Slide 1: Investor Update Full Year 2012 & Q4 results
Investor Update Full Year 2012 & Q4 results Full-Year Ton Büchner & Keith Nichols February 20, 2013
Slide 2: Agenda
Agenda 1 1. 2012 hi highlights hli ht 2. Operational review 3. Financial review 4. Conclusion 5. Questions Investor Update Full-Year 2012 & Q4 results 2
Slide 3: 2012 highlights
2012 highlights • 2012 revenue up 5 percent driven by favorable currencies and pricing pricing, offset by lower volumes • 2012 EBITDA* 4 percent higher at €1,901 million (2011: €1,834 million) • Performance P f improvement i t program 2012 ttargett h have b been exceeded d d • Net loss from continui
Slide 4: In Q4 2012 both revenue and EBITDA increased
In Q4 2012 both revenue and EBITDA increased € million Q4 2012 Δ% Revenue 3,673 3 EBITDA* EBITDA 363 3 Ratio, % Q4 2012 Q4 2011 EBITDA* margin 99 9.9 99 9.9 Revenue development Q4 2012 vs. Q4 2011 Increase Decrease +2% +3% 0% +2% -1% Volume Price/Mix Acquisitions/ q Exchange g rates Total divestment
Slide 5: Revenue growth & EBITDA margin
Revenue growth & EBITDA margin Reported quarterly revenue growth in % year-on-year year on year 2011 2012 20 15 10 +5% +3% +3% 5 +3% 0 -5 Decorative Paints Performance Coatings g Specialty p y Chemicals AkzoNobel Quarterly EBITDA* margin in % 20 13.6% 13.0% 9.9% 4.7% 15 10 5 0 Decorative Paints Perf
Slide 6: Prices being maintained in soft markets
Prices being maintained in soft markets Quarterly volume development in % year year-on-year on year 2011 2012 10 6 +2% 2% 2 -2% -1% -1% -2 -6 6 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel Quarterly price/mix development in % year-on-year 8 5 +3% +2% 2 +1% 0% -1 Decorative Pa
Slide 7: Performance improvement program is on track and supporting results
Performance improvement program is on track and supporting results EBITDA bridge FY 2011 – FY 2012 EBITDA* Increase € million Decrease 2.400 2.300 (150) 2.200 2.100 411 (248) 238 (251) 2 000 2.000 1.900 67 1.800 1,901 1,834 1 700 1.700 1.600 1.500 1.400 1.300 1.200 FY 2011 Currency Price/Mix Volume
Slide 8: Performance improvement program delivers €238 million in 2012
Performance improvement program delivers €238 million in 2012 FY 2012 FY 2012 Reported Amount € million EBITDA due to PIP 2012 target Decorati e Paints Decorative 425 85* Performance Coatings 769 100 Specialty Chemicals 889 53 Other (182) - Total 1,901 238* 200 € million H1 2012 FY 2012 2012 target
Slide 9: Significant FTE reductions as a result of the performance improvement program
Significant FTE reductions as a result of the performance improvement program FTE bridge Year-end 2011 – Year-end 2012 Increase Decrease 52500 52000 52,020 (540) 51500 (1450) 51000 50500 580 50,610 50000 49500 49000 year-end 2011* Acq/Div** PIP*** Seasonal/New hires year-end 2012 * Restated for the
Slide 10: Decorative Paints Q4 2012 highlights
Decorative Paints Q4 2012 highlights € million Q4 2012 Δ% Revenue 995 3 EBITDA* 47 (23) Ratio, % Q4 2012 Q4 2011 EBITDA* margin 4.7 6.3 Revenue development Q4 2012 vs. Q4 2011 0% 0% +1% +3% +2% Volume Price/Mix Acquisitions/ Exchange rates Total divestments Increase • Q4 revenue up 3 percent, mainly
Slide 11: Performance Coatings Q4 2012 highlights
Performance Coatings Q4 2012 highlights € million Q4 2012 Δ% Revenue 1,394 5 EBITDA* 190 35 Ratio, % Q4 2012 Q4 2011 EBITDA* margin 13.6 10.6 Revenue development Q4 2012 vs. Q4 2011 +1% +3% +5% +3% -2% Volume Price/Mix Acquisitions/ Exchange rates Total divestments Increase • Q4 Revenue up 5 percent
Slide 12: Specialty Chemicals Q4 2012 highlights
Specialty Chemicals Q4 2012 highlights € million Q4 2012 Δ% Revenue 1,320 3 EBITDA* 172 (17) Ratio, % Q4 2012 Q4 2011 EBITDA* margin 13.0 16.1 Revenue development Q4 2012 vs. Q4 2011 +2% +3% +1% -1% +1% Volume Price/Mix Acquisitions/ Exchange g rates Total divestments Increase • Q4 Revenue up 3 perc
Slide 13: Financial review
Financial review Keith Nichols Investor Update Full-Year 2012 & Q4 results 13
Slide 14: Impact of moving Decorative Paints North America to discontinued operations
Impact of moving Decorative Paints North America to discontinued operations € million FY 2012 FY 2012 reported Deco NA Revenue 15,390 1,190 EBITDA* 1,901 19 Depreciation & Amortization* (625) (57) EBIT* 1 276 1,276 (38) Incidentals (414) (17) Impairment p charge g ((2,106)) ((372)) EBIT after incide
Slide 15: Summary – Q4 2012 results
Summary – Q4 2012 results € million Q4 2012 Q4 2011 EBITDA* 363 352 Amortization and depreciation (161) (154) Incidentals (195) (91) Net financing expenses (54) (141) Minorities and associates (19) (7) Income tax 29 25 Discontinued operations (22) (52) Net income total operations (59) (68) Net cash
Slide 16: Q4 2012 incidentals
Q4 2012 incidentals € million Q4 2012 Q4 2011 Restructuring costs (148) (54) Results related to major legal, (12) (33) anti-trust and environmental cases Results of acquisitions and divestments (34) (11) Other incidental results (1) 7 Total (195) (91) • Higher restructuring costs are the result of t
Slide 17: Cash flows Q4 2012 clearly improved on last year
Cash flows Q4 2012 clearly improved on last year € million Q4 2012 Q4 2011 Profit for the period from continuing operations (19) (9) Amortization, depreciation and impairments 177 160 Change g working g capital 469 144 • Pension provisions (10) (37) • Restructuring 36 9 • Other provisions (2) (21) C
Slide 18: Operating Working Capital % of revenue reduced towards 12%
Operating Working Capital % of revenue reduced towards 12% OWC € million Operating Working Capital OWC as % of LQ revenue*4 2.500 15.1% 16% 14.1% 13.4% 13 9% 13.9% 13.8% 13.6% 13.2% 2,259 14% 2,314 2.000 2,111 2,051 2,178 1,946 , 11.2% 12% 1 891 1,891 1.500 1,659 10% 8% 1.000 6% 4% 500 2% 0 0% Q1 20
Slide 19: Pension deficit increases to €1.1 billion
Pension deficit increases to €1.1 billion Key pension metrics Q4 2012 Q3 2012 Discount rate 3.9% 3.9% Inflation assumptions p 2.4% 2.1% Pension deficit development during Q4 2012 € million Decrease Increase (879) (1,086) 24 10 145 ((447)) 61 Deficit end Q3 Top-ups p p Increased p plan Discount rates
Slide 20: Conclusion
Conclusion Ton Büchner Investor Update Full-Year 2012 & Q4 results 20
Slide 21: Conclusion
Conclusion • Solid fourth quarter quarter, despite economic slowdown • Performance improvement program targets exceeded • Focus remains on return on capital and cash generation • The economic environment remains challenging, challenging especially in Europe Investor Update Full-Year 2012 & Q4 result
Slide 22: Questions
Questions Investor Update Full-Year 2012 & Q4 results 22
Slide 23: Safe Harbor Statement
Safe Harbor Statement This presentation Thi t ti contains t i statements t t t which hi h address dd suchh kkey iissues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline, and product approvals. Such statements should be carefull
Slide 24: Appendices
Appendices Investor Update Full-Year 2012 & Q4 results 24
Slide 25: Returns on invested capital
Returns on invested capital Moving average ROI % 14% 12% 12.1% 10% 10.5% 10.0% 8% 6% 4% 2% 0% 2010 2011 2012 Investor Update Full-Year 2012 & Q4 results 25
Slide 26: Q4 2012 EBITDA – Cash bridge
Q4 2012 EBITDA – Cash bridge € million Q4 2012 Q4 2011 EBITDA before incidentals 363 352 Incidentals (cash) ((134)) ((65)) Change working capital 469 144 Change provisions 24 (49) Interest paid (62) (65) Income tax paid (30) (61) Net cash from operating activities 630 256 • Higher cash from operatin
Slide 27: AkzoNobel Group restatement for Decorative Paints North America divestment
AkzoNobel Group restatement for Decorative Paints North America divestment As Reported Restatements for NA Deco As Reported (excluding NA Deco) FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012 R Revenues 14 640 14.640 15 697 15.697 3 972 3.
Slide 28: Decorative Paints restatement for Decorative Paints North America divestment
Decorative Paints restatement for Decorative Paints North America divestment As Reported Restatements for NA Deco As Reported (excluding NA Deco) FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012 Revenues 4.968 5.296 1.242 1.551 1.456 -1.035
Slide 29: Other Activities restatement for Decorative Paints North America divestment
Other Activities restatement for Decorative Paints North America divestment As Reported Restatements for NA Deco As Reported (excluding NA Deco) FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012 Revenues -57 -104 -38 -48 -36 - 2 3 2 1 -57 -1