Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q3 2005 Earnings Presentation
26 slides from Akzo Nobel's earnings presentation, Oct 19, 2005
Slide 1: Q3 2005 Results
Rob Frohn, CFO Q3 2005 Results October 19, 2005 Q3 2005 Results Press Conference
Slide 2: Third quarter 2005 highlights
Third quarter 2005 highlights Topline up across the board; revenue EUR 3.3 bln, up 6% – Emerging markets strong – Mature markets under pressure Basic EBIT EUR 315 mln, down 7% – R&D ramping up at Organon – investing in the future – Impact energy and raw material prices Net income excluding one
Slide 3: Third quarter performance
Third quarter performance Q-3, EUR mln 2005 ∆% Revenues* 3,299 6 Basic EBIT* 315 (7) Net income 175 (66) Net income* excluding one-offs 200 (2) 2005 2004 Basic EBIT margin, %* 9.5 10.9 EPS, EUR 0.61 1.78 * Present operations
Slide 4: Third quarter EBIT drivers
Third quarter EBIT drivers Basic EBIT decreased 7% to EUR 315 mln Topline growth all groups Higher R&D spend Organon Growth emerging markets Energy/raw materials Intervet performance Subdued mature markets
Slide 5: NuvaRing – direct marketing campaign in US
NuvaRing® – direct marketing campaign in US
Slide 6: NuvaRing – Continued rapid growth
NuvaRing® – Continued rapid growth EUR mln NuvaRing® Quarterly Sales 2003 – YTD 35 30 25 20 15 10 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2003 2004 2005
Slide 7: Organon – topline improvement continues
Organon – topline improvement continues Q-3 2005 highlights Key priorities Topline continues to grow Topline growth NuvaRing® up Pipeline progress Puregon® up Pharmaceutical ingredients R&D ramping up Pharmaceutical ingredients continue to suffer
Slide 8: Organon – autonomous product growth
Organon – autonomous product growth Autonomous growth, % on Q-3 2004 on Q-2 2005 Contraceptives 9 1 – of which NuvaRing® 43 5 Puregon® /Follistim® 28 (6) Remeron® outside U.S. (18) (8) Livial® (2) (4) Pharmaceutical ingredients (9) (4)
Slide 9: Organon – revenue growth; R&D ramping up
Organon – revenue growth; R&D ramping up Q-3, EUR mln 2005 ∆% Revenues 590 2 Basic EBIT 68 (17) Ratios 2005 2004 Basic EBIT margin 11.5 14.2 S&D as % of revenues 31.0 32.1 R&D as % of revenues 18.3 16.9
Slide 10: Intervet – solution & capacity for avian influenza H5N1
Intervet – solution & capacity for avian influenza H5N1
Slide 11: Intervet – excellent quarter; strong autonomous growth
Intervet – excellent quarter; strong autonomous growth as strategy delivers Q-3 2005 highlights Key priorities Topline clearly up, Innovation and new product 9% autonomous growth launches Æ growth All regions and virtually all Complete roadmap execution products up Efficiency improvements
Slide 12: Intervet – results jump on growth; efficiency improvements
Intervet – results jump on growth; efficiency improvements Q-3, EUR mln 2005 ∆% Revenues 277 10 Basic EBIT 56 24 Ratios 2005 2004 Basic EBIT margin 20.2 17.9 S&D as % of revenues 24.2 24.6 R&D as % of revenues 9.7 11.1
Slide 13: Coatings – powder and protective coat Pudong terminal
Coatings – powder and protective coat Pudong terminal
Slide 14: Emerging markets – goal to be China's No 1 coatings company
Emerging markets – goal to be China’s No 1 coatings company Coatings in China Positions/potential Total China revenues some USD Among top 5 producers in Asia 650 mln; 2010 Target USD 1 bln Leading positions China/Asia: – Marine & Protective Coatings Some USD 500 mln from Coatings – Powder Co
Slide 15: Coatings – topline growth, mature market margins need attention
Coatings – topline growth, mature market margins need attention Q-3 2005 Highlights Key priorities Topline up, volumes steady Step up growth in emerging markets Emerging markets strong, China above average Restore margins Industrial activities regaining strength Focus on cost savings in
Slide 16: Coatings – raw materials; slower growth in mature markets
Coatings – raw materials; slower growth in mature markets Q-3, EUR mln 2005 ∆% Revenues 1,457 5 Basic EBIT 142 (6) Ratio 2005 2004 Basic EBIT margin 9.7 10.9
Slide 17: Chemicals in emerging markets – major plant opened in Brazil
Chemicals in emerging markets – major plant opened in Brazil
Slide 18: Chemicals – steady despite energy costs
Chemicals – steady despite energy costs; all growth platforms contributing Q-3 2005 highlights Key priorities Topline improved Grow five core platforms Performance stable despite Grow in emerging markets headwinds energy and raw material prices Execute performance roadmaps Pulp & Paper C
Slide 19: Chemicals – Autonomous growth 3%
Chemicals – Autonomous growth 3% Q-3, EUR mln 2005 ∆% Revenues 966 4 Basic EBIT 83 (1) Ratio 2005 2004 Basic EBIT margin 8.6 9.1 Present operations
Slide 20: Strong financial position
Strong financial position
Slide 21: Strong financial position
Strong financial position Sept. ‘05 / Dec. ‘04; EUR bln 2005 2004 Equity 3.4 2.8 Net borrowings 1.8 1.4 Gearing (ratio) 0.53 0.51 YTD ratios 2005 2004 Interest coverage 9.4 11.2 EBITDA coverage 13.2 15.2 EUR 2005 2004 Interim dividend 0.30 0.30
Slide 22: 2005 YTD performance
2005 YTD performance YTD, EUR mln 2005 ∆% Revenues * 9,694 5 Basic EBIT * 901 (5) Net income 644 (19) 2005 2004 Basic EBIT margin, % * 9.3 10.3 EPS, EUR 2.25 2.77 Number of employees 61,420 62,990 * Present operations
Slide 23: Steady pace of execution on our priorities
Steady pace of execution on our priorities 2005 DELIVERY PRIORITIES Topline growth: Return to topline growth; R&D Pipeline; ORGANON R&D ramp-up Pharmaceutical ingredients being addressed Strong sales & EBIT growth; INTERVET Execution roadmap; Execute remainder of roadmap New products Acquisitions; T
Slide 24: Outlook – unchanged
Outlook – unchanged Net income* around EUR 800 mln *This excludes restructuring and impairment charges, charges related to major legal, antitrust and environmental cases, results on divestments, the impact of the new pension scheme in the Netherlands, and the intended deal with Barr to settle their
Slide 25: Safe harbor statement
Safe harbor statement* This report 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, including but not limited to the “Ou
Slide 26: Creating a platform for growth
Creating a platform for growth October 19, 2005 Q3 2005 Results Press Conference