Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q3 2006 Earnings Presentation
30 slides from Akzo Nobel's earnings presentation, Oct 18, 2006
Slide 1: Q3 Results 2006 “Profitable Growth”
Hans Wijers, CEO Q3 Results 2006 “Profitable Growth” October 18, 2006
Slide 2: Asenapine update
Jo Asenapine update
Slide 3: Q3 2006 highlights – delivering on profitable growth
Q3 2006 highlights – delivering on profitable growth Solid revenue growth continued: up 5% to EUR 3,449 mln Operating income up 14% to EUR 364 mln led by Organon and Coatings Net income (including incidentals) up 79% Industry leading DJSI position
Slide 4: DJSI Top Performer
DJSI Top Performer Rated on the index for the second successive year Akzo Nobel ranked among the chemicals industry leaders on DJSI Significantly improved average score
Slide 5: Q3 Operational Performance
—— AKZO NOBEL Q3 OPERATIONAL PERFORMANCE
Slide 6: Excellent operational performance
Excellent operational performance EUR mln Q3 2006 ∆% Revenues 3,449 5 EBIT* 364 14 Net income* 240 19 Ratio 2006 2005 EBIT margin*, % 10.6 9.7 * Excluding incidentals.
Slide 7: Organon: NuvaRing sales 66% up helped by US campaign
Organon: NuvaRing® sales 66% up helped by US campaign
Slide 8: Organon – strong operational quarter
Organon – strong operational quarter Sustained revenue growth – volume up 8% Improved operational performance Healthy revenues growth in key franchises - Revenues from NuvaRing up 66% driven by success in the US - Anesthesia revenues up 32%: Esmeron® and Anzemet® Avinza® co-promotion expired
Slide 9: Organon – strong operational quarter
Organon – strong operational quarter EUR mln Q3- 2006 ∆% Revenues 626 6 EBIT* 96 41 Ratios 2006 2005 EBIT margin*, % 15.3 11.5 S&D % revenues 31.5 31.0 R&D % revenues 17.6 18.3 *Excluding incidentals.
Slide 10: Intervet – growth in US companion animal market
Intervet – growth in US companion animal market
Slide 11: Intervet – substantial autonomous growth
Intervet – substantial autonomous growth Substantial autonomous growth: volumes up 7% Strong revenue growth in North America Steady EBIT margin of 20% Important new product approvals: Zilmax® and West Nile vaccine
Slide 12: Intervet – substantial autonomous growth
Intervet – substantial autonomous growth EUR mln Q3 2006 ∆% Revenues 276 - EBIT* 54 (4) Ratios 2006 2005 EBIT margin*, % 19.6 20.2 S&D % revenues 23.9 24.2 R&D % revenues 9.2 9.7 *Excluding incidentals.
Slide 13: Coatings – Interchar for high value infrastructures
Coatings – Interchar ® for high value infrastructures
Slide 14: Coatings – healthy growth, acquisitions contributing
Coatings – healthy growth, acquisitions contributing Healthy growth: revenues up 12%, autonomous growth 7% Acquisitions added 7% to revenues Double-digit EBIT improvement Ongoing pressure from raw material prices Acquisition of Flood completed – top 3 US Wood Finishes position
Slide 15: Coatings – healthy growth, acquisitions contributing
Coatings – healthy growth, acquisitions contributing Industrial activities – revenues up 11%, all regions showing strength Decorative Coatings – emerging markets acquisitions contributing – retail market in Europe remained weak Car Refinishes – turnaround showing results Marine & Protective
Slide 16: Coatings – healthy growth, acquisitions contributing
Coatings – healthy growth, acquisitions contributing EUR mln Q3 2006 ∆% Revenues 1,638 12 EBIT* 161 13 Ratio 2006 2005 EBIT margin*, % 9.8 9.7 *Excluding incidentals.
Slide 17: Chemicals: Surfactants for cleaning jobs in all industries
Chemicals: Surfactants for cleaning jobs in all industries
Slide 18: Chemicals – solid performance
Chemicals – solid performance Solid performance – autonomous growth of 4% Improved EBIT margin: up 0.5% to 9.1% Continued pressure from energy and raw material cost
Slide 19: Chemicals – solid performance
Chemicals – solid performance Polymer Chemicals – continued strong demand for plastics – jump in performance Pulp & Paper Chemicals – higher revenues partly offset by increased energy costs Functional Chemicals – difficult quarter, start-up and maintenance costs
Slide 20: Chemicals – solid performance
Chemicals – solid performance EUR mln Q3 2006 ∆% Revenues 912 (6) EBIT* 83 - Ratio 2006 2005 EBIT margin*, % 9.1 8.6 *Excluding incidentals.
Slide 21: Q3 Financial Performance
—— AKZO NOBEL Q3 FINANCIAL PERFORMANCE
Slide 22: Delivering on profitable growth
Delivering on profitable growth EUR mln Q3 ∆% YTD ∆% Revenues 3,449 5 10,415 7 EBIT 461 65 1,188 14 Net income 313 79 923 43 2006 2005 2006 2005 EBIT margin, % 13.4 8.5 11.4 10.7
Slide 23: Positive contribution from incidentals
Positive contribution from incidentals EUR 97 mln gain (last year: EUR 39 mln loss) Change in US benefit plans Profit on divestments – Solar Salt activities – Office building in Stockholm
Slide 24: Strong cash flow
Strong cash flow YTD, EUR mln 2006 2005 EBITDA 1,604 1,466 Net cash from operations 768 (53) Capital expenditures 339 342 Net change in cash 337 (357)
Slide 25: Strong financial position
Strong financial position Sept 30, EUR bln 2006 2005 Equity 4,197 3,401 Net borrowings 1,228 1,814 Gearing (ratio) 0.29 0.53 YTD ratios 2006 2005 Interest coverage 12.1 9.4 EBITDA coverage 16.4 13.2
Slide 26: Interim dividend
Interim dividend Interim dividend of EUR 0.30 per share (2005: EUR 0.30) – ex-dividend date October 19, 2006 – payment date October 26, 2006
Slide 27: Trading Update 2006
—f— AKZO NOBEL TRADING UPDATE 2006
Slide 28: Trading update 2006
Trading update 2006 We look forward to a successful 2006 We will deliver on our main operational objectives for this year: – revenue growth across the board – increased operational results at all segments
Slide 29: Q3 Results 2006 “Profitable Growth” Q&A
Q3 Results 2006 “Profitable Growth” Q&A October 18, 2006
Slide 30: 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,