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Akzo Nobel N.V. 

AkzoNobel Q3 2011 Analyst Factsheet 

20 October 2011 • • • • • • •

Revenue up 5 percent to €4 billion, driven by pricing actions to offset raw material cost inflation Weaker economic conditions and continued raw material price inflation impacted results, particularly in Decorative Paints EBITDA decreased to €507 million (2010: €574 million) Net income €149 million (2010: €238 million) Adjusted earnings per share €0.91 (2010: €1.19) Interim dividend of €0.33 per share declared, up 3 percent Major performance improvement program launched to deliver €500 million EBITDA in 2014

Figure 1: key Q2 metrics 2010

   € million unless stated otherwise

2011

Q3

Q4

Q1

Q2

Q3

Decorative Paints Performance Coatings Specialty Chemicals Other

1,372 1,239 1,272 (16)

1,139 1,238 1,259 (16)

1,196 1,237 1,351 -(22)

1,461 1,312 1,350 (26)

1,435 1,295 1,349 (28)

Group Revenue Decorative Paints Performance Coatings Specialty Chemicals Other

3,867 198 166 254 -44

3,620 63 147 221 -54

3,762 90 143 241 -37

4,097 191 170 220 -30

4,051 148 157 238 -36

EBITDA D&A Incidentals

574 (146) (47)

377 (155) (63)

437 (148) (12)

551  (15)0 

507  (155) 

27

(51)

Operating Income Finance Income/expenses Associates

381 (70) 9

159 (56) 4

277 (63) 7

428 (64) 8

428 (70) 9

PBT Tax Charge Non-controlling interests

320 (81) (22)

107 40 (17)

221 (73) (16)

372 

240 

(99) (22)

(74) (18)

Net Income (continuing operations)

217

130

132

Tax Rate

25%

(37%)

33%

251  27% 

148  31% 

 

Operational detail • •

•

• • •

Revenue growth was achieved in all three Business Areas, driven by a combination of volume and price gains but offset by adverse exchange rate movements Raw materials have continued to impact our margins in the third quarter, particularly visible in Decorative Paints. Sequentially compared to the second quarter, raw material costs have risen around 2 percent, and compared to the third quarter last year around 15 percent. For the quarters to come we anticipate most of the raw materials to rise, albeit with a more moderate pace, except for titanium dioxide which continues to be faced with tight supply circumstances, causing further upward price pressure. Decorative Paints reported a 25% year-on-year reduction in Q3 EBITDA, this is a reflection of increased raw material costs and unfavourable mix effects resulting in a lower profit margin Performance Coatings reported a 5% fall in EBITDA as a result of the same impacts experienced in Decorative Paints although the adverse mix affects were more keenly felt in high growth economies Specialty Chemicals’ EBITDA fell 6% through a combination of raw material inflation and exchange rate movements, against a very strong Q3 2010.

Figure 2: volume & price/mix in % (quarterly basis year-on-year)

Volume

Q2  Decorative Paints Performance Coatings Specialty Chemicals

6% 2% 1%

Average development

3%

• •

Q3  4%  1%  (1%) 1% 

Price/mix

Q2  2% 3% 8% 4%

Q3  3%  7%  8%  6% 

Acquisitions/ Divestments

Exchange rates

Q2 

Q3 

Q2 

3% -

-

‐  -

(4%) (4%) (2%)

1%

‐ 

(3%)

Q3  (2%)  (3%)  (1%)  (2%) 

Total

Q2  4% 4% 7% 5%

Q3  5% 5% 6% 5%

Performance Improvement Program launched to deliver €500m additional EBITDA in 2014 Program will standardize, simplify and rationalize AkzoNobel’s current portfolio of businesses, leveraging the Group’s scale and leadership positions by transferring best practices and consistent methodologies.

Balance sheet detail • • •

Pension deficit widened to €661 million since 2Q 2011. In September 2011, we have renewed our five year multi-currency syndicated revolving credit facility for €1.8 billion (previously: €1.5 billion). Net debt increased from €936 million at year-end 2010 to €1,595 million at the end of Q3

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Figure 3: 9 Month Analysis Group 9 months 2011

9 months 2010

Δ%

Revenue

11,910

11,020

8

EBITDA

1,495

1,587

(6)

EBITDA margin (in %)

12.6

14.4

Net income

545

592

(9)

Decorative Paints 9 months 2011

9 months 2010

Δ%

Revenue

4,092

3,829

7

EBITDA

429

485

(12)

EBITDA margin (in %)

10.5

12.7

9 months 2011

9 months 2010

Δ%

Revenue

3,844

3,548

8

EBITDA

470

500

(6)

EBITDA margin (in %)

12.2

14.1

9 months 2011

9 months 2010

Δ%

Revenue

4,050

3,684

10

EBITDA

699

718

(3)

EBITDA margin (in %)

17.3

19.5

Performance Coatings

Specialty Chemicals

 

3