Akzo Nobel N.v. · EURONEXT:AKZA
Akzo Nobel — Q3 2023 Earnings Presentation
16 slides from Akzo Nobel's earnings presentation, Oct 25, 2023
Slide 1: Investor update Q3 2023
Investor update Q3 2023 October 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: Q3 2023 Highlights
Q3 2023 Highlights Profit rebound continuing on margin expansion, deleveraging gathering speed Q3 2023 y-o-y YTD 2023 y-o-y • Revenue growth of 5% in CC • Revenue growth of 5% in CC • Volumes resilient, flat in the quarter • ROS at 10.5% (vs 8.0% YTD’22) • ROS at 11.8% (vs 6.4% in Q3’22) • Margin1 e
Slide 4: Business update
Business update Mixed trends, volume rebound not yet visible, easier comps in Q4 Q3 2023 Q4 2023 Paints EMEA Demand continuing to stabilize, Europe flat Flat Flat Paints LATAM Soft market conditions -MSD% Paints China Continuation of H1 trend +HSD% Paints South Asia Mixed market conditions dictating
Slide 5: Q3 Business performance
Q3 Business performance Strong margin expansion in both Paints and Coatings, FX headwinds AkzoNobel Paints Coatings Q3 revenue development % y-o-y Q3 revenue development % y-o-y Q3 revenue development % y-o-y 1 1 (9) 3 1 1 (8) 1 1 (10) 3 3 0 (4) 0 (3) 0 (5) Volumes Price/ M&A Hyper- FX Revenue Volum
Slide 6: De-levered to 3.2x Net Debt/EBITDA in Q3
De-levered to 3.2x Net Debt/EBITDA in Q3 Rebounding EBITDA and improving working capital supporting FCF Adjusted EBITDA Operating working capital Operating Free cashworking flow (FCF) capital (€m) (% of revenue) (€m) 1,116 18.0% 380 17.4% 17.5% 937 17.0% 243 54 414 283 -224 Q3‘22 Q3’23 YTD’22 YTD’23
Slide 7: 2023 Outlook
2023 Outlook Delivering on priorities – outlook reaffirmed 2023 Priorities 2023 Outlook Pricing discipline • Adjusted EBITDA: around €1.45bn • Volumes: ~flat Realize benefit from raw material deflation • Year-end leverage: <3x (Kansai Paint Africa acquisition not expected to close in 2023) Reduce co
Slide 8: Industrial Transformation
Industrial Transformation Unlock value in integrated supply chain Cost savings: €180-200m • Optimize footprint Reduce complexity • Reduce unit production cost €250m • Reset distribution model Improve asset utilization value unlock Efficiency gains: €50-70m in 2027 Modernize anchor sites • Increase a
Slide 9: Three-pronged transformation
Three-pronged transformation Deco Europe under way, Coatings implementation starting 1 Deco Europe 2 Coatings Europe & US 3 LATAM & Asia Key • Harmonize formulations • Implement business-specific • Historically highest maturity elements supply chains levels • Rationalize raws & packs • Improve asset
Slide 10: Industrial Transformation delivering €250m benefit
Industrial Transformation delivering €250m benefit Full potential in 2027 Deco Europe 65-85 Investment over three years (2024-2026) Coatings Europe & US 115-135 LATAM & Asia 40-60 • Identified items: €130-150m Totalbenefit Total benefit €250m • CAPEX: ~€150m, incremental to normative level Cost savi
Slide 11: Contact and upcoming events
AkzoNobel Media Relations T +31 (0)88 - 969 7833 Upcoming events Contact: Joost Ruempol Ex-dividend date of 2023 interim dividend October 30, 2023 media.relations@akzonobel.com Record date of 2023 interim dividend October 31, 2023 Payment date of 2023 interim dividend November 9, 2023 AkzoNobel Inve
Slide 12: Price/mix and volumes
Price/mix and volumes AkzoNobel Paints Coatings price/mix (% y-o-y) 1616 1919 12.5 14 1414 1313 6 12 7 7 11 6 5 4 11 4 5 4 10 111111 3 1 2 2 -1 1 -1 1 7 5 3 2 1 2 1 -2 10 5 5 3 0 3 0 1 0 -2 4 8 4 3 -4 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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
Slide 14: Additional financial information
Additional financial information Consolidated statement of free cash flows Operating income to net income Q3’22 Q3’23 € million YTD’22 YTD’23 Q3’22 Q3’23 € million YTD’22 YTD’23 265 443 EBITDA 878 1,079 168 354 Operating income 605 815 2 — Impairment losses 6 2 (33) (68) Financing income and expense
Slide 15: Alternative performance measures
Alternative performance measures Q3 Q3 YTD YTD Q3 Q3 YTD YTD Average invested capital (€m) 2022 2023 Δ% Operating income (€m) 2022 2023 Δ% 2022 2023 OPI margin (%) 2022 2023 Oct 2021 - Sep 2022/Oct 2022 - Sep 2023 2022 2023 Δ% 102 156 53% Decorative Paints 341 401 18% 8.8 13.9 Decorative Paints 10.2
Slide 16: ESG ratings
ESG ratings 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 16 Investor update | Q3 2023 1. The lower risk, the