Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q1 2021 Earnings Presentation
26 slides from Akzo Nobel's earnings presentation, Apr 21, 2021
Slide 1: Investor update Q1 2021
Investor update Q1 2021 April 21, 2021 Polar Pod partnership to push boundaries of scientific exploration A pioneering expedition which will send a manned oceanographic platform drifting around Antarctica has brought AkzoNobel on board as exclusive paints and coatings partner. The Polar Pod will ena
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 | Q1 2021 3
Slide 4: Strong growth and profitability in Q1
Strong growth and profitability in Q1 Q1 2021: Revenue Adjusted EBITDA* Free Cash Flow Completed €300m In constant currencies* share buyback on April 16, 2021 16% higher Up 29% at €391m Improved by €118m (up 10% vs 2019) ROS* Adjusted EPS* ROI* Titan acquisition From continuing operations completed
Slide 5: Powerful start to Grow & Deliver strategy
Powerful start to Grow & Deliver strategy Growth for third Strong focus on margin consecutive quarter management (volumes up 8% vs. 2019) Closed acquisition of Titan Now 100% renewable Paints in Spain; recognized for electricity for France, environmental performance and 11 other countries Strong gro
Slide 6: Focus on growth underpinned by robust end market demand
Focus on growth underpinned by robust end market demand North South EMEA North South Asia Asia America America Paints Industrial Powder Automotive and Specialty Marine and Protective End market demand (y-o-y) Strong Medium Weak Source: Company estimates Investor update | Q1 2021 6
Slide 7: Powder coatings fastest growing and high performing segment
Powder coatings fastest growing and high performing segment ~€8bn market Revenue growth (%) In constant currencies* Continuing to invest in growth… Fastest growing end market in coatings1 Powder €1.1bn revenue in 2020 Coatings Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 '19 '19 '19 '19 '20 '20 '20 '20 '21 Clear mark
Slide 8: Paints South America continues to deliver, despite FX headwinds
Paints South America continues to deliver, despite FX headwinds ~€3.5bn market Q1 2021 revenue up 62% in Outgrowing market through… constant currency vs. Q1 2019 Solid margin management to offset €0.4bn revenue in 2020 transactional FX impact Stronger customer and painter Leading positions in Argent
Slide 9: Financial review
Financial review Investor update | Q1 2021 9
Slide 10: ROS improved 320bps to 13.6% due to higher volumes and cost savings
ROS* improved 320bps to 13.6% due to higher volumes and cost savings € million Q1 2020 Q1 2021 Δ% Δ%CC Δ%CC Vs. Q1 ‘19 Revenue 2,058 2,263 10% 16% 10% Adjusted EBITDA* 302 391 29% Adjusted operating income* 214 307 43% … ROS* 10.4% 13.6% ROI* 14.7% 17.7% We’ve invested in pioneering coatings applica
Slide 11: Higher volumes and cost savings delivered 43% more profit
Higher volumes and cost savings delivered 43% more profit Adjusted operating income* (€m) Positive impact - Negative impact 41 - 59 - 38 ROS* 13.6% -9 175 ROS* 10.4% - - 17 - 307 214 Q1 2020 FX Volumes Price/mix Mix Raw materials/ OPEX savings and one- Q1 2021 Variable cost offs *Alternative perform
Slide 12: Paints ROS up 740bps at 15.9%, driven by strong demand in all regions
Paints ROS up 740bps at 15.9%, driven by strong demand in all regions € million Q1 2020 Q1 2021 Δ% Δ%CC Δ%CC Vs. Q1 ‘19 Revenue 754 930 23% 31% 20% Adjusted EBITDA* 100 183 83% Adjusted operating income* 64 148 131% ROS* 8.5% 15.9% ……. Revenue development Q1 2021 (%) Increase Decrease 1 2 With the U
Slide 13: Coatings volumes 10% higher as demand continues to improve
Coatings volumes 10% higher as demand continues to improve € million Q1 Q1 Δ% Δ%CC Δ%CC 2020 2021 Vs. Q1 ‘19 Revenue 1,295 1,332 3% 8% 5% Adjusted EBITDA* 230 234 2% Adjusted operating income* 190 196 3% ROS* 14.7% 14.7% McLaren Racing’s 2021 Formula 1 car again features our high- Revenue developmen
Slide 14: Strong working capital management; Free cash flow continues to improve
Strong working capital management; Free cash flow continues to improve Operating working capital Free cash flow (FCF) €m Operating working capital (Trade) excl. pension pre-funding and top- (trade): 13.4% in Q1 2021 as a % of revenue up payments* (2020: 16.5%) Q1 ‘19 Q1 ‘20 Q1 ‘21 Net Debt/EBITDA 1.
Slide 15: Adjusted EPS up 66% to €1.18 per share, €300m share buyback completed
Adjusted EPS up 66% to €1.18 per share, €300m share buyback completed Adjusted EBITDA* Adjusted earnings per share* €300m share buyback (€) (EPS) from cont. operations (€) completed on April 16, 2021 Number of shares (weighted average) €1 billion share buyback will be 391 189m started on April 27, 2
Slide 16: Concluding remarks
Concluding remarks Investor update | Q1 2021 16
Slide 17: Q1 Highlights and Outlook
Q1 Highlights Outlook Revenue up 10% and 16% higher in constant AkzoNobel targets to grow at least in line with currencies with strong growth in Asia its relevant markets. ROS increased to 13.6% (Q1 2020: 10.4%) Trends differ per region and segment with raw material disruption and inflation expected
Slide 18: Upcoming events
Upcoming events Annual general meeting of shareholders April 22, 2021 Ex-dividend date of 2020 final dividend April 26, 2021 Record date of 2020 final dividend April 27, 2021 Payment of 2020 final dividend May 6, 2021 Report for second quarter 2021 July 21, 2021 Investor update | Q1 2021 18
Slide 19: 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 20: 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 21: Appendix
Appendix Investor update | Q1 2021 21
Slide 22: Delivered growth for third quarter in a row
Delivered growth for third quarter in a row; Q1 revenue up 16% in constant currencies Paints Coatings Total Quarterly price/mix development in % year-on-year +2% price +4% price +1% price +2% price -6% mix -3% mix -3% mix -3% mix 11 0 4 5 8 6 4 5 2 1 4 2 1 7 7 7 1 0 6 9 6 5 3 5 3 0 3 0 2 5 4 1 2 2 1
Slide 23: 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 24: Performance measures and assumptions
Performance measures and assumptions Definitions of alternative performance measures Assumptions for 2021 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 operating inc
Slide 25: Alternative performance measures
Alternative performance measures Adjusted earnings per share EBITDA (€m) Q1 ‘20 Q1 ‘21 Operating income (€m) Q1 ‘20 Q1 ‘21 Δ% from continuing operations Q1 ‘20 Q1 ‘21 Operating income 915 1,079 Decorative Paints 58 147 153% Profit before tax from continuing operations 181 302 Depreciation and amorti
Slide 26: Additional financial information
Additional financial information Consolidated statement of free cash flows* Operating income to net income € million Q1 2020 Q1 2021 € million Q1 2020 Q1 2021 EBITDA 277 388 Operating income 187 303 Impairment losses - - Net financing expenses (13) (8) Pre-tax result on acquisitions and Results from