Akzo Nobel N.v. · EURONEXT:AKZA

Akzo Nobel — Q2 2007 Earnings Presentation

25 slides from Akzo Nobel's earnings presentation, Jul 24, 2007

1. Slide 1: Q2 2007 Results: Fit for the future

   Hans Wijers, CEO Q2 2007 Results “Fit for the future” July 24, 2007

2. Slide 2: The new Akzo Nobel – fit for the future

   The new Akzo Nobel – fit for the future ƒ Executing growth strategy in a financially disciplined manner ƒ Focus on geographic expansion and product innovation ƒ China: USD 2 billion revenues target 2012 (2006: USD 800 mln) ƒ Acquisition Chemcraft – adding scale and value in U.S. Wood Coatings ƒ Stra

3. Slide 3: Excellent track record

   Excellent track record ƒ Track record of delivery – Unlocked the value of Pharma – Revitalized and refocused Chemicals – Accelerated growth in Coatings ƒ Total Shareholder Return of 270% since 2003 ƒ Continued operational improvement

4. Slide 4: Focus on performance improvement is paying off

   Focus on performance improvement is paying off ƒ Excellent growth in Coatings and Chemicals ƒ EBITDA up 24% ƒ EBITDA margin improved to 13.7% ƒ Net income before incidentals up 34%

5. Slide 5: Highly active operational management

   Highly active operational management

6. Slide 6: Q2 Operational Performance

   AKZO NOBEL Q2 OPERATIONAL PERFORMANCE

7. Slide 7: Strong operational quarter Coatings and Chemicals

   Strong operational quarter Coatings and Chemicals EUR mln Q2 2007 ∆% Revenues 2,685 2 EBITDA* 367 24 EBIT* 279 35 Net income* 166 34 Ratio Q2 2007 Q2 2006 EBITDA margin*, in % 13.7 11.3 EBIT margin*, % 10.4 7.9 * Before incidentals and from continuing operations

8. Slide 8: Powder Coatings – staying close to our customers

   Powder Coatings – staying close to our customers

9. Slide 9: Coatings – EBITDA up 10%

   Coatings – EBITDA up 10% ƒ Revenues up 8% – autonomous growth and acquisitions ƒ Emerging markets and Europe drive growth ƒ Margin improvement programs working well: EBITDA margin 13.1% ƒ EBITDA up 10% to EUR 232 million ƒ Ongoing pressure from raw materials

10. Slide 10: Coatings – start of Deco turnaround clearly visible

    Coatings – start of Deco turnaround clearly visible ƒ Decorative Coatings - Reaping benefits of new organization - Favorable market conditions ƒ Industrial activities– strong growth, despite weakness in U.S. housing market ƒ Marine & Protective Coatings – robust performance continued ƒ Car Refinishe

11. Slide 11: Coatings – summary Q2 2007

    Coatings – summary EUR mln Q2 2007 ∆% Revenues 1,775 8 EBITDA* 232 10 EBIT* 199 14 Ratio 2007 2006 EBITDA margin*, in % 13.1 12.8 EBIT margin*, % 11.2 10.7 * Before incidentals.

12. Slide 12: Chemicals – fit for China

    __ Chemicals -— fit for China = ‘. . = 7 oe C a — ee a Wee Te RR Re RUBE Bo, (eRe rare AKZO NC Akzo Nobel Fridplast ety at : So sal ; te eh if

13. Slide 13: Chemicals – EBITDA margin up to 17.4%

    Chemicals – EBITDA margin up to 17.4% ƒ Clearly benefits from its focused strategy ƒ Autonomous growth of 4%; negative currency impact of 1% ƒ Strong margin management contributed to EBITDA up 22% and EBITDA margin up to 17.4% ƒ Moving average ROI to record 20% ƒ Final impact of 2005 divestment prog

14. Slide 14: Chemicals – benefiting from focused strategy

    Chemicals – benefiting from focused strategy ƒ Pulp & Paper – 6% autonomous growth ƒ Base Chemicals – strong performance driven by Energy ƒ Functional Chemicals – good performance of Ethylene Amines ƒ Surfactants – impacted by raw materials ƒ Polymer Chemicals – well ahead of last year on lower manu

15. Slide 15: Chemicals – summary Q2 2007

    Chemicals – summary EUR mln Q2 2007 ∆% Revenues 904 1 EBITDA* 157 22 EBIT* 104 39 Ratio Q2 2007 Q2 2006 EBITDA margin*, in % 17.4 14.4 EBIT margin*, % 11.5 8.4 *Before incidentals.

16. Slide 16: Organon BioSciences

    AKZO NOBEL ORGANON BIOSCIENCES

17. Slide 17: Organon BioSciences – good quarter

    Organon BioSciences – good quarter ƒ Revenues down 5% on currency and loss of Avinza® ƒ Organon strong performance of Implanon® and NuvaRing® ƒ Operating income Organon before incidentals EUR 129 million ƒ Record quarter for Intervet; revenues up 9% to EUR 306 million ƒ Net income up 21%

18. Slide 18: Organon BioSciences – summary Q2 2007

    Organon BioSciences– summary EUR mln Q2 2007 ∆% Revenues 936 (1) EBIT* 191 25 Ratio Q2 2007 Q2 2006 EBIT margin*, in % 20.4 16.1 S&D in % revenues 28.2 29.9 R&D in % revenues 15.3 16.5 * Before incidentals.

19. Slide 19: Financial Position

    AKZO NOBEL FINANCIAL POSITION

20. Slide 20: Strong financial position

    Strong financial position End June ’07/ End ‘06, EUR mln 2007 2006 Equity 4,064 4,263 Net borrowings 1,261 1,090 Gearing (ratio) 0.31 0.26 Share buyback 596 Ratios 2007 2006 Q2 Interest coverage 10.0 5.4

21. Slide 21: Agenda 2007

    AKZO NOBEL AGENDA 2007

22. Slide 22: Agenda 2007

    Agenda 2007 ƒ Accelerate growth across portfolio ƒ Improve margins in mature markets ƒ Return value to shareholders through share buyback ƒ Active consolidator in a financially disciplined manner ƒ Transfer of Organon BioSciences

23. Slide 23: Positive for H2 2007

    Positive for H2 2007 ƒ Portfolio is well-positioned for further profitable growth ƒ Well placed to deliver: – Outgrow markets – Further improve the financial returns in Coatings and Chemicals compared to 2006

24. Slide 24: Q2 2007 Results Q&A

    Q2 2007 Results “Fit for the future” Q&A July 24, 2007

25. Slide 25: Safe Harbor Statement

    Safe Harbor Statement* This presentation 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 should be carefully considered,

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