Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Q3 2010 Earnings Presentation
25 slides from Akzo Nobel's earnings presentation, Oct 21, 2010
Slide 1: Press Conference Q3 2010 results
October 21, 2010 Press Conference Q3 2010 results, Keith Nichols, CFO
Slide 2: Agenda
Agenda • Q3 2010 highlights and operational review • Financial review • Outlook and medium-term ambitions
Slide 3: Q3 2010 highlights and operational review
Q3 2010 highlights and operational review
Slide 4: Q3 2010 highlights
Q3 2010 highlights • Revenue €3.9 billion (2009: €3.4 billion), up 13 percent (5 percent in constant currencies) • EBITDA* €574 million (2009: €528 million), up 9 percent (2 percent in constant currencies) • EBITDA* margin 14.8 percent (2009: 15.4 percent) • Sale of National Starch completed on Octo
Slide 5: Volume and price development per quarter to Q3 2010
Volume and price development per quarter to Q3 2010 Volume development Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Decorative Paints (9) - 5 1 - Performance Coatings (11) (2) 8 12 5 Specialty Chemicals (6) 4 15 15 10 AkzoNobel (8) 1 10 8 4 Price development Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Decorative Paints 4 (1) (1
Slide 6: Summary – Q3 2010 results
Summary – Q3 2010 results € million Q3 2010 Q3 2009 EBITDA* 574 528 Amortization and depreciation (146) (143) Incidentals (47) (39) Financial income & expense (70) (97) Minorities and associates (13) (16) Income tax (81) (32) Discontinued operations 21 (4) Net income total operations 238 197 Net cas
Slide 7: Q3 2010 incidentals
Q3 2010 incidentals € million Q3 2010 Q3 2009 Restructuring costs (53) (116) Results related to major legal, - (2) antitrust & environmental cases Results on acquisitions & divestments 15 19 Other incidental results (9) 60 Total (47) (39) Restructuring costs are mainly related to: • Impairment of a
Slide 8: Decorative Paints Sikkens Alpha SanoProtex
Decorative Paints Sikkens Alpha SanoProtex In Q3, Sikkens succesfully launched Alpha SanoProtex, a waterborne wall paint especially designed to prevent bacteria from multiplying. It proves to be a great solution for hospitals, clinics and social service buildings and other locations where hygiene is
Slide 9: Decorative Paints Q3 2010 highlights
Decorative Paints Q3 2010 highlights • Revenue of €1,372 million (2009: €1,271 million), up 8 percent, with favorable currency impact of 7 percent • EBITDA* €198 million (2009: €198 million) • AkzoNobel to be primary paint supplier to Walmart in the US • Strong revenue growth and increased investmen
Slide 10: Decorative Paints Q3 2010
Decorative Paints Q3 2010 € million Q3 2010 Δ% Revenue 1,372 8 EBITDA* 198 - Ratio, % Q3 2010 Q3 2009 EBITDA* margin 14.4 15.6 0% 1% 0% * Before incidentals Increase Decrease 10
Slide 11: Performance Coatings
Performance Coatings The acquisition of Changzhou Prime Automotive Paint Co. Ltd. will significantly boost AkzoNobel’s presence in the Chinese automotive market. Prime is one of China’s largest vehicle refinish suppliers and a leader in the fast-growing mid-market segment. This sector is estimated t
Slide 12: Performance Coatings Q3 2010 highlights
Performance Coatings Q3 2010 highlights • Revenue €1,239 million, up 18 percent (2009: €1,051 million) • Demand improved in all businesses, with volumes up 5 percent • EBITDA* €166 million (2009: €169 million) • EBITDA* margin of 13.4 percent (2009: 16.1 percent), impacted by raw material prices • I
Slide 13: Performance Coatings Q3 2010
Performance Coatings Q3 2010 € million Q3 2010 Δ% Revenue 1,239 18 EBITDA* 166 (2) Ratio, % Q3 2010 Q3 2009 EBITDA* margin 13.4 16.1 0% +5% * Before incidentals Increase Decrease 13
Slide 14: Specialty Chemicals
Specialty Chemicals Our Pulp & Paper Chemicals business concept, Compozil Fx, reduces energy consumption, fiber need and water usage for the customer. Used on 7 of the 8 largest paper machines in Asia, it is the preferred sustainable choice on new paper machines. 14
Slide 15: Specialty Chemicals Q3 2010 highlights
Specialty Chemicals Q3 2010 highlights • Revenue increased 15 percent to €1,272 million (2009: €1,109 million); volume increased 10 percent • EBITDA* was up 29 percent to €254 million (2009: €197 million) • EBITDA* margin 20.0 percent (2009:17.8 percent) • Performance improvement in all businesses •
Slide 16: Specialty Chemicals Q3 2010
Specialty Chemicals Q3 2010 € million Q3 2010 Δ% Revenue 1,272 15 EBITDA* 254 29 Ratio, % Q3 2010 Q3 2009 EBITDA* margin 20.0 17.8 +2% -5% +8% +15% +10% * Before incidentals Increase Decrease 16
Slide 17: Financial review
Financial review
Slide 18: Supporting the medium term growth agenda
Supporting the medium term growth agenda • Maintain EVA and cash focus • Delivering further operating working capital improvement • Disciplined capital allocation for organic growth • Selective acquisitions • Building capabilities and processes to support “leading” ambition • Prudent financing polic
Slide 19: Year-on-year Operating Working Capital % of revenue to reduce towards 12%
Year-on-year Operating Working Capital % of revenue to reduce towards 12% OWC € million 3000 19.1% 20% 19% 18% 2500 16.4% 16.2% 17% 15.6% 15.0% 16% 14.6% 14.1% 2000 15% 13.7% 14% 13% 1500 2,185 2,341 2,238 2,007 1,691 2,037 2,346 2,191 12% 11% 1000 10% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 OWC OWC
Slide 20: A stable to rising dividend
A stable to rising dividend Our dividend policy* We intend to pay a stable to rising dividend: • a cash interim and a final dividend will be paid 2010 interim dividend €0.32 per share - up 6.7% from 2009* • Interim dividend to be paid on 3 November, 2010 • We intend to grow the 2010 total dividend b
Slide 21: Unchanged ambition to maintain strong balance sheet
Unchanged ambition to maintain strong balance sheet € million Sept 30, 2010 Dec 31, 2009 Total Equity 9,291 8,245 Net debt* 2,030 1,744 • Credit ratings confirmed in August at BBB+/Baa1, outlook improved to stable • National Starch proceeds will fund growth and potentially partly be used to further
Slide 22: Outlook and medium-term ambitions
Outlook and medium-term ambitions
Slide 23: We want to be the world's leading Coatings and Specialty Chemicals company
We want to be the world’s leading Coatings and Specialty Chemicals company Our medium-term strategic ambitions are: Value – accelerated growth Values – sustainable growth • Grow to €20 billion revenues • Top quartile safety • Increase EBITDA* each year, performance maintaining a 13-15% margin • Top
Slide 24: 2010 Outlook
2010 Outlook “Cautiously optimistic” Reasons for caution • Global economic outlook • Construction and housing markets remain soft in mature markets • Potential bubbles in high growth markets Reasons for optimism • Leading positions, scale and diversified markets • Strong balance sheet to fund growth
Slide 25: 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