Integrated Annual Report 2023

4 Segment information

Accounting policy

dsm-firmenich has segmented its operations by business activity from which revenues are earned and expenses incurred. These operating results are regularly reviewed by the Executive Committee (ExCo), dsm-firmenich’s Chief Operating Decision Maker (CODM), to make decisions about resources to be allocated to the operating segments and assess their performance. dsm-firmenich uses Adjusted EBITDA as the main indicator to evaluate the consolidated performance as well as the performance per operating segment. Discrete financial information is available for each identified operating segment.

The same accounting policies that are applied for the consolidated financial statements of dsm-firmenich are also applied for the operating segments. Prices for transactions between segments are determined on an arm’s length basis at market-based prices. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can reasonably and consistently be allocated. Interest income, interest expense, and income tax expense or income are not allocated to segments as these amounts are not included in the measure of segment profit or loss reviewed by the ExCo, or otherwise regularly provided to the ExCo.

Selected information on a country and regional basis is provided in addition to the information about operating segments.

Operating segments

Following the merger, dsm-firmenich is organized into four distinct Business Units:

  • Perfumery & Beauty (P&B) creates premium scents with proven benefits, using the best and largest palette of natural, synthetic, and biotech ingredients. This Business Unit mainly consists of Firmenich’s former Fragrance and Ingredients businesses and DSM’s former Personal Care & Aroma Ingredients business
  • Taste, Texture & Health (TTH) helps customers create food and beverage products that are delicious, nutritious, affordable, and sustainable. Providing enjoyment and nourishment for consumers, business success for customers, and better health for people and planet. This Business Unit mainly consists of Firmenich’s former Taste & Beyond business and DSM’s former Food & Beverage business
  • Health, Nutrition & Care (HNC) provides people a way to look after their health by adding critical nutrients to diet. Driving medical innovation forward, speeding up recovery, and enhancing quality of life. This Business Unit mainly consists of DSM’s former Health, Nutrition & Care business, excluding the former Personal Care & Aroma Ingredients business
  • Animal Nutrition & Health (ANH) delivers healthy animal proteins efficiently and sustainably, harnessing power of data to make animal farming practices more sustainable, productive, and transparent

For 2023, these Business Units have been identified as the reportable operating segments of dsm-firmenich.

Any consolidated activities outside the four reportable operating segments above are reported as the reportable segment ‘Corporate Activities’. These consist of corporate operating and service activities that are not further allocated to the operating segments.

dsm-firmenich does not have a single external customer that represents 10% or more of total sales.

Geographical information

 

 

Switzer­land

 

Nether­lands

 

Rest of EMEA

 

North America

 

Latin America

 

China

 

Rest of Asia

 

Total

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales (by destination)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In € millions

 

156

 

402

 

2,305

 

1,869

 

1,507

 

803

 

1,348

 

8,390

In %

 

2

 

5

 

26

 

22

 

18

 

10

 

17

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Workforce at year-end (headcount)1

 

2,232

 

2,642

 

4,366

 

2,618

 

2,302

 

4,591

 

1,931

 

20,682

Intangible assets and property, plant and equipment at year-end (carrying amount)

 

1,852

 

1,304

 

2,105

 

2,143

 

404

 

774

 

141

 

8,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales (by destination)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In € millions

 

204

 

424

 

3,103

 

2,420

 

1,653

 

997

 

1,826

 

10,627

In %

 

2

 

4

 

29

 

23

 

16

 

9

 

17

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Workforce at period-end (headcount)

 

3,647

 

1,783

 

7,953

 

4,264

 

3,617

 

4,664

 

3,373

 

29,301

Intangible assets and property, plant and equipment at period-end (carrying amount)

 

15,474

 

1,665

 

3,147

 

2,600

 

506

 

612

 

283

 

24,287

1

Refers to total group, including discontinued operations.

Reportable segments

 

 

Perfumery & Beauty

 

Taste, Texture & Health

 

Health, Nutrition & Care2

 

Animal Nutrition & Health

 

Corporate Activities

 

Total continuing operations

 

Discontinued operations

 

TOTAL

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

2,619

 

2,471

 

2,246

 

3,223

 

68

 

10,627

 

388

 

11,015

Adjusted EBITDA1

 

579

 

437

 

377

 

128

 

(78)

 

1,443

 

(2)

 

1,441

EBITDA

 

417

 

361

 

355

 

(30)

 

(293)

 

810

 

2,827

 

3,637

Adjusted operating profit1

 

317

 

169

 

158

 

(80)

 

(134)

 

430

 

(2)

 

428

Operating profit

 

154

 

93

 

118

 

(504)

 

(358)

 

(497)

 

2,827

 

2,330

Capital expenditures

 

112

 

86

 

129

 

252

 

121

 

700

 

5

 

705

Adjusted EBITDA margin (in %)

 

22.1

 

17.7

 

16.8

 

4.0

 

 

 

13.6

 

(0.5)

 

13.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

1,545

 

2,990

 

3,784

 

71

 

8,390

 

2,090

 

10,480

Adjusted EBITDA1

 

 

 

266

 

678

 

546

 

(95)

 

1,395

 

330

 

1,725

EBITDA

 

 

 

245

 

669

 

523

 

(133)

 

1,304

 

1,342

 

2,646

Adjusted operating profit1

 

 

 

136

 

429

 

351

 

(149)

 

767

 

304

 

1,071

Operating profit

 

 

 

115

 

420

 

328

 

(181)

 

682

 

1,312

 

1,994

Capital expenditures

 

 

 

99

 

103

 

309

 

61

 

572

 

64

 

636

Adjusted EBITDA margin (in %)

 

 

 

17.2

 

23.0

 

14.4

 

 

 

16.6

 

15.8

 

16.5

1

See Note 2 Alternative performance measures for the reconciliation to IFRS performance measures.

2

The 2022 figures for Health, Nutrition & Care include the Personal Care & Aroma Ingredients business, which was transferred to Perfumery & Beauty following the merger.

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