Slide 1: Investor update
Investor update Maëlys Castella October 19, 2016 20 16
Slide 2: Agenda
Agenda Highlights Q3 2016 Operational review Financial review Summary Questions Investor update 2
Slide 3: Key highlights for Q3 2016
Key highlights for Q3 2016 Investor update 3
Slide 4: Profitability improved overall and for all business areas
Profitability improved overall and for all business areas Volume growth in Decorative Paints and Specialty Chemicals Revenue down 4 percent, due to adverse currency and price/mix effects EBIT* up 1 percent at €442 million Operating income up 4 percent at €454 million ROS** and ROI** improved Net inc
Slide 5: Profitability improved further despite adverse currency and price/mix effects
Profitability improved further despite adverse currency and price/mix effects Revenue (€ million) EBIT* (€ million) ROS %** Moving average ROI %** 3,760 3,600 442 15.2 436 13.0 11.6 12.3 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Highlights Q3 2016 *EBIT = Operating income exclu
Slide 6: Building on the foundation we have created
Building on the foundation we have created Investor update 6
Slide 7: Higher EBIT, driven by continuous improvement initiatives and lower costs
Higher EBIT, driven by continuous improvement initiatives and lower costs € million Q3 Q3 Δ% 2015 2016 Revenue 3,760 3,600 (4) Operating income 436 454 4 EBIT (Operating income excluding incidental items) 436 442 1 Ratio, % Q3 Q3 2015 2016 ROS* 11.6 12.3 Moving average ROI* 13.0 15.2 Revenue develop
Slide 8: Volume growth in Decorative Paints and Specialty Chemicals, although flat overall
Volume growth in Decorative Paints and Specialty Chemicals, although flat overall Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel Quarterly volume development in % year-on-year 6 4 3% 2 1% 0% 0 -2 -2% -4 2015 2016 Quarterly price/mix development in % year-on-year 2 0 -1% -2 -2%
Slide 9: Decorative Paints Q3 2016: Volumes were up in Asia and EMEA
Decorative Paints Q3 2016: Volumes were up in Asia and EMEA € million Q3 2015 Q3 2016 Δ% Our Color of the Year, Revenue 1,052 1,021 (3) Denim Drift, was launched Operating income 121 132 9 EBIT (Operating income excluding incidental items) 121 123 2 Ratio, % Q3 2015 Q3 2016 ROS* 11.5 12.0 Moving ave
Slide 10: Performance Coatings Q3 2016: Returns increased despite lower volumes
Performance Coatings Q3 2016: Returns increased despite lower volumes € million Q3 2015 Q3 2016 Δ% Revenue 1,493 1,406 (6) Operating income 210 192 (9) EBIT (Operating income excluding incidental items) 210 199 (5) Ratio, % Q3 2015 Q3 2016 ROS* 14.1 14.2 Moving average return ROI* 26.5 30.9 Revenue
Slide 11: Specialty Chemicals Q3 2016: Volumes up and profitability improved
Specialty Chemicals Q3 2016: Volumes up and profitability improved € million Q3 2015 Q3 2016 Δ% Revenue 1,235 1,202 (3) Operating income 163 168 3 EBIT (Operating income excluding incidental items) 163 168 3 Ratio, % Q3 2015 Q3 2016 ROS* 13.2 14.0 Moving average ROI* 16.4 17.2 Revenue development Q3
Slide 12: Strong financial position provides foundation for growth
Strong financial position provides foundation for growth Investor update 12
Slide 13: Improved financial performance for another consecutive quarter
Improved financial performance for another consecutive quarter EBIT* up 1 percent at €442 million Operating income up 4 percent at €454 million ROS** was up at 12.3 percent; ROI** improved to 15.2 percent Net income attributable to shareholders €285 million Adjusted EPS at €1.20 Net cash inflow from
Slide 14: Free cash flow continued to improve
Free cash flow continued to improve Q3 Q3 Δ Capital expenditures € million € million 2015 2016 % EBITDA 590 593 1 Interest paid -25 -23 Tax paid -84 -101 Changes in working capital, provision* and other 112 141 Capital expenditures (including intangible assets) -161 -131 Free cash flow, excluding pe
Slide 15: Further de-risking of pension liabilities including £2.6 billion non-cash buy-ins
Further de-risking of pension liabilities including £2.6 billion non-cash buy-ins* Other post-retirement benefits Various activities to reduce liabilities Other pension plans CPS UK ICI PF UK £8.2 billion insurance buy-ins for UK schemes 100 (2014-16). $0.7 billion buy-out relate to a US 2 scheme (2
Slide 16: IAS19 pension deficit up to nearly €1.0 billion in Q3 2016
IAS19 pension deficit up to nearly €1.0 billion in Q3 2016 Key pension financial assumptions Q3 2016 Q2 2016 Discount rate 2.1% 2.6% Inflation rate 2.8% 2.6% Pension deficit development during Q3 2016 Increase € million Decrease Deficit end Discount Inflation Asset return Deficit end Q2 2016 Top-ups
Slide 17: Interim dividend up 6 percent
Interim dividend up 6 percent Dividends € per share Dividend policy is to pay a “stable to rising” dividend each year Interim dividend paid in cash, unless shareholders elect to receive a stock dividend 1.12 (normal uptake 35-40 percent) 1.20 1.12 1.12 1.12 Interim dividend up 6 percent to €0.37 per
Slide 18: Concluding remarks
Concluding remarks Investor update 18
Slide 19: Recent highlights from our Human Cities, innovation and sustainability activities
Recent highlights from our Human Cities, innovation and sustainability activities Summary Investor update 19
Slide 20: Profitability improved overall and for all Business Areas
Profitability improved overall and for all Business Areas Volume growth in Decorative Paints and Specialty Chemicals Revenue down, due to adverse currency and price/mix effects EBIT and operating income higher ROS* and ROI* improved Net income attributable to shareholders was €285 million Net cash i
Slide 21: Upcoming events
Upcoming events Ex-dividend of 2016 interim dividend October 21, 2016 Record date of 2016 interim dividend October 24, 2016 Election period cash or Stock interim dividend October 25, 2016 – November 16, 2016 Payment of cash dividend and delivery of new shares November 23, 2016 Full-year and Q4 2016
Slide 22: And now for questions
And now for questions Investor update 22
Slide 23: A strong case for investment
A strong case for investment Portfolio of businesses with leadership positions in many markets Strong global brands in both consumer and industrial markets Long-term growth potential from end-user segments Balanced exposure across geographic regions Track record of improving returns and cash flow Hi
Slide 24: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements which address such key issues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline, and product approvals. Such statements should be carefully considered, and it should be