Ladies and gentlemen, thank you for standing by. Welcome to DSM's conference call on the first half year results of 2019. Throughout today's presentation, all participants will be in a listen-only mode. After the presentation, there'll be an opportunity to ask questions. To register for questions, you may dial star one at any time. Now I would like to turn the call over to Mr. Huizing. Please go ahead.
Thank you, operator. Ladies and gentlemen, good morning and welcome to this conference call on DSM's first half 2019 results, which we published earlier this morning. We know it's a very busy day for all of you with all these companies reporting today, so we will give it our best try to limit the call to 45 minutes. I'm sitting here with Feike Sijbesma, CEO and Chairman of DSM's Managing Board, and Mrs. Geraldine Matchett, Chief Financial Officer and member of the board. Geraldine will give a short introduction, after which Feike and Geraldine will answer any questions you may have. As always, I need to caution you that today's conference call may contain forward-looking statements. In that regard, I would like to direct you to the disclaimers about forward-looking statements as published in the press release. With that, the floor is yours, Geraldine.
Thank you, Dave. Good morning, ladies and gentlemen. It's a pleasure to welcome you on this call on DSM's first half results for 2019. I will provide a few comments on the key slides of our investor presentation that we published this morning together with the press release, and then we'll open the Q&A session. However, before starting, I have to point out that our H1 2019 results are reported against a set of prior year figures that include a significant additional benefit from the exceptional supply disruption in some key vitamins that we clearly communicated all along last year as the temporary vitamin effect. In order to provide as much transparency as possible, we continue to show this separately, calculating growth against 2018 total results, including this special event, as well as the comparison excluding this event.
Of course, from a perspective of monitoring the progress of our business, the comparison to last year's underlying business is the meaningful one. For this reason, in the remainder of my introduction, I will compare H1 2019 versus the underlying business as estimated and reported in 2018. One more comment on comparisons. Please note that we adopted the new IFRS 16 standard on lease accounting as per its effective date on the 1st of January 2019, whilst the 2018 figures are not restated. You can find the full information on this on page 24 of our press release. This said, let's start with the financial highlights for the first half on page two. We are pleased to report a good performance in the first half of the year.
In terms of top-line development, nutrition delivered a good 4% organic sales growth in both quarters, while sales in materials remained 5%-6% below prior in Q1 and Q2 on the back of ongoing weak market conditions in some end markets. Overall, however, adjusted EBITDA increased 12% in the first half, and when excluding the positive effects from IFRS 16, this remains a good growth of 9%, which is well in line with our strategic targets. More specifically, on Q2, we saw continued good momentum with 10% EBITDA growth, including IFRS 16. This growth is driven by continued good performance in nutrition and a step up in the performance of our innovation center. Over the two quarters, we stepped up our cash generation with an adjusted net operating free cash flow up 14% to EUR 257 million.
Finally, we are pleased to reiterate our full year outlook as communicated in Q1. Now moving to page eight for nutrition. Nutrition delivered a 4% organic growth in H1, driven by good performance in animal nutrition, a solid performance in human nutrition, and strong growth in personal care and food specialties. This is a strong result, particularly considering the tough comparable period we saw with 10% organic growth in H1 2018. Adjusted EBITDA in nutrition increased by 13% in H1 or 11% including IFRS 16. The EBITDA margin increased 120 basis points to 21.1%, including 50 basis points from IFRS 16. This increase in margin was supported by the solid organic growth, lower costs, and positive foreign exchange.
Looking at Q2, results were overall in line with the first quarter, with 4% organic growth, this time driven by animal nutrition mainly, and supported by ongoing good performance in personal care and food specialties. After a strong start in Q1, human nutrition had a softer quarter, but this was partially related to order patterns at large food and beverage customers and does not reflect a change in business sentiment. In Q2, nutrition delivered 13% EBITDA growth, including a 3% from IFRS 16, almost the same as in Q1. The adjusted EBITDA margin was again strong at 21.4%, including 50 basis points from IFRS 16 versus 20.4% in Q2 last year. Let's look more specifically for a moment at animal nutrition on page nine. For the first half, animal nutrition reported 4% organic growth with volumes up 3%.
This is very strong performance compared to the 8% volume growth last year. Q2 demonstrated continued good business performance with a 10% organic growth. The 6% volume growth in the second quarter was achieved despite the intensified African swine fever in China, that we were able to mostly compensate given the higher poultry production in the region, as well as increased pork production in other regions. These offsetting effects demonstrate the value of our global footprint and our broad species coverage. Prices were slightly up in the first half with a small positive momentum in Q2 following some price initiatives to compensate higher input costs and the continued benefit from the environmental policies implemented in China. Let's move to page 10 to look at human nutrition. Overall, business conditions in human nutrition are good.
Early life nutrition, pharma, and dietary supplements performed well, with especially our B2C business, i-Health, showing a continued double-digit growth. In food and beverage, we continue to see soft demand from large global customers, while our small and regional customers, which we typically serve with our premix, continued their strong growth. After a good start to the year with a 5% organic growth in Q1 against 8% in the same period last year, Q2 was a softer quarter, mainly driven by lower sales to large F&B customers, which was partly related to order patterns and does not reflect a change in business sentiment. Overall, we realized 2% organic growth in the first half against a tough comparison of 8% last year. In our other nutrition activities, we realized a strong 8% organic growth in the first half.
Personal care showed a very strong growth in sun and skin care, while in food specialties, we enjoyed good growth in enzymes and cultures. Moving to our materials business, let's go to page 12. Market conditions in Q2 remain challenging in automotive, building and construction, and E&E, especially in China. Other segments were robust with strong market conditions in our Dyneema and functional materials businesses. Volumes were down 5% in the first half with a similar performance in Q2 as we had seen in the first quarter, while price developments reflect the fluctuations in input costs. The adjusted EBITDA for the first half remains flat versus prior year, in line with Q1, resulting from a strong performance in the high-margin businesses of Dyneema and functional materials and supported by good margin management, strict cost control, and a small benefit from currencies.
These earning drivers are reflected in the EBITDA margin for H1, which expanded 90 basis points to 18.4%, including 30 basis points from IFRS 16, and in Q2 showed a similar margin development as in the first quarter, with an EBITDA margin up 110 basis points to 19%, including 30 basis points from IFRS 16. Now moving to our innovation center, let's go to page 14. The innovation center had a good first half of the year with a solid top-line and bottom-line growth. Bio-based products and services contributed strongly to the results, in part thanks to new and recurring license income from these technologies used for producing bio-based fuels. In the quarter, however, solar experienced continued softness due to the subdued Chinese markets. The adjusted EBITDA increased from breakeven in H1 2018 to EUR 11 million in H1 2019.
Let's turn to page 15 for a couple of quick comments on cash flow and working capital. Page 15. As mentioned earlier, our overall cash generation in H1 increased 14% to EUR 257 million in adjusted net operating free cash flow. Our working capital to sales ratio at the end of Q2 of 20% remains behind last year's H1 performance of 19.2%, in part reflecting increases in capital employed from foreign exchange movements, IFRS 16, and the consolidation of Andre Pectin. The working capital performance in Q2 did improve after the difficult start to the year in Q1, more needs to be done. Reducing inventories has been challenging, especially in materials where the visibility remains low in some of our end markets.
Given where we stand at the first half, our aim is to ensure that the working capital ratio is back in line with 2018 by the end of the year. Now let's move to slide 17 for some brief comments on sustainability and innovation. That is 17. As you know, sustainability is at the very core of DSM and its purpose. As such, we focus on delivering science-based, sustainable, and scalable solutions that seek to meet the future challenges of the world today. This slide highlights some of the great progress we are making in staying true to our purpose. Please read page 15 in today's press release for all the details on these initiatives. Courses sustainability are, of course, our big-ticket innovation projects, which we continue to make good progress on, achieving some important milestones in the first half of this year.
Veramaris began commercial production of its algae-based omega-3 fatty acids for aquaculture in its new plant in Blair, Nebraska. CleanCow, the feed ingredient that significantly reduces methane emissions from cows, submitted its regulatory filing in Europe in order to get the product authorized for commercial use. Avansya, the fermented stevia sweetener, saw a very positive customer response, and production on a semi-commercial scale has started in H1. The construction of the commercial site plant in Blair, Nebraska, is on track with targeted completion by the end of this year. Niaga is seeing an increasingly good customer response and appetite for its revolutionary technology to produce fully recyclable carpets. Now, to finish, let's go to page 18 on the outlook. On our outlook, we can be short. We continue to see good business conditions in nutrition, and we aim to continue to deliver some earnings growth in materials.
As such, we are therefore pleased to reiterate our full-year outlook as shown on this slide. With this, I open the floor for questions. Operator.
Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star one on your phone. For questions, star one. Go ahead, please. The first question is from Mr. Neil Tyler, Redburn. Go ahead.
Yeah, good morning. A couple from me, please. Firstly, Geraldine, on the working capital ratio, are you able to split out the impact on the ratio of Andre Pectin and foreign currencies, to give us an idea of how the sort of underlying ratio excluding these factors developed? Second question, in animal nutrition, the price initiatives. We've read about some market disruption on the supply side again taking place. Are you confident that the pricing gains made in the quarter weren't, to some extent, inflated by temporary factors? I wonder if you could share a little bit on that. Thirdly, the comments you made about customer order patterns, can you help us understand what you are sort of seeing that allows you to make that comment, if you like, to be confident that it's not a deterioration in demand? Thank you.
Yeah. Hi, Neil. Good morning. Maybe let me start with the working capital, and for me, the best way to address that is probably actually through the ROCE KPI. If you actually look at our ROCE, we are at 13.1 versus 13.8 last year, same time. The first thing is we need to correct for IFRS 16, that brings you up to 13.4. Then there's acquisition impact, which is 0.3%, and FX is 0.1%. That makes up the delta between the 13.1 and the 13.8. As you can see, there is an impact of acquisitions on our balance sheet that we will struggle to offset. What we want to make sure is that the working capital part is back on track. Actually, when you look at the total working capital, it hasn't increased. If we look at DSO, it's pretty stable.
Actually, so are the other KPIs. DSO is at 70 days. Our DPO is 93, in line with last year. Inventories, which is the one we want to reduce, is the one that's remaining stubbornly stable. I have to say that the lack of visibility to some extent and predictability of the markets is not helping us in that space. This remains an area where there's a lot of action and focus, and we'll continue to work on it towards the year-end. That's on working capital. Maybe I'll go to your third question briefly on HNH, so the customer order patterns. Here, what we're seeing is actually overall for HNH, good business conditions. Early life nutrition, dietary supplements, pharma are fine. The area where we're seeing the sluggish growth is on F&B in our larger customers.
Now, there is an element of cut-off. There are a couple more fewer days this quarter versus quarter last year. What we're also seeing is a bit of hesitation in terms of the orders. We're not seeing something structural in the sense of we're not seeing a big shift in products or in relationships, et cetera, which is why we're quite confident in saying that this is related to order patterns as opposed to any big change in business sentiment.
Mainly from the big ones in food and beverage.
Yeah, exactly. As I said, it's specific to the larger customers. Feike, do you want to take the animal nutrition?
Yeah. The animal nutrition can be short. We don't have, in this quarter, a clear windfall of price increases in the bigger vitamins. I don't anticipate that in the coming quarters either. You're right that some prices will be increased or announced to be increased. As you know, we don't operate on the spot market, so I will not expect an immediate impact on our quarterly results, as a large part will go via premixes, et cetera. There's always a dampening and effect up and down, to be honest, on how that works in our results. You will see that more on the longer term. If it sticks, because I need to see also how much of that will be really realized to all customers. Of course, I like higher prices more than lower prices. You're right.
Okay. Thanks, Feike. Thanks, Geraldine.
Mm-hmm. Next question is from Mr. Mutlu Gundogan, ABN AMRO. Go ahead, please.
Yes, good morning, everyone. A few questions. The first one is on Animal. Quite a step up from the previous quarter in terms of price mix. Can you give us an idea of how much that was driven by mix versus higher selling prices, and indicate or perhaps talk about what the main products or product groups were that was driving both of these elements? Secondly, is on Other Nutrition. If I recall correctly, your organic growth was 12% in Q1. You now talk about 8% in the first half. That seems to indicate somewhat or around 4% in Q2. Is there a slowdown? Is it a difficult comps? Perhaps talk a little bit about that. Then finally, on Materials. Your EBITDA margin was very strong, up 80 basis points excluding IFRS 16. You do talk about different product mix, higher unit margin.
Perhaps split that one out for us, please. How sustainable are each of those elements? Thank you.
Hello, Mutlu. Let me maybe start in reverse order. Looking at the margin in materials. What we're seeing there is indeed we have a step-up in margin, which is a combination of mix. What we're seeing is that the growth that we're getting is in these higher margin businesses such as Dyneema, and even within Dyneema, the life protection part of that business, also our performance materials are very strong. We have to say that there's also in there a fair amount of very proactive margin management, cost containment actions to make sure that we're also defending our earnings line when we're seeing the top line being very similar to Q1 at -5%, -6%. I think the main sort of color that we can give around materials is that we are seeing a Q2 which is very similar to Q1.
When we spoke last, we were thinking that we were sort of open to maybe Q2 having a different business dynamic. That was not the case. We're happy that we are able to deliver stable earnings. This is a combination of those different moving parts that get us there. That's really the additional color we can add to the materials margin. Let's go back to which one is second?
Well, maybe the prices.
No.
You said on animal health in the second quarter, 4% price increase. Correct. I would be a little bit careful taking really it on quarter by quarter. If I look already for the first half year, Mutlu, you see in the first half year a price increase of 1%. I think it's not a enormous price increase if I look especially for the half year. Indeed, it has a lot to do with mix effects. Also, some more sales of some of the source products. Of course, they're passed on as what we do of the prices which we source in, so that there's a higher pricing effect and a more limited effect, of course, on the margin. There is some effect indeed in the prices also in China, Blue Sky, safety, and all of that stuff.
Indeed, there's not a negative pricing momentum there, but I would not overestimate the positive effect. On the comps, if you look to nutrition and materials, the EBITDA was about 12%, 13% Q1 and Q2 for nutrition and about flat for materials in both quarters. The total company has also to do with the innovation, the corporate cost, and the other elements. If you look to two businesses, you see more or less the same effect in the second and third quarter. Of course, the second quarter, let's be honest, has a higher EBITDA than the first quarter. I don't think that the second quarter showed a slowdown, even in terms of EBITDA. It has a step-up compared to the first quarter. You need always to be careful indeed in those comps thing.
Last year, of course, there was a lot of movements in the first three quarters, to be honest, on the ordering, coming back to Geraldine's previous point on ordering patterns. You remember last year, of course, this vitamin effect, which caused some nervosity in the first quarter, and then the second quarter, people were hoping that things would resolve itself because of the mergers of BASF. That was a little bit different. In the third quarter, they felt they need to order again. Last year, there were quite some movements over the different quarters, which will have some effects on the comps. I think the third quarter also of last year, was again, a strong quarter on some of those elements. Would like to be careful on the comps.
If I just look to the EBITDA also, I think we delivered on both, to be honest, Nutrition and Materials, good EBITDA. More than 10% of Nutrition, flat of Materials. Well, in this economic climate, I should not judge about myself, but I think that's a solid performance.
Excellent. Thank you.
Next question is from Mr. Adam Bubes, Jefferies. Go ahead, please.
Hello, Laurence Alexander speaking. Two questions. One on Veramaris. Can you characterize the strategy and are you targeting the premium prices currently seen for algal oils, or will it be priced more closer to conventional fish oils? Is it competitive with sugarcane economics? Secondly, for the cluster of JV, so the Veramaris, Stevia, the Clean Cow effort as well, how should we think about the return on capital hurdle for the next tranche of investments in these areas?
All right. Well, on Veramaris, we just opened the factory. I was there in Nebraska, I visit two weeks ago, for the opening of the factory. We built it all on time, on budget and all that stuff. It looks good. The interest of the market is clearly there. Yeah, customers, I don't want to say are knocking on our door. Maybe I want to say that. I think we will supply the market. We are now building up the pipeline, customer trials, first supplies, the whole supply chain, in the second half year. Next year we can grow. We have seen that some retailers clearly make the interest in the announcement, like Kaufland in Germany or Carrefour in France. Lerøy, the Norwegian salmon producer, made its announcement of its interest in us.
You see also that some players, both in the retail area and the salmon producers made let's say public announcements about it. Here you see the interest. It goes a little bit too fast and too far for me to say where our pricing will end up because that's exactly the discussion we have at this moment. Of course, there is a reference point to fish oil, because it's replacing that, but they're more sustainable. We have a constant cost price where fish oil prices have always been fluctuating due to quota, heating of the ocean, et cetera. There you will see always some movements, where we, of course, have a stable cost price, hopefully declining. Indeed, if I can get a premium there because I think it is a product which provides really the sustainability, it's great. There's another element.
Over the years, the fish oil went down a little bit in its content of EPA and DHA. That means that over the recent five years, the DHA and EPA content in our salmons, which we eat from fish farms, has a lesser omega content than let's say five or 10 years ago. We can restore that with our product so that is a quality effect. I give a couple of arguments which I'm using also to our customers, on why our product has also some uniqueness. On Stevia and Clean Cow, I think we're on track. Geraldine can say something about thresholds and investment. On Stevia, we are building the factory and doing the testings now. Clean Cow, we have registration, like Geraldine said in the introduction, and waiting on the registration. Geraldine can add something here.
Yeah. In terms of the return on capital employed from the JV, we don't provide the granular splits of that. What we've done in every single case is we compared how do we go forward with this under our own steam versus how does it compare if we go into the journey as a joint venture. To give you an idea, for Veramaris, we knew that the plant would cost broadly EUR 200 million. Although, by the way, teaming up with Evonik was helpful because they had a very appropriate site in Blair for this. It also enables to therefore share the capital investment between parties. Similarly, for Avansya, for stevia with Cargill, they brought a fair number of pots and pans to get this going. We used to have quite discussions about that.
All of these big tickets are very positive in terms of our overall financials. We don't split out by JV.
Thank you.
Our next question is from Ms. Laura Lopez Bueno, Bank of America. Go ahead, please.
Good morning. First, on pricing on the materials business. I will be interested to see how the pricing for your specialty products for sure has kept robust. We also see that in the margin. How do you see that going forward? We are hearing from other players in the chemical space also that now, let's say, they are feeling some pricing pressure also in the specialty supply chain. How do you see that evolving in the second half? In general, what is your view for the materials division also in the second half? Do you continue to expect this weak environment to continue? I have a question on the innovation division. You mentioned weakness in the solar projects and indeed in China, this has been very low since last year already.
Demand has been strong this year again. Prices in general have been low. It would be interesting to understand what is your exposure there. Are you feeling more like a negative pricing or it's also volumes from your side? Thanks.
All right. On the pricing of materials, I basically said it all. Look to the whole company. Nutrition is 70%, hardly an impact of the economic climate. Materials is 30%, of course, there we feel it, but not so much in the specialty part of materials. Dyneema, functional materials, those specialties, we don't see it. Of course, we see it in automotive business. Therefore, due to the specialty part of the materials and the change transformation of our materials business over the years, we don't have a big impact, and we have a flat EBITDA. If you compare that with many other players, that is a different picture. Dyneema, functional materials, those kinds of things. I don't see a change in the second half year. I think we will continue to have good pricing with those products.
You see it like you said, also in our margins, which are pretty good in materials, of course. The higher volume products in automotive have a lower volume, and that you see in our volume and sales. The smaller volume products having a good margin and a good price, and we kept that, and I expect we keep that. Of course, we don't see in the second half year an improvement of our bigger products in materials in automotive. I don't anticipate now on a resolution between China and the U.S. On that end, the second half in the volumes, I don't see an improvement there in our materials business. On innovation, indeed, the innovation center did very well, both on biomedical and bio-based, very well. On solar, a little bit hurt. Why?
We sell a lot of our products of the solar business coatings and others to China, also for the U.S. market. Panels being manufactured from our coatings in China to the U.S. Well, that trade clearly went down. You're right, stock to total global consumption of this business went down, and that means that maybe we switch over time some of our sales to the U.S., but that will not go automatically, so that's always a lead time. The U.S., China resolve it, and then our imports from China to the U.S. with our materials could be restored. All of this, of course, is a very small part of our innovation center, and our innovation center is small part of our total company. We talk about small movements here, but we notice something in our solar business.
Thank you.
Our next question is from Ms. Alain Gabriel, Morgan Stanley. Go ahead, please.
Good morning. Thanks for taking my questions. Could you just please talk through, I know you've given us some color already on the human nutrition business around volume and pricing, but could you maybe give us a bit more color around geographically where we're seeing the pressure in pricing and the slowdown in volume? The second question, you've already given us some color on Veramaris as well, but now that that plant's up and running, could you give us a bit more of an idea of the P&L impact and the phasing of when we can start to see sales?
Sorry. The last one again.
Veramaris.
Yeah.
Now that the plant is up and running.
Yeah.
Could you give us an idea of what you expect or what your expectations are around their P&L impact?
Yeah.
Maybe let me start with Veramaris. What we said there is the current facility, which is now up and running, when it reaches its full capacity, we will be generating sales of around EUR 150 million-EUR 200 million for the JV. Now we are in the process, of course, of getting it started and deliveries, et cetera. Really, I think the best way to think about it is that we will start seeing that contribution from next year, and not really a huge something material to the group in the second half. Although I have to say it is going very well, so maybe we will see a little acceleration there. This would be fully in line with our assumptions for the whole JV.
On the human side, you can make a double split of our human business. You can look it by geographical distribution. You can look to the different segments. If I take the segments first in human nutrition, early life is doing well. Dietary supplements is doing well. Pharma applications doing well. Of the food and beverage market, it's a little bit of mixed bag. It is only, I guess, about 30% of our total HNH business, because early life infant formula, pharma dietary supplements is a big part of our human nutrition business. There we see that the bigger customers, like Geraldine said earlier, have some hesitation, and we switch more and more to the smaller customers. That has quite some impact. Smaller customers for small orders, bigger customers, a bigger order flow. It's a little bit a shift.
If I look to our total food and beverage business, I would say roughly globally, half of that food and beverage part, which is a part of human nutrition, is the big customers, and the other half is the small customers. If I split out all of this geographically, I think, the business did well in North America, but not so much on the food and beverage market, but more on the eye health and the dietary supplement markets. Also Asia, was good, Europe, a little bit lesser, and strong in Latam. You can split this whole HNH into segments, as I said, there the weakest part was the larger businesses of the food and beverages segment. You can split it geographically, then I would say Europe was maybe the weakest, and Asia, North America, strong. I hope that gives some feeling of the total HNH business.
To add another part, which is also human nutrition, first half year in food specialties, personal care, aroma ingredients, which is also partly going to the same market, showed an 8% growth over the first half year.
Okay.
Okay. Maybe we have for one last question. Who's going to take the last round? Next question is from Mr. David Simon, JP Morgan. Go ahead, please.
Yeah. Hi, this is Chetan here, from JP Morgan. I had one question around, we've seen some issues with BASF again in terms of vitamin A supply, maybe a specific grade. I think structurally the question was in the last few years, we've seen more disruptions than the other way around. I'm just thinking whether you've seen any change in terms of conversations that you might be having in terms of your customers, either in terms of contract structure that they want to have in place maybe longer term than right now, or any other sort of share shifts that you might be seeing structurally, any change in your conversation with the customers?
I would like to answer this very carefully, if I'm honest, because disruptions and issues with our competitors is not a topic I should talk about, nor how customers have trust or less trust or whatever in our competitors here. I would like to be very careful here. Of course, what we do is running our own operations with high quality and high reliability and try to gain as much as possible the heart and minds and wallets also of our customers and getting their preference and ordering. I think we do well on that area, if I'm honest. I don't know whether that answers, but I want to be careful here.
No, that's helpful.
I wish all competitors, of course, the best. Wish us, by the way, the very best.
Maybe if I can squeeze in one on materials that you still are guiding to some increase, which means second half has to improve. Is that just a base effect that?
The price increase, you mean?
No, I think he was referring to our outlook for materials.
Materials. Yeah, that's right.
Yeah. We aim to deliver some earnings growth. At the end of quarter one, we were aiming to deliver some earnings growth as well. Given that the market, as we all know, is not really moving much, this remains our ambition, but maybe there's a little bit less space to deliver that. Maybe it's a good opportunity for me to just remind you that if you look at the second half of last year, Q3 was a strong quarter, Q4 was a much smaller quarter. It will be important to look at it from a total H2 point of view, to see whether on a full year we're able to deliver that earnings development.
Understood. Thank you.
Okay. That leaves us basically to close. Geraldine, you want to make some closing remarks?
Very briefly, as you know everybody's busy today, thank you, Dave. In summary, H1, we delivered a good performance. It's important to remember that the business conditions in nutrition remain very supportive to our plans for the full year, and that in materials, as we just explained, we aim to deliver some earnings growth. This leads us to maintain our outlook for the full year, and we're very well positioned to deliver on our 2021 strategic target. With that, I thank you all for joining the call.
Thank you, Geraldine. Thank you, Feike. This concludes our conference call for today. Thank you very much for your attention and your questions. If you have any further questions, don't hesitate to reach out to our team today. We wish you luck with this busy day. With that, I now hand over the call back to the operator.
Ladies and gentlemen, this concludes the DSM half year results call. You may now disconnect the line. Thank you and have a nice day.