Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q4 2023 Earnings Presentation
20 slides from Akzo Nobel's earnings presentation, Feb 7, 2024
Slide 1: Investor update Q4 2023
Investor update Q4 2023 February 7, 2024
Slide 2: Forward-looking statements
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 'forward-lookin
Slide 3: Q4 and FY 2023 Highlights
Q4 and FY 2023 Highlights Solid performance despite significant FX headwinds, deleveraging ahead of schedule Q4 2023 YoY FY 2023 YoY • Revenue +4% in CC • Revenue +5% in CC on flat volumes • Volumes +3% • ROS 10.1% (up 280bps YoY) • ROS 8.7% (up 390bps YoY) • Adj. EBITDA €1,429m (vs €1,157m PY) desp
Slide 4: Business update
Business update Q4 volumes positive, good growth momentum for 2024 Q4 2023 2024 Deco EMEA Demand bottomed out in 2023, progressive rebound underway +LSD% Deco LATAM Growth in Brazil; macro uncertainties in Argentina; Colombia solid +MSD% +LSD% Deco South Asia Growth in India; Indonesia robust; Vietn
Slide 5: Q4 business performance
Q4 business performance Strong profitability rebound, significant currency headwinds AkzoNobel Paints Coatings Q4 revenue development % YoY Q4 revenue development % YoY Q4 revenue development % YoY 2 1 (2) 2 2 (2) 2 - 3 (7) 3 (7) 3 (1) (7) (3) (2) (3) Volumes Price/ M&A Hyper- FX Revenue Volumes Pri
Slide 6: Operating results for Q4 and FY 2023
Operating results for Q4 and FY 2023 EBITDA +270bps, robust FCF on profit rebound and working capital reduction Adjusted EBITDA Operating working capital Operating Free cashworking flow (FCF) capital (€m) % revenue (% of revenue) (€m) 10.7% 13.4% 1,429 840 18.6% 17.5% 17.0% 16.9% 1,157 15.1% 460 313
Slide 7: Debt overview
Debt overview De-leveraging ahead of schedule, Net Debt/EBITDA to normalize by end of 2024 Net Debt/EBITDA Debt profile (x) (€m) 5,563 4.2 4.0 3.8 57% 3.2 3.4 3.2 Bonds, other LT debt 2.7 LT 3,785 (@ 2.1%1) 1.9 ~2.3 1,778 43% Commercial paper, ST bank loans & other debt ST (@ 4.5%1) Q1 Q2 Q3 Q4 Q1 Q
Slide 8: ESG performance
ESG performance Unwavering industry leadership Progress towards 2030 ambitions Year highlights Carbon reduction in FY2023 2030 ambitions1 • Top ESG rated in the industry 38% 50% own operations ‒ EcoVadis: top 1% Carbon reduction in 9% 50% ‒ MSCI: highest rating for 8th consecutive year supply chain
Slide 9: Outlook 2024
Outlook 2024 Margin management and volumes to drive profit growth, focus on de-leveraging • Volumes: +LSD% Adj. EBITDA • Industrial efficiency benefit: >€25m • CAPEX: €350m €1.50-1.65bn • Net Debt/EBITDA: around 2.3x • Stable dividend Outlook is based on organic volumes and constant currencies, assu
Slide 10: Mid-term organic growth
Mid-term organic growth Powder, Marine & Protective and Deco Asia/LATAM underpin organic growth % group Mid-term volumes (2023) volume growth Deco EMEA Near-term +LSD% rebound off low base, flat afterwards 20% Flat+ Deco Asia Emerging markets with structural growth 35% +MSD% Deco LATAM Powder Coatin
Slide 11: Powder coatings
Powder coatings Extending leadership with advanced technology and unmatched service Competitive advantage Growth strategy • Clear #1, strong in all regions • Defend premium segment • Powder technology leader leadership • Broadest product portfolio • Expand mid-market position • Market-leading techni
Slide 12: Marine & Protective coatings
Marine & Protective coatings Well-positioned to rebuild leadership in growing markets Competitive advantage Growth strategy • Strong products, people and brands • Rebuild position in Marine new-build • Leader in sustainable innovation • Capture new LNG and • Renowned technical service offshore inves
Slide 13: Mid-term ambitions
Mid-term ambitions Expanding profitability underpinned by growth and industrial excellence Strategic priorities Targets Sustainability-driven Adj. EBITDA margin ROI innovation Growth in focus >16% 16-19% segments and markets Adj. EBITDA growth Industrial efficiency benefit CAGR: >6% €250m by 2027 In
Slide 14: Contact and upcoming events 2024
AkzoNobel Media Relations T +31 (0)88 - 969 7833 Upcoming events 2024 Contact: Joost Ruempol Publication annual report 2023 February 28 media.relations@akzonobel.com Q1 results April 23 Annual General Meeting of shareholders April 25 AkzoNobel Investor Relations Ex-dividend date of 2023 final divide
Slide 15: Planning assumptions
Planning assumptions 2024 Mid-term Industrial efficiency benefit Adj. EBITDA €1.50-1.65bn CAGR ‘23-’27: >6% Margin: >16% 2024 Organic volumes +LSD% +LSD% 2025 Industrial efficiency benefit >€25m €250m 2026 Identified items €100-150m Industrial efficiency: €130-150m (‘24-’26) 2027 CAPEX €350m pa, inc
Slide 16: Adj. EBITDA and ROI
Adj. EBITDA and ROI Operating working capital margin Adj. EBITDA Operating working capital ROI % % 19% 16.9% 15.0% 16% 16.1% 16.0% 16% 14.4% 13.4% 13.9% 14.1% 12.3% Mid-term 12.6% 13.0% Mid-term 11.2% 10.7% 9.8% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 16 Investor update
Slide 17: Price/mix and volumes
Price/mix and volumes AkzoNobel Paints Coatings price/mix (% YoY) 1616 1919 12.5 14 1414 1313 6 12 7 7 11 6 54 11 5 4 5 4 10 111111 3 3 3 3 2 1 2 2 -1 1 -1 1 7 3 2 2 1 2 1 10 5 5 2 8 -2 0 0 1 0 -2 4 4 -4 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3
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
Slide 19: Additional financial information
Additional financial information Consolidated statement of free cash flows Operating income to net income Q4’22 Q4’23 € million 2022 2023 Q4’22 Q4’23 € million 2022 2023 198 307 EBITDA 1,076 1,386 103 214 Operating income 708 1,029 — 2 Impairment losses 6 4 (51) (121) Financing income and expenses (
Slide 20: Alternative performance measures
Alternative performance measures Q4 Q4 Q4 Q4 Average invested capital (€m) 2022 2023 Δ% Operating income (€m) 2022 2023 Δ% 2022 2023 OPI margin (%) 2022 2023 Jan 2022 - Dec 2022/Jan 2023 - Dec 2023 2022 2023 Δ% 47 99 111% Decorative Paints 388 500 29% 4.7 10.0 Decorative Paints 8.9 11.6 Decorative P