Ladies and gentlemen, thank you for standing by. Welcome to DSM conference call on the first half year results of 2018. Throughout today's presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. To register for questions, you may dial star one at any time. I would like to turn the call over to Mr. Huizing. Go ahead, please, sir.
Thank you, operator. Ladies and gentlemen, good morning and welcome to this conference call on DSM's first half year 2018 results, which we published earlier this morning. I'm sitting here with Mr. Feike Sijbesma, CEO and Chairman of the Managing Board, and Mrs. Geraldine Matchett, Chief Financial Officer and member of the DSM Managing Board. They will elaborate on the results, and after that, answer your questions. 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, I will hand over to Geraldine. Geraldine, please go ahead.
Thank you, Dave. Good morning, ladies and gentlemen. After having welcomed many of you at our Capital Markets Day on June 20th, it's a pleasure to welcome you again to this call on DSM H1 2018 results. I'll start with providing some comments on the key slides in our investor presentation that we published this morning together with the press release, and then we'll open the line for our Q&A session. However, before starting, I would like to point out that in order to provide as much transparency as possible, we have once again shown separately for Q2 the estimated impact on our business of the temporary higher vitamin prices resulting from the exceptional supply disruptions in the industry. Therefore, what is referred to as the underlying business in today's call and in the press release are the normal business activities excluding this temporary vitamin effect.
As previously mentioned, this split is, of course, not our usual way of reporting and does require some estimates. Let's start with the financial highlights on page two. As you can see from this slide, our underlying business reported a very good H1 with strong performance across all businesses and a continued strong organic sales growth of 10%. Adjusted EBITDA went up 7%, despite a significant FX headwind of about EUR 50 million, which means that at constant currencies, the EBITDA grew double digit. This strong earnings performance resulted in a ROCE of 13.8%, up 160 basis points. During the second quarter, we also took further steps in the monetizing our partnerships and announced our exits from Fibrant as well as from DSM-Sinochem Pharmaceuticals.
These two transactions will result in an additional cash inflow of around EUR 475 million and demonstrate our continued strong track record at extracting value from our partnerships in line with our strategic ambition for the period 2016-2018. Looking ahead to the remainder of the year, the interim dividend to be paid in Q3 will amount to EUR 0.77 per share, reflecting a nearly 25% step-up in the proposed dividend 2018, highlighting our confidence in the future earnings growth indicated in our strategy update that we communicated on June 20th. Finally, we reiterate our full year 2018 outlook, which you can find on page five of this presentation, supported by the very good H1 underlying performance, ongoing positive business conditions, and a temporary vitamin effect of EUR 275 million.
Before moving to the underlying performance of each business, let me just say a few words about the temporary vitamin price effects. For that, let's move to page nine. As shown on this table, the first half of the year benefited from an estimated EUR 275 million additional adjusted EBITDA contribution relating to the exceptional vitamin price environment. This effect was mainly related to animal nutrition. In our Q1 communication, we stated that these effects would be temporary and heavily weighted towards the first half of the year. This vitamin price effect was mainly related to animal nutrition, with prices normalizing by the end of the second quarter. Moving to the performance of the underlying business in nutrition. Let's go to page 10.
Nutrition continued to deliver on its above-market growth ambition with organic growth in the underlying business, estimated at 10% in H1 2018 with 6% higher volumes. The 4% higher prices partly offset 9% foreign currency effects and higher input costs. The adjusted EBITDA for the underlying business is estimated to be EUR 564 million, representing a 7% increase compared to H1 2017. The increase was mainly driven by volume growth and the contribution from the savings and efficiency improvement programs, partly offset by negative foreign exchange effects. The estimated EBITDA margin for the quarter was 19.9%, representing a further step-up versus the 19.0% in H1 2017. Looking more specifically at animal and human nutrition, let's move to page 11 first. Animal nutrition continued to show strong performance in the underlying business, with organic sales growth in the first half of the year estimated at 14%.
Volumes were up 8%, driven by very strong sales in premix solutions, and with strong business conditions in all regions except for Brazil, where the ongoing unrest continues to impact the local economy. As indicated in our Q1 release, H1 2018 benefited from an exceptionally strong first quarter. In Q2, the market normalized and volumes up 3% were negatively impacted by the trucker strikes in Brazil. Without this event, volume growth of the underlying business would have been around 6%. For the remainder of the year, we expect continued good business conditions, except in Brazil, where we expect to see a 1%-2% negative volume impact from these strikes in the second half of the year. The 6% higher prices were the results of initiatives undertaken to mitigate higher input costs and the impact of clearly less favorable exchange rates, especially the weaker US dollar and Brazilian real.
prices were supported by the effect of the Blue Sky policies. Let's continue with human nutrition. Moving to page 12. Our human nutrition businesses continue to deliver strong growth, supported by all regions and segments, and resulting in an estimated 8% organic sales growth in the underlying business. Volumes were up 5%, well above market, with especially strong growth in premix solutions as well as in the i-Health business. Prices were up 3%, coming from the combination of positive mix effect resulting from this strong growth in premix and in i-Health, as well as higher prices in premix and advanced formulation, supported by the effect of the Blue Sky policies in China. For our materials businesses, let's move to page 13.
Our materials businesses delivered another solid set of results with an organic growth for H1 of 9%, reflecting a 6% increase in volume and a positive price effect of 3% linked to higher input costs. Driven by overall good demand, which was especially strong in the automotive and life protection, our engineering plastics, resins, and Dyneema businesses all continued to deliver their above-market growth ambition. Only in the European coatings resins activities did we notice some softening following uncertainties in the value chain on how the European building and construction markets will develop in H2. As shown on page 15, the continued strong overall performance of the materials businesses delivered an adjusted EBITDA of EUR 261 million in the first half of the year, up 8% compared to H1 2017.
This resulted in an adjusted EBITDA margin of 17.5% versus 16.9% in H1 2017, which was positively influenced by good volume growth in the specialty portfolio. Moving to cash generation to finish off. Let's go to page 20. Cash flow from operating activities amounted to EUR 503 million in H1 2018, an increase of EUR 174 million compared to H1 2017. This is of course, in part the result of the temporary vitamin price effect. Average total working capital as a percentage of sales came down slightly at 18.3% for H1 from 18.9% in H1 2017. Operating working capital, on the other hand, increased to EUR 2.3 billion at the end of H1 2018 compared to EUR 2.1 billion at the end of H1 2017.
The increase was due to higher working capital in nutrition following some inventory buildup in view of the scheduled maintenance stops in H2, as well as the higher receivables in line with the higher sales levels. We indicated during our Capital Markets Day, we believe inventory levels in nutrition are currently too high, and we're working to improve this structurally over time. Capital expenditure for the first half of the year reached EUR 295 million, an increase compared to last year that was mainly caused by some overflow from 2017 and the timing of projects. Net debt closed at EUR 831 million, somewhat up compared to Q1 2018, in line with the usual seasonality and reflecting our full year 2017 final dividend payment and repurchases of shares during the quarter. With this, I would like to open the floor for questions. Operator.
Thank you. Ladies and gentlemen, as said, we will start the question and answer session now. If you have a question or remark, please press star one. Star one for your question or remark. Go ahead, please. The first question is coming from Mr. Neil Tyler, Redburn. Go ahead, please.
Geraldine, two questions please. The animal nutrition business from a volume perspective, can you discuss perhaps a little bit how customer buying patterns have developed sequentially through Q2 and Q3 as prices have fallen, and whether perhaps now that prices are stabilizing, we might see a resumption of some buying that had been postponed. Also staying with animal nutrition on the pricing front, the broader-based price inflation that you've seen away from the one-off effects, do you see any risk of a sort of halo effect from those vitamin E and A prices particularly, that might unwind later this year now that those prices are normalizing, or are there broader-based inflationary effects in the other animal nutrition products? Thank you.
Good morning, Neil. Thank you for joining us on the call. Do you want to take some of those or
Okay.
Hi, Neil. Feike. As we have seen in the first quarter, the volumes in animal health, especially A and E, due to the outage of one of our competitors, was strong in the beginning of the year. In the first quarter, I think people were nervous of having all the materials. In the second quarter, we have seen some hesitation in the volumes. Still, we did about 3%, corrected for Brazil, about 6%. I expect the volume intake in Q3, Q4, second half year, to normalize, and that means for our company still above the growth of the market. I see that also at the beginning of the third quarter.
The hesitation, which was there a little bit in the second quarter, logically because people expect BASF to be back, and they came back at the end of the second quarter, people wait for that moment. That builds on your pricing. I think the pricings for A&E go back to normal as they are doing or did at the end of the quarter. I expect that to remain, and we feel okay at these price levels like we felt before.
I was really referring to sort of products outside of the A&E complex. The remaining prices seem to be inflating more quickly than perhaps I would have expected or than they have done for some time, and whether that's being sort of dragged up by general premix lack of availability or whether there are other inflationary effects or anything else that we need to bear in mind as we look through to the second half of the year.
Yeah. We have seen some of the prices already increasing of the non-A&E already in the second half year. On a comp basis, you see that also, in the second half year of 2017. You see that also right now reflecting into our prices. It is maybe but limited, maybe some raw materials, but it is mainly also competitive situation in China, the whole Blue Sky on all kind of products, which makes it for some the output, for some the investments, which need to be done in order to adhere to all the environmental policies.
which makes them maybe less competitive and increasing prices. We saw indeed outside the A&E, also an okay issue. I would not overestimate or over express that, but an okay price development for us. Yeah. Correct.
Okay. Thank you. Just one follow-up. The inventory build that you referred to in nutrition, do you think that's had any positive effect on gross margins in the second quarter as production rates have been lifted and perhaps fixed costs over-absorbed, or is it not meaningful enough to have had any effect?
Neil, it's not something really meaningful enough to carve out. This is very much sort of in the swing of things. What we did see and, of course, is highlighted in our figures, the working capital is on the high side at the half year. Now, it's obviously very much linked to the high sales in Q1, Q2. Also, as you can imagine, our production was running quite strong, then we saw this kind of hesitation to buy that we mentioned in the capital market, there's a little bit of bunching up. Although the end of the quarter, we saw a pickup there. I would say from a margin point of view, nothing really worth carving out or flagging.
That's clear. Thank you very much.
The next question comes from Mr. Mutlu Gungor, ABN AMRO. Go ahead, please.
Yes, good morning. A few questions. The first one is on the trucker strikes in Brazil. Thank you for disclosing the impact on sales. Just wondering if you could also get the impact on EBITDA. The second question is on vitamins. Last year, obviously in the winter, there was this huge impact also coming from China as they closed down capacity. Is this something that you expect again this year? Thirdly is the comment you made on resins that your coating customers are uncertain on how the Building and construction industry will develop throughout the current high season. I was wondering if you could explain that to us, because we already had Q2, we are now far away in Q3, just wondering what you mean with that. Thank you.
Okay. I don't know whether Geraldine can say something about the EBITDA of the trucker strike, but if I look to the vitamin, first of all, I would like to say that the vitamins are only 30% of the total nutrition business. Maybe every time, it is up to you which kind of questions, of course, you ask, but I don't want to overstress the impact of vitamins on the total next to the one-time effect because there are always some outages and in and out and price fluctuations, et cetera. I don't see a specific reason, Mutlu, why in the winter or in the second half here, some of the vitamin producers in China will be out. I don't see any specific reason for that. I see the overall attention in China for so-called the Blue Sky, that is continuing.
That is more a trend and that places some competitors a little bit weaker in volume, sometimes even closing down the factories or reducing volumes and several of investing, and that makes them less competitive. I think we run now into a normalized situation as I see it in the second half year, and we can easily deal with that. We continue to grow vitamins and non-vitamins above market. I expect we continue to grow in the second half here and the coming years. On the materials, basically the momentum for all our materials business is doing well. The only thing automotive E&E, the specialties especially in Dyneema, et cetera, all doing very fine. The only thing we flat is resins in the area of building construction, especially in Europe. We see that weakening a little bit in this second quarter.
We mentioned that, but that was only the building construction and only to be honest in Europe, not so much in Asia where we are also active. It is just out of completeness that we want to give you the full update of all the different market segments.
Yeah, Mutlu, regarding the Brazil truck issue, yeah, it's always a little harder to carve out exactly what to associate with the trucks when it comes to the overall results. It's probably in the order of about EUR 3 million to EUR 4 million on the EBITDA line. Bearing in mind that that 3% is a bit below EUR 18 million in top line. That's broadly the numbers. I think what's worth maybe highlighting because I mentioned it in my opening comments, the main impact is on Q2, but in segments such as poultry and a little bit swine as well, there the impact will have a bit of an H2 element as well because there the animals actually died and they had to start again from scratch. Whereas for the ruminants, it was more an inability to produce and to ship the product.
It had a more immediate and it got started again. There will be a little bit of a tail to this in Q3 most likely.
Understood. Thank you very much.
Thanks, Mutlu.
The next question comes from Mr. Thomas Wrigglesworth, Citi. Go ahead, please.
Good morning, Feike. Good morning, Geraldine. Just on the human nutrition growth, could you just break that out into how much of the growth this quarter was or even this half was from i-Health and how maybe some of the other elements within human nutrition are growing dietary supplements and infants as well? Certainly ICL looks like infant was quite strong in Asia in this quarter. Secondly, to come back to the vitamins, do you think we're currently at the marginal cost of production now for vitamin prices, i.e., are we at that point if we look at spot prices where we're into the cost curve and downside would actually probably lead to closures from some of the higher cost producers? This is the current floor. Thank you.
Thanks for your questions. On human nutrition, on page 11 of our quarterly report, we give a little bit of breakdown of the developments in the different segments and would like to be careful to break it quantitative further down in our growth. Indeed, i-Health is showing a very good growth. In total, the growth in the second quarter was 9%, 5 out of volume and 4 out of prices also due to the mix of prices. i-Health is a very positive contributor with double-digit growth. Also now not only in the U.S. where historically i-Health was only in the U.S., but now we started also in China and I expect a lot more growth from that.
Also the infant formula or early life as we said, that is by the way across the globe, so in the U.S., Europe and Asia, the second area of very good growth. Our solutions, the premixes tailor-made, also good growth as a third element of growth. We benefited also that in the omega also for human, already the investment we did in Mulgrave before making more concentrated omega also benefited. We benefited in our growth from that one. Those are the elements. The vitamins, whether they are at marginal cost now, the prices, that depends a little bit per vitamin. For some manufacturers, the current prices might be close to their cost. For some vitamins that might not be the case, and let me not go vitamin per vitamin. I think, to be honest, we have 14, 15 different vitamins.
We have it for human, we have it for animal, we have it as straights, we have it a lot as premixes. You will see all over the place, always fluctuations up and down, not as big as we saw in the first half year with the outages on A&E in animal, and therefore we reported that separate. That was totally out of any ordinary fluctuation or business and therefore we want to show that. For the rest, we see always some fluctuations, and I think so far we can deal with that and it balance each other out. We continue to grow our volume in that segment, and once again, above market. Something to do with our growth position, something to do with our premix position, something to do with our solutions. Therefore, we grow faster than the market, basically.
I expect that to continue. It's difficult to say in this vitamin we reach the bottom and in that vitamin not. I will see always some fluctuations. Overall, I think the price is now more or less normalized a little bit.
Okay. Thank you.
The next question comes from Mr. Gunther Zechmann, Bernstein. Go ahead, please.
Hi, good morning, Feike. Good morning, Geraldine. Two questions, please. From the 4% pricing you had in nutrition, you said the two effects were to offset higher raw material cost and to offset currency headwinds. Could you split out how much of that was FX pricing and how much was the underlying pricing to offset the feedstock cost inflation? The second one is, you mentioned in the prepared remarks the buildup in inventories on the nutrition cluster was in part due to expected maintenance turnarounds in the second half. Can you give us some idea of the magnitude of those turnarounds and what we should expect there?
Okay. Yeah, Geraldine can do the second one.
Yeah.
On the first one, I think it doesn't exactly work like that. The main arguments we use indeed in the market to increase our prices outside a little bit this vitamin A, E story, was that we see some raw material price increases and we see some FX. In some countries we just invoice normally on local FX, so you automatically have that effect if you have a local price in some countries, and there you get automatically that effect. The price increase, our arguments in the market were these arguments, and I think valid, and sometimes it goes even automatically if you have local prices. For me, difficult to split it, has also something to do in different segments about competitiveness. In total, we saw the possibility to do that.
Yeah. Sure. Inventory level's a bit high, as we already mentioned a couple of times now. Part of it is to do with the shutdowns. On vitamin C, which we flagged, this is a bit of a longer shutdown this year. We started beginning of July with a full month close. For that, we built up the inventory to make sure we can deliver to our clients. All very much according to plan. As for the others, they're pretty recurring. Every year we have some shutdowns. A&E are regular activities and this will be in the second half of the year.
We should expect that to be fully offset with the inventory build because everything is planned turnarounds, as long as they come back on stream as planned?
Yeah. Absolutely.
Just to confirm that. Yeah. Okay, great. Thank you.
Scheduled inventory buildup in order to continue the deliveries.
Yeah. Mm-hmm.
Okay, great. Thank you.
The next question comes from Mr. Paul Walsh, Morgan Stanley. Go ahead, please.
Thanks very much. Morning, Feike, Geraldine, Dave. Just three quick ones if I can. On the maintenance in the third quarter or fourth quarter, I was just wondering if you'd quantified what that might mean for EBITDA, if anything. My second question, just around the working capital outflows you saw in the first half, can we expect those to be recovered in the second half, or to what extent can you reverse those outflows? My final question, in the material space, you're still seeing very good organic growth dynamics in that business. I know you've already mentioned building construction in Europe seeing some slight signs of slowdown. Are you getting any feedback in the automotive chain around the summer shutdowns, whether or not it's sort of typical or year-over-year very different? Thanks very much.
Hi, Paul. On the inventory, in terms of the earnings impact in H2, this is all wrapped into our full year outlook. Nothing-
Got it
there to flag.
Thank you.
As to the working capital, I definitely expect to see a big part of this unwind in the second half. I deliberately included in my comments the fact that in line with what we discussed at the Capital Markets Day, we also see a need to do real structural efforts on our working capital in nutrition. If you recall, Chris was on stage with that, and there's been a number of initiatives and actions taken already. On the one hand, yes, absolutely, seasonality, timing, and impacted by the vitamin effect because it's very difficult to carve out on the balance sheet what is underlying business and what vitamin effect. Also structural effort needed.
On the materials business, as we said, basically the conditions of our material business are very favorable. We look very positive, also to the remainder of the year and the next years into our materials business. Electronics, the electrics industry, we saw also the results of some big electronic companies this evening or yesterday evening in the U.S., and looks all favorable. Automotive, I see favorable developments, so no concerns. Building construction also globally, but not so much in Europe. Some weakening, we flagged that. Dyneema, very strong. Our specialties in engineering plastics, very strong. Most of the markets in which we operate, including automotive, are okay. I only flagged the area which we need to watch.
That's great. Thanks a lot, guys.
The next question comes from Mr. Christian Fite, Kepler Cheuvreux. Go ahead, please.
Yes. Good morning, Geraldine. Good morning, gentlemen. Two questions remaining. First of all, just to add on to Paul's questions and also Mutlu's. In materials, the weakness of the deco coating market in Europe. In your view, has this persisted into Q3? You talk a lot about Q2, but didn't really flag Q3, except for obviously unexpected summer lull and stuff like that. Second question, in animal health, that slowdown from Q1 into Q3, can we expect the slowdown to continue into Q3 as a result of the drought with slaughter rates clearly going up, at least in Europe?
No. Both things on the materials. Yeah, I think, overall, materials are doing well, and I'm not flagging anything negative for materials in the second half here. The only is, once again, I repeat myself, is that we see the building construction in Europe weakening somewhat. We operate in many markets, and that building construction weakening most likely will continue in Q3. I think it will not affect our total performance in materials since we operate in many markets. This building construction in Europe is not only something of Q2 and most likely also of the second half here, but nothing to worry for the total business of materials. This slowdown in animal or hesitation in the second quarter will not continue in the third quarter. I see even with the start of the third quarter normalizing.
It had all to do with almost logical psychological effect that some customers anticipated that at the end of the second quarter, BASF would be back, which was also the case. People didn't want to pre-buy and maybe postponed till the prices would normalize, and they did. They are back in the normal setting. I don't see a slowdown in the third quarter.
Okay. Even with all the reports about increasing slaughter rates on the back of the drought in Europe, you don't see a slowdown in demand, at least in Europe?
Yeah. This whole drought in Europe can affect some of the industries, but to be honest, we have not seen that having a material impact on our business. It could be because the drought does continue for a long time. We see several farmers, especially also in agriculture, suffering from that. To be honest, have we seen any material impact in our business from it so far? To be honest, no.
Okay, great. Thanks, Feike.
The next question comes from Mr. Laurence Alexander, Jefferies. Go ahead, please.
Hi there. Just two quick ones. Can you update your thinking about the net productivity captured this year relative to the tailwind that you will have next year as you hit the full run rate at the end of the year? Secondly, there's a comment in the text about the stevia samples being out in North America. Are those samples to corporate customers, or can you just give an update on the process and how you think about the stevia ramp over the next couple of years?
Laurence, let me just check your first question. Are you referring here to the improvement programs, the savings?
Yes.
Okay. Sorry. Yeah. The programs are fully on track, as we mentioned the Capital Markets Day. What we have is that by the end of the year, we should be reaching EUR 270 million, EUR 275 million run rate, of which the bulk, by the way, already in this year. It's kind of completing the process. As for the cost
The whole programs will have reached about EUR 250 million. When we started the whole journey, we were estimating EUR 230 million. We're a little bit above, but not significantly. What we're seeing this year in terms of programs and what is really now driving the backbone to deliver on our targets are all the customer centricity programs that pretty much each of our business groups are actively working on. You will see in terms of program related costs, it won't be at all in the scale of what we've done in the past, but you will see a bit of a ramp-up in that in H2. Those are really the key comments around the savings programs.
Indeed, on the stevia, you said that sampling we sent out to corporate customers, and by the way, don't know exactly what corporate customers are. Yeah, they are two corporations, two companies, especially to some big companies in this field, as you can imagine, without mentioning names. What needs to be done is two things. They need to test in their taste panels, the exact profile, and that goes together with the exact formulation, how the product behaves in the exact formulation, and how that exact formulation then again, has an effect on their taste. That's always with those customers, a complicated or lengthy process because they're very careful and sensitive on formulations and on taste. We believe that we have the right form of stevia with Reb M and being very well positioned both from a cost and a taste profile.
Of course, the final verdict comes here from the customers, and then we need to see how we can come to the right production levels. Theoretically, you can talk here about very big volumes, and we need to see how far customers want to go. I don't want to speculate now how that process goes because it will be dependent on a couple of very big potential leads indeed, and could go several directions. The fact that we are well-positioned with the right product and the right cost profile at the end of the day, creates potentially a very big market here.
Perfect. Thank you. The next question comes from Mr. Andreas Heine, MainFirst. Go ahead, please.
Thank you for taking my question. I have a couple of very small ones. The first is on the human nutrition. The price increase of the 4%, you said most of the vitamin price effect was in animal nutrition. We can assume that this 4% is something we can also see in the second half as being sustainable. That's the first question. Secondly, the dietary supplement business, which usually includes the i-Health. If you extract the i-Health, is then the dietary supplement business also back on growth, especially in the U.S.? Thirdly, on Dyneema, you expand the capacities should be ready in Q1 2019. These unidirectional capacity set all dedicated for personal protection to prepare for more growth. The last part from this ChemicaInvest , what is left after the disposal?
Is that the acrylonitrile business which is left and the rest is sold, or how do we have to think about the remaining value of this business?
Thank you, Andreas. Let me maybe start with your last question and then hand over to Feike. When it comes to the associates, indeed, having now done the two transactions in Q2, that now leaves us with effectively what were the composite resins and the acrylonitrile businesses. They're the two that still remain within our hands with 35% at this stage. We had indicated at the Capital Markets Day that sort of on a last 12 months basis, those two businesses have an EBIT of about EUR 88 million on 100% basis. It's still reasonably sizable businesses. That is the last two from the associates that we had aimed to monetize and divest within the strategic period.
Right. If I look to the price increases in nutrition, it was in fact across the board. It was not only in animal or human. It was in animal, human, and some of the other business like in personal care and food specialties, et cetera. It is basically across the board in nutrition. The arguments, as we mentioned, sometimes the exchange rate was a reason to increase prices in those countries where we are invoicing anyway in local currencies that had automatic effect next to the raw material increase. I think the current price levels will remain. We need to remind you that in the second half of 2017, the prices started already to increase.
If you look to comps basis, that comps is stronger in the first half year than maybe in the second half year, even with so-called flat pricing further from this quarter onwards. On dietary supplements, yes, moving into a growth situation in the U.S. in multivitamin, but also in specialties like I mentioned, the Omega out of Mulgrave, the highly concentrated products, et cetera. I think we do much better, and you see it in our growth profiles of human nutrition as well. Dyneema indeed, growing very fast at this moment. It's both areas and all kinds of applications in textile, et cetera, but also in life protection, doing very well, and personal protection, and indeed, looking for debottlenecking expansions of capacities which can support our further growth from 2019 onwards. I think the demand is very good.
Thanks.
We go to the last one in the queue. Patrick, for you, the honor of having the last questions.
Mr. Patrick Lambert, Raymond James. Go ahead, please.
Thank you, Dave. Thank you, Geraldine. Thank you, Feike. Good morning, everybody. Two remaining questions. Very quickly on Q3 special vitamin A, E impact, do you intend still to go on with that? There is still a remaining impact in Q3 that we should still try to forecast? That's question 1. Question 2, again, following Laurence's questions on the new big projects. Can you comment a bit more on the aquaculture milestones and also the Clean Cow negotiations that you mentioned at the Capital Markets Day? Thank you.
Yeah. On the A&E, we said basically in full transparency, we wanted to show that we had an extraordinary situation with A&E in the first half year due to the outage, estimated at that moment in time as about EUR 275 million. It came exactly to that number. Basically, I think that's it, because the prices at the end of the second quarter are more or less normalized. I need to see exactly the order intake in Q3. I think that basically, this was it in H1, and nothing to expect in H2 anymore of that special effect. Referring to the total business, excluding this effect of DSM in this first half year was growing 10% sales wise, 7% EBITDA wise, if you correct for FX, even 14%, all excluding this temporarily vitamin effect.
I think we're on a very strong growth trajectory, and we expect underlying also, again, as you see in our outlook towards 25% increase, again, also a strong second half year. The big projects we already discussed, stevia, we didn't discuss Niaga, which is also an important one on stream. Clean Cow, we are in the testing mode now with the regulatory bodies. That will also take some time in 2019. The moment we have some outcome on that, we will update you on that. Green Ocean, we are fully on track of finalizing the investments in the factory, on budget, on schedule, and we see a strong interest from our customers.
Our customers, next to you, who's asking, are we on track with Green Ocean or Veramaris, which I appreciate that you're checking us, but I even appreciate more that our customers checking us whether we're on track, because that gives good indication that they want to buy. By the way, we want to sell. I think that is moving in the right direction. I think we had a really very strong, to be honest, second quarter, first half year, like Geraldine said also in the introduction, with 10% sales growth, excluding this whole temp effect and 7% EBITDA growth, corrected for FX, even close to 14%. I think we are well on track also towards the future.
Do you also want to make some closing remarks, Geraldine?
Very briefly, Feike did a great job. No. Hey, thanks everyone for joining the call, especially during what is, I know, vacation period for a lot of people, so highly appreciated. Really, in summary, a very strong first half of the year. Business conditions remain strong, and we're ready to write a full year outlook. With that, other than of course we will be in Q3 paying the stepped-up dividends, which is nearly 25% up, really on the back of the confidence that we have to deliver our new strategic targets that we shared on June 20th. With that, I thank you all, and I wish you a good day.
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 me or my team. With that, I hand it back to the operator.
Ladies and gentlemen, as said, this will conclude the DSM conference call. You may now disconnect your line. Thank you. Have a nice day.