Thank you. Ladies and gentlemen, good morning and welcome to this conference call on the second quarter 2015 results that we published earlier this morning.

I'm sitting here with Mr. Feike Sijbesma, Chief Executive Officer and Chairman of the DSM Managing Board; Mrs.

Geraldine Matchett, Chief Financial Officer and Member of the DSM Managing Board; and Mr. Jos Op Heij, Senior Vice President, Corporate Control & Accounting.

Mrs. Matchett will give a short overview of the quarterly results, before we move to the Q&A session.

This call is planned until 10 o'clock Dutch time. As a reminder, I have to highlight to you that today's presentation 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 would like to hand over the call to Mrs.

Matchett. Geraldine, go ahead.

Thank you, Dave. Good morning, ladies and gentlemen, and welcome to this call on the DSM Q2 2015 results.

Before we get started with the Q&A session, I will walk you through some of the key slides from my investor presentation, which we published this morning with the press release and that you can find on our website dsm.com and on our DSM investor relations app. I will start on Slide 2.

We have had an overall solid quarter in line with expectations and this slide shows the main financial highlights. Our sales reached €1,965 million, which is an increase of 12% versus last year, clearly supported by foreign exchange rates at 10%, but also supported by a solid 3% volume growth coming from all businesses within each cluster.

Our EBITDA increased 6% to €279 million, coming from good volume growth but also, in particular, from performance materials, from favorable exchange rates, and current lower input costs. As anticipated, nutrition continues to be negatively impacted by the drop in Vitamin E prices, yet the cluster managed to deliver a solid 5% volume growth.

Performance materials had a particularly strong quarter with an EBITDA growth of 25% versus last year, and this was achieved through volume growth, cost saving programs implemented over the recent years, positive foreign exchange effects and the temporary benefit of lower input costs. And cash from operating activities reached €103 million for the quarter and the interim dividend will be €0.55 per ordinary share, representing one-third of the 2014 full-year dividend of €1.65 as in previous years.

These were the main highlights and I will now run you through some of the other slides before addressing our outlook for 2015. I will start on Slide 9 with nutrition.

As indicated in the table on slide 9, nutrition delivered an overall sales growth versus prior year of 16%, made up of a strong 5% volume growth, 2% lower price mix effect, mainly due to Vitamin E, a positive 11% from currencies, and 2% from our Aland acquisition. On a sequential basis, nutrition showed a 1% volume growth and flat prices versus Q1.

For the breakdown within the cluster, I'll come back to animal and human nutrition in a minute, but I would like to highlight here that DSM Food Specialties clearly contributed to the good volume growth progression, with enzymes and cultures delivering double-digit growth and gaining market share. The overall EBITDA for nutrition was €208 million, down 6% versus prior year, as the positive volume developments were not sufficient to fully offset the impact of the lower Vitamin E prices which amounted to €30 million this quarter.

This resulted in an EBITDA margin for Q2 of 16.7%, representing, as you can see, a 400 basis point drop versus the 20.7% margin in prior year. While the main element of this drop is the Vitamin E price evolution, other factors should be mentioned here, particularly in-sourced ingredients for which the higher cost increased our top line but with a much lesser effect on the EBITDA line, same as in Q1.

And the currency mix which boosted the sales by 11% as mentioned, but benefited our EBITDA to a lesser extent due to the strengthening of the Swiss franc and the British pound, two currencies linked particularly to our cost base. Moving now to Slide 10 for animal nutrition highlights.

Animal nutrition maintained its positive momentum with a 10% sales growth versus prior year, supported by volumes up 4%. In addition, it is worth highlighting that this growth would have been higher had the supply chain for Tortuga not been interrupted by a fire in the port of Santos in Brazil.

Without this incident, for which the damages will fall under our DSM captive, our volumes would have been up 6% instead of 4%. This strong growth was achieved in premix activities, while the negative price effect of Vitamin E on sales was broadly compensated by higher prices of other and mainly in-sourced ingredients.

On a sequential basis, animal nutrition showed a small decline of 1% in volume versus Q1, due to the negative impact of the fire. Spot prices in Vitamin E were, on average, slightly below Q1.

Moving now to Slide 12 for human highlights. Our human nutrition business reported an overall 19% growth in sales for Q2, with a good volume growth of 5%.

Infant nutrition, eye health, as well as food and beverage businesses in Europe and Asia, performed well, whereas the US and South America food and beverage sector remained weak. In the U.S., multivitamin sales regained some growth in the quarter, whereas the fish oil based Omega-3 remained weak.

On a sequential basis, volumes in human nutrition improved 4% versus Q1, mainly thanks to the improved dietary supplement sales and good performance in food and beverage, particularly in Asia. Now for performance material, let's move to Slide 13.

Performance material sales in Q2 increased 8% compared to prior year, as a result of a 2% volume growth, 4% lower prices, reflecting the lower raw material costs, and a 10% positive currency effect. DSM Engineering Plastics and DSM Dyneema showed good volume growth, while our resins and functional material volumes declined.

On a sequential basis, volumes were up 6% for the cluster versus Q1, mainly due to seasonality, while prices were down 2% reflecting the lower input costs. The EBITDA, at the €106 million for the quarter, increased 25% versus prior year, which is a new record for the cluster, on a like-for-like basis.

Volume growth and efficiency gains from programs implemented over recent years contributed positively. The increase in EBITDA was, however, also enhanced by the positive foreign exchange effect, as well as temporarily stronger margins, thanks to the lower input costs.

As a result of the above, the EBITDA margin from performance materials significantly increased to 16%, as you can see, above our 2015 target range of 13% to 15%. Please take into account that a part of this margin increase is due to temporary tailwinds, which might fade, or even reverse partly in Q2, as some of the input costs go up.

I will now move directly to Slide 17 to comment on the performance of our JVs and associates. I am now on Slide 17.

DSM Sinochem Pharmaceuticals, the 50-50 joint venture, had a good quarter, with sales reaching €112 million, that is on a 100% basis, and an EBITDA margin for the quarter around 15%. DPx holdings, of which we hold 49%, realized total sales on a 100% basis, of €447 million, for the period February 1 to April 30, which is their quarter, with a corresponding EBITDA margin of 20%.

In Q2 2015, following the successful refinancing from DPx, DSM received a capital distribution of €155 million. DPx, to be renamed Patheon, has filed a registration statement on Form S-1 with the United States Securities and Exchange Commission, relating to a possible Initial Public Offering of its common share -- common stocks.

The timing of the offering, as well as the number of shares to be offered and the price range of their offering, are not yet determined. On this subject please note that due to this SEC filing we are not able to comment today on the performance of DPx and on the filing itself.

And we refer you to the filing documents themselves as well as any communication made directly by DPx Patheon. Moving to Slide 19.

The cash flow performance for the quarter is highlighted on this Slide 19. Cash from operating activities amounted to €103 million from continuing operations.

Overall operating working capital from the continuing operations remains stable at €2.1 billion versus Q1. And, expressed as a percentage of annualized sales, amounted to 26.7%, which is an improvement compared to the 27.9% that we had in Q1, and an improvement versus the comparative period last year.

In nutrition, operating working capital, as a percentage of annual sales, declined from 34% at the year-end 2014, to 33% at the end of the quarter now. And finally, net debt.

Our net debt closed at €2,860 million, decreasing slightly for the quarter, by €69 million, compared to Q1, reflecting the cash flow contributions and the positive development in the mark-to-market values of our financial derivatives. This partly offset the interest and dividend payments in the period, as well as the buyback of own shares for management options.

And moving now to Slide 24, let me address the outlook. Based on the performance of each of our businesses in the first half of 2015, we believe that the underlying business strengths that were taken into account when expressing a view earlier this year on our full-year outlook have not materially changed.

We indicated that we aim to deliver an EBITDA ahead of 2014, mainly driven by positive foreign exchange effect. Since then volatility in currencies continued, with amongst other, weakening of the U.S.

dollar. We now estimate that currencies could lead to an overall positive impact of approximately €35 million on our 2015 EBITDA, should current exchange rates persist throughout the remainder of the year.

This is slightly below the €45 million we estimated in April. As a result we maintain our outlook as stated.

DSM aims to deliver an EBITDA in 2015, ahead of 2014, mainly driven by positive foreign exchange effects. And with this I would like to open the floor.

Operator?

I've got three questions. Just firstly on performance materials.

Could you just give an indication of, effectively, the normalized margin, or at least maybe the impact that we -- or the benefit we saw from the raw material tailwinds? And then secondly, on animal nutrition, with the organic growth rates now at 3%, I think we were about 14% in Q1, are we starting to see some kind of easing there?

There was also some discussions from Tyson Foods on potentially higher feed costs, or the expectation of that into next year; is there, maybe, some expectation, or some downturn in the momentum there? And then finally, just for the cash flow statement, with the interest charges there, there was, again, the one-off from this €500 million bond that you have, the interest hedging.

Is that everything for this year, the impact of that? Or is there more to come in the second half?

Thank you.

Let me address a couple of the questions here, and I'll hand over to Feike. Firstly, on the performance and materials margin, indeed, we're highlighting here, quite clearly, that we are benefitting from the lower input costs, at least at this stage.

The range of the margins that we've been targeting for performance materials has been 13% to 15%. If we back out, to the best of our ability, the benefit that we're getting from these lower raw material costs, the 16% would revert back within the range that we're targeting, at the higher end of that range.

Hopefully that gives you some indication there. Now, indeed, thank you for the question on the financing costs, the interest costs.

During the quarter, we are -- we refinanced one of our long-term bonds. But the rate was pre-hedged.

And that led to an expense, and it's shown in interest paid, of €130 million, relating to that pre-hedge of the interest rate, which is a one-time and there will be no such events in H2.

On the animal health, the organic growth, 3%, we said the organic growth, without the fire in Tortuga would be -- or the supply to Tortuga, would be 5%, with is 6% volume growth. So I would not call this a weak quarter for animal health with 6% volume growth, 1% down in prices; which, of course, Vitamin E plays a very important role, it's even more than 1%, compensating by some of the other products, also some in-sourced products.

But if you look to volume growth, 6% without the fire is a good volume growth, also, in light of the first quarter. Of course, I don't have a crystal ball of the coming quarters, but we have a very strong position in animal health globally.

And I hope that we also for the quarters to come, so a longer vision, that we can grow our business. Promising this quarter was also that human health showed, again, growth, also, volume growth.

By the way, together with the performance materials business, I think we still have growth all over the place in DSM. We are not yet there, but I've found it a pretty solid quarter.

Nutrition business and could you talk a little bit more about the net pricing impact there, I'm slightly surprised of the development given the commentary around….

I am afraid we missed the start of your question, the line cut out.

In human nutrition, net pricing was down a little bit. Could you talk a little bit about the dynamics within that?

Given the relative performance of the components in human, I was slightly surprised that that was down. Secondly, the Omega-3 supplements, you said, are still weakening year on year.

I wondered if you could discuss the impact of your promotional programs there, and whether sequentially you're seeing anything more encouraging. Thirdly, can you explain again, sorry, the EBITDA impact of the Tortuga supply chain interruption, both within nutrition, and also within corporate?

And then finally, just on the guidance, for a tiny point of clarification. You say mainly, an increase mainly attributable to currencies.

But if we exclude the EUR35 million that you're anticipating at spot rates, would you expect the EBITDA to still be better than last year? Thank you.

Let me, maybe, start with Tortuga, which we state quite clearly in the press release, the impact. There, the fire at the site, which was in the port, wasn't actually our site, or even our supplier's site, but led to an interruption which reduced the sales by EUR15 million, and had a related EBITDA impact of EUR7 million.

What's important here is that the EUR7 million will be actually covered by our captive, which means that it's an expense to our corporate costs, as opposed to the cluster in itself. So what we're seeing here is, if we adjust, we see a 100 basis points step-up in the growth, had we had the revenue.

And if you look at the margin, it has about a -- on the quarter, if I'm not mistaken, 200 basis point impact on the margin. But I'll stand corrected on that one.

I'll come back on the margin impact. On the Omega-3 promotional campaigns, what we have seen is that despite the promotional campaigns, while the pilot had been quite effective at a smaller scale, the larger campaign did not deliver according to expectations.

And we are still seeing that this market has been declining in Q2. Unfortunately, it is a big space to move in terms of the ultimate demand, so there, to clarify the dynamic, is that we are yet to see an improvement.

Now, we're taking a lot of actions that we can do in terms of product developments, managing the relationship with our clients and making investments in the products that we can produce. But from a Nielsen data point of view, it is still, indeed, a slight decline over the quarter.

Maybe, to add to Geraldine, I totally agree. In human health, indeed, the volumes were up, you might say last year was not a strong second quarter.

But this year, at least, a much stronger second quarter, where, indeed, like Geraldine said, multi-vitamins up. Omega, not yet seen the bottom, indeed, the decline.

Although we talk about the decline especially caused by the United States, the Omega industry outside United States are growing; and also, the multi-vitamins, and there we see quite a potential. And let's not overstate because I think the total sales of the Omega in the United States is around 1% or something like that, of our total nutrition business.

So let's not overly focus on that one. Overall, human health, indeed, eye health was growing; infant formula, back to normal.

So, overall, a good growth. And pricing-wise, indeed, some of the infant formula products, as we said before, will, over the years, see gradually a price decline.

But also, a cost decline, so no margin impact on that. That is due to the fact that we will use increasingly different and more competitive technology; and a part of that will be passed on to our customers, but not at the expense of margins.

So overall also, human health in that sense, not a bad quarter.

And the outlook reference, the last question of Neil?

Yes, the mainly indeed, the improvement is coming, I think, mainly from exchange rates. If you see -- if you would exclude the exchange rate benefit of EUR35 million, you see hardly an improvement compared with last year; correct.

However, you should take into consideration that we have a EUR80 million to EUR90 million negative impact in that for Vitamin E. So I don't want to say we are not growing, but overall maybe not in EBITDA, except for the help of exchange rate.

But we are compensating this 80 million to 90 million downturn from Vitamin E.

Just on -- just take the Vitamin E forward, you -- I think I may be wrong here, but you're asserting that, perhaps, some of the Chinese producers were losing money. But the price has been down around these levels for some time now.

I think there's a chart in the slide show that says, perhaps, it's bouncing off the bottom. Is there any update on where you think the price is likely to head to?

Do you still believe that Chinese producers are losing money? Second point, I know you said you wouldn't comment on the DPx transaction, but I just want to confirm that the refinancing proceeds, they are in the cash flow statement?

And there are various one-off issues within the human health side, but perhaps if you can give a little bit more detail on what you're doing in terms of trying to stimulate the market and improve your marketing activity and whether you think there is any grounds for optimism. I know you indicated that the Omega oil side that there wasn't, but then you seem to be quite successful in Europe and Asia.

Just a bit more flesh on how you're trying to drive the human side of the equation.

On the refinancing, Geraldine will answer. But on the two questions on Vitamin E and human health, in human health we have set up last year promotional activities; multi-vitamins, and also Omega-3, two different programs.

Omega-3, especially in childhood tissue, remember where we did the first test. We did not expand at this moment to a national level in the United States, also not because we don't want to do that ourselves alone.

It is not a big program. On the multi-vitamins, some of our customers and together in the whole industry, we are promoting that.

You see also that multi-vitamins are improving, the Omega-3 still not in the United States; outside the United States it's growing. What we do in Omega-3, if the market does not really grow it's difficult for us to grow, although we are upgrading our Mulgrave facilities and we are focusing more and more on the specialty part of the market of the Omega-3 higher end of the market.

There's more margin and also there if you segment again this market, there is a little bit more of the growth and we are focusing on that one. Next to that we remain open and we will try, together with some of our customers, to promote the category as well, although to be honest at this moment for Omega-3, that's still not simple, a lot of vitamins improving in the United States.

On Vitamin E, correct, you never know where it's bottoming out but I think around this 5'ish level where it is today, today it's 5.20, 5.30. I think it's somewhere around this 5, it's bottoming out.

I don't know exactly whether that is true but it looks like that. And if you make the curve over the recent years, you see also that that curve is sliding towards this 5'ish and there it is bouncing a little bit and a little bit flattish around that level.

And I expect it also not to go further because indeed, like you indicate, the smaller Chinese are losing money at this level, so why should we see prices even lower? Can the prices be higher?

Always. Do we anticipate on that?

No, at this moment not and we take care of our improvement programs that we are competitive at this price level. We can easily maintain this price level in terms of competitiveness, in terms of making money.

Of course less than before, we don't like that, but we can deal with that. And we have made a change last year in our policy by having very strongly our volumes in this, you see that also in our growth.

So I hope that gives a little bit an update of the Vitamin E and of the human health; and the refinancing, Geraldine?

Yes, Andrew, the DPx capital reduction inflow is indeed in the cash flow and you see it in other from investing.

A few questions around nutrition again. Firstly, in animal health you're indicating large shutdowns in the second half; could you quantify what kind of EBITDA impact that might have?

And also returning to Tortuga, I believe the port is now open. Should we think those volumes will come back again in the second half or are they lost for the season?

And then lastly, on enzymes and cultures gaining share, is that linked to any new specific product launch or any market; could you just give a little bit of color about what you're gaining share?

Yes, for Tortuga there it's quite straightforward, so the business interruption actually had a permanent effect because we were running pretty much at full capacity on that site, but now the site is back up and running, so, on we go. So it's resolved but there's a limited ability to catch up the delta because it was indeed running at full capacity, so that's there.

Now indeed there are some shutdowns scheduled in H2. They're relatively sizeable shutdowns, and we expect an impact of about €15 million to €20 million in H2 relating to those shutdowns; so that's correct as well.

And would you like to comment on cultures and enzymes?

Yes, I think over the years you've seen we did some acquisitions also in the culture enzymes business and we are expanding our portfolio in terms of further developing new products, new strains in the cultures and of course improving our position in the enzymes. In both we are broadening our portfolio, and it's a growing market in which we perform in fact very well.

You see also other people reporting that the market growth in that segment is substantial and we become, increasingly, also one of the important players in that field, and that's what we want and like.

Can you give some detail on the weakness in functional materials that you noticed in the performance materials commentary?

Yes, it's a part of our resins and functional materials material, right, and they're the functional materials more on the Desotech, on the optical fibers and all that stuff. We have in one particular case seen some hiccup with a large customer and that influenced the volumes there at this moment.

You mentioned cost savings, can you quantify them for the second quarter and what do you expect for the full year? And also maybe regarding the segment performance materials, can you talk about the momentum you have seen in the second quarter and what do you order books tell you for the beginning of the third quarter?

Thank you.

Yes, the cost savings is difficult to quantify. We have said after a couple of years of focusing on acquisitions, divestment acquisitions, we now focus on increasing our operational performance; that is what we do in our nutrition and materials business.

And I think you see the fruits of that focus of the Company. Now on top of that we said we will have next all kind of programs we have running; we have two big programs, one is in our global support functions and we will update the market on that before the end of this month, before the end of August; and the other one is how do we deal further with nutrition growth increased performance over the coming period, and we will update the market on that at the Capital Market Days.

Next to that we have, in all the different businesses, smaller programs running because indeed we focus fully on operational performance improvement. And you see that reflected in the second quarter, also in our materials business because we are, like Geraldine said, in this range, even the higher end of this range, 13% to 15%, which we had as the margin target.

We're even higher in the second quarter, 16%, but we said that might be a little bit helped by low raw material prices. But even if you could correct for that, we are in the high end of that range.

Also in performance materials we're doing well. We need to realize of course that we do that against the background, that the world's economy is not growing with an enormous speed; I mean Europe with 1.5%, United States with 2.5%, high growth economies a little bit less than before.

So we're not helped by the market and we need to do it ourselves, cost containment, but also finding all the niches and all the spaces in the market. And if we look to the volume growths also of our materials business in the second quarter, 2%, I think it's good volume growth if you compare that with what's happening in the industry.

If you look to margin, also there we are performing well. So basically I think that also our materials business had a very solid performance and a good step-up in this second quarter.

Maybe I can follow-up regarding the momentum I asked, we have more and more companies who reported at the end of the quarter we have strong demand, while the beginning of the quarter there is low demand. So, was that the case also for you that June was a strong month and while April and May were poor?

And then a follow-up on that, how does the business outlook look in July? Is there any normal summer lull or a destocking taking place or just normal business?

That would be very helpful.

Yes, let's not go now into almost monthly update, although I would love to share that but I don't think that this is meaningful. I think that overall the whole quarter with a 2% volume growth of materials is in fact a pretty good volume growth.

And you see that we have even done that with a hampering situation in functional materials, we just mentioned that. So we had some negative elements also we needed to cope with so against that background the 2% I think is promising.

Of course we achieved that over the whole quarter, let's not split that by month. For the second half-year, of course we don't give a specific outlook of materials and nutrition but we gave an outlook for the total company and I think that means also that on materials we are on track of achieving our goals.

One question on the innovation division. You were quite bullish when you acquired Kensey Nash and so far the gross is not really picking up.

Can you update on the developments here and would you expect more, medium term? And secondly on Dyneema, you had strong growth in the quarter, is this coming from higher military spending and therefore this growth is sustainable or was this triggered by one contract and therefore you should not overestimate this?

On Dyneema, no, it was not military; that is still already for years a little bit lower because of the vehicles etc. program as you know and we do not anticipate on any big tenders here, not at this moment; so on the whole military, it's down.

So the growth is coming mainly from the other segments and marine in the second quarter also played a very important role in that growth so it's coming from the fibers and not coming from the ballistic applications. On biomedical, we have indeed a little bit weaker demand this quarter of one of our big customers as compared with last year.

Of course we missed the St. Jude contribution.

So if we compare year to year, it was not a great quarter that I agree. If I see the underlying developments in terms of product developments in the period to come, talking about 2016/2017, I have good expectations on biomedical.

But I agree at this very moment we don't show a good growth due to indeed one specific customer and to comparison year by year with last year. Is that concerning me?

No. But if I look to the outlook to the future I think it's very promising and it continues to be like that.

Do we push this a little bit? That counts for the whole Company, we focus, I cannot repeat more at this moment on operational performance improvement and there's not any unit who missed that purpose for our focus of the company.

Two questions on nutrition. First on Vitamin E.

Just wondering why you have increased the expected negative impact from EUR80 million to the new range of EUR80 million to EUR90 million. I know it's a small number but considering that Vitamin E prices seemed to not have moved significantly over the quarter, just wondering why that is.

And then secondly, on the EBITDA margin for 2015. Do you still expect to get to a low end of the 17% to 18% rates that you provided earlier?

Because if I look at the first half I think you reported 16.5% so you would need at least 17.5% quite a jump from the current levels.

Yes, the Vitamin E we updated you, we said it's around EUR80 million and at this moment if we look to the exact calculation we are further progressing in the year, we come to EUR80 million to EUR90 million. And it is due to the fact that the prices are, as an average at this moment, a little bit lower than anticipated before so we give you a precise update on where we are and then you come instead of around EUR80 million, which was maybe a little bit above EUR80 million to what's now EUR80 million to EUR90 million bracket.

So it's not materially different but we wanted to show the impact and we are not anticipating at this moment further price increases but of course it could happen and we like that. The total margin in nutrition at this moment, we are on 16.7% or something like that for the quarter, so just below 17%.

If we look to the second half-year and all the different elements playing a role there, I would not anticipate on a totally different margin in the second half-year as we have today. So that is just below 17% or approaching 17%, 16.5%/17% is my expectation for the year, so close to the 17%.

I don't see any material difference in the second half-year compared with the first.

Right, so you expect slightly below 17%.

Yes.

I have several questions. One question on corporate costs, if I may.

Obviously with creation of JVs etc., the top line of the company is reduced but the corporate costs somehow stepped up last year again. So if you could guide on this year and what is the normalized level of corporate costs that you are seeing in not necessarily this year, but in a couple of years.

Second question on -- in Q1, you had nutrition higher sales and marketing expenses. And I assumed that you were hiring people from maybe i-Health business, so B2C, and will this level of sales and marketing normalize during the year?

And will this help the margin? And the last one is on Omega-3 and the fact that [indiscernible], as far as I know, started their factory in June for Omega-3 and it is mostly for export.

How do you think it will affect you or is it in medical purity grade, so it doesn't affect you?

Just regarding the corporate costs, I think here you have to be careful because there's been a change in scope of the Company. Before the new Co creation with CVC that has been closed just on July 31st, we also had within that line an income from a company called Sitech which is a service company.

That is now out of scope, so what it's done is that if you restate properly the prior figure for 2014, it's actually 117 million of corporate cost and the guidance for the full year is around the same number, at about 120 million for the full year this year. So there isn't a big increase in corporate cost; it's just the way that it's presented.

And in terms of longer term, do you plan to keep it at this level or do you plan to reduce?

The programs that we make reference to, amongst others, are addressing our functional costs. Now of course part of the corporate costs are -- well, a big part are related to functional costs.

We also have in there R&D and stock options, etc. So indeed we are looking at how to make that as light as possible on the Company as a whole so this is what we'll be talking more about later this month.

Yes, that's correct. So we're not ramping up the corporate costs; on the contrary.

On nutrition, i-Health, your question was are we increasing our capabilities here with hiring people and building more B2C capability?

The reference was made to the higher marketing and sales expenses we had in Q1 and whether that was normalized over the year.

Yes, we have, of course, spent some money on the campaigns, which on multi-vitamins returned into benefits; in the Omega-3, not yet. In the i-Health, yes, we are ramping up some of our capabilities there.

Don't know for sure how much it is, but we see a good progress in the i-Health activities and this B2C segment where we play a role has a good margin as well, so it's an interesting area for us. On the Omega-3, the issue is not competition out of Peru from Chinese or other players; the issue here is the market in the United States, which is still not growing, although as I said, we try to do promotional activities but we don't want to do that alone, only with the rest of the industry.

And we focus more and more on specialty Omega-3 products, higher concentration and higher purity form, which is the higher end of that Omega-3 segment. And we focus on growth outside United States.

So that is what we do there. The issue is more the market and not so much competition.

Thank you so much, just one follow-up on Martek with the recovery of human nutrition -- I'm sorry, human, infant nutrition, Martek should be doing considerably better than 1Q right?

Yes. Martek is also selling Omega-3, but then the different quality and different type of product made by algae and not coming from fish oil; that is a totally different market with different pricing, etc.

That business is doing very well, indeed, as you say. Be careful there that we have a higher market share and we keep that higher market share by also giving some of the benefit of different strains and different technology which we use to our customers, whilst keeping the margin.

So here, you see some negative influence on prices in human health, although it does not influence negatively the margins. And that is unique to what we do on Martek where, as a basis, also volume-wise, it's growing very nice.

Firstly, they're both on nutrition, but can you just clarify, Geraldine, what you were saying on the margin impact at Tortuga from the fire? If I understand correctly, it's 8 million sales impact, but then I think you mentioned 200 basis point impact on margins.

And then I wasn't sure whether you were talking about Tortuga specifically or animal nutrition as a whole, so if you could just clarify that, that would be great. And then the second one, also on nutrition.

Can you talk a bit more about the pricing dynamics ex-Vitamin E, so what were the main raw materials that were moving up and down?

Let me clarify, sorry, that was a bit of garbled answer earlier. So just to clarify on Tortuga, so the missing revenue is 15 million and the missing EBITDA relating to that is 7 million.

So that's the impact of the fire on the performance of the cluster. Now, the cost of that 7 million is actually reflected in corporate costs and that's what I was trying to clarify earlier; that it is not reflected in the cluster numbers.

So that's on Tortuga. Then the other materials and ingredients is something that we flagged already in Q1, is that for a portion of our activities, we actually in-source, we buy ingredients.

Those ingredients have actually -- or some of these ingredients have increased in prices and for us, it's a bit of a pass-through cost. So we price it on a cost-plus basis but you see a much bigger effect on the revenue line than you do on the EBITDA line, which is why, effectively, it's dilutive on the margin overall.

So that's what we were flagging there. It's in line with the comments that we made in the first quarter.

Okay. Then we have time for one last question.

A follow up on biofuels, whether -- what progress is being made, and what the aspiration is for that business now within the others. And then, just to finish off, what your midterm view in the new business start-up is now, given the medical side is going more slowly than expected.

And so really just to focus on that division.

On the bio-fuels, we opened the factory in September, and we are ramping up the output of the factory as we speak. The start-up was not easy.

It's not easy, and it's a new technology, as we have seen also with other players in the industry. But step by step, we make our improvements in terms of output.

We do that in an environment with a relatively low oil price, around $50 at this moment; and an EPA, that's the Environmental Protection Agency in the United States, which reduced a little bit the blending situation in the United States, although still at a level which is substantially higher than the production, at this moment, the whole country can deliver. So the negativism around the EPA targets need to be nuanced I think.

But indeed, it's against an oil price which is around $50. So at this moment, in that sense, not the most easy environment to give new licenses.

On the other hand, we have clear hopes that the world is in a transition. And you followed yesterday the new plan of Obama in the United States, which was very clear.

And I would even call it aggressive and promising. And, of course, that whole situation, and he indicated also, to switch towards renewable's like bio-fuels.

So this whole plan of the Obama administration will slightly -- will create a better environment for us. We need to see what happens in Paris in December.

But the climate change agreements that the world wants to make in December, in Paris, is of course also of help both of our biofuels business, but also of our solar business. Biomedical need to grow.

It's not growing at this moment, but I anticipate that it will grow next year, and the year after. And if I look to the whole innovation center, we said before, this year it will be improved from a minus [20, 18] or something last year, to minus [10, 12] or something like that this year, as we indicated at the Capital Markets Day.

And next year, it has to be close to break even. And that is the goals which we have set in the Capital Markets Day last year.

We will update you, of course, at the Capital Markets Day this year but we're on that trajectory. So increasingly, it should contribute.

Can I just -- sorry, just to qualify. The biofuels business, obviously it is difficult, and you've talked about the biomass processing.

But I just want to get a sense of the progress you're making towards getting the system working effectively, as opposed to the market dynamics.

I think we get our technology working. We are improving month by month, day by day.

So that is not the point. We have one of the best -- or not one of the best, I think we have the best [enzyme] system in the world.

So I think, in terms of technology and our position that is an extremely strong one. In terms of licenses in the United States, the environment was not helpful in the last year.

I need to see what's now happening with the new Obama statements and the new agreements in Paris. As we see in the rest of the world, we see several countries, like China, India, etc., being very interested in licensing.

They will always take some time. But if we have it, it could be of course quite substantial.

And why do they have it? Because those countries are importing energy.

So even at low oil prices, they need to import. And they have a lot of agricultural waste.

So they are looking to upgrade their agricultural waste into fuels, do something about sustainability, do not spend money to import and, of course, becoming more self-sufficient. So we see quite an interest from other regions in the world.

It will always take some time. Also, in China, etc., it will be partly state-owned enterprises, so it will not be done overnight.

But the potential there is not small.

Okay. Thank you, Feike.

Maybe some closing remarks from you, Geraldine.

Yes. Thank you, Dave, I will.

Firstly, thank you to all of you for your interest in DSM, and for listening to this call today. As mentioned in my opening remarks, we had a solid quarter with volume growth across the board.

Our focus on operating efficiencies, it will continue. And this will be communicated further, later this month, so one part, and at the Capital Markets Day.

Our outlook remains unchanged. We aim to deliver an EBITDA of -- for 2015, ahead of 2014, mainly driven by positive foreign exchange.

Thank you.

Thank you, Geraldine. This concludes our conference call for today.

Thank you very much for your attention and your questions. If you have any further questions or need background information, please feel free to contact investor relations.

With that, I now hand the call back to the operator.