Slide 1: Investor Update Q1 2014 results
Investor Update Q1 2014 results Keith Nichols April 17, 2014
Slide 2: Agenda
Agenda 1. Q1 2014 highlights 2. Operational and financial review 3. Conclusion 4. Questions Investor Update Q1 2014 results 2
Slide 3: Q1 2014 highlights
Q1 2014 highlights • Volume and price / mix development positive in all three Business Areas • Revenues down 2 percent due to 5 percent adverse currency effects • Restructuring costs €44 million (2013: €29 million). Excluding these, ROS% is 7.7 percent (2013: 7.1 percent) • Operating income at €216
Slide 4: Q1 2014 revenue and operating income
Q1 2014 revenue and operating income € million Q1 2014 Δ% Revenue 3,383 -2 Operating income 216 0 Ratio, % Q1 2014 Q1 2013 Return on sales 6.4 6.3 Return on sales (excluding restructuring costs) 7.7 7.1 Moving average return on investment 9.7 7.8 Increase Revenue development Q1 2014 vs. Q1 2013 Decr
Slide 5: Market conditions remain challenging but volumes and price/mix improved in all Business Areas
Market conditions remain challenging but both volumes and price/mix improved in all Business Areas Quarterly volume development in % year-on-year 2013 2014 6 +1% +3% +2% +2% 2 -2 -6 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel Quarterly price/mix development in % year-on-year
Slide 6: Foreign exchange rates continued to negatively impact our revenues in Q1
Foreign exchange rates continued to negatively impact our revenues in Q1 Quarterly foreign exchange rate development in % year-on-year 2013 2014 4 -6% -6% -4% -5% 0 -4 -8 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel • Higher volumes and price/mix were offset by a 5 percent ne
Slide 7: Decorative Paints Q1 2014 highlights
Decorative Paints Q1 2014 highlights = • Volumes up due to strong volume € million Q1 2014 Δ% development in Asia while market Revenue 865 -6 conditions in Europe and Latin America were challenging Operating income 17 -60 • Revenues down 6 percent mainly due to adverse currency effects and Ratio, %
Slide 8: Performance Coatings Q1 2014 highlights
Performance Coatings Q1 2014 highlights • Volumes up 3 percent compared with € million Q1 2014 Δ% previous year, mainly driven by Revenue 1,319 -1 Marine and Protective Coatings and Powder Coatings Operating income 126 -2 • Revenues down 1 percent, due to 6 percent adverse currency effects Ratio, %
Slide 9: Specialty Chemicals Q1 2014 highlights
Specialty Chemicals Q1 2014 highlights • Volumes up 2 percent compared with € million Q1 2014 Δ% the previous year, driven by volume Revenue 1,222 -2 increases in Functional Chemicals Operating income 135 36 • Revenues down 2 percent, mainly due to adverse currency effects (4 percent) Ratio, % Q1 20
Slide 10: Summary – Q1 2014 results
Summary – Q1 2014 results € million Q1 2014 Q1 2013 EBITDA 364 375 Amortization and depreciation (148) (158) Incidentals - - Operating income 216 217 Net financing expenses (37) (63) Minorities and associates (10) (13) Income tax (43) (45) Discontinued operations 3 (7) Net income attributable to sha
Slide 11: Cash flows Q1 2014
Cash flows Q1 2014 € million Q1 2014 Q1 2013 Profit for the period from continuing operations 142 112 Amortization and depreciation 148 158 Change working capital (471) (350) • Pension provisions (281) (236) • Restructuring (7) (21) • Other provisions (6) (22) Change provisions (294) (279) Other cha
Slide 12: Further de-risking of pension liabilities in the UK
Further de-risking of pension liabilities in the UK • Trustee of ICI Pension Fund in UK entered into two annuity buy-in agreements with Legal & General and Prudential, covering £3.6 billion (€4.3 billion) of pensioner liabilities, equivalent to one quarter of our total pension liabilities and one th
Slide 13: IAS total pension deficit increases to over €1.0 billion
IAS 19 total pension deficit increases to over €1.0 billion Key pension metrics Q1 2014 Q4 2013 Discount rate 4.1% 4.2% Inflation assumptions 3.1% 3.2% Pension deficit development during Q1 2014 € million Decrease Increase 171 (194) 59 (638) 297 (1,057) (773) 21 Deficit end Q4 Top-ups Asset return D
Slide 14: Conclusion
Conclusion • Volume and price/mix development positive in all three Business Areas • Despite higher restructuring charges, continued adverse currency effects and ongoing weakness in Europe, our year-on-year return on sales, both before and after restructuring charges, improved for the third consecut
Slide 15: Questions
Questions Investor Update Q1 2014 results 15
Slide 16: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements which address such key issues as AkzoNobel’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 be
Slide 17: Appendices
Appendices Investor Update Q1 2014 results 17
Slide 18: Restructuring charges by quarter
Restructuring charges by quarter* FY Q1 € million Q1 Q2 Q3 Q4 2013 2014 Decorative Paints 7 24 8 66 105 22 Performance 11 5 9 77 102 15 Coatings Specialty 1 0 46 27 74 7 Chemicals Other 10 11 12 34 67 0 Total 29 40 75 204 348 44 * 2013 charges related to Performance Improvement Program Investor Upda
Slide 19: Effects from Building Adhesives on FY 2013 results
Effects from Building Adhesives on FY 2013 results € million Q1 Q2 Q3 Q4 FY 2013 Revenue 45 49 47 - 141 Operating Income 4 5 3 - 12 • Divestment completed on October 1st, 2013 • Results still included in 2013 financials, impact on 2014 revenue development visible through acquisitions/divestments Inv
Slide 20: FY2013 Operating Income bridge
FY2013 Operating Income bridge Operating Income bridge FY2012 – FY2013 Increase € million Decrease (56) 61 295 (224) 64 (66) 61 27 (106) 55 972 958 908 897 FY 2012 Incidentals FY 2012 Currency / Volume Price/Mix Raw Additional Additional Other FY 2013 Incidentals FY 2013 OPI 2012 EBIT Acq / Div mate
Slide 21: Our proposition: Leading market positions delivering leading performance
Our proposition: Leading market positions delivering leading performance AkzoNobel has gone through a significant amount of strategic change over the past five years Today, the company has • Excellent portfolio of businesses • Good long term growth potential on the basis of end-user segment growth •
Slide 22: Realistic 2015 financial targets
Realistic 2015 financial targets focused on quality of earnings and value creation Return on sales Return on investment Net debt/EBITDA (Operating income/revenue) (Operating income/average x % 12 months invested capital) % 12 16 14.0 3 9.0 12 < 2.0 8 5.9* 6.6 8.9* 9.6 2 1.4 8 1.0 4 1 4 0 0 0 2012 20
Slide 23: AkzoNobel strategy introduced in 2013
AkzoNobel strategy introduced in 2013 • Organic growth • Operational excellence Investor Update Q1 2014 results 23
Slide 24: AkzoNobel today
AkzoNobel today • Revenue €14.6 billion • 49,560 employees • 44% of revenue from high growth markets • Major producer of Paints, Coatings and Specialty Chemicals • Leadership positions in many markets Revenue by Operating income Invested capital by Business Area by Business Area Business Area Perfor
Slide 25: Revenue by end-user segment
~44% of revenues ~16% of revenues New Build Projects Automotive OEM, Parts and Assembly Maintenance, Renovation & Repair Automotive Repair Building Products & Components Marine and Air Transport ~16% of revenues ~24% of revenues Consumer Durables Natural Resource and Energy Industries Consumer Packa
Slide 26: The global paints and coatings market is around €80 billion
The global paints and coatings market is around €80 billion By market sector By end-user segment 2013, 100% = €80 billion 2013, 100% = €80 billion Yacht Aerospace Specialty Packaging Industrial Finishes Coil Decorative Consumer Buildings and Marine Paints Goods Infrastructure Wood (42%) Automotive O
Slide 27: AkzoNobel has many leading market positions
AkzoNobel has many leading market positions No.1 Position Other key players Multiple regions outside North PPG, regional players Decorative America North America* Sherwin-Williams PPG, regional players Protective Sherwin-Williams, Jotun Powder Axalta, Jotun, regional players Auto refinish Axalta PPG
Slide 28: High growth markets are 44% of revenue
High growth markets are 44% of revenue and their importance will increase % of 2013 revenue 38% Mature Europe 15% 8% North America Emerging Europe 25% Asia Pacific 11% 3% Latin America Other regions Share of revenues from high growth markets will increase over time Investor Update Q1 2014 results 28
Slide 29: In aggregate variable costs represent 53% of revenue
In aggregate variable costs represent 53% of revenue Profit and loss breakdown* % of total • AkzoNobel is well positioned for economic recovery 100% • Variable costs represent 53% of revenue, down from 54% in 2012 • Decorative Paints is more driven by personnel costs in the distribution network, whi
Slide 30: We are actively addressing all components of operating expenses
We are actively addressing all components of operating expenses Operating expenses € 4.7 Research, Operating expense General & Selling Expenses Development & components Administrative Innovation € 1.4 € 3.0 € 0.4 Global Business Addressed by Commercial Excellence Initiatives Services Drives organic
Slide 31: Drive towards continuous improvement and commercial excellence
Drive towards continuous improvement and commercial excellence • Restructuring activities to continue into 2014, moving into continuous improvement which will enable us to achieve the 2015 targets – 2014 restructuring charges expected to total at least €250 million and will be more evenly spread ove
Slide 32: Sustainability is business; business is sustainability
Sustainability is business; business is sustainability of revenue by 2020 from products that are more sustainable for our customers than the products of our competitors more efficient resource and energy use across the entire value chain by 2020 (measured by carbon footprint reduction) (Resource Eff
Slide 33: AkzoNobel values drive cultural change
AkzoNobel values drive cultural change Investor Update Q1 2014 results 33
Slide 34: Leading performance; gaining momentum
Leading performance; gaining momentum Historical Vision 2015 Targets Culture issues & Strategy & Incentives & Values • ROS below peers • Organic growth • ROS 9% • Customer Focused • Not earning our cost • Operational • ROI 14% • Deliver on of capital excellence • Operating income - Commitments • Ina
Slide 35: Decorative Paints business at a glance
Decorative Paints business at a glance Revenue by end-user Revenue by geographic spread sub-segment 4% 16% 8% Mature Europe Maintenance, renovation and repair 14% Asia Pacific 49% Latin America New build projects Emerging Europe Other regions 25% 84% Decorative Paints key figures Key messages € mill
Slide 36: The global Decorative Paints market is attractive in terms of size and growth
The global Decorative Paints market is attractive in terms of size and growth Decorative Paints sales € billion • Used for protection as well as decoration 50 • Consumption per capita 40 driven primarily by the frequency of repainting 30 • Demand growth closely correlated with GDP growth, 20 consume
Slide 37: High-growth markets are growing well and are increasingly 'trading up'
High-growth markets are growing well and are increasingly ‘trading up’ Paint market growth* Paint market composition* $ billion % of total, by value • Paint markets in high-growth markets are still showing 100% 8% p.a. significant opportunities for growth • Spending power of the middle 75% class in
Slide 38: In Decorative Paints we hold strong market positions across all regions
In Decorative Paints we hold strong market positions across all regions Geographic size AkzoNobel Geographic area (€ billion) position Europe* 12.2 1 South East Asia and Pacific 1.7 1 China and North Asia 6.4 2 Latin America 2.5 2 India and South Asia 2.8 3 * Europe includes Africa and Middle East C
Slide 39: We are strong in the premium segment, but also compete successfully elsewhere
We are strong in the premium segment, but also compete successfully elsewhere AkzoNobel Decorative Paints revenue by segment % of revenue 100% 75% 50% 25% 0% Brazil China Indonesia South Africa Economy Mid-market Premium Investor Update Q1 2014 results 39
Slide 40: We have very strong brands linked by a global approach to branding
We have very strong brands linked by a global approach to branding • Our well-known brands are one of our key competitive advantages Consumer • We have a number of powerful, relevant brands occupying a number of positions across different markets (consumer, professional, and other such as woodcare)
Slide 41: Accomplishments to date
Accomplishments to date Area Beginning 2008 End 2013 Cost reductions* n/a > 200 million Number of FTEs 25,800 16,240 Brands 100 59 SKUs >90,000 69,000 Factories 80 45 Warehouses 160 135 ERP systems >40 1 * Related to Performance Improvement Program Investor Update Q1 2014 results 41
Slide 42: Fix Europe
Fix Europe Objectives: • Improve performance by driving operational excellence and changing the operating model in Europe • Ensure that we are positioned for organic growth in mature European markets when the market recovers (e.g. UK) • Pursue organic growth in select countries where there are attra
Slide 43: Fix Europe
Fix Europe Actions: • Implement a central operating model and simplify our organizational structure • Consolidate our manufacturing and distribution footprint • Develop and implement standardized and efficient marketing and sales platforms • Redesign back office processes to support back office cons
Slide 44: Changing our operating model in Europe
Changing our operating model in Europe Action 2012 2013 2014 2015 Integrate relevant European activities and management Rationalize product portfolio and raw materials Rationalize manufacturing footprint Fully implement sales excellence Outsource certain finance businesses Implement central operatin
Slide 45: Grow profitably in high-growth markets
Grow profitably in high-growth markets Objectives: • Outgrow the market • Ensure that we leverage our (global) scale to ensure that we improve relative profitability while we grow Actions: • Develop profitable mid-market business model(s) • Build and implement a robust distribution strategy framewor
Slide 46: Performance Coatings business at a glance
Performance Coatings business at a glance Revenue by end-user segment Revenue by geographic spread 14% Buildings and 4% Mature Europe 24% Infrastructure 11% 27% North America Transportation 8% Asia Pacific 25% Latin America Consumer Goods Emerging Europe 30% 20% 37% Industrial Other regions Performa
Slide 47: We are organized in four Business Units
We are organized in four Business Units 2013 revenue by Business Unit • Protective Marine & • Marine Protective Coatings • Yacht Marine & Protective Coatings 27% 32% • Vehicle Refinishes Automotive & Automotive & Aerospace • Specialty Finishes Aerospace Coatings Coatings • Aerospace Powder Coatings
Slide 48: The Performance Coatings market is based on twelve sectors
The Performance Coatings market is based on twelve sectors Performance Coatings market sectors € billion, 2013 7 2013 total market size ~ €50 billion 6 5 4 3 2 1 0 AkzoNobel competes in these market sectors Source: Orr & Boss 2011 for base data on market sectors; AkzoNobel analysis Investor Update Q
Slide 49: The five year outlook for most sectors is positive
The five year outlook for most sectors is positive Performance Coatings market sectors 3-5 % (>GDP growth) € billion, 2013 3% (at GDP growth) 7 See next slide 6 5 4 3 2 1 0 Protective Vehicle Powder Wood Marine Specialty Coil Packaging Aerospace Yacht Refinishes Finishes Source: Orr & Boss 2011 for
Slide 50: The Marine new build market may have now reached the bottom of the cycle
The Marine new build market may have now reached the bottom of the cycle... New build ship deliveries Million deadweight tons, 2007 = 95 -5.7% -30.1% ? +18.4% p.a. 2007 08 09 10 11 12 13 14 Delivered Range of outcome On order Source: Clarkson Research Services Limited, January 2014, AkzoNobel analys
Slide 51: AkzoNobel is the global market leader in Performance Coatings, excluding Automotive
AkzoNobel is the global market leader in Performance Coatings, excluding Automotive Performance Coatings revenue € billion, 2013 unless noted 6 5 4 3 2 1 0 Non-Automotive Automotive * 2012 data Source: Annual Reports; AkzoNobel analysis Investor Update Q1 2014 results 51
Slide 52: AkzoNobel has many leading market sector positions in Performance Coatings
AkzoNobel has many leading market sector positions in Performance Coatings Performance Coatings market sectors AkzoNobel market share x € billion, 2013 position (by value) 2013 1 7 3 1 6 5 1 4 1/2 1 3 1 2 2 1 1/2 1 0 Protective Vehicle Powder Wood Marine Specialty Coil Packaging Aerospace Yacht Refi
Slide 53: We successfully expanded our portfolio and global presence
We successfully expanded our portfolio and global presence • Performance Coatings has made four bolt-on acquisitions over the last few years that brought many benefits, including: – Expanding our global reach – Broadening our technology offering – Taking leadership positions – Extracting significant
Slide 54: We have a strong business but there is room for improvement going forward
We have a strong business but there is room for improvement going forward What we have done Room for improvement over the last three years over the next three years Grown the business in a difficult market environment Grow volume organically • Bolt-on acquisitions • Margin management actions Reduced
Slide 55: Drive performance improvement initiatives
Drive performance improvement initiatives Initiative Actions Roll out a common set of commercial processes Drive commercial excellence to increase to deliver both organic growth and sales effectiveness commercial efficiency Use a cross-business, cross-functional approach Deliver further complexity r
Slide 56: Drive commercial excellence to increase sales effectiveness
Drive commercial excellence to increase sales growth and commercial efficiency Commercial excellence is a key Actions value driver in Performance Coatings • Best practice selling processes • Best practice and competency training will be effectiveness Sales force focused on business in growth markets
Slide 57: Complexity reduction and continuously reduce external spend
Complexity reduction and continuously reduce external spend Performance Coatings Actions 2013 Drive further complexity reduction: Profit and loss breakdown* • Harmonize recipes % of total • SKU reductions 100% Use a cross-functional approach to deliver year-on-year savings in external spend • Aggreg
Slide 58: Continuously improve operational productivity
Continuously improve operational productivity Supply Chain performance is a key element for Actions success in Performance Coatings Embed standard processes and continuous • Supply Chain cost improvement capabilities to achieve (Manufacturing, logistics and warehousing) year-on-year savings exceedin
Slide 59: Pursue differentiated growth strategies
Pursue differentiated growth strategies Outgrow the market organically Expected outcomes • Marine • Improved market share • Protective • Costs don’t grow as fast as revenue • Powder • Improved return on sales • Specialty Finishes in percentage terms Improve performance by Expected outcomes driving o
Slide 60: Specialty Chemicals business at a glance
Business at a glance Revenue by end user segment Revenue by geographic spread 5% Buildings and Mature Europe 18% infrastructure 10% 2% North America Transportation 6% 44% Asia Pacific Consumer 17% 57% Latin America 19% goods Emerging Europe Industrial 22% Other regions Specialty Chemicals key figure
Slide 61: The chemical industry is large and growing
The chemical industry is large and growing Chemicals industry over time, by geography $ trillion • $3.5 trillion market Other China 6.3 Asia Pacific • Solution provider for society North America – manufacturing Western Europe – food production – climate change 3.4 • Continuous growth 1.3 0.9 • Stron
Slide 62: Five well positioned platforms in their industries
Five well positioned platforms in their industries Our Business Units Our Platforms Bleaching Chemicals Pulp & Performance chemicals 60% of Pulp & Performance chemicals Salt-chlorine chain Industrial Chemicals 100% of Industrial Chemicals Polymer Catalysts 40% of Functional Chemicals Functional Chem
Slide 63: Platforms operate world scale plants based on advanced technologies
Platforms operate world scale plants based on advanced technologies Our main chemical platforms Key products • Sodium chlorate Bleaching chemicals • Hydrogen peroxide • Energy/Salt • Monochloroacetic acid Salt-chlorine chain • Chlorine • Chloromethanes • Organic peroxides Polymer catalysts • Metal a
Slide 64: We have invested in the recent past and are well-prepared for future growth
We have invested in the recent past and are well-prepared for future growth BA Specialty Chemicals capital expenditure € million 500 400 300 200 100 0 2010 2011 2012 2013 Capital Expenditure Depreciation and Amortization Major projects and timing of spend Investment project 2010 2011 2012 2013 2014
Slide 65: Accomplishments to date
Accomplishments to date Area 2010 2013 Delta Number of operations integrated with customers 15 17 +13% Sales per FTE (k€) 445 467 +5% Capacity expansions (>10%) 12 units Number of manufacturing sites 109 102 -7% Sales/site (€ million) 42.6 48.5 +14% Renewable energy usage n/a 31% Waste (ton/€ millio
Slide 66: Four operational improvement initiatives
Four operational improvement initiatives Improve Strengthen Reduce Enhance product productivity of commercial organizational and process supply chain and excellence costs innovation operations • Asset optimization • Customer value • Restructuring • New applications • Production system creation and p
Slide 67: Differentiated strategies per platform
Differentiated strategies per platform Outgrow the market organically Actions ~ 50% of portfolio • Capitalize on investments Main platforms • Grow by successfully • Bleaching chemicals • Surfactants commercializing products for attractive applications Improve performance by driving Actions operation
Slide 68: Salt-Chlorine chain: Right at the heart of the customer base
Salt-Chlorine chain: Right at the heart of the customer base Steam cracker Refinery Olefin consumer Refinery & olefin producer Pipelines* * Pipelines transporting crude oil (RAPL), nafta (PALL), industrial gasses, ethylene and propylene Investor Update Q1 2014 results 68
Slide 69: Ethylene oxide network: Capitalizing on China investments
Ethylene oxide network: Capitalizing on China investments Bio-treatment facility Chelates Surfactants Hydrogen Organic Cyanide Peroxides Ethylene Oxide Ethylene Amines Cellulosics Site plan Investor Update Q1 2014 results 69
Slide 70: Surfactants: Growing with attractive end markets
Surfactants: Growing with attractive end markets Oilfield Lubricants Mining Agriculture Investor Update Q1 2014 results 70
Slide 71: Our platforms build on value chains
Our platforms build on value chains Raw Base Chemical Performance/ materials chemicals inter-mediates functional ‘End’ products chemicals Bleaching chemicals Salt-chlorine chain Polymer catalysts Ethylene oxide network Surfactants Investor Update Q1 2014 results 71
Slide 72: Our platforms build on value chains
Our platforms build on value chains Raw Base Chemical Performance/ materials chemicals inter-mediates functional ‘End’ products chemicals Bleaching chemicals Electrochemistry Salt-chlorine chain Polymer catalysts Serving plastics industry Ethylene oxide network Ethoxylation chemistry Surfactants Inv
Slide 73: Capital expenditure will be more in line with depreciation and amortization
Capital expenditure will be more in line with depreciation and amortization Capital Expenditures (millions €) 5.4% 4.5% 4.6% € 826 3.7% € 708 • 40-50% of capital expenditure is € 666 growth related € 534 • Going forward, capital expenditure will be around 4% of revenues, in line with depreciation an
Slide 74: Performance improvement actions release cash in Operating Working Capital
Performance improvement actions release cash in Operating Working Capital Operating Working Capital € million Operating Working Capital OWC as % of LQ revenue*4 2.500 16% 12.9% 14% • Operating Working Capital as % of revenue has 2.000 12% reduced towards 9.9% 10.7% 9.9% 10% • Significant seasonality
Slide 75: 2015 target: net debt to EBITDA ratio of less than two
2015 target: net debt to EBITDA ratio of less than two Net debt/EBITDA x • We have a strong liquidity position to support business needs: net cash and cash equivalents 1,5 €2.1 billion* • Undrawn revolving credit facility of €1.8 billion 1,0 (2018) €1.5 and $3 billion commercial paper programs, back
Slide 76: Continuously reducing costs of long term bonds
Continuously reducing costs of long term bonds Debt maturities € million Repaid € bonds £ bonds $ bonds 7.75% 4.00% 2.62% 7.25% 5.62% • Debt duration 3.6 years 825 8.00% 800 750 622 379 • Improving cash flow and 306 divestments enabled full 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 repayment
Slide 77: On track to deliver cash positive after dividend in 2015
On track to deliver cash positive after dividend in 2015 Cash flow sources and uses • Restructuring and pension 2012 2013 top-ups consume a significant proportion of cash • Performance improvement focus starts to address cash challenge • Remuneration metrics include cash generation • Positive cash i
Slide 78: Proactively managing or removing pension liabilities
Proactively managing or removing pension liabilities • ICIPF’s active management of interest rate and inflation Interest rate / exposure, with around 80% of defined benefit obligation Inflation hedging (DBO) risks hedged to date Retain and • Courtaulds (CPS) longevity swap with Swiss Re in 2012 Mana
Slide 79: Pension cash flow guidance
Pension cash flow guidance Defined benefit pension cash top-ups • Top-ups relate mainly to the 2 big UK plans, the ICI Pension Fund € million and the CPS Pension Scheme 2013 actual* 311 • Top-ups are based on prudent actuarial valuation of liabilities, 2014 -17 est.** ~330/year which differs from ac
Slide 80: Dividend policy unchanged
Dividend policy unchanged Dividends paid (€) • Our dividend policy is to pay a stable to rising dividend each year 1.08 1.12 1.12 1.12 1.05 • An interim and final dividend will be paid in cash unless shareholders elect to receive a stock dividend 0.30 0.32 0.33 0.33 0.33 2009 2010 2011 2012 2013 Fin
Slide 81: Realistic expected 2015 outcomes
Realistic expected 2015 outcomes Expected Outcomes 2012 2015 16 Return on 12,0 12,0 sales 12 9,5 9,0 7,5 8 4 2,2 0 % Decorative Paints Performance Coatings Specialty Chemicals Return on 32 25,0 investment 24 21,7 13,6 15,0 16 12,0 8 3,0 0 % Decorative Paints Performance Coatings Specialty Chemicals
Slide 82: Variable costs analysis
Variable costs analysis 2013 (excluding Decorative Paints North America) Packaging Energy & other variable costs* Raw materials Solvents 6% 7% 29% Chemicals and intermediates*** 17% 3% Other raw materials** 10% 5% Additives 6% Titanium 2% dioxide 15% Pigments Coatings’ specialties Resins * Other var
Slide 83: Both short & long term incentives are aligned with our priorities
Both short & long term incentives are aligned with our priorities Executive short term incentive 2014 Executive long term incentive 2014 STI Metric LTI Metric Element Element 20% Return on investment 35% Return on investment 20% Operating income 35% Total Shareholder Return 30% Operating cash flow 3
Slide 84: Decorative Paints – Dulux Easycare
Innovation Pipeline Q1 2014 Decorative Paints – Dulux Easycare Key Features Customer Benefits • Stain Beading • Stains bead on the surface • Repels water-based liquids such as tea, • Surfaces are easier to clean; walls stay clean for coffee, soya sauce, wine from the surface longer • Easy to apply a
Slide 85: Marine & Protective Coatings – Intertrac
Innovation Pipeline Q1 2014 Marine & Protective Coatings – Intertrac Key Features Customer Benefits • Shipping industry’s first digital tool for accurately • Enables ship owners to match anti-fouling coating assessing and predicting the risk of hull fouling specifications with vessels’ needs, ensuri
Slide 86: Surface Chemistry – Controlled-release scale inhibition technology
Innovation Pipeline Q1 2014 Surface Chemistry – Controlled-release scale inhibition technology Key Features Customer Benefits • Proprietary technology for incorporating scale • An eco-premium solution for oilfield owners and inhibitors into controlled-release particles for use service companies in o