General
Biosciences1
Biosciences are any of the sciences that deal with living organisms.
Business Partners
Business Partners enable excellence and efficiency, by partnering with the Group and the Business Units, helping them to deliver on their ambitions, serve their customers. In addition, the Business Partners will drive excellence with shared centers of expertise, to bring differentiated capabilities to our company.
Category of one
Our ambition is to be more than just a merger of two brilliant companies, each with its own incredible talent and history, but to be seen as a category of one, unique in the world, and something that our customers and stakeholders are proud to be a part of.
Integrated Reporting <IR> Framework – value creation model
The Value Creation diagram is based on the International Integrated Reporting Council’s Integrated Reporting <IR> framework and gives an overview of how we create value for our stakeholders based on six capital inputs.
- Human capital
- Societal & relationship capital
- Natural capital
- Financial capital
- Intellectual capital
- Manufactured capital
Plant-forward
A trend descriptor coined by Innova Market Insights in 2021 to signal the plant-based foods category’s push toward broader consumer appeal and expansion into more market categories and regions of the world.
Sustainability
Bio-based
Bio-based refers to a material that is derived from a biological source, i.e., a living organism. This includes, but is not limited to, materials derived from plants, animals and fungi.
Circular economy
Circular economy refers to an economy that is restorative and in which materials flows are of two types: biological nutrients, designed to re-enter the biosphere safely, and technical nutrients, which are designed to circulate at high quality without entering the biosphere throughout their entire lifecycle.
Chemical Oxygen Demand
Chemical Oxygen Demand (COD)is an indicator of the degree of pollution of wastewater by organic substances.
Eco-efficiency
Eco-efficiency is a concept (created in 1992 by the WBCSD) that refers to the creation of more goods and services while using less resources and creating less waste and pollution throughout their entire life cycle.
Energy
Primary energy is energy that has not yet been subjected to a human engineered conversion process. It is the energy contained in unprocessed fuels.
Final (consumed) energy is the energy that is consumed by end-users. The difference between primary energy and final consumed energy is caused by the conversion process between the two as well as any transmission losses.
Equal pay and gender pay gap
Equal pay is a legal requirement for men and women to be paid the same for performing the same or similar work or work that has been rated as being of equal value (by job evaluation). The gender pay gap zooms in on the difference between what men typically earn overall in an organization compared to women, irrespective of their role or seniority.
Frequency index (Safety)
The Frequency Index is a way to measure safety performance. The number of accidents of a particular category per 100 employees per year.
Total Recordable Incident Rate
The Total Recordable Incident Rate (TRIR) is the number of recordable injuries per 100 dsm-firmenich employees and contractor employees in the past 12 months. The ‘TRIR-own’ refers only to dsm-firmenich employees.
TRIR rate = 100 * (# of recordable incidents (past 12 months) / average effective manpower (past 12 months))
Process Safety Incidents
The PSI rate is the number of Process Safety Incidents per 100 dsm-firmenich employees and contractor employees in the past 12 months.
PSI rate = 100 * (# of PSIs (past 12 months) / average effective manpower (past 12 months))
Occupational health
The Occupational health rate is the number of occupational health cases per 100 dsm-firmenich employees and contractor employees in the past 12 months.
REC rate = 100 * (# of health cases (past 12 months) / average effective manpower (past 12 months))
Global South
The term Global South is used to describe countries whose economies are not yet fully developed and which face challenges such as low per capita income, excessive unemployment, and a lack of valuable capital. These countries are located largely in the southern hemisphere.
Greenhouse gas emissions
dsm-firmenich applies the Greenhouse Gas Protocol, which defines greenhouse gas emissions (GHG) as “atmospheric gases that absorb and emit radiation within the thermal infrared range and that contribute to the greenhouse effect and global climate change.” We report GHGs based on their global warming potential over 100 years in carbon dioxide equivalent (CO2e).
Scope 1 and 2
Scope 1: Direct GHG emissions occur from sources that are owned or controlled by the company (i.e., emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.).
Scope 2: Indirect GHG emissions relate to the generation of purchased energy (i.e., electricity, heat or cooling) consumed by the company. Purchased energy is defined as energy that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where the energy is generated.
Market-based emissions
Reflects GHG emissions from electricity supplies (Scope 2) that companies have purposely chosen (or their lack of choice) and contracted. Corresponding emission factors:
- Supplier specific emission factor (provided by the supplier)
- Residual emission factor (country-based grid factor, corrected for allocated purchased electricity from renewable resources
Location-based emissions
Reflects the average GHG emissions intensity of grids on which electricity consumption (Scope 2) occurs (using mostly national grid-average emission factor data). Corresponding emission factor: in most cases, the country emission factor.
Scope 3
Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
Net-zero emissions
The Intergovernmental Panel on Climate Change states: “net-zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period. Where multiple greenhouse gases are involved, the quantification of net-zero emissions depends on the climate metric chosen to compare emissions of different gases (such as global warming potential, global temperature change potential, and others, as well as the chosen time horizon)”.
GRI
The Global Reporting Initiative (GRI) has developed Sustainability Reporting Guidelines that strive to increase the transparency and accountability of economic, environmental, and social performance. The GRI was established in 1997 in partnership with the UN Environment Programme. It is an international, multi-stakeholder and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organizations for reporting on the economic, environmental, and social dimensions of their activities, products and services.
Guarantee of origin
A guarantee of origin (GO)is defined in EU Directive 2009/28/EC as “an electronic document which has the sole function of providing proof to a final customer that a given share or quantity of energy was produced from renewable sources as required by Article 3(6) of Directive 2003/54/EC.” The requirements of a GO are explained in Article 15 of the same Directive.
Living wage
The remuneration received for a standard working time by an employee in a particular place sufficient to afford a decent standard of living for the employee and his/her family. Elements of a decent standard of living include food, water, housing, education, healthcare, transport, clothing, and other essential needs, including provision for unexpected events.
Loss of Primary Containment
Loss of Primary Containment (LOPC) is an unplanned or uncontrolled release of material from the container that is in direct contact with the material.
Mass-balance
Mass-balance accounting is a well-known approach that has been designed to trace the flow of materials through a complex value chain. The mass-balance approach provides a set of rules for how to allocate the bio-based and/or recycled content to different products to be able to claim and market the content as ‘bio’-based or ‘recycled’-based.
NOx
Nitrogen oxides. These gases are released mainly during combustion.
Renewable resource
A natural resource which is replenished by natural processes at a rate comparable to, or faster than, its rate of consumption by humans or other users. The term covers perpetual resources such as solar radiation, tides, winds and hydroelectricity as well as fuels derived from organic matter (bio-based fuels).
Safety, Health and Environment (SHE)
Our policy is to maintain business activities and produce products that do not adversely affect safety or health, and that fit with the concept of sustainable development. The company does this by setting the following objectives: to provide an injury-free and incident-free workplace; to prevent all work-related disabilities or health problems; to control and minimize the risks associated with our products for their whole life cycle and to choose production processes and products such that the use of raw materials and energy is minimized; to evaluate and improve our practices, processes and products continuously in order to make them safe and acceptable to its employees, the customers, the public and the environment.
SOx
Sulfur oxide. This gas is formed during the combustion of fossil fuels.
VOC
Volatile organic compounds. The term covers a wide range of chemical compounds, such as organic solvents, some of which can be harmful.
Water use and water consumption
Water use includes water used for ‘once-through cooling’ that is returned to the original water source after use. Water consumption is the portion of water used that is not returned to the original water source after being withdrawn.
Financial
General
This report includes information that is presented on a pro forma basis (‘pro forma figures’) as well as other alternative performance measures (APMs), and information that is presented in accordance with IFRS as issued by the International Accounting Standard Board (‘figures on an IFRS basis’). Please refer to the section below for the definitions as applied.
Pro forma
In preparing the pro forma figures, the financial results of Firmenich and DSM have been combined as if the merger had occurred on 1 January 2022, and with purchase price allocation adjustments included as of 8 May 2023.
APM adjustments
In presenting and discussing dsm-firmenich’s financial position, operating results and net results, management uses certain other alternative performance measures (APMs) not defined by IFRS. To arrive at these APMs, adjustments are made for material items of income and expense arising from circumstances such as acquisitions and divestments, restructuring, impairments and other events (i.e., APM adjustments).
For an overview of the APMs and the reconciliations to the most directly reconcilable IFRS metric, please see Note 2 Alternative performance measures to the Consolidated Financial Statements. In calculating financial profitability ratios, use is made of the average of the opening and closing values of balance sheet items in the year under review.
Capital expenditures
Capital expenditures (CAPEX) include all investments in intangible assets and property, plant and equipment.
Core capital employed
Core capital employes is defined as capital employed, adjusted for the impact of the Firmenich purchase price allocation (PPA) – see also Note 3 Change in the scope of consolidation. Average core capital employed is calculated as the average of the core capital employed at the end of the preceding five quarters, including the current quarter.
Core adjusted return on capital employed (ROCE)
Core adjusted return on capital employed (Core adj. ROCE) is core adjusted EBIT as a percentage of average core capital employed.
Disposals
The total of the carrying amount of intangible assets and property, plant and equipment, inventories, trade receivables and other receivables, less trade payables, other current liabilities, investment grants and customer funding.
Earnings per share
Net profit available to holders of ordinary shares, divided by the average number of ordinary shares outstanding. The financial indicators per ordinary share are calculated on the basis of the average number of ordinary shares outstanding (average daily number). In calculating Shareholders’ equity per ordinary share, however, the number of shares outstanding at year-end is used.
Net debt
Net debt is the total of current and non-current borrowings less cash and cash equivalents, current investments and the net position of derivatives.
Operating working capital
The total of inventories and trade receivables, less trade payables. See also Working capital.
Organic sales growth
Organic sales growth is the sales growth excluding the impact of acquisitions, divestments, and currency impacts.
Return on capital employed (ROCE)
ROCE is the adjusted operating profit from continuing operations as a percentage of average capital employed.
R&D expenditure
&D expenditure relates to all efforts done across the company to develop new products or improve existing products and processes. As such, R&D expenditure includes all costs and capitalized expenditures that relate to Research & Development, as well as costs incurred by other departments to support R&D activities.
Total Shareholder Return
Total Shareholder Return (TSR) is capital gain plus dividend paid.
Working capital
The total of inventories and current receivables, less current payables. See also Operating working capital.
List of abbreviations
1 Source: The Free Dictionary