Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q2 2024 Earnings Presentation
17 slides from Akzo Nobel's earnings presentation, Jul 23, 2024
Slide 1: Investor Update
Investor Update July 23, 2024
Slide 2: Forward-looking statements
Forward-looking statements This presentation1 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 'forward-lookin
Slide 3: Q2 2024 Overview
Q2 2024 Overview Topline growth continues, margin expansion temporarily muted by OPEX inflation Q2 2024 YoY H1 2024 YoY • Organic sales +2% • Organic sales +2% • Volumes +1% • Volumes +1% • Gross margin1 +160 bps • Gross margin1 +270 bps • Adj. EBITDA €411m or 14.8% (flat) • Adj. EBITDA €782m or 14.
Slide 4: Q2 adj. EBITDA
Q2 adj. EBITDA Variance vs. expectation driven by softer growth, OPEX build-up and hyperinflation Expectation Actual (basis vs. Q2’23) vs. expectation Organic volume growth 2% 100bps lower • Deco EMEA impacted by weather Price/mix Flattish - • H2 targeted price increases underway Raw material benefi
Slide 5: 2024 volume projections update
2024 volume projections update Growth momentum despite flat markets H1 2024 FY 2024e Deco EMEA Exterior start delayed by Q2 weather; progressive rebound intact Flat +1% Deco LATAM Continued growth in Brazil; weak demand in Colombia, Argentina -LSD% +MSD% Deco SE Asia Strong H1 driven by India and In
Slide 6: Industrial efficiency - measures and KPIs
Industrial efficiency - measures and KPIs Our transformation is delivering results – and accelerating Vehicle Powder Marine & Deco EMEA Wood Aerospace Refinishes N. America Protective 3 sites +30% +20%pts +5%pts +25% +7%pts Closures announced, Labor productivity gains OTIF increase in US; OTIF impro
Slide 7: Industrial efficiency – benefit projections
Industrial efficiency – benefit projections Progressing well, acceleration and amplification underway Expected benefit by year • 2024 benefit on track >€25m • 2025 benefit projected at €70m 2024 >€25m • ~2/3 cost savings • ~1/3 efficiency gains 2025 €70m • New measures identified; total opportunity
Slide 8: Q2 business performance
Q2 business performance Coatings margin expansion offset by Deco performance AkzoNobel Deco Coatings Q2 revenue development % YoY Q2 revenue development % YoY Q2 revenue development % YoY Organic sales: Organic sales: Organic sales: +2% -1% +4% 1 1 (1) 2 2 - (1) 3 1 (1) - 1 (1) (1) 2 Volumes Price/
Slide 9: Operating results for Q2 and H1 2024
Operating results for Q2 and H1 2024 Continued ROI rebound and normalizing FCF levels impacted by seasonality Return Operating on investment working capital (ROI) Operating working capital Operating Free cashworking flow (FCF) capital (%) (% of revenue) (€m) 249 13.7% 17.5% 17.3% 137 10.0% 77 (134)
Slide 10: Outlook
Outlook Q3 similar to Q2; FY EBITDA towards lower end of guidance range, as per consensus Reminder - FY2024 Outlook • Adj. EBITDA: €1.50-1.65bn • CAPEX: €350m • Volumes: +LSD% • Net Debt/EBITDA: around 2.3x • Industrial efficiency benefit: >€25m • Stable dividend Outlook is based on organic volumes
Slide 11: Upcoming events 2024 and contacts
AkzoNobel Media Relations Upcoming events 2024 T +31 (0)88 - 969 7833 Q3 results October 23 Contact: Joost Ruempol media.relations@akzonobel.com AkzoNobel Investor Relations T +31 (0)88 - 969 0139 Contact: Kenny Chae investor.relations@akzonobel.com Alternative performance measures (APM) AkzoNobel u
Slide 12: Price/mix and volumes
Price/mix and volumes AkzoNobel Paints Coatings price/mix (% YoY) 1616 1919 12.5 14 1414 1313 12111111 11 11 5 4 10 3 3 3 2 2 2 3 2 2 1 10 2 2 0 8 -1 1 -1 1 7 0 1 1 -2 5 5 0 1 0 -2 4 4 0 2 -4 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 13: Mid-term ambitions
Mid-term ambitions Expanding profitability underpinned by growth and industrial excellence Strategic priorities Targets Sustainability-driven Adj. EBITDA margin ROI innovation Growth in focus >16% 16-19% segments and markets Adj. EBITDA growth Industrial efficiency benefit CAGR: >6% €250m by 2027 In
Slide 14: Planning assumptions
Planning assumptions 2024 Mid-term Adj. EBITDA Towards the lower end of: CAGR ‘23-’27: >6% €1.50-1.65bn Margin: >16% Organic volumes +LSD% +LSD% Industrial efficiency benefit >€25m €250m Identified items €100-150m Industrial efficiency: €130-150m (‘24-’26) CAPEX €350m pa, incl. €50m pa from industri
Slide 15: Performance measures
Performance measures Definitions of alternative performance measures • Adjusted earnings per share are the basic earnings per share from continuing operations, excluding Identified items and taxes thereon • Adjusted EBITDA is operating income excluding depreciation, amortization and identified items
Slide 16: Additional financial information
Additional financial information Consolidated statement of free cash flows Operating income to net income Q2’23 Q2’24 € million YTD’23 YTD’24 Q2’23 Q2’24 € million YTD’23 YTD’24 367 362 EBITDA 636 712 279 270 Operating income 461 531 2 — Impairment losses 2 — (45) (31) Financing income and expenses
Slide 17: Alternative performance measures
Alternative performance measures Q2 Q2 YTD YTD Q2 Q2 YTD YTD Average invested capital (€m) Q2 Q2 2023 2024 Δ% Operating income (€m) 2023 2024 Δ% 2023 2024 Adjusted EBITDA margin (%) 2023 2024 July 2022 - June 2023/July 2023 - June 2024 2023 2024 Δ% 151 121 (20)% Decorative Paints 245 237 (3)% 16.7 1