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Hitt og þetta 26. júlí 2007

DSM reports good second quarter and raises 2007 outlook

* Organic growth of 5% in Q2 2007 due to higher volumes (2%) and prices (3%). * Operating profit from continuing operations 3% lower than in Q2 2006, substantially impacted by currency exchange rates. * Earnings per share before exceptional items increased by 8%. * Conclusions of Vision 2010 mid-term evaluation to be presented at the September Analysts' Conference. * Outlook: full-year 2007 operating profit now expected to be EUR 790 million +/-3% (versus EUR 760 million +/- 5% indicated in Q1 report). Feike Sijbesma, Chairman of the DSM Managing Board, gave the following comment on the results: 'This has been a good second quarter for DSM, benefiting from higher volumes and increased prices. Looking ahead to the remainder of the year, our expectations are that these trading conditions will continue, enabling us to raise our full-year guidance for 2007 today.' second quarter in EUR million first half 2007 2006 +/- 2007 2006 +/- Continuing operations: 2,198 2,126 3% Net sales 4,344 4,187 4% 331 342 -3% Operating profit plus depreciation 626 656 -5% & amortization (EBITDA) 227 234 -3% Operating profit (EBIT) 419 440 -5% 65 87 -25% - Nutrition 126 169 -25% 30 14 114% - Pharma 40 29 38% 84 88 -5% - Performance Materials 168 172 -2% 66 53 25% - Industrial Chemicals 116 93 25% -18 -8 - Other activities -31 -23 Total DSM: 2,198 2,132 3% Net sales 4,344 4,200 3% 227 234 -3% Operating profit (EBIT) 419 439 -5% 158 152 4% Net profit before exceptional items 286 292 -2% -111 5 Net result from exceptional items -111 26 47 157 -70% Net profit 175 318 -45% Net earnings per share in EUR: 0.85 0.79 - before exceptional items 1.52 1.50 0.24 0.81 - including exceptional items 0.92 1.64 In this report: * 'operating profit' (plus depreciation and amortization) is understood to be operating profit (plus depreciation and amortization) before exceptional items. * 'net profit' is the net profit attributable to equity holders of Royal DSM N.V. Net sales in EUR million second quarter 2007 2006 differ-ence vol-umes prices exch. other rates Nutrition 630 612 3% 8% -2% -3% 0% Pharma 250 233 7% 1% 9% -2% -1% Performance 738 698 6% 3% 4% -1% 0% Materials Industrial 484 480 1% -3% 8% -4% 0% Chemicals Other activities 96 103 Total, continuing 2,198 2,126 3% 2% 3% -2% 0% operations Net sales from continuing operations in Q2 2007 were up 3% from Q2 2006 due to organic volume growth and higher selling prices. The effect of exchange-rate developments on DSM's net sales was 2% negative. The US dollar was on average 7% lower against the euro and the Japanese yen 13%. Sales volumes in Performance Materials and Industrial Chemicals were negatively affected by an unplanned outage of the European caprolactam plant. Operating profit Q2 operating profit from continuing operations amounted to EUR 227 million, 3% less than in Q2 2006. The change in operating profit was the result of a number of developments, which in total almost offset one another. On the one hand there were the unfavorable general issues mentioned earlier this year: the development of currency exchange rates had an adverse effect of EUR 20 million (after hedging); fixed costs increased, mainly because of the intensified innovation effort; and the phasing-out of contracts related to the Roche Vitamins acquisition had an effect of almost EUR 10 million. In addition to this there was an unplanned outage of the European caprolactam plant, which caused production and sales losses not only at DSM Fibre Intermediates, but also in DSM Engineering Plastics' nylon business. In total this had an effect of some EUR 10 million. On the other hand these unfavorable developments were almost compensated for by strong underlying trading conditions. Nutrition showed a strong increase in volumes and market share, while price pressure eased somewhat. In Pharma, DSM Anti-Infectives profited from a sudden and strong increase in prices of penicillin and penicillin-related products. Performance Materials was able to increase volumes and prices. In Industrial Chemicals the selling price increase was clearly higher than the increase in feedstock and energy prices. Business review Nutrition +-------------------------------------------------------------------+ | second quarter | | in EUR million | first half | |----------------+---+--------------------------+-------------------| | 2007 | 2006 | | | | 2007 | 2006 | |--------+-------+---+--------------------------+---+-------+-------| | | | | | | | | |--------+-------+---+--------------------------+---+-------+-------| | 630 | 612 | | Net sales | | 1,243 | 1,225 | |--------+-------+---+--------------------------+---+-------+-------| | 100 | 124 | | Operating profit plus | | 196 | 243 | | | | | depreciation and | | | | |--------+-------+---+--------------------------+---+-------+-------| | | | | amortization | | | | |--------+-------+---+--------------------------+---+-------+-------| | 65 | 87 | | Operating profit | | 126 | 169 | +-------------------------------------------------------------------+ Sales in this cluster increased by 3%. This was the balance of higher sales volumes, lower selling prices and negative exchange-rate effects (mainly US dollar). Compared to Q2 2006, DSM Nutritional Products achieved solid volume growth at slightly lower prices, with Animal Nutrition & Health performing slightly better than Human Nutrition & Health. DSM Nutritional Products' operating profit decreased, mainly because of the strongly negative impact of the US dollar and higher innovation costs. The price pressure in the more mature parts of the portfolio eased somewhat. DSM Food Specialties' sales and operating profit decreased due to lower sales volumes (phasing out of phytase tolling) and higher innovation costs. DSM Special Products (benzoic acid and benzaldehyde) showed a small loss, as in Q2 2006. In June DSM announced a comprehensive profit improvement program for DSM Nutritional Products which, through a mix of cost savings and higher revenues, is expected to deliver at least EUR 100 million per annum of improved profitability by 2010. Pharma +-------------------------------------------------------------------+ | second quarter | | in EUR million | first half | |----------------+---+----------------------------+-----------------| | 2007 | 2006 | | | | 2007 | 2006 | |--------+-------+---+----------------------------+---+------+------| | | | | | | | | |--------+-------+---+----------------------------+---+------+------| | 250 | 233 | | Net sales | | 467 | 470 | |--------+-------+---+----------------------------+---+------+------| | 50 | 34 | | Operating profit plus | | 80 | 70 | | | | | depreciation and | | | | |--------+-------+---+----------------------------+---+------+------| | | | | amortization | | | | |--------+-------+---+----------------------------+---+------+------| | 30 | 14 | | Operating profit | | 40 | 29 | +-------------------------------------------------------------------+ Sales were up 7% due to higher selling prices (mainly at DSM Anti-Infectives) and despite the weaker US dollar. DSM Pharmaceutical Products' operating profit was slightly higher than in Q2 2006, owing to higher margins and a good production level, which was partly due to overflow from Q1. The operating result of DSM Anti-Infectives was positive and much higher than in Q2 2006. The main driver for the better performance of DSM Anti-Infectives was the increase in prices for penicillin and related products. This increase was due to shortages on the market caused by temporary curtailments of domestic production in China. In the light of these shortages DSM Anti-Infectives was able to significantly raise its prices for penicillin derivatives as well. In mid-June DSM published the outcome of the strategic review of its Anti-Infectives business. DSM has studied all options and has concluded that the greatest value will be generated through a partnering strategy (possibly with - partial - divestments) for the business combined with innovation initiatives and further restructuring measures to improve profitability. As a result, DSM Anti-Infectives aims to report a sustainable profit as from 2008. One of the implications of the strategic review is the impairment (as an exceptional item) of the cash-generating unit DSM Anti-Infectives to net realizable value as at June 30. Performance Materials +-------------------------------------------------------------------+ | second quarter | | in EUR million | first half | |----------------+---+--------------------------+-------------------| | 2007 | 2006 | | | | 2007 | 2006 | |--------+-------+---+--------------------------+---+-------+-------| | | | | | | | | |--------+-------+---+--------------------------+---+-------+-------| | 738 | 698 | | Net sales | | 1,458 | 1,378 | |--------+-------+---+--------------------------+---+-------+-------| | 108 | 113 | | Operating profit plus | | 215 | 221 | | | | | depreciation and | | | | |--------+-------+---+--------------------------+---+-------+-------| | | | | amortization | | | | |--------+-------+---+--------------------------+---+-------+-------| | 84 | 88 | | Operating profit | | 168 | 172 | +-------------------------------------------------------------------+ Sales were up almost 6% due to higher sales volumes and selling prices and despite the lower exchange rate for the US dollar and the caprolactam plant outage. The operating profit for the cluster decreased slightly, mainly due to the production outage of DSM Fibre Intermediates' European caprolactam plant, which had an adverse effect on DSM Engineering Plastics' nylon business. DSM Engineering Plastics' operating profit also suffered from lower margins and from the weaker US dollar and Japanese yen. DSM Dyneema showed the same operating profit as in Q2 2006, with volume growth being offset by a less favorable product mix and increased fixed costs. The operating profit of DSM Resins was slightly lower, as higher margins could not completely compensate for increased costs for innovation and expansion. DSM Elastomers' operating profit was higher than in Q2 2006 because of higher sales volumes. Industrial Chemicals +-------------------------------------------------------------------+ | second quarter | | in EUR million | first half | |----------------+---+----------------------------+-----------------| | 2007 | 2006 | | | | 2007 | 2006 | |--------+-------+---+----------------------------+---+------+------| | | | | | | | | |--------+-------+---+----------------------------+---+------+------| | 484 | 480 | | Net sales | | 964 | 907 | |--------+-------+---+----------------------------+---+------+------| | 82 | 70 | | Operating profit plus | | 148 | 127 | | | | | depreciation and | | | | |--------+-------+---+----------------------------+---+------+------| | | | | amortization | | | | |--------+-------+---+----------------------------+---+------+------| | 66 | 53 | | Operating profit | | 116 | 93 | +-------------------------------------------------------------------+ Sales in this cluster were up 1% from Q2 2006 due to clearly increased selling prices and despite lower sales volumes (caused in part by the production outage) and a weaker US dollar. All business groups in this cluster except DSM Energy posted a higher operating profit. Selling prices increased more than raw-material costs. The operating profits recorded by DSM Fibre Intermediates and DSM Agro were higher due to higher margins. The results of DSM Melamine improved strongly due to higher sales volumes and margins. DSM Energy showed a slightly lower profit, reflecting the natural decline of the business. Other activities +-------------------------------------------------------------------+ | second quarter | | in EUR million | first half | |----------------+---+----------------------------+-----------------| | 2007 | 2006 | | | | 2007 | 2006 | |--------+-------+---+----------------------------+---+------+------| | | | | | | | | |--------+-------+---+----------------------------+---+------+------| | 96 | 103 | | Net sales | | 212 | 207 | |--------+-------+---+----------------------------+---+------+------| | -9 | 1 | | Operating profit plus | | -13 | -5 | | | | | depreciation and | | | | |--------+-------+---+----------------------------+---+------+------| | | | | amortization | | | | |--------+-------+---+----------------------------+---+------+------| | -18 | -8 | | Operating profit | | -31 | -23 | +-------------------------------------------------------------------+ The operating result for Other activities was substantially lower than in Q2 2006. Innovation expenditure and costs relating to share-based payments were considerably higher, the latter being due to the increase in the DSM share price. On the other hand, DSM's captive insurance company posted a higher result due to lower damage amounts. Exceptional items As already indicated, in order to align the book value of the cash-generating unit DSM Anti-Infectives with the net realizable value, DSM has recognized an impairment charge of EUR 150 million before tax (EUR 110 million after tax). Net profit Net profit decreased compared to the second quarter of 2006, from EUR 157 million to EUR 47 million, strongly influenced by the exceptional item for DSM Anti-Infectives. Net finance costs in Q2 2007 amounted to EUR 15 million. This represents a decrease of EUR 8 million compared to Q2 2006, which was due to interest results on derivatives, higher capitalized interest during construction and interest income on a tax refund. The effective tax rate in Q2 2007 was 25%. This is 2% below Q2 2006, due mainly to the lower tax rate in the Netherlands. Net profit before exceptional items was EUR 158 million, up EUR 6 million (4%) from the second quarter of 2006. Net earnings before exceptional items per share increased by 8%, 4% arising from the higher net profit and 4% from the lower number of shares outstanding as a result of the share buy-back program. Cash flow, capital expenditure and financing Cash flow from operating activities in the first half of the year increased substantially to EUR 292 million. This was mainly due to a lower seasonal increase in working capital. At EUR 99 million, capital expenditure (excluding acquisitions) in Q2 was slightly below the level of depreciation (EUR 104 million), but above the Q2 2006 level (EUR 87 million). Compared to year-end 2006, the operating working capital increased by EUR 150 million in the first half of 2007 (of which EUR 68 million in the second quarter). This was due to the increase in sales and the usual seasonal pattern. Net debt increased by EUR 221 million in Q2 2007 and stood at EUR 1,089 million. Gearing increased to 16%. The increase was due mainly to the payment of the final dividend for 2006 and the repurchase of ordinary shares. Share buy-back program After the publication of the Q1 2007 results DSM resumed the execution of the share buy-back program of EUR 750 million that the company initiated in September 2006. The total number of shares repurchased under the second phase of this program up till 24 July amounted to 8,569,879 shares for a total consideration of EUR 313.6 million. Interim dividend It has been decided to pay out an interim dividend of EUR 0.33 per ordinary share for the year 2007 (2006: EUR 0.33). This represents one third of the dividend paid out for 2006. The interim dividend is no indication of the total dividend for 2007. The interim dividend for 2007 will be paid out in cash on 22 August 2007. Workforce The workforce increased by 209 in Q2 2007 to 22,723. Progress update on DSM strategy Vision 2010 DSM's strategy program Vision 2010 - Building on Strengths focuses on accelerating the profitable and innovative growth of the company's specialties portfolio. The overall objective is strong value creation, to be accomplished via three main levers. 1. Market-driven growth and innovation In Q2 DSM's innovation initiatives resulted in the introduction of new products, new applications of existing products, and significant expansion in recently introduced products. Examples of products launched by DSM in Q2 are given in the appendix. Recently DSM has acquired Pentapharm, a company that holds a global leading position in the development and production of active ingredients and system solutions for the cosmetics industry, thereby increasing DSM's innovation potential in Personal Care. 2. Increased presence in emerging markets In Q2 sales in China grew by USD 41 million (21%) to USD 234 million. In June DSM announced the opening of Wuxi NutriRice® Co. Ltd., a production facility in China operated in a joint venture between Bühler and DSM. This facility - the first commercial scale production of its kind in the world - produces NutriRice®, nutritionally enriched rice kernels to be mixed with natural rice. Last month the Chinese Premier visited the DSM Citric Acid manufacturing site, also located in Wuxi, in recognition of its outstanding safety, health and environment (SHE) performance and recognized DSM as a 'Good Citizen'. 3. Operational Excellence As indicated above, in June DSM announced the outcome of the strategic review of its Anti-Infectives business. In Q2 DSM also announced a comprehensive profit improvement program for DSM Nutritional Products. Vision 2010 - evaluation The Managing Board in its new composition is evaluating the strategy program Vision 2010 - Building on Strengths and will present its conclusions at the annual conference for financial analysts on September 27 and 28. The strategic program Vision 2010 - Building on Strengths and its objectives and targets were set out at the time of the program's launch in September 2005. The mid-term evaluation was originally planned for 2008. Outlook Trading conditions in the majority of DSM's business portfolio have improved further and are favorable. Based on this, DSM is able to raise its guidance as published in the Q1 report (EUR 760 million with an uncertainty of plus or minus 5%) for the 2007 operating profit (before exceptional items). Barring unforeseeable developments and based on current trading conditions and exchange rates, DSM now expects the operating profit (before exceptional items) for the year 2007 to be EUR 790 million with an uncertainty of plus or minus 3%. Heerlen, 26 July 2007 The Managing Board of Directors Important dates Ex-dividend date (interim dividend 2007): 27-Jul-07 Record date (interim dividend 2007): 31-Jul-07 Interim dividend 2007 made payable: 22-Aug-07 Annual Analysts' Conference: 27-28 September 2007 Publication of third-quarter report: 25-Oct-07 Annual Report 2007: 13-Feb-08 Annual General Meeting: 26-Mar-08 For more information DSM, Corporate Communications tel.: +31 (45) 5782421 e-mail: media.relations@dsm.com Investors DSM, Investor Relations tel.: +31 (45) 5782864 e-mail: investor.relations@dsm.com internet: www.dsm.com Condensed consolidated statement of income second quarter 2007 in EUR million second quarter 2006 before excep- total before excep- total excep- tional excep- tional tional items tional items items items 2,198 - 2,198 net sales 2,132 - 2,132 operating profit plus depreciation and 331 -1 330 amortization (EBITDA) 342 17 359 227 -151 76 operating profit (EBIT) 234 17 251 0 - 0 operating profit from 0 - 0 discontinued operations 227 -151 76 operating profit from 234 17 251 continuing operations -15 - -15 net finance costs -23 - -23 0 - 0 share of the profit of 1 -8 -7 associates 212 -151 61 profit before income tax 212 9 221 expense -52 40 -12 income tax expense -58 -4 -62 160 -111 49 net profit from 154 5 159 continuing operations net profit from discontinued / discontinuing - - - operations 0 - 0 160 -111 49 profit for the period 154 5 159 -2 - -2 minority interests -2 - -2 158 -111 47 net profit 152 5 157 158 -111 47 net profit 152 5 157 -2 - -2 dividend on cumulative -2 - -2 preference shares 156 -111 45 net profit used for 150 5 155 calculating earnings per share 104 150 254 depreciation and 108 - 108 amortization 260 39 299 cash flow 258 5 263 99 capital expenditure 87 - acquisitions 8 per ordinary share in EUR*: 0.85 0.24 - net earnings 0.79 0.81 1.41 1.62 - cash flow 1.36 1.38 183.9 average number of 190.3 ordinary shares (x million) 179.9 number of ordinary 190.4 shares, end of period (x million) 22,723 workforce at end of **22,156 period 7,161 of which in the **7,061 Netherlands * After deduction of dividend on cumulative preference shares. ** Year-end 2006. This quarterly report has not been audited. Condensed consolidated statement of income for the first half first half 2007 in EUR million first half 2006 before excep- total before excep- total excep- tional excep- tional tional items tional items items items 4,344 - 4,344 net sales 4,200 - 4,200 operating profit plus depreciation and 626 -1 625 amortization (EBITDA) 656 37 693 419 -151 268 operating profit (EBIT) 439 35 474 0 - 0 operating profit from 1 - 1 discontinued operations 419 -151 268 operating profit from 440 35 475 continuing operations -32 - -32 net finance costs -42 - -42 -1 - -1 share of the profit of 1 -8 -7 associates 386 -151 235 profit before income tax 399 27 426 expense -96 40 -56 income tax expense -104 -1 -105 290 -111 179 net profit from 295 26 321 continuing operations net profit from discontinued / discontinuing - - - operations 0 - 0 290 -111 179 profit for the period 295 26 321 -4 - -4 minority interests -3 - -3 286 -111 175 net profit 292 26 318 286 -111 175 net profit 292 26 318 -5 - -5 dividend on cumulative -5 - -5 preference shares 281 -111 170 net profit used for 287 26 313 calculating earnings per share 207 150 357 depreciation and 216 2 218 amortization 488 39 527 cash flow 503 28 531 179 capital expenditure 160 26 acquisitions 8 per ordinary share in EUR*: 1.52 0.92 - net earnings 1.50 1.64 2.64 2.85 - cash flow 2.64 2.78 184.6 average number of 190.7 ordinary shares (x million) 179.9 number of ordinary 190.4 shares, end of period (x million) 22,723 workforce at end of **22,156 period 7,161 of which in the **7,061 Netherlands * After deduction of dividend on cumulative preference shares. ** Year-end 2006. This quarterly report has not been audited. Consolidated balance sheet in EUR million 30 June 2007 31 December 2006 intangible assets 1,012 1,008 property, plant and equipment 3,462 3,655 deferred tax assets 457 496 pre-paid pension costs 1,016 918 associates 21 26 other financial assets 96 100 -------- -------- non-current assets 6,064 6,203 inventories 1,566 1,515 trade receivables 1,445 1,377 other receivables 272 362 financial derivatives 112 79 current investments 3 3 cash and cash equivalents 340 552 -------- -------- current assets 3,738 3,888 -------- -------- total assets 9,802 10,091 in EUR million 30 June 2007 31 December 2006 shareholders' equity 5,524 5,784 minority interests 77 71 -------- -------- equity 5,601 5,855 deferred tax liabilities 375 383 employee benefit liabilities 287 304 provisions 149 188 borrowings 890 907 other non-current liabilities 38 44 -------- -------- non-current liabilities 1,739 1,826 employee benefit liabilities 16 21 provisions 85 127 borrowings 611 607 financial derivatives 43 41 trade liabilities 1,060 1,091 other current liabilities 647 523 -------- -------- current liabilities 2,462 2,410 -------- -------- total equity and liabilities 9,802 10,091 capital employed 6,050 6,303 equity / total assets 57% 58% net debt 1,089 921 net debt / equity plus net debt 16% 14% operating working capital (OWC) 1,951 1,801 OWC / 4 x quarterly net sales 22.2% 21.8% This quarterly report has not been audited. Condensed consolidated statement of cash flows first half in EUR million 2007 2006 Cash and cash equivalents at 552 902 beginning of period Operating activities: - net profit plus 532 536 depreciation and amortization - change in working capital -213 -316 - other changes -27 -61 --------- --------- cash flow from operating 292 159 activities Investing activities: - capital expenditure -163 -162 - acquisitions -26 -8 - sale of subsidiaries - 74 - divestments 17 24 - other changes - 6 --------- --------- net cash from investing -172 -66 activities dividend -131 -146 net cash from financing -202 41 activities effects of changes in consolidation and exchange differences 1 -12 --------- --------- Cash and cash equivalents at 340 878 end of period Condensed statement of changes in shareholders' equity first half in EUR million 2007 2006 Balance at beginning of period 5,784 5,501 Changes: - net profit 175 318 - exchange differences, net of income tax -34 -68 expense - dividend -199 -216 - repurchase of ordinary shares -250 -76 - proceeds from reissue of ordinary shares 36 32 - other changes 12 57 --------- --------- Balance at end of period 5,524 5,548 This quarterly report has not been audited. Appendix Examples of DSM's innovation initiatives in Q2 2007: Nutrition * The launch of Radiance CR, a unique actives complex to beautify the skin. * The introduction of Niacinamide PC, a new exclusive grade of niacinamide with skin-lightening, anti-wrinkle, anti-acne and skin-barrier-strengthening properties. * The launch of Delvotest® Accelerator, a fully automated reliable testing system that reduces the time and costs associated with testing milk for antibiotic residues on a large scale at milk control stations and dairies. * The introduction of Bakezyme WholeGain, a unique cellulose preparation that combats the issues of reduced volume and unappealing crumb which often occur when producing high-fiber bread. * A GRAS (Generally Recognized As Safe) notification by the FDA for PreventAse(TM), the first enzyme that is able to reduce the toxic substance acrylamide in baked foods by as much as 90%. * The launch of Sensarite(TM), a revolutionary range of taste potentiators created for use in bakery and dairy applications. * The introduction of Bakezyme X-pan, a baking enzyme that offers enhanced dough development, whiteness of crumb and increased volume, guaranteeing an effective way of baking white bread. * The launch of Rapidase Maxifruit, an enzyme that ensures targeted grape component release which allows the production of supple and fruity wines and boasts a more stable and intense cherry red color after alcoholic fermentation. * The launch of Parsol Guard, an efficient shield to protect color and light-sensitive ingredients in personal care products. Pharma * A licensing agreement with Sartorius Biotech GmbH for PER.C6, the technology platform for biopharmaceutical products. Performance Materials * Beneteau, the world's leading builder of sailing yachts, and DSM Dyneema are cooperating to improve sailboat performance through the use of next-generation running rigging made with Dyneema®. * Cooperation between DSM Dyneema and the Allseas Group, an offshore pipe-laying company, to improve the safety and speed of underwater pipe-laying using stinger adjustment rope made with Dyneema®. * Machinefabriek Amersfoort, a worldwide specialist in machining, has chosen a one-size lifting sling made with Dyneema® to replace a range of polyester slings. * DSM Dyneema and Shimano are collaborating on high-tech fishing lines. * The launch of Arnitel VT for the manufacture of breathable films. Arnitel Vapor Transmission films are ideally suited for roofing applications, textile applications and plasters, as well as for medical gowns and drapes. * The introduction of Atlac E-Coat, a sprayable high-performance barrier against osmosis for the marine industry. * The launch of UVentionTM, highly specialized UV-curable custom coatings that can be optimized for just about any substrate. * The launch of HiTone polyesters for powder coating systems with improved aesthetics. * The launch of Halwedrol PU480, an environmentally friendly, waterborne poly-urethane dispersion with improved exterior durability for decorative coatings. * The launch of Uradil AZ770, an environmentally friendly, waterborne alkyd emulsion, with improved storage stability, good application properties and high gloss for decorative coatings.