Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Q2 2021 Earnings Presentation
92 slides from Akzo Nobel's earnings presentation, Jul 21, 2021
Slide 1: Investor update Q2 2021
Investor update - 2020 and beyond February 13, 2020 Investor update Q2 2021 July 21, 2021
Slide 2: Agenda
Agenda UPDATE 2020 BEYOND 2020 Introduction Beyond 2020 Executive summary Grow Market dynamics Deliver Winning together: 15 by 20 PEOPLE. PLANET. PAINT. Investor update | 2020 and beyond 2
Slide 3: Executive summary
Executive summary Thierry Vanlancker Investor update | 2020 and beyond 3
Slide 4: A focused paints and coatings company
A focused paints and coatings company North America Mature Europe Emerging Europe 12% 35% 10% €9.3bn revenue Asia Pacific 30% €1.2bn EBITDA €1bn EBIT 12.0% ROS Other regions 17.2% ROI South America 4% 33,800 employees 9% Revenue by destination All figures are based on year-end 2019. ROS = adjusted o
Slide 5: Delivering on promises made in 2017
Delivering on promises made in 2017 Creating two focused businesses as a logical next step Dual-track separation process completed Accelerating growth momentum and enhanced profitability Revenue growth ambition reduced X ROS increased from 10.6% to 12.0% Clear separation of Specialty Chemicals withi
Slide 6: Winning together: 15 by 20
Winning together: 15 by 20 Passion for paint Precise processes Powerful performance Proud people Investor update | 2020 and beyond 6
Slide 7: Performance improvement accelerated during H2 2019
Performance improvement accelerated during H2 2019 Return on sales (ROS), full-year Return on sales (ROS), second half-year % Unallocated cost % Unallocated cost 15.5 15.5 12.0 12.5 14.5 10.6 14.5 10.6 10.6 9.2 FY 2017 FY 2018 FY 2019 FY 2020 H2 2017 H2 2018 H2 2019 FY 2020 Ambition Ambition ROS = a
Slide 8: Significant share price increase and total shareholder return delivered since 2017
Significant share price increase and total shareholder return delivered since 2017 Share price Share price €59.7 €90.6 + 125 Shareholder returns* €17.3 Rebased to AkzoNobel (€) +82% 100 +52% 75 +24% Share price Total Shareholder Return AEX 50 January-17 June-17 December-17 June-18 December-18 June-1
Slide 9: Performance gap versus top peers narrowed
Performance gap versus top peers narrowed, with further room to improve ROS 15% AkzoNobel 10% 5% 0% 2014 2015 2016 2017 2018 2019 ROS = adjusted operating income as percentage of revenue (including unallocated cost) Source: Company data, internal estimates Investor update | 2020 and beyond 9
Slide 10: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement… GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 10 Assumes no significant market disruption
Slide 11: Market dynamics
Market dynamics Ruud Joosten Investor update | 2020 and beyond 11
Slide 12: Paints and coatings protect assets and inspire people's everyday lives
Paints and coatings protect assets and inspire people’s everyday lives Investor update | 2020 and beyond 12
Slide 13: Attractive €125bn industry with multiple opportunities for growth
Attractive €125bn industry with multiple opportunities for growth Global paints and coatings by market sector Peer revenue comparison ~€125 billion, 2018 € billion, 2018 Decorative paints 14 Deco North Top players General Industrial America; 12 Powder coatings and Other; 10% ~50% of the market 14% 1
Slide 14: Strong global portfolio with leading positions in most segments
Strong global portfolio of businesses with leading positions in most segments Segment Market size Position Market growth Current market dynamics ~€bn, 2018* by revenue 2017-2020 Consolidation in fragmented market Decorative Paints Asia continues to outgrow (ex. North America) 35 1 1-2% more develope
Slide 15: Business portfolio managed according to clear strategic mandates
Business portfolio managed according to clear strategic mandates Strategic mandates Actions Performance cells 2017 view Average ROS Grow Maintain Harvest Change the game Invest to grow market share Grow and/or profit ROS Commercial actions M&A or divestiture Restructure Maintain current investment l
Slide 16: Decorative Paints EMEA
Decorative Paints EMEA Combining leading positions with strong brands and distribution Largest player in fragmented market ROS +500bps AkzoNobel 60% €2.2bn revenue #1 positions 2x relative market share Peer 1 20% #1 in Africa Others Peer 2 #2 positions Peer 3 H2 2017 H2 2019 Strong foundation to gro
Slide 17: Decorative Paints: successful bolt-on acquisitions
Decorative Paints Successful bolt-on acquisitions Focus on strategically aligned #1 in Romania and value generating acquisitions: Strong market presence +€85m Local production revenue capacity in 2019 Strengthen market position Increase relative market share Shared #1 in Spain Strengthens metal Inte
Slide 18: Marine and Protective Coatings
Marine and Protective Coatings Recovered to double-digit ROS in tough market Industry headwinds persisted in marine Profitability back in double-digits ROS and oil and gas industries Focus on value over volume +600bps CGT* Oil and gas capital $bn expenditure ($ bn) Right-sized cost structure 140,000
Slide 19: Industrial Coatings
Industrial Coatings Turnaround with focus on value over volume and cost savings €1.7bn revenue Deliberate focus on Investing in our assets: value over volume €50m upgrade for #1 packaging wood coatings in the US (inside the can) Raw material pricing inflation recovery #2 coil Margin management Tail
Slide 20: Winning together: 15 by 20
Winning together: 15 by 20 Maarten de Vries Investor update | 2020 and beyond 20
Slide 21: Winning together: 15 by 20 strategy continues to deliver results
Winning together: 15 by 20 strategy continues to deliver results Sales force effectiveness 10% cumulative price increases (2017-2019) Margin management Moving towards ongoing margin management Innovation excellence Paint the Future creating an innovation ecosystem Global Business Services Integrated
Slide 22: Transformation delivering towards previously announced cost savings
Transformation delivering towards previously announced cost savings Sales force effectiveness Cost savings (€m) Total €220m Margin management Achieved cost savings 10 Innovation excellence 43 19 Carryover cost savings 33 Global Business Services 38 Integrated Business Planning 18 ERP and systems pla
Slide 23: Good progress and sustained focus on transformation plans
Good progress and sustained focus on transformation plans 2017 2018 2019 2020 Sales force effectiveness Margin management Innovation excellence Global Business Services Integrated Business Planning ERP and systems platform ALPS continuous improvement Fit-for-purpose organization Procurement excellen
Slide 24: Several key initiatives contribute to 2020
Several key initiatives contribute to 2020 Significant € contribution to 2020 Sales force effectiveness Moving towards margin management Margin management 1-2% annual pricing discipline Innovation excellence Global Business Services Additional 36 GBS transitions in progress Integrated Business Plann
Slide 25: Momentum to deliver higher ROS in 2020
Momentum to deliver higher ROS in 2020 Margin management and cost savings drive profitability improvement Return on sales (ROS) Remaining % Unallocated cost cost savings Margin management Continuous €120m 15.5 1-2% improvement 14.5 12.5 10.6 Fixed cost 9.2 inflation H2 2017 H2 2018 H2 2019 FY 2020 A
Slide 26: Momentum to deliver improved ROI in 2020
Momentum to deliver improved ROI in 2020 despite lower growth assumptions and impact of IFRS 16 Return on investment (ROI) % Unallocated cost and invested capital 18.0 17.8 >20 16.6 17.2 Excluding impact of IFRS 16 ROI also impacted by: Lower revenue growth Recent acquisitions 2017 2018 2019 2019 20
Slide 27: Delivered promised shareholder returns
Delivered promised shareholder returns Moving towards target leverage 1-2x net debt/EBITDA Net Leverage Net Leverage Net Leverage Net Leverage 1.7x (5.6x) 0.7x 1.0x – 2.0x Net Debt 1,000 1,951 500 521 802 5,500 Net Cash 642 -7,812 -5,861 Special Net debt end Net cash Net debt end Total pension* Cash
Slide 28: Winning together: 15 by 20
Winning together: 15 by 20 Passion for paint Precise processes Powerful performance Proud people Investor update | 2020 and beyond 28
Slide 29: Beyond 2020
Beyond 2020 Thierry Vanlancker Investor update | 2020 and beyond 29
Slide 30: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement… GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 30 Assumes no significant market disruption
Slide 31: Key levers to grow and deliver profitability improvement 2021-2023
Key levers to grow and deliver profitability improvement 2021-2023 Integrated Supply Chain Portfolio management Value engineering Market segment growth ERP and application integration Sustainable (open) innovation End-to-end processes Attractive capital allocation Investor update | 2020 and beyond 3
Slide 32: Rigorous portfolio management
Rigorous portfolio management Creating a high-performance culture 2017 ROS 10.4% 10.6% 2019 ROS 10.4% 12.0% Sales to 3rd parties, €m Average ROS Grow Maintain Harvest Change the game ROS = adjusted operating income as percentage of revenue (excluding unallocated cost) Investor update | 2020 and beyo
Slide 33: Market segment growth and sustainable innovation
Market segment growth and sustainable innovation Ruud Joosten Investor update | 2020 and beyond 33
Slide 34: Attractive growth opportunities across geographies and industries
Attractive growth opportunities exist across geographies and industries Aerospace Powder Yacht Packaging Decorative Paints Decorative Decorative Paints Asia Paints EMEA Growth South America Protective Coil Cons. Elect. Specialty Wood Vehicle Marine Plastics Refinishes Relative attractiveness Source:
Slide 35: Decorative Paints in China
Decorative Paints in China Highly profitable with strong growth drivers Strong platform in place Positioned for future growth ~€5bn market Renewed management team Drive product penetration and partnerships for premium Cleaned-up product portfolio Disciplined pricing #1 in premium segment Acquired mi
Slide 36: Decorative Paints: leverage global scale to drive growth
Decorative Paints Leverage global scale to drive growth and efficiency Marketing Innovation Color of the Year Easycare Color Sensor €3.7bn revenue All countries 31 countries 18 countries ROS +300bps TV campaigns Rezisto Wet tester H2 2017 H2 2019 25 countries 13 countries 22 countries Investor updat
Slide 37: Powder Coatings
Powder Coatings Clear global #1 - fastest growing and high performing Multiple sources of growth.. Product launches.. New Interpon 610 Low E applications Wood and plastic Reduced energy AkzoNobel consumption Peer 1 Increased Interpon D X-Pro Peer 2 capacity China and India Improved scratch Peer 3 re
Slide 38: Packaging Coatings
Packaging Coatings Well placed to capture share in a growing market segment Shift from plastic New categories Brand differentiation Leading technology Market leading epoxy and BPANI inside spray technologies... Robust application High-speed coating and flexibility ~€2.5bn market Market expected to c
Slide 39: Aerospace Coatings
Aerospace Coatings Leading position with strong growth dynamics Leading position with basecoat/clearcoat technology Sustainable solutions (e.g. chrome-free technology) Enables entry into #1 in exterior coatings Strong key account management cabin/interior coatings Strengthens position 50:50 new:main
Slide 40: Yacht Coatings
Yacht Coatings Attractive, growing niche segment; leading brands and technology Only player with global presence: Present in all segments: – Recreational boating (distribution) #1 position – Superyacht (OEM and distribution) €400m market Complete offering: – Below water 3% growth CAGR (primers, anti
Slide 41: Innovation
Innovation Solutions beyond generations for our customers worldwide ~€1.25 billion spent on R&D in the last five years Technology ~3,000 scientists worldwide Product development 2,900+ patents Customer support Priority patent applications filed Innovation drivers Asset [4Productivity innovation prot
Slide 42: Creating an innovation ecosystem
Creating an innovation ecosystem Collaborative open innovation transforming the industry Paint the Future Innovation Regional startup startup challenge acceleration acceleration Collaborative with suppliers Brazil innovation Spring 2019 November 2019 Spring 2020 ecosystem Investor update | 2020 and
Slide 43: Integrated Supply Chain and value engineering
Integrated Supply Chain and value engineering David Prinselaar Investor update | 2020 and beyond 43
Slide 44: Integrated Supply Chain: 2023 ambitions
Integrated Supply Chain Reinventing our supply chain to become strategic and customer-driven 2023 ambitions Safety Remain top quartile 13,500 People Capital Reduced 125 Sites inventory 365 Warehouses Service Become top quartile ~€250m CapEx/year People €1.5bn Cost Become top quartile (OHI) Cost 4% a
Slide 45: Integrated Supply Chain
Integrated Supply Chain Reinventing our supply chain to become strategic and customer-driven 2017-2019 2020 and beyond Functional to integrated Reinventing supply chain Organizational End-to-end customer transformation service Asset network based on ALPS implementation supply chain archetypes Integr
Slide 46: ALPS continuous improvement drives operational excellence
Integrated Supply Chain ALPS continuous improvement drives operational excellence ALPS continues to offset inflation Waste (kg/t) (Implementation level 2020 to 2023 in %) 25 2023 20 15 10 Regional Industry 2017 2018 2019 2023 100% 100% best ALPS delivering results Manufacturing cost productivity (%)
Slide 47: Streamlined manufacturing footprint
Integrated Supply Chain Streamlined manufacturing footprint; consolidated warehouse network EBIT per site* Number of warehouses AkzoNobel 400 300 200 100 0 2017 2019 2023 EBIT €m per site Sites Outsourced Insourced From… To… Broad manufacturing and warehouse footprint Streamlined manufacturing footp
Slide 48: Three archetypes enable customer-driven supply chain
Integrated Supply Chain Three archetypes enable customer-driven supply chain optimization Simple and efficient Managed complexity Agile and adaptive 50% 40% 10% of total volumes of total volumes of total volumes Lowest total cost for high volumes Offer many SKUs with selective Fulfil new and/or unex
Slide 49: Capital expenditure based on strategic mandates and archetypes
Integrated Supply Chain Capital expenditure based on strategic mandates and archetypes ~€250m PLAN Advanced planning CapEx/year system Data analytics MAKE 40% Performance portals In line technology 60% Automation Capacity optimization DELIVER 4PL Data analytics Maintain Capacity optimization Invest
Slide 50: Value engineering
Value engineering Procurement category management, enabling efficiency gains Category management in place Value engineering 2.0 Efficiency gains… Titanium dioxide Achieved: Additives Raw material slate TiO2 rationalization China Specialty 12 17 rationalization across ~20% average reduction of TiO2 r
Slide 51: ERP, end-to-end, and capital allocation
ERP, end-to-end, and capital allocation Maarten de Vries Investor update | 2020 and beyond 51
Slide 52: Information Technology
Information Technology Removing complexity; creating a future-proof technology backbone 2017 2020 2023 Driving cost savings 29 ERP systems 1 ERP system through standardization 43 ERP systems and simplification >1,000 applications ~725 applications ~350 applications End 2020 Beyond 2020 ERP systems ~
Slide 53: Global Business Services (GBS)
Global Business Services (GBS) Embed operational excellence and deliver cost savings END 2020 BEYOND 2020 2,600 people (from 350 in 2017) Rigorous standardization Centralize before standardize Automation of activities Transparency of end-to-end metrics Annual cost productivity (7%-10%) Reliable data
Slide 54: Stepping up free cash flow
Stepping up free cash flow Free cash flow (FCF) €m Free cash flow excluding pension top-up payments Reported free cash flow from operations FCF yield* Strong cash generation 5.0% Increased profitability -22 Minimal pension top-up payments FCF yield* 1.8% 461 Industry top quartile working capital Fur
Slide 55: Stable to rising dividend and modular share buybacks
Stable to rising dividend and modular share buybacks Dividend (€) Adjusted earnings per share* (EPS) (€) 2.50 0.85 1.80 1.90 3.10 1.55 1.65 2.56 1.45 1.65 2.38 1.91 1.28 1.09 1.43 1.49 1.12 1.20 0.33 0.35 0.37 0.56 0.37 0.41 2014 2015 2016 2017 2018 2019 2016 2017 2018 2019 Related to the Specialty
Slide 56: Strategically aligned, value creating, M&A
Strategically aligned, value creating, M&A Disciplined approach, in line with strategic mandates Strategic fit: Exploratory Signing Target list Prioritizing and Paints and coatings and closing due diligence segments Aligned with strategic mandates Add geography and/or technology Opportunity for syne
Slide 57: Capital allocation priorities
Capital allocation priorities 2021-2023 Chemicals separation proceeds returned Pension liabilities de-risked ~2.5% capital expenditures/revenue Profitable organic growth ≥ market CAGR; +50 bps ROS CAGR Leverage ratio 1-2x Dividend Stable to rising net debt/EBITDA Acquisitions Strategically aligned a
Slide 58: PEOPLE. PLANET. PAINT. and concluding remarks
PEOPLE. PLANET. PAINT. and concluding remarks Thierry Vanlancker Investor update | 2020 and beyond 58
Slide 59: PEOPLE. PLANET. PAINT.
PEOPLE. PLANET. PAINT. Our approach to sustainability Investor update | 2020 and beyond 59
Slide 60: PEOPLE. PLANET. PAINT.
PEOPLE. PLANET. PAINT. Overall engagement trend positive Organizational health up 9% (2018-2019) Executives (~300 people) 2nd quartile Response rate 65% Above leadership benchmark Accreditation by Top Employers Institute in key countries: Brazil, China, the Netherlands, UK, US 2019 Employer awards i
Slide 61: PEOPLE. PLANET. PAINT. 2025 ambitions
PEOPLE. PLANET. PAINT. 2025 ambitions >25% 50% Reduced carbon emissions Water re-usage (Baseline 2018) >50% 75% Renewable energy Reusable waste Investor update | 2020 and beyond 61
Slide 62: PEOPLE. PLANET. PAINT. Sustainable solutions
PEOPLE. PLANET. PAINT. Sustainable solutions Eco-premium solutions make up >40% of total revenue >20% target for 4 consecutive years 23 22 22 21 21 21 20 20 40% 19 60% 17 15 2014 2015 2016 2017 2018 2019 Other Sustainable Eco-premium solutions solutions as % of sales Dulux Trade Evolve Interpon “Low
Slide 63: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 63 Assumes no significant market disruption
Slide 64: Financial ambitions 2021-2023
Financial ambitions 2021-2023 PLANNING ASSUMPTIONS Constant currencies ROS = Adjusted operating income as percentage of revenue (including other activities/eliminations) Revenue growth ROS +50bps CAGR ≥ market CAGR Effective tax rate 27% ~2.5% Capital expenditures as a percentage of revenue Leverage
Slide 65: Investor update Q2 2021
Investor update Q2 2021 July 21, 2021 Bringing color and inspiration to Port Moresby The surface of a bland concrete wall in Port Moresby, Papua New Guinea, has been brought to life thanks to one of our latest “Let’s Colour” projects. The 100-meter-long wall was transformed into something far more c
Slide 66: Agenda
Agenda Key highlights Financial review Concluding remarks Q&A Alternative performance measures (APM) AkzoNobel uses APM adjustments to the IFRS measures to provide supplementary information on the reporting of the underlying developments of the business. A reconciliation of the alternative performan
Slide 67: Key highlights
Key highlights Investor update | Q2 2021 67
Slide 68: Strong growth and higher profit in Q2 2021
Strong growth and higher profit in Q2 2021 Q2 2021: H1 2021: Revenue Adjusted EBITDA* Revenue €223m of €1bn In constant currencies* In constant currencies* share buyback completed 29% higher Up 31% at €419m 23% higher (up 8% vs 2019) (up 9% vs 2019) Adjusted Adjusted EPS* Adjusted Announced From con
Slide 69: Grow & Deliver strategy continues strong momentum
Grow & Deliver strategy continues strong momentum Growth for fourth Strong focus on margin consecutive quarter management; prices up 4.5% (revenue* up 8% versus 2019) Announced acquisition of Sustainability: highest Grupo Orbis (~€260m); possible MSCI rating (AAA) leadership in South America for six
Slide 70: Acquisition of Grupo Orbis expands position in South and Central America
Acquisition of Grupo Orbis expands position in South and Central America ~€260m 3,000 8 manufacturing Complimentary geographic fit revenue employees sites AkzoNobel Grupo Orbis Headquartered in Colombia Presence across South and Central America 100-year heritage Brands include Pintuco, Protecto and
Slide 71: Leading industry in sustainability ratings and ambitions
Leading industry in sustainability ratings and ambitions AkzoNobel AkzoNobel AkzoNobel 2030 ambitions People. Industry Industry average average Industry Top quartile Organizational Health average >30% female executives Planet. Cut carbon emissions in half, versus 2018 baseline (no offsetting) – 30%
Slide 72: Focus on growth underpinned by robust end market demand
Focus on growth underpinned by robust end market demand North South EMEA North South America America Asia Asia Paints Industrial Powder Automotive and Specialty Marine and Protective End market demand (y-o-y) Strong Medium Weak Source: Company estimates Investor update | Q2 2021 72
Slide 73: Industrial coatings strong profitability and growth opportunities ahead
Industrial coatings strong profitability and growth opportunities ahead ~€17bn market Moving average revenue vs. 2018 (index) Transforming surfaces through… €1.6bn revenue in 2020 More safe and sustainable coil coatings #1 packaging (inside metal cans) Coil Packaging Wood Expanded offering for #2 co
Slide 74: Paints EMEA growing leading positions organically and with bolt-on acquisitions
Paints EMEA growing leading positions organically and with bolt-on acquisitions €2.2bn revenue in 2020 Quarterly revenue growth (%) vs. 2018 Successful bolt-on acquisitions… #1 in Europe and Africa 2021 2020 Presence in all major markets Professional Consumer Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 '19 '19 '1
Slide 75: Financial review
Financial review Investor update | Q2 2021 75
Slide 76: Adjusted operating income 41% higher, driven by higher volumes and prices
Adjusted operating income 41% higher, driven by higher volumes and prices € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 1,987 2,511 26% 29% 8% Adjusted EBITDA* 321 419 31% Adjusted operating income* 238 335 41% ROS* 12.0% 13.3% ROI* 13.8% 19.3% Revenue development Q2 2021 (%) Increase De
Slide 77: Revenue growth and margin management delivered ~€100m more profit
Revenue growth and margin management delivered ~€100m more profit for Q2 2021 Adjusted operating income* (€m) - Positive impact Negative impact 89 - 61 - 128 - 66 285 - 15 ROS* 13.3% - ROS* 12.0% Note: €78m -7 temporary cost savings in Q2 2020 335 238 Q2 2020 FX Volumes Price Mix Raw materials/ OPEX
Slide 78: Paints volumes up 22%, driven by continued strong demand
Paints volumes up 22%, driven by continued strong demand € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 899 1,086 21% 23% 18% Adjusted EBITDA* 211 226 7% Adjusted operating income* 175 191 9% ROS* 19.5% 17.6% ……. Revenue development Q2 2021 (%) Increase Decrease Two major projects to inst
Slide 79: Coatings adjusted operating income up 74%, with prices 5% higher
Coatings adjusted operating income up 74%, with prices 5% higher € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 1,086 1,423 31% 35% 4% Adjusted EBITDA* 139 218 57% Adjusted operating income* 103 179 74% ROS* 9.5% 12.6% Revenue development Q2 2021 (%) Increase Our Yacht Coatings business h
Slide 80: Strong working capital management
Strong working capital management Operating working capital Free cash flow (FCF) €m (Trade) excl. pension pre-funding and top- Net Debt/EBITDA 1.2 times as a % of revenue up payments* (Q2 2020: 1.4) 17.4% 263 14.0% 13.2% 107 107 62 27 -176 Q2 H1 Q2 H1 Q2 H1 Q2 ‘19 Q2 ‘20 Q2 ‘21 2019 2020 2021 *Alter
Slide 81: Adjusted EPS up 50% to €1.20 per share
Adjusted EPS up 50% to €1.20 per share Adjusted EBITDA* Adjusted earnings per share* €223 million of €1 billion share (€m) (EPS) from cont. operations (€) buyback completed by end Q2 Number of shares (weighted average) 216m 191m 187m 810 1.20 642 623 0.96 0.80 419 321 285 Towards €2bn adjusted EBITD
Slide 82: Concluding remarks
Concluding remarks Investor update | Q2 2021 82
Slide 83: Q2 Highlights and Outlook
Q2 Highlights Outlook AkzoNobel targets to grow at least in line with Revenue up 26% and 29% higher in constant its relevant markets. Trends differ per region currencies, with 4.5% price increase and segment with significant raw material inflation expected to continue in the second half Adjusted ope
Slide 84: Upcoming events
Upcoming events Report for third quarter 2021 October 20, 2021 Investor update | Q2 2021 84
Slide 85: A focused, high performing, paints and coatings company
A focused, high performing, paints and coatings company Strong global brands Leading positions in large and attractive markets Balanced geographic exposure: ~50% revenue from emerging markets Well positioned to accelerate growth and enhance profitability Significant returns to shareholders Investor
Slide 86: Disclaimer/forward-looking statements
Disclaimer/forward-looking statements This presentation does not constitute or form a part of any offer to sell, or any invitation or other solicitation of any offer, to buy or subscribe for any securities in the United States or any other jurisdiction. Some statements in this presentation are 'forw
Slide 87: Appendix
Appendix Investor update | Q2 2021 87
Slide 88: Delivered growth fourth quarter in a row; Q2 revenue up 29%
Delivered growth fourth quarter in a row; Q2 revenue up 29% in constant currencies Paints Coatings Total Quarterly price/mix development in % year-on-year +2% price +4% price +3% price +1% price +5% price +2% price +4.5% price -6% mix -3% mix -5% mix -3% mix -1% mix -3% mix -3.1% mix 11 9 6 0 4 5 8
Slide 89: Delivering on capital allocation priorities
Delivering on capital allocation priorities Profitable organic growth ~2.5% capital expenditures/revenue Dividend Stable to rising Acquisitions Strategically aligned and value creating Shareholder returns Modular share buybacks Net debt/EBITDA Target 1-2x Retain strong investment grade credit rating
Slide 90: Performance measures and assumptions
Performance measures and assumptions Definitions of alternative performance measures Assumptions for 2021-2023 Adjusted earnings per share are the basic earnings per share from operations, excluding identified items and taxes thereon Revenue growth ≥ market CAGR Adjusted operating income is operatin
Slide 91: Additional financial information
Additional financial information Consolidated statement of free cash flows* Operating income to net income Q2 Q2 H1 H1 Q2 Q2 H1 H1 € million € million 2020 2021 2020 2021 2020 2021 2020 2021 297 469 EBITDA 574 857 207 384 Operating income 394 687 Pre-tax result on acquisitions and (25) (4) Net finan
Slide 92: Alternative performance measures
Alternative performance measures Q2 ’20 Q2 ’21 Δ% Operating income (€m) H1 ‘20 H1 ‘21 Δ% Q2 ’20 Q2 ’21 OPI margin (%) H1 ‘20 H1 ‘21 Average invested capital (€m) 2020 2021 Δ% 169 238 41% Decorative Paints 227 385 70% 18.8 21.9 Decorative Paints 13.7 19.1 Decorative Paints 2,959 2,734 (8%) 89 186 109