Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — Q3 2009 Earnings Presentation
26 slides from Akzo Nobel's earnings presentation, Oct 27, 2009
Slide 1: Q3 2009 results
October 27, 2009 Q3 2009 results
Slide 2: Agenda
Agenda • Q3 Highlights and operational review • Financial review • Outlook and medium-term targets
Slide 3: Q3 Highlights and operational review
Q3 Highlights and operational review
Slide 4: Q3 Highlights
Q3 Highlights • Ongoing volume pressure • Strong company-wide focus on customers, costs and cash • Margin management and cost restructuring delivering results • Operating working capital reduced • Recovery remains fragile Q3 2009 results 4
Slide 5: Financial overview Q3 2009
Financial overview Q3 2009 • Revenue declined 10 percent to €3,639 million • EBITDA* of €549 million, up 4 percent, EBITDA margin at 15.1 percent • Restructuring continues • Net income: €197 million (2008: €152 million) • Operating working capital reduced to 14.5 percent of revenue (2008: 17.4 perce
Slide 6: Revenue growth and margin development per quarter to Q3 2009
Revenue growth and margin development per quarter to Q3 2009 Reported revenue in % year-on-year 10 (12)% 5 (6)% (8)% (10)% 0 -5 -10 -15 Decorative Paints Performance Specialty AkzoNobel Coatings Chemicals EBITDA margin in % 20 16.1% 16.7% 15.2% 15.1% 15 10 5 0 Decorative Paints Performance Specialty
Slide 7: Q3 2009 revenue
Q3 2009 revenue € million Q3 2009 Δ% Revenue 3,639 (10) Revenue development Q3 2009 vs. Q3 2008 0 -1 -2 -3 -4 -8% -5 -10% -6 -1% -7 -8 -1% -9 -10 Volume Price Acquisitions/ Currency Total divestments Increase Decrease Q3 2009 results 7
Slide 8: We are delivering on synergies and cost reduction
We are delivering on synergies and cost reduction Cumulative annualized savings € million 540 600 530 500 370 200 400 286 300 204 182 200 134 340 67 244 100 37 188 137 97 0 FY 2008 Q1 2009 Q2 2009 Q3 2009 FY 2011 target ICI synergies Additional restructuring Total cost savings targeted of at least €
Slide 9: ICI synergies and additional restructuring on track
ICI synergies and additional restructuring on track 2008 & YTD 2009 ICI Additional Total synergies restructuring Net FTE 1,742 2,240 3,982 reductions* Cash costs 142 167 309 (€ million) Annualized savings 244 286 530 (€ million) We will continue to pursue efficiency improvements: • Alignment of manu
Slide 10: Operational review Decorative Paints
Operational review Decorative Paints Q3 2009 results 10
Slide 11: Decorative Paints highlights Q3 2009
Decorative Paints highlights Q3 2009 • Revenue down 6 percent (Q2, 2009: 5 percent) • Volume decline of 9 percent (Q2, 2009: 10 percent) • EBITDA at €198 million (2008: €207 million) • Improved EBITDA margin at 15.2 percent (2008: 15.0 percent) • Trade market remains weak • Margins positively impact
Slide 12: Decorative Paints Q3 2009
Decorative Paints Q3 2009 € million Q3 2009 Δ% Revenue 1,299 (6) EBITDA* 198 (4) Ratio, % Q3 2009 Q3 2008 EBITDA* margin 15.2 15.0 Revenue development Q3 2009 vs. Q3 2008 0 -2 -6% -4 -9% -6 +4% +1% -2% -8 -10 Volume Price Acquisitions/ Currency Total divestments * Before incidentals Increase Decreas
Slide 13: Operational review Performance Coatings
Operational review Performance Coatings Q3 2009 results 13
Slide 14: Performance Coatings highlights Q3 2009
Performance Coatings highlights Q3 2009 • Revenue decreased by 12 percent • Volumes down 11 percent (Q2, 2009: 19 percent down) • EBITDA up 12 percent at €166 million (2008: €148 million); EBITDA margin at 16.1 percent • Cost levels decreased as restructuring programs continue • Improving performanc
Slide 15: Performance Coatings Q3 2009
Performance Coatings Q3 2009 € million Q3 2009 Δ% Revenue 1,030 (12) EBITDA* 166 12 Ratio, % Q3 2009 Q3 2008 EBITDA* margin 16.1 12.7 Revenue development Q3 2009 vs. Q3 2008 0 -5 -12% -11% +1% -1% -10 - -1% -15 Volume Price Acquisitions/ Currency Total divestments * Before incidentals Increase Decre
Slide 16: Operational review Specialty Chemicals
Operational review Specialty Chemicals Q3 2009 results 16
Slide 17: Specialty Chemicals highlights Q3 2009
Specialty Chemicals highlights Q3 2009 • Revenue decreased by 8 percent • Volumes down 6 percent (Q2 2009: 18 percent) • Cost and cash savings initiatives gathered momentum, with programs in all businesses • EBITDA at €220 million (2008: €242 million) with margin at 16.7 percent (2008: 16.8 percent)
Slide 18: Specialty Chemicals Q3 2009
Specialty Chemicals Q3 2009 € million Q3 2009 Δ% Revenue 1,319 (8) EBITDA* 220 (9) Ratio, % Q3 2009 Q3 2008 EBITDA* margin 16.7 16.8 Revenue development Q3 2009 vs. Q3 2008 0 -2 -6% -4 -8% -6 +3% -8 -5% -10 -12 Volume Price Acquisitions/ Currency Total divestments * Before incidentals Increase Decre
Slide 19: Financial review
Financial review
Slide 20: Cash management discipline
Cash management discipline • OWC reduction Focus on • Capex prioritization cash • R&D stable • Only bolt-on acquisitions • Dividend policy unchanged • OWC reduced to 14.5% of revenue (Q3 2008: 17.4%) • Careful prioritization of Capex • We continue to look for attractive bolt-on acquisitions • Divide
Slide 21: Continued focus on Operating Working Capital is delivering results
Continued focus on Operating Working Capital is delivering results OWC € million 3000 20% 19% 18% 17% 2500 16% 15% 14% 2000 13% 12% 11% 1500 10% 3Q08 4Q08 1Q09 2Q09 3Q09 OWC OWC as % of revenue Q3 2009 results 21
Slide 22: Medium-term targets
Medium-term targets
Slide 23: Well positioned to meet current challenges
Well positioned to meet current challenges Sound fundamentals • Strong market positions and brands • Diverse geographic spread in highly attractive sectors • Strong operating cash flow Actions • Continued focus on customers • Rigorous cost restructuring • Cash protection • Prudent capital allocation
Slide 24: Outlook and medium-term targets
Outlook and medium-term targets Focus continues to be given to customers, cost reduction and cash generating actions so that the company is well positioned to meet the current challenges and, as a result, will be in good shape to take advantage of the recovery when it comes. However, the economic re
Slide 25: Q&A
Q&A
Slide 26: 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