Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q4 2021 Earnings Presentation
29 slides from Akzo Nobel's earnings presentation, Feb 9, 2022
Slide 1: Investor update Q4 2021
Investor update Q4 2021 February 9, 2022 Preserving sporting history This is the impressive Centenario Stadium in Uruguay, which was built to host the first-ever FIFA World Cup in 1930. The stadium has just been renovated and our Inca brand provided a valuable assist by supplying 12,000 liters of pa
Slide 2: 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 3: Key highlights
Key highlights Investor update | Q4 2021 3
Slide 4: Revenue up 9% on strong pricing of 12.5%
Revenue up 9% on strong pricing of 12.5% on track to offset raw material inflation Q4 2021: Full Year 2021: Revenue Pricing* Revenue €1 billion share buyback completed in Up 9% Up 12.5% Up 12% January 2022 (up 12% vs 2019 in CC) December pricing up 14% (up 9% vs 2019 in CC) Adjusted Adjusted EPS* Ad
Slide 5: Topline growth and continued progress in line with Grow & Deliver strategy
Topline growth and continued progress in line with Grow & Deliver strategy Growth for sixth Despite supply chain consecutive quarter volatility, businesses (revenue* up 12% vs 2019) delivered on internal quarterly forecasts Strong pricing of 12.5% and in December at 14% ERP consolidation with 94% of
Slide 6: Underlying demand robust, continued impact in Q4 from supply constraints
Underlying demand robust, continued impact in Q4 from supply constraints North South EMEA North South America America Asia Asia Paints Industrial Powder Automotive and Specialty Marine and Protective Backlog due Backlog due Strong to supply to supply sequential constraints constraints recovery End m
Slide 7: AkzoNobel outperforming Europe market
AkzoNobel outperforming Europe market UK DIY and Trade market volumes above 2019 levels AkzoNobel Paints Europe development (Excludes Middle East and Africa) AkzoNobel Paints UK volume trends Indexed versus 2017 130 Versus 2019 with base index 50 for both segments 120 100 110 100 50 90 2017 2018 201
Slide 8: Decorative Paints South East South Asia
Decorative Paints South East South Asia Leading positions and strong brands Quarterly revenue rebased to Q1’19 (100) Market share increase in 7 out of ~€7bn market (2021) 140 9 countries in 2021 through… 120 6,700 new stores onboarded across the #3 in South Asia 100 80 region in 2021 (+4%) Top marke
Slide 9: Marine and Protective Coatings
Marine and Protective Coatings Visible recovery in second half of 2021 Moving average revenue vs. 2018 (index) Marine €1.2bn revenue in 2021 140 Protective Marine Marine New Build demand recovering Yacht #1 in Yacht Launch of Intertrac Hullcare for hull 100 performance and sustainability goals #2 in
Slide 10: Financial review
Financial review Investor update | Q4 2021 10
Slide 11: Revenue up 9% (12% versus 2019), driven by strong pricing initiatives
Revenue up 9% (12% versus 2019), driven by strong pricing initiatives € million Q4 2020 Q4 2021 Δ% Δ%CC Δ%CC Vs. Q4 ‘19 Revenue 2,209 2,403 9% 7% 12% Adjusted EBITDA* 380 301 (21%) Adjusted operating income* 294 209 (29%) ROS* 13.3% 8.7% ROI* 16.1% 16.0% Revenue development Q4 2021 (%) Royal seal of
Slide 12: Significant price increases partly offset raw material inflation and volume decline
Significant price increases partly offset raw material inflation and volume decline Adjusted operating income* (€m) - Positive impact Negative impact - -2 - Adj. EBIT 276 - 325 margin* 13.3% 2 - - - 64 Adj. EBIT margin* 8.7% 28 294 209 Q4 2020 FX Volumes Price Mix Raw materials/ OPEX and one-offs Q4
Slide 13: Q4 pricing up 12.5%
Q4 pricing up 12.5% December pricing run-rate at 14% Raw material price index development AkzoNobel pricing (%)* y-o-y impact (€m) 14 12.5% €325m 12 €360-390m 10 9% FY 2021: ~20% 14-16% 8 4.5% €278m 6 4 €128m 2% 2 €38m €38m 2% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2021 2022 20
Slide 14: Paints revenue 17% higher than 2019, despite return of normalized seasonality
Paints revenue 17% higher than 2019, despite return of normalized seasonality € million Q4 2020 Q4 2021 Δ% Δ%CC Δ%CC Vs. Q4 ‘19 Revenue 901 950 5% 4% 17% Adjusted EBITDA* 160 148 (8%) Adjusted operating income* 126 108 (14%) ROS* 14.0% 11.4% ……. Revenue development Q4 2021 (%) Increase Decrease Brin
Slide 15: Coatings revenue up 11%, supported by y-o-y growth in all segments
Coatings revenue up 11%, supported by y-o-y growth in all segments € million Q4 2020 Q4 2021 Δ% Δ%CC Δ%CC Vs. Q4 ‘19 Revenue 1,306 1,452 11% 9% 10% Adjusted EBITDA* 253 179 (29%) Adjusted operating income* 212 137 (35%) ROS* 16.2% 9.4% Protecting a record breaker This is the hugely impressive Ain Du
Slide 16: Working capital reflecting higher raw material cost and supply constraints
Working capital reflecting higher raw material cost and supply constraints Operating working capital (Trade)* Free cash flow (FCF) €m as a % of revenue excl. pension pre-funding and top-up Working capital payments** 988 Working capital impact from raw material inflation ~2% of revenue (2021 13.0% ye
Slide 17: Adjusted EPS up 5% and dividends up 1.5% in 2021
Adjusted EPS up 5% and dividends up 1.5% in 2021 Adjusted EBITDA* Adjusted earnings per share* Dividend (€m) (EPS) from cont. operations (€) (€) Number of shares (weighted average) 213m 191m 185m Final dividend Interim dividend 1,442 1,436 4.07 1,341 3.88 1.90 1.95 1.98 3.10 1.49 1.52 1.54 380 1.08
Slide 18: Delivering on capital allocation priorities
Delivering on capital allocation priorities Profitable ~3% capital expenditures/revenue organic growth Dividend Stable to rising Acquisitions Strategically aligned and value creating Shareholder New €500 million Modular share buybacks share buyback announced returns Net debt/EBITDA Retain strong inv
Slide 19: Concluding remarks
Concluding remarks Investor update | Q4 2021 19
Slide 20: Q4 Highlights and Outlook
Q4 Highlights Outlook Pricing up 12.5% compared with Q4 2020. AkzoNobel targets to grow at or above its Revenue 9% higher (up 12% from Q4 2019, in relevant markets, in line with its Grow & Deliver constant currencies) strategy. Trends differ per region and segment, while raw material cost inflation
Slide 21: Upcoming events
Upcoming events Investor Update on Grow & Deliver February 17, 2022 Publication annual report 2021 March 2, 2022 Report for the first quarter 2022 April 21, 2022 Annual general meeting of shareholders April 22, 2022 Ex-dividend date of 2021 final dividend April 26, 2022 Record date of 2021 final div
Slide 22: 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 Grow & Deliver strategy balances growth and margin improvement People. Planet. Paint. approach to sustainabl
Slide 23: 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 'for
Slide 24: Appendix
Appendix Investor update | Q4 2021 24
Slide 25: Robust pricing initiatives continue, Q4 pricing up 12.5%
Robust pricing initiatives continue, Q4 pricing up 12.5% Paints Coatings Total +12.5% price Quarterly price/mix development in % year-on-year 0% mix +7% price +14% price +3% mix +1% price 0% mix +9% price -3% mix +2% mix +10% price 12.5 0% mix 14 4 5 8 6 4 5 2 1 4 1010 7 11 7 7 11 6 9 6 5 11 0 2 1 3
Slide 26: 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 Revenue growth ≥ market CAGR** operations, excluding identified items and taxes thereon Adjusted operating income is operat
Slide 27: Additional financial information
Additional financial information Consolidated statement of free cash flows* Operating income to net income Q4 Q4 Q4 Q4 € million 2020 2021 € million 2020 2021 2020 2021 2020 2021 333 299 EBITDA 1,324 1,469 243 205 Operating income 963 1,118 9 - Impairment losses 10 3 (16) (8) Net financing expenses
Slide 28: Alternative performance measures
Alternative performance measures Q4 ’20 Q4 ’21 Δ% Operating income (€m) 2020 2021 Δ% Q4 ’20 Q4 ’21 OPI margin (%) 2020 2021 Average invested capital (€m) 2020 2021 Δ% 13.5 11.4 Decorative Paints 15.5 16.1 Decorative Paints 2,799 2,872 3% 122 108 (11%) Decorative Paints 551 640 16% 16.5 9.4 Performan
Slide 29: We are leading the way in our industry
We are leading the way in our industry AkzoNobel Industry average Investors Customers Investors Europe Society Industry average Industry average Industry average Industry average Industry average AkzoNobel AkzoNobel AkzoNobel AkzoNobel AkzoNobel Only P&C company rated “Platinum” rating “Low risk” ra