Slide 1: Investor update Q2 2023
Investor update Q2 2023 July 25, 2023
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: Q2 2023 financial highlights
Q2 2023 financial highlights Profit growth driven by solid pricing and resilient volumes Q2 2023: H1 2023: Revenue Pricing Revenue Margin expansion Price vs raws & freight Up 3% in CC Up 5% Up 5% in CC €€209m (down 4% vs Q2’22) (Flat vs H1’22) Adjusted ROS Adjusted Leverage operating income EBITDA €
Slide 4: Q2 2023 business highlights
Q2 2023 business highlights Sustainability enabling commercial gains Completing our portfolio to extend our Sustainable solutions driving share leadership in beverage coatings gains in high-value vessels Launch of BPA-free internal coating for beverage can tops Supply contracts for new-build LNG car
Slide 5: Volume projections update for 2023
Volume projections update for 2023 No clear acceleration yet but easier H2 comps H1 2023a FY 2023e Consumer confidence recovering Paints EMEA -LSD% -LSD% DIY up sequentially, Pro rebounding Market softer than anticipated Paints China +MSD% +DD% Easier comps in H2 Paints South Asia Mixed H1 trends to
Slide 6: Q2 2023 financial performance
Q2 2023 financial performance Up on resilient volume and robust pricing, unfavorable FX AkzoNobel Paints Coatings Q2 revenue development % y-o-y -2 2 -1 -8 5 1 -7 5 4 1 -1 -4 -1 -3 -1 -2 -7 -5 Volumes Price/ M&A Hyper- FX Revenue Volumes Price/ M&A Hyper- FX Revenue Volumes Price/ M&A Hyper- FX Reve
Slide 7: Q2 profit bridge
Q2 profit bridge Solid pricing, raw mats becoming favorable, FX headwind Adjusted OPI (€m) 5 -19 -27 -11 ROS 11.3% 144 ROS 8.7% -17 -13 - - 311 249 Q2 Q2 2022 2022 Volumes Volumes Mix Mix Price Price Raw material Raw material & and OPEX OPEX & FX FX Hyperinflation Hyperinflation Q2 Q2 2023 2023 frei
Slide 8: Pricing vs raw materials and freight costs
Pricing vs raw materials and freight costs First benefits of raw material deflation at group level Raw material and freight inflation1 Pricing Quarterly adj. OPI impact y-o-y, €m €2bn cumulative raw €2.3bn cumulative material inflation pricing €5m deflation Pricing2 y-o-y 26% 25.5% 123 23.5% Pricing
Slide 9: Leverage improves in line with expectations
Leverage improves in line with expectations Strong FCF on profit rebound and OWC management Adjusted EBITDA Operating working capital Free cash flow (FCF) (€m) (% of revenue) (€m) 2022 2023 2022 2023 2022 2023 702 249 654 18.6% 17.5% 137 17.4% 16.5% 397 337 -119 -278 Q2 H1 Q2 H1 Q1 Q2 Q1 Q2 Q2 H1 Q2
Slide 10: 2023 priorities and outlook
2023 priorities and outlook Executing on priorities, guidance increased 2023 Priorities 2023 Outlook Pricing discipline Adjusted EBITDA: €1,400–1,550m Volumes ~flat y-o-y Realize benefit from Year-end leverage: <3.4x (incl. Kansai Paint Africa acquisition) raw material deflation Reduce costs Post-20
Slide 11: Q3 results: October 25, 2023
Q3 results: October 25, 2023 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 performance measures to the most directly
Slide 12: Pricing remains robust, Q2 pricing up 5%
Pricing remains robust, Q2 pricing up 5% AkzoNobel Paints Coatings Quarterly price/mix development (% y-o-y) +18% price +4% price +16% price +13% price +1% mix -% mix -% mix +5% price -2% mix -% mix +6% price -1% mix 1616 12.5 1919 1313 6 12111111 7 7 14 1414 6 5 4 11 4 5 4 2 1 10 10 3 3 11 1 2 2 1
Slide 13: 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 opera
Slide 14: 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 2022 2023 € million 2022 2023 2022 2023 € million 2022 2023 292 367 EBITDA 613 636 205 279 Operating income 437 461 1 2 Impairment losses 4 2 (28) (45) Financing income a
Slide 15: Alternative performance measures
Alternative performance measures Q2 Q2 H1 H1 Q2 Q2 H1 H1 Average invested capital (€m) 2022 2023 Δ% 2022 2023 Δ% Operating income (€m) 2022 2023 Δ% 2022 2023 OPI margin (%) 2022 2023 Jul 2021 - Jun 2022/Jul 2022 - Jun 2023 128 151 18% Decorative Paints 239 245 3% 10.9 13.2 Decorative Paints 11 11.2
Slide 16: Recognized sustainability leader in the industry
Recognized sustainability leader in the industry Only paints and coatings company AAA in MSCI AkzoNobel Peer average Top 1% all companies assessed by EcoVadis AkzoNobel Peer average Low risk rating Sustainalytics1 AkzoNobel Peer average 1. The lower risk, the better. Investor update | Q2 2023 16