Slide 1: Investor update Q1 2023
Investor update Q1 2023 April 25, 2023
Slide 2: Agenda
Agenda Key highlights Financial review Outlook Q&A Alternative performance measures (APM) AkzoNobel uses APM adjustments to the IFRS measures to provide supplementary information on the reporting of the underlying developments of the business. A reconciliation of the alternative performance measures
Slide 3: Q1 above expectations on resilient volumes (Europe, China) and pricing
Q1 above expectations on resilient volumes (Europe, China) and pricing Q1 2023: Revenue Pricing Pricing vs raw material & freight inflation Up 5% Up 7% Up €60m (up 12% in Q1’22) (up 17% in Q1’22) Adjusted ROS1 Adjusted EPS1 operating income1 €218m €0.74 8.2% €0.73 (€230m in Q1’22) (Q4 2020: (9.1% €1
Slide 4: Q1 highlights
Q1 highlights China accelerating, organic growth Selected as global supplier of powder in Q1, Sherwin Deco acquisition to to leading EV OEMs for batteries, support Tier 3-5 expansion strategy motors and charging stations EMEA volumes more resilient than Rebuilding Marine & Protective expected in Pai
Slide 5: Market vs Q4 expectations
Market vs Q4 expectations Indicated end market demand as of Q4 2022 China South Asia North America LATAM EMEA North Asia Pacific Industrial Paints Coil benefitting from China rebound Industrial Wood impacted by lower residential starts in all regions Powder Automotive and Specialty Marine and Powder
Slide 6: Financial review
Financial review Atlantis the Royal hotel opened in Dubai Dubai’s newest luxury resort hotel – Atlantis the Royal – opened its doors recently after being coated with products supplied by our Powder Coatings business. The impressive hotel features our Interpon D2525 range, which gives a stunning natu
Slide 7: Q1 profit in line with prior year for both Paints and Coatings
Q1 profit in line with prior year for both Paints and Coatings AkzoNobel Paints Coatings (Q1 revenue development % y-o-y) (Q1 revenue development % y-o-y) (Q1 revenue development % y-o-y) 4 -3 5 -4 7 5 -1 5 5 3 -1 6 -3 -4 8 Revenue Revenue Revenue Volumes Price/mix M&A FX Volumes Price/mix M&A FX Vo
Slide 8: Volumes resilient and margin expansion ahead of plan
Volumes resilient and margin expansion ahead of plan Adjusted OPI1 (€m) -123 ROS1 9.1% 183 0 -12 -11 ROS1 8.2% -35 -14 - - 230 218 Q1 2022 FX Volumes Mix Price Raw material and OPEX Hyperinflation Q1 2023 freight cost and one-offs accounting 1. Alternative performance measure, for definitions and re
Slide 9: Inflation mitigated to date, margin expansion to accelerate in Q2
Inflation mitigated to date, margin expansion to accelerate in Q2 Raw material and freight inflation1 Pricing Quarterly adj. OPI impact y-o-y, €m €2.0bn cumulative €2.1bn cumulative raw material inflation pricing 26% 123 23.5% 4%‒5% Deflation 22% 20.5% 7% 0 to -30 209 19% 279 11% 13% 321 16% 334 17%
Slide 10: Working capital increased due to seasonality and lower payables
Working capital increased due to seasonality and lower payables Operating working Free cash flow (FCF)2 €m capital (Trade)1 Working capital impacted by as a % of revenue seasonality vs Q4’22 18.6% Inventory stable vs Q4’22, 16.5% 16.9% reduction plans to continue 13.0% -88 -112 -159 Net Debt/EBITDA
Slide 11: Adjusted EBITDA and adjusted EPS
Adjusted EBITDA and adjusted EPS Adjusted EBITDA1 Adjusted EPS1 (€m) from continuing operations (€) Adj. EBITDA in line with prior year Number of shares (weighted average) 189m 178m 171m Adj. EPS lower mainly due 391 to interest costs 1.18 317 305 0.86 Number of shares reduced, 0.73 ~4m shares cance
Slide 12: Outlook unchanged
Outlook unchanged 2023 Priorities 2023 Outlook* AkzoNobel expects the ongoing macro-economic uncertainties to continue and weigh on organic volume growth. The company will focus Pricing discipline on margin management, cost reduction, working capital normalization and de-leveraging. Cost reduction p
Slide 13: Upcoming events
Upcoming events Ex-dividend date of 2022 final dividend April 25, 2023 Record date of 2022 final dividend April 26, 2023 Payment of 2022 final dividend May 5, 2023 Report for the second quarter 2023 July 25, 2023 Investor update | Q1 2023 13
Slide 14: Disclaimer/forward-looking statements
Disclaimer/forward-looking statements This presentation1 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
Slide 15: Appendix
Appendix Awlgrip celebrates 50th anniversary Our world-leading yacht paint brand, Awlgrip, has marked its 50th anniversary. Over the years, it has evolved to become the go-to range of quality yacht finishes, primers, fillers and varnishes for boaters across the world. Originally, the product was sup
Slide 16: Pricing remains robust, Q1 pricing up 7%
Pricing remains robust, Q1 pricing up 7% AkzoNobel Paints Coatings Quarterly price/mix development (% y-o-y) +7% price +19% price +1% mix +17% price +7% price -% mix -1% mix -% mix +13% price +7% price -1% mix -2% mix 1616 12.5 1919 1313 6 12 111111 7 7 14 1414 6 5 4 11 4 5 4 10 10 3 3 11 1 2 2 1 7
Slide 17: 2023 planning assumptions
2023 planning assumptions EBITDA 2023 €1.2bn–€1.5bn Volumes y-o-y (5%)–(1%) Pricing vs raws y-o-y €250m–€450m Pricing Pricing retention on ~50% of portfolio during deflationary cycle Raw materials (LSD%)–(HSD%) OPEX y-o-y €200m savings programs to offset OPEX inflation Identified items €100–125m Eff
Slide 18: Performance measures
Performance measures Definitions of alternative performance measures Adjusted earnings per share are the basic earnings per share from operations, excluding identified items and taxes thereon Adjusted EBITDA is operating income excluding depreciation, amortization and identified items Adjusted opera
Slide 19: Additional financial information
Additional financial information Consolidated statement of free cash flows1 Operating income to net income € million Q1 2022 Q1 2023 € million Q1 2022 Q1 2023 EBITDA 321 269 Operating income 232 182 Impairment losses 3 — Financing income and expenses (12) (38) Results from associates and joint ventu
Slide 20: Alternative performance measures
Alternative performance measures Operating income (€m) Q1 2022 Q1 2023 Δ% OPI margin (%) Q1 2022 Q1 2023 Average invested capital (€m) April 2021 - March 2022/April 2022 - March 2023 2022 2023 Δ% Decorative Paints 111 94 (15%) Decorative Paints 11.1 9.0 Performance Coatings 152 130 (14%) Decorative
Slide 21: Recognized sustainability leader in the industry
Recognized sustainability leader in the industry Only paints and coatings company AAA in MSCI AkzoNobel Peer average Top 1% all companies assessed by EcoVadis AkzoNobel Peer average Low risk rating Sustainalytics1 AkzoNobel Peer average A 1. The lower risk, the better. Investor update | Q1 2023 21