Akzo Nobel N.v. · EURONEXT:AKZA

Akzo Nobel — Q2 2006 Earnings Presentation

29 slides from Akzo Nobel's earnings presentation, Jul 20, 2006

  1. Slide 1: Q2 2006 Results: Organon and Coatings drive strong performance

    Rob Frohn, CFO Q2 2006 Results Organon and Coatings drive strong performance July 20, 2006

  2. Slide 2: Q2 2006 headlines

    Q2 2006 headlines ƒ Strong autonomous growth, across all segments ƒ Net income nearly doubled ƒ Strong financial position

  3. Slide 3: Q2 Operational Performance

    —— AKZO NOBEL Q2 OPERATIONAL PERFORMANCE

  4. Slide 4: Strong operational performance

    Strong operational performance EUR mln Q2-2006 ∆% Revenues 3,574 7 EBIT* 365 9 Net income 361 98 Ratios 2006 2005 EBIT margin*, % 10.2 10.0 * Excluding incidentals

  5. Slide 5: Organon – U.S. approval for Implanon

    Organon – U.S. approval for ImplanonTM

  6. Slide 6: Organon – double-digit growth

    Organon – double-digit growth ƒ Further strong revenue growth in key franchises - Revenues up 12%, contributing to 49% rise in operating income - NuvaRing® accelerating in U.S.; over 1 million users world-wide - Biotech product Puregon® enjoys record quarter ƒ Investing in pipeline - R&D expenses EU

  7. Slide 7: Organon – continued strong growth

    Organon – continued strong growth EUR mln Q2-2006 ∆% Revenues 675 12 EBIT* 104 49 Ratios 2006 2005 EBIT margin*, % 15.4 11.6 S&D % revenues 31.3 32.7 R&D % revenues 18.6 16.6 *Excluding incidentals

  8. Slide 8: Intervet – companion animals growth

    Intervet – companion animals growth

  9. Slide 9: Intervet – autonomous growth of 6%

    Intervet – autonomous growth of 6% ƒ Revenues ongoing business up 6% to EUR 280 million ƒ Strong growth in Americas and Europe ƒ EBIT margin slightly down – higher selling expenses ƒ Focus on core activities; Crina (feed additives) divested

  10. Slide 10: Intervet – autonomous growth of 6%

    Intervet – autonomous growth of 6% EUR mln Q2- 2006 ∆% Revenues ongoing business 280 6 EBIT* 51 (6) Ratios 2006 2005 EBIT margin*, % 18.2 19.5 S&D % revenues 25.9 24.2 *Excluding incidentals

  11. Slide 11: Nobilon – NVI vaccine deal

    Nobilon – NVI vaccine deal ƒ Nobilon is active in the field of human vaccines ƒ Contract with Netherlands Vaccine Institute (NVI) to develop vaccine against respiratory syncytial virus (RSV) ƒ RSV is a viral infection which can prove fatal to young children and the elderly; no preventive treatment b

  12. Slide 12: Launch Akzo Nobel Global Coatings Report

    Launch Akzo Nobel Global Coatings Report ƒ First ever overview of Global Coatings Market ƒ World wide Coatings market; USD 86 billion ƒ Akzo Nobel #1 with appr. 8% market share ƒ Highly attractive growth opportunities

  13. Slide 13: Coatings – record quarter, strong profit growth

    Coatings – record quarter, strong profit growth ƒ Excellent 6% volume growth; revenues up 9% to EUR 1.6 billion ƒ Solid demand in China ƒ Ongoing pressure from raw materials ƒ Cost reduction programs continue in mature markets ƒ EBIT and EBIT margin sharply up ƒ Completed acquisition Sico, Canada’s

  14. Slide 14: Coatings – enhancing consumer electronics

    Coatings – enhancing consumer electronics

  15. Slide 15: Coatings – record quarter, strong profit growth

    Coatings – record quarter, strong profit growth ƒ Industrial activities – excellent performance ƒ Marine & Protective Coatings – strong earnings growth ƒ Car Refinishes – back on track ƒ Decorative Coatings – challenging business conditions in Europe

  16. Slide 16: Coatings – record quarter, strong profit growth

    Coatings – record quarter, strong profit growth EUR mln Q2-2006 ∆% Revenues 1,643 9 EBIT* 175 21 Ratios 2006 2005 EBIT margin*, % 10.7 9.7 *Excluding incidentals

  17. Slide 17: Chemicals – key ingredients for top performance

    Chemicals – key ingredients for top performance

  18. Slide 18: Chemicals – autonomous growth; increasing energy impact

    Chemicals – autonomous growth; increasing energy impact ƒ Autonomous growth of 7% to EUR 981 million ƒ Volume contributing 3%; prices up 4% ƒ Ongoing pressure from high energy cost and oil-related feedstock ƒ EBIT and EBIT margin up year-on-year ƒ Divestment program close to finalization

  19. Slide 19: Chemicals – autonomous growth; increasing energy impact

    Chemicals – autonomous growth; increasing energy impact ƒ Pulp & Paper and Base Chemicals – improved performance in spite of increasing energy pressure ƒ Polymer Chemicals – excellent performance buoyed by strong demand

  20. Slide 20: Chemicals – autonomous growth; increasing energy impact

    Chemicals – autonomous growth; increasing energy impact EUR mln Q2-2006 ∆% Revenues 981 2 EBIT* 80 14 Ratio 2006 2005 EBIT margin*, % 8.2 7.3 *Excluding incidentals

  21. Slide 21: First Half Year Financial Performance

    FIRST HALF YEAR FINANCIAL PERFORMANCE

  22. Slide 22: First half year - strong earnings growth

    First half year - strong earnings growth HY, EUR mln 2006 ∆% Revenues 6,966 9 EBIT* 697 15 Net income 610 30 2006 2005 EBIT margin*, % 10.0 9.5 Number of employees 62,440 61,640 *Excluding incidentals

  23. Slide 23: Improved cash flow

    Improved cash flow Cash flow, EUR mln 1HY-2006 1HY-2005 EBITDA 1.004 1.040 Net cash from operations 168 (31) Net change in cash (144) (446) Capital expenditures 214 233 ƒ Capital expenditures estimate 2006 EUR 500 million

  24. Slide 24: Strong financial position

    Strong financial position June ‘06 / Dec. ‘05; EUR bln 2006 2005 Equity 3.9 3.6 Net borrowings 1.7 1.6 Gearing (ratio) 0.45 0.44 YTD ratios 2006 2005 Interest coverage 10.1 10.7 EBITDA coverage 13.9 14.6

  25. Slide 25: Agenda 2nd Half 2006

    —-— AKZO NOBEL AGENDA 2" HALF 2006

  26. Slide 26: Agenda 2nd half 2006 (1)

    Agenda 2nd half 2006 (1) Organon ƒ Unlock value late stage product pipeline ƒ Continue to grow key franchises ƒ Roll-out ImplanonTM in U.S. Intervet ƒ Focus on core activities – continue roadmap improvements

  27. Slide 27: Agenda 2nd half 2006 (2)

    Agenda 2nd half 2006 (2) Coatings/ Chemicals ƒ Identify further growth opportunities, organically and via acquisitions ƒ Focus on costs in mature markets (mainly EU) ƒ Conclude Chemicals divestment program Trading update ƒ Confidence in the second half of the year

  28. Slide 28: Delivering on growth – Q&A

    Delivering on growth Q2 2006 results Q&A July 20, 2006

  29. Slide 29: Safe harbor statement

    Safe harbor statement* This presentation contains statements which address such key issues as Akzo Nobel’s growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements should be carefully considered,

Akzo Nobel — Q2 2006 Earnings Presentation on 6ix