Thank you, operator. Ladies and gentlemen, good morning, and welcome to this conference call on DSMs full-year 2018 results, which we published earlier this morning.

I am sitting here with Mr. Feike Sijbesma, CEO and Chairman of the DSM Managing Board; and Ms.

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. And in that regard, I would like to direct you to the disclaimers about forward-looking statements, as published in the press release.

And with that out of the way, Geraldine, it’s yours.

Thank you, Dave. Good morning, ladies and gentlemen.

I'm pleased to welcome you on this call on our DSM full year 2018 results. I will start by providing a few comments on the key slides in our investor presentation that we published this morning together with our press release, and then we will open the line for the Q&A session.

However, before starting, I would like to point out again that in order to provide as much transparency as possible, we have reported separately the estimated 2018 impact on our business of the exceptional supply disruption in some of the key vitamins, which began in November 2017, and resulted in an additional contribution to our performance in the first nine months of 2018. Therefore, what we refer 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, the split is, of course, not our usual way of reporting and thus require some estimates. Now lets start with the financial highlights for the year on Page 2.

We are pleased to report that 2018 is another record year for DSM, delivering once again on our strategic targets, and that is even when excluding the temporary vitamin effect. In our underlying business, we reported a 6% organic growth despite a very strong prior year, with all our businesses delivering above-market growth.

Adjusted EBITDA in the underlying business also increased by 6% to EUR 1.532 billion. This figure includes roughly EUR 60 million of negative foreign includes roughly EUR 60 million of negative foreign exchange effect, which means that, at constant currencies, the adjusted EBITDA growth was about 10%.

And this strong earnings performance resulted in a ROCE of 13.3%, up 100 basis points compared to 2017. Now looking at the total business, and I mean by this, the underlying business, plus the temporary vitamin effect.

The total adjusted EBITDA increased by 26% in 2018 to EUR 1.822 billion and the ROCE increased 450 basis points to 16.8%. Our strong results also resulted in a 40% increase in cash from operating activities.

Now let me pause here. Although I fully realize that there's some further interesting bullets on this slide, which I promise I'll come back to later in this introduction, but let's first comment on the fourth quarter results.

And for this, let's move to Page 3. As indicated in this slide, we had a robust Q4, particularly when seen against the 12% organic growth achieved in the same quarter last year.

Regarding the temporary vitamin effect, the benefit in 2018 ended in the third quarter. But please remember that the supply disruptions began in November 2017.

Therefore, when correctly comparing Q4 2018 to prior year, the reported organic growth of 1% for Q4 2018 in Nutrition increases to an underlying organic growth of 4%. This also applies to the adjusted EBITDA.

Q4 2018 EBITDA for the group was up 3% against Q4 2017. But when taking into account the temporary vitamin effect in 2017, the adjusted Q4 2018 EBITDA for the growth actually increased 8% and for Nutrition by 7%.

It is also important to highlight that in the final quarter, material reported a solid result, especially given the relative softness in some of the end markets. Now looking at the performance of each business, let's go to Page 7 for Nutrition.

On this slide, just as a reminder, you can see in the middle table the total temporary vitamin effect for 2018 estimated at EUR 415 million in additional sales with a corresponding adjusted EBITDA of EUR 290 million. These figures are unchanged since the end of the third quarter.

And as mentioned earlier, given that these supply disruptions actually began in Q4 2017, there was already a benefit in that quarter estimated at a EUR 40 million in sales and EUR 15 million in adjusted EBITDA. All in Animal Nutrition and predominantly a volume effect.

In our press release and in this presentation, when explaining the sales and the adjusted EBITDA growth in total Nutrition and Animal Nutrition, we have made comparisons versus the reported Q4 2017 figures as well as provided the figures adjusted for this temporary vitamin effect in Q4 2017. Having clarified this, we can now move to Page 9 for the Nutrition business developments.

Nutrition delivered another good quarter with a reported 1% organic growth in the underlying business. However, when adjusted for the estimated EUR 40 million temporary vitamin effect in Q4 2017 that I just mentioned, the organic sales growth would have been 4%, with volumes up 3% and price 1% despite a strong organic sales growth in the prior year.

In Q4 2018, the cluster reported a 1% growth in adjusted EBITDA and an adjusted EBITDA margin of 18.7%. When corrected for the estimated EUR 15 million temporary vitamin effect in Q4 2017, the adjusted EBITDA growth would have been 7%.

Overall, 2018 was again a very successful year in which the underlying Nutrition business delivered a 7% organic growth while the adjusted EBITDA was up 6% against a very strong prior year and despite negative FX. At constant currencies, the adjusted EBITDA of the underlying business of Nutrition was up about 10% in 2018.

Now looking more specifically at Animal and Human Nutrition, let's first move to Page 11. In the fourth quarter, Animal Nutrition continued to see good business conditions in all regions.

Although the African swine flu swine flu affected some parts of China and Eastern Europe, our broad geographical spread and our product reach across a diverse variety of species enabled us to largely mitigate this effect, highlighting the resilience of our integrated business model. On a reported basis, Animal Nutrition saw a 2% organic decline in sales, with the currencies having an additional 2% negative impact.

However, adjusting for the EUR 40 million temporary vitamin effect in the prior year comparable period, organic sales growth would have been 3%, led by volumes, a very satisfactory result given the 7% volume growth achieved in Q4 2017. When looking at the full year 2018, Animal Nutrition delivered a strong year with 8% organic growth in the underlying business, supported by favorable business conditions in almost all regions.

Volumes showed a 4% growth, achieved against a tough prior year. And prices in the underlying business increased 4%, driven by pricing initiatives to mitigate higher cost in sourced ingredients and the impact of negative FX development.

Furthermore, prices were supported by the effects of the Blue Sky Policies in China. Now let's move to Page 12 to look at Human Nutrition.

Human Nutrition delivered another good quarter, broadly in line with the previous nine months. Volumes during the fourth quarter increased by 3% with prices up also 3%.

All regions contributed to our volume gains in the fourth quarter with a strong performance in dietary supplements, i-Health and Pharma. Early Life Nutrition and Food & Beverages maintained their solid performance, with premix solutions doing well across all segments.

In 2018, Human Nutrition delivered a strong year with 7% organic growth, which is clearly above market, including a 4% volume growth. All regions and segments performed well.

Prices were up 3% in 2018, driven by a combination of favorable mix due to strong growth in the premix solutions and i-Health as well as benefits from higher prices in premix and advanced formulations, supported by the effects of the Blue Sky Policies in China. Now for our Materials business, let's move to Page 14.

Materials delivered fourth quarter sales in line with prior year with a positive 3% price effect, largely from pricing initiatives to mitigate higher input costs, offset by a 3% volume decline. The lower volumes were mainly in our resins business due to the gradual slowdown in the building and construction markets in 2018, and this was exacerbated by end-of-year destocking in Engineering Plastics and resins.

Adjusted EBITDA for the fourth quarter closed at EUR 119 million, which is in line with prior year and a good performance given the general softness in automotive, building and construction as well as in electronics. This result was supported by business conditions in most of our other end markets that remained good.

For the full year, Materials reported a 5% organic growth and an adjusted EBITDA up 5% as well, driven by good volume growth and DSM continuing to shift towards specialty portfolio and this despite negative foreign exchange effect. Finally, the adjusted EBITDA margin increased, reaching 17.6% compared with 70.3% in 2017.

Now moving to Page 17 for a couple of quick comments on cash flow and working capital. Cash flow from operating activities amounted to EUR 1.391 billion an increase of 395 million or 40% compared to 2017.

This of course partly reflects the result of the temporary vitamin effect, although the underlying business also delivered a higher cash generation this year of EUR 1.126 billion. Average total working capital as a percentage of sales was slightly up at 18.7% from 18.4% in 2017 partly due to the temporary vitamin effect.

This percentage is well below the aspired 20% per our Strategy 2018. Within this, Nutrition continued to make good progress.

As you may recall, at the start of our Strategy 2018 period, back in November 2015, I presented a slide with total working capital to sales in Nutrition at 31% and OWC to sale at 34%. Since then, we've indeed made good progress, although we recognize that there is still more to be done.

Net debt closed at EUR 113 million, down from EUR 740 million at the end of 2017. Net debt was positively impacted by the strong EBITDA this year as well as the monetizing of our associates with the divestments of DSM Sinochem Pharmaceutical and Fibrant.

Now please turn to Slide 22 for some comments on our outlook. Business conditions in Nutrition are good, both in Animal and in Human Nutrition as well as across all regions and business segments.

We are, therefore, very confident that we can deliver upon all the targets and ambitions that we have set ourselves for Nutrition as communicated in our Strategy 2021. In Materials, at this moment, we have to be a bit more cautious, however, given the conditions in some of the end markets.

Having said that, we nowadays have a far more resilient portfolio and feel comfortable that we have the ability to drive some earnings growth in 2019 in Materials as well. As a result, our outlook for 2019 reads: DSM expects to deliver a full-year 2019 mid-to-high single digit increase in adjusted EBITDA compared to prior year underlying adjusted EBITDA, pre-temp vitamin effect, and we mean, therefore, here the EUR 1.532 billion of EBITDA together with an improvement in underlying adjusted net operating free cash flow in line with the Strategy 2021 targets.

Last but not least, this guidance does not include the impact of IFRS 16. The recognition of leases as of the January 01, 2019, will result in an estimated EUR 45 million additional adjusted EBITDA on an annual basis.

In addition, the impact on ROCE is estimated to be about a 30 basis points impact given the balance sheet increase. Finally, to conclude on Page 23, a few words on our share buyback program.

Highlighting our confidence, the confidence that we have in our future earnings and cash flow generation and given the strength of our balance sheet, we are pleased to announce our intended – that we intend to repurchase ordinary shares with an aggregate market value of EUR 1 billion starting in Q2 2019 with the intention to reduce our issued capital. This will be in addition to the usual repurchase programs, which DSM executes from time to time to cover commitments under share-based payment compensation plans and the stock dividend.

This program is estimated to run well into the first half of 2020. And with this, I would like to give the floor for questions.

Operator.

Thanks for the presentation Geraldine. Two question if I may.

The first is with regards to the deal that you've done with Cargill. Could you explain a little bit about what that will mean for the route to market for your fermentative Stevia product?

And just to explore a little bit more that kind of guidance, just to confirm, you're saying growth. Should we think what low single-digit growth for Materials in 2019?

And perhaps you can give us a little bit of color as to why you think you can grow that business. More granularity there would be very helpful.

Thank you.

Thank you Thomas. Thank you for your questions.

Maybe Feike, you want to take the first one?

Yes. What we did, we already, a few years ago, embarked on this new sweetener or sugar replacer called Stevia.

It is one of the few or maybe the only real natural -- coming nature-identical product. Now Stevia is only coming from plant extracts, which makes a irregular supply and maybe also expensive.

And maybe the volumes are also not big enough to make Stevia really big. You need to ferment it.

There's several forms for that, so-called Reb M, Reb A, et cetera. We now have the right form of it.

Cargill was also working on this with a little bit complementary position. At the end of the day, we joined forces together.

And I think, together, we are a pretty strong player into this. They can also bring in their manufacturing facilities.

We combine the technologies. So we will not go separate to the market.

We will use same sort of sales organizations. They will take a few more of the bigger beverage companies, which they address.

We will take some flavor and fragrance companies and all that stuff. So we use all the sales arms to find the right customers.

But the profit is shared 50/50 between the two of us, and that we – is the way forward. We need to see, of course, how the adoption rate is with the big players, how fast they will go.

And at these two markets, we are entering – it is the light or the diet market, which we enter. But we enter also the sugar market itself, so the sugar-enriched products, which might reduce the sugar compound and mix it with Stevia.

So I have good hopes. And I think the teaming up with Cargill makes a strong group.

And maybe, Geraldine, on the gross, or me, or what? Yes, go ahead.

Well, let me first give a clarification, and then we can hear how we complement the answer. So indeed, we are – if you look at our outlook, we're going for mid to high single-digit EBITDA growth.

We're very comfortable and confident with our Nutrition business all, as I tried to say in my introductory comments, the business conditions are good pretty much across-the-board. So that is all fine now.

When it comes to Materials, we are, of course, a little more cautious there given the macro conditions out there. But we do believe that we can grow the business because we're not – they are part of the portfolio, which are still very resilient right now, and we have a lot more specialties than we ever had in the past.

And so that's why we're are just nuancing a bit our outlook for the year. But I don't know if you want to add something, Feike.

No, I totally agree with Geraldine. Overall, the company will continue to grow in line with strategy.

Nutrition, okay. And then like Geraldine said, if you look to Materials, Dyneema and all those applications, they do very fine, not so much affected by the economic climates.

And of course, some automotive applications, et cetera, are – so of course, Materials will see more headwinds than we see, of course, in Nutrition. That's logical.

But I think, overall, the company is on track.

Okay. Thank you both very much.

Thanks Tom.

Yes, good morning, Feike, Geraldine. Two for me, please.

Firstly, with regards to the growth in Nutrition EBITDA, can you possibly provide some shape and size of the contribution of the recently announced acquisition and the full consolidation of Andre Pectin. That's the first one.

And secondly, on the dividend and buyback and capital allocation, do you still intend to offer the stock dividend? It seems that you do.

I'm just wondering what the rationale for that is. Thank you.

Okay. Maybe I start with the acquisition, then Geraldine with dividend and buyback.

Two acquisitions both in the Nutrition area, as we also said in our strategy, we will predominantly do the acquisitions in the nutrition space, most in China, providing us not only market access to China, but also strong competitive position for exports out of China, one in the vitamin space, vitamin E. I expect this to close Q2, Q3, and then we need to take some measures there to get it fully up to our standards, as we indicated.

So I would not take any of this, of course, not in the first half year because we don't own it then, maybe we own it someway in Q3 and maybe even a slight negative in this year. And so the contribution starts in 2020 for the vitamin E acquisition.

And it provides us continuous growth in vitamin E, and we use that vitamin E to put it into our premix. That need is there because we see our business growing very well.

So we didn't took any profits of this into our outlook and forecast, I would not do that. The other one in the pectin area, Andre Pectin, I hope we can close this Q1, Q2.

I would say that we're careful putting the profit in there this year because we still need first to definitely acquire in China. But of course, this is profitable business and might contribute somewhat in the second half year.

But per quarter, I think I need to calculate quickly, but there's a couple of millions in a quarter. So I will be careful putting this in.

But both, of course, will help to further growth also in 2020.

And Neil, to your question on the stock dividends, indeed, we will continue. The reason for that is that there seems to be a demand.

So it's entirely optional. And every year, we tend to hear, well, we don't want this.

And then when people – well, our investors, the truth is, still about 40% that is requested in whole. But please remember that we buy back for that, so it's effectively neutral.

It's just a different way of delivering the dividend.

Very helpful. Thank you.

Good morning. Two quick ones.

What's – can you give us an update on trends in the savory market? And secondly, will the commercialization of the omega-3s be material in 2019 or 2020?

And you mean with the omega-3 into the Veramaris?

The joint venture.

Yes. Right, right.

Savory markets, trends remained positive. And last year, we have been struggling a little bit, as you saw also in our reportings over the year.

With some of the capacities, I think that is okay at this moment. So I expect that in Food Specialties, on savory, we continue to pick up and continue to grow in 2019.

And I think we have a broad range of all kind of savory flavorings, flavoring solutions here. On the omega-3 for the fishing industry, the factory which we're building together with Evonik, I think is running very fine, both financially.

We are on budget also on timing. So expect this to be commissioned somewhere in the second half of 2019.

I will be careful putting in a lot of profit on this one in 2019, but I hope it starts to contribute in 2020. The investment program is running very fine, and I need to say also that the interest of the market is – we are not selling yet, so I cannot call it strong.

But the interest is pretty much okay, so I hope we see good start of this in 2020. But the factory will somewhere in the second half start-up.

And the product I referred to in the – that you're already selling to for salmon feed, where is that being sourced from?

That is being sourced from our Kingstree site, so we are able to make already some – it's more than pilot material because this is a technology actually that we were – we have been applying for Infant Nutrition for many years. And through the capacities at that site, we've been able to build the market, test it all out.

The salmon like it, and the salmon tastes good and the whole chain. So that's being – in that sense, a great project because we don't always have the privilege to do that.

And to Feike's comments, that give us a very strong confidence that the demand is there. And that once our operations at scale are running, that's – the sales should be in line with our hopes and expectations.

Thank you.

All those – I appreciate the questions on Stevia, and now on Veramaris. The third question might be coming on Clean Cow.

Also that is running. We need to wait for the final approvals in the course of 2019, but it looks all okay.

And what I'm very pleased is that we see continued growth in our Nutrition business, as we indicated in our outlook in 2019. But I've looked to 2020 and 2021, and also those big innovation projects should contribute.

And I feel very positive on Stevia, on Veramaris, on Clean Cow, continued contribution from 2020 onwards. So I'm pleased with that.

Yes, thank you. First, on your share buyback.

What is the rationale to announce it today? At your Capital Markets Day, you said that you could – would consider doing a share buyback at the end of your mid-term planning horizon in case you do not find a value-enhancing target.

Why do you throw in the towel already today? The second question is on the delta between the adjusted EBIT and the reported EBIT in Q4, which is nearly EUR 15 million.

And can you elaborate on that and differentiate between what was restructuring costs and what were write-downs in terms of impairments? Because I saw in your press release that there were some impairments in the Nutrition segment.

And in connection with that, maybe you can help me what you expect on this delta between adjusted and reported EBIT in 2019. And finally, just a small question on the Innovation Center.

Quite nice beat on EBITDA. And I understand you had an impact from the collaboration and license agreement with Aerie Pharmaceuticals.

Can you quantify that effect? Thank you.

Okay. Well, let me maybe start with the reporting one.

So indeed, you see a gap between adjusted EBIT and EBIT, which picks up, amongst other, an impairment relating to the creation of the joint venture with Cargill. So when we created the joint venture both sides, I look at what they were going to contribute into the joint venture, including capitalized R&D.

And we did the same and some went into the joint venture, and the rest, we decided to impair. And that is in the order of about EUR 15 million-ish.

The rest of – is really a sum of small things though, so not much to flag there. So that's the gap between the two.

Now, of course, it's virtually impossible for me to give you a guidance on the gap going forward because by definition, the things that fall under APMs are somewhat unexpected or unusual. Now we do have some programs, so what you see in – when we run Darwin, The Darwin costs have come pretty much on track, which, by the way, is maybe a nice thing to highlight as well right here.

So we achieved the savings of EUR 275 million versus the baseline of 2014. All on track and the cost came in as guided at about EUR 250 million.

Now going forward, we don't have major structural programs, but of course, we keep working on our cost base. This is how we can manage to handle inflation going forward.

And as we've mentioned also in previous calls, we're running some customer-centricity programs in all of our businesses to maintain and boost our organic growth path. So you can expect some costs on that line, but we're not looking at anything meaningful to flag at this stage.

Yes. And maybe on the share buyback – the towel is fully in our hands to drop off the sweat of our hard work, and we need to towel ourselves.

And it is, for sure, not in the ring, to make that clear. And listen, what we said in mid-2018, we will consider share buybacks when we have the room or excess cash, and that is just running in a prudent way our balance sheet.

We just announced, or as we discussed the last couple of weeks, two acquisitions. We will continue to be active on the acquisition front.

We will do the acquisitions always in a prudent way. We will be cautious not to overpay.

We do it in the area we want to do it, like predominantly in Nutrition. And we will continue to be active.

If we look at our own cash generation, if we look to the developments of our own profits together with our outlook, if we look to the developments in 2020, 2021 with the big Innovation projects, we believe that we can keep ample, sufficient room for acquisitions whilst doing also share buyback and confirming the increase of dividend of 25%. So we believe this is a prudent way to manage our balance sheet and manage the way we are leveraged whilst fully maintaining and retaining financial flexibility on our balance sheet to do acquisitions.

So I think it is more an and-and strategy than an either/or strategy, which we choose at this moment. And then do we understand all has to do with the confidence that we have in cash generation and continued growth in the coming year, years.

And maybe then on the Innovation Center?

Yes. So Innovation Center, yes, you're picking up here the collaboration and license agreement that we have with Aerie Pharmaceuticals.

We mentioned that we're very happy with that in the Q3 announcement. Now in terms of the results this year, I believe we are around the 5-ish, but I don't have the exact number at hand.

But it's a very exciting collaboration looking at how we can have the polymers loaded with an API for long-term eye treatment, and that is a really nice piece of collaboration going forward.

Thank you.

Good morning. So first, I have a question on the 25% appreciation of Nenter's vitamin E operations.

So if I am not mistaken, there was like 20 Kt of production capacity. And with this acquisition, I think your global market share on vitamin E will also be very high, above 40%.

So do you expect to face any antitrust issues in this transaction or any problems in this regard? And secondly, can you give us a little bit of guidance on the cost curve of this vitamin E production route?

So now you're backward integrated into farnesene, so you bought it from Amyris in your – in the acquisition in Brazil. So is this production cost much lower than your current production process in Switzerland?

And so that's my first question, a little long, sorry. And then secondly, on Materials.

So we have been seeing – so the general basket of chemical basic raw materials going down. What are your expectations for next year?

Is this also partly helping the guidance in Materials? What you're saying that you still expect earnings growth?

Is this also because you're seeing raw material prices now going down? And regarding pricing, do you expect some more positive pricing in the first half of the year with the delay effects from higher raw material cost in 2018?

Thank you.

Maybe on the Nenter, I would like to be a little bit careful on sharing all the different details and granularity, although I fully understand that you are looking for that. On how much capacity we have today ourselves and how much capacity and/or production Nenter has, it could also be that – I mean, they have announced what kind of capacity they have.

I think they have never announced how much sales they have off that capacity. And since we do not own the company yet – and by the way, it will be always, like we indicated, a joint venture where we have the majority.

I would like to be careful to speak on behalf of them about capacity and sales. But you're right.

Now let me look to the strategic rationale. We are leader in vitamin E, especially for Animal Health.

We want to continue to be leader in that area. We see continued growth in that field, especially with us.

Especially in the premixes, not so much in selling the straights, and towards the future, we see an extra need from our site for vitamin E to put it in our premixes. And therefore, we have done this deal.

Like you said, it fits, of course, because we need capacity. It fits because we're already providing the raw materials to farnesene.

It fits because it is cost effective in China position, and I won't go exactly whether they are costly compared with our cost position in Switzerland, et cetera. But of course, we do not buy a facility which is not competitive.

Of course, we buy a very competitive facility. Since this is mainly for our growth in the premixes, I expect no antitrust issues.

But to be honest, we need to get all the different regulatory approvals. So I will just await that.

But that is the way we look to it. We continue with this, our leadership position.

On the – maybe Geraldine can add, but on the Materials business, I think our guidance for the year has not so much to do with speculation on raw materials, I think. It's more to do that we hope that we can keep margins and grow somewhat, maybe a little bit more in the second half year than in the first half year.

But overall, I think our materials will show some resilience against the economic climate out there. And it has to do, what Geraldine said before, with the profile of our products, but I don't know what we put in for the raw materials.

Geraldine?

No, I mean what we can say is that if you look back at the last two, three, four years, our portfolio has become increasingly specialty. And while you may always have a bit of a time delay, we've been able to reflect.

When the input cost were going up, we were able to price it. And so we don't really draw out the business as much anymore, to be fair, on big input cost movements.

It's much more specialty-driven. And if anything, we think that the earnings growth we can deliver in 2019 is a volume growth rather than a price delta.

Thank you so much.

Good morning, all. I'd like to come back to the buyback decision, and I certainly wouldn't characterize it as throwing in the towel.

I would characterize it as a recognition of delivering shareholder value, so congratulations on that. I'm just curious to understand how you arrived at the EUR 1 billion size.

What the thought process was behind that? That's the first question.

Second question, on Materials, you've highlighted that the volume impact in Q4 is due to both the end markets slowing and destocking. Please, could you provide us with the split on that?

And then finally, Feike, thank you for preempting the question on Clean Cow, but I'm now going to spoil your party by asking a question about Niaga and how that's going. Thank you.

All right.

Even better, we got all four.

Maybe I'll start with the last one, indeed. Next to the Clean Cow, the Veramaris, the Stevia, we have the Niaga, the fully recyclable carpets.

And we are working also on applications, we made some announcements already about that on applications beyond carpets. So we see quite a bit of interest.

Again, also, I don't expect this will contribute to our profit in 2019. But also, again, for 2021, the interest in Niaga is, I don't want to say overwhelming, but the interest is very, very strong even beyond carpet.

So this can become very big. We are working on that right now, but I will be careful on 2019.

But it indicates it has also to do with the questions about share buyback and those kind of things. It indicates a little bit on, yes, the trust we have on the continued growth of our company.

Geraldine can say something about the exact science behind the choice of EUR 1 billion, most likely about the end markets, indeed, like you indicate in Materials. Some of the end markets are soft also in Q3, Q4.

If I take automotive, I take some of D&A applications, especially also in China. We need to see that.

I think two effects were there. One is, of course, the U.S.-Chinese trade, which created the situation of less export from China.

But the other one in China also, automotive, was a domestic consumption, and also because of the reduction of loan facilities for, let's say, ordinary people in China, which also give an impact. So we see clearly in some of the applications in Materials, those movements, like I said.

In some of the other applications, we see continued growth in Dyneema, some of the other Engineering Plastic applications holding very well. So it's a mixed picture.

And maybe stronger in the second half than in the first half, but overall, still okay-ish. You raised a good point, which you might see some movements of the quarter.

Always, in my experience also with the past, in these kind of circumstances, you see people getting nervous in the beginning and then they destock, and then maybe the nervous people on how they need to restock. So you might see some destocking-restocking effects over the year, and that might influence a little bit the quarters.

And we try to give you, as much as possible, insights with that because you should always be careful not to mislead yourself by destocking neither restocking events. And they might happen in the year.

Now I don't know yet what will happen, but we try to get as good as possible a feeling for that, and it's a good point. Now, Geraldine, the exact science behind the number, EUR 1 billion.

Yes. I may shock everyone on the call, but I think it's a little more art than science, to be honest, the EUR 1 billion.

So – and I appreciate your comments. The mindset is very much about having a balanced approach to shareholder value.

We've always said we would be disciplined in the way that we deploy capital. And if we look at the strength of the balance sheet now, we believe that EUR 1 billion is a meaningful contribution to shareholder value without reducing the flexibility that we have to invest in growth.

And this is investing in growth both in terms of organic CapEx, which, by the way, the question didn't come. But in terms of expectations, you should see us continue to invest in our business and broadly, maybe a little bit more investment than in 2018 where we closed at EUR 646 million, but also with an inorganic investment.

So looking at the balance sheet, where the strength of the balance sheet came from and all of these parameters, we felt that EUR 1 billion was a good number.

Okay. And then just to, I guess, preempt any further questions on that.

Without prejudicing the growth pipeline in terms of inorganic acquisitions, do you expect that this review of the balance sheet will become an annual event for you and that this idea of looking at buyback as a way of managing the balance sheet becomes a regular feature?

Well, I think it's a little early really to do that. So consider that as something that we would do on a regular basis.

I think from a philosophy, we will continue to make sure that we create a balanced approach to our share value – our shareholder value-creation. But indeed, it's – we're just kicking off this one, and we'll see how things pan out going forward.

Okay. Thank you.

Hi, good morning. Thanks for taking.

A few questions, which will be pretty brief. First, looking at Q4 numbers, could you help us quantify with the African flu impact on the volumes in Animal Nutrition minus three, if you could?

And also the outlook of that at the start of the year, why do you think will – how quickly can we reverse there? The second, same topic on volumes.

Could you quantify a bit the negative impact of O2 and electronics in Q4 on the volumes of materials? That will be helpful.

So that's looking at Q4. And looking forward, the – could you comment on balance sheet expectation in 2019?

And also that your comment on Stevia, I think you said satisfactory introduction. Does it mean that you get some results of the year to test you were actually running last year?

And if you can share with that the outcome of those. And finally, a very quick one on vitamin A.

Vitamin A prices are still pretty high going into 2019. And you – in Q4, you had no impact of that.

Is that a fair assumption that you don't expect anything at all also on the vitamin A, specifically in 2019? Thanks.

All right. Thanks for your three questions.

I'll do the second part, but no problem. Maybe address a few…

I can – I'll kick off with the swine flu. Hi, Patrick, by the way.\

Hi.

So the African swine flu had a relatively small impact in Q4. I mean, I think it's around EUR 5 million, EUR 10 million for the quarter.

Now I think what is very important is to realize that given that we have good coverage or very good coverage geographically and across species, what we're seeing happen is that the shortfall in pork in China is being partly offset by more imports, which, of course, we have a good geographical spread, so we can play there, an important mitigating card. And the other is that when people don't trust the pork, they tend to switch to another meat, and that is poultry, where we are traditionally very strong.

So for Q4, a pretty limited impact. Now the development at the start of this year is that this is gaining in scale, unfortunately, in China with quite a bit of culling.

And so we may see a bit of an impact – sorry, my voice is breaking up, in Q1. With the mitigation, we'll have to see the exact timing of that.

So we don't have it quantified, but it's something that we keep an eye on. Having said that, we feel we have – the strength of our business model is to be able to react to this.

And if I look at – if I zoom out of it, these things happen from time to time. And what we also know is that after a reduction in heads of animals, then there's a recovery, and that tends to lead to then an acceleration as well.

So it's not something that we're overly nervous about. We just need to see how it falls over the next weeks and maybe a couple of quarters.

Yes. And to add to that, the swing in Q4 that you say Animal Health was not performing well was especially to a non-normalized 2017.

Correct.

And if you correct for that, the growth was pretty much there in Animal Health and nothing to do with swine flu. But I agree.

The automotive and D&A, we have to give more granularity, I would not go there. But it's especially, of course, in some of our resins business and some of our Engineering Plastic business.

Of course, we saw the effects, especially in China in Q3, Q4. I need to be careful about the quantification of the effects also into 2019.

Basically, I want to wait until the Chinese New Year is over that is right now. And now we can see how that picks up.

So I hope to give you more insights in that in – when we publish Q1 results. But once again, Materials will be affected by the economic climate, but I don't think hugely, but it will be affected.

On Stevia, satisfactory. Well, the most important are two things, maybe three things for the customers is the reliable supplier.

They will never go big scale if they're not a big reliable supplier. Now the combination DSM and Cargill is a very big reliable supplier, I think.

The second one is the taste profile okay, that's maybe the first one by the way. And especially with our Reb M position, I think we have the right product.

The third one is, can we supply at the right cost level for them to introduce that on big scale. And I think we are addressing all three with our joint venture.

So now we need to be in discussion with the big users to make that switch. So always careful considerations because this switch for them could be huge, and it will not take overnight decisions here.

As you can imagine, we don't talk to big beverage companies about small stuff here. On the vitamin prices, what we did is we took the outage of one of our competitors in some of the vitamin products mainly used for Animal Health.

Now can I be more specific on who it was? And we took that as a guidance of the special vitamin effect.

Since everybody is back in the market, which is there, we see normal vitamin prices fluctuation. One is high, one is low, one is moving up, one is moving down.

And we have so many vitamins, and we sell it so much not on the spot market but via premixes, forms, et cetera, that there will always be some movements. And I don't want to go too much specific, and this one is up, this ones, and this one is down, that one, et cetera.

I think, overall, we are managing that. And the broadness of our geographical presence, the broadness of species, the broadness of full products we are in and especially via premix and forms make it a pretty resilient business.

Indeed, some will be high, some will be low, but for me, there is not any temp effect anymore because everybody is back in the market. And then the last thing is balance sheet, Geraldine.

Balance – yes, balance sheet. So thank you for mentioning yet another of our great innovation that is hitting the market right now.

We don't actually provide a split out of how much it is, but it is clearly very attractive to the customers. It's introducing basically eubiotics, probiotics in the animal feed space and helping increase in that sense the effective digestion of feed.

So a very nice Innovation, but we won't split out the exact impact other that it's got very good traction. And of course, this is a collaboration with Novozymes that's been going on for many years, and we're very excited to bring this new generation of feeds ingredients to the market.

And with that, we're running out of Q&A time. We have 1 minute left until 10:00.

So maybe Geraldine, a few quick closing remarks.

Yes, really quick, because I know you – it's a very busy morning for everyone. So thanks, Dave.

So again, a record year for us. We very successfully completed the three-year strategy 2016-2018 period, ticking off all the boxes and some more.

We're generally positive about the business conditions going forward in 2019, of course, particularly in Nutrition with a little reservation on Materials, but we see how we go. And as a show of confidence, not as a show of we're throwing in the towel, we're really happy that we're able to announce a share buyback today as well in addition to retaining financial flexibility to grow.

And with that, I hand back to you.

Yes. Thank you, Geraldine.

Thank you also, Feike. This concludes our conference call for today.

Thank you very much for your attention and your questions. And as always, please don't hesitate to reach out to the Investor Relations.

And with that, operator, you can close the call.