Q1 2014 highlights Volume and price / mix development positive in all three Business Areas Revenues down 2 percent due to 5 percent adverse currency effects Restructuring costs 44 million (2013: 29 million). Excluding these, ROS% is…
Q1 2014 revenue and operating income million Q1 2014 % Revenue 3,383 -2 Operating income 216 0 Ratio, % Q1 2014 Q1 2013 Return on sales 6.4 6.3 Return on sales (excluding restructuring costs) 7.7 7.1 Moving average return on…
Market conditions remain challenging but both volumes and price/mix improved in all Business Areas Quarterly volume development in % year-on-year 2013 2014 6 +1% +3% +2% +2% 2 -2 -6 Decorative Paints Performance Coatings…
Foreign exchange rates continued to negatively impact our revenues in Q1 Quarterly foreign exchange rate development in % year-on-year 2013 2014 4 -6% -6% -4% -5% 0 -4 -8 Decorative Paints Performance Coatings Specialty…
Decorative Paints Q1 2014 highlights = Volumes up due to strong volume million Q1 2014 % development in Asia while market Revenue 865 -6 conditions in Europe and Latin America were challenging Operating income 17 -60 Revenues down 6…
Performance Coatings Q1 2014 highlights Volumes up 3 percent compared with million Q1 2014 % previous year, mainly driven by Revenue 1,319 -1 Marine and Protective Coatings and Powder Coatings Operating income 126 -2 Revenues down 1…
Specialty Chemicals Q1 2014 highlights Volumes up 2 percent compared with million Q1 2014 % the previous year, driven by volume Revenue 1,222 -2 increases in Functional Chemicals Operating income 135 36 Revenues down 2 percent,…
Summary Q1 2014 results million Q1 2014 Q1 2013 EBITDA 364 375 Amortization and depreciation (148) (158) Incidentals - - Operating income 216 217 Net financing expenses (37) (63) Minorities and associates (10) (13) Income tax (43) (45)…
Cash flows Q1 2014 million Q1 2014 Q1 2013 Profit for the period from continuing operations 142 112 Amortization and depreciation 148 158 Change working capital (471) (350) Pension provisions (281) (236) Restructuring (7) (21) Other…
Further de-risking of pension liabilities in the UK Trustee of ICI Pension Fund in UK entered into two annuity buy-in agreements with Legal & General and Prudential, covering 3.6 billion (4.3 billion) of pensioner liabilities,…
IAS 19 total pension deficit increases to over 1.0 billion Key pension metrics Q1 2014 Q4 2013 Discount rate 4.1% 4.2% Inflation assumptions 3.1% 3.2% Pension deficit development during Q1 2014 million Decrease Increase 171…
Conclusion Volume and price/mix development positive in all three Business Areas Despite higher restructuring charges, continued adverse currency effects and ongoing weakness in Europe, our year-on-year return on sales, both before…
Effects from Building Adhesives on FY 2013 results million Q1 Q2 Q3 Q4 FY 2013 Revenue 45 49 47 - 141 Operating Income 4 5 3 - 12 Divestment completed on October 1st, 2013 Results still included in 2013 financials, impact on 2014…
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…
Realistic 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…
AkzoNobel today Revenue 14.6 billion 49,560 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…
44% 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 16% of revenues 24% of revenues…
The global paints and coatings market is around 80 billion By market sector By end-user segment 2013, 100% = 80 billion 2013, 100% = 80 billion Yacht Aerospace Specialty Packaging Industrial Finishes Coil Decorative Consumer…
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…
High growth markets are 44% of revenue and their importance will increase % of 2013 revenue 38% Mature Europe 15% 8% North America Emerging Europe 25% Asia Pacific 11% 3% Latin America Other regions Share of revenues…
In aggregate variable costs represent 53% of revenue Profit and loss breakdown* % of total AkzoNobel is well positioned for economic recovery 100% Variable costs represent 53% of revenue, down from 54% in 2012 Decorative Paints is…
We are actively addressing all components of operating expenses Operating expenses 4.7 Research, Operating expense General & Selling Expenses Development & components Administrative Innovation 1.4 3.0 0.4 Global…
Drive towards continuous improvement and commercial excellence Restructuring activities to continue into 2014, moving into continuous improvement which will enable us to achieve the 2015 targets 2014 restructuring charges expected to…
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…
Leading performance; gaining momentum Historical Vision 2015 Targets Culture issues & Strategy & Incentives & Values ROS below peers Organic growth ROS 9% Customer Focused Not earning our cost Operational ROI 14% Deliver on of…
Decorative Paints business at a glance Revenue by end-user Revenue by geographic spread sub-segment 4% 16% 8% Mature Europe Maintenance, renovation and repair 14% Asia Pacific 49% Latin America New build projects Emerging Europe…
The global Decorative Paints market is attractive in terms of size and growth Decorative Paints sales billion Used for protection as well as decoration 50 Consumption per capita 40 driven primarily by the frequency of repainting…
High-growth markets are growing well and are increasingly trading up Paint market growth* Paint market composition* billion % of total, by value Paint markets in high-growth markets are still showing 100% 8% p.a. significant…
In Decorative Paints we hold strong market positions across all regions Geographic size AkzoNobel Geographic area ( billion) position Europe* 12.2 1 South East Asia and Pacific 1.7 1 China and North Asia 6.4 2 Latin America…
We are strong in the premium segment, but also compete successfully elsewhere AkzoNobel Decorative Paints revenue by segment % of revenue 100% 75% 50% 25% 0% Brazil China Indonesia South Africa Economy Mid-market…
We have very strong brands linked by a global approach to branding Our well-known brands are one of our key competitive advantages Consumer We have a number of powerful, relevant brands occupying a number of positions across…
Accomplishments to date Area Beginning 2008 End 2013 Cost reductions* n/a 200 million Number of FTEs 25,800 16,240 Brands 100 59 SKUs 90,000 69,000 Factories 80 45 Warehouses 160 135 ERP systems 40 1 * Related to Performance…
Fix Europe Objectives: Improve performance by driving operational excellence and changing the operating model in Europe Ensure that we are positioned for organic growth in mature European markets when the market recovers (e.g.…
Fix Europe Actions: Implement a central operating model and simplify our organizational structure Consolidate our manufacturing and distribution footprint Develop and implement standardized and efficient marketing and sales…
Changing our operating model in Europe Action 2012 2013 2014 2015 Integrate relevant European activities and management Rationalize product portfolio and raw materials Rationalize manufacturing footprint Fully implement sales…
Grow profitably in high-growth markets 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…
Performance Coatings business at a glance Revenue by end-user segment Revenue by geographic spread 14% Buildings and 4% Mature Europe 24% Infrastructure 11% 27% North America Transportation 8% Asia Pacific 25% Latin America…
We are organized in four Business Units 2013 revenue by Business Unit Protective Marine & Marine Protective Coatings Yacht Marine & Protective Coatings 27% 32% Vehicle Refinishes Automotive & Automotive & Aerospace Specialty…
The Performance Coatings market is based on twelve sectors Performance Coatings market sectors billion, 2013 7 2013 total market size 50 billion 6 5 4 3 2 1 0 AkzoNobel competes in these market sectors Source: Orr…
The five year outlook for most sectors is positive Performance Coatings market sectors 3-5 % (GDP growth) billion, 2013 3% (at GDP growth) 7 See next slide 6 5 4 3 2 1 0 Protective Vehicle Powder Wood Marine Specialty…
The Marine new build market may have now reached the bottom of the cycle... New build ship deliveries Million deadweight tons, 2007 = 95 -5.7% -30.1% +18.4% p.a. 2007 08 09 10 11 12 13 14 Delivered Range of outcome On…
AkzoNobel is the global market leader in Performance Coatings, excluding Automotive Performance Coatings revenue billion, 2013 unless noted 6 5 4 3 2 1 0 Non-Automotive Automotive * 2012 data Source: Annual Reports;…
AkzoNobel has many leading market sector positions in Performance Coatings Performance Coatings market sectors AkzoNobel market share x billion, 2013 position (by value) 2013 1 7 3 1 6 5 1 4 1/2 1 3 1 2 2 1 1/2 1 0…
We successfully expanded our portfolio and global presence Performance Coatings has made four bolt-on acquisitions over the last few years that brought many benefits, including: Expanding our global reach Broadening our technology…
We have a strong business but there is room for improvement going forward What we have done Room for improvement over the last three years over the next three years Grown the business in a difficult market environment Grow volume…
Drive performance improvement initiatives Initiative Actions Roll out a common set of commercial processes Drive commercial excellence to increase to deliver both organic growth and sales effectiveness commercial efficiency Use…
Drive commercial excellence to increase sales growth and commercial efficiency Commercial excellence is a key Actions value driver in Performance Coatings Best practice selling processes Best practice and competency training will be…
Complexity reduction and continuously reduce external spend Performance Coatings Actions 2013 Drive further complexity reduction: Profit and loss breakdown* Harmonize recipes % of total SKU reductions 100% Use a cross-functional…
Continuously improve operational productivity Supply Chain performance is a key element for Actions success in Performance Coatings Embed standard processes and continuous Supply Chain cost improvement capabilities to achieve…
Pursue differentiated growth strategies Outgrow the market organically Expected outcomes Marine Improved market share Protective Costs dont grow as fast as revenue Powder Improved return on sales Specialty Finishes in percentage…
Business at a glance Revenue by end user segment Revenue by geographic spread 5% Buildings and Mature Europe 18% infrastructure 10% 2% North America Transportation 6% 44% Asia Pacific Consumer 17% 57% Latin America 19% goods…
The chemical industry is large and growing 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 Europe food…
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…
Platforms operate world scale plants based on advanced technologies Our main chemical platforms Key products Sodium chlorate Bleaching chemicals Hydrogen peroxide Energy/Salt Monochloroacetic acid Salt-chlorine chain Chlorine…
We have invested in the recent past and are well-prepared for future growth BA Specialty Chemicals capital expenditure million 500 400 300 200 100 0 2010 2011 2012 2013 Capital Expenditure Depreciation and Amortization Major…
Accomplishments to date Area 2010 2013 Delta Number of operations integrated with customers 15 17 +13% Sales per FTE (k) 445 467 +5% Capacity expansions (10%) 12 units Number of manufacturing sites 109 102 -7% Sales/site ( million)…
Four operational improvement initiatives Improve Strengthen Reduce Enhance product productivity of commercial organizational and process supply chain and excellence costs innovation operations Asset optimization Customer value…
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…
Salt-Chlorine chain: Right at the heart of the customer base Steam cracker Refinery Olefin consumer Refinery & olefin producer Pipelines* * Pipelines transporting crude oil (RAPL), nafta (PALL), industrial gasses, ethylene and…
Ethylene oxide network: Capitalizing on China investments Bio-treatment facility Chelates Surfactants Hydrogen Organic Cyanide Peroxides Ethylene Oxide Ethylene Amines Cellulosics Site plan Investor Update Q1 2014…
Surfactants: Growing with attractive end markets Oilfield Lubricants Mining Agriculture Investor Update Q1 2014 results 70
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…
Our platforms build on value chains Raw Base Chemical Performance/ materials chemicals inter-mediates functional End products chemicals Bleaching chemicals Electrochemistry Salt-chlorine chain Polymer catalysts Serving…
Capital expenditure will be more in line with depreciation and amortization Capital Expenditures (millions ) 5.4% 4.5% 4.6% 826 3.7% 708 40-50% of capital expenditure is 666 growth related 534 Going forward, capital expenditure…
Performance improvement actions release cash in Operating Working Capital Operating Working Capital million Operating Working Capital OWC as % of LQ revenue*4 2.500 16% 12.9% 14% Operating Working Capital as % of revenue has 2.000…
2015 target: net debt to EBITDA ratio of less than two Net debt/EBITDA x We have a strong liquidity position to support business needs: net cash and cash equivalents 1,5 2.1 billion* Undrawn revolving credit facility of 1.8 billion…
Continuously reducing costs of long term bonds Debt maturities million Repaid bonds bonds bonds 7.75% 4.00% 2.62% 7.25% 5.62% Debt duration 3.6 years 825 8.00% 800 750 622 379 Improving cash flow and 306 divestments enabled…
On track to deliver cash positive after dividend in 2015 Cash flow sources and uses Restructuring and pension 2012 2013 top-ups consume a significant proportion of cash Performance improvement focus starts to address cash…
Proactively managing or removing pension liabilities ICIPFs active management of interest rate and inflation Interest rate / exposure, with around 80% of defined benefit obligation Inflation hedging (DBO) risks hedged to date Retain…
Pension cash flow guidance Defined benefit pension cash top-ups Top-ups relate mainly to the 2 big UK plans, the ICI Pension Fund million and the CPS Pension Scheme 2013 actual* 311 Top-ups are based on prudent actuarial valuation of…
Dividend policy unchanged Dividends paid () Our dividend policy is to pay a stable to rising dividend each year 1.08 1.12 1.12 1.12 1.05 An interim and final dividend will be paid in cash unless shareholders elect to receive a…
Variable costs analysis 2013 (excluding Decorative Paints North America) Packaging Energy & other variable costs* Raw materials Solvents 6% 7% 29% Chemicals and intermediates*** 17% 3% Other raw materials** 10% 5%…
Both short & long term incentives are aligned with our priorities Executive short term incentive 2014 Executive long term incentive 2014 STI Metric LTI Metric Element Element 20% Return on investment 35% Return on investment 20%…
Innovation Pipeline Q1 2014 Decorative Paints Dulux Easycare Key Features Customer Benefits Stain Beading Stains bead on the surface Repels water-based liquids such as tea, Surfaces are easier to clean; walls stay clean for coffee,…
Innovation Pipeline Q1 2014 Marine & Protective Coatings Intertrac Key Features Customer Benefits Shipping industrys first digital tool for accurately Enables ship owners to match anti-fouling coating assessing and predicting the risk…
Innovation Pipeline Q1 2014 Surface Chemistry Controlled-release scale inhibition technology Key Features Customer Benefits Proprietary technology for incorporating scale An eco-premium solution for oilfield owners and inhibitors into…
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