Slide 1: Delivering on growth
Hans Wijers, CEO Delivering on growth February 7, 2006 2005 Results Press Conference 1
Slide 2: Delivering on growth
Delivering on growth • Strategic progress • Revenues up • Net income up • Strong financial position 2
Slide 3: Revenues growth; net income up
Revenues growth; net income up • Revenues from present operations up 6% • EBIT down 3% • EBIT excluding incidentals 6% lower • Incidentals positive EUR 334 million • Net income up at EUR 961 million 3
Slide 4: Net income up
Net income up EUR mln or % 2005 2004 ∆% Revenues* 13,000 12,251 6 EBIT 1,486 1,527 (3) EBIT excl. incidentals 1,152 1,223 (6) Net income 961 945 2 EBIT margin, %* 11.4 7.5 EPS, EUR 3.36 3.31 Number of employees 61,340 61,450 * Present operations 4
Slide 5: Autonomous growth 4%
Autonomous growth 4% EUR bln Sales* Δ% Drivers 13.0 6 Organon 3 Volume/prices +4% Intervet 7 Currencies +1% Coatings 6 Acquisitions +1% Divestments -5% Chemicals 4 2005 * Present operations 5
Slide 6: Operational EBIT – down 6%
Operational EBIT – down 6% Drivers All units Revenues growth Organon Higher R&D/S&D spend Intervet Improved supply chain Impacted raw Coatings materials/weak EU markets Chemicals Restructuring offset higher energy costs 6
Slide 7: Organon - Birth control & Innovation
Organon - Birth control & Innovation 7
Slide 8: Organon – returning to growth
Organon – returning to growth • Revenues – up 3%; strong finish • Infertility products – excellent growth • NuvaRing® – sales and market share up • Lower EBIT – increased marketing and R&D spend • Positive incidentals of EUR 145 million 8
Slide 9: Organon – returning to growth
Organon – returning to growth EUR mln 2005 2004 ∆% Revenues 2,425 2,344 3 EBIT 415 275 51 EBIT excl. incidentals 270 326 (17) Ratios EBIT margin 17.1 11.7 S&D % revenues 32.9 32.8 R&D % revenues 17.9 16.9 9
Slide 10: Intervet - #3 worldwide in animal health
Intervet - # 3 worldwide in animal health 10
Slide 11: Intervet – excellent growth
Intervet – excellent growth • Revenues – 7% growth • EBIT margin of 21.8% • Benefiting from supply chain improvements • Feed additives divested • Acquisition AgVax • Nobilon – future growth platform 11
Slide 12: Intervet – strong year
Intervet – strong year EUR mln 2005 2004 ∆% Revenues 1,094 1,027 7 EBIT 238 184 29 EBIT excl. incidentals 209 173 21 Ratios EBIT margin 21.8 17.9 R&D % revenues 10.3 11.5 12
Slide 13: Coatings – innovative solutions for performance and environmental benefit
Coatings – innovative solutions for performance and environmental benefit 13
Slide 14: Coatings – tough start, strong finish
Coatings – tough start, strong finish • Revenue growth 6% • Lower EBIT – raw material prices and weaker EU economies • Strong recovery in H2 led by Industrial and Marine & Protective Coatings • Decorative Coatings – management reorganization to meet global challenge • Ongoing acquisitions and invest
Slide 15: Coatings – H1 raw material pressure, picked up in H2
Coatings – H1 raw material pressure, picked up in H2 EUR mln 2005 2004 ∆% Revenues 5,555 5,237 6 EBIT 384 406 (5) EBIT excl. incidentals 423 467 (9) Ratio EBIT margin 6.9 7.8 15
Slide 16: Chemicals – leadership in selected market segments
Chemicals – leadership in selected market segments 16
Slide 17: Chemicals – successful realignment
Chemicals – successful realignment • Growth of 4% • Efficiency measures offset high energy prices • Successful portfolio realignment; present operations record ROI • Base and Functional Chemicals – strong performance • Surfactants – clear improvement • Divestment program – progressing well 17
Slide 18: Chemicals – strong performance
Chemicals – strong performance EUR mln 2005 2004 ∆% Revenues 3,890 3,735 4 EBIT 312 265 18 EBIT excl. incidentals 351 349 1 Ratio EBIT margin 8.0 7.1 18
Slide 19: Incidentals - on balance EUR 334 million
Incidentals - on balance EUR 334 million + _ EUR mln EUR mln • Pension/ • Impairments/ Healthcare 283 restructurings 169 • Risperdal/Barr 258 • Remeron anti- trust 64 • Divestments 44 19
Slide 20: Cash flow impacted by pension accounting
Cash flow impacted by pension accounting Dec ‘05/Dec ‘04 ; EUR bln 2005 2004 Cash generated by operations 1.4 2.0 Net change in cash (0.4) 1.1 Incidentals - Dutch pensions deal 0.3 - Redemption bond 0.2 - Proceeds divestments Chemicals 1.0 20
Slide 21: Strong financial position, dividend maintained
Strong financial position, dividend maintained Dec ‘05/Jan ‘05 ; EUR bln 2005 2004 Equity 3.6 2.7 Net borrowings 1.6 1.4 Gearing (ratio) 0.44 0.52 YTD ratios Interest coverage 9.5 10.6 Dividend in EUR 1.20 1.20 21
Slide 22: Agenda 2006 – continue to enhance shareholder value
Agenda 2006 – continue to enhance shareholder value • Accelerate growth across portfolio –investments –acquisitions • Further unlock value pipeline Organon • Adjust cost structure in mature markets • New structure Deco businesses • Conclude chemicals divestment program 22
Slide 23: Akzo Nobel – delivering on growth
Akzo Nobel – delivering on growth 23
Slide 24: Safe harbor statement
Safe harbor statement* These sheets contain statements which address such key issues as Akzo Nobel’s growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements should be carefully considered, and i