Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Investor Day (February 2020)
94 slides from Akzo Nobel's investor day presentation, Feb 13, 2020
Slide 1: Investor update 2020 and beyond
Investor update 2020 and beyond February 13, 2020
Slide 2: Agenda
Agenda UPDATE 2020 BEYOND 2020 Introduction Beyond 2020 Executive summary Grow Market dynamics Deliver Winning together: 15 by 20 PEOPLE. PLANET. PAINT. Investor update | 2020 and beyond 2
Slide 3: Speakers
Speakers Thierry Vanlancker Maarten de Vries Ruud Joosten David Prinselaar CEO CFO Chief Operating Officer Chief Supply Chain Officer Investor update | 2020 and beyond 3
Slide 4: Executive summary
Executive summary Thierry Vanlancker Investor update | 2020 and beyond 4
Slide 5: A focused paints and coatings company
A focused paints and coatings company North America Mature Europe Emerging Europe 12% 35% 10% €9.3bn revenue Asia Pacific 30% €1.2bn EBITDA €1bn EBIT 12.0% ROS Other regions 17.2% ROI South America 4% 33,800 employees 9% Revenue by destination All figures are based on year-end 2019. ROS = adjusted o
Slide 6: Delivering on promises made in 2017
Delivering on promises made in 2017 Creating two focused businesses as a logical next step Dual-track separation process completed Accelerating growth momentum and enhanced profitability Revenue growth ambition reduced X ROS increased from 10.6% to 12.0% Clear separation of Specialty Chemicals withi
Slide 7: Winning together: 15 by 20
Winning together: 15 by 20 Passion for paint Precise processes Powerful performance Proud people Investor update | 2020 and beyond 7
Slide 8: Performance improvement accelerated during H2 2019
Performance improvement accelerated during H2 2019 Return on sales (ROS), full-year Return on sales (ROS), second half-year % Unallocated cost % Unallocated cost 15.5 15.5 12.0 12.5 14.5 10.6 14.5 10.6 10.6 9.2 FY 2017 FY 2018 FY 2019 FY 2020 H2 2017 H2 2018 H2 2019 FY 2020 Ambition Ambition ROS = a
Slide 9: Significant share price increase and total shareholder return delivered since 2017
Significant share price increase and total shareholder return delivered since 2017 Share price Share price €59.7 €90.6 + 125 Shareholder returns* €17.3 Rebased to AkzoNobel (€) +82% 100 +52% 75 +24% Share price Total Shareholder Return AEX 50 January-17 June-17 December-17 June-18 December-18 June-1
Slide 10: Performance gap versus top peers narrowed, with further room to improve
Performance gap versus top peers narrowed, with further room to improve ROS 15% AkzoNobel 10% 5% 0% 2014 2015 2016 2017 2018 2019 ROS = adjusted operating income as percentage of revenue (including unallocated cost) Source: Company data, internal estimates Investor update | 2020 and beyond 10
Slide 11: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement… GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 11 Assumes no significant market disruption
Slide 12: Market dynamics
Market dynamics Ruud Joosten Investor update | 2020 and beyond 12
Slide 13: Paints and coatings protect assets and inspire people's everyday lives
Paints and coatings protect assets and inspire people’s everyday lives Investor update | 2020 and beyond 13
Slide 14: Attractive €125bn industry with multiple opportunities for growth
Attractive €125bn industry with multiple opportunities for growth Global paints and coatings by market sector Peer revenue comparison ~€125 billion, 2018 € billion, 2018 Decorative paints 14 Deco North Top players General Industrial America; 12 Powder coatings and Other; 10% ~50% of the market 14% 1
Slide 15: Strong global portfolio with leading positions in most segments
Strong global portfolio of businesses with leading positions in most segments Segment Market size Position Market growth Current market dynamics ~€bn, 2018* by revenue 2017-2020 Consolidation in fragmented market Decorative Paints Asia continues to outgrow (ex. North America) 35 1 1-2% more develope
Slide 16: Business portfolio managed according to clear strategic mandates
Business portfolio managed according to clear strategic mandates Strategic mandates Actions Performance cells 2017 view Average ROS Grow Maintain Harvest Change the game Invest to grow market share Grow and/or profit ROS Commercial actions M&A or divestiture Restructure Maintain current investment l
Slide 17: Decorative Paints EMEA
Decorative Paints EMEA Combining leading positions with strong brands and distribution Largest player in fragmented market ROS +500bps AkzoNobel 60% €2.2bn revenue #1 positions 2x relative market share Peer 1 20% #1 in Africa Others Peer 2 #2 positions Peer 3 H2 2017 H2 2019 Strong foundation to gro
Slide 18: Decorative Paints: successful bolt-on acquisitions
Decorative Paints Successful bolt-on acquisitions Focus on strategically aligned #1 in Romania and value generating acquisitions: Strong market presence +€85m Local production revenue capacity in 2019 Strengthen market position Increase relative market share Shared #1 in Spain Strengthens metal Inte
Slide 19: Marine and Protective Coatings
Marine and Protective Coatings Recovered to double-digit ROS in tough market Industry headwinds persisted in marine Profitability back in double-digits ROS and oil and gas industries Focus on value over volume +600bps CGT* Oil and gas capital $bn expenditure ($ bn) Right-sized cost structure 140,000
Slide 20: Industrial Coatings
Industrial Coatings Turnaround with focus on value over volume and cost savings €1.7bn revenue Deliberate focus on Investing in our assets: value over volume €50m upgrade for #1 packaging wood coatings in the US (inside the can) Raw material pricing inflation recovery #2 coil Margin management Tail
Slide 21: Winning together: 15 by 20
Winning together: 15 by 20 Maarten de Vries Investor update | 2020 and beyond 21
Slide 22: Winning together: 15 by 20 strategy continues to deliver results
Winning together: 15 by 20 strategy continues to deliver results Sales force effectiveness 10% cumulative price increases (2017-2019) Margin management Moving towards ongoing margin management Innovation excellence Paint the Future creating an innovation ecosystem Global Business Services Integrated
Slide 23: Transformation delivering towards previously announced cost savings
Transformation delivering towards previously announced cost savings Sales force effectiveness Cost savings (€m) Total €220m Margin management Achieved cost savings 10 Innovation excellence 43 19 Carryover cost savings 33 Global Business Services 38 Integrated Business Planning 18 ERP and systems pla
Slide 24: Good progress and sustained focus on transformation plans
Good progress and sustained focus on transformation plans 2017 2018 2019 2020 Sales force effectiveness Margin management Innovation excellence Global Business Services Integrated Business Planning ERP and systems platform ALPS continuous improvement Fit-for-purpose organization Procurement excellen
Slide 25: Several key initiatives contribute to 2020
Several key initiatives contribute to 2020 Significant € contribution to 2020 Sales force effectiveness Moving towards margin management Margin management 1-2% annual pricing discipline Innovation excellence Global Business Services Additional 36 GBS transitions in progress Integrated Business Plann
Slide 26: Momentum to deliver higher ROS in 2020
Momentum to deliver higher ROS in 2020 Margin management and cost savings drive profitability improvement Return on sales (ROS) Remaining % Unallocated cost cost savings Margin management Continuous €120m 15.5 1-2% improvement 14.5 12.5 10.6 Fixed cost 9.2 inflation H2 2017 H2 2018 H2 2019 FY 2020 A
Slide 27: Momentum to deliver improved ROI in 2020
Momentum to deliver improved ROI in 2020 despite lower growth assumptions and impact of IFRS 16 Return on investment (ROI) % Unallocated cost and invested capital 18.0 17.8 >20 16.6 17.2 Excluding impact of IFRS 16 ROI also impacted by: Lower revenue growth Recent acquisitions 2017 2018 2019 2019 20
Slide 28: Delivered promised shareholder returns
Delivered promised shareholder returns Moving towards target leverage 1-2x net debt/EBITDA Net Leverage Net Leverage Net Leverage Net Leverage 1.7x (5.6x) 0.7x 1.0x – 2.0x Net Debt 1,000 1,951 500 521 802 5,500 Net Cash 642 -7,812 -5,861 Special Net debt end Net cash Net debt end Total pension* Cash
Slide 29: Winning together: 15 by 20
Winning together: 15 by 20 Passion for paint Precise processes Powerful performance Proud people Investor update | 2020 and beyond 29
Slide 30: Beyond 2020
Beyond 2020 Thierry Vanlancker Investor update | 2020 and beyond 30
Slide 31: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement… GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 31 Assumes no significant market disruption
Slide 32: Key levers to grow and deliver profitability improvement 2021-2023
Key levers to grow and deliver profitability improvement 2021-2023 Integrated Supply Chain Portfolio management Value engineering Market segment growth ERP and application integration Sustainable (open) innovation End-to-end processes Attractive capital allocation Investor update | 2020 and beyond 3
Slide 33: Rigorous portfolio management
Rigorous portfolio management Creating a high-performance culture 2017 ROS 10.4% 10.6% 2019 ROS 10.4% 12.0% Sales to 3rd parties, €m Average ROS Grow Maintain Harvest Change the game ROS = adjusted operating income as percentage of revenue (excluding unallocated cost) Investor update | 2020 and beyo
Slide 34: Market segment growth and sustainable innovation
Market segment growth and sustainable innovation Ruud Joosten Investor update | 2020 and beyond 34
Slide 35: Attractive growth opportunities across geographies and industries
Attractive growth opportunities exist across geographies and industries Aerospace Powder Yacht Packaging Decorative Paints Decorative Decorative Paints Asia Paints EMEA Growth South America Protective Coil Cons. Elect. Specialty Wood Vehicle Marine Plastics Refinishes Relative attractiveness Source:
Slide 36: Decorative Paints in China
Decorative Paints in China Highly profitable with strong growth drivers Strong platform in place Positioned for future growth ~€5bn market Renewed management team Drive product penetration and partnerships for premium Cleaned-up product portfolio Disciplined pricing #1 in premium segment Acquired mi
Slide 37: Decorative Paints: leverage global scale to drive growth and efficiency
Decorative Paints Leverage global scale to drive growth and efficiency Marketing Innovation Color of the Year Easycare Color Sensor €3.7bn revenue All countries 31 countries 18 countries ROS +300bps TV campaigns Rezisto Wet tester H2 2017 H2 2019 25 countries 13 countries 22 countries Investor updat
Slide 38: Powder Coatings
Powder Coatings Clear global #1 - fastest growing and high performing Multiple sources of growth.. Product launches.. New Interpon 610 Low E applications Wood and plastic Reduced energy AkzoNobel consumption Peer 1 Increased Interpon D X-Pro Peer 2 capacity China and India Improved scratch Peer 3 re
Slide 39: Packaging Coatings
Packaging Coatings Well placed to capture share in a growing market segment Shift from plastic New categories Brand differentiation Leading technology Market leading epoxy and BPANI inside spray technologies... Robust application High-speed coating and flexibility ~€2.5bn market Market expected to c
Slide 40: Aerospace Coatings
Aerospace Coatings Leading position with strong growth dynamics Leading position with basecoat/clearcoat technology Sustainable solutions (e.g. chrome-free technology) Enables entry into #1 in exterior coatings Strong key account management cabin/interior coatings Strengthens position 50:50 new:main
Slide 41: Yacht Coatings
Yacht Coatings Attractive, growing niche segment; leading brands and technology Only player with global presence: Present in all segments: – Recreational boating (distribution) #1 position – Superyacht (OEM and distribution) €400m market Complete offering: – Below water 3% growth CAGR (primers, anti
Slide 42: Innovation
Innovation Solutions beyond generations for our customers worldwide ~€1.25 billion spent on R&D in the last five years Technology ~3,000 scientists worldwide Product development 2,900+ patents Customer support Priority patent applications filed Innovation drivers Asset [4Productivity innovation prot
Slide 43: Creating an innovation ecosystem
Creating an innovation ecosystem Collaborative open innovation transforming the industry Paint the Future Innovation Regional startup startup challenge acceleration acceleration Collaborative with suppliers Brazil innovation Spring 2019 November 2019 Spring 2020 ecosystem Investor update | 2020 and
Slide 44: Integrated Supply Chain and value engineering
Integrated Supply Chain and value engineering David Prinselaar Investor update | 2020 and beyond 44
Slide 45: Integrated Supply Chain: reinventing our supply chain
Integrated Supply Chain Reinventing our supply chain to become strategic and customer-driven 2023 ambitions Safety Remain top quartile 13,500 People Capital Reduced 125 Sites inventory 365 Warehouses Service Become top quartile ~€250m CapEx/year People €1.5bn Cost Become top quartile (OHI) Cost 4% a
Slide 46: Integrated Supply Chain
Integrated Supply Chain Reinventing our supply chain to become strategic and customer-driven 2017-2019 2020 and beyond Functional to integrated Reinventing supply chain Organizational End-to-end customer transformation service Asset network based on ALPS implementation supply chain archetypes Integr
Slide 47: ALPS continuous improvement drives operational excellence
Integrated Supply Chain ALPS continuous improvement drives operational excellence ALPS continues to offset inflation Waste (kg/t) (Implementation level 2020 to 2023 in %) 25 2023 20 15 10 Regional Industry 2017 2018 2019 2023 100% 100% best ALPS delivering results Manufacturing cost productivity (%)
Slide 48: Streamlined manufacturing footprint; consolidated warehouse network
Integrated Supply Chain Streamlined manufacturing footprint; consolidated warehouse network EBIT per site* Number of warehouses AkzoNobel 400 300 200 100 0 2017 2019 2023 EBIT €m per site Sites Outsourced Insourced From… To… Broad manufacturing and warehouse footprint Streamlined manufacturing footp
Slide 49: Three archetypes enable customer-driven supply chain optimization
Integrated Supply Chain Three archetypes enable customer-driven supply chain optimization Simple and efficient Managed complexity Agile and adaptive 50% 40% 10% of total volumes of total volumes of total volumes Lowest total cost for high volumes Offer many SKUs with selective Fulfil new and/or unex
Slide 50: Capital expenditure based on strategic mandates and archetypes
Integrated Supply Chain Capital expenditure based on strategic mandates and archetypes ~€250m PLAN Advanced planning CapEx/year system Data analytics MAKE 40% Performance portals In line technology 60% Automation Capacity optimization DELIVER 4PL Data analytics Maintain Capacity optimization Invest
Slide 51: Value engineering
Value engineering Procurement category management, enabling efficiency gains Category management in place Value engineering 2.0 Efficiency gains… Titanium dioxide Achieved: Additives Raw material slate TiO2 rationalization China Specialty 12 17 rationalization across ~20% average reduction of TiO2 r
Slide 52: ERP, end-to-end, and capital allocation
ERP, end-to-end, and capital allocation Maarten de Vries Investor update | 2020 and beyond 52
Slide 53: Information Technology
Information Technology Removing complexity; creating a future-proof technology backbone 2017 2020 2023 Driving cost savings 29 ERP systems 1 ERP system through standardization 43 ERP systems and simplification >1,000 applications ~725 applications ~350 applications End 2020 Beyond 2020 ERP systems ~
Slide 54: Global Business Services (GBS)
Global Business Services (GBS) Embed operational excellence and deliver cost savings END 2020 BEYOND 2020 2,600 people (from 350 in 2017) Rigorous standardization Centralize before standardize Automation of activities Transparency of end-to-end metrics Annual cost productivity (7%-10%) Reliable data
Slide 55: Stepping up free cash flow
Stepping up free cash flow Free cash flow (FCF) €m Free cash flow excluding pension top-up payments Reported free cash flow from operations FCF yield* Strong cash generation 5.0% Increased profitability -22 Minimal pension top-up payments FCF yield* 1.8% 461 Industry top quartile working capital Fur
Slide 56: Stable to rising dividend and modular share buybacks
Stable to rising dividend and modular share buybacks Dividend (€) Adjusted earnings per share* (EPS) (€) 2.50 0.85 1.80 1.90 3.10 1.55 1.65 2.56 1.45 1.65 2.38 1.91 1.28 1.09 1.43 1.49 1.12 1.20 0.33 0.35 0.37 0.56 0.37 0.41 2014 2015 2016 2017 2018 2019 2016 2017 2018 2019 Related to the Specialty
Slide 57: Strategically aligned, value creating, M&A
Strategically aligned, value creating, M&A Disciplined approach, in line with strategic mandates Strategic fit: Exploratory Signing Target list Prioritizing and Paints and coatings and closing due diligence segments Aligned with strategic mandates Add geography and/or technology Opportunity for syne
Slide 58: Capital allocation priorities
Capital allocation priorities 2021-2023 Chemicals separation proceeds returned Pension liabilities de-risked ~2.5% capital expenditures/revenue Profitable organic growth ≥ market CAGR; +50 bps ROS CAGR Leverage ratio 1-2x Dividend Stable to rising net debt/EBITDA Acquisitions Strategically aligned a
Slide 59: PEOPLE. PLANET. PAINT. and concluding remarks
PEOPLE. PLANET. PAINT. and concluding remarks Thierry Vanlancker Investor update | 2020 and beyond 59
Slide 60: PEOPLE. PLANET. PAINT.
PEOPLE. PLANET. PAINT. Our approach to sustainability Investor update | 2020 and beyond 60
Slide 61: PEOPLE. PLANET. PAINT.
PEOPLE. PLANET. PAINT. Overall engagement trend positive Organizational health up 9% (2018-2019) Executives (~300 people) 2nd quartile Response rate 65% Above leadership benchmark Accreditation by Top Employers Institute in key countries: Brazil, China, the Netherlands, UK, US 2019 Employer awards i
Slide 62: PEOPLE. PLANET. PAINT. 2025 ambitions
PEOPLE. PLANET. PAINT. 2025 ambitions >25% 50% Reduced carbon emissions Water re-usage (Baseline 2018) >50% 75% Renewable energy Reusable waste Investor update | 2020 and beyond 62
Slide 63: PEOPLE. PLANET. PAINT. Sustainable solutions
PEOPLE. PLANET. PAINT. Sustainable solutions Eco-premium solutions make up >40% of total revenue >20% target for 4 consecutive years 23 22 22 21 21 21 20 20 40% 19 60% 17 15 2014 2015 2016 2017 2018 2019 Other Sustainable Eco-premium solutions solutions as % of sales Dulux Trade Evolve Interpon “Low
Slide 64: Strategy beyond 2020 balances growth and profitability improvement
Strategy beyond 2020 balances growth and profitability improvement GROW &DELIVER Applicable 2021-2023 Investor update | 2020 and beyond 64 Assumes no significant market disruption
Slide 65: Financial ambitions 2021-2023
Financial ambitions 2021-2023 PLANNING ASSUMPTIONS Constant currencies ROS = Adjusted operating income as percentage of revenue (including other activities/eliminations) Revenue growth ROS +50bps CAGR ≥ market CAGR Effective tax rate 27% ~2.5% Capital expenditures as a percentage of revenue Leverage
Slide 66: Investor update Q3 2020
Investor update Q3 2020 October 21, 2020 Unearth your courage in 2021 with AkzoNobel’s Color of the Year Brave Ground has been unveiled as AkzoNobel’s Color of the Year for 2021. It’s a warm and grounding neutral shade that gives us the courage to embrace change. A range of palettes has been develop
Slide 67: Agenda
Agenda Key highlights Financial review Concluding remarks Q&A Investor update | Q3 2020 67
Slide 68: Key highlights
Key highlights Investor update | Q3 2020 68
Slide 69: Strong profitability during Q3, driven by disciplined margin and cost focus
Strong profitability during Q3, driven by disciplined margin and cost focus ROS, excluding unallocated costs, increased to 17.7% (2019: 13.8%) due to strong margin management and cost savings Growth in volumes of 3%, with strong demand trends for most segments and regions Total cost savings delivere
Slide 70: Q3 2020 ROS improved to 17.7%, and 51% increased cash generation
Q3 2020 ROS* improved to 17.7%, and 51% increased cash generation Q3 2020: YTD 2020: ROS* Revenue Adjusted EPS In constant currencies From continuing operations Increased to 17.7% Up 1% Up 19% at €2.80 (2019: 13.8%) ROI** Free cash flow Leverage (Net Debt/EBITDA) 18.8% 51% higher 1.0x (2019: 16.8%)
Slide 71: COVID-19 headwinds eased in Q3; revenue up 1% in constant currencies
COVID-19 headwinds eased in Q3; revenue up 1% in constant currencies Revenue development YTD 2020 (Δ%)* 50% Paints 0% Total Coatings -50% Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Slide 72: Demand trends continue to differ per region and segment
Demand trends continue to differ per region and segment South Powder America Industrial ~ EMEA China Automotive South Asia and Specialty ~ Marine and Protective Investor update | Q3 2020 72
Slide 73: Taking steps to rapidly reduce costs and key parts of transformation resumed
Taking steps to rapidly reduce costs and key parts of transformation resumed Sales force effectiveness Margin management Delivering strong margin management Innovation excellence Powder technology acquisition accelerated access to low curing technology Global Business Services 10 GBS transitions com
Slide 74: Financial review
Financial review Investor update | Q3 2020 74
Slide 75: ROS increased 390bps during Q3 2020
ROS* increased 390bps during Q3 2020, due to margin management and cost savings € million Q3 2019 Q3 2020 Δ% Δ%CC Revenue was 5% lower, while up 1% up in constant Revenue 2,398 2,276 (5%) 1% currencies. Volumes were Adjusted EBITDA 387 439 13% up 3% overall, mainly driven by Decorative Adjusted oper
Slide 76: Revenue up 1% in constant currencies, with differing trends per segment
Revenue up 1% in constant currencies, with differing trends per segment Decorative Paints Performance Coatings Total Quarterly price/mix development in % year-on-year +2% price 11 8 -6% geo-mix 9 6 2 7 7 7 6 6 0 4 5 4 5 1 4 5 3 0 0 1 5 5 4 1 3 3 2 2 2 -4 -1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3
Slide 77: Margin management and cost savings delivered 18% higher profitability in Q3 2020
Margin management and cost savings delivered 18% higher profitability in Q3 2020 Adjusted operating income Positive impact €27m transformation Negative impact €22m temporary ROS* 17.7% 49 - 30 ROS* 13.8% - 15 38 - 21 32 - 353 300 Q3 2019 FX Volumes Price/mix Raw materials/ Transformation and One-off
Slide 78: Decorative Paints ROS at 20.7%, driven by strong demand globally
Decorative Paints ROS at 20.7%, driven by strong demand globally € million Q3 2019 Q3 2020 Δ% Δ%CC Revenue 968 1004 4% 11% Adjusted EBITDA 174 243 40% Adjusted operating income 135 208 54% Operating income 130 202 55% ROS* 13.9% 20.7% ROI** 12.5% 18.5% AkzoNobel is to further grow in Europe after ag
Slide 79: Performance Coatings demand improving with revenue up in September
Performance Coatings demand improving with revenue in constant currency up in September € million Q3 2019 Q3 2020 Δ% Δ%CC Revenue 1,413 1,270 (10%) (5%) Adjusted EBITDA 238 232 (3%) Adjusted operating income 194 195 1% Operating income 156 179 15% ROS* 13.7% 15.4% ROI** 20.8% 19.0% Revenue developme
Slide 80: Adjusted EPS for continuing operations up 34% for Q3 and 19% YTD
Adjusted EPS for continuing operations up 34% for Q3 and 19% YTD Q3 2019 Q3 2020 € million YTD 2019 YTD 2020 The outstanding share capital was 190.6 million common 247 326 Operating income 668 720 shares at the end of (27) (15) Net financing expenses (58) (53) September 2020 6 6 Results from associa
Slide 81: Q3 free cash flow improved by 51%; maintained strong balance sheet
Q3 free cash flow improved by 51%; maintained strong balance sheet Q3 2019 Q3 2020 € million YTD 2019 YTD 2020 334 417 EBITDA 929 991 28 1 Impairment losses 61 1 Pre-tax result on acquisitions and (5) (10) (71) (10) divestments 35 101 Changes in working capital (502) (182) - - Pension pre-funding (1
Slide 82: Delivering on capital allocation priorities
Delivering on capital allocation priorities ~2.5% CAPEX/revenue Dividend € per share Profitable organic growth Investing in our sites and systems Related to the Specialty Chemicals business Final dividend Interim dividend 2.50 Policy “stable to rising” Dividend Interim dividend €0.43 0.85 1.90 (2019
Slide 83: Concluding remarks
Concluding remarks Investor update | Q3 2020 83
Slide 84: Strong profitability during Q3, driven by disciplined margin and cost focus
Strong profitability during Q3, driven by disciplined margin and cost focus ROS, excluding unallocated costs, increased to 17.7% (2019: 13.8%) due to strong margin management and cost savings Growth in volumes of 3%, with strong demand trends for most segments and regions Total cost savings delivere
Slide 85: Outlook
Outlook AkzoNobel has suspended its 2020 financial ambition in response to the significant market disruption resulting from the pandemic. Headwinds related to COVID-19 continued to ease, although demand trends differ per region and segment in an uncertain macro-economic environment. Raw material cos
Slide 86: Upcoming events
Upcoming events Ex-dividend date of 2020 interim dividend October 23, 2020 Record date of 2020 interim dividend October 26, 2020 Payment of 2020 interim dividend November 5, 2020 Report for the full-year and the fourth quarter February 17, 2021 Investor update | Q3 2020 86
Slide 87: 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 Balanced geographic exposure: 50% revenue from emerging markets Well positioned to accelerate growth and enhance profitability Transformation plans in place and clear path t
Slide 88: 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 'forw
Slide 89: Appendix
Appendix Investor update | Q3 2020 89
Slide 90: YTD 2020
YTD 2020 € million YTD 2019 YTD 2020 Δ% Δ%CC Adjusted operating income was €805 million (2019: Revenue 7,034 6,321 (10%) (7%) €768 million); driven by Adjusted EBITDA 1,029 1,062 3% margin management and cost-saving programs. Adjusted operating income 768 805 5% Continuous improvement initiatives su
Slide 91: YTD 2020: Decorative Paints
YTD 2020: Decorative Paints € million YTD 2019 YTD 2020 Δ% Δ%CC Decorative Paints performance continued to Revenue 2,801 2,657 (5%) -% improve. Margin Adjusted EBITDA 446 554 24% management and cost savings more than Adjusted operating income 331 447 35% compensated for lower volumes Operating incom
Slide 92: YTD 2020: Performance Coatings
YTD 2020: Performance Coatings € million YTD 2019 YTD 2020 Δ% Δ%CC Performance Coatings adjusted operating income Revenue 4,184 3,651 (13%) (10%) was lower, with positive price/mix, margin Adjusted EBITDA 661 601 (9%) management and cost Adjusted operating income 529 488 (8%) savings more than offse
Slide 93: Representation of revenue 2019
Representation of revenue 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 € million Reported Represented Reported Represented Reported Represented Reported Represented Decorative Paints EMEA 506 498 620 611 573 565 462 454 Decorative paints South America 99 98 103 102 121 120 139 137 Decorative Paints Asia 240
Slide 94: Definitions and assumptions 2020
Definitions and assumptions 2020 ROS = adjusted operating income as percentage of revenue (excluding unallocated cost) ROI = adjusted operating income of the last 12 months as percentage of average invested capital (excluding unallocated cost and invested capital) Other activities/eliminations €140-