Slide 1: Investor update Q2 2021
Investor update Q2 2021 July 21, 2021 Bringing color and inspiration to Port Moresby The surface of a bland concrete wall in Port Moresby, Papua New Guinea, has been brought to life thanks to one of our latest “Let’s Colour” projects. The 100-meter-long wall was transformed into something far more c
Slide 2: Agenda
Agenda Key highlights Financial review Concluding remarks 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 performan
Slide 3: Key highlights
Key highlights Investor update | Q2 2021 3
Slide 4: Strong growth and higher profit in Q2 2021
Strong growth and higher profit in Q2 2021 Q2 2021: H1 2021: Revenue Adjusted EBITDA* Revenue €223m of €1bn In constant currencies* In constant currencies* share buyback completed 29% higher Up 31% at €419m 23% higher (up 8% vs 2019) (up 9% vs 2019) Adjusted Adjusted EPS* Adjusted Announced From con
Slide 5: Grow & Deliver strategy continues strong momentum
Grow & Deliver strategy continues strong momentum Growth for fourth Strong focus on margin consecutive quarter management; prices up 4.5% (revenue* up 8% versus 2019) Announced acquisition of Sustainability: highest Grupo Orbis (~€260m); possible MSCI rating (AAA) leadership in South America for six
Slide 6: Acquisition of Grupo Orbis expands position in South and Central America
Acquisition of Grupo Orbis expands position in South and Central America ~€260m 3,000 8 manufacturing Complimentary geographic fit revenue employees sites AkzoNobel Grupo Orbis Headquartered in Colombia Presence across South and Central America 100-year heritage Brands include Pintuco, Protecto and
Slide 7: Leading industry in sustainability ratings and ambitions
Leading industry in sustainability ratings and ambitions AkzoNobel AkzoNobel AkzoNobel 2030 ambitions People. Industry Industry average average Industry Top quartile Organizational Health average >30% female executives Planet. Cut carbon emissions in half, versus 2018 baseline (no offsetting) – 30%
Slide 8: Focus on growth underpinned by robust end market demand
Focus on growth underpinned by robust end market demand North South EMEA North South America America Asia Asia Paints Industrial Powder Automotive and Specialty Marine and Protective End market demand (y-o-y) Strong Medium Weak Source: Company estimates Investor update | Q2 2021 8
Slide 9: Industrial coatings strong profitability and growth opportunities ahead
Industrial coatings strong profitability and growth opportunities ahead ~€17bn market Moving average revenue vs. 2018 (index) Transforming surfaces through… €1.6bn revenue in 2020 More safe and sustainable coil coatings #1 packaging (inside metal cans) Coil Packaging Wood Expanded offering for #2 co
Slide 10: Paints EMEA growing leading positions organically and with bolt-on acquisitions
Paints EMEA growing leading positions organically and with bolt-on acquisitions €2.2bn revenue in 2020 Quarterly revenue growth (%) vs. 2018 Successful bolt-on acquisitions… #1 in Europe and Africa 2021 2020 Presence in all major markets Professional Consumer Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 '19 '19 '1
Slide 11: Financial review
Financial review Investor update | Q2 2021 11
Slide 12: Adjusted operating income 41% higher, driven by higher volumes and prices
Adjusted operating income 41% higher, driven by higher volumes and prices € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 1,987 2,511 26% 29% 8% Adjusted EBITDA* 321 419 31% Adjusted operating income* 238 335 41% ROS* 12.0% 13.3% ROI* 13.8% 19.3% Revenue development Q2 2021 (%) Increase De
Slide 13: Revenue growth and margin management delivered ~€100m more profit for Q2 2021
Revenue growth and margin management delivered ~€100m more profit for Q2 2021 Adjusted operating income* (€m) - Positive impact Negative impact 89 - 61 - 128 - 66 285 - 15 ROS* 13.3% - ROS* 12.0% Note: €78m -7 temporary cost savings in Q2 2020 335 238 Q2 2020 FX Volumes Price Mix Raw materials/ OPEX
Slide 14: Paints volumes up 22%, driven by continued strong demand
Paints volumes up 22%, driven by continued strong demand € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 899 1,086 21% 23% 18% Adjusted EBITDA* 211 226 7% Adjusted operating income* 175 191 9% ROS* 19.5% 17.6% ……. Revenue development Q2 2021 (%) Increase Decrease Two major projects to inst
Slide 15: Coatings adjusted operating income up 74%, with prices 5% higher
Coatings adjusted operating income up 74%, with prices 5% higher € million Q2 2020 Q2 2021 Δ% Δ%CC Δ%CC Vs. Q2 ‘19 Revenue 1,086 1,423 31% 35% 4% Adjusted EBITDA* 139 218 57% Adjusted operating income* 103 179 74% ROS* 9.5% 12.6% Revenue development Q2 2021 (%) Increase Our Yacht Coatings business h
Slide 16: Strong working capital management
Strong working capital management Operating working capital Free cash flow (FCF) €m (Trade) excl. pension pre-funding and top- Net Debt/EBITDA 1.2 times as a % of revenue up payments* (Q2 2020: 1.4) 17.4% 263 14.0% 13.2% 107 107 62 27 -176 Q2 H1 Q2 H1 Q2 H1 Q2 ‘19 Q2 ‘20 Q2 ‘21 2019 2020 2021 *Alter
Slide 17: Adjusted EPS up 50% to €1.20 per share
Adjusted EPS up 50% to €1.20 per share Adjusted EBITDA* Adjusted earnings per share* €223 million of €1 billion share (€m) (EPS) from cont. operations (€) buyback completed by end Q2 Number of shares (weighted average) 216m 191m 187m 810 1.20 642 623 0.96 0.80 419 321 285 Towards €2bn adjusted EBITD
Slide 18: Concluding remarks
Concluding remarks Investor update | Q2 2021 18
Slide 19: Q2 Highlights Outlook
Q2 Highlights Outlook AkzoNobel targets to grow at least in line with Revenue up 26% and 29% higher in constant its relevant markets. Trends differ per region currencies, with 4.5% price increase and segment with significant raw material inflation expected to continue in the second half Adjusted ope
Slide 20: Upcoming events
Upcoming events Report for third quarter 2021 October 20, 2021 Investor update | Q2 2021 20
Slide 21: 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 Significant returns to shareholders Investor
Slide 22: 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 23: Appendix
Appendix Investor update | Q2 2021 23
Slide 24: Delivered growth fourth quarter in a row; Q2 revenue up 29% in constant currencies
Delivered growth fourth quarter in a row; Q2 revenue up 29% in constant currencies Paints Coatings Total Quarterly price/mix development in % year-on-year +2% price +4% price +3% price +1% price +5% price +2% price +4.5% price -6% mix -3% mix -5% mix -3% mix -1% mix -3% mix -3.1% mix 11 9 6 0 4 5 8
Slide 25: Delivering on capital allocation priorities
Delivering on capital allocation priorities Profitable organic growth ~2.5% capital expenditures/revenue Dividend Stable to rising Acquisitions Strategically aligned and value creating Shareholder returns Modular share buybacks Net debt/EBITDA Target 1-2x Retain strong investment grade credit rating
Slide 26: Performance measures and assumptions
Performance measures and assumptions Definitions of alternative performance measures Assumptions for 2021-2023 Adjusted earnings per share are the basic earnings per share from operations, excluding identified items and taxes thereon Revenue growth ≥ market CAGR Adjusted operating income is operatin
Slide 27: Additional financial information
Additional financial information Consolidated statement of free cash flows* Operating income to net income Q2 Q2 H1 H1 Q2 Q2 H1 H1 € million € million 2020 2021 2020 2021 2020 2021 2020 2021 297 469 EBITDA 574 857 207 384 Operating income 394 687 Pre-tax result on acquisitions and (25) (4) Net finan
Slide 28: Alternative performance measures
Alternative performance measures Q2 ’20 Q2 ’21 Δ% Operating income (€m) H1 ‘20 H1 ‘21 Δ% Q2 ’20 Q2 ’21 OPI margin (%) H1 ‘20 H1 ‘21 Average invested capital (€m) 2020 2021 Δ% 169 238 41% Decorative Paints 227 385 70% 18.8 21.9 Decorative Paints 13.7 19.1 Decorative Paints 2,959 2,734 (8%) 89 186 109