Bio-based BusinessFrom a Technology Point of View

Marcel WubboltsChief Technology Officer, DSM

Bio-based business seminar - December 4, 2012 London Stock Exchange

Safe harbor statement

This presentation may contain forward-looking statements with respect to DSM’s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this presentation, unless required by law. The English language version of this document is leading.

A more comprehensive discussion of the risk factors affecting DSM’s business can be found in the company’s latest Annual Report, which can be found on the company's corporate website, www.dsm.com

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2

• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

Slide 2

Long history in chemistry and biotechnology

Technological competences1902 1930 19701950 1990 2000

Life Science Products

Coal

Fertilizers

Petrochemicals

Performance Materials

Bio-based / Biologics

Chemical engineering

Polymer technology

Fine chemicals

Materials sciences

Mechanical engineering

Modern Biotechnology

2010

Classical Biotechnology

Serving our Health, Nutrition and Materials Business

Slide 3

Unique track record of continuous innovation

BIOECONOMY(21st century)

• MethaPlus (Biogas)• Advanced Cellulosic

Yeast & Enzymes• Renewable bio-diesel• Platform chemicals:

- Succinic acid- Adipic acid

• Microbial oil platform

• Yeast• Ethanol• Yeast extracts • Vitamins• Penicillin• Enzymes• Citric acid

CLASSICAL BIOTECH (19th century)

MODERN BIOTECH(20th century)

• Food & Feed enzymes(e.g. Phytase, Lactase, Proteases,... )

• Metabolic engineering(e.g. Vitamin B2, Cephalexin, Arachidonic acid)

• Biocatalysis(e.g. Pharma intermediates (PharmaPLE)

• Cell culture(e.g. CHO, Per C6TM cell lines)

Slide 4

Process TechnologyNutrition

Biotechnology is one of DSM’s key competences

Materials Sciences

Advanced SynthesisMaterials ChemistryBiotechnology

Analysis & Characterization

Slide 5

Biobased market positions• Enzymes• Cultures• Yeast extracts• Pharma• Biologics

DSM has a broad range of bio-based platforms

Algae Fungi/ Yeast Enzymes Advanced

ChemistryCell

Culture

In house bio-processes• Fermentation processes

• Anti-infectives• Several vitamins• Enzymes for Food, Feed• Enzymes for Pharma• Cultures

• Biocatalysis• Vitamins• Semi-synthetic antibiotics• APIs and building blocks

• Biopharmaceuticals

Microbial

Development• Advanced bioenergy• Bio chemicals• Renewable raw

materials for polymers

Slide 6

Access to large global DSM Science Network

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8

• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

Slide 8

Finding biotech alternatives for Cephalexin

• Cost leadership

• More sustainable process

– Reduction of process steps

– No protective group chemistry

– Ambient temperature

– All in one solvent and ideally water

• Best in class for quality

• Amenable to other semi-synthetic Cephalosporins

“What Would the Best Process Look

Like?”

Slide 9

Attractive bio-based route Cephalexin precursor

13 chemical steps 2 enzymatic steps

TraditionalFermentation

Sugar

MetabolicEngineering

Sugar

‘Old Route’ New Route Penicillium chrysogenum

Slide 10

Thorough understanding of the cell is essential

Current assembly line in Cell Factory: Biosynthesis of Penicillin G

Slide 11

Changing the pathway to make Cephalexin

Changed Assembly Line to Ad-7-ADCA

Slide 12

(*)

(*) Research was done together with Codexis

• 50% Lower costs• Fewer processing steps (13 3)• More pure product• 65% Less energy and materials requirements• Water based process• Strongly reduced amount of waste water

Green Cephalexin Process with 50% lower cost!

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• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

Slide 14

1000 30002000

Oil

cons

umpt

ion

Living off the land Living off the landA brief

momentin history

The fossil age will end long before we run out of oilAnd while running out, it will become much more expensive

The end of the petroleum era

Slide 15

The modern concept of “living off the land”

Convert Biomass to Sugars w

ith Enzym

es

Recycle ProductsBegin with Nature’s Powerplant

Bio-based economy

Need to organize the new bio-based value chain

Nutrition

Chemicals& Materials

Energy

Nutrition

JobsBiodiversityLand Use

Efficient use of ournatural resources

More secureincome

Slide 17

Threats & Opportunities for bio-based economy

Slide 18

Bio diversity Climate change

Agricultural efficiency

Food security

Water use Waste/re-use

Biomass from Agro Waste as a Feedstock

• Agricultural waste material (e.g. corn stover, fiber, cob) or dedicated energy crops

• Pretreatment to open up the fibers, remove lignin and hydrolyze hemicellulose to C5 sugars

• Enzyme treatment to hydrolyze cellulose to C6 sugars (glucose)

• Fermentation organisms (e.g. yeast) that can convert cellulosic C5 and C6 sugars into biofuels and other valuable products

Source: CEN December 2008Slide 19

Termites convert biomass highly efficiently

Collecting the biomass

Enzymatic conversion(Enzymes in Gut)

Pre-treatment throughgrinding the biomass

Enzymatic conversion(Enzymes from Fungi)

Slide 20

Elephants convert biomass into sugars

• Pretreatment through grinding• Enzymes in gastrointestinal system convert

fibers into sugars• Microorganisms convert sugars further

• Enzymes and micro-organisms can be extracted from dung

Enzymes from GI tract

Pre-treatment through grinding the biomass

Organisms from dung

Slide 21

• Introduction to biotechnology at DSM• Creating brighter processes• Bio-based economy• Bio-based chemicals & materials at DSM

Slide 22

Mission of DSM

Our purpose is to create brighter lives

for people today and generations to come

We connect our unique competencesin life sciences and materials sciences

to create solutions that nourish, protect and improve performance

Slide 23

Strategy ‘DSM in motion: driving focused growth’

Slide 24

Two exciting new growth platforms established

2 new growth platforms

DSM Bio-based Products & Services

DSM Biomedical

Bio-succinic acidCellulosic bio-ethanolBio-based adipic acid

…

Biomedical coatingsDyneema Purity®

Polyurethane Silicone Hydrogels (PTG)

Kensey Nash…

Aspiration by 2020: Sales > € 1bn at high EBITDA margin

Slide 25

Complete technology player bio-based economy

• Driven by our strengths in biotechnology, etc.

• Through selective acquisitions & partnerships to develop leadership positions

• Based upon strong chemo-catalytic and biotechnology capability to develop fully integrated solutions

• Working across the value chain

Joint Ventures drive commercialization:

Slide 26

Bio-based chemicals coming of age

The growth trend of Industrial Biotech is forecasted at • 15-20% per year between 2010-2020• as shown in various studies using

different approaches (PMCs grouping, classification and assumptions)

0

100

200

300

400

500

Bn €

2020

CAGR 19%

2015

432

75

2010

188

Consumer Chemicals

Polymers & FibersSpecialty Chemicals

Base Chemicals

Source: FESTEL CAPITAL Industrial Biotech Database 2011

Slide 27

Growing a bio-based chemicals industryD

evel

opm

ent

Com

mer

cial

Feas

ibili

ty

C3C2 C5+C4

Chai

n Le

ngth

Lactic Acid PDO

AcrylicAcid

1G EtOH

Ethylene

ItaconicAcid

MicrobialOils

Adipic Acid

SuccinicAcid

i-BuOH

Fumaric

1,4 BDO

2G EtOH

1,4 DAB

FDCA

28

not exhaustive / stages estimated

DSM’s Bio-based chemicals pipeline is evolving

RenewableProduct #3

RenewableProduct #4

RenewableProduct #3

RenewableAdipic Acid

BiosucciniumTM

Bio-based Succinic Acid

Commercialized

Development

Ideation/Feasibility

RenewableProduct #4

• BioSuccinium™ is the frontrunner and 10kt scaled up in Cassano, Italy in Q4 2012 with Roquette(Reverdia™)

• Renewable Adipic Acid –most promising route entering development in 2012

• Other high value platform molecules in pipeline for a variety of material applications

Slide 29

BiosucciniumTM

Slide 30

Alternative bio-based route for succinic acid

• Cost competitive sustainable process

– High quality of product and thus feedstock demanded for polymer applications

– Low pH process superior wrteconomics, sustainability, robustness and side products

– Yeast as a robust production organism

• Longer term corn stover biomass feedstock

• In partnership with a leading, complementary player

Slide 31

“What Would the Best Process Look

Like?”

Yeast & bacteria compete for bio-succinic acid

Slide 32

DSM’s yeast based process outperforms

Low pH Biosuccinium™ process outperforms competing bacterial processes

Slide 33

Sustainability benefits with yeast technology

Slide 34

Biosuccinium™ - significant CO2 reduction potential

Example ski boots: ~8 kg CO2 reduction per pair

Slide 35

Biosuccinium™ - Best-in-class Carbon Footprint

36

0.9

-0.7

1.5

2.3

-1

0

1

2

3

Carb

on fo

otpr

int

[kg C

O 2eq

./kg a

cid]

Bacterialhigh pH

technology -ammonium

sulfateBiosuccinium™ future potential

Biosuccinium™ MaturePetrochemical

Process

Source: DSM, Executed by Copernicus InstituteData pending publication

Slide 36

Biosuccinium™ - qualified for key applications

TPU = thermoplastic polyurethane; PU = polyurethanes; PBS = polybutylene succinate: new biopolymer; Spandex / Elastane = elastic fibers

Slide 37

Bio-based succinic acid enables large markets

Source: McKinsey 2008Slide 38

Moving towards a licensing business

Slide 39

Medium-Scale

Meanwhile in Cassano, Italy ……. (June 2012)

Slide 40

Biosuccinium™ – Ready to Roll

• Biosuccinium™ qualified in multiple applications

• Very positive feedback (quality, color)

• 1mt to several tons quantities shipped

• Various joint developments ongoing, e.g. on 100% bio renewable polyolswith Dupont, Tate&Lyle

• Product available from our Cassanofacility in Q1 2013

Slide 41

Wrap up

• DSM has a long track record in biotechnology and a wide range of world class (bio)technology platforms

• Biotechnology can offer substantial benefits over traditional routes

• Bio-based economy offers huge opportunities and opens new sizeable markets

• DSM’s yeast technology for succinic acid is superior to bacterial technology

• Biosuccinium™ - (bio-based succinic acid) has strong economic and sustainability benefits which enables many new applications

Slide 42

Contact:

DSM Investor RelationsP.O. Box 6500, 6401 JH Heerlen, The Netherlands

(+31) 45 578 2864e-mail: investor.relations@dsm.com

internet: www.dsm.com

visiting address: Het Overloon 1, Heerlen, The Netherlands