Slide 1: Investor update Q2 and half-year 2018
Investor update Q2 and half-year 2018 July 18, 2018 Fastest coating in the world Team AkzoNobel put in a powerful performance during the 2017-18 Volvo Ocean Race and made history by setting a new 24-hour distance record. All seven boats in the fleet were coated with AkzoNobel’s Awlgrip and Internati
Slide 2: Continued progress on transformation into a focused paints and coatings company
Continued progress on transformation into a focused paints and coatings company Implemented phase one of transformation to create a fit-for-purpose organization delivering €25m in Q2 Decorative Paints ROS up at 12.2% (2017: 11.6%) driven by 5% higher selling prices Improving trend for Performance Co
Slide 3: Delivering towards our "Winning together: 15 by 20" strategy
Delivering towards our “Winning together: 15 by 20” strategy Sales force effectiveness Selling prices up 4% in Q2 Margin management Innovation excellence Paints ROS up and Coatings closing the gap Global Business Services All Performance Coatings businesses trained Integrated Business Planning ERP a
Slide 4: Dealing with temporary headwinds…
Revenue growth for most businesses; Dealing with temporary headwinds… South Powder and South Coatings East Asia Latin China America EMEA Marine and Automotive ~ Protective and Specialty Coatings Coatings Foreign Raw exchange materials Investor update | Q2 and half-year 2018 4
Slide 5: Revenue up in constant currencies; Robust pricing initiatives continue
Revenue up in constant currencies; Robust pricing initiatives continue Q2 2018 Half-year 2018 Revenue Raw materials Announced Revenue acquisition of Fabryo to achieve €137m #1 position in up 2% headwind up 1% in constant currencies Romania in constant currencies Selling prices ROS Selling prices Ope
Slide 6: Higher selling prices, partly offset by lower volumes
Higher selling prices, partly offset by lower volumes Decorative Paints Performance Coatings* Paints and Coatings* Quarterly price/mix development in % year-on-year 5 0 4 1 0 0 5 3 2 -3 -3 -3 -5 -1 -1 -1 -1 -1 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17
Slide 7: Prices up 4%, demonstrating traction to compensate for higher raw materials
Prices up 4%, demonstrating traction to compensate for higher raw materials € million Q2 2017¹ Q2 2018 Δ% Revenue up 2% in constant currencies Revenue 2,533 2,446 (3) Volumes lower, mainly due Adjusted EBITDA 366 285 (22) to Marine and Protective Adjusted operating income 294 225 (23) Coatings Opera
Slide 8: Price increases and cost savings compensating for higher raw materials
Price increases and cost savings compensating for higher raw materials Mainly includes: Increase Continuous improvement, Decrease fit-for-purpose organization 109 - 21 -137 and fixed cost inflation - 27 27 - 20 294 273 246 246 218 218 225 Q2 2017 Adjusted FX Volumes Price/mix Raw materials Cost savi
Slide 9: Decorative Paints ROS% up driven by 5% higher selling prices
Decorative Paints ROS% up driven by 5% higher selling prices € million Q2 2017 Q2 2018 Δ% Revenue 1,046 1,006 (4) Adjusted EBITDA 152 145 (5) Adjusted operating income 121 123 2 Operating income 121 111 (8) ROS%* 11.6 12.2 ROI%* 13.5 11.8 Revenue development Q2 2018 (%) Increase AkzoNobel has entere
Slide 10: Performance Coatings pricing initiatives gaining traction and closing the gap
Performance Coatings pricing initiatives gaining traction and closing the gap € million Q2 2017 Q2 2018 Δ% Revenue 1,504 1,454 (3) Adjusted EBITDA 242 207 (14) Adjusted operating income 202 172 (15) Operating income 202 162 (20) ROS%* 13.4 11.8 ROI%* 27.2 19.9 Production has started at AkzoNobel’s l
Slide 11: Specialty Chemicals revenue and ROS up driven by higher selling prices
Specialty Chemicals revenue and ROS up driven by higher selling prices € million Q2 2017 Q2 2018 Δ% Revenue up 7% in constant currencies with Revenue 1,259 1,270 1 price increases in all Adjusted EBITDA 252 258 2 business units Adjusted operating income 166 175 5 Adjusted operating income up 5%, due
Slide 12: Half-year net income 3% lower, including discontinued operations
Half-year net income 3% lower, including discontinued operations € million Q2 2017* Q2 2018 H1 2017* H1 2018 Operating income 263 192 471 300 Net financing expenses (15) (28) (32) (9) Results from associates and joint ventures 6 6 12 10 Profit before tax 254 170 451 301 Income tax (63) (47) (115) (4
Slide 13: Free cash flow impacted by lower EBITDA, while CAPEX and pension top-ups reduced
Free cash flow impacted by lower EBITDA, while CAPEX and pension top-ups reduced € million H1 2017 H1 2018 Adjusted EBITDA 1,154 954 Interest paid -13 -19 Tax paid -158 -70 Changes in working capital, provisions¹ and other -744 -871 Capital expenditures (including intangible assets) -281 -251 Free c
Slide 14: Continued progress on transformation into a focused paints and coatings company
Continued progress on transformation into a focused paints and coatings company Implemented phase one of transformation to create a fit-for-purpose organization delivering €25m in Q2 Decorative Paints ROS up at 12.2% (2017: 11.6%) driven by 5% higher selling prices Improving trend for Performance Co
Slide 15: Outlook
Outlook 2020 guidance* ROS 15% ROI >25% We are delivering towards our "Winning together: 15 by 20" strategy by creating a fit-for-purpose organization for a focused Paints and Coatings company, contributing to the achievement of our 2020 guidance. For the remainder of 2018, we expect positive develo
Slide 16: Upcoming events
Upcoming events Report for the third quarter 2018 October 17, 2018 Report for the full-year and fourth quarter 2018 February 13, 2019 Report for the first quarter 2019 April 24, 2019 Annual General Meeting of shareholders April 25, 2019 Investor update | Q2 and half-year 2018 16
Slide 17: 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 2020 Balanced geographic exposure: 50% revenue from emerging markets guidance* Well positioned to accelerate growth and enhance profitability ROS 15% ROI >25% Transformation
Slide 18: Appendix
Appendix Investor update | Q2 and half-year 2018 18
Slide 19: Price increases and cost savings not yet fully compensating for higher raw materials
Price increases and cost savings not yet fully compensating for higher raw materials € million H1 2017¹ H1 2018 Δ% Selling prices up 3% overall and for all businesses Revenue 4,910 4,622 (6) Revenue up 1% in constant Adjusted EBITDA 647 494 (24) currencies Adjusted operating income 502 374 (25) Volu
Slide 20: Decorative Paints price realization gaining momentum; up 4% overall in H1
Decorative Paints price realization gaining momentum; up 4% overall in H1 € million H1 2017 H1 2018 Δ% Revenue 1,968 1,852 (6) Adjusted EBITDA 261 224 (14) Adjusted operating income 198 179 (10) Operating income 198 159 (20) ROS%* 10.1 9.7 ROI%* 13.5 11.8 Revenue development H1 2018 (%) Increase Dec
Slide 21: Performance Coatings revenue growth excluding Marine and Protective Coatings
Performance Coatings revenue growth¹ excluding Marine and Protective Coatings € million H1 2017 H1 2018 Δ% Revenue 2,975 2,796 (6) Adjusted EBITDA 467 376 (19) Adjusted operating income 389 306 (21) Operating income 389 283 (27) ROS%² 13.1 10.9 ROI%² 27.2 19.9 Revenue development H1 2018 (%) Increas
Slide 22: Specialty Chemicals revenue increased driven by higher selling prices
Specialty Chemicals revenue¹ increased driven by higher selling prices € million H1 2017 H1 2018 Δ% Revenue 2,548 2,522 (1) Adjusted EBITDA 503 491 (2) Adjusted operating income 332 325 (2) Operating income 350 325 (7) ROS%² 13.0 12.9 ROI%² 15.3 16.8 Revenue development H1 2018 (%) Increase Decrease
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