the scope of discussion with the solar business. Now Covestro took the solar coatings business, but they were less interested in the back sheet. Now what we did within Q4 was to have a look at the market condition, market development, et cetera. And as we always have to do, we've run an impairment test, and we had to impair the remainder of the solar business. But to be fair, that was already expected when we closed the deal with Covestro. So this doesn't - this is actually factored into the gain on disposal that we estimated when we communicated the divestment's financials. So that was about half of the impairments. And the other half is linked to BP&S, so Bio-based Products & Services. Now if you recall, the joint venture, we impaired earlier in the year due to the weak market conditions in biofuels that we don't foresee to improve in a hurry and some technical issues with the downstream processing. Now what we've done as part of the full year impairment reviews as we've also looked at what we had on the balance sheet as DSM relating to biofuel, so here, we're talking about some of the yeast and enzyme second-generation R&D that we've done over the years and seeing them prolonged difficult market conditions, this led as well to an impairment of those assets on the balance sheet, which is the other half. So both of those have been booked in Q4. And then Nutrition in terms of the margins. Now indeed, what you're seeing is broadly a stable margin in the quarter. Now Q3, to be fair, was an outlier at 22%, and it's probably best to look at the full year margin for Nutrition. And here, what you see is that we are at 21% versus 20.7%, so 30 bps up. And if you recall from our expectations around Nutrition, is that we would be above 20% and then with some upside coming from the mix, whether it be innovation, whether it be M&A, et cetera. But there are, of course, a lot of moving parts in there. And this is sort of in line with what we would expect to see our Nutrition business evolve towards, which is a gradual increase in margin of 30, 50 bps per year.
  • Operator:
    Next question is from Mr. Chetan Udeshi, JPMorgan.
  • Chetan Udeshi:
    I just had one question just around the - there was a bit of - a lot news flow, anecdotal data suggesting a lot of disruptions in the whole shipping channels, especially between Asia and Europe and Asia and U.S. And I'm just wondering if DSM has seen any impact from that either positively or negatively in your Materials, or probably more in your Nutrition business given the shipments of vitamins that usually happens from China to the rest of the world?
  • Geraldine Matchett:
    Sure. Why don't you take that, Dimi?
  • Dimitri de Vreeze:
    Yes, let me take that one. So we do see disruption in the world of container shipping and freight rates going up, but it's predominantly on spot rates. As you would expect, we, as a company, have long-term contracts with shipping companies. So it is not directly impacting us on the operations, although we're absolutely alert on when the shipping is being contracted and we bring stuff across the globe. So from that perspective, no. But we do see disruption and insecurity from goods flows, and all types of people in the value chain do see insecurity ongoing. Coupled with the fact that you see Chinese New Year upcoming, which is always a bit of a supply chain nightmare the month before, so that has escalated this whole insecurity around it. I personally think that this will normalize again after Chinese New Year is over and people are ramping up. So this has more a short-term volatility effect, where we need to absolutely be keen on. But I can assure you that by contracting what we have done on the freights, we can continue shipping what we intended to ship. So it's a bit of a volatility and insecurity for the spot rate. Nevertheless, I think it is not helpful in creating a more secure supply chain going forward.
  • Chetan Udeshi:
    My question was more besides just the freight rates. Have you seen any impact on the demand for DSM products given that you guys are one of the few who produce some of these vitamins outside China? So are you seeing some better demand from customers in this environment, where maybe the shipments from China might be disrupted in general?
  • Dimitri de Vreeze:
    Yes. So I think the demand itself will not go up if freight rates are going up or whether it's insecurity on the supply. What you do see is that there are interruptions from one player to another. And as we are a global player, we do see the interruptions but we do only see that for the short term. And at the end of the day, it is smoothening out. So no, we've not seen a huge impact on us. What I say is we see insecurity and volatility popping up because there is a big spot behavior ongoing. So that is not helpful in creating a bit of a secure supply chain. But no, we've not seen a huge demand going up because there is a scarcity in freight.
  • Operator:
    Next question is from Mr. Andrew Stott, UBS.
  • Andrew Stott:
    Two questions. First one is on the nice problem you're going to have in the next few months, I guess. So you - once you've got that cash from Covestro, you're going to have a reasonably inefficient balance sheet again. Can you just remind me of what your priorities are for '21 and where the capacity is for the - I'm thinking management, not just yourselves, but divisional level as well, about the ability to do more deals in the short-term, if that ambition is there. That's the first question. The second question is much more detailed around your Nutrition performance. The others business saw what seems to me like a crazy number, so 15% organic growth in Q4. And I think you're referencing restocking in Food Specialties is one of the key things behind that. I just wondered if you could elaborate a bit more on that performance and maybe what you see for '21 in that subdivision.
  • Geraldine Matchett:
    Thanks, Andrew. Let me start with the first one. So maybe just a couple of words on the balance sheet. Indeed, we closed the year with a net debt of €2.6 billion, started the year with €1.2 billion, which is a delta of €1.4 billion, which basically reflects our spend on acquisitions of about €1.5 billion and the share buyback we did, about €145 million in 2020. So that brings us to €2.6 billion. And then, of course, we will get the proceeds from the divestments, which are actually about €1.4 billion. So it brings us back to €1.2 billion. Now I wouldn't say it's a grossly inefficient balance sheet. I mean, when we announced the €1 billion buyback at the time, we were net cash. So it is a slightly different situation. But you're right, it does give us financial capacity to continue to invest into our future growth, which is great. I think your question was actually towards the organizational ability to do more. And we are very mindful that, of course, on the one hand, we have to complete the carve-out, but we also need to properly integrate. CSK now is done, but we're still partly doing Glycom. And clearly, Erber, we've just celebrated the 100 days. And so there is quite a bit going on. So we are in no rush in terms of having to deploy this fast and we want to be sure. Like we've always been very disciplined on what we acquire. We also want to be disciplined in terms of not overloading the organization with too much to be done. So we'll see how we go. But of course, looking back, we're very happy with the three acquisitions that we did, particularly - and it's important to highlight that they were in different parts of the organization. So CSK in Food Specialties, Glycom in Human Nutrition and Erber in Animal Nutrition, which also have spread the load in terms of the burden of integration. So that's broadly how we go into the year. And Dimi, do you want to take the other Nutrition?
  • Dimitri de Vreeze:
    Yes. The other Nutrition, I mean, if you say other Nutrition, it looks like we have something on the sight. Absolutely not. This is a core segment for us. But it has about three segments, and let me try to give you some color on these three segments. One is Food Specialties, the other one is Personal Care and the third one is aroma. And what we've seen on the Food Specialties side, we saw indeed demand for savory and dairy was very good throughout the year. And Q4 saw a very strong demand across almost all product categories with, certainly, some stocking effects into that. And you've seen that in the number for Q4. In Personal Care, remember that they were impacted by COVID throughout the year. But we saw a start of a recovery in quarter four, especially in the sun filters and cosmetics. And the third one, the Aroma Ingredients. Be aware that the Aroma Ingredients are also linked into hand sanitizers and all that has to do with cleaning. So part of that was really helping, and we saw strong demand for household and laundry goods. So you saw three elements of which some recovery in Personal Care, aroma being strong and Food Specialties being strong, but also with the extra stocking effect, creating a very good quarter four. For the full year, this whole set up was around 3%. So I think if you rate it for the full year, I think that is more in line than an exceptional quarter four.
  • Andrew Stott:
    Okay. Do you mind - can I just come back to a comment, Geraldine, you made on the use of balance sheet? If you're not in a hurry to do deals, is a buyback another option? Or are you just happy to continue to focus on organic growth only?
  • Geraldine Matchett:
    Yes. I mean, if you look at - firstly, the current market environment still have a fair amount of uncertainty. So I think pushing leverage for the sake of leverage is probably not wise. We also do have a lot of ideas as to where we could deploy a very - valuably this capital to boost our growth. So our intention is, as we always have with our capital allocation prioritization, support organic growth, obviously, honor our dividends commitment and then invest where possible in M&A. And so that very much is our mantra. So now very little intentions of giving any cash back. That would have to really come on the back of not seeing sufficient opportunities, which is not the case, right now.
  • Operator:
    Next question is from Gunther Zechmann from Bernstein.
  • Gunther Zechmann:
    On the Materials business and the uncertainty around the outlook into 2021, can you just talk about the order book and how visibility has changed over the course of the last year? And secondly, have you seen or are you expecting to see any impact from the semi shortage in that business?
  • Dimitri de Vreeze:
    Yes. Thanks for that question. Indeed, visibility, I think, is still difficult. That's also why we're not giving a precise outlook. Certainly with the stocking - restocking effect, it's very difficult to judge what the real markets are doing. So that is difficult to give some color around. What we can - what we do see is that - what we see in the automotive piece is that automotive and electronics are coming together. And I think, strategically, we have already indicated in our strategy a couple of years ago that we think more in terms of mobility, mobility and connectivity, as the new segment, which merge more or less electronics with automotive. And it's very interesting to see that the last couple of weeks, that has been spelled out because the chips and the semiconductors are going in those 2 spaces. And today, the new electrical vehicles are more - driving connectors or driving computers than anything else. So we do see that there is a bit of disruption. But as we play in automotive as well as supplying almost all electronic and mobile companies in the world, we basically are not being impacted. We see some disruption. But I think the automotive world in itself, with the long value chain, has time to adjust. So if this takes longer, most probably it will have more structural effect. But we do see - if you fill the pipeline, you always see a bit of disruption going through. So I don't think this is structural. But hey, if you go back to a bit of normalization, it will go with some volatility going forward.
  • Operator:
    The last question is from Mr. Sebastian Bray from Berenberg.
  • Sebastian Bray:
    I would have two, please. The first is on the innovation segment. What is in here now? Is it Kensey Nash plus an allocation for R&D? Or how has that gone? Is there anything related to biofuels left in there? What I'm trying to get at is, is the EBITDA margin shown a reliable guide to Kensey Nash? Or what are the factors that might change this? My second question is on potential resources of capital. Prior to - about 3 years ago now, DSM divested part of its caprolactam assets to Highsun. And at that time, from memory, there was a composite resins business stake as well as one in acrylonitrile that was held jointly with CVC. What is the book value that these assets are held at? And could you perhaps give us an idea of the sales and EBITDA from these and if a divestment is on the cards given that multiples in the chemicals sector are quite high at the moment?
  • Geraldine Matchett:
    Sebastian, thanks for your question. Let me start with the Innovation Center. So indeed, very fair question, what is left in there? So it's probably good to remind everyone that we have our biomedical business in there, which is broadly about €150 million in sales and delivers about €40 million in EBITDA. So that is a quality business. It has suffered a bit last year because of elective surgeries being postponed because of COVID. So we will expect a nice recovery in 2021. Now if you look at the EBITDA of the Innovation Center for the year 2020, you see there €21 million. And that is netted out by a combination of other activities. Partly, we had BP&S in there with the license income, but some losses on the solar business. So put together, that's about 0. And then we have - what we have, our shared innovation support expenses, which include our IP, venturing, incubator, et cetera, which is also netted in there. So what we will see going forward is partly a strong performance in biomedical and a step-up in some of our other activities. So that's in terms of the P&L. In terms of the capital employed, you see there a big reduction. And that is predominantly linked to biomedical now. So following these impairments that I commented on earlier, the €436 million is, for the vast majority, biomedical-related. So hopefully, that provides some guidance there. And Dimi, do you want to talk to the associates?
  • Dimitri de Vreeze:
    Yes. I think what we do see is that we still have a minority share in our acrylonitrile business, that is AnQore together with CVC. Like we said, minority share is - that really is not key strategic to us, and we're looking at options to add value. And we certainly have. Like one of the options is to step out over time or to go with a buyout over time. It's not critical for us. We're looking at it from a value-adding perspective together with the CVC. And like we said, we are a minority shareholder. The same composite resins. Composite resin, at the same time, I think 1.5 years ago, acquired the AOC Resins business. So this is a €1 billion business in total. We have diluted our share there. And over time, we will also exit that business. It's just a matter of value generation for DSM. So it's a timing issue going forward, like we've done on many of our divestments. And I think we've done that very well in the past, and we will try to do the same for these two business going forward.
  • Geraldine Matchett:
    Great. And for the valuation, you'll find in the balance sheet the share of associates and joint ventures is about €90 million in there. And that includes those associates. So these are not very big balance sheet positions.
  • Dave Huizing:
    Okay. That brings an end to the Q&A for today. Dimitri, do you want to make some closing remarks?
  • Dimitri de Vreeze:
    Yes. Thank you, Dave. First, as Geraldine already mentioned, I want to express once again how proud we are of our colleagues at DSM, without whom we couldn't have realized these good results in this difficult environment besides closing three acquisitions, 1 divestment and also delivering against our purpose-led sustainability ambitions in people and planet. It goes hand-in-hand. On the latter, on the sustainability topics, I would understandably say a few things on the pandemic situation. A lot of people would've thought that we would let go of it. However, we did not. And I would remind you of our highlights on planet and people, which you can find on Page 27 of the presentation. We are continuing to make strides toward net zero by 2050, not only towards the end of the 2050, but certainly already year after year today. And we improve our greenhouse gas emissions along with our key suppliers. Our energy efficiency has improved by almost 6% compared to the previous year, above our own annual ambitions, and we also have stepped up our renewable electricity purchase to now 60%, 6-0 percent. And I'm also personally very proud on our safety and performance. Our safety frequency recordable index has improved year-on-year as well as our employee engagement index in a COVID-19 year of 2020. And this was supported by a launch of several initiatives in the year despite the pandemic. We also look confidently at the medium and long-term growth prospects of our company, and Nutrition will maintain a strong growth by building on its global products, local solutions with an additional third leg, precision and personalization. And in Materials, we expect to continue the development of a more resilient, higher-growth, high-margin specialty business, amongst others, by adding further bio-based and circular solutions. And with that, back to you, Dave.
  • Dave Huizing:
    Okay. Thank you, Dimitri. This concludes today's conference call. If you have any further questions, please go and reach out to me and my team. Thank you. Operator, back to you.
  • Operator:
    Ladies and gentlemen, thank you for attending. This concludes the DSM conference call. You may now disconnect your lines, and have a nice day.

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