Agenda Introduction, Malys Castella Decorative Paints, Jeremy Rowe Performance Coatings, Thijs Bakker Specialty Chemicals, Malys Castella Summary, Malys Castella Q&A AkzoNobel in Asia Singapore June 2015 2
Introduction Malys Castella AkzoNobel in Asia Singapore June 2015 3
AkzoNobel strategy introduced in 2013 Organic growth Operational excellence AkzoNobel in Asia Singapore June 2015 4
Our proposition: Leading market positions delivering leading performance AkzoNobel has gone through a significant amount of strategic change over the past five years Today, the company has Excellent portfolio of businesses Good long…
2015 financial targets focused on quality of earnings and value creation Return on sales Return on investment Net debt/EBITDA (Operating income/revenue) (Operating income/average x % 12 months invested capital) % 12 16 14.0 3 9.0…
High growth markets are 44% of revenue and their importance will increase % of 2014 revenue 37% Mature Europe 15% 8% North America Emerging Europe 26% Asia Pacific 10% 4% Latin America Other regions Share of…
Overall market conditions remain challenging in many countries Purchase Managers Index (PMI)* April 2015 60 US Mexico Vietnam Manufacturing PMI India Japan 50 Germany France Taiwan Turkey Indonesia China Brazil…
Consumer confidence is high and increasing for most Asian countries Consumer confidence, Q1 2015 Figures below 100 indicate some degree of pessimism 140 Recent trends compared 120 to Q4 2014 100 80 60 130 123 112 107 106 100…
Economic growth rates in Asia remain above other regions Regional GDP forecast 5% Asia-Pacific Middle East & North 4% Africa Latin America 3% Eastern Europe North America 2% Western Europe 1% 0% 2012 2013 2014 2015 2016…
We have a large presence in Asia with all business areas represented 2014 Revenue 3.7 billion (26% total) 14,300 Employees CapEx 109 million Revenue by Business Area % 24% 29% Decorative Paints Performance Coatings Specialty…
Recent business highlights Decorative Paints Performance Coatings Specialty Chemicals Up to 10% Major project Ningbo annual energy secured investment passes savings 400million Planet possible Driving innovation Organic growth We…
Our Human Cities initiative By 2050, more than 75 percent of the worlds population will live in cities. 60 percent of our products are in the Buildings & Infrastructure and Transportation In 2014, we launched our Human Cities…
AkzoNobel Human Cities Heritage Malacca AkzoNobel in Asia Singapore June 2015 14
Decorative Paints plans for profitable growth in Asia Jeremy Rowe AkzoNobel in Asia Singapore June 2015 15
The Decorative Paints market is attractive in terms of size and growth Decorative Paints sales* Used for protection billion as well as decoration 60 Consumption per capita driven primarily by the 50 frequency of repainting 40…
High growth markets are increasingly trading up Paint market composition % of total, by value 100% Paint markets in high-growth markets are still showing significant opportunities for growth 75% Spending power of the middle class in…
We have strong positions in the main Decorative Paints markets Revenue by region 21% China and 20% North Asia Professional (Projects) Southeast Asia 53% and Pacific Retail (SSO and LSO) India and 26% South Asia 80% Asia…
Our strategy to grow profitably in Asia Objectives: Outgrow the market Ensure that we leverage our (global) scale to ensure that we improve relative profitability while we grow Actions: Develop profitable mid-market business…
China AkzoNobel position Extensive geographic coverage across all regions Key actions Drive further expansion outside the eastern region with investments in manufacturing footprint: New plant opened in Guangzhou (2013) Plant under…
Indonesia AkzoNobel position The leading paints company in the Indonesian market with a strong market share Key actions Continue to build our premium portfolio through strong brands including Dulux Weathershield and Dulux EasyClean…
Confidential: Not to be shared Dulux EasyClean AkzoNobel in Asia Singapore June 2015 22
Vietnam recent Projects win One of Vietnams largest urban development projects Mixed-use project spread over 128 ha, to be completed in 3 phases over 8 years Ho Chi Minh Citys new financial district plus apartment blocks,…
India AkzoNobel position Strong position in premium segment Key actions Continue to build our premium portfolio through strong brands including Dulux Weathershield and Dulux Velvet Touch Grow the mid-market segment Build on…
Visualizer App global innovation delivered locally Key Features Customer Benefits Growth Potential A world first consumer Enables users to see in real- Downloaded more than 2.7 million application of augmented reality time what a room…
Summary Decorative Paints market in Asia is attractive in terms of size and growth Asia will continue to grow well and is trading up Strong positions in the main, growing, Decorative Paints markets of Asia Capability to invest…
Performance Coatings leading through sustainable innovation Thijs Bakker AkzoNobel in Asia Singapore June 2015 27
Our performance coatings business is balanced across four end-user segments Buildings and Transportation Infrastructure 21% 37% 28% 14% Consumer Goods Industrial AkzoNobel in Asia Singapore June 2015 28
Differentiated growth strategies exist for each market segment Outgrow the market organically Expected outcomes Marine Improved market share Protective Costs dont grow as fast as revenue Powder Improved return on sales Specialty…
Recent transformation makes us fit for growth New organization structure with fewer management layers and clearer accountability Strategic Market Units more customer focused, agile and lean Lowering Selling, General & Administrative…
We have a significant local footprint and continue to invest in Asia Marine Headquarters and Technology Center Based in Singapore since 2012 New polymer plant in Songjiang Investment of 14 million in epoxy and polyester resins New…
Intersleek helps marine customers to save fuel and reduce emissions Key features: Intersleek foul release marine coatings reduce fuel consumption and emissions by an average of 9% Shipping industrys first methodology for generating…
We are a key player in both premium and mid-market Vehicle Refinishes for Asia Passenger cars and light vehicles (units) Light vehicle production China 5.3% p.a. Brazil, Russia, India, China 9.2% p.a. Vehicle car park…
Summary World-leading position in performance coatings technology and innovation Global reputation for quality and reliability Supply market-leading brands to many of the worlds leading companies Flatter organization makes us more…
Specialty Chemicals Malys Castella AkzoNobel in Asia Singapore June 2015 35
The chemical industry is large and growing, especially in Asia Chemicals industry over time, by geography trillion 3.5 trillion market Other China 6.3 Asia Pacific Solution provider for society North America manufacturing Western…
Specialty Chemicals is well positioned to capitalize on our current position Revenue by end user segment Revenue by geographic spread 5% Buildings and Mature Europe 18% 2% infrastructure 10% North America Transportation 6% 43%…
Recent investments provide a foundation for future growth Increased footprint Opportunities exist for operational leverage Ningbo was our largest ever one-site investment, Organic growth from strong customer base inaugurated in November…
Summary Malys Castella AkzoNobel in Asia Singapore June 2015 39
AkzoNobel is well positioned for continued growth in Asia Established and profitable business Broad range of activities in the region Addressing a wide variety of end user segments Strong brands and leading market positions Several…
Questions
Appendix AkzoNobel in Asia Singapore June 2015 43
AkzoNobel today Revenue 14.3 billion 47,200 employees 44% of revenue from high growth markets Major producer of Paints, Coatings and Specialty Chemicals Leadership positions in many markets Revenue by Operating income Invested…
42% of revenues 16% of revenues New Build Projects Automotive OEM, Parts and Assembly Maintenance, Renovation & Repair Automotive Repair Building Products & Components Marine and Air Transport 17% of revenues 25% of revenues…
Strategy on a page Strategic focus areas Processes Actions End-user segments Care for the customer People, process and Deliver dependably Buildings and Reduction of product product safety Grow organically Infrastructure and…
AkzoNobel values drive cultural change AkzoNobel in Asia Singapore June 2015 47
Sustainability is business; business is sustainability of revenue by 2020 from products that are more sustainable for our customers than the products of our competitors more efficient resource and energy use across the entire value…
Human Cities in action A new report developed by the Economist Intelligence Unit and AkzoNobel is now available which explores how cities create optimal environments for citizens. Called Tomorrows cities, we worked together to collect…
Decorative Paints at a glance Revenue by end-user Revenue by geographic spread sub-segment 4% 8% Mature Europe 25% Maintenance, renovation and repair 14% Asia Pacific 46% Latin America New build projects Emerging Europe 75%…
Our manufacturing footprint is changing to address our market environment Existing Plants Megaplants Plants under construction AkzoNobel in Asia Singapore June 2015 51
Capital expenditure supports growth and manufacturing footprint optimization New greenfield Paints Manufacturing Plant in China west region Chengdu City Total investment 44 million from 2014 Focus on water-based paints with 2…
Decorative Paints vision and targets Decorative Paints vision The leading global Decorative Paints company in size and performance Expected outcomes (2015): Return on sales: 7.5% Return on investment: 12% AkzoNobel in Asia…
Decorative Paints strategy on a page Strategic Processes Actions End-user focus areas Per the company agenda Per the company agenda segments Per the company Buildings and agenda Business area capabilities Business area actions…
Performance Coatings at a glance Revenue by end-user segment Revenue by geographic spread 14% Buildings and 3% Mature Europe 21% Infrastructure 11% 27% North America Transportation 8% Asia Pacific 28% Consumer Latin America…
We cover a uniquely broad set of markets with leading global brands 2014 revenue by Reporting Unit Protective Marine & Marine Marine & Protective Protective Coatings 25% Coatings 49% Vehicle Refinishes Automotive & Specialty…
We are well positioned globally in terms of revenue and manufacturing locations % of 2014 revenue 11% 20% 27% Emerging Europe North America Mature Europe 3% 31% Middle East Asia Pacific 8% and Africa Latin America BU…
Performance Coatings vision and targets Performance Coatings vision: The leading coatings company from a performance perspective Expected outcomes 2015: Return on sales: 12% Return on investment: 25% AkzoNobel in Asia…
Performance Coatings strategy on a page Strategic Processes Actions End-user focus areas Per the company agenda Per the company agenda segments Per the company Buildings and agenda Business area capabilities Business area actions…
Specialty Chemicals at a glance Revenue by end user segment Revenue by geographic spread 5% Buildings and Mature Europe 18% 2% infrastructure 10% North America Transportation 6% 43% Asia Pacific 18% Latin America 57% Consumer…
Five well positioned platforms in their industries Our Business Units Our Platforms Bleaching Chemicals Pulp & Performance chemicals 60% of Pulp & Performance chemicals Salt-chlorine chain Industrial Chemicals 100% of Industrial…
Our platforms build on value chains Raw Base Chemical Performance/ materials chemicals inter-mediates functional End products chemicals Bleaching chemicals Salt-chlorine chain Polymer catalysts Ethylene oxide network…
Global manufacturing network serves both regional and global customers % of 2014 revenue Mature Europe North America 43% Emerging Europe 22% 5% Middle East and Africa 2% Asia Pacific 18% Latin America 10% Multi-site…
Specialty Chemicals vision and targets Specialty Chemicals vision: Delivering leading performance based on sustainable chemical platforms driving profitable growth in selected markets Expected outcomes (2015): Return on sales:…
Specialty Chemicals strategy on a page Strategic Processes Actions End-user focus areas Per the company agenda Per the company agenda segments Per the company Buildings and agenda Infrastructure Business area capabilities Business…
Differentiated strategies per platform Outgrow the market organically Actions 50% of portfolio Capitalize on investments Main platforms Grow by successfully Bleaching chemicals Surfactants commercializing products for attractive…
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