Accounting policy
Revenue from contracts with customers is recognized by identifying the contract and its performance obligations as well as by determining and allocating the transaction price to these performance obligations. Net sales represent the invoice value less estimated rebates, cash discounts, and indirect taxes. No element of financing is deemed present as sales are made with a short-term credit term.
The payment terms are determined per business segment on a customer basis. dsm-firmenich has neither specific obligations for returns or refunds, nor specific warranties or other related obligations.
Sale of goods
At dsm-firmenich, revenue related to the sale of goods is recognized in the income statement when the performance obligation is satisfied. This is at the point in time when transfer of control of the goods passes to the buyer. Fulfilment of the performance obligations related to goods sold is measured using the commercial shipment terms as an indicator for the transfer of control. Revenue recognized is measured at the fair value of the contractual transaction price allocated to the performance obligation that is satisfied.
Rendering of services
Income coming from the rendering of services is recognized when the service, i.e., the performance obligation, has been performed. Fulfilment of the performance obligations for services rendered is identified according to the individual contract. The revenue recognized is measured at the fair value of the contractual transaction price allocated to the performance obligation that is satisfied.
Licensing (royalties)
Income related to the sale or licensing of technologies or technological expertise is recognized in the income statement either at a point in time or over time, depending on when the contractually identified performance obligations are satisfied. Performance obligations related to license income include the transfer of rights and obligations associated with those technologies. License income is reported in Net sales as it is part of the ordinary and recurring activities of the business.
|
|
2024 |
|
2023 |
|---|---|---|---|---|
Goods sold |
|
12,609 |
|
10,410 |
Services rendered |
|
184 |
|
205 |
Royalties |
|
6 |
|
12 |
Total |
|
12,799 |
|
10,627 |
|
|
2024 |
|
2023 |
|---|---|---|---|---|
Perfumery & Beauty |
|
3,964 |
|
2,619 |
- Perfumery |
|
2,443 |
|
1,480 |
- Ingredients |
|
903 |
|
551 |
- Personal care |
|
618 |
|
588 |
|
|
|
|
|
Taste, Texture & Health |
|
3,245 |
|
2,471 |
- Taste |
|
1,842 |
|
1,139 |
- Ingredients solutions |
|
1,403 |
|
1,332 |
|
|
|
|
|
Health, Nutrition & Care |
|
2,214 |
|
2,246 |
- Dietary supplements and I-Health |
|
991 |
|
1,017 |
- Early life nutrition |
|
413 |
|
411 |
- Biomedical solutions |
|
208 |
|
204 |
- Other |
|
602 |
|
614 |
|
|
|
|
|
Animal Nutrition & Health |
|
3,324 |
|
3,223 |
- Essential Products |
|
2,469 |
|
2,434 |
- Performance Solutions |
|
855 |
|
789 |
|
|
|
|
|
Corporate Activities |
|
52 |
|
68 |
|
|
|
|
|
Total |
|
12,799 |
|
10,627 |
Total costs
In 2024, total operating costs (the total costs included in operating profit) amounted to €12.3 billion, €1.1 billion higher than in 2023, when these costs stood at €11.2 billion. The difference is mainly attributable to the inclusion of Firmenich for the full year in 2024, compared to eight months in 2023, following the merger.
Total operating costs in 2024 included Cost of sales amounting to €8.6 billion (2023: €8.0 billion); gross profit as a percentage of net sales increased to 33% (2023: 25%), thanks to the improved margins in the business (particularly the ANH business) and the full year inclusion of the Firmenich results.
|
|
2024 |
|
2023 |
|---|---|---|---|---|
Amortization of intangible assets |
|
609 |
|
477 |
Depreciation of property, plant and equipment owned |
|
481 |
|
428 |
Depreciation of right-of-use assets |
|
96 |
|
75 |
Impairment losses |
|
244 |
|
327 |
Total |
|
1,430 |
|
1,307 |
For impairment losses see Note 2 Alternative performance measures.
|
|
2024 |
|
2023 |
|---|---|---|---|---|
Release of provisions |
|
3 |
|
– |
Gain on sale of assets and activities |
|
47 |
|
17 |
Insurance benefits |
|
21 |
|
53 |
Amendments/settlements to pension plans |
|
– |
|
– |
Earn-out payments and other settlements |
|
21 |
|
57 |
Lease income |
|
– |
|
4 |
Royalties |
|
– |
|
2 |
Sale of emission rights |
|
– |
|
8 |
Sundry |
|
21 |
|
47 |
Total |
|
113 |
|
188 |
|
|
2024 |
|
2023 |
|---|---|---|---|---|
Additions to provisions |
|
7 |
|
22 |
Exchange differences |
|
7 |
|
13 |
Acquisitions/disposals |
|
39 |
|
59 |
Damages w.r.t insurance |
|
– |
|
– |
Sundry |
|
17 |
|
23 |
Total |
|
70 |
|
117 |