2 Alternative performance measures

Definitions

• Earnings before interest, tax, depreciation and amortization (EBITDA) is the IFRS metric operating profit, with depreciation, amortization, and impairments added back
• Adjusted earnings before interest, tax, depreciation and amortization (Adj. EBITDA) is EBITDA adjusted for material items of profit or loss, as defined under ‘APM adjustments’
• Adjusted operating profit (Adj. EBIT) is the IFRS metric operating profit adjusted for material items of profit or loss, as defined under ‘APM adjustments’
• Core adjusted EBIT (Core adj. EBIT) is calculated as the IFRS metric operating profit adjusted for material items of profit or loss, as defined under ‘APM adjustments’, and adjusted for the impact of the Firmenich purchase price allocation (PPA)
• Adjusted net profit (Adj. net profit) is the IFRS metric net profit adjusted for material items of profit or loss, as defined under ‘APM adjustments’
• Core adjusted net profit (Core adj. net profit) is the IFRS metric net profit from continuing operations adjusted for material items of profit or loss, as defined under ‘APM adjustments’, and adjusted for the impact of the Firmenich purchase price allocation (PPA)
• Adjusted gross operating free cash flow (AGOFCF) is defined as the IFRS metric operating profit plus depreciation, amortization, and impairments, adjusted for material items of profit or loss, as defined under ‘APM adjustments’, adjusted for intrinsic changes in the working capital, minus capital expenditures. This metric is based on continuing operations
• Adjusted earnings per share (Adj. EPS) is calculated as the net profit available to holders of ordinary shares adjusted for material items of profit or loss, as defined under ‘APM adjustments’, divided by the average of ordinary shares outstanding
• Core adjusted earnings per share (Core adj. EPS) is calculated as the net profit from continuing operations available to holders of ordinary shares adjusted for material items of profit or loss, as defined under ‘APM adjustments’, and adjusted for the impact of the Firmenich purchase price allocation (PPA), divided by the average of ordinary shares outstanding
• Capital employed is 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. Average capital employed is calculated as the average of the capital employed at the end of the preceding five quarters, including the current quarter

APM adjustments

APM adjustments mainly impact the EBITDA, operating profit, net profit, and EPS and can be specified as per the table below.

2024

The main APM adjustments in 2024 were:

• Book result of divestments of €63 million mainly relates to €93 million on the divestment of the Yeast Extract business (excluding the impairment on the manufacturing facility of €73 million), partly offset by smaller divestment losses
• Acquisition (merger), divestment, and integration costs of €103 million relate mainly to the further integration between DSM and Firmenich, the preparation for the carve-out of the ANH business, the sale of the Jiangshan vitamin C business, the divestment of the Yeast Extract business and the deconsolidation of Olatein
• Restructuring costs of €45 million relates to various restructuring programs within dsm-firmenich, including the vitamin transformation program and the additional costs following the closure of the Pinova ingredients plant
• Impairments of PPE, goodwill and intangible assets of €238 million are mainly related to the intangible assets of €54 million concerning specific molecule technologies, for which the supply rights were transferred, to the impairment of the Marine Lipids business of €74 million, and the manufacturing facility of €73 million, following the divestment of the Yeast Extract business; see also above
• Other costs of €42 million mainly relates to costs of litigation and claims

2023

The main APM adjustments were:

• Acquisition (merger) and divestment costs of €363 million relate mainly to the merger and integration between DSM and Firmenich, including the impact of the inventory step-up of €197 million, following the purchase price allocation of Firmenich
• Restructuring costs of €234 million relate mainly to restructuring projects, following the announced restructuring of the vitamin asset footprint, the closure of the Pinova ingredients plant, and restructuring costs following the merger
• Impairments of PPE, goodwill, and intangible assets of €294m are mainly related to the restructuring of our vitamin asset footprint. This includes the closure of the Xinghuo vitamin B6 plant in China and the refocusing of the company’s vitamin C activities on its specialty Quali®-C from Dalry (UK) only.
• The production of vitamin C in Jiangshan, China, which had already been significantly reduced since the end of 2022, was completely shut down in mid-May. dsm-firmenich is committed to the sale of its vitamin C business in Jiangshan (China), and therefore classified end of 2023 the assets and liabilities as held for sale
• Other costs of €36 million and financial income and expense of €34 million mainly include the overnight devaluation of the Argentine peso by more than 50% at the inauguration of the new president, together with several litigation costs

Reconciliation Alternative performance measures (APMs) (continuing operations)

A reconciliation of the APMs to the most directly comparable IFRS measures can be found in the tables below.