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COATINGS OF DSM

DSM Resins & Functional Materials

Highlights 2018

 Very good performance in functional materials business, 2% organic growth overall

 New applications for Niaga® launched with partners Auping and ECOR
 Sustainability efforts in developing waterborne coatings and inks recognized by
partners

DSM Resins & Functional Materials reported sales of €1,053 million in 2018 compared to
€1,045 million in 2017. DSM Resins & Functional Materials faced a gradual slow-down in
the building and construction markets in 2018, resulting in 2% organic growth for the year. In
the fourth quarter, we saw some destocking, especially in powder coating resins. Functional
Materials delivered another very good year, reflecting strong demand for these high-margin
materials used in data infrastructure.

We are a global leader in the development and production of waterborne, UV and powder
coating resins. These products offer clear sustainability advantages over solvent-borne resins
traditionally used in paints and coatings. In functional materials, we are the global leader in
fiber-optic coatings. In additive manufacturing (3D printing), we offer highly efficient and
effective prototyping technologies which help the industry accelerate the pace at which new
products are designed and brought to market.

Our fiber optics business grew significantly compared to the previous year, driven by the
continuing rapid expansion of fiber optic networks, while our packaging coatings and inks
business exhibited mid single-digit growth.

Together with our customers and value chain partners, we are helping to build a more
sustainable future. As legislation continues to drive down the use of harmful substances such
as volatile organic compounds (VOCs), our growth comes from anticipating changing end-
user preferences and offering innovative waterborne, powder and UV resins to replace
solvent-borne products. In addition, we aim to reduce our carbon footprint in all our own
activities, and in the raw materials we purchase. Our resins give our customers the
opportunity to develop safe and low-carbon footprint alternatives to mainstream solutions.
For example, we are developing circular economy alternatives to traditionally manufactured
carpets and mattresses to help combat the growing global problem of landfilling with our
Niaga® technology.

Niaga® carpet solutions have been extended beyond 100% polyester materials to create a
fully recyclable DUO carpet. The proprietary Niaga® adhesives enable separation of raw

Yangzhou HYropes Co., Ltd.

Room D1, Level 18, No 9, Hubin West Rd, Yi Li Mansion, Siming DC,
Xiamen, China
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materials into their separate material streams at the end of each useful life. Fifteen pilot
projects have been installed featuring Niaga® carpet and rug solutions throughout Europe.

Niaga® design philosophy is being applied to categories beyond carpet, as showcased in two
product collaborations. Together with Royal Auping, DSM-Niaga has redesigned mattresses
for circularity, with the first 100 mattresses under evaluation. DSM-Niaga and ECOR have
successfully produced laminated panels combining ECOR's cellulose fiber converting
technology and Niaga® adhesive and lamination tools. The first laminated panels for
furniture, desk and building applications were produced in the fourth quarter.

We intensified our focus on 3D printing in 2018 by establishing a dedicated business unit for
Additive Manufacturing, which includes stereolithography, digital light processing, fused
filament fabrication, selective laser sintering, multi-set fusion, ink jet and binder jet
processes. By combining these technologies, we are better able to harness the potential of this
fast-developing market.

The new Additive Manufacturing unit addresses four market segments — healthcare,
transportation, sports and lifestyle, and electronics — and cultivates partnerships with major
players in the value chain. In 2018, partnerships were announced with Ultimaker and
Chromatic 3D Materials, among other companies. We also launched a 100% recyclable
filament, which offers a unique combination of extreme flexibility and prolonged high-
temperature resistance for the 3D printing of demanding industrial and end-use applications.

In January 2018, we launched a special series of resins, Skins®, introducing a new element for
graphic and packaging design: touch. These resins enable a wide range of feel opportunities
for food and non-food packaging irrespective of the substrate — coated or uncoated paper,
board, plastics or aluminum. As such, these surfaces can be transformed into packaging that
gains sensory attention and positively affects consumer behavior.

In April 2018, we joined forces with Dynaplak to create a joint venture (DSM-Amulix) in
bio-based and biodegradable seed protection to develop the next generation of seed protection
coatings. Currently most seeds are covered with conventional non-degradable coating
systems which contribute to the growing problem of microplastics in the environment. DSM-
Amulix's seed coating solutions, by contrast, are safe, high-performing, and rapidly
biodegradable.

Driven by our strong sustainability focus, we developed our partnership with PPG Industries.
By integrating our plant-based resin platform Decovery® with PPG's proprietary technology,
we have helped to develop a paint that purifies indoor air and removes formaldehyde. In
2018, we extended the scope of our collaboration and further optimized this technology in
line with customer demands.

Yangzhou HYropes Co., Ltd.

Room D1, Level 18, No 9, Hubin West Rd, Yi Li Mansion, Siming DC,
Xiamen, China
www.hyropes.com.cn
sales@hyropes.com
Page 2 of 3
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Another key collaboration development in 2018 was our partnership with Hewlett-Packard.
We were chosen to develop next-generation waterborne digital printing inks and paperboard
because of our recognized sustainability agenda.

Meanwhile in China we saw the positive effects of the 'Blue Skies' policy initiative to
substitute solvent-borne coatings for waterborne coatings in sea container protection. Our
waterborne coating solution is unique as its corrosion resistance outperforms the current
solvent-based systems and reduces VOC emissions by almost 90%. Together with our partner
Sherwin Williams, we control a meaningful share of the container coating business in China.

Yangzhou HYropes Co., Ltd.

Room D1, Level 18, No 9, Hubin West Rd, Yi Li Mansion, Siming DC,
Xiamen, China
www.hyropes.com.cn
sales@hyropes.com
Page 3 of 3