Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Shareholder Meeting (April 2012)
36 slides from Akzo Nobel's shareholder meeting presentation, Apr 23, 2012
Slide 1: Annual General Meeting of Shareholders: 2011 review
Amsterdam, April 23, 2012 Annual General Meeting of Shareholders 2011 review Hans Wijers, CEO
Slide 2: Agenda
Agenda • Introduction and strategic ambitions • 2011 value highlights • 2011 values highlights • 2011 financial review • Performance improvement program • Outlook 2012 Annual General Meeting of Shareholders: 2011 review 2
Slide 3: AkzoNobel key facts
AkzoNobel key facts 2011 • Revenue €15.7 billion • 57,240 employees • EBITDA: €1.8 billion* • Net income: €0.5 billion • 40 percent of revenue from high growth markets • A leader in sustainability Revenue by business area EBITDA* by business area * Before incidentals Annual General Meeting of Shareh
Slide 4: Leading positions and strong brands
Leading positions and strong brands 2011 Revenue by market position Some of our strong brands Decorative Paints Performance Coatings Specialty Chemicals Annual General Meeting of Shareholders: 2011 review 4
Slide 5: Our medium term strategic goals
Our medium term strategic goals • Top quartile safety performance • Top 3 position in sustainability • Top quartile performance in diversity, employee engagement, and talent development • Top quartile eco-efficiency improvement rate • Grow to €20 billion revenues • Increase EBITDA each year, maintai
Slide 6: High growth markets will become significantly more important
High growth markets will become significantly more important % of revenue, indicative 32% “Mature” Europe 9% 18% “Emerging” Europe North America 25% 5% Asia Pacific Middle East and Africa 11% Latin America High growth markets will be around 50% of revenue in this decade Annual General Meeting of Sha
Slide 7: 2011 value highlights
2011 value highlights Annual General Meeting of Shareholders: 2011 review 7
Slide 8: Highlights
Highlights • 2011 revenue up 7 percent driven by pricing actions to offset raw material cost inflation • Weaker end markets and cost inflation impacted results • 2011 EBITDA 9 percent lower at €1,796 million (2010: €1,964 million) • Net income from continuing operations €469 million (2010: €664 mill
Slide 9: FY 2011 revenue and EBITDA
FY 2011 revenue and EBITDA € million FY 2011 Δ% Revenue 15,697 7 EBITDA* 1,796 (9) Ratio, % FY 2011 FY 2010 EBITDA* margin 11.4 13.4 +1% -1% +5% +2% +7% * Before incidentals Increase Decrease Annual General Meeting of Shareholders: 2011 review 9
Slide 10: Achieved price increases have caught up with most raw material price inflation
Achieved price increases have caught up with most raw material price inflation EBITDA* bridge FY 2010 – FY 2011 € million 1,964 1,796 * Before incidentals Increase Decrease Annual General Meeting of Shareholders: 2011 review 10
Slide 11: Price increases coming through
Price increases coming through Quarterly volume development in % year-on-year 2% -2% -4% -2% Quarterly price/mix development in % year-on-year 7% 5% 6% 4% 2010 2011 Annual General Meeting of Shareholders: 2011 review 11
Slide 12: Decorative Paints
Decorative Paints +4% +6% +2% Film: How can we add colour to people’s lives? Annual General Meeting of Shareholders: 2011 review 12
Slide 13: Decorative Paints 2011 highlights
Decorative Paints 2011 highlights € million 2011 Δ% Revenue 5,296 7 EBITDA* 440 (20) Ratio, % 2011 2010 EBITDA* margin 8.3 11.0 Increase Decrease 0% -1% +3% +7% +5% • Strongest revenue growth in China, India and Latin America • Challenging year in Europe and the US with continued restructuring • Mar
Slide 14: Decorative Paints
Decorative Paints +4% +6% +2% Film: Flexa tv commercial Annual General Meeting of Shareholders: 2011 review 14
Slide 15: Performance Coatings
Performance Coatings +4% +6% +2% Film: How do you keep yachts in the water for longer? Annual General Meeting of Shareholders: 2011 review 15
Slide 16: Performance Coatings 2011 highlights
Performance Coatings 2011 highlights € million 2011 Δ% Revenue 5,170 8 EBITDA* 611 (6) Ratio, % 2011 2010 EBITDA* margin 11.8 13.5 Increase Decrease +2% -1% +5% +8% +2% • Strong growth in Industrial Coatings, but weakness in Wood Finishes and Adhesives • Margins impacted by higher raw material cost
Slide 17: Performance Coatings
Performance Coatings +4% +6% +2% Film: Stickerfix commercial Annual General Meeting of Shareholders: 2011 review 17
Slide 18: Specialty Chemicals
Specialty Chemicals +4% +6% +2% Film: How do we satisfy our love for salt and our need for health? Annual General Meeting of Shareholders: 2011 review 18
Slide 19: Specialty Chemicals 2011 highlights
Specialty Chemicals 2011 highlights € million 2011 Δ% Revenue 5,335 8 EBITDA* 906 (4) Ratio, % 2011 2010 EBITDA* margin 17.0 19.0 Increase Decrease 0% 0% +7% +8% +1% • After a strong 2010, the Specialty Chemicals portfolio delivered a solid performance during 2011 • Weakening demand in some segments
Slide 20: Specialty Chemicals
Specialty Chemicals +4% +6% +2% Film: How do you make vast quantities of paper make good sustainable sense? Annual General Meeting of Shareholders: 2011 review 20
Slide 21: 2011 values highlights
2011 values highlights Annual General Meeting of Shareholders: 2011 review 21
Slide 22: 2011 values results – working towards our medium-term ambitions
2011 values results – working towards our medium-term ambitions Eco-premium solutions Operational Eco Efficiency in % of revenue % reduction from 2009 30% 30% 30% 21% 22% 22% 21% 18% 18% 11% 7% Total reportable injury rate Female executives per million hours worked in % of total executives 20% 3.7 3
Slide 23: Innovation in Decorative Paints
Innovation in Decorative Paints Coral Rende Muito Value for money paint, without compromising quality of finish Key Features Customer Benefits •A concentrated paint emulsion • Higher value for money for our customers •Paint can be diluted by up to 80% • Best-in-class spreading rate •More coverage pe
Slide 24: Innovation in Performance Coatings
Innovation in Performance Coatings Marine Coatings - Interline® 9001 Next generation low absorption, easy-to-clean lining for chemical cargo tanks Key features Customers benefits • New coating for chemical cargo tanks •Greater efficiency and flexibility in • Low chemical absorption enables operation
Slide 25: Innovation in Specialty Chemicals
Innovation in Specialty Chemicals Pulp and Performance Chemicals – Bindzil CC Improving the quality of waterborne coatings Key Features Customer Benefits •Solves stability and compatibility •Enables paint and lacquer producers to issues in waterborne coatings up-grade their products in a cost-effect
Slide 26: 2011 financial review
2011 financial review Annual General Meeting of Shareholders: 2011 review 26
Slide 27: Capital expenditure prioritization for growth
Capital expenditure prioritization for growth • Capex 2011 was €708 million (including Ningbo €45) • Medium term: Capex level to be at least 4 percent of revenues Capex as a % of revenue 2011 Capex split Annual General Meeting of Shareholders: 2011 review 27
Slide 28: Strong operating returns on invested capital
Strong operating returns on invested capital 27.7% 23.2% 22.3% 9.2% 10.8% 8.9% Moving average ROI % * Operating ROI is calculated as EBIT before amortization divided by average invested capital excluding intangible assets Operating ROI %* Annual General Meeting of Shareholders: 2011 review 28
Slide 29: Debt duration lengthened to 3.6 years and no refinancing needed in 2012
Debt duration lengthened to 3.6 years and no refinancing needed in 2012 Debt maturities* € million (nominal amounts) Strong liquidity position to support growth • Undrawn revolving credit facility of €1.8 billion (2016) or €1.5 and $3 billion commercial paper programs available • Net cash and cash e
Slide 30: Total 2011 dividend increase of 4 percent
Total 2011 dividend increase of 4 percent Our dividend policy We intend to pay a stable to rising dividend: • A cash interim and a final dividend will be paid – scrip dividend optional 2011 total dividend €1.45 per share proposed • Total 2011 dividend of €1.45 per share equals a 4 percent increase v
Slide 31: Performance improvement program
Performance improvement program Annual General Meeting of Shareholders: 2011 review 31
Slide 32: Performance improvement program: stepping up operational and functional excellence
Performance improvement program: stepping up operational and functional excellence Underpin our growth and margin objectives • Enhance our ability to grow • Expected to bring us at or above the mid-point of our 13-15 percent EBITDA margin guidance. Deliver structural competitive advantage • Leveragi
Slide 33: Outlook 2012
Outlook 2012 Annual General Meeting of Shareholders: 2011 review 33
Slide 34: Medium-term strategic ambitions unchanged
Medium-term strategic ambitions unchanged • We are delivering on price increases • Performance Improvement Program on track - next update with half year results • The economic environment remains uncertain: - volumes remain soft - raw material costs remain a risk • Our solid fundamentals, strong bra
Slide 35: Q1 2012 revenue and EBITDA
Q1 2012 revenue and EBITDA € million Q1 2012 Δ% Revenue 3,972 6 EBITDA* 423 (3) Ratio, % Q1 2012 Q1 2011 EBITDA* margin 10.6 11.6 +2% +2% +6% +5% -3% * Before incidentals Increase Decrease Annual General Meeting of Shareholders: 2011 review 35
Slide 36: 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