Slide 1: Investor update Q3 2018
Investor update Q3 2018 Spiced Honey has been unveiled by AkzoNobel as the Color of the Year for 2019. It was selected following expert research into global trends, insights and consumer behavior. The warm amber tone – which perfectly captures October 17, 2018 the theme of “Let the light in” – is be
Slide 2: Continued progress on transformation into a focused paints and coatings company
Continued progress on transformation into a focused paints and coatings company Paints ROS up at 12.1% (2017: 9.4%) and Coatings ROS up at 12.2% (2017: 10.3%) Price/mix increased further to 6% overall Lower volumes, partly driven by moving away from lower margins given our value over volume strategy
Slide 3: Q3 2018 delivering towards our "Winning together: 15 by 20" strategy
Q3 2018 delivering towards our “Winning together: 15 by 20” strategy Sales force effectiveness Price/mix increased further to 6% in Q3 Margin management Innovation excellence ROS* up at 12.3% (Q3 2017: 10.0%) Global Business Services Continued progress on IBP implementation: Integrated Business Plan
Slide 4: Taking next step in our transformation to deliver next €200m cost savings by 2020
Taking next step in our transformation to deliver next €200m cost savings by 2020 Sales force effectiveness Margin management Innovation excellence Total quality and service excellence Supplier €200m annual cost savings by 2020* Global Business Services collaboration (from ISC, SG&A and R&D) Integra
Slide 5: Focusing on value over volume; Dealing with market headwinds
Focusing on value over volume; Dealing with market headwinds Powder EMEA Coatings South and South Industrial East Asia Coatings Automotive China ~ and Specialty Coatings Marine and Protective Coatings ~ Latin America Foreign Raw exchange materials Investor update | Q3 2018 5
Slide 6: Robust pricing initiatives continue in Q3; ROS increased 230 basis points
Robust pricing initiatives continue in Q3; ROS* increased 230 basis points Revenue Price/mix Completed sale of Specialty Flat Chemicals; returning a total in constant currencies of €6.5 billion to Lower volumes, partly due to 6% higher shareholders focus on value over volume ROS* Interim dividend Ac
Slide 7: Focusing on value over volume: Continued progress on pricing initiatives
Focusing on value over volume: Continued progress on pricing initiatives Decorative Paints Performance Coatings* Paints and Coatings* Quarterly price/mix development in % year-on-year 7 6 0 4 5 1 0 0 5 5 3 2 -3 -3 -3 -5 -1 -1 -1 -1 -1 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q1 17 Q2 17 Q3 17 Q4 17
Slide 8: Pricing initiatives and cost savings compensating for higher raw material costs
Pricing initiatives and cost savings compensating for higher raw material costs € million Q3 2017¹ Q3 2018 Δ% Δ%CC Revenue flat in constant currencies, with positive Revenue 2,419 2,326 (4%) 0% price/mix offset by lower Adjusted EBITDA 294 303 3% volumes Adjusted operating income 225 243 8% Volumes
Slide 9: Positive price/mix and cost savings offsetting higher raw materials
Positive price/mix and cost savings offsetting higher raw materials Adjusted operating income bridge: Q3 2017 to Q3 2018 Positive impact Negative impact - 10 - 108 140 61 - 65 243 225 215 182 182 150 150 Q3 2017 Adjusted FX Volumes Price/mix Raw materials/ Cost savings and Q3 2018 Adjusted operating
Slide 10: Decorative Paints ROS% up driven by selling prices and cost savings
Decorative Paints ROS% up driven by selling prices and cost savings € million Q3 2017 Q3 2018 Δ% Δ%CC Revenue 1,007 951 (6%) 0% Adjusted EBITDA 124 138 11% Adjusted operating income 95 115 21% Operating income 95 112 18% ROS%* 9.4 12.1 ROI%* 12.4 12.6 Revenue development Q3 2018 (%) Colorful Yunnan
Slide 11: Performance Coatings ROS% up for all businesses
Performance Coatings ROS% up for all businesses € million Q3 2017 Q3 2018 Δ% Δ%CC Revenue 1,428 1,388 (3%) 0% Adjusted EBITDA 185 204 10% Adjusted operating income 147 170 16% Operating income 147 164 12% ROS%* 10.3 12.2 ROI%* 24.8 20.2 Revenue development Q3 2018 (%) Animal attraction has drawn Akz
Slide 12: Specialty Chemicals revenue up; Adverse impact from one-off items
Specialty Chemicals revenue up; Adverse impact from one-off items € million Q3 2017 Q3 2018 Δ% Δ%CC Revenue 1,209 1,287 6% 9% Revenue up 9% in constant currencies, Adjusted EBITDA 239 229 (4%) mainly due to positive Adjusted operating income 156 145 (7%) price/mix Operating income 156 145 (7%) Adjus
Slide 13: Total operations Q3 net income higher for continuing and discontinued operations
Total operations Q3 net income higher for continuing and discontinued operations € million Q3 2017* Q3 2018 Operating income 215 237 Net financing expenses (31) (20) Results from associates and joint ventures 3 4 Profit before tax 187 221 Income tax (57) (66) Profit from continuing operations 130 15
Slide 14: Paints and Coatings free cash flow impacted by higher OWC; CAPEX lower
Paints and Coatings free cash flow impacted by higher OWC; CAPEX lower Q3 2017 Q3 2018 in € millions YTD Q3 2017 YTD Q3 2018 130 155 Profit for the period 466 410 69 60 Amortization and depreciation 214 180 43 155 Changes in working capital (344) (427) (66) (45) Changes in provisions (329) (248) (5)
Slide 15: Sale of Specialty Chemicals completed; returning a total of €6.5 billion to shareholders
Sale of Specialty Chemicals completed; returning a total of €6.5 billion to shareholders Apr 19, 2017 Dec 7, 2017 Oct 1, 2018 Q1 2019 2019 – mid 2020 Announced separation Advance proceeds of Closed sale of €2 billion capital €2.5 billion share of Specialty Chemicals separation paid as Specialty Chem
Slide 16: Interim dividend of €0.37 per share; Suspending scrip option
Interim dividend of €0.37 per share; Suspending scrip option Dividend € per share Final dividend Interim dividend €0.85 represented the Dividend rebased for Specialty Chemicals portion of the dividend AkzoNobel as a focused paints and coatings company Dividend policy remains to pay a “stable to risi
Slide 17: Continued progress on transformation into a focused paints and coatings company
Continued progress on transformation into a focused paints and coatings company Paints ROS up at 12.1% (2017: 9.4%) and Coatings ROS up at 12.2% (2017: 10.3%) Price/mix increased further to 6% overall Lower volumes, partly driven by moving away from lower margins given our value over volume strategy
Slide 18: Outlook
Outlook 2020 guidance* ROS 15% ROI >25% We are delivering towards our "Winning together: 15 by 20" strategy and continue creating a fit-for-purpose organization for a focused paints and coatings company, contributing to the achievement of our 2020 guidance. Demand trends differ per region and segmen
Slide 19: Upcoming events
Upcoming events Ex-dividend date of 2018 interim dividend October 19, 2018 Record date of 2018 interim dividend October 22, 2018 Payment of 2018 interim dividend October 26, 2018 Extraordinary General Meeting (EGM) November 13, 2018 Report for the full-year and fourth quarter 2018 February 13, 2019
Slide 20: A focused, high performing paints and coatings company
A focused, high performing paints and coatings company Strong global brands Leading positions in large and attractive markets 2020 Balanced geographic exposure: 50% revenue from emerging markets guidance* Well positioned to accelerate growth and enhance profitability ROS 15% ROI >25% Transformation
Slide 21: 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