1.1

1.2

• DSM’s strategy over the last strategy period canbe summarized in one slide.

• DSM’s focus on Life Sciences (Nutrition andPharma) and Materials Sciences (PerformanceMaterials and Polymer Intermediates) has beenfueled by the four major societal trends: ClimateChange and Energy; Health and Wellness;Functionality and Performance; and EmergingEconomies. By focusing on Life Sciences andMaterials Sciences, DSM addresses the unmetneeds resulting from the four main societal trendsmentioned. Innovation solutions play a key rolein this respect.

• Life Sciences and Materials Sciences offerattractive growth potential on their own and incombination. DSM’s EBA (Emerging BusinessArea) program, launched as part of Vision 2010,creates growth platforms based on the strengthsand synergies of DSM’s positions in Life Sciencesand Materials Sciences. For example, DSM isconvinced that biotechnology, traditionallyassociated with life sciences, will increasinglyplay a role in developing new biomaterials; and inturn materials that will increasingly be applied inlife sciences applications. The cross-fertilization

potential between Life Sciences and MaterialsSciences – internally referred to as the X-factor –is high.

1.3

• In the past three years, DSM has transformed itsbusiness into a focused Life Sciences andMaterials Sciences company by divesting non-core businesses and making selective acquisitions.

• Completed divestments include Stamicarbon,DSM Energy, DSM’s interest inNoordgastransport, DSM Agro and DSMMelamine. Preliminary agreements regarding thesale of DSM Special Products and ThermoplasticElastomers (Sarlink®) have been announced.

• The selling processes for the Keltan® business ofDSM Elastomers, Citric Acid Europe and MaleicAnhydride and Derivatives are underway.

• A number of smaller acquisitions and venturinginvestments have been made in recent years.DSM acquired The Polymer Technology Group(PTG), giving it access to valuable know-how andclient relationships in the biomedical market.With the acquisition of Pentapharm, DSMobtained a leading position in the developmentand production of active ingredients for thepersonal care market. DSM Venturing has about€ 60 million committed in promising companiesand leading venture capital funds. Earlier thisyear, DSM completed the acquisition ofMitsubishi Chemical Corporation’s polyamidebusiness in exchange for DSM’s polycarbonatebusiness.

• Other actions to improve the portfolio include theclosure of the citric acid plant in China and thereduction in the number of DSM Anti-Infectives’sites.

• In addition to the portfolio changes, DSM furtherincreased its presence in China while improvingits position in other High Growth Economiessuch as India, Russia and Brazil.

• Apart from reaching the Vision 2010 target ofadding € 1 billion in sales through innovationbetween 2006 and 2010, DSM has alsosucceeded in increasing the number of productlaunches.

• DSM is a recognized as a technology leader insecond-generation biofuels and bio-basedmaterials.

• In 2009 DSM regained its number one positionin the chemical industry sector in the Dow JonesSustainability Index.

• By “Staying the Course” – a fast, strong andeffective response to the changing economicconditions by focusing on costs, cash andworking capital, reducing net debt, whilst stillconcentrating on customers, innovation andvalues/sustainability – DSM emerged from theeconomic downturn as a stronger company.

1.4

• Fundamental changes have taken place in DSM’sportfolio over the past ten years. Through a seriesof major and minor divestments (such as thepetrochemicals business and a number of basechemical businesses) as well as a number ofacquisitions, DSM’s profile today is very differentfrom that of ten years ago.

• DSM has transformed itself from a predominantly‘chemical’ company in 2000 to a Life Sciencesand Materials Sciences company. More than 50%of DSM’s portfolio in 2000 has been divested.Net sales of DSM’s Nutrition business haveincreased more than tenfold in ten years as aresult of the Roche Vitamins acquisition andorganic growth. Life Sciences as a percentage oftotal DSM sales increased from 14% in 2000 tomore than 40% today.

• After the successful divestment program – part ofAccelerated Vision 2010 – DSM’s portfolio nowhas a clearer focus, and the quality of earningshas significantly improved. A large proportion ofgroup revenues and earnings are now in high-margin, high-quality businesses that havesignificantly lower cyclicality.

1.5

• In the period 2006-2010 DSM has given itsportfolio a greater and clearer focus. At the sametime, it has achieved most of the important targetsof Accelerating Vision 2010, despite the mostsevere economic downturn of the last 70 years.

• The targets in the Accelerating Vision 2010strategy were set assuming that there would beno adverse general economic and tradingconditions affecting DSM specifically.

• During the period 2006 – 2008 DSM was ontrack with all targets. However, due to thefinancial crisis and the subsequent economicdownturn, DSM’s financial results were heavilyimpacted as of Q4 2008. By executing its strategy(focus on customers, innovation and values /sustainability), DSM has weathered this stormvery well. DSM had to implement toughmeasures to manage cash and working capital,and to reduce costs. This involved the reductionof the global workforce by approximately 1,200and cost savings of more than € 200 million. As aresult, DSM will achieve the targets set out inAccelerating Vision 2010, except for the EBITDAmargin targets for Performance Materials andPolymer Intermediates.

• The Pharma cluster has faced considerablechallenges and a changing marketplace and willnot achieve its EBITDA margin target.

1.6

• The economic context in which all globalcompanies are operating is arguably morecomplex than it has ever been. The post-crisisrecovery is happening at different speeds and todifferent levels.

• DSM remains cautious about unpredictablefinancial markets, particularly in the context ofchanging bank rules and possible defaults.

• DSM sees only moderate growth in most matureeconomies. Whilst there are always some sectorsand some companies which grow strongly, therecovery is still weak in Japan, varied across theEU, and apparent only in certain industries in theUS. Consumer confidence is extremely volatile,which is hardly surprising given the fact of a’jobless recovery’ in many countries,accompanied by continual Government rhetoricabout the need to cut public expenditure anddeficits.

• In the meantime many “emerging economies”have developed into “high growth economies”and for the first time, it is the high growtheconomies which are pulling the world out ofglobal recession. Two decades of economic

growth have created strong consumer demand inChina, Brazil and India, which is in turn feedingthrough to production industries and servicesectors.

1.7

1.8

• DSM has a long history of transformation. Fromthe beginning in 1902, when the Dutchgovernment formed the state-owned coalcompany, to today’s DSM: a Life Sciences andMaterials Sciences company.

• At a very early stage, DSM realized the need forchange. In the 1930s it converted a by-productfrom coal mining into a profitable commodity,ammonia, a key raw material for nitrogenousfertilizers. This marked the first step on adiversification path that ultimately saved DSMfrom the fate of many other coal miningcompanies in Western Europe.

• By 1970, chemicals and fertilizers comprised thecompany’s main activity, accounting for two-thirds of its turnover. Petrochemicals then tookcenter stage.

• In 1989 DSM was privatized and its shares werefloated on the stock exchange. During the 1990s,the company paid greater attention to aligning itsR&D efforts with market needs. By that time ithad also diversified into high-quality plastics andfine chemicals.

• Over the past 12 years major portfolio changeshave taken place, such as the divestment of thepetrochemicals business and the acquisition ofthe vitamins business. With the divestment of thebase chemicals activities in recent years and thechanges within the organization, DSM is nowready for the next growth phase.

• In this next phase DSM will deliver on itspromise of creating brighter lives, driving focusedgrowth and becoming a truly global company.

1.9

• DSM’s strategy is based on demonstrable globaltrends that are affecting economies, people andmarkets in different ways. They underpin DSM’sthinking and planning and the same holds for ourcustomers, who are also developing plans andproducts to meet these current and future needs.

• The continuous growth of the world population isthe main course for these global trends. The USCensus Bureau currently estimates the worldpopulation to be around 6.9 billion people.The United Nations expects this figure to reach9 billion in 2050.

• Global Shifts. Customers know that we live in aworld which is changing faster than ever –influencing where demand comes from, how andwhere people are living and how we connectwith one another. Urbanization and economicprosperity are promoting dietary changes andincreased spending on housing, transport, lifestyleand energy, all benefiting the chemical industry.In 2009, per-capita demand for chemicals indeveloped economies was 6 times greater than inHigh Growth Economies, showing the latter’shuge potential. Increased demand around theworld is also driving a higher use of naturalresources, leading to a search for furtherefficiency. Several new technologies, especially in

the communications industry, are having a highimpact on society and behavior.

• Climate and Energy. Customers know thatclimate change is a reality and future energy is acentral challenge for society both in terms of howto create it and how to get more out of it. In thiscontext, customers are seeking sustainable valuechains with higher yields, reduced waste, lowerenergy use and fewer GHG emissions. Forexample: the use of lightweight plastics in UScars grew from 27 kg to 150 kg per vehicle in2007. At the same time there is a growing focuson renewable energy sources.

• Health and Wellness. Customers know theyneed to address core health needs; whetherthrough nutrition, medicines or lifestyleimprovements. The population in the West isageing and there is cost pressure in all healthcaresystems. For example: according to GoldmanSachs the cost of healthcare for the over 65s is 3-5 times higher than for a young person. At thesame time, healthcare demand in High GrowthEconomies is increasing. Nutrition security andaccess is increasingly important, and there is alsogrowing demand for safer and healthier foods andpharmaceuticals.

1.10

• DSM in motion: driving focused growth marksthe shift from an era of intensive portfoliotransformation to a strategy of maximizingsustainable and profitable growth of the ‘new’DSM. The current businesses compose the ‘newcore’ of DSM in Life Sciences and MaterialsSciences.

• DSM’s focus on Life Sciences (Nutrition andPharma) and Materials Sciences (PerformanceMaterials and Polymer Intermediates) is fueled bythree main societal trends. DSM aims to providesolutions for issues posed by: Global Shifts(demographic shifts, urbanization, high growtheconomies, usage of resources, impact of newtechnology); Climate Change and Energy andHealth and Wellness. The main underlyingdrivers for these trends are the world’s populationgrowth and increasing life expectancy on the onehand, and increasing economic prosperity in theHigh Growth Economies on the other. DSM aimsto contribute to the unmet needs resulting fromthese societal trends with innovative andsustainable solutions.

• It is DSM’s ambition to fully leverage the uniqueopportunities in Life Sciences and Materials

Sciences, using four growth drivers: a focus onHigh Growth Economies, Innovation,Sustainability and Acquisitions & Partnerships. Itis DSM’s ambition to bring all four growth driversto the next level. At the same time DSM aims tomake also maximum use of the potential of allfour growth drivers to mutually reinforce eachother.

• DSM will use the regions, functional excellencegroups and shared services, creating ‘One DSM’to capture regional business opportunities andsynergies and to implement excellencethroughout the global organization.

• The culture change program that is currently inprogress (external orientation, accountability forperformance, inspirational leadership, based onthe joint beliefs in sustainability and diversity)will be further rolled out with an emphasis oncollaboration and speed of execution to supportthis strategy. All this is based on DSM’s jointbelief in sustainability and diversity, includinginternationalization.

1.11

• DSM has set itself ambitious targets for the nextstrategy period. With the transformationcompleted, DSM can now focus on, andaccelerate, growth. The company has highaspirations, based on an assessment of theopportunities, particularly in High GrowthEconomies.

• For 2013 two profitability targets have been set:an increase in EBITDA to a level of € 1.4 – 1.6billion and an increase in Return on CapitalEmployed (ROCE) to more than 15% in 2013.

• The following sales targets have been set for2015. DSM aims for organic sales growth of 5%-7% per year, enhanced by acquisitions andpartnerships. It strives to more than double itssales in China from $ 1.5 billion in 2010 to morethan $ 3.0 billion in 2015. Towards 50% ofDSM’s total net sales should be in High GrowthEconomies by 2015 compared withapproximately 32% in 2010. Innovation sales –which from now on will be measured as salesfrom innovation products introduced in the lastfive years – are targeted to be approximately 20%of total net sales by 2015.

• For the period 2011 – 2015 comparable capitalexpenditures can be expected to the AcceleratingVision 2010 period: between € 450 – 600 millionper year. For the total period, capital expenditureis expected to amount to € 2.5 – 2.7 billion, ofwhich $ 1 billion is foreseen in China. Inaddition, DSM aspires to keep working capital aspercentage of net sales below 19%.

• For the Emerging Business Areas a sales target ofmore than € 1 billion has been set for 2020.

1.12

• In the field of sustainability, also, a number ofambitious targets and aspirations have been set.

• For 2011 – 2015 the following value-creating-performance aspirations have been definedregarding sustainability: – Top ranking in the Dow Jones Sustainability

Index– ECO+ products as percentage of running

business should increase from about 34%toward 50%

– Percentage of ECO+ products in the innovationpipeline at least 80%.

– Energy consumption reduction of 2% annually– Greenhouse gas emissions reduction of ~ 3.5%

per year over a time period of 3-5 years– Satisfaction as measured in the employee

engagement survey over 68%– Further diversity and People+ aspirations will

be defined in 2011.

1.13

1.14

• In High Growth Economies, DSM’s ambition is togo to the next level: from reaching out to beingtruly global.

• All the evidence indicates that fast-growingeconomies such as China, India, Brazil and Russiawill be the major global growth engines for theworld economy over the next decade.

• DSM has actively pursued growth opportunitiesin High Growth Economies across all businesses.In the past five years the share of sales from theseeconomies has increased from 22% in 2005 to32% expected in 2010. DSM has built a stronglocal presence in different regions in the last fewyears. A significant factor in DSM’s Vision 2010 isthe expected achievement of the ambitious salesgrowth target of $ 1.5 billion in China (in 2007this target was increased from $ 1.0 billion).

• DSM’s ambition now is to broaden this approachand accelerate growth in multiple economies andregions. By 2015 DSM expects High GrowthEconomies to grow towards 50% of DSM’s totalnet sales. Over 70% of DSM’s growth in theperiod to 2015 is expected to come from HighGrowth Economies.

• DSM will continue with its strong focus in Chinaand expects to more than double its China salesto over $ 3.0 billion by 2015. To support thisgrowth DSM intends to invest $ 1 billion inChina in this strategy period. DSM will alsoincrease its presence in other markets, doublingor even trebling revenues in India, Latin Americaand Russia.

• DSM will establish new Innovation Centers inChina and India to harvest the opportunities inthese countries. This will enhance the localinfluence on the company’s innovation approach.

• To enable this ambitious growth, DSM will needto adjust its organization in a variety of ways tofacilitate local decision-making and innovation,and to establish clear accountability for regionalgrowth at Managing Board level.

1.15

• DSM expects sales in High Growth Economies togrow towards 50% of total DSM sales by 2015.

• Some examples of the key business opportunitiesthat the company has identified are: – Providing high-performance materials for the

automotive, building & construction, electronicsand packaging markets, especially in India andChina.

– Expanding DSM Nutritional Product’s premixnetwork in Brazil, Russia, India and China.

– Building the second caprolactam productionline in China, effectively doubling capacity by2014 in the country.

– Building a new 6-APA plant in China tostrengthen DSM’s position in the fast-growingantibiotics market in the country.

1.16

• China is changing very rapidly, transforming fromthe world’s manufacturing base into one of theworld’s leading economies with the highestgrowth rates and with innovation playing anincreasing role. China has become one of thelargest markets in the world, accompanied by anincreasing demand for Life Sciences and MaterialsSciences products. Economic prosperity andstrong domestic demand, driven by a fast-risingincome level, are expected to fuel economicgrowth for the coming decades.

• In 1998, DSM reported less than $ 100 million insales in China. In 2005 sales had increased morethan fivefold to $ 0.5 billion. DSM is proud that itwill achieve the target of $ 1.5 billion that wasset for 2010, which we will further double.

• As DSM’s sales in China grew, so did theorganization, especially in the last ten years. DSMnow has a workforce of more than 3,000 peoplein China, spread across 24 locations, of which 16are manufacturing sites.

• DSM’s China organization is headed by a full-time president, and DSM has focused onstrengthening its China top management to leadDSM in the next growth phase. DSM has

followed a policy of systematically appointingChinese people to key senior positions in itsChina businesses to strengthen local decision-making and ensure we have a goodunderstanding of local markets and needs.

• DSM has opened its China Campus in Shanghai -DSM’s most important research facility outsideEurope and the US.

• DSM will continue to maintain its strong focus inChina, and expects to more than double its Chinasales to over $ 3 billion by 2015.

• In order to achieve this, the management will befurther strengthened to grow the business. Inaddition to organic growth, acquisitions andpartnerships, capital expenditures ofapproximately $ 1 billion are foreseen in the nextfive years. Included in the capital expendituresare a second production line for caprolactam, a 6-APA plant for Anti-Infectives, furtherexpansions of the number of premix plants andseveral expansions in performance materials.A new innovation center will also be establishedat the research facility, led by the DSM ChinaPresident.

1.17

• DSM’s goal now is to truly internationalize itsbusiness. This will bring the company closer to itskey markets and customers – where DSMexpects 70% of its growth – strengthen theregional businesses and stimulate diversity andinnovation.

• DSM will combine a stronger regionalinfrastructure with clear board levelaccountability for regional growth. Over the nexttwo years DSM intends to: – Relocate the headquarters of the business

groups DSM Fibre Intermediates, DSMEngineering Plastics and DSM Anti-Infectivesto Asia.

– Relocate the DSM Biomedical (DBM) businessheadquarters to the United States.

– Relocate the Bio-Fuel (BF) business, a part ofDSM Bio-based Products & Services (DBPS)formerly named DSM White Biotech to theUnited States. The headquarters of DBPS andthe Bio-Chemical business remain in Europe.

– Establish new Innovation Centers in China andIndia, and expand the existing InnovationCenters in the US and Japan.

– Strengthen regional capabilities, infrastructureand management to provide regional views tothe business and support growth and

innovation in the regions. We will establishfull-time presidents in China, India, Russia andthe US and, initially, a combined business /president role in Latin America.

– Allocate regional growth and synergyaccountability to designated members of theManaging Board (dual desk in combinationwith cluster oversight).

1.18

• In innovation, DSM’s ambition is to go to thenext level: from building the machine to doublinginnovation output.

• Since the announcement of the innovation boostback in 2005, as part of DSM’s Vision 2010strategy, the achievement of numerousmilestones shows that the increased commitmentto innovation has significantly paid off. The mosttangible one is the € 1 billion in additional salesthrough innovation, which will be reached in2010 despite the strong headwinds encounteredsince Q4 2008. Furthermore, DSM has made abig step in improving innovation practices andculture in the company and has succeeded inconsiderably increasing the number of launches(from about 25 back in 2006 to a steady launchrate of approximately 60 per year now).

• In addition, the Emerging Business Area programshave resulted in strong, long-term growthplatforms which optimally combine the availablecompetences in Life Sciences and MaterialsSciences.

• Building on this track record, DSM aspires to takevalue creation by innovation to the next level.This will be visible, amongst other things,through: an even higher speed of innovation and

consequently a new stretching innovation target;an ambitious growth perspective for the EBAsWhite Biotechnology (which will be renamed toDSM Bio-based Products & Services) and DSMBiomedical; and the implementation of acompany-wide platform approach (currently fivebusiness platforms and three EBAs).

• DSM has adopted a new innovation targetdefinition which is more in line with othermainstream innovators in the industry:percentage of sales created by new products andapplications introduced in the last five years,replacing the previous target of an absoluteamount of additional sales through innovation.DSM aims to increase innovation sales from~ 12% towards 20% of total sales by 2015. Thistarget reflects DSM’s aspiration to further boostinnovative growth as well as portfolio renewaland the speed of innovation.

• The EBAs should grow to a combined turnover ofmore than € 1 billion in 2020.

• An important element to bring innovation to thenext level is expanding innovation to newregions. Therefore, DSM will establish InnovationCenters in China and India.

1.19

• To achieve the new innovation targets and bringDSM to the next level of excellence ininnovation, the company will introduce portfoliomanagement at platform level. By increasinglyfocusing on platforms rather than individualprojects, the success rate of innovation activitiesis expected to grow further.

• In addition, DSM will use portfolio managementto ensure balance between incremental andradical innovation. This will facilitate discussionson the composition of the innovation portfolio andwill help optimize the mix between incrementaland radical innovation within the company. Forthe radical part of DSM’s innovation portfolio, aglobal, company-wide portfolio approach will beadopted. This will secure the long-term attentionfor Life Sciences and Materials Sciences as thekey pillars of DSM’s strategy and will secure thatthe cross-fertilization between the two fields isactively stimulated. The Managing Board will ona yearly basis decide on the final composition ofthis portfolio.

• Expanding innovation to new regions andinternationalization will be another importantelement in DSM’s innovation efforts in thecoming years. Breakthrough innovation isincreasingly happening in the High Growth

Economies (especially in the East). In response tothis, DSM will establish new Innovation Centersin China and India to harvest the opportunities inthese countries. This will enhance the localinfluence on the company’s innovation approach.Open innovation will continue to be a key driverto speed up innovation. DSM will further expandthe quality of its open innovation, e.g. throughlicensing, which perfectly fits the drive towardsnew business models in DSM. In addition, theventuring activities will be speeded up.Furthermore, DSM will increase its partneringactivities, not only in its key business areas butalso in technology areas as it aims to broaden andstrengthen its technology/competence base.

• DSM will also increase the speed of delivery of itsinnovation portfolio by expanding and reinforcingits Excellence in Innovation program, building onthe following programs Increased MarketUnderstanding, Business Group Innovativeness,Top Project Delivery, Improved Entrepreneurshipand Boost Performance Orientation.

• DSM’s broad high quality technology base willcontinue to provide the solid foundation andsupport for its innovation activities. DSM willmake sure its core competences remain in topshape.

1.20

• To focus its innovation efforts DSM has translatedthe global trends into clearly defined businessareas and has selected a number of promisingplatforms in various stages of development torespond to the needs of these fields. Theseplatforms represent a cohesive set of projects /business development activities that DSM hasembarked on based on (i) the commercialopportunities offered by the business area and (ii)DSM’s competences. These include (but are notlimited to): – Bio-based food and feed processing ingredients; – Food and feed ingredients with

health/performance benefits;– (Bio)Manufacturing platforms for

pharmaceuticals; – Bio-based clean/green materials for coatings,

automotive electronics and other applications; – Materials for Life Protection and Sports; – EBAs for DSM Biomedical, DSM Bio-based

Products & Services (formerly WhiteBiotechnology) and DSM Advanced Surfaces.

• Through company-wide platform managementthe focus will be increased in the coming years.Opportunities and ideas which could lead to newplatforms will be gathered in a threefold

approach: via the DSM Innovation Center,individual BGs and at regional level. Stage-gating,which DSM has already been using for manyyears to steer individual innovation projects, willnow also be applied to steer at platform level.

1.21

• In sustainability, DSM’s ambition is to go to thenext level: from responsibility to a business driver.

• DSM is consciously shifting its sustainabilityapproach from internal value / responsiblecontributors to society, to a strategic business-driver.

• DSM’s strategy is strongly connected to thecompany’s mission to create brighter lives forpeople today and for generations to come: it istherefore proud of its strong track record insustainability achievements.

• DSM believes sustainability will be the keydifferentiator and value driver over the comingdecades and that the company is uniquelypositioned to capture new value-creatingopportunities.

• DSM is setting new and ambitious businesstargets for sustainability. By 2015 ECO+ productswill account for over 80% of innovation sales andtowards 50% of the total running business sales(compared to less than 35% now). Thesedevelopments will make DSM the clear industryleader and preferred partner in value creation

through sustainability. To achieve these ambitiousgoals, we are embedding sustainability into allour business activities.

• Global trends such as population growth andincreased affluence, pressure on naturalresources, over-exploitation and pollution arecreating challenges that need to be addressed atevery level: – Responsible care: improving our own eco-

footprint through initiatives to reduce energyuse, emissions and waste.

– Innovative new products: developing newproducts that offer clear environmental orpeople benefits over their mainstreamalternatives (‘ECO+’ and ‘People+’).

– Creating sustainable value chains:enhancing the eco-footprint along an entirevalue chain through improved sourcing,processes and/or products.

– Redesigning value chains: using innovativetechnologies and partnerships to create new,fundamentally different, industry-changingsolutions.

1.22

• The integrated Triple P approach pursuessustainable value creation on three dimensionssimultaneously: People+: improving people’s lives through ouractivities and innovationsPlanet+: improving the environment throughour innovative productsProfit+: creating profitable businesses whichmeet our stringent People+ and Planet+objectives to provide solutions to global societalneeds.

• DSM’s People+ strategy will deliver measurablybetter solutions to meet human needs andimprove lives. The company commits to developinternationally recognized measures of itsbusiness and social impact on people. Thecompany will engage with communities,governments and societies around the world tounderstand needs in areas such as health,nutrition and product performance. In additionDSM will invest further in innovation to addressbasic human needs, for example in projects tofight hidden hunger.

• DSM will tap the creativity of its increasinglyglobal and diverse organization to increasePlanet+ innovation and meet the ambitious

2015 ECO+ sales targets. DSM will build on itsstrong platform of ECO+ innovation, such ascoatings for solar cells, waterborne paints, bio-based materials, halogen-free plastics, etc. Inaddition the company has started discussionswith major suppliers about actions that can betaken to improve the overall footprint of thevalue chain.

• DSM’s Profit+ objective is to translate innovativesustainable solutions into strong value-creatingbusinesses. As a result of its increased focus onunderstanding (societal) needs, DSM will growthe profitability of its People+ and ECO+businesses in several ways. This includes meetingdemand for cleaner, greener technologies;developing products specific to High GrowthEconomies; and making Triple P sustainability akey criterion for Acquisitions & Partnerships.

• To capture the extraordinary profit potential ofTriple P for DSM’s business, the company isembedding it fully into its organization, reportingand activities. For example, Triple P andstakeholder engagement (connectivity) will bebuilt into the business planning and innovationprocesses and quality review management for allbusinesses.

1.23

• In Acquisitions & Partnerships, DSM’s ambition isto go to the next level: from portfoliotransformation to driving focused growth.

• DSM has transformed its business into a focusedLife Sciences and Materials Sciences company bydivesting non-core businesses and makingselective acquisitions. DSM has realized the saleof Stamicarbon, DSM Energy, DSM’s interest inNoordgastransport, DSM Agro and DSMMelamine. Preliminary agreements regarding thesale of DSM Special Products and ThermoplasticElastomers (Sarlink®) have been signed. Theselling processes for the Keltan® business of DSMElastomers, Citric Acid Europe and MaleicAnhydride and Derivatives are underway.

• Like many other companies, DSM has beencautious about making acquisitions during thefinancial crisis and economic downturn.However, a number of smaller acquisitions andventuring investments have been made in recentyears. DSM acquired The Polymer TechnologyGroup (PTG), giving it access to valuable know-how and client relationships in the biomedicalmarket. With the acquisition of Pentapharm DSMobtained a leading position in the development

and production of active ingredients for thepersonal care industry. DSM Venturing has about€ 60 million committed in promising companiesand leading venture capital funds. Earlier thisyear, DSM reached agreement to acquire Bayer’sindustrial premix business in Korea andcompleted the acquisition of the polyamide6 polymerization facility in the United States fromNylon Polymer Company, LLC (NPC). DSM alsocompleted the acquisition of Mitsubishi ChemicalCorporation’s Novamid polyamide business inexchange for DSM’s Xantar polycarbonatebusiness.

• DSM has also established partnerships and jointventures in many areas, most recently a jointventure with Roquette for bio-based succinicacid, a joint venture with Tatanergo JSC for theconstruction of a premix plant in the Republic ofTatarstan, and a partnership agreement with theAustralian Government to design, build andoperate the first major Australianbiopharmaceutical manufacturing facility basedon the “factory of the future” concept.

• The company has the capabilities and resources –people and financing – available to invest inselected acquisitions and partnerships.

1.24

• DSM applies stringent strategic and financialcriteria to any potential acquisition orpartnership. In the screening process a firstselection is made on the basis of strategic fit. Thisresults in a shortlist to which DSM applies itsfinancial criteria.

• A key strategic criterion is that the business orpartner should add or increase a leadershipposition and should add value to DSM in terms oftechnological and/or market competencies.

• DSM will also look for opportunities tostrengthen competencies and market positions inthe other three strategic growth drivers:expansion in High Growth Economies,innovation potential and sustainability.

• As DSM is fully committed to maintaining itsSingle A credit rating, the key financial criterionis that any acquisition should be cash EPSaccretive from the beginning and should besupportive to the other financial targets.

• In the exceptional case that a very attractiveacquisition opportunity arises of a size that wouldput pressure on financial metrics, DSM may be

willing to accept a temporary deviation from thecredit metrics commensurate with its ratingtarget. However, DSM believes that Single Aratings are the right place to be for the companyto ensure sufficient financial and strategicflexibility at all times, and DSM would seek tomanage its balance sheet and underlyingfinancials after such an acquisition to allow us tore-align ratios with Single A ratings within a shortperiod of time.

• There are exceptions to the cash EPS criterion forpotential acquisitions or partnerships; thisrequirement may for instance not be appropriatein the case of small innovative growthacquisitions.

1.25

• Each of DSM’s four strategic growth drivers isimportant in its own right. They are also mutuallyreinforcing. By combining multiple growthdrivers, DSM will be able to generate a greaternumber of compelling, high-potential businessopportunities

• DSM and Roquette have signed a joint ventureagreement for the production, commercializationand market development of bio-based succinicacid. This renewable and versatile chemicalbuilding block will replace existing fossil-basedsuccinic acid as well as opening up newapplications.

• DSM Engineering Plastics is one of the fewmultinational companies with local engineeringplastics manufacturing and applicationdevelopment support in India. This has allowedDSM to become a key supplier for the Tata Nanocar. DSM’s engineering plastics have beenapproved for use in more than twentycomponents ‘under the bonnet’ and in parts ofthe transmission system of this innovative car.

• In 2009 DSM opened its DSM China Campus inShanghai to advance local research and

development competence. It is DSM’s largest andmost important research facility outside Europeand the US and acts as an incubator for DSM’slocal innovation competence.

• Brewers Clarex™ helps brewers to prevent chillhaze formation in beers while decreasing energyconsumption and CO2 emissions by up to 8%. Itremoves the costly, time and energy-consumingand environmentally damaging sub-zerotemperature stabilization stage from the brewingprocess.

1.26

1.27

• To meet the next-level ambitions for all fourgrowth drivers, DSM is transforming itsorganization and culture to create a genuinelyglobal organization to achieve our strategicambitions. By strengthening and empoweringregional businesses, DSM will deepen localmarket insights and relationships. In parallel, the‘One DSM’ program will progressively enhanceknowledge-sharing and collaboration acrossbusinesses, functions and regions, enabling thecompany to capture the full benefits of diversity.

• ‘One DSM’ – which will contain a global drivefor a high-performance organization – will beequipped to enable DSM to reach its targets andambitions. The Business Groups are the primaryorganizational and entrepreneurial buildingblocks with a primary focus on customers andmarkets. The regions will strengthen the BusinessGroups by providing infrastructure andcapabilities to support the businesses. The regionswill also cater for local innovation in designatedcountries and present the ‘One DSM’ face to theexternal constituencies. As a sharedresponsibility, the regions will also drive top-linegrowth.

• All this will be supported and optimized byFunctional Excellence groups – offeringfunctional expertise and implementationcapabilities leveraged across the company – andShared Services – providing efficient high qualityservices in designated areas across the company.

• The transformation of DSM’s organization will besupported by DSM’s culture change program,which has established a shared understanding ofessential DSM values and principles to drivegrowth: – External orientation and drive for innovation:

bringing DSM closer to customers, suppliers,partners and other key influencers;

– Accountability for performance: instillingindividual responsibility at all levels;

– Inspirational leadership: the complementaryand consistent combination of setting directionwith ambition and passion, taking decisionsbased on a healthy sense of urgency, anddemonstrating authenticity, engagement andstrong motivation along the way.

• DSM’s culture change program will be furtherrolled out with emphasis on collaboration andspeed of execution. All this is based on DSM’sjoint belief in sustainability and diversity.

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• As DSM has embarked on a journey to become agenuinely global organization with multipledynamic regional centers, each focused onlocal/regional markets and customer needs, thecompany recognizes and values diversity as a keystrength to help it adapt its business to anuncertain, fast-changing world, and as a source ofnew innovation potential.

• The ‘One DSM’ agenda provides a strongplatform to support internationalization and drivevalue-creating behaviors. A common missionstatement, values and business principles form anintegral part of ‘One DSM’.

• Cross-business and cross-regional collaboration,effective knowledge sharing and inclusiveinnovation will lead to synergies. Excellence willbe implemented in a global approach.

• The DSM mission and brand are essentialelements of the strategy. DSM can only fulfill itsstrategic goals if it operates as one united teamacross the globe and it is therefore important thatemployees will be engaged around the newbrand, which will be launched early 2011.

• By embracing the culture change program, DSMwill continue to maintain its focus on externalorientation and innovation, accountability forperformance and inspirational leadership. DSMwill also introduce a new emphasis on: – Collaboration: improving the ways that DSM

people connect with colleagues, customers,partners, governments, regulators and otherkey opinion leaders

– Speed: facilitating knowledge-sharing andinformation flow, leading to faster, moreeffective decision-making

– New ways of working: embracing flexibleworking practices and policies.

• Further internationalization of DSM’s workforceand senior management will contribute tobecoming a truly global organization.

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• An example of the implementation of ‘One DSM’in the organization is the mission statement. It isan important cornerstone in creating a moreunified culture.

• The mission statement describes why DSMexists, what the company adds to a changingworld, and how DSM makes the world a betterplace. It gives us direction and purpose asindividuals, as team members and as a company.

• The mission statement recognizes the enormoustransformation DSM has undergone from amining company to a diversified chemicalcompany, into a world leading Life Sciences andMaterials Sciences company.

• Embedded in the mission is the core value thateverything DSM does should contribute to asustainable world. This guides how DSM pursueseconomic performance, environmental qualityand social responsibility to create value forPeople, Planet and Profit.

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• Sustainability concerns continue to rise across allsectors, and increasingly across all major markets– food ingredients and methods of productionand supply are no exception. Regulators, too, areapplying stricter standards to the oversight ofcontents, claims and production systems.

• In the High Growth Economies, increasingconsumer wealth is changing diets, as meat andfish are becoming more affordable to morepeople. Urbanization and changes in traditionalroles are also changing eating habits, increasingdemand for processed foods as supermarkets andfood stores replace the role of traditional markets.

• In mature markets, consumers are increasinglybecoming aware of the role of food and nutritionin promoting health and wellness, which isimpacting choices and promoting discussion ofhealthy eating. At the same time, food is still asource of enjoyment and indulgence, and thepersonal care markets are driven by consumersneeds for new innovations and improvedperformance.

• DSM’s Nutrition cluster has driven a step-changein performance over the last five years. A strongfocus on operational excellence has underpinnedcost control whilst also deepening the company’s

offer in terms of quality of customer service.Structural changes to the competitive landscapehave contributed to a favorable shift in marketdynamics.

• DSM has pursued a ‘value-before-volume’ policy,through all areas of its business, creatingcustomer value by understanding what itscustomers need and where it can best add valueto their business.

• This “specialties approach” is created by DSM’sdifferentiation and innovation strategy, ensuring itconcentrates on innovative approaches, includingactivities that take it further down the valuechain. Coupled with this, DSM’s Quality forLife™ standard – quality, safety, traceability andreliability – emphasizes DSM’s commitment tohigh standards of production, in the context ofcustomer and consumer desire for peace of mindabout their food.

• DSM has expanded its network of premix plantsinto new markets, giving it a closer connection toits customers and access to markets – forexample, ANH premix plants have recently beenopened in Tatarstan, Russia, and China, andexpanded in Korea.

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• DSM will continue to grow and build by: – ensuring its cost position is at a par with the

best of the industry: by continuing processinnovations and improvements, rigorous siteselection, and pursuing ‘asset light’ strategies;

– differentiation and innovation: continuing tobe the Quality player in the sector, pursuingproduct and process innovation, marryingtechnological advances with consumer trendsand customer needs;

– enhancing the aspired growth by pursuingacquisitions and partnerships: focusing oncomplementary ingredients, with a biastowards naturals, which can be marketedthrough DSM’s existing global infrastructure.

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• All health service providers – governments &insurance companies – are under pressure toreduce spend. Medicines are becoming anincreasing element of healthcare costs, typically10% of total healthcare spend. As a result, healthproviders are increasingly ‘going out to tender’for drug supply contracts, explicitly searching forthe lowest cost.

• The pharmaceutical industry is facing a ‘patentcliff’: it is estimated that $ 260 billion worth ofsales will go ‘off patent’ in the next 5 years. Thisis reflected in the steep growth of generic sales inboth developing and developed markets,including emerging bio-similars. The latestestimates indicate that generics and bio-similarswill rise from 10-12% of global spending onmedicines to 15% by 2015.

• At the same time, it is becoming ever harder todiscover new active molecules with sufficientadditional patient benefits and an acceptable riskprofile – and which the FDA and other regulatorybodies are prepared to approve.

• The innovative biologics market in 2010 isestimated to be around $ 100 billion. With a CAGR

of around 12%, this extremely fast-growing marketis expected to be around $ 200 billion in 2015.

• The pharma market in Asia currently representsonly about 6-7% of total global pharmaceuticalspend, but is estimated to rise to 20% by 2020(Source: Credit Suisse/IMS).

• Asset restructuring – DAI has taken tough butnecessary decisions to rationalize the siteportfolio, and by 2011 DSM will have completedthe shifting of its asset base eastwards with theopening of a new 6-APA plant in China. DPP willneed to consider this further.

• DSM’s proprietary biotechnology gives DSMleadership in terms both of cost andsustainability: it reduces energy use andminimizes the need for solvents. Consequentlyemissions and cost are considerably lower thanwith conventional technology.

• DPP’s agreement with Shire demonstrates that itsstrength lies in being able to operate as a trulystrategic supply chain partner, able to harness afull range of tools and experience to support ourcustomers.

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• DSM’s new 6-APA plant will not only significantlyincrease DSM Anti-Infectives’ exposure to HighGrowth Economies in line with the corporatestrategy, but will also make the business lessdependent on external penicillin sources.

• Growth will come from market share gains in thepresent business scope and by expanding theportfolio to include differentiated, higher-valuespecialty products: one example is a special gradeof Purimox® for direct compression in acombination with clavulanic acid. Moreover,DSM will also grow its range of APIs and, incertain regions, also forward integrate intofinished dosage (FD) products and, additionally,provide the regulatory approval support(dossiers), that customers need.

• The range of actions implemented to improve theDAI business and its intrinsic long-termprospects, including the new 6-APA plant inChina, mean we are confident DAI will growsuccessfully under its own steam.

• However, it is still clear that growth and profitimprovement in DAI would be accelerated if wewere to participate in the necessary industry

consolidation that is beginning in China andIndia. We therefore continue to seek a partner,and are having purposeful discussions withinterested companies in China and India to thiseffect.

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• We will further optimize our current assets andre-focus them towards new customerrequirements. This essentially means re-balancingtowards lower cost assets in the High GrowthEconomies. Associated with this will be a moveto add the production of APIs to our already wellrespected final dosage (FD) business.

• The inherent volatility of the CMO businessmodel makes optimizing asset utilization verychallenging. In order to address this, DSMintends to significantly expand its range of ownproducts. DSM also intends to pursue morecomplete value chain deals (like the one withShire). It can deliver most value when it operatesas a full-service strategic value chain partner.

• DSM Biologics continues to develop itstechnology and will open the world’s firstcommercial scale biopharmaceuticalmanufacturing site in Australia in 2013.

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• Climate change and the adverse effects of over-dependence on fossil fuels continue to be themost important trends driving the materialsindustry. DSM’s customers in virtually everysector are seeking products that reduce energyuse or emissions in their own operations, or, evenmore importantly, throughout their value chains.Energy reduction is key. This means not onlyfinding new, less energy intensive ways tomanufacture our own products, but also, forexample, developing resins systems that requireless energy for curing, saving energy in theapplication.

• An ageing population is just one of the radicalglobal shifts DSM is now seeing. The world hasbecome multi-polar and more difficult to predict,with rapidly growing prosperous middle classes inmany formerly ‘emerging’ countries. Demand forplastics and resins is therefore high/increasing inthese markets, not only because manufacturersare seeking to meet growing local needs, but alsobecause global manufacturing and developmenthas shifted to these High Growth Economies.At the same time, concerns about personal safetyand global threats have not diminished.Innovation in this area is needed.

• The Performance Materials cluster has expandedsignificantly in the last two decades from just over

€ 0.5 billion in sales in FY 1990 to around € 2.3billion in 2008 and € 1.2 billion in H1 2010.

• With major investments in High GrowthEconomies such as China and India, thePerformance Materials cluster is making a majorcontribution to DSM’s growth in Asia.

• The Performance Materials cluster outperformedits innovation targets. With the great majority ofthese innovations driven by sustainability, DSM’sPerformance Materials cluster is recognized as afront-runner in creating and introducingsustainable innovative solutions.

• During the last two decades, the portfolio inPerformance Materials has clearly evolvedtowards more specialized, higher-value-addedbusinesses. Innovations, branding and continuedoperational excellence programs in the moremature part of the portfolio have contributed to acontinuous increase in average contributionmargin over sales.

• The cluster reacted quickly and very flexibly tothe downturn, focusing strongly on operatingworking capital reduction, implementing cost-saving plans and reducing fixed costs. As a result,the cluster is recovering very effectively aseconomic growth returns.

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• The businesses in the Performance Materialscluster have achieved strong leadership positionsin chosen segments of the global markets foradvanced materials.

• DSM Engineering Plastics has a focused portfolioof products: its leadership in sustainable solutionsis demonstrated by its complete portfolio ofhalogen-free engineering plastics, developed for awide range of high-performance applications,further strengthened by the launch of newinnovations such Stanyl® ForTii™. Dyneema® isrespected as the global premium brand for Ultra-High-Molecular-Weight Polyethylene fiber. DSMResins ranks among the global leaders in themarkets for resin systems for industrial coatingsand decorative coatings, and as the global leaderin fiber optic coatings. Furthermore, DSM Resinsis the European market leader in unsaturatedpolyester resins and is rapidly building a positionin the fast growing markets of China.

• Exciting examples of new innovative sustainablesolutions of the cluster are EcoPaXX™, (the greenpolymer that is being enthusiastically welcomedin multiple end-use markets), Palapreg® ECO (thenew bio-based composite resins used in theautomotive industry) and for instance the newultra lightweight air cargo container panels made

with DSM’s Dyneema® fiber and DSM'sAeronite® resins.

• DSM has invested considerably in High-GrowthEconomies, building its asset base in countrieswhich will see the majority of global growth. Ithas built a new engineering plastics compoundingplant in India, opened an Akulon® PA6 polymerplant in China, expanded compounding facilitiesin China, invested in waterborne acrylic resinsproduction in China and expanded themanufacturing facility of DSM Desotech inShanghai. In addition, more R&D will move tothe East: DSM Engineering Plastics will set up aMaterials Research and Automotive DevelopmentCenter in Shanghai. All this will drive salesgrowth in High Growth Economies.

• Acquisitions and Partnerships will remainimportant elements of DSM’s growth strategy inPerformance Materials.

• DSM is convinced that its Performance Materialscluster is well positioned to capture growthopportunities that arise from the global trends.With key focus on growth via innovativesustainable solutions, DSM aims at a sales growthfor the cluster at double GDP level and anEBITDA margin of above 17%.

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• DSM Fibre Intermediates is the global leader inthe production and supply of caprolactam, theraw material for polyamide 6. With productionfacilities on three continents, total productioncapacity is almost 700 kt. DSM holds a marketshare of around 20%. With a market share of25%, DSM is also a major player in theacrylonitrile market in Europe. A strongadvantage is the forward integration in DSMEngineering Plastics.

• In the Chinese region (China and Taiwan),consumption of polyamide 6, and thereforedemand for caprolactam, will grow rapidly in thecoming years, primarily driven by strong growthin engineering plastics and film segments (CAGR> 10%). China is largely dependent on imports tosatisfy the demand for polyamide 6. Half of thepolyamide 6 demand is imported andapproximately two-thirds of the caprolactamneeded for the production of polyamide 6 has tobe imported as well. China will reduce thisdependency and consequently much more localcaprolactam will be needed.

• With projected increase both in demand andcapacity, the GURs (global utilization rates) are

expected to remain high the coming years (over90%).

• Over 40% of the caprolactam on the total marketis produced using DSM’s proprietarytechnologies. The fact that even DSM'scompetitors use its technologies is proof of itsleadership reputation.

• The business group has established a strongposition in China resulting in excellent and, as itturned out, crisis-proof partnerships with winningcustomers in downstream polyamide 6 industries.This confirms that having a significant positionwith a local presence and assets in the Asianmarket is a true asset.

• Although DSM Fibre Intermediates was heavilyimpacted by the downturn in Q4 2008 and Q12009, its markets and its profitability recoveredquickly. The economic downturn has confirmedhow important the emerging markets are forDSM Fibre Intermediates. DSM FibreIntermediates has emerged stronger fromdownturn, with improved yields, reducedvariable and fixed costs and a continued full focuson customers and sustainability.

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• DSM Fibre Intermediates has a uniquely strongstarting point: its global market position, a solidpartnership in China, excellent performance,technological leadership and a growing securedsupply to DSM Engineering Plastics. Building onthese foundations, DSM Fibre Intermediates cangrow further and faster by: – further strengthening backward integration for

DSM Engineering Plastics, and supporting thisbusiness group’s ambitious growth plans(providing security of supply, enabling growthin all regions) and

– strengthening its own global market position toconsolidate its industry-leading position.

• DSM Fibre Intermediates has chosen a threefoldapproach to capitalize on the opportunities thatare arising: doubling production capacity inChina; continuously improving existing assets bymeans of Life Time Extension and Variable CostReduction projects; and a firm commitment tosustainability.

• The rapidly increasing demand, both captive andmerchant, the Chinese government's intention toreplace imported caprolactam by localproduction, and improving margins providesound foundations for expanding capacity. Bybuilding a second line in China, DSM aims to

double its capacity in the country by 2014 (withthe second line in China on stream in 2013).

• DSM's caprolactam technology is one of the mostenergy efficient and least wasteful available,which makes DSM the front-runner in ‘green’caprolactam. By further investing in sustainabilityimprovement, DSM Fibre Intermediates will beable to add ’green value’ to the polyamide 6 itscustomers produce, thereby further increasing itsown margins at the same time.

• The actual capital expenditure on the second linein Nanjing will be lower for DSM because of theparticipation of Sinopec in the project. At thesame time, DSM Fibre Intermediates will limitcapital exposure in general by pursuing furtherpartnership deals with customers who acquire acertain share of DSM's capacity, following themodel of the existing partnership with Shaw.

• With its tight connections to DSM EngineeringPlastics, its powerful presence in High GrowthEconomies and its green focus, DSM FibreIntermediates is an asset that will bring sustainedvalue to DSM.

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• DSM’s EBA (Emerging Business Area) program,started with Vision 2010, created growthplatforms based on the strengths and synergies ofDSM’s positions in Life Sciences and MaterialsSciences. Although the EBAs were initially notexpected to take off before 2010, within fiveyears this approach has already resulted inpromising businesses in White Biotechnology andBiomedical.

• As the world’s population becomes older – andolder people stay active longer – there is a higherdemand for biomedical solutions. In this fastgrowing market, DSM has actively built a leadingposition in the development of novel materials-based solutions to meet the present and futureneeds of the medical device andbiopharmaceutical industries. Milestones includethe successful integration of The PolymerTechnology Group which was acquired in 2008,the exclusive world-wide license for a uniquedrug & biologics delivery system developed byMediVas, and the launch of several new products.

• The scope of the EBA White Biotechnology willbe expanded, for example through the inclusionof Biogas activities, and the EBA will be renamed

DSM Bio-based Products & Services to betterreflect the activities on which it focuses. DSMhas realized a breakthrough in technology toproduce second-generation biofuels which willhelp them become more cost effective and aviable alternative to both first-generation biofuelsand conventional fossil fuels.

• Furthermore, DSM has formed a joint venturewith Roquette for the production,commercialization and market development ofbio-based succinic acid. The demo plant is now inoperation and many customers are testing thisrenewable and versatile chemical building block.

• As the effects of climate change and the adverseconsequences of the world’s dependency on fossilfuels (and materials) are recognized, there is anincreasing demand for clean energy as well asrenewable chemicals and materials.

• The focus on the EBA programs PersonalizedNutrition and Specialty Packaging will be reducedand they will either be partnered, exitedotherwise or transferred to other parts of DSM.

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• Both DSM Biomedical and DSM Bio-basedProducts & Services (formerly DSM WhiteBiotechnology) will now be taken to the nextlevel in view of their ambitious growthperspectives. Both EBAs will accelerate organicgrowth and growth via Acquisitions &Partnerships.

• DSM is confident that the growth of the EBA’swill continue at a steep rate, ultimately leading toaspired combined sales of more € 1 billion in2020 with an above average profitability.

• The EBA concept has proven successful and willbe continued. A new EBA, DSM AdvancedSurfaces, is to be established.

• For DSM Bio-based Products & Services, DSMwill develop amongst others a license and servicemodel with regard to its second-generationbiofuels efforts for the cellulosic ethanol industry.For the production of bio-based chemicals andpolymers DSM, will initially focus on traditionalcrops as starting materials. Innovation efforts willfocus on green and high-performance materials.

• For Biomedical, DSM is looking to expand itscurrent biomaterials, application and technologyportfolio. In drug delivery DSM will establish astrong market presence building on a robusttechnology portfolio. For the future market ofregenerative medicine and tissue engineering, thebusiness will look for venturing and/orpartnership opportunities.

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• DSM has transformed itself into a Life Sciencesand Materials Sciences company, exploiting thecross-fertilization between these two areas. DSMaddresses the key global trends (global shifts,climate and energy and health and wellness) withinnovative solutions for global markets. This willbe supported by leveraging and developing thecompany’s competences and organization torealize the company’s ambitious goals ’OneDSM’.

• It is DSM’s ambition to bring all four growthdrivers to the next level. At the same time DSMaims to make also maximum use of the potentialof all four growth drivers to mutually reinforceeach other., – High Growth Economies: from reaching out to

becoming truly global – Innovation: from building the machine to

doubling the output – Sustainability: from responsibility to business

driver – Acquisitions & Partnerships: from portfolio

transformation to growth

• For each cluster a clear strategy has been defined: – Nutrition: continued value growth. – Pharma: leveraging partnerships for growth. – Performance Materials: growing via sustainable

innovative solutions. – Polymer Intermediates: strengthening

backward integration for DSM EngineeringPlastics.

– EBAs: building new growth platforms.

• DSM will use the regions, functional excellencegroups and shared services, creating ‘One DSM’to capture regional business opportunities andsynergies and to implement excellencethroughout the global organization.

• In short: DSM’s strategy is about driving focusedgrowth with ambitious targets.

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DISCLAIMER

This document may contain forward-looking statements with respect to DSM's future(financial)performance and position. Such statements are based on current expectations, estimates andprojections of DSM and information currently available to the company.

Examples of forward-looking statements include statements made or implied about the company’s strategy,estimates of sales growth, financial results, cost savings and future developments in its existing business aswell as the impact of future acquisitions, and the company’s financial position. These statements can bemanagement estimates based on information provided by specialized agencies or advisors.

DSM cautions readers that such statements involve certain risks and uncertainties that are difficult topredict and therefore it should be understood that many factors can cause the company's actualperformance 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 andcomplete acquisitions and to successfully integrate acquired companies, the company’s ability to realizeplanned disposals, savings, restructuring or benefits, the company’s ability to identify, develop andsuccessfully commercialize new products, markets or technologies, economic and/or political changes andother developments in countries and markets in which DSM operates. As a result, DSM’s actual future performance, position and/or financial results may differ materially fromthe plans, goals and expectations set forth in such forward-looking statements.

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

A more comprehensive discussion of the risk factors affecting DSM’s business can be found in the company’slatest Annual Report, a copy of which can be found on the company's corporate website, www.dsm.com

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3P Triple P (People, Planet, Profit)6-APA 6-amino-penicillanic acid ACN AcrylonitrileAcq. acquisition7-ADCA 7-amino-deacetoxycephalosporanic

acid AGM Annual General Meeting of

ShareholdersAM Advanced ManufacturingANH Animal Nutrition & HealthAPI Active pharmaceutical ingredientsBF Bio-Fuelbn billionbps Basis Points BC&M Base Chemicals and MaterialsBoP Base of the PyramidCAGR Compound Annual Growth RateCAPEX Capital ExpendituresCEO Chief Executive OfficerCFO Chief Financial OfficerCFROI Cash Flow Return On InvestmentcGMP current good manufacturing practiceCHF Swiss FrancCMO Contract Manufacturing OutsourcingCOS Cost of SalesDAI DSM Anti-InfectivesDBM DSM BioMedicalDBPS DSM Bio-based Products & ServicesDD DSM DyneemaDEC DSM Expert CenterDEP DSM Engineering PlasticsDFI DSM Fibre IntermediatesDFS DSM Food SpecialtiesDivest. DivestmentDJSI Dow Jones Sustainability IndexesDNP DSM Nutritional ProductsDPP DSM Pharmaceutical ProductsDR DSM ResinsE&E Electrical & Electronic IndustryEBA Emerging Business AreaEBIT Earnings before Interest and TaxesEBITDA Earnings Before Interest, Taxes,

Depreciation and Amortization ECO+ The Greenhouse DialogueEDPM Ethylene Propylene Diene MonomerEPS Earnings per ShareEU European Unionadj. FfO Adjusted Funds from OperationsFD Finished dosage / final doseFDA Food and Drugs AdministrationFOOP Fixed Out of Pocket costsFX Foreign Exchange (exchange rates)G&A General and AdministrativeGDP Gross Domestic ProductGHG Greenhouse GasGRI Global Reporting Initiative

GUR Global Utilization RateHNH Human Nutrition & HealthICT Information and Communication

TechnologyInno center Innovation CenterIFRS International Financial Reporting

StandardsIP Intellectual propertyJV Joint Venturekt kilotonKPI Key Performance IndicatorsLATAM Latin AmericaLS&MS Life Sciences and Materials Sciencesm millionM&A Merger & AcquisitionsM&S Marketing and SalesMB Managing BoardMCC Mitsubishi Chemical CorporationNCPC North China Pharmaceutical

CorporationNPC Nylon Polymer Company LLCOWC Operating Working Capitalp/a per annumPA6 Polyamide 6PBT Polybutylene terephtalatePEN PenicillinPET Polyethene terephtalatePTG The Polymer Technology GroupP&L Profit and LossR&D Research and DevelopmentROCE Return on Capital EmployedSBB Share Buy-BacksTPV Thermoplastic VulcanizateTriple P Triple P (People, Planet, Profit)TSR Total Shareholder ReturnUD Unidirectional UHMwPE Ultra-High Molecular Weight

PolyethyleneUS United States (of America)USA United States of AmericaUSD United States DollarUS$ United States DollarWACC Weighted average cost of capitalWTO World trade Organization

Abbreviation ExplanationAbbreviation Explanation