Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q2 2005 Earnings Presentation
27 slides from Akzo Nobel's earnings presentation, Jul 20, 2005
Slide 1: 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 2: Creating a platform for growth
Rob Frohn, CFO Creating a platform for growth July 20, 2005 Q2 2005 Results Press Conference
Slide 3: Q2 2005: Encouraging developments across our businesses
Q2 2005: Encouraging developments across our businesses Robust revenue growth Pressure on margins being tackled Strong financial position Active acquisition and divestment program
Slide 4: Q2 2005 highlights: robust revenue growth
Q2 2005 highlights: robust revenue growth Revenue from present operations up 6% to EUR 3.4 bln Volumes flat – Organon & Intervet strong volume growth – Coatings volume down – Chemicals flat Pricing increasing across the board, 4% up Currencies limited impact
Slide 5: EBIT Drivers
EBIT Drivers EBIT present operations increased 25% to EUR 341 mln Like-For-Like performance EUR 312 mln, down 9% Top-line growth all groups Raw materials/economy Intervet performance Higher R&D spend Lower pension charges New NL labor agreement One-off gains Incidentals Chemicals
Slide 6: Second quarter performance
Second quarter performance Q-2, EUR mln 2005 ∆% Revenues present operations 3,354 6 EBIT present operations 341 25 EBIT excluding one-offs 312 (9) Net income 182 22 2005 2004 EBIT margin, % 10.2 8.7 EPS, EUR 0.64 0.52 Number of employees 61,640 63,950
Slide 7: Organon ramping up R&D
OOS ie = AKZO NOBEL | Organon ramping up R&D
Slide 8: Organon – revenue growth, R&D expenditure significantly up
Organon – revenue growth, R&D expenditure significantly up Autonomous growth 4% NuvaRing® – sales steadily increasing Infertility – renewed growth R&D expenses significantly up – investing in the pipeline R&D milestone asenapine Step-up in R&D collaborations – contracts with Lexicon and
Slide 9: Organon: autonomous product growth
Organon: autonomous product growth Autonomous growth, % on Q-2 2004 on Q-1 2005 Contraceptives 6 4 –of which NuvaRing® 65 18 Puregon® /Follistim® 31 10 Remeron® outside U.S. (12) 6 Livial® (3) 12 Pharmaceutical ingredients 2 (2)
Slide 10: Organon – revenue growth; R&D expenditure significantly up
Organon – revenue growth; R&D expenditure significantly up Q-2, EUR mln 2005 ∆% Revenues 603 4 EBIT 87 10 Ratios 2005 2004 EBIT margin 14.4 13.6 S&D % revenues 32.7 33.8 R&D % revenues 16.6 14.9
Slide 11: Intervet: growth on all fronts
Intervet: growth on all fronts
Slide 12: Intervet – results jump on growth; efficiency improvements
Intervet – results jump on growth; efficiency improvements Revenues up 9% 8% autonomous growth in virtually all regions and franchises Benefiting from efficiency improvements EBIT increased 50%; EBIT margin 21.7% More focus – feed additives divestment announced
Slide 13: Intervet – results jump on growth; efficiency improvements
Intervet – results jump on growth; efficiency improvements Q-2, EUR mln 2005 ∆% Revenues 277 9 EBIT 60 50 Ratios 2005 2004 EBIT margin 21.7 15.7 S&D % revenues 24.2 24.3 R&D % revenues 10.5 11.8
Slide 14: 100th vessel coated with Intersleek
100th vessel coated – with 7,100 litres of Intersleek®
Slide 15: Coatings – raw materials; slower growth in mature markets
Coatings – raw materials; slower growth in mature markets Revenues up 7%; EBIT decreased 6% Autonomous growth 4% Prices up 6%; volumes down 2% Continued increases of raw material prices, oil-based/protective products in particular
Slide 16: Coatings – raw materials; slower growth in mature markets
Coatings – raw materials; slower growth in mature markets Decorative Coatings – slow market in Europe; ROW better Industrial activities – EU under pressure; Asia strong Car Refinishes – signs of recovery; restructuring ongoing Acquisition of Swiss Lack announced
Slide 17: Coatings – raw materials; slower growth in mature markets
Coatings – raw materials; slower growth in mature markets Q-2, EUR mln 2005 ∆% Revenues 1,502 7 EBIT 140 (6) Ratio 2005 2004 EBIT margin 9.3 10.6
Slide 18: Chemicals: keeping the water healthy
Chemicals: keeping the water healthy
Slide 19: Chemicals – impacted by energy prices and incidentals
Chemicals – impacted by energy prices and incidentals Revenues present operations up 2% – higher selling prices Pressure from raw material and energy prices Base Chemicals – scheduled maintenance stop Pulp & Paper Chemicals – industry strike in Finland Divestment program – on track
Slide 20: Chemicals – Impacted by energy prices and incidentals
Chemicals – Impacted by energy prices and incidentals Q-2, EUR mln 2005 ∆% Revenues 963 2 EBIT 77 12 Ratio 2005 2004 EBIT margin 8.0 7.3 Present operations
Slide 21: Strong financial position
Room to maneuver Strong financial position
Slide 22: Strong financial position
Strong financial position June ‘05 / Dec. ‘04; EUR bln 2005 2004 Equity 3.2 2.8 Net borrowings 1.9 1.4 Gearing (ratio) 0.60 0.51 HY ratios 2005 2004 Interest coverage 10.7 7.0 EBITDA coverage 14.6 10.8
Slide 23: First half year
First half year
Slide 24: 2005 half year performance
2005 half year performance HY, EUR mln 2005 ∆% Revenues present operations 6,395 4 EBIT present operations 760 48 EBIT excluding one-offs 586 (4) Net income 469 66 2005 2004 EBIT margin, % 11.9 8.4 EPS, EUR 1.64 0.99 Number of employees 61,640 63,950
Slide 25: Priorities for second half of 2005
Priorities for second half of 2005 A platform for growth Organon – top-line growth and support R&D pipeline Intervet – keep up the pace Coatings – growth in emerging markets, acquisitions Chemicals – execute new strategy with five platforms Complete divestments
Slide 26: Outlook – unchanged
Outlook – unchanged Aspiring to achieve net income* within 2004 range of EUR 800 mln * This excludes restructuring and impairment charges, charges related to major legal, antitrust and environmental cases, results on divestments, and the impact of the new pension scheme in the Netherlands. It is bas
Slide 27: Creating a platform for growth
Creating a platform for growth July 20, 2005 Q2 2005 Results Press Conference