Strategy summit is our annual strategy & innovation conference where we combine some of the world’s leading thinkers in the field, with break-out workshop sessions. We’ve looked worldwide for the best cases, the best research and the most incredible examples of leading strategic transformations. It’s a leadership skill few boards and CEO’s master. It’s a leadership skill that will become increasingly important over the coming decades. It’s the theme and focus of the 2nd annual Strategy Summit: Learning to lead strategic transformation. How a company of 25.000 employees have gone through five waves of transformation, from mining and petrochemicals to advanced Sciences. Rob Kirschbaum has led innovation work at DSM since 2000. He will share his insights into building the innovation engine for longterm transformation. Rob Kirschbaum Former VP Open Innovation at Royal DSM

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Stavanger, 29th January, 2015
Innovating 4 Change at DSM
Rob Kirschbaum, CEO SakuragiConsult
(former VP Open Innovation DSM)
Page
 Introduction to Royal DSM
 Innovation
- Open Innovation model
- DSM Innovation Center
- The “Balancing Act”
 Breakthrough examples
- Health
- Sustainability
 Take aways

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© 2014 DSM. All rights reserved
DSM at a glance*
Page 4
Sales
~ €10 billion
EBITDA
~ €1.3 billion
Global
presence
~24,500
employees
worldwide
Listed at
Euronext NYSE
Share price
quintupled in
25 years
• DSM is a global Life Sciences and Materials Sciences company active in health,
nutrition and materials
• DSM delivers innovative solutions that nourish, protect and improve performance in
global markets such as food and dietary supplements, personal care, feed, medical
devices, automotive, paints, electrical and electronics, life protection, alternative
energy and bio-based materials
• 5% of Turnover in R&D (~2500 Fte)
Sustainability
leader
Top ranking
Dow Jones
Sustainability
Index
* 2013 numbers total DSM

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DSM – understands change
Coal Mining
Commodity
Chemicals
Specialty
Chemicals
Life Sciences &
Materials Sciences
Page 5
Successful transformation track record
Page 6
Evolution
Life Science Products
Coal
Fertilizers
Petrochemicals
Performance Materials
Bioterials / Biologics
Chemical engineering
Polymer technology
Life Sciences
Materials Sciences
Mechanical engineering
Modern Biotechnology
Technological competences1902 1930 19701950 1990 2000 2010
Classical Biotechnology

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Significant transformation (Sales %)
Page 8
Chemical synthesis &
biotechnology
Energy, chemistry &
polymer technology
Biotechnology
Hoffman La Roche’s
Vitamins (1930s)
DSM (1902)
Gist-Brocades (1869)
Vitamins
Omega’s
Carotenoids
Premixes for food & feed
Enzymes
Minerals
Cultures & Yeasts
Nutraceuticals
Pharmaceuticals
Cellulosic bioethanol
Biomedical materials
Bio-plastics
High Performance Plastics
Polyamides and precursors
Resins for coatings and
composites
Functional Materials
Solar – advanced surfaces
Life Sciences
Materials Sciences
Building on an impressive history

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DSM’s
organization
Page 9
Supervisory Board
Managing Board
Functional Excellence
Shared Services
Associates
DSM Sinochem
Pharma
DPx Pharma POET-DSM
Nutrition
DSM Food
Specialties
DSM Nutritional
Products
Performance Materials
DSM
Dyneema
DSM Resins &
Functional Materials
DSM Engineering
Plastics
Corporate Staffs
Polymer Intermediates
DSM Fiber
Intermediates
DSM Innovation
Center
DSM Bio-based
Products & Services
DSM
Biomedical
DSM
Advanced Surfaces
LIFE SCIENCES & MATERIAL SCIENCES
12%
4%
7%
2%
24%
3%6%
8%
7%
9%
11%
7%
Attractive
markets
of DSM Food &
Beverages
PharmaE&E
Textiles
Automotive
Building &
Construction
Other
Infant
nutrition
Dietary
Supplements
Animal
Feed
Page 10
Personal
Care
2013 Sales by end-market
(Food)
Packaging
DSM offers products & solutions to a wide range of markets

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• Our purpose is to create brighter lives for
people today and generations to come
• We connect our unique competences in Life
Sciences and Materials Sciences to create
solutions that nourish, protect and improve
performance
Mission
De
afb
eel
Global societal trends drive DSM’s markets
Population growth
Wealth
Resources constraints
Sustainability
UrbanizationHealthcare costs Energy security
Food security
Ageing population
MaterialsNutritionHealth

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Page
DSM in motion: driving focused growth
Challenge: >9 billion people in 2050!

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De
afb
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“We cannot be
successful nor can we
call ourselves successful
in a society that fails”
Feike Sijbesma,
CEO, Royal DSM
Sustainable
Manufacturing/
Raw Materials
Energy Security
Health
Food & Nutrition
Security
People
Planet
Profit
Science & Innovation Themes
 a Sustainable Company
People+
Eco+

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 Introduction to Royal DSM
 Innovation
- Open Innovation model
- DSM Innovation Center
- The “Balancing Act”
 Breakthrough examples
- Health
- Sustainability
 Take aways
Page
FOR INTERNAL USE ONLY

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De
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20%
Innovation Sales 2015
@ ~5% higher Gross Margins
Top Quartile
McKinsey Innovation
Benchmark 2012
€1B
Disruptive Platforms, 2020
Building an intrinsically innovative company
Page 19
De
afb
eel
Science @ work
R & D
Innovation
Competences
Technology
Platforms
Knowledge
IdeasIP
Market SolutionsBusiness
Models
Inventions
Know-how

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De
afb
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21
Breakthroughs can be “Proudly Found Elsewhere”

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Page
Why do we need Open Innovation?
99.9996% of world population outside DSM!
Networks needed!
DSM
Page 23
Page
Contrasting principles of Innovation
•Closed Open
• All smart people work for us Most of the smart people do not work for us
• Invent, develop, produce yourself Add internal & external forces
• Discover and get to market as No1 We can profit from outside R&D
• Commercialize quickly Choose the best business model
• Create most and best idea’s to win Use internal and external idea’s to win
• Control your IP to defend positions Profit from other’s and combine with own IP
• The Lab is our World ! The World is our Lab !
Page 24

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Page
Prof. Henry Chesbrough: 2003 ~2012
Page 25
Page
Open Innovation means Opening doors!

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PagePage 27
Page
Value Creation by Open Innovation
Fuzzy
start
Well
defined
goal
Interaction /
Synthesis
Intellectual Asset Management
Licensing
In Venturing
Spin in
Joint
Business
Developments
Acquisitions
Licensing
Out
Spin out/off
Divestments
R&D services
Market Scouting / Business Intelligence
Competence Development, Technology Intelligence
Open innovation has become a competitive necessity!

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Page
It works much
better when
Open!
Page 29
Innovation is like a parachute……
Innovation is like a parachute…
It works much better when it’s open!
Page
DSM Innovation CenterDSM Innovation Center
EBA Biomedical
EBA Advanced
Surfaces
EBA Bio-based
Products &
Services
Business
Incubator
New Business DevelopmentNew Business Development
CTO Office
Venturing
Excellence in
Innovation
Licensing
Enablers / AcceleratorsEnablers / Accelerators
Page 30

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Page
Venturing: How to mitigate risks?
Page
DSM Venturing Mission
Competence center for external (VC) participations
aimed at boosting innovation & growth
Window to the world
• Explore new emerging markets, technologies and products
to enhance product portfolio, technology toolbox and business model(s)
Strategic value
• Add value internally and externally
• Facilitate strategic co-operations with start-ups
Financial return
• Portfolio approach
• Returns needed to pay for cost and capital and be a sustainable activity

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Page
Venturing integral part of innovation
Since 2001
• Scouted and screened more than 5,000
companies, window on-the-world
Resulting in
• ~50 direct investments; >20 active in
current portfolio
• Partnerships and collaborations with >50
companies in various forms
Venture 2020 Strategy
• (just) 4 focus areas
• Industry savvy within Venturing
• Strategic remains primary drive
• Financial performance boundary
condition for sustainable venturing
• Be present and active in innovation hubs
Page
Portfolio snapshot of direct investments – May 2014
Nutrition (Bio)medical OtherBioBased

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FOR INTERNAL USE ONLY
Corporate Venturing
A win-win situation is the objective
35
Page
FOR INTERNAL USE ONLY
36
1
2
3
4
5
6
7
8
9
Innovation Aspirations
Innovation Strategy
Idea Generation and Validation
Project Management
Commercialization and Launch
Portfolio Management
External Networks
Organization
Culture and Talent
2.0 2.5 3.0 3.5
Industry
average
Average
DSM 2006
Average
DSM 2010
Monitoring Innovation Performance
Scale 1 - 4
ID 2012

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37
Product new
to DSM
Market new to DSM
“Adjacent Business”
New to
The World
Mature
Managing the Portfolio across Levels
Emerging
Growth
Decline
Marketlifecycle
Improved
Product
Disruptiveness
1~1.5yr
Established
Products and
Business Lines
1.5–3yr3-5yr5-9yr
New
Platforms
Break-Away
New
Applications
and
Adjacencies
Page 38
Portfolio management of innovations
EmergingMature
Existing New
Renew & Grow
existing position
Maintain &
Strengthen
existing position
Expand to
adjacent
markets
Red Box
Explore & Build
Disruptiveness
MarketMaturity

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Breakthrough versus Incremental Innovation
The Balancing Act
Long term Vision
Entrepreneurship
Agility
Medium term Vision
Operational Excellence
Lower risk
Pilot plants
Scaling-up
Breakthrough
Innovation
Innovation Center Business Groups
Sustainable, Profitable Innovations
Page 39
Arnitel® Eco A high performance thermoplastic
elastomer
Partially made from renewable
resources, using rapeseed oil.
Adding new performances, like UV
and heat resistance
Eco+
A high performance thermoplastic
elastomer
Partially made from renewable
resources, using rapeseed oil.
Adding new performances, like UV
and heat resistance
Eco+
Panliners of Arnitel Eco,
lowering the carbon footprint
enabling higher temperatures
Panliners of Arnitel Eco,
lowering the carbon footprint
enabling higher temperatures

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The first natural, scientifically substantiated
solution for healthy blood flow
EFSA (proprietary) health claim:
“Fruitflow® helps maintain normal platelet
aggregation, which contributes to healthy blood flow”
People+
The first natural, scientifically substantiated
solution for healthy blood flow
EFSA (proprietary) health claim:
“Fruitflow® helps maintain normal platelet
aggregation, which contributes to healthy blood flow”
People+
FiSA 2012 : Fruitflow® one of the
most innovative products of the year
FiSA 2012 : Fruitflow® one of the
most innovative products of the year
Maxilact®
The freedom to enjoy
dairy
People+
Lactose free is one of the
fastest growing segments
in dairy, driven by
increasing awareness of
lactose intolerance and
health & wellness trend.
Maxilact® breaks down
lactose in dairy products,
making them suitable for
lactose intolerant
consumers.
DSM was the first company
to commercialize lactase
and has been innovating
ever since to meet today’s
and tomorrow’s lactase
needs.

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Brewers Clarex ™
Natural beer stabilization system for extended shelf life
‘With DSMs Brewers Clarex™
CO2 emissions from brewing
1 hectoliter of beer are reduced
between 5 and 8%’
‘Every December, in the UK
a billion pints of beer
are being sold’
Eco+ example
Page 43
Reducing Methane Emission from Cattle
Identification and development of a feed additive(s)
solution to:
1. reduce methane by 25-30% in vivo
2. with the potential for better performance
(increased milk yield, increased daily weight gain, etc.).
Eco+

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BioBased: Beyone™ 1 for Wind Mills
Bright Science
Windmill blades from Beyone™ 1 resin
Superior fatigue resistance using a styrene-
free, cobalt-free resin with 40 % bio-content
Brighter Living
Fast blade manufacturing:
increased production output per mold
Reduced Eco-footprint vs. epoxy
Elimination of exposure during blade
production
Trends
Sustainable energy generation
45Page © 2013 DSM. All rights reserved
46
Biobased: Waterborne Decorative Coatings
Trends
Need for sustainable paints
Reducing the carbon footprint
Bright Science
Bio-based waterborne alkyd emulsions,
VOC free, high performance
Brighter Living
Renewable content between 40 – 70%
Protecting indoor air quality and
improving working conditions
Application:
Primers and high gloss paints
for professionals and DIY
© 2013 DSM. All rights reserved

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EcoPaXX®: Engine cover
Bright Science
70% bio-based engineering plastic
Superb surface appearance
High thermal resistance up to 250C
Brighter Living
Reduction of 40% of the CO2 emissions
compared to conventional polyamides
Trends
Reducing carbon footprint
Mercedes A class: reduced CO2
footprint with 40%
A new standard in hand protection
The world’s most cut resistant fiber
8x thinner than Nylon
2x thinner than aramid and any HPPE……
…. results in a new level of
protection with no compromise in
comfort or durability!!

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De
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 Introduction to Royal DSM
 Innovation
- Open Innovation model
- DSM Innovation Center
- The “Balancing Act”
 Breakthrough examples
- Health
- Sustainability
 Take aways
New exciting growth platforms established
3 Emerging Business Areas up and running
DSM Bio-based
Products & Services
DSM Biomedical
Advanced Enzymes and
Yeast platforms:
enabling
Advanced Bio Energy
and Bio-based chemicals
Innovative materials that
deliver more advanced
clinical procedures and
improved patient
outcomes
Aspiration by 2020: sales up to €1bn at high EBITDA margin
Slide 50
DSM Advanced Surfaces
Smart coatings and surface
technologies to boost
performance in the solar
industry

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Page
DSM Biomedical
Page
DSM Biomedical
materials improve
over 4.4 million
people’s lives,
every day.
FOR INTERNAL USE ONLY
Page 52

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Page
 A new application for Dyneema® Purity:
Fixation of transplanted ligaments in the knee
 A continuous loop made from
Dyneema® Purity is used to
secure the soft tissue transplant,
providing strength and stiffness
 The application of these very
strong yet soft fibers reduce
trauma to the transplant
 Product is ingredient-branded
with the Dyneema® Purity
ingredient logo
Innovation in Biomedical Materials
Page
Materials evolution
Treatment moves from repair to healing
Stimulation of
Bone growth
Cartilage repair
Orthopedic OrthopedicOrthopedic CMFCardio
Pacemaker leads Hip implants Bone cement
Ophthalmology Orthopedic
Back-of-the-eye
medication
Resorbable screws
tendon repair
• Material stays in the body
• Highly durable
• Maintaining mechanical
properties over years
• Controlled drug release
• Disappears after use
• Healing by stimulation and
growth of patients’ own tissue
• Disappears over time
BIO-INTERACTIVEBIO-ACTIVE
Medical coatings
and polymers
BIO-PASSIVE
Resorbable polymers
and Drug Delivery
Therapeutic materials,
Regenerative medicine

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Open Innovation in biomedical materials
EBA
Biomedical
Licensing
In
Venturing
Spin in
Joint
Business
Developments
Acquisitions,
Alliances / JVs
Licensing
Out
Spin out/off
Divestments
R&D services
Joint
R&D
Device design;
Exclusive material developments
Scientific Advisory Board
& other Consultants
Page 55
Public Private
Partnerships
Page
Biomedical
Materials
Medical Device
Development
Medical Device
Manufacturing
/ Assembly
Implant
Surgery
Patient
After-
care
License agreements
Extended offering
Materials
Assembly
Joint
development
Royalties
US$ 1.5bn US$ 150bn >US$ 150bn
Device Supply
Agreements
Component Supply
Agreement
Materials Supply
Agreement
Move Forward selectively in the Value Chain

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Page
Biomaterials history at DSM
Medical Coatings
R&D efforts
started in DSM
Desotech
First sales of
Dyneema Purity®
fiber for knee
ligament fixation
First sales
Medical Coatings
Start of UH and
Drug Delivery
activities
BMM Public
Private
Partnership
funded by Dutch
government
Medivas technology
acquisition for Drug
Delivery
Bionate® II PCU
Antimicrobial
Coatings
Next generation UH
product
VitroStealth® non-
biofouling coatings
Start of DSM
Dyneema’s Medical
R&D Efforts
Official launch
of Dyneema
Purity®
orthopedic
sutures
Biomedical
EBA launched
PTG Acquisition (est. 1989)
First cardiovascular and
ophthalmic drug delivery
development agreements
First sales of Dyneema
Purity® fiber in
cardiovascular and spinal
applications
Actamax
DSM-DuPont JV
HQ move to
Berkeley, CA
DSM targets
EBA sales in
2020 > €1bn
Expanded
portfolio for
ophthalmic
applications
Kensey Nash
Acquisition
20122000 2002 2004 2006 2008 2010
Page 57
Page
58
DSM Bio-based Products & Services
Eco+

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Page
Hydrocarbons are running out and/or become much
more expensive
Source: http://www.trendlines.ca/scenarios.htm
Peak Oil: 94-mbd in 2022
The year flow breaches below today's 86-mbd: 2040
The year we virtually run out (excl BTL): 2257 (less than 5mbd)
Page
1000 30002000
Fossilresourceuse
Living off the land Living off the land
A brief
Fossil
moment
in history
From the Fossil Age to the Bio-Age

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Page
Drivers promoting a Bio-economy are changing
Induce Innovations
Page
Biomass “cracking” enables the Bio-economy
Lignin
Hemicellulose
Cellulose
Protein
Fatty acid
(veg. oil)
Starch
Fuel, Chemicals & Food

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Page
Biomass as a source of fermentable sugars
Plant cells
Cellulose Hemi-cellulose
Lignin
Glucose
Xylose
Arabinose
Glucose
Galactose
Mannose
Biomass
63
Page
Inspired by Nature – Xylose Isomerase
• C5 Yeast
• Conversion of Xylose and Arabinose
• Increased yield of EtOH

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Page
Page
From biomass to cellulosic bio-ethanol

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Enabling Advanced Biofuels
POET & DSM: two innovative leaders – one
shared vision
• Making cellulosic ethanol competitive
to grain ethanol
• Building Project LIBERTY ($250 Mln
investment) in Emmetsburg, Iowa
• Grand Opening 3 September 2014
Page
DSM-POET Biomass storage yard

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69Emmetsburg, September 3rd, 2014
• Cellulosic bio-ethanol
• Renewable diesel
• Bio-Succinic
+
Current major Biomass Ventures

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Renewability is Not Enough as a Value Proposition
DSM Advanced Surfaces

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KhepriCoat® Anti-reflective coating
KhepriCoat® AR coating has best in class
transmission gain and outstanding outdoor
durability.
DSM is a committed partner, offering
development support and a filled pipeline
of future offerings
KhepriCoat® AR coating has best in class
transmission gain and outstanding outdoor
durability.
DSM is a committed partner, offering
development support and a filled pipeline
of future offerings
Light trapping : Next step in efficiency gain
DSM acquired SolarExcel and its proprietary light trapping technology

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DSM and the sun, an era of progress
1902 1970 2000 2010 2020
1 nano second
1~3 year
~70 Million year
~300 Million year
Coal from
carbon layers;
solar energy
captured 300
million years
ago
Hydrocarbons as
derivate of natural
oil; solar energy
captured 10-70
million year before
using
Bio fuels captured
from biomass where
solar energy was
stored for
approximately 1 year
Solar PV, immediate
use of solar energy
What worked for us ….
• Sustainability and Innovation go hand-in hand
• Create enough breakthrough options in the pipeline
• Nominate and empower “Intrapreneurs”
• Protect Radical Innovation Platforms
• Strategic consistency; Stay the Course!
• Accept the Balancing Act (Business & People)
• Patience is needed for Culture changes

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Page
77
Product new
to DSM
Market new to DSM
“Adjacent Business”
New to
The World
Mature
Emerging
Growth
Decline
Marketlifecycle
Improved
Product
Disruptiveness
1~1.5yr
Established
Products and
Business Lines
1.5–3yr3-5yr5-9yr
New
Platforms
Break-Away
New
Applications and
Adjacencies
Organizing Incremental vs. Radical Innovation
De
afb
eel
Key Take Aways
• Venturing improves the power to select options
• Open Innovation : A tool to rejuvenate your business
• Partnerships mitigate innovation risks
• Partner with an open mind; dare to share!
• Construct Alliances based on complementarity
• Focus on the Grand Challenges
Page 78

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linkedin.com/company/DSM
twitter.com/DSM
facebook.com/DSMcompany
flickr.com/DSMcompany
youtube.com/DSMcompany
Questions ?