Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Q3 2008 Earnings Presentation
24 slides from Akzo Nobel's earnings presentation, Oct 29, 2008
Slide 1: Resilient performance underlines fundamental strength
Keith Nichols, CFO Q3 results, October 29, 2008 Resilient performance underlines fundamental strength
Slide 2: Q3 operational performance
Q3 operational performance Q3 Results 2008 | The new AkzoNobel 2
Slide 3: Q3 2008 highlights
Q3 2008 highlights • Q3 revenue, at constant currencies, ahead 8 percent (reported: up 3 percent) • All business areas delivered resilient EBITDA performance • Higher one-off charges impacted EBITDA • Net income down 23 percent, impacted by one-off items • Incidental charges of €79 million before ta
Slide 4: Q3: Resilient performance
Q3: Resilient performance € mln 2008 Δ% Revenue constant currencies 4,007 8 Revenue reported 3,820 3 EBITDA constant currencies 492 (5) EBITDA reported 477 (8) Net income before fair value adjustments 219 (15) Ratio 2008 2007 EBITDA margin constant currencies, % 12.3 13.9 EBITDA margin reported, % 1
Slide 5: Q3: Revenue growth in constant currencies of 8 percent
Q3: Revenue growth in constant currencies of 8 percent % Total Volume Price Currency Acq./div. Decorative Paints - (1) 5 (5) 1 Performance Coatings - - 5 (5) - Specialty Chemicals 5 (3) 12 (5) 1 AkzoNobel 3 (1) 8 (5) 1 Versus Q3, 2007 proforma Q3 Results 2008 | The new AkzoNobel 5
Slide 6: Q3 other and incidental costs
Q3 other and incidental costs Other costs in EBITDA of €72 million (2007: €37 million) include: • Lower results in captive insurance companies of €30 million • Fair value changes from energy derivatives of €18 million • Corporate and pension costs of €24 million Incidental charges of €79 million ( 2
Slide 7: Decorative Paints
Decorative Paints Q3 Results 2008 | The new AkzoNobel 7
Slide 8: Q3 Decorative Paints: good results
Q3 Decorative Paints: good results • Revenue up 5 percent in constant currencies (reported: stable) • EBITDA in constant currencies up 8 percent • Double-digit growth in Asia and Latin America • Revenue growth of 3 percent achieved in Europe, despite a difficult UK market • Challenging market condit
Slide 9: Q3 Decorative Paints
Q3 Decorative Paints € mln 2008 Δ% Revenue constant currencies 1,483 5 Revenue reported 1,413 - EBITDA constant currencies 218 8 EBITDA reported 207 3 Ratio, % 2008 2007 EBITDA margin constant currencies 14.7 14.2 EBITDA margin reported 14.6 14.2 Before incidentals; 2007 pro forma Q3 Results 2008 |
Slide 10: Performance Coatings
Performance Coatings Q3 Results 2008 | The new AkzoNobel 10
Slide 11: Q3 Performance Coatings: a solid quarter
Q3 Performance Coatings: a solid quarter • Revenue in constant currencies up 5 percent (reported: stable) • EBITDA in constant currencies increased by 1 percent • Good quarter for Marine & Protective, Powder Coatings and Packaging Coatings • Industrial Finishes continues to face pressure on margins
Slide 12: Q3 Performance Coatings
Q3 Performance Coatings € mln 2008 Δ% Revenue constant currencies 1,196 5 Revenue reported 1,138 - EBITDA constant currencies 146 1 EBITDA reported 143 (1) Ratio, % 2008 2007 EBITDA margin constant currencies 12.2 12.7 EBITDA margin reported 12.6 12.7 Before incidentals; 2007 pro forma Q3 Results 20
Slide 13: Specialty Chemicals
Specialty Chemicals Q3 Results 2008 | The new AkzoNobel 13
Slide 14: Q3 Specialty Chemicals: revenue growth supports healthy margins
Q3 Specialty Chemicals: revenue growth supports healthy margins • 9 percent autonomous growth, driven by price increases • EBITDA margin remained strong at more than 16% • Functional Chemicals turned in positive volume development • Pulp bleaching holding up, paper chemicals markets softening • Poly
Slide 15: Q3 Specialty Chemicals
Q3 Specialty Chemicals € mln 2008 Δ% Revenue constant currencies 1,267 10 Revenue reported 1,212 5 EBITDA constant currencies 205 (1) EBITDA reported 199 (4) Ratio, % 2008 2007 EBITDA margin constant currencies 16.2 18.0 EBITDA margin reported 16.4 18.0 Before incidentals; 2007 pro forma Q3 Results
Slide 16: Q3 financial performance
Q3 financial performance Q3 Results 2008 | The new AkzoNobel 16
Slide 17: Strong financial position
Strong financial position € mln September 30, 2008 Dec. 31, 2007 Equity 10,443 12,155 Net debt 1,781 2,832 YTD Q3, € mln 2008 2007 Net cash from operating activities (176) 26 2007 pro forma Q3 Results 2008 | The new AkzoNobel 17
Slide 18: Q3 YTD operational performance
Q3 YTD operational performance Q3 Results 2008 | The new AkzoNobel 18
Slide 19: Q3 YTD operational performance
Q3 YTD operational performance € mln 2008 Δ% Revenue constant currencies 11,846 8 Revenue reported 11,196 2 EBITDA constant currencies 1,485 2 EBITDA reported 1,401 (4) Net income before fair value adjustments* 633 (10) Ratio 2008 2007 EBITDA margin constant currencies, % 12.5 13.3 EBITDA margin rep
Slide 20: Medium-term targets
Medium-term targets
Slide 21: Medium term targets
Medium term targets For the next 3 years, we will • Continue to outgrow our markets • Improve our EBITDA margin to at least 14% • Continue to generate year-on-year EVA growth • Remain a leader in sustainability (top 3 DJSI) 21
Slide 22: Outlook 2008 reconfirmed
Outlook 2008 reconfirmed We expect our 2008 EBITDA before incidentals, in constant currencies, to be close to the 2007 pro-forma level of €1,870 million Q3 Results 2008 | The new AkzoNobel 22
Slide 23: Q&A
Q&A
Slide 24: 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, products in the pipeline, and product approvals. Such statements should be carefully considered, and it should b