Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Shareholder Meeting (September 2017)
31 slides from Akzo Nobel's shareholder meeting presentation, Sep 8, 2017
Slide 1: Extraordinary General Meeting
Extraordinary General Meeting September 8, 2017
Slide 2: Agenda
Agenda 1. Appointment of Mr. T.F.J. Vanlancker as member of the Board of Management (voting point) 2. Further explanation and discussion regarding AkzoNobel's response to the unsolicited and non-binding proposals made by PPG in March/April 2017 (discussion point) Extraordinary General Meeting 2
Slide 3: Switch to voting slide
Switch to voting slide Extraordinary General Meeting 3
Slide 4: How we evaluated the PPG proposals / Our approach to shareholder engagement
How we evaluated the PPG proposals Our approach to shareholder engagement
Slide 5: Further explanation of our response to the unsolicited proposals from PPG
Further explanation of our response to the unsolicited proposals from PPG Provide further insight into decision-making and response – Render account of these decisions in the period between 2 March and 1 June Show transparency regarding the process followed by the Boards Objectives: – Explain how th
Slide 6: The timeline of events
The timeline of events Meeting of the Boards (21) 2 March 2017 20 March 2017 24 April 2017 30 May 2017 1 June 2017 First proposal PPG Second proposal PPG Third proposal PPG PPG sends PPG withdraws its € 54.00 per share in cash + € 57.50 per share in cash + € 61.50 per share in cash + additional thou
Slide 7: The process followed by the Boards
The process followed by the Boards Financial advisors to assist in financial evaluation of the PPG proposals Relevant Legal advisors to advise on Boards' legal duties and assist in legal evaluation of the PPG proposals (including antitrust) expertise Independent legal advice for the Supervisory Boar
Slide 8: Legal framework for Boards' assessment
Legal framework for Boards' assessment ”The management board is responsible for the continuity of the company and its affiliated enterprise. The management board focuses on long-term value creation for the company and its affiliated enterprise, and takes into account the stakeholder interests that a
Slide 9: Value considerations
DRAFT Value considerations Hans De Vriese – Interim CFO
Slide 10: Valuation methodologies used to assess financial terms of the proposals
Valuation methodologies used to assess financial terms of the proposals To assess the financial terms of PPG's proposals, the financial advisors provided the Boards with a value assessment based on a broad range of valuation methodologies and related analyses, including the following: 1) CONTROL VAL
Slide 11: PPG's proposals undervalued AkzoNobel
PPG’s proposals undervalued AkzoNobel 0.357 0.331 Value of equity component dependent on fluctuation 0.300 shares shares in PPG share price and USD / EUR FX rate shares Offer price should be adjusted for already announced €54.00 €57.50 €61.50 €1.28 final dividend for 2017 and any other future divide
Slide 12: Reference was made to the AkzoNobel standalone strategy, announced April 19
Reference was made to the AkzoNobel standalone strategy, announced April 19 The assessment of financial terms of PPG proposals took into account AkzoNobel's standalone strategy as announced on April 19, including the following highlights: Strategy: create two focused businesses Paints and Coatings 2
Slide 13: Proposals did not represent an adequate change of control premium
Proposals did not represent an adequate change of control premium AKZONOBEL’S STAND-ALONE VALUE BASED ON BROKER VIEWS(1) IMPLIED PREMIUM OF LAST PROPOSAL (1) c.€91 (4) (2) (3) €96.75 c.€77 c.€72 +6% +26% (3) € 91 € 77 Broker Valuation Broker Valuation Post Broker Valuation Implied premium on stand-
Slide 14: Proposals implied an inadequate multiple
Proposals implied an inadequate multiple SELECTED BENCHMARK TRANSACTIONS MULTIPLES OF PPG’S FINAL PROPOSAL 16,3x Enterprise Value AkzoNobel as per Proposal € 26.9bn 15,3x x EBITDA '16A 12.8x 12,0x ~11.7–13.2x x EBITDA '17E 12.0x Value of Spec. Chem . € 9.0bn € 10.0bn € 11.0bn (2) x EBITDA '17E 10.1x
Slide 15: Real value of proposals at risk due to significant equity component
Real value of proposals at risk due to significant equity component Value of equity component dependent on fluctuation in PPG share price and FX rate €96,75 €90,86 € 35,25 €… € 30,64 (1,28) € 61,50 € 60,22 Proposal (April 24, 2017) 2016 final dividend Current situation Up to 18 months… Value receive
Slide 16: Timing and certainty
Timing and certainty Sven Dumoulin – General Counsel
Slide 17: The proposed combination would have posed significant antitrust issues
The proposed combination would have posed significant antitrust issues Countries where filings are highly likely or possible Antitrust assessment In-depth antitrust analysis was conducted, including assessment of required filing requirements, expected level of divestments and timing implications Hig
Slide 18: Antitrust review of proposed combination would likely take up to 18 months
Antitrust review of proposed combination would likely take up to 18 months Following in-depth analysis of antitrust risks, a review of similar complex transactions showed that time between announcement and closing would likely take up to 18 months Serious risk that a transaction could not be complet
Slide 19: Expected impact on the business
Expected impact on the business Areas of expected divestments Impact on the business Aerospace coatings, Decorative paints, Protective Up to 18 months of regulatory efforts and extended coatings, Coil & Extrusion coatings, Packaging period of distraction for management coatings, Vehicle Refinishes a
Slide 20: Antitrust concerns not resolved in PPG proposals
Antitrust concerns not resolved in PPG proposals No solutions for antitrust in Risk of no completion Reverse termination fee insufficient PPG proposals The day before PPG withdrew Divestment cap does not Reverse termination fee is insufficient compensation for its offer, PPG first provided provide d
Slide 21: Stakeholders and Culture
Stakeholders and Culture Antony Burgmans – Chairman of the Supervisory Board
Slide 22: The factors AkzoNobel took into account
The factors AkzoNobel took into account The Boards must make a balanced judgement of which strategy best serves the interests of AkzoNobel and all of its stakeholders This is required by Dutch law including the Dutch Corporate Governance Code In considering how PPG’s proposals affected stakeholder i
Slide 23: Stakeholders and Culture
Stakeholders and Culture Antony Burgmans – Chairman of the Supervisory Board
Slide 24: Shareholder engagement: Next steps
DRAFT Shareholder engagement: Next steps Ben Verwaayen - Chairman of the Supervisory Board Committee for Shareholder Relations
Slide 25: Increased shareholder engagement
Increased shareholder engagement More than 350 meetings and calls with investors since March Program of meetings to introduce new CEO EGM to explain and discuss consideration of proposals by PPG Established Supervisory Board committee on shareholder relations Appointed David Mayhew and team at JP Mo
Slide 26: Actions aligned with shareholder interests
Actions aligned with shareholder interests Interim and special dividend to be paid in November – 50% higher dividend for 2017 – €1bn special cash dividend Executive remuneration aligned to delivery of plan; linked to 2020 financial guidance Agreement reached with Elliott Advisors following recent co
Slide 27: Questions on:
Questions on: How we evaluated the PPG proposals Our approach to shareholder engagement Extraordinary General Meeting 27
Slide 28: Actions taken to ensure delivery of 2020 financial guidance
Actions taken to ensure delivery of 2020 financial guidance New Executive Committee structure New integrated management organization Increased selling prices Efficiency programs 2020 Financial guidance remains unchanged: – Return on sales 15% – Return on Investment >25% Separation of Specialty Chemi
Slide 29: Questions on:
Questions on: • Recent events and business update Extraordinary General Meeting 29
Slide 30: Thank you
Thank you Extraordinary General Meeting 30
Slide 31: Disclaimer
Disclaimer Each financial adviser is (and was at all times) acting as financial adviser to AkzoNobel and for no one else in connection with the PPG approach and will not be responsible or liable to anyone other than AkzoNobel for advice in relation to the PPG approach or any other matters referred t