Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q1 2018 Earnings Presentation
18 slides from Akzo Nobel's earnings presentation, Apr 24, 2018
Slide 1: Investor update Q1 2018
Investor update Q1 2018 April 24, 2018
Slide 2: Progress on transformation into a focused Paints and Coatings company
Progress on transformation into a focused Paints and Coatings company Successfully completed the dual-track process; announced sale of Specialty Chemicals On track implementing “Winning together: 15 by 20” Transformation process gaining momentum Robust pricing initiatives ramping up: price increase
Slide 3: Transformation plans in place with most projects already being initiated
Transformation plans in place with most projects already being initiated Sales force effectiveness Margin management Selling prices up 3% in Q1 Innovation excellence Second wave of increases to come in 2018 Global Business Services Integrated Business Planning 3 businesses equipped for ERP and syste
Slide 4: Announced sale of Specialty Chemicals to The Carlyle Group and GIC for €10.1bn
Announced sale of Specialty Chemicals to The Carlyle Group and GIC for €10.1bn Key milestone in creating a focused, high performing Paints and Coatings company Thorough dual-track process, resulting in best outcome for all stakeholders, and ahead of schedule Vast majority of net proceeds to be retur
Slide 5: Dealing with temporary headwinds…
Revenue growth for most businesses; Dealing with temporary headwinds… Powder Coatings Asia Raw Materials Automotive and EMEA Specialty Latin Foreign Coatings ~ America exchange Oil and gas industries Marine industry Investor update | Q1 2018 5
Slide 6: Higher selling prices; volumes lower, mainly due to marine, and oil and gas
Higher selling prices; volumes lower, mainly due to marine, and oil and gas Decorative Paints Performance Coatings* Paints and Coatings* Quarterly volume development in % year-on-year 066 Quarterly price/mix development in % year-on-year -1 -3 * Includes impact from acquisitions (continuing operatio
Slide 7: Price increases and cost savings not yet fully compensating for higher raw materials
Price increases and cost savings not yet fully compensating for higher raw materials € million Q1 2017¹ Q1 2018 Δ% Selling prices up 3% overall and for all businesses Revenue 2,377 2,176 (8) Revenue down, mainly due Adjusted EBITDA 281 209 (26) to adverse foreign Adjusted operating income 208 149 (2
Slide 8: Price increases and lower costs not yet fully compensating for higher raw materials
Price increases and lower costs not yet fully compensating for higher raw materials Includes: Continuous improvement, fit-for-purpose organization, Increase cost discipline, Decrease and other items (continuing operations) Investor update | Q1 2018 8
Slide 9: Decorative Paints price increases gaining momentum and up 4% overall
Decorative Paints price increases gaining momentum and up 4% overall € million Q1 2017 Q1 2018 Δ% Revenue 922 846 (8) Adjusted EBITDA 109 79 (28) Adjusted operating income 77 56 (27) Operating income 77 48 (38) ROS%* 8.4 6.6 ROI%* 13.8 11.7 Revenue development Q1 2018 (%) Our customers in Pakistan n
Slide 10: Performance Coatings growth offset by marine, and oil and gas industries
Performance Coatings growth offset by marine, and oil and gas industries € million Q1 2017 Q1 2018 Δ% Revenue 1,471 1,342 (9) Adjusted EBITDA 225 169 (25) Adjusted operating income 187 134 (28) Operating income 187 121 (35) ROS%* 12.7 10.0 ROI%* 28.6 21.3 Revenue development Q1 2018 (%) Our commitme
Slide 11: Specialty Chemicals price increases more than offset by currencies
Specialty Chemicals price increases more than offset by currencies € million Q1 2017 Q1 2018 Δ% Revenue up 4% excluding currencies, Revenue 1,289 1,252 (3) mainly due to positive Adjusted EBITDA 251 233 (7) pricing impact Adjusted operating income 166 150 (10) Operating income 166 150 (10) Adjusted
Slide 12: Free cash flow impacted by lower EBITDA, while CAPEX and pension top-ups reduced
Free cash flow impacted by lower EBITDA, while CAPEX and pension top-ups reduced € million Q1 2017 Q1 2018 Adjusted EBITDA 534 417 Interest paid -4 -8 Tax paid -88 -70 Changes in working capital, provisions¹ and other -517 -540 Capital expenditures (including intangible assets) -128 -101 Free cash f
Slide 13: Net income up 5% to €253 million, including discontinued operations
Net income up 5% to €253 million, including discontinued operations € million Q1 2017* Q1 2018 Operating income 208 108 Net financing income/(expenses) (17) 19 Results from associates and joint ventures 6 4 Profit before tax 197 131 Income tax (52) 1 Profit from continuing operations 145 132 Profit
Slide 14: Progress on transformation into a focused Paints and Coatings company
Progress on transformation into a focused Paints and Coatings company Successfully completed the dual-track process; announced sale of Specialty Chemicals On track implementing “Winning together: 15 by 20” Transformation process gaining momentum Robust pricing initiatives ramping up: price increase
Slide 15: Outlook
Outlook Higher raw material costs and adverse 2020 effects from foreign currencies are projected to continue in 2018, especially guidance* during the start of the year. ROS 15% We anticipate ongoing positive ROI >25% developments for Decorative Paints in all regions, particularly Asia. Trends for Pe
Slide 16: Upcoming events
Upcoming events Annual General Meeting April 26, 2018 Ex-dividend date of 2017 final dividend April 30, 2018 Payment of cash dividend/ delivery of new shares May 25, 2018 Report for the second quarter 2018 July 18, 2018 Investor update | Q1 2018 16
Slide 17: A focused, high performing Paints and Coatings company
A focused, high performing Paints and Coatings company Strong global brands 2020 Leading positions in large and attractive markets guidance* Balanced geographic exposure: 50% revenue from emerging markets ROS 15% Well positioned to accelerate growth and enhance profitability ROI >25% Transformation
Slide 18: Disclaimer/ forward-looking statements
Disclaimer/ forward-looking statements This presentation does not constitute or form a part of any offer to sell, or any invitation or other solicitation of any offer, to buy or subscribe for any securities in the United States or any other jurisdiction. Some statements in this presentation are 'for