Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Shareholder Meeting (April 2013)
39 slides from Akzo Nobel's shareholder meeting presentation, Apr 26, 2013
Slide 1: 2012 review - Annual General Meeting of Shareholders
2012 review Annual General meeting of Shareholders Ton Büchner - CEO April p 26, 2013
Slide 2: Agenda
Agenda 1. Introduction 2. 2012 review 3. Strategy update 4 4. S Summary and d conclusion l i Annual General meeting of Shareholders: 2012 review 2
Slide 3: AkzoNobel today
AkzoNobel today • Revenue €15.4 billion • 50,610 50 610 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* EBITDA** by Business Area by Business Area Business Area Perfor
Slide 4: Our proposition: Leading market positions delivering leading performance
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 term growth potential on the basis of end-user end user segment
Slide 5: 2012 review
2012 review Annual General meeting of Shareholders: 2012 review 5
Slide 6: 2012 highlights
2012 highlights • 2012 revenue up 5 percent driven by favorable currencies and pricing, offset by lower volumes • 2012 EBITDA* 4 percent higher at €1,901 million (2011: €1,834 million) • Performance improvement program 2012 target have been exceeded • Decorative Paints North America reported in disc
Slide 7: In 2012 both revenue and EBITDA increased
In 2012 both revenue and EBITDA increased € million 2012 Δ% Revenue 15,390 5 EBITDA* 1,901 4 Ratio, % 2012 2011 EBITDA* margin 12.4 12.6 Revenue development 2012 vs. 2011 Increase Decrease +1% % +3% 5% +5% +3% -2% V l Volume P i /Mi Price/Mix Acquisitions/ A i ii / E h Exchange rates T l Total dives
Slide 8: Performance improvement program is on track and supporting results
Performance improvement p program p g is on track and supporting results EBITDA* bridge FY 2011 – FY 2012 Increase € million Decrease 2.400 2.300 (150) 2 200 2.200 2.100 411 (248) 238 (251) 2.000 1.900 67 1.800 1,901 1,834 1.700 1.600 1.500 1.400 1.300 1.200 FY 2011 Currencyy Price/Mix Volume Raw ma
Slide 9: Operating Working Capital reduced towards 12%
Operating p g Working g Capital p % of revenue reduced towards 12% OWC € million Operating Working Capital OWC as % of LQ revenue*4 2.500 15.1% 16% 14.1% 13.4% 13.9% 13.8% 13.6% 13.2% 2 259 2,259 14% 2,314 2.000 2,111 2,051 2,178 1,946 11.2% 12% 1,891 1.500 1,659 10% 8% 1.000 6% 4% 500 2% 0 0% Q1 20
Slide 10: Economic slowdown, particularly in Europe, continues to impact our businesses
Economic slowdown,, particularly p y in Europe, p , continues to impact our businesses Quarterly volume development in % year-on-year 2011 2012 10 2013 6 2 -2 -1 % -3 % -3 % -6 -4 % Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel • The economic environment remains challenging, a
Slide 11: 2012 sustainability highlights
2012 sustainability highlights • No.1 in prestigious 2012 Dow • Safety improvement: our total Jones Sustainability y Index reportable p rate of injuries j ((TRR)) p per million ours worked declined 23% • High scores in all 3 dimensions: versus 2011 towards 2.4 DJSI 2010 2011 2012 dimension score sco
Slide 12: Strategy update
Strategy update Annual General meeting of Shareholders: 2012 review 12
Slide 13: The global paints and coatings market is around €75 billion
The g global paints p and coatings g market is around €75 billion By market sector By end-user segment 2011 100% = €75 billion 2011, 2011 100% = €75 billion 2011, Aerospace Yacht Packaging Industrial Coil Marine Decorative Consumer Buildings and Wood Paints Goods Infrastructure (43%) Vehicle Refinis
Slide 14: AkzoNobel has many leading market positions
AkzoNobel has many y leading g market positions No.1 Position Other key players Multiple regions outside North PPG, regional players Decorative America N th A North America* i * Sh Sherwin-Williams i Willi PPG regional PPG, i l players l Protective Sherwin-Williams, Jotun Powder Axalta Jotun, Axalta
Slide 15: High growth markets are 44% of revenue and their importance will increase
High g growth g markets are 44% of revenue and their importance will increase % of 2012 revenue, excluding Decorative Paints North America Three year GDP growth* 38% 9% Mature Europe 6% 3% 8% 15% Emerging Europe 0% North America UK Eurozone USA Latin America China Developing Asia 2013 2014 2015 26%
Slide 16: Annual General meeting of Shareholders: 2012 review 16
Annual General meeting of Shareholders: 2012 review 16
Slide 17: ~43% of revenues
~43% of revenues New Build Projects Maintenance, Renovation and Repair Building Products and Components Annual General meeting of Shareholders: 2012 review 17
Slide 18: Film on Buildings and Infrastructure end market segment
Film on Buildings g and Infrastructure end market segment Annual General meeting of Shareholders: 2012 review 18
Slide 19: ~25% of revenues
~25% of revenues Natural Resource and Energy Industries Process Industries Annual General meeting of Shareholders: 2012 review 19
Slide 20: Film on Industrial end market segment
Film on Industrial end market segment Annual General meeting of Shareholders: 2012 review 20
Slide 21: ~16% of revenues
~16% 16% of revenues Automotive OEM, Parts and Assembly Automotive Repair Marine and Air Transport Annual General meeting of Shareholders: 2012 review 21
Slide 22: Film on Transportation end market segment
Film on Transportation p end market segment Annual General meeting of Shareholders: 2012 review 22
Slide 23: ~16% of revenues
~16% of revenues Consumer Durables Consumer Packaged Goods Annual General meeting of Shareholders: 2012 review 23
Slide 24: Film on Consumer Goods end market segment
Film on Consumer Goods end market segment Annual General meeting of Shareholders: 2012 review 24
Slide 25: AkzoNobel strategy
AkzoNobel strategy Annual General meeting of Shareholders: 2012 review 25
Slide 26: New and realistic 2015 financial targets focused on quality of earnings
New and realistic 2015 financial targets focused on q quality y of earnings g 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 < 2.0 12 8 5.9 * 8.9 * 2 1.4 8 4 1 4 0 0 0 201
Slide 27: We will drive five strategic focus areas
We will drive five strategic focus areas 1. Care for the customer 1. Care for the customer 2 Reduction 2. R d ti off product d t and process complexity 3 Focus on cash and return on investment 3. 3 Cash 3. C h and d return t on investment 4. Embedded safety y and sustainability y 4 Embedded 4. E b d
Slide 28: Sustainability is business; Business is sustainability
Sustainability y is business;; Business is sustainability • ‘Downstream eco-premium solutions’: 20% of our revenues by 2020 We will increase the revenue from solutions that generate direct resource and energy benefits for our customers, consumers and users • Reduction of carbon emissions 25-30% redu
Slide 29: Film on sustainability
Film on sustainability Annual General meeting of Shareholders: 2012 review 29
Slide 30: Decorative Paints overview
Decorative Paints overview Revenue by end-user Revenue by geographic region sub-segment 8%4% Maintenance, Mature Europe 16% renovation and repair Asia Pacif ic New build projects 14% Latin America 49% Emerging Europe Other regions 84% 25% Decorative Paints key figures (new definition) € million 2012
Slide 31: Performance Coatings overview
Performance Coatings overview Revenue by end-user segment Revenue by geographic region Mature Europe 14% Transportation 8% 4% 27% North America 36% Consumer 11% Goods Asia Pacific 23% Buildings and Emerging Infrastructure Europe Industrial 30% 20% Latin America 27% Other regions Performance Coatings
Slide 32: Specialty Chemicals overview
Specialty Chemicals overview Revenue by end-user segment Revenue by geographic spread Buildings and 3% 4% Mature Europe 18% Infrastructure 10% North America Transportation 40% 6% Asia Pacific 58% Consumer 22% Latin America 18% Goods Emerging Europe Industrial 21% Other regions Specialty Chemicals ke
Slide 33: Summary and conclusion
Summary and conclusion Annual General meeting of Shareholders: 2012 review 33
Slide 34: A smaller Executive Committee going forward
A smaller Executive Committee going forward* Spelling and * *With effect from the Annual General Meeting on April 26, 2013 **Until June 2013 Annual General meeting of Shareholders: 2012 review 34
Slide 35: Dividends
Dividends • Our dividend policy is to pay a stable to rising dividend each year 1.08 1.12 1.12 1.05 • An interim and final dividend will be paid in cash unless shareholders elect to receive a stock dividend 0.30 0.32 0.33 0.33 2009 2010 2011 2012 Final dividend Interim dividend Annual General meetin
Slide 36: Both short & long term incentives have been aligned with our priorities
Both short & long g term incentives have been aligned with our priorities Executive short term incentive 2013 Executive long term incentive 2013 STI Metric LTI Metric Element Element 20% Return on investment 35% Return on investment 20% Operating income 35% Total Shareholder Return 30% Operating cas
Slide 37: Summary
Summary • Solid performance in 2012, despite economic slowdown. Performance improvement program targets exceeded. • Clear end-user segment focus providing direction for our market initiatives and innovation spend • Operational strategy on the basis of: – Well defined strategic focus areas – Core pro
Slide 38: Thank you for your attention
Thank you for your attention AkzoNobel ¥, /”
Slide 39: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements which address such key issues as AkzoNobel’s AkzoNobel s growth strategy, strategy future financial results results, market positions positions, product development development, products in the pipeline, and product approvals. Such statemen