Thank you, Operator. Ladies and gentlemen, good morning, and welcome to this conference call on our first half results that we published earlier this morning.

I'm sitting here with Mr. Feike Sijbesma, CEO and Chairman of the DSM 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 a reminder, I'm obliged to point you to our, let's say, our disclaimer, which we published on the website and in the press release. With that being said, I will hand over to Geraldine.

Geraldine, please go ahead.

Thank you, Dave. Good morning, ladies and gentlemen, and welcome to this call on DSM's H1 2017 results.

On this call, I'll walk you through some of the key slides of the investor presentation that we published this morning with the press release, and then we'll open the lines for the Q&A session. Now let me start with the financial highlights on Page 2.

As you will have noticed from the front page of our press release, we maintained positive momentum built up in 2016, resulting in a very strong first half 2017. All businesses delivered sales above market growth rates, resulting in an overall organic growth of 8%, supported by strong volume growth of 6%, and our adjusted EBITDA increased by 16% versus the same period last year.

Our return on capital employed closed at 12.2% for the semester, up 170 basis points, and our net profit increased by 42% to €312 million. Now putting this in the context of our Strategy 2018 targets, given that we are at the halfway point, we're happy to report that we are well ahead, having achieved broadly double the original target set for EBITDA growth and ROCE improvement, supported by our growth programs as well as our ambitious cost-saving and efficiency programs that are all on track.

In addition, the expected pace in transaction demonstrates our commitment to monetize the significant value of our associates; and in the case of Patheon, earlier than expected. Also important is our continued progress with our sustainability agenda, which is embedded across the organization.

We are proud that after having been named the global leader in the materials industry group and the Dow Jones Sustainability World Index again in 2016, for the seventh time, DSM was also named leader in its industry sector by Sustainalytics in the ESG assessment, ranking us #1 out of 130. Looking forward, while being mindful of the volatile macroeconomic environment and the higher base results achieved since 2015, we're confident for the remainder of the year and have slightly increased our outlook for 2017 as follows.

DSM now expects to deliver full year 2017 results above targets set in its Strategy 2018, with an EBITDA growth for the year moving slightly up from high single digit to double digit, and with the ROCE increase moving from double-digit basis points to over 100 basis points. Finally, I would like to point out that we have set an interim dividend at €0.58, which, as usual, represents 1/3 of the total dividend paid in the previous year and therefore should not be taken as an indication of the total dividend for 2017.

Now let me move to, more specifically, to our Nutrition business. And starting on Page 9.

As you can see, Nutrition continued its strong momentum, delivering above-market growth with a 6% organic growth rate in H1, coming mainly from volume growth of 5% and overall relatively stable prices. Adjusted EBITDA increased 14% in H1 compared to prior year, mainly driven by healthy volume growth and the improvement programs, although also benefiting somewhat from easier year-on-year comps in prices and currencies.

The EBITDA margin for Nutrition increased to 19% in H1, up 80 basis points, already well within the 18% to 20% range set as a target for the end of 2018. Specifically in Q2, the EBITDA margin of 19.6% benefited from a highly favorable mix due to the strong sales in Human Nutrition, especially the food premix, i-Health and fish oil-based omega-3 businesses.

Finally, the ROCE also stepped up significantly at 13.9% versus 12.3% in H1 2016. Now moving more specifically to Animal Nutrition, let's go to Page 10.

Overall, Animal Nutrition continued to make good progress with its growth programs, resulting in the continued healthy development of our premix business as we further increase the proportion of sales coming from tailored solutions. Sales were up 11% in H1 versus prior year, including an organic growth of 7%, driven by good business conditions across most regions, with the exception of Latin America.

The ongoing meat scandal in Brazil that had an impact of approximately 3% on volumes in Q2 further dampened market conditions in a region that was already pressured by a weak economic situation. Excluding this effect, Q2 volumes would have been in line with DSM's growth trends in recent years.

The positive exchange rate effect of 4% relates mainly to the U.S. dollar and the Brazilian real and partly offset by the Chinese renminbi being weaker.

Now moving to Human Nutrition on Page 11. Our Human Nutrition businesses have delivered good growth since the start of our Strategy 2018, reflecting the impact of several initiatives taken over the last couple of years, including, in particular, the reorganizing and refocusing of our commercial organization and giving the business a clear growth momentum across all regions and all segments.

We have been successful in bringing the premix business, which includes the former Fortitech acquisition, back to higher growth. These tailored solutions allow DSM to diversify its market presence and capture additional value.

Early Life Nutrition also continued to perform well with good growth. Finally, the sales initiatives also resulted in us outgrowing the North America dietary supplement market in both multivitamins as well as fish oil-based omega-3, while our i-Health business continued to show double-digit growth, with good initial traction in the markets outside the U.S.

This all resulted in a strong H1 volume growth of 7%, while the profitability in Q2 benefited, as I previously mentioned already, from a highly favorable mix effect. Now for our Materials business, please move to Page 14.

Our Materials business continued to make solid progress in executing its strategy during this first half year. In particular, the strong growth in specialties driving the demand for innovative, lightweight, environmentally friendlier, safer and higher-performance solutions was the main driver behind the high 8% volume growth in H1.

All businesses contributed to this volume growth, although we did see in Q1 some stocking effects in parts of the value chain. With the volume growth of 4% in Q2, Materials returns to a more normalized growth after the exceptionally high 11% volume growth in Q1 2017.

As for the 5% price effect, this relates to the increased input costs. Regarding profitability, the adjusted EBITDA increased by 14% versus H1 2016 on the back of the higher volumes as well as our continued drive for cost savings and efficiency improvements.

Currencies also had a small positive impact. The adjusted EBITDA margin was 16.9% in H1 2017 versus 17.1% in the previous year when we still fully benefited from the low input costs.

Our margin in this first half year is a clear reflection of our ability to implement price increases to offset higher input costs and underlines the structural improvements achieved in the quality of returns of our Materials businesses over recent years. Now moving over to cash generation, let's go to Page 19.

Cash flow from operating activities amounted to €329 million in H1 2017, which is slightly higher than in the same period last year. Although in Q2 specifically, the cash generation was lower as the absolute working capital increased, reflecting our strong sales growth.

Total working capital as a percentage of sales came down slightly to 18.4% in H1, while our operating working capital stood at 23.9% of sales versus 25.2% in H1 2016. Capital expenditure in the semester reached €250 million, an increase compared to last year, influenced mainly by the timing of creditors.

Net debt closed at €2.2 billion, in line with expectations and slightly up versus December 2016 due to seasonality. And to conclude, let me point you to a few quick status update on the other actions regarding Strategy 2018, and for this, let's move to Page 23.

As you can see on this summary page, we are delivering significantly ahead of schedule at the halfway point of our Strategy 2018. Our well-identified cost-reduction and improvement programs continued to progress as planned and are on track to deliver the targeted benefits, with current run rate of approximately €150 million in gross savings achieved versus the baseline 2014.

We expect this good momentum to continue in the second half of the year. Our growth initiatives and profit improvement projects are clearly working and embedded in the whole organization, and we expect to continue to drive this in the coming months.

Next to that, I would like to point to our commitment to monetize the significant value in our associates, the expected Patheon transaction at $35 per share; and that came a bit earlier than initially foreseen is a clear demonstration of this. We expect cash proceeds of about $1.7 billion once the deal is complete.

More details on the progress of our programs as well as some very interesting examples of our sustainable, innovative solution that help us outgrow the market are given in the next pages of this presentation. And with this, I would like to open the floor for questions.

Operator?

The first one was on Human Nutrition. Obviously, very strong performance there.

Operating leverage looks quite high with the drop-through to margins in the second quarter, in particular. You comment in the release on a better mix impact within Human Nutrition.

I just wondered if you could give us some additional color in terms of what changed there in the second quarter and how sustainable that was likely to be over the remainder of the year. And the second question was on the guidance upgrades.

So you've obviously upgraded guidance for 2017 today. I wonder whether you saw any potential for a change to the overall 2018 targets that you have in place, i.e.

do you think they could be raised at some point? Or should we think of this guidance upgrade as more of a bringing forward of some of those 2018 targets?

And on the €150 million in gross savings, could you give us a target number for what you're looking to achieve for the remainder of the year, so in the second half of 2017?

Stephanie, thank you for your question. Let me maybe take a couple of those and then hand over to Feike.

So mainly first -- to your first question on Human Nutrition, it's clearly been a very strong first half. As you saw, our volume growth of 7% both in Q1 and in Q2, with all segments really delivering.

Now this has had a particularly positive effect on our mix effect in Q2, and here, one can estimate that the positive effect is in the range of 80 to 100 basis points on the quarter. Having said that, the positive momentum is something that we continue to expect for the remainder of the year.

So it's not as if it necessarily unwinds, but that is -- gives you a bit of a magnitude of the mix effects on the quarter. Now as for the programs, the €150 million run rate achieved at the half year should evolve through, and we try to sort it geographically, about €190 million run rate by the end of this year, which is fully in line with the plan that we had put in place, so we're happily on track there.

And would you like to comment to the outlook right now?

Yes, we increased the outlook for this year, obviously after a pretty good first half year. You know the whole strategic period is 2015-2018.

We're delivering on growth almost double of the markets we operate in. We deliver on our cost-saving programs.

Geraldine mentioned that also. We're increasing our ROCE 170 basis point now from 7.5%, which was clearly too low, in '15, to 12.2% right now and cashing amortizing the joint ventures.

So we are well on track. On the other hand, the program, which we are embarking upon, is until the end of 2018.

We are not sitting on our hands at all, but it goes a little bit too far now to give an outlook update for 2018. But we want to continue our growth in the markets we operate in, fully implement our cost-savings programs; last part will be in '18, increasing ROCE by operating working capital, et cetera.

And I'd just say at the moment, utilizing the money of the joint ventures. Not now, because the focus on organic growth has been rewarding, but I hope it goes a little bit too far.

I hope you agree or can understand -- I understand you want to have it -- but to give an outlook update now on 2018. But I tell you, we are focusing on continuing to grow our company.

A couple from me, please. Firstly, on the guidance, again, for this year.

I don't know if it's deliberate or you're just being economical with words, but from low -- from high single digits, you've said double digits rather than low double digit. Is that deliberate?

Secondly, on the $1.7 billion cash proceeds, can I just confirm that that's a net figure post any tax leakage? And then finally, on your Materials business, you talked about the increasing proportion from specialties sold.

Can you possibly put a little historic context around that? I know it's very difficult, but broadly speaking, what you would classify as specialties in terms of percentage of sales this year versus, say, at the beginning of the program a couple years ago.

Okay, thank you, Neil. Again, I'll take a couple.

So maybe firstly, to the outlook, let me say that I would highlight the word slightly increased the outlook and then leave it at that. So that's really for the refinement.

Now in terms of the Patheon proceeds, indeed, the $1.7 billion is pretty much a net figure. And on...

Regarding the Materials specialties, yes, it's what in -- what's in the name, of course. If we compare our Materials business today with the Materials business of the past, I call it all specialties, because caprolactam, ACN and all that stuff is out, which was, in the past, a part of our Materials business.

But again, within the Materials business we have created now, again you have products with a more specialty and a lesser specialty. I would not call it commodities.

I don't think we have commodities. But we have more or less a specialty character.

And what we do every time is to focus more on higher-margin and the more specialty products. You see that also 3 years ago, 4 years ago, we had an EBITDA margin of 11%.

We moved up to 13%, 14%. Today, we're around 17% EBITDA margin in our Materials business.

To give you an example, polymers, the base polymers in Engineering Plastics, we don't try to push the volume there but to convert as much as possible of those into some of our specialties or compounds which have a higher margin and using those more captive to the higher-margin end than to sell the polymers straight. As an example, in our Engineering Plastic business.

But we do that basically in Resins as well and therefore moving up step-by-step the whole Materials business increasingly to higher-margin, more specialty business. And I think we will continue that journey.

So just with that in mind and looking -- thinking more short term, there's been some volatility in the Materials margin over the last few quarters. Can you help us frame what you expect in terms of margin development over the remainder of this year?

Yes. We came from a margin with -- the previous guidance was, we are 14%, 15% -- around 15% on a sustained basis, and we have been benefiting in the past.

And this was 1 year, 1.5 year ago that we had those statements. And we really moved that up.

And I think I would say, today, we are more on the 16%, 17% margin of our portfolio due to the specialization of the products I mentioned. Today, we hit the 17%, clearly.

And we have a lesser and lesser benefit, which we had last year, from the lower level of input prices. I mean, if your whole pricing is lower, then your margin is a relative higher percentage of your wholesale.

So the lower the input prices, you get automatically a little bit of benefit mathematically. Today, we benefit lesser from that and still have 17%, so this must reflect something else than the input prices, and that reflects our cost-reduction programs and the portfolio -- product suites in the portfolio.

Now that means that, over time, we have moved up from a 15%, 14% margin business now to a 16%, 17%, hitting the 17% margin business. Goes too far now to say what could that be in the future and what could it be in '18 or '19, but we try to move in the right direction here.

First question was on -- back to Materials, actually. Just -- Feike, I know you just ran through some of the issues there, but I'm just trying to get a better feel for volume across the -- each individual business unit.

It's clearly a very impressive volume number against some of your peers, so trying to understand how much is Dyneema, how much is Resins. I mean, Resins, in particular, interesting given what we've seen out of the coatings market.

I'm wondering if you could, at all, put some numbers or at least a pecking order on the growth rates in volume from the business units. Second question was on -- sorry, on Patheon again, just on the technicals.

I mean, given what's going on in the White House right now, I guess we need to consider the weaker dollar on that $1.7 billion of cash proceeds. So do you just take spot on completion?

Or have you got a hedge rate already?

Now Geraldine first on the Patheon, and I will say something about the Materials. Go ahead.

Yes, sure. Yes, what we've done, indeed, given the volatile currency markets out there, we gradually hedged that position, so we are now substantially covered.

It's a little early to give you the effective rates, but I think it's fair enough to say that we will most likely have about €1.5 billion net out of that transaction. So you can do the math in terms of...

Yes, perfect. Yes, that's great.

There you go.

So we are not hit by the White House on this one, and not that, that they would have any intention to hit us, obviously. On the different businesses in Materials.

Indeed, a 5% volume growth over the first half year, goes too far for me, of course, to mention the different growth rates in the different businesses. But if I take Engineering Plastics, and I do it qualitative, and it's in line, which I said before, we try to sell a little bit less of the base polymers and more of the specialties and the compounds.

Especially this quarter, we saw our new polymer 4T taking off very well, and it's pretty stiff margins there, so that's good. In the Resins, both Functional Materials and more the powder and waterborne coatings doing very well, and we pushed that.

And Dyneema has been very good growth also in this quarter, especially in personal protection also. And in Dyneema, we are, from time to time, hitting the double-digit growth in one quarter, a little bit less the other quarter, we do that.

So -- although it's the smallest part in the portfolio sales-wise. So basically, all the parts in Materials are doing well; and indeed, the markets in which we operate in are maybe growing 2%, 3% on a yearly basis, I don't know, maybe 3%.

But we do with 5%, clearly ahead of the markets. And that's all reflected by our portfolio we have created over time.

And we see good demand. And therefore, to be honest, because volume and prices are sometimes connected, we saw this time -- sometimes, we need half the year, 3/4 of the year to pass on the raw material prices to our end products.

That's not unusual. At this moment, not.

We could pass on it all, and you see it reflected in our margins. 17%, pretty good.

So the specialty profile of our portfolio made it also possible to pass on the raw material prices pretty fast, so to say. So I'm very satisfied with how our Materials business is developing at this moment, and I look also with confidence to the future.

So the first one, on the meat scandal in Brazil, you mentioned in the presentation that it had a longer impact than expected. So do you -- how much do you expect that to impact the third quarter and maybe -- or just the second half?

And also, following the suspension of the European Commission for the use of ethoxyquin as a stabilizer in several vitamins and other products, now DSM offers a ethoxyquin-free portfolio. My question is, has the market also fully transformed?

Or do you believe there -- that some competitors in the vitamins market are taking longer to find a replacement? And would this -- could this mean that maybe you'll have like an advantage next year with regards to pricing power?

Or how can we see that? And yes, that's it.

Okay.

Okay, maybe I'll take the meat scandal. So just to clarify, there was a little bit -- 2 waves of scandal.

At the end of March, that was the first. If you remember, sort of meat certificate-type issues.

Then of course, there was sort of a second wave of concerns a bit later in Q2. Now the impact on the quarter was about 3% volume growth, and that's about €20 million.

It's extremely difficult to read what's going to happen next. It is Brazil.

When will it surprise us? But we are expecting a continued impact for at least in Q3, and then we will see how that develops.

So it's a bit of a fluid situation there, but we're not expecting much better news right now, although it has to say that the JBS crisis seems to have settled itself a bit, certainly from the financial side of their issues there. So that's really Brazil.

Now would you like to -- yes, to EMQ?

Yes, EMQ. Ethoxyquin, EMQ, which is an antioxidant in feed additives, including with vitamin E.

This issue was already addressed by us since, I guess, 2015. And as soon as the European authorities, the EFSA, came with their opinion about EMQ, about potential health risks for consumers and animals, we tried to address this and work on replacements and work on EMQ-free products, and we have been very successful for that.

So at this moment, we are totally compliant with all the regulatory requirements. We have the right products.

Whether that would result into more sales or more pricing power, we need to say. But at least, I would say, just not any negative influence on the two, because we are well positioned.

And this is, by some, seen as an issue, of which we responded well and feel pretty comfortable.

The first question is on the EBITDA margin in Nutrition. Geraldine, you spoke about the positive impact from the mix and how sustainable that is.

If I go back to the Capital Markets Day and the targets you set out, the EBITDA margin rate of 17% to 20%. Obviously, you're now at the high end of the range.

Do you think that range is still applicable? And then, the second question is a bit broader, it's on M&A.

We have seen -- we are seeing quite some M&A in the chemicals sector. If I then look at you, aren't you afraid that your low valuation, your low leverage and limited synergies between Nutrition and Materials will make you a takeover target or a breakup candidate?

And if so, what are you doing to prevent that?

Maybe back to -- I'll kick off with the margin on Nutrition. Now at the Capital Markets Day in 2015, if you remember, our ambition was to reach the range of 18% to 20% for Nutrition, which, as you can see, we are already comfortably within.

Now what I wanted to point out is that in Q2, our margin is on the high side, and there, there is maybe a bit of an unusual mix effect going on. So if we look at -- and that's because of the strong growth in Human Nutrition and particularly some of the businesses in that.

And if I was to try and quantify, it's broadly about an 80 to 100 basis points positive effect on the margin in Q2. Now having said that, we are not revisiting the 18% to 20% range.

But do remember that the margin is actually not one of the set targets that we've put for ourselves. It's the absolute growth in EBITDA, and in any given period, mix can have an impact.

So what we are particularly focusing on is growing the absolute EBITDA of Nutrition.

On the M&A, a couple of things, Mutlu. I think there's a lot of things written nowadays about activism and takeovers and all that stuff.

I think the best a company can do, next to all the protection mechanisms and countrywide mechanisms, and you can all find it on the website, what we have or what The Netherlands has, but the best thing we can do is to have a good strategy, a transparent communication about those ambitious targets and delivering on those. And I think nothing replaces that.

And I think, to be honest, we do them all. As Geraldine explained, at the certain moment we get the cash proceeds, already partly hedged, the cash proceeds in of the joint ventures, and we will use that at a certain moment for M&A.

But we delivered this set in 2015 after a period of 5 years of big portfolio transformation. That's focused for a couple of years on our own organic growth, our own strengths, delivering more than market growth, which we do; and reducing our costs, which we do; and then acquisitions ourself will come into the picture again.

And at a certain moment, it will. And we never exclude share buybacks or other returns to shareholders, but we prefer to invest on our own growth.

But this comes when the proceeds comes in, so let's cross that bridge and discuss that when it comes in. So focused on our own things, and I think there is no better difference than that.

On the share price and whether we should be careful, I was trained over the last 10 years by investor relations very eloquently that I should never comment on share price, so I don't, because they taught me that, that is more your territory. So if you think we should have different valuation, I would say, be my guest and work it out.

But let me not comment on the share price.

I have three questions. First of all, can you provide some color on what you're seeing in North American dietary supplement market?

That this is now sort of like the second consecutive quarter you're revealing strong volume growth there. Is it driven by the marketing initiatives or sort of a real change in consumer sentiment?

The second one is sort of going back to the cost-savings program. I believe you mentioned that the cumulative cost savings by full year '17 will be €190 million.

And at one quarter stage, you mentioned that this year, your cost savings will be €80 million. But in your presentation, I believe in your results statement, you mentioned €70 million, so could you just provide a little bit more color on that?

And then coming back to the M&A side, your net debt to EBITDA is now at very comfortable levels, and obviously you're getting in some proceeds from Patheon. Could you sort of provide a bit more color whether you would prioritize organic initiatives or a sort of more the M&A route?

And if you're prioritizing organic initiatives, where that would be -- potentially be invested in?

Thank you very much for your questions. Let me get started, maybe with the programs for clarification.

Apologies if it was confusing. So one is cumulative, and the other one is on the full year.

So what we're seeing and what we're aiming for is a cumulative from the start of the programs in our strategic period. By the end of this year, we should reach €190 million of run rate at the end of this year, which means, because we were at €110 million at the end of last year, an €80 million increase in that run rate achieved during this year.

Of course, this is made up of a lot of different pieces and initiatives, et cetera. But that's the clarification in case it was a bit confusing there.

Now in terms of the net debt and the capital allocation in particular, now we've always been pretty clear with our preferred capital allocation. And that is, first and foremost, if I rank them in an order of priority, to actually support organic growth, be it through CapEx, be it through scaling up projects.

So that is priority #1. Then of course, defending our dividend policy, which is stable, preferably rising dividend.

Third would be M&A; and should we not find enough value-creating projects for shareholders and investors, then of course, we never say never to giving cash back. But we are pretty confident that we still have the ability to grow all of our businesses.

So that's the prioritization. Now there are a number of projects, and it's going to be very difficult on the call to run through all the different things that make up our organic growth, because it's a wide variety.

Some of the more lumpy ones, I would say, are things such as Green Ocean, which we have referred to in the past. We've got developments on Stevia.

We've got developments on our recyclable carpets, Niaga, et cetera. So there's actually quite a lot in there.

I would refer you actually to the slides in our investor presentation, where we tried to put some of the best examples of these kinds of innovations that will fuel not only the growth short term but also midterm. So maybe if you have a look there.

And also, I would invite you to join us at our investor seminar in the end of September in The Hague and in Delft, where we will be exactly focusing on this, which is, what are the innovation drivers and growth drivers behind our organic growth going forward. In some way, thank you for your question.

It gives me a good chance to remind everyone that we have this event coming up at the end of September. And maybe do you want to talk to the dietary supplement?

Yes, on the dietary supplement, you mentioned both. The multivitamin business and the omega-3 business in the U.S.

is already, for about 2, 3 years, in a decline mode. And I think also this year, we have seen this half year maybe a 1% to 2% decline, so, let's say, flattish or slightly negative.

We, however, have been growing double digits now, so above 10%, both in omega-3 and multivitamin in the U.S. So we do pretty well, and that is a result on the marketing efforts, like you mentioned, we mentioned that before that we invested in that, and at the end, this is returning.

The enormous push we put into the sales organization over there; and also the changes we made in the organization over the last years. So although we like more that the market is growing, we do invest pretty well in the market.

We also differentiated further our product portfolio with the new forms also of omega-3 with higher concentration, which is performing better, et cetera. On top of that, I would like to highlight, our i-Health business is doing very well in the U.S.

especially. We are looking to opportunities to broaden that outside the U.S.

But in the U.S., growing already for a couple of years more than double digit or double digit, in our case. And with -- amongst others, one brand I want to highlight to you and to stimulate you even to buy it, and that's Culturelle.

Everybody needs probiotics. It's good for your guts, and gut health is a good new growth area for DSM.

And the #1 top-selling consumer brand of probiotics in the U.S. is Culturelle, and that is DSM i-Health.

So we're doing very well in this space after a couple of years of investments. And to be honest, you remember, 2, 3 years ago when we were really struggling with this business; did our investments and efforts and I think, at the end, it's returning.

Took a while, but we do well.

I think, I should declare I did buy Culturelle, but no comments on whether I remember to take it, but -- 3 questions around Nutrition, please. I mean, firstly, on the Brazil issue, have you seen any pickup in any other countries or regions to compensate for the Brazil export issues?

Secondly, the alginate business from DuPont, which is now for sale, is that -- would that in your portfolio? And is it the type of -- or the size of acquisition that you could consider today?

We know major acquisitions are off the table until next year.

Do I talk DuPont, the...

The alginate business.

Oh, yes.

Yes. And then thirdly, I mean, with apologies for this, I guess, vitamins, particularly vitamin E, it's not mentioned for a reason today, which we can understand.

But if you look at today's current spot price, is it a reasonable estimate to think the impact, 2018 versus 2017, is a low double-digit number, in that ballpark?

Tell me.

Okay. Do you want to start with one of ours?

Or...

You asked -- to the Brazil. In Brazil, there are 2 issues in Brazil.

The economy in general is not doing well, it's not helping us. And on top of that, Geraldine said early in the call, the meat scandal and even a second round, so to say.

So that didn't help either. So that resulted into less beef exports from Argentina -- from Brazil to other countries, especially China.

Some countries take that over, like Argentina, United States, et cetera, but we see also sometimes people switch to eating other type of animal proteins. That could also happen.

So it's very difficult to notice exactly what is happening here. We are very well positioned in Brazil.

There, we have a very strong market share, so if Brazil doesn't do well in its exports, we are not helped by that. At the end of the day, I think it is temporary.

I would be amazed if Brazil will not come back. The animal production in the -- in Brazil is pretty, pretty big, and I think they will get their act together and come back.

And then I'm glad again of the growth rates then of what we can achieve. Yes, DuPont alginate, yes, I understand, but let me not -- you anticipated that reaction, say on any specific business, we are interested or not interested, et cetera.

But like you said, at this moment we don't look to make acquisitions. And at a certain moment, that will come at our table, but let's cross that bridge by then.

Vitamin E, yes, we didn't discuss that so far in the call, and I want to keep it like that. No, no, no, I will answer.

Of course, vitamin E prices are lower at this moment again. And we benefited, to be honest, in the first half year and in the second half of 2016 from an increased price of vitamin E, which now again decreased, so we will not benefit from that in the second half of 2017, this year.

So yes, that will pressure our results. However, we gave the outlook as we gave, and that is also because we should not overestimate the impact of vitamin E in our total business.

I mean, it has a certain impact, but it has also certain limitations. And we said, we do not think that the prices are back again to what we call the so-called unsustainable level.

I think at this moment, they are too low, and so what we anticipate for the second half of 2017, I think, is too low. I think some people will really make losses.

But we said before, we can live with these levels. We make profit, less than maybe we could, but we make profit, and we feel okay.

And at a certain moment, it will bounce back. What you will see, I think, in the coming years, I think you will see some volatility, one half year, it is up, one half year, it is a little bit down.

We benefited in the first half year. We benefited in the second half year '16.

God knows about '18, whether it is again the second half year or whatever. But you see some volatility, but we can deal with that.

Geraldine, any things I said wrong?

Not at all.

The first question is on the Patheon -- or sorry, more specifically on your M&A ambitions, which I know has been touched upon on the call. Should we expect more opportunities on the Nutrition side or on the Performance Materials side?

Just thinking in terms of DSM's personal ambitions but also availability of assets or sort of interesting valuation? And then, just a quick one on FX.

You mentioned you'd hedged for Patheon, but I was wondering whether you could confirm that there's any hedges for the rest of the business. And if at all, any guidance on sort of potential FX impact for the year?

Yes, let me start with FX. Now we always do have some hedging, so maybe a quick recap in terms of the FX.

Broadly speaking, what we're seeing is that we've had a net somewhat positive impact in Q1 and Q2 around €10 million each, so that's about €20 million in H1. Now if I take -- and it's difficult to sort of recent exchange rates, let's call it, we probably will see an unwinding of that benefit with an overall position this year, broadly a net outcome.

But of course, it's very volatile out there and we have a bundle of currencies, so it's a bit difficult to read at this point. Now in terms of the hedging policy, as you may know, we hedge systematically 50% of our net exposures 1 year ahead, and that is something that we have continued to do, which has, as a purpose, to give a bit of a time to adjust to big fluctuations and dampen somewhat the FX impacts.

Yes, and on the big thing on the M&A to push us, do you want -- when do you get big acquisitions back again, is it the Nutrition and Materials? Yes, it could be all over the place.

Of course, we have a strategy, which is clear, and Nutrition is a much bigger business in the company. But let me not now to say it will be this or it will be that.

Let's cross that bridge later on. And what I've found interesting, 2 years ago, everybody asked, well, could you not -- you were busy with quite a portfolio change.

It's good that the company focused a little bit on organic growth and fully focused on own strengths and own programs. And I love the acquisition questions again.

But still, I think at this very moment, I have found it very healthy for the company, at least for the remainder of this year, and we will see out what we evolve next year, but that we focus on our own organic growth, our own effort to outpace the market's growth, our own cost-reduction programs and take care of very solid results of the company, growing solid results. And then, exactly like you say, the proceeds will come in.

They are hedged. And when that is there, we will see how we can acquire.

And I apologize that I won't allocate it yet to this business or that business.

Two remaining questions. The first one is -- well, actually, yes, 2, yes.

Can I get a bit more granularity on the strong Human Nutrition growth in terms of geography, in particular? I think you mentioned already a bit the U.S.

on i-Health and dietary, but if you can overall give us a bit of flavor on the big regions of Human Nutrition, that's question number one. And question number two, in innovation, I mean, clearly, the loss of a contract and the impact on margins, could you give us a bit of outlook on -- in terms of breakeven, does it -- did that change the overall?

I know it's very small, but we still have a progression of margins in that. So if you could comment a bit on how you see the development this year and next year in terms of innovation.

And maybe a last one. On the balance sheet hedges, the [indiscernible] any changes on the absolute amount of cash outflows forecasted in H2 with the U.S.

dollar strength?

Maybe let me start with the derivatives and the hedging. So probably worth highlighting that, indeed, given all the movements in exchange rate, the size of the hedge positions on the balance sheet has come down substantially.

It's around now about €50 million, whereas we started the year above €200 million in the hedge positions. And that probably leads to, broadly, a guidance on cash out of about €100 million.

By the way, year-to-date, we were at €16 million, but we do have some of the more long-term hedging positions crystallizing in the second half. So if you put in €100 million there, that should be about right.

Now the overall position on the innovation is that, indeed, we have had a contractual change there. But what we're seeing is that we remain in the positive territory for innovation and a move beyond the breakeven somewhat this year, so heading in the right direction but, as you said yourself, not a particularly big number for us.

And Feike, do you want to comment here on the [indiscernible]?

Yes, on the Innovation Center, a couple of activities. Basically, we are progressing with all.

We are progressing with our enzymes and yeast activities in bio-based. We are progressing with our solar activities very well and also growing with our Biomedical activities.

The latter is, by far, in sales, the biggest part of the total. You don't see that, because we lost a big contract in the ophthalmic area, was substantial in the sales but not so much in the EBITDA, so it did not hurt us too much.

And since the rest of the Biomedical business is growing double digit outside that contract, we can compensate. And basically, I'm happy with that reset more or less because, if you remember from the beginning, we had this contract -- I don't reveal the customer name, but -- and to the area, but in the past, we had also St.

Jude, which was important when we bought this business and built it. We had 2, 3 customers which were very dependent on -- in our total sales.

At this moment, we saw also the loos of these customers, the sales is much more spread about all kind of customers, which gives me a much more comfortable feeling not to be dependent on one. And this year, we are already breakeven with our innovation activities, and that should be a good start to make those to a real positive contributor into the profit of the company, and that is what we are working on.

And at the certain moment, we will give updates. Today, it's too early, about what we can expect from the Innovation Center, but I see this as a basis to have a profit contribution from that.

And I like that we are at least at breakeven, but I don't take that for granted at all.

Now Human Nutrition?

Human Nutrition, please?

Yes. Oh, and Human Nutrition, sorry.

Well, the growth was very strong in the U.S. Like I said, i-Health in the U.S., also omega-3, multivitamins.

We've been growing also very well globally in our what we call early life infant formula business. And in fact, all regions of the world are doing well, Europe, U.S.; for human health, also Latin America but smaller, and China.

So yes, basically all regions in the world grow well. And the omega in the U.S.

maybe, in particular, we see omega, multivitamin, i-Health, but also infant formula, globally.

Okay, then we run out of time, so we don't have any time for additional questions. Geraldine, do you want to make some closing remarks?

Yes, thanks, Dave. Well, firstly, thanks for your time, as usual, for the call.

In short, halfway through the strategy, we're well ahead of our targets. All businesses are delivering on their growth targets, and we're fully on track with our programs.

So as we've mentioned on the call, while being mindful of the volatile macroeconomic environments and the fact that we have high comps due to the good results since 2015, we are nonetheless confident to remain for the remainder of the year and, as a result, increased slightly our outlook for this full year. Now I'd like to once again draw your attention, I mentioned it briefly in the questions, to the last page of our press release, where you see the dates of our calendars, and we have an investor seminar on the 25th of September in -- partly in Delft and partly in The Hague in The Netherlands.

And I hope we will see many of you there to join us. Thanks, everybody.

Yes, 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 on the background information, please feel free to contact us. And with that, I hand back to the operator.