Investor update Responsible Investing Conference London June 4, 2015
AkzoNobel today Revenue 14.3 billion 47,210 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…
AkzoNobel strategy introduced in 2013 Organic growth Operational excellence Sustainability is at the heart of what we do Investor Update - Responsible Investing Conference London 3
Global trends impacting our key market segments by 2050 Population growth Urbanization Climate Change Natural resource constraints
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…
Principle of materiality used to assess the topics to include in Report 2014 We have updated the materiality to assess the topics to include in the AkzoNobel Report 2014, which are current and important for the company and key…
Our Strategic Targets Financial Targets Sustainability Targets of return on sales of revenue by 2020 from products that are (operating income/revenue) by 2015 more sustainable for our customers than the products of our…
While we use a multitude of external methodologies, DJSI is currently our primary external benchmark Operational eco-efficiency 100 Used to measure our performance against external good practice and peers in our sector 50 93 78 86…
Human Cities: A sustainable business opportunity Global challenge is how to create effective, sustainable urban environments for people to live and work in National governments, municipal authorities, developers and planners are…
Color Heritage Transport Cities should be Urban heritage needs People must more colorful. to be embraced. connect to make cities come alive Creating character Preserving the Keeping transport and emotion through originality of historic…
Sustainability : Embedded into the company mindset We build successful partnerships Customer Focused with our customers Core principles: Safety, Deliver on Commitments We do what we say we will do Integrity, Sustainability We…
Additional effort needed to make progress towards the 2020 sustainability targets Eco-premium solutions Cradle-to-Grave REI with customer benefits Carbon Footprint Resource Efficiency Index In % of revenue % reduction CO2(e) Gross…
What we are doing to further improve Eco-premium solutions (EPS) Carbon emissions More than two-thirds of our We are increasing our activities Looking at new ways to RD&I output remains on cradle-to-grave carbon measure business value.…
4 dimensions (4D) A new way of measuring business value During 2014, a pilot study at the Pulp and Performance Chemicals business in Brazil was carried out specifically looking at environmental, human, social and financial impact (4D…
Eco-premium solutions - Definition A product qualifying for the list of AkzoNobel Eco-premium solutions must meet the following criteria when assessed against the competing mainstream products/solutions: 1. It provides the same or better…
Eco-premium solutions -Top line and bottom line growth opportunities Eco-premium solutions with customer benefits stimulate both top line and bottom line growth opportunities. They deliver advantages to our direct customers :…
Delivering breakthrough innovations: Paint that keeps you cool Weathershield KeepCool product benefits: Surface temperature up to 5oC lower than comparable products Reflects up to 85% more infrared radiation than comparable exterior…
Ecosel COOL CHEMISTRY AsphaltProtection coatings Our COOL CHEMISTRY coatings feature special An additive for road salt which pigments that reflect infrared can reduce the development energy, while still absorbing of frost damage by up…
Resource Efficiency Index The objective of our new strategy is to create more value from fewer resources right across the value chain. The Resource Efficiency Index is defined as gross margin divided by cradle-to-grave carbon…
Closing the carbon gap The chemical and coatings industries are resource intensive: long-term success depends on improving Million tons CO2 equivalents, 2014 energy/material efficiency across the value chain 15 AkzoNobel has…
The three key elements to safety - update People Product 98% of our manufacturing sites have a behavior- Committed to reducing the use of substances in based safety program our products that may pose a significant risk to We already…
Talent development Our people are the key to our success as an ViewPoint score employee engagement organization. We need to ensure that we have a (1 to 5 scale) performance-driven culture and the right people with the right capabilities…
Diversity and inclusion High growth market Diversity of thought is an important factor in Executives in % creating the right culture. Our companys workforce should reflect the 16 20 societies where we do business 13 13 14 2011…
Conclusion Sustainability is fully integrated into our processes and our mindset. We believe we have the right strategy in place and you can see progress is being made Our people are the key to our success as an organization. We…
Appendix
The global paints and coatings market is around 100 billion By market sector By end-user segment 2014, 100% = 100 billion 2014, 100% = 100 billion Yacht Industrial Others Aerospace Consumer Buildings and Decorative Packaging…
AkzoNobel has many leading market positions No.1 Position Other key players Multiple regions outside North PPG, regional players Decorative America North America* Sherwin-Williams PPG, regional players Protective…
Financial results Q1 2015 improved performance in a challenging environment Revenue Operating income Return on Sales % Return on Investment % million million +6% +42% 3,591 10.6 9.7 8.5 3,383 306 6.4 216 Q1 2014 Q1 2015 Q1…
Decorative Paints business 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…
Decorative Paints Q1 2015 highlights = Revenues up, due to favorable million Q1 2014 Q1 2015 % currency effects. Volume growth Revenue 865 890 3 in Latin America more than offset by soft demand in Europe Operating income 17 50 194…
Performance Coatings business 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…
Performance Coatings Q1 2015 highlights Revenue higher in all million Q1 2014 Q1 2015 % businesses; favorable Revenue 1,319 1,430 8 currencies and price/mix offset lower volumes Operating income 126 170 35 Volumes up in Automotive…
Specialty Chemicals business 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%…
Specialty Chemicals Q1 2015 highlights Revenue up, mainly due to million Q1 2014 Q1 2015 % favorable currency effects ; volumes and price/mix were flat Revenue 1,222 1,296 6 Operating income 135 163 21 Developments in bleaching and…
Disciplined cash management Operating Working Capital Capital Expenditures million million Operating Working Capital Specialty Chemicals Decorative Paints OWC as % of LQ revenue * 4 Performance Coatings Other 2.500 16% 5.4%…
Continuously reducing costs of long term bonds Debt maturities million Repaid 7.75% 4.00% bonds bonds bonds 2.625% 7.25% 1.75% Debt duration 4.8 years 825 8.00% 800 750 622 500 Net interest expense down 320 by 74 million…
Operational cash inflow close to covering uses of cash Cash flow sources and uses Restructuring and pension top-ups consume a significant 2012 2013 2014 proportion of cash Performance improvement focus starts to address cash…
Dividend policy unchanged stable to rising dividend Dividends paid () Our dividend policy is to pay a stable to rising dividend each year 1.08 1.12 1.12 1.12 1.12 1.05 An interim and final dividend will be paid in cash unless…
Proactively managing or removing pension liabilities Active management of interest rate and inflation Interest rate / exposure, with around 70% of overall defined benefit Inflation hedging obligation (DBO) risks hedged Retain and…
Pension cash flow guidance Defined benefit pension cash top-ups Top-ups relate mainly to the 2 big UK plans, the ICI Pension Fund and the CPS [Status February 2013] Pension Scheme million Top-ups are based on prudent actuarial valuation…
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