Akzo Nobel N.v. · EURONEXT:AKZA

Akzo Nobel — ICI — Q3 2007 Earnings Presentation

26 slides from Akzo Nobel's earnings presentation, Nov 1, 2007

  1. Slide 1: Third Quarter and Nine Months 2007 Results

    Third Quarter and Nine Months 2007 Results 1 November 2007

  2. Slide 2: Agenda

    Introduction Agenda Alan Brown, Chief Financial Officer „ Highlights „ Operating and financial review „ Summary and outlook „ Q&A 2

  3. Slide 3: Third Quarter Group Highlights

    Highlights Third Quarter Group Highlights „ 5% comparable1 sales growth „ 12% comparable1 growth in trading profit „ 13.3% trading margin (2006 Q3: 12.4%) „ 18% growth in Group adjusted PBT to £177m „ 24% growth in Group adjusted net profit to £138m „ Acquisitions - Dulux from AECI in Southern Afric

  4. Slide 4: Highlights – Nine Months

    Highlights Highlights – Nine Months „ Group adjusted profit before tax £432m, 15% ahead of 2006 „ Net profit after special items1 £1,145m including £912m profit on sale of Quest „ Adjusted earnings per share 28.4p up 22% „ Net cash £243m (2006: Net debt £481m) Good progress in first nine months of 2

  5. Slide 5: Trading Environment

    Highlights Trading Environment Mixed trading environment „ Asia and Latin America remained strong „ European markets were varied „ North America remained challenging Mixed trends in raw material pricing „ High inflation for acrylates used in Adhesives and Paints „ Corn and tapioca cost inflation for

  6. Slide 6: Group Results: Sales

    Operating and financial review Group Results: Sales Q3 2007 Growth % 9M 2007 Growth % Comparable1 Group Sales2 5% 5% Foreign exchange translation effects (3)% (6)% Business acquisitions and divestments <(1)% <(1)% Reported Sales2 £1.3bn 2% £3.7bn (1)% 1 “Comparable” excludes the effects of currency

  7. Slide 7: Group Results: Sales by Region

    Operating and financial review Group Results: Sales by Region Continuing Group Comparable 9M 2007 Sales by customer location growth1 Q3 9M Europe Asia 31% 27% Asia 10% 10% - Decorative Paint 21% 20% - National Starch2 10% 11% Latin America 11% 12% Latin North America (1)% (2)% America 8% - Decorativ

  8. Slide 8: Paints

    Operating and financial review Paints Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £640m £1,826m 3% 3% Sales Trading Trading profit1: £98m £225m 10% 10% 50% Profit Trading margins: 15.3% 12.3% 50% „ Decorative UK and Republic of Ireland (22% of Paints2): Sales were

  9. Slide 9: Paints continued

    Operating and financial review Paints continued Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £640m £1,826m 3% 3% Sales Trading Trading profit1: £98m £225m 10% 10% 50% Profit Trading margins: 15.3% 12.3% 50% „ Decorative North America (34% of Paints2): Sales 5% lowe

  10. Slide 10: Paints continued

    Operating and financial review Paints continued Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £640m £1,826m 3% 3% Sales Trading Trading profit1: £98m £225m 10% 10% 50% Profit Trading margins: 15.3% 12.3% 50% „ Decorative Latin America (8% of Paints2): Sales grew 12%

  11. Slide 11: National Starch: Adhesives

    Operating and financial review National Starch: Adhesives Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £264m £791m 4% 5% Sales Trading Trading profit1: £23m £67m 31% 11% 21% Profit Trading margins: 8.7% 8.4% 15% „ Sales up 4%; growth across all regions. „ Strong sa

  12. Slide 12: National Starch: Specialty Starches

    Operating and financial review National Starch: Specialty Starches Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £139m £402m 16% 13% Sales Trading Trading profit1: £20m £53m 11% 27% 11% Profit Trading margins: 14.0% 13.1% 12% „ Sales up 16%; good growth in all regio

  13. Slide 13: National Starch: Specialty Polymers

    Operating and financial review National Starch: Specialty Polymers Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £74m £213m 15% 14% Sales Trading Trading profit1: £15m £44m 29% 31% 6% Profit Trading margins: 20.9% 20.7% 10% „ Sales up 15%; led by overall strong doub

  14. Slide 14: National Starch: Electronic Materials

    Operating and financial review National Starch: Electronic Materials Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segment Sales: £49m £145m 4% 3% Sales Trading Trading profit1: £12m £35m 7% (1)% 4% Profit Trading margins: 24.2% 24.0% 8% „ Sales up 4%; reflecting improved demand i

  15. Slide 15: Regional and Industrial

    Operating and financial review Regional and Industrial Comparable Q3 2007 9M 2007 Q3 9M % of 9M 07 continuing reporting segments Sales: £105m £301m 5% 2% Sales Trading Trading profit1: £11m £24m 1% (7)% 8% Profit Trading margins: 10.8% 8.1% 5% „ Sales ahead of prior year; good sales growth in ICI Pa

  16. Slide 16: Trading Profit to Net Profit

    Operating and financial review Trading Profit to Net Profit As reported growth Q3 2007 9M 2007 Q3 2007 9M 2007 Trading profit1 £168m £421m 9% 7% Discontinued operations - £12m Income from associates2 - £3m Net finance income (expense)3 £9m £(4)m Adjusted profit before tax3 £177m £432m 18% 15% Tax £(

  17. Slide 17: Group Cash Flow

    Operating and financial review Group Cash Flow „ Stable working capital to sales of 7.3% „ Acquisition spend £78m to date „ Cash outflow before acquisitions and divestments of £239m (2006 9M: £105m) „ Net cash £243m (2006: net debt £481m) 17

  18. Slide 18: Conclusions

    Operating and financial review Conclusions „ Third quarter continued good progress in H1 2007 „ Strong underlying performance from most businesses - good cost control - benefit of selective price increases „ Overall trading conditions were mixed - strong growth in particular in emerging markets - No

  19. Slide 19: Outlook

    Outlook Outlook „ Expected out-turn for the year as a whole has improved - Asia and Latin America remaining buoyant - Further operational efficiency improvements expected „ Results for the fourth quarter and the year are forecast to be ahead of our previous expectations 19

  20. Slide 20: Questions & Answers

    leadership in formulation science Questions &Answers

  21. Slide 21: Third Quarter 2007 Supplementary Information

    Third Quarter 2007 Supplementary Information

  22. Slide 22: Foreign Exchange Translation

    Supplementary Information Foreign Exchange Translation „ Main impact from USD depreciation „ £20m adverse profit impact on translation in 9M „ 1 cent movement ~ £1.6m full year trading profit impact „ Indicative figures only, based on 9M profit mix and average Oct 2007 rates GBP/USD Q1 Q2 Q3 Q4 FY 2

  23. Slide 23: Cash flow before acquisitions and divestments

    Supplementary Information Cash flow before acquisitions and divestments 9M 2007 9M 2006 £m £m EBITDA – continuing operations 512 488 EBITDA – discontinued operations 12 87 Total Group EBITDA 524 575 Working capital movements (212) (173) Post-retirement benefit charges in EBITDA 29 36 Post retirement

  24. Slide 24: Cash flow from acquisitions, divestments and other activities

    Supplementary Information Cash flow from acquisitions, divestments and other activities 9M 2007 9M 2006 £m £m Cash flow before acquisitions and divestments (239) (105) Net disposal proceeds 1,194 358 Post retirement benefit payments – disposal related (226) - Tax in relation to disposals (11) (1) Ac

  25. Slide 25: Forward looking statements

    Forward looking statements This document contains statements concerning the Group’s business, financial condition, results of operations and certain of the Group’s plans, objectives, assumptions, projections, expectations or beliefs with respect to these items. These statements are intended as forwa

  26. Slide 26: leadership in formulation science

    leadership in formulation science

ICI — Q3 2007 Earnings Presentation on 6ix