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Leading market positions delivering leading performance Ton Büchner & Keith Nichols February 20, 2013
Agenda 1.
Introduction
2.
Market environment
3.
Group strategic update
4.
Business Areas Coffee break
5.
Financial implications
6.
Summary and conclusion Questions
Strategy Update 2013
2
1. Introduction 1. Introduction 2. Market environment 3. Group strategic update 4. Business areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013
3
Our proposition: Leading market positions delivering leading performance AkzoNobel has gone through a significant amount of strategic change over the past five years Today, the company has • Excellent portfolio of businesses • Good long term growth potential on the basis of end-user segment growth • Strong positions in high growth markets (44% of revenue) • Leadership positions in many markets • Clear leader in sustainability • Track record of delivering sustainable innovations and products • Strong brands, both in consumer and industrial markets Clear focus to deliver on our significant potential • Improved returns and cash flow • Leveraging scale • Simplification and standardization • Continued innovation
Strategy Update 2013
4
AkzoNobel strategy
Strategy Update 2013
5
New and realistic 2015 financial targets focused on quality of earnings and value creation Return on sales (Operating income/revenue) %
Return on investment (Operating income/average 12 months invested capital) %
Net debt/EBITDA x
12
16
3
8
9.0 5.9 *
12
14.0 8.9 *
2
8
4
0 2012
2015
2.0
1.4
1
4
0
<
0 2012
2015
2012
2015
Assumes sales growth (CAGR) for the period of 4%
*2012 excluding impairment (€2.1 billion) and after IAS19
Strategy Update 2013
6
AkzoNobel today • • • •
Revenue €15.4 billion 50,610 employees 44% of revenue from high growth markets Major producer of Paints, Coatings and Specialty Chemicals • Leadership positions in many markets
Revenue by Business Area
Operating income* by Business Area
EBITDA** by Business Area Performance Coatings
36%
37%
38%
44%
27%
5.4% Growth 2012 vs. 2011
48%
8%
5.9% Return on sales (operating income/revenue)
*2012 excluding impairment (€2.1 billion) **New definition including incidentals and after IAS19
Decorative Paints
47%
Specialty Chemicals
15%
10.4% EBITDA/revenue
Strategy Update 2013
7
2013 market conditions not expected to improve significantly 2012 showed challenging market conditions in most end-user segments and geographical end markets Key developments in 2012: • Divestment of Decorative Paints North America announced • Impairment of €2.1 billion on continued operations • Exceeded Performance Improvement Program intermediate targets
2013 market conditions are not expected to improve significantly • Focus will be on: – Organic growth – Operating income – Return on capital – Operating cash flow • Management remuneration has been adapted accordingly • Continue building on our end-user segments and strong high growth market positions • Key management changes
Strategy Update 2013
8
2. Market environment 1. Introduction 2. Market environment 3. Group strategic update 4. Business Areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013
9
~43% of revenues
~16% of revenues
New Build Projects
Automotive OEM, Parts and Assembly
Maintenance, Renovation and Repair Building Products and Components
~16% of revenues Consumer Durables Consumer Packaged Goods
Automotive Repair Marine and Air Transport
~25% of revenues Natural Resource and Energy Industries Process Industries
Strategy Update 2013 10
In Buildings and Infrastructure, our main market is in renovation and repair New non-residential construction $ billion, output
Residential housing completions Thousand units
Total market maintenance and repair $ billion, output
BRIC CAGR 0.0%
BRIC CAGR 13.3%
2011 = 11,845 2011 = 1,222
2011 = 1,557
2011 = 3,943 2011 = 1,075
2011
12
13
EUR & US CAGR 4.2%
EUR & US CAGR 3.1%
14
Source: IHS / Construction IC
15
16
BRIC CAGR 12.3%
2011 = 410 EUR & US CAGR 0.4%
2011
12
13
14
Source: Euromonitor International
15
16
2011
12
13
14
15
16
Source: IHS / Construction IC
Strategy Update 2013 11
Buildings and Infrastructure trends and implications for strategy and actions Recent trends • Market contraction • Limited recovery • Mortgage markets restricted • Fewer house purchases
Impact on strategy and actions going forward • Invest further in our strong positions in the high growth markets • Restructure proactively in mature markets, primarily Europe • Build re-paint culture in high growth markets
• High growth market outlook positive • Lower growth in the future • Increased demand for improved sustainability in housing
• Continuously innovate to improve sustainability for – Product itself – Application – End-use
• Some government stimulus packages for infrastructure
Strategy Update 2013 12
In Transportation, our main markets are vehicle refinish and marine Light vehicle production and sales Million units
Vehicle (car) miles driven Billion car kilometers
Freight rates ClarkSea* index $ earnings/day
Production 2011 = 77, CAGR 4.8% Sales 2011 = 76, CAGR 4.9% West Europe 2011 = 2,741 growth 2012 = -0.3% US 2011 = 2,550 growth 2012 = -0.7%
2012 avg = $9,945
China 2011 = 1,120 growth 2012 = 10.2% 2011
12
Source: IHS
13
14
15
16
2011
12
13
14
15
16
Source: Historical data (through 2012) IRF / Euromonitor International; management estimates for forward looking data
2006
08
10
12
14
16
* Weighted average of tanker, bulk carrier, containership and gas carrier earnings Source: Historical data (through 2012) Clarkson Research Services Limited; management estimates for forward looking data
Strategy Update 2013 13
Transportation trends and implications for strategy and actions Recent trends • Continued growth • Shift to Asia in automotive manufacture and demand • Increasing use of lighter/ different materials • Vehicle car park increasing, but repair rate decreasing
• Considerable reduction in new ship building • Reduced maintenance spend as shipping rates fell
Impact on strategy and actions going forward • Adapt value proposition and distribution models for high growth market success • Restructure and reconfigure in contracting segments and geographies • Innovate to improve functionality, sustainability and margins • Strengthen business models to support our customers on the maintenance aspects
• Airplane miles continuing to increase after recession
Strategy Update 2013 14
Consumer Goods trends and implications for strategy and actions Recent trends • Continued growth • Geographic shift to Asia in demand, production and design
Impact on strategy and actions going forward • Ensure both production and design presence in high growth countries • Manage margins and/or restructure in lower value segments
• Significant drop in demand in mature markets during the recession • Recovery muted thus far
• Improve multi-level relationships (e.g. OEM, ODM) • Differentiate through color, design, and customer process improvement
• Different types of demand • „Vanishing middle‟ in mature markets • Affordable products are the focus for growth elsewhere
Strategy Update 2013 15
Industrial trends and implications for strategy and actions Recent trends
Cyclical sectors but AkzoNobel segments are on different cycles Recession impact muted due to strong demand in high growth countries Particularly strong growth in oil and gas due to high prices and feedstock shifts Government encouragement of investment in (renewable) energy
Impact on strategy and actions going forward • Adapt our structure in mature markets • Expand production and sales force in the high-growth markets • Increase focus and investment in more differentiated products • Innovate for additional functionality and sustainability • Manage margins as raw materials fluctuate
Pulp and paper lower growth but more stable
Strategy Update 2013 16
High growth markets are 44% of revenue and their importance will increase % of 2012 revenue, excluding Decorative Paints North America 38% Mature Europe
Three year GDP growth* 9%
6%
3%
8% Emerging Europe
15% North America
0% UK
Eurozone
USA
2013
2% Middle East and Africa
Latin America 2014
China
Developing Asia
2015
26% Asia Pacific
11% Latin America
Our goal: Greater than 50% of revenues from high growth markets
*Source: EIU: GDP year on year growth in local currency at constant prices
Strategy Update 2013 17
Capital allocation policy is focused on high growth markets and efficiency Capital expenditure 2012, 100% = €826 million (5.4% of revenue)
Major projects underway and timing of spend Business Area
2% 15%
25% 58%
Performance Coatings
Decorative Paints
Specialty Chemicals
Other
• Capital expenditure will be around 4% of revenues going forward
Investment 2012 2013 project
Performance Coatings
China expansion
Decorative Paints
UK megaplant
Decorative Paints
China expansion
Specialty Chemicals
Ningbo multisite
Specialty Chemicals
Frankfurt membrane
Specialty Chemicals
Brazil Eldorado
Specialty Chemicals
Brazil Suzano
2014 2015
• 40-50% growth related
Strategy Update 2013 18
Consumer confidence impacts three of our segments Recent trends
Consumer confidence Q4 2012 150 125 100 75 121 50
111
108 89
87
80
79
76 52
25 0 India
Brazil
China
US
Germany
Source: Nielsen, Consumer confidence figures below 100 demonstrate some degree of pessimism
Sweden
UK
Netherlands
France
Strategy Update 2013 19
Purchase Managers’ Index (PMI) shows a clear change in trend in Q4 2011 PMI 60
•
US, China, India and Brazil indicate expansion of manufacturing
•
Eurozone indicates further contraction
•
PMI is a good indicator for our Industrial segment
55
50
45
40 Dec-09
Dec-10 Global
Source: JP Morgan
Eurozone
Dec-11 US
China
Dec-12 Brazil
Strategy Update 2013 20
AkzoNobel benefits from its broad end-user segmentation and geographical presence •
AkzoNobel’s four end-user segments show a mixed picture for future development – Buildings and Infrastructure faces challenges, especially in Europe – Marine transportation shows reduced activity levels – Consumer Goods, Industrial, automotive and air transport are reasonably robust
•
High growth markets show stronger demand developments in virtually all segments
•
North America shows earlier signs of recovery compared to Europe
•
Consumer confidence varies strongly per region and has a clear influence on significant end user buying decisions (housing, cars, furniture, etc.)
•
The optimism levels reflected in the Purchasing Managers‟ Index (PMI) will have a positive impact on our Industrial segments
Strategy Update 2013 21
3. Group strategic update 1. Introduction 2. Market environment 3. Group strategic update 4. Business Areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013 22
The vision and new targets Vision: Leading market positions delivering leading performance To be a leader in: • Operating efficiency and customer service • Innovation • Sustainability
New targets • • • •
Return on sales (ROS, operating income/revenue) Return on investment (ROI, operating income/average 12 months invested capital) Carbon emissions across the value chain Eco-premium products
Strategy Update 2013 23
AkzoNobel strategy
Strategy Update 2013 24
We will drive five strategic focus areas 1. Care for the customer
1. Care for the customer
2. Reduction of product and process complexity 3. Focus on cash and return on investment
3. Cash and return on investment
4. Embedded safety and sustainability
4. Embedded safety and sustainability
5. Diverse and inclusive talent development
5. Diverse and inclusive talent development Strategy Update 2013 25
The company core processes will support our strategic focus areas Core processes
Behavior-based and process safety
Process owner
Integrated Supply Chain (HSE)
Operational control cycle
CEO/CFO
Continuous improvement
Integrated Supply Chain (Operations)
Innovation
Procurement
Talent management
RDI Integrated Supply Chain (Procurement) HR
Strategy Update 2013 26
Actions
> Deliver dependably > Grow organically > Innovate > Simplify > Standardize > Continuously improve
Strategy Update 2013 27
Strategy on a page
Strategic focus areas
Processes
Actions
End-user segmentation
• Care for the customer • Reduction of product and process complexity • Cash and return on investment • Embedded safety and sustainability • Diverse and inclusive talent development
• Behavior-based and process safety • Operational control cycle • Continuous improvement • Innovation • Procurement • Talent management
• • • • • •
• Buildings and Infrastructure • Transportation • Consumer Goods • Industrial
Deliver dependably Grow organically Innovate Simplify Standardize Continuously improve
Strategy Update 2013 28
Our sustainability strategy: Creating more value with fewer resources More customer value in our end-user segmentation
Resource scarcity across the value chain will create opportunities Scope 3 upstream
Scope 1 and 2
Raw materials
Own operations, including energy use
Scope 3 downstream
Customer operations
End-user
End of life
Scope 4 Energy/ resource benefits in use
Strategy Update 2013 29
Sustainability is business; Business is sustainability •
„Downstream eco-premium solutions’: 20% of our revenues by 2020 We will increase the revenue from solutions that generate direct resource and energy benefits for our customers, consumers and users
•
Reduction of carbon emissions 25-30% reduction per ton by 2020 (2012 base) We will reduce our carbon emissions through the value chain
•
Resource efficiency As of 2014 AkzoNobel will report on an innovative new index measuring how we improve resource efficiency across the full value chain - compared to the value we generate
Strategy Update 2013 30
End-user segment trends, combined with sustainability, direct our innovation spend
End-user segments
Sustainability Sustainability = Business Business = Sustainability
Direction of innovation spend (2.5% of 2012 revenue)
Strategy Update 2013 31
AkzoNobel delivers innovation Buildings and Infrastructure Dulux Guardian
Transportation Aerobase Coating System
A premium, low-VOC and low-odor soft-sheen emulsion for interior walls
A consistently performing OEM-approved low VOC base coat/clear coat system for aerospace
Consumer goods Biostyle™ CGP
Industrial Monochloroacetic acid (MCA)
A range of sustainable hybrid polymers for consumer applications
An asset-light approach to sustainable chemical production using proprietary hydrogenation technology
Strategy update 2013 32
Performance Improvement Program to deliver €500 million in 2013, one year earlier than planned Performance Improvement Program
Operational Excellence
Functional Excellence
Business Unit Adaptations
Key summary to date
2013 Plan
• Gains of €250 million, excluding Decorative Paints North America • Costs of €292 million, excluding Decorative Paints North America • Pulled actions and associated costs forward • Added measures (including European Decorative Paints) with additional cost in 2012
• Accelerate delivery of recurring €500 million EBITDA gain in 2013, which was originally intended in 2014 • Associated cost is estimated at €205 million • Guidance of €500 million remains even though North America Decorative Paints will be divested • Added measures included
Strategy Update 2013 33
Moving from project based to continuous improvement will be core in 2013 Operational Excellence
• • •
Product and margin management Consolidation of RD&I Logistic and warehouse optimization
Functional Excellence
• • •
IT infrastructure simplification HR shared service model Finance shared service centers
•
Organizational redesign of Marine and Protective Coatings, Wood Finishes and Adhesives, and Pulp and Performance Chemicals Additional restructuring of Decorative Paints Europe
Business Unit Adaptations
Embedding
• •
During 2013, we will embed continuous improvement in our businesses
Strategy Update 2013 34
Our actions in 2012 have simplified the Business Areas Business Area
Decorative Paints
Business Units
• Europe • Latin America • Asia
Performance Coatings
• • • •
Marine and Protective Coatings Automotive and Aerospace Coatings Powder Coatings Industrial Coatings
Specialty Chemicals
• • • •
Functional Chemicals Industrial Chemicals Surface Chemistry Pulp and Performance Chemicals
2012 Actions
•
Announced divestment of North America Decorative Paints
• •
Reduction of business units Wood finishes is now part of Industrial Coatings Specialty finishes, previously in Industrial Coatings, is now with Automotive
•
•
Completed divestment of Chemicals Pakistan
Strategy Update 2013 35
AkzoNobel strategy
Strategy Update 2013 36
4. Business Areas 1. Introduction 2. Market environment 3. Group strategic update 4. Business Areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013 37
The global paints and coatings market is around €75 billion By market sector 2011, 100% = €75 billion
Aerospace Yacht Packaging Coil Marine Wood
By end-user segment 2011, 100% = €75 billion
Industrial
Decorative Paints (43%)
Consumer Goods
Buildings and Infrastructure
Vehicle Refinish Powder
Transportation
Protective
Performance Coatings (57%)
General Industrial
Source: Orr & Boss; management analysis
Automotive OEM
Strategy Update 2013 38
AkzoNobel has many leading market positions No.1 Position
Decorative
Multiple regions outside North America North America*
Other key players PPG, regional players
Sherwin-Williams
PPG, regional players
Protective
Sherwin-Williams, Jotun
Powder
Axalta, Jotun, regional players
Auto refinish
Axalta
PPG, AkzoNobel
Wood
Sherwin-Williams, Valspar
Marine
Jotun, Chugoku
Coil
PPG, Beckers
* AkzoNobel not present with North America divestment to PPG
Strategy Update 2013 39
Decorative Paints overview Revenue by end-user sub-segment
Revenue by geographic region
New build projects
Mature Europe
8%4%
Maintenance, renovation and repair
16%
Asia Pacif ic
14%
Latin America
49% 84%
25%
Emerging Europe Other regions
Decorative Paints key figures (new definition)
€ million
2012*
BA-level core processes and capabilities
Revenue
4,297
• • • • •
EBITDA Operating income
284 94
Return on sales
2.2%
Return on investment
3.0%
# Employees
Branding Distributor, wholesaler, retail management Understanding and serving professional painters Consumer inspiration Quality management, including product portfolio management
17,020
*After the divestment of Decorative Paints North America, excluding impairment (€2.1 billion)
Strategy Update 2013 40
Decorative Paints sees limited overall market sector growth in the near future End-user sub-segment New build projects
Maintenance, renovation and repair
Geographic region
Europe North America Asia Latin America
Europe North America Asia Latin America
Forward looking trends
Revenue by Business Unit
Europe
24% Latin America
14%
62%
Asia
Expected market growth for the market sectors relevant to AkzoNobel: 3-4%
Strategy Update 2013 41
After the divestment of North America, our focus is on adapting Europe, and investing in high growth markets Europe
High growth markets
•
European organization de-layered
•
Additional investment in China
•
Better proximity to customers
•
Continuously expanding the franchise network in China, India, and South East Asia
•
Implemented standard processes and merged ERP system to one
•
Stronger focus on Eastern Europe, Middle East and Africa
•
Expansion of activities in Latin America
•
Implementing a single business entity
•
Restructuring cost and benefits for 2013 included in Performance Improvement Program
•
Additional costs are expected in 2014; total recurring operational benefits of €100 million will be realized by end of 2014
Strategy Update 2013 42
Decorative Paints strategic direction Noteworthy events 2012 • Launched “Let‟s Color” brand and campaign globally • Global campaigns to inspire customers • Expanded store network in China and India • Announcement divestment of Decorative Paints North America • Realigning and restructuring European business Actions going forward • Expand manufacturing capacity in China and India • Expand market presence in emerging Europe and the Middle East • Complete the divestment of North America • Launch new products for the high growth markets • Deliver on the realignment of the European organization
Expected 2015 financial outcomes • Organic revenue growth: 5% • Return on sales: 7.5% • Return on investment : 12%
Strategy Update 2013 43
Performance Coatings overview Revenue by end-user segment
Revenue by geographic region Mature Europe
8% 4%
Transportation
14%
36% 23%
Consumer Goods
11%
27%
Asia Pacific
Buildings and Infrastructure Industrial
North America
30%
27%
20%
Emerging Europe Latin America Other regions
Performance Coatings key figures (new definition) € million
2012
BA-level core processes and capabilities
Revenue
5,702
• • • •
EBITDA
673
Operating income
542
Return on sales
9.5%
Return on investment
21.7%
# Employees
21,310
Industrial key account management Technical support and service Design, color and color matching Continuous innovation in functionality and ease-of-use • Sustainable, safe solutions
Strategy Update 2013 44
Performance Coatings sees growth in several key market sectors End-user segment
Performance Coatings market sectors serving the segment
Transportation
Automotive and air Marine transport
Consumer Goods
Powder and packaging coatings, wood and specialty plastic finishes
Buildings and Infrastructure
Protective, coil and powder coatings, wood finishes
Industrial
Protective and powder coatings
*AkzoNobel has a limited position in Automotive OEM coatings
Forward looking trends
Revenue by Business Unit Marine and Protective Coatings
32%
28%
Automotive and Aerospace Coatings Powder Coatings
17%
23%
Industrial Coatings
Expected market growth for the market sectors relevant to AkzoNobel: 4%
Strategy Update 2013 45
Performance Coatings strategic direction Noteworthy events 2012 • Schramm acquisition integration on track • Opened a new manufacturing facility in Vietnam • Multiple sport stadium contracts for London Olympics and Brazil‟s future events • McLaren partnership expanded • Realigned organization to four Business Units (from five) • Reorganized Europe for multiple Business Units (Wood, Marine, Automotive)
Actions going forward
Expected 2015 financial outcomes • Organic revenue growth: 5% • Return on sales: 12% • Return on investment: 25%
• Complete manufacturing expansion for automotive refinish in China • Complete Schramm integration • Product and margin management • Continue product line rationalization • Continue ERP consolidation
Strategy Update 2013 46
Specialty Chemicals overview Revenue by end-user segment
18% 6% 58%
18%
Buildings and Infrastructure Transportation Consumer Goods Industrial
Revenue by geographic spread
3% 4% 10%
Mature Europe
North America 40%
Asia Pacific Latin America
22%
Emerging Europe Other regions
21%
Specialty Chemicals key figures (new definition) € million
2012
BA-level core processes and capabilities
Revenue
5,543
• • • • • •
EBITDA
830
Operating income
500
Return on sales
9.0%
Return on investment
13.6%
# Employees
10,750
Management of integrated value chains Continuous technological advancement Engineering and project management Process safety Product and margin management Managing capital intensive businesses and expansions
Strategy Update 2013 47
Specialty Chemicals sees limited growth in its key market sector positions End -user segment
Industrial
Specialty Chemical market sectors serving the segment
Surface Chemistry, Industrial Chemicals, Functional Chemicals, Pulp and Performance
Consumer Goods
Surfactants, polymers, chelates, ethylene amines, silica products
Buildings and Infrastructure
Redispersable powders, cellulosic derivatives, chlorine, surfactants
Transportation
Forward looking trends
Chlor-alkali, organic peroxides, metal alkyls
Revenue by Business Unit Functional Chemicals
21% 37%
Industrial Chemicals Surface Chemistry
20% 22%
Pulp and Performance Chemicals
Expected market growth for the market sectors relevant to AkzoNobel: 3%
• Key challenges due to capacity surplus in ethylene amines • Significant energy cost differentiation among regions
Strategy Update 2013 48
Specialty Chemicals strategic direction Noteworthy events 2012 • • • •
Acquired Boxing Oleochemicals, China Further expansion in Ningbo, China multisite MCA expansion in Taixing, China Opened bleaching chemical Island in Brazil and further investment in another site • Demerger and sales of Chemicals Pakistan
Expected 2015 financial outcomes
Actions going forward
• Return on sales: 12%
• Further integrate and grow Boxing • Benefit from capacity expansions in Taixing, Brazil and Germany • Generate growth from new products • Further rationalize and consolidate ERP systems
• Organic revenue growth: 3%
• Return on investment: 15%
Strategy Update 2013 49
Realistic expected 2015 outcomes Expected Outcomes
16
12.0 12
Return on sales
9.5
4
9.0
7.5
8 2.2
0
%
Decorative Paints
Performance Coatings
32
16 8 0 %
Assumption: Revenue growth 3 year CAGR
Specialty Chemicals
25.0
21.7
24
Return on investment
12.0
2012 2015
15.0
13.6
12.0 3.0
Decorative Paints
Performance Coatings
5.0
5.0
Specialty Chemicals
8 3.0
4 0 %
Decorative Paints
Performance Coatings
Specialty Chemicals
Strategy Update 2013 50
5. Financial implications 1. Introduction 2. Market environment 3. Group strategic update 4. Business Areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013 51
Historical EBITDA profitability shows stable results in challenging economic times EBITDA as reported*
EBITDA margin
€ billion 2.0
% 14
12 1.5
10 8
1.0 1.8
2.0 1.7
1.8
1.9
6 4
0.5
2 0.0
0 2008
2009
2010
EBITDA margin *All years excluding National Starch
2011
2012
EBITDA Strategy Update 2013 52
AkzoNobel sources and uses of cash remains a key challenge we are addressing • We are not generating enough cash from operations to adequately meet our needs
Cash flow sources and uses € million 2011
Source
2012
Use
Source
Use
• Restructuring and pension top-ups consume a significant proportion of cash • We have been borrowing to pay dividends • Need to generate more cash from better performance • Remuneration metrics have been adjusted to include cash generation
0 EBITA Provision Operating working capital Pensions Capital expenditures Dividends
Strategy Update 2013 53
Targets for 2015 are focused on increased cash generation and value creation New targets
Old targets
Change driver
Increase return on sales (ROS, operating income/ revenue) to 9%
Grow to €20 billion revenues
• Increased focus on delivery of operating profit after incidentals
Achieve return on investment (ROI) to 14%
Increase EBITDA each year, maintaining 13-15% margin
• Ultimate driver of value creation • Deliver returns above the cost of capital
Net debt/EBITDA <2.0 times
Reduce OWC/revenues by 0.5 p.a. towards a 12% level
• Fuller measure of cash generation; not just one component
Deadline: end 2015
Deadline: medium term
• Shorter term • Defined point in time • Increased focus on delivery and accountability
Strategy Update 2013 54
Incidentals are now included in EBITDA* as part of our ongoing business € million
Incidentals as reported
2010
2011
• Incidentals are now included in EBITDA unless genuinely one-off and not related to normal business (2,520) 2012
(139)
(126)
(32)
3
0
0
(2,170) • Restructuring charges are now considered an ongoing business activity and are not reported as incidentals 6
(107)
(129)
• Performance improvement program restructuring charges are also now included in (344) EBITDA
13
12
40
2,009
1,834
1,901
14.8%
12.6%
12.4%
Restated EBITDA
1,915
1,717
1,597
Restated EBITDA %
14.1%
11.8%
10.4%
Total restated incidentals Restated IAS19 incidentals with no impact on EBITDA
Total incidental EBITDA adjustment: IAS19 EBITDA adjustment EBITDA as reported EBITDA %
*Restated for IAS19 adjustments which impact the other line
Strategy Update 2013 55
Operating income is our new focus: our return on sales target is to deliver 9% in 2015 • Going forward, operating income, after incidentals, and return on sales (ROS, operating income/revenue) are key metrics
Operating income development € billion 1.5 1.0
• This will focus management on delivery and quality of profits
0.5 0.0 2010
2011
2012*
Return on sales (ROS) development Operating income/revenue
• Operating income and ROS have not progressed over the last three years • Our ROS target is 9%, an increase of 3.1% percentage points, by 2015
15% 10%
• Absolute operating income is one of the targets for management remuneration
5%
0% 2010
2011
2012*
2015
Specialty Chemicals
Decorative Paints
Performance Coatings
AkzoNobel
*2012 excluding impairment (€2.1 billion)
Strategy Update 2013 56
Return on investment target is to deliver 14% in 2015 Return on investment (ROI) development Operating income/Average 12 month invested capital
40%
• Return on investment is another key target for the group, reflecting our focus on delivering value through returns in excess of our cost of capital
20%
• Invested capital defined as total assets (excluding cash, investments in associates, pension assets, assets held for sale) less tax liabilities and other payables
10%
• Return on investment target is 14%, an increase of 5.1 percentage points, by 2015
0%
• Return on investment is one of the targets for management remuneration
30%
2010
2011
2012*
2015
Specialty Chemicals
Performance Coatings
Decorative Paints
AkzoNobel
*2012 excluding impairment (€2.1 billion)
Strategy Update 2013 57
Variable costs represent 54% of revenue Profit and loss breakdown* % of total 100%
• Decorative Paints is more driven by personnel costs in the distribution network, while Specialty Chemicals has more production costs • Operating expense growth is primarily due to wage inflation 0% Decorative Performance Specialty AkzoNobel Paints Coatings Chemicals
• The performance improvement program benefits are equally split between fixed and variable costs
EBIT margin Selling, advertising, administration, R&D costs Fixed production costs Raw materials, energy and other variable costs
* Rounded percentages
Strategy Update 2013 58
Operating cash flow is a key internal target Operating cash flow development € billion
1.5
1.0
0.5
1.1
0.9
1.0
• Operating cash flow includes: – EBITDA (new definition) – Change in operating working capital – Capital expenditure – Incidental costs
• Management remuneration is linked to delivery of operating cash flow targets
0.0 2010
*2012 excluding impairment (€2.1)
2011
2012*
Strategy Update 2013 59
2015 target is to maintain a net debt to EBITDA ratio of less than two times Debt maturities billion
Net debt/EBITDA x 1.5
0.9
1.0
0.6 0.3
0.5
0 2013 2014 2015 2016
0.0 2010
• • • •
2011
2012
Maintain investment grade rating of BBB+ We have a strong liquidity position to support growth No immediate refinancing is needed Average cost of debt has reduced over the last three years
€ bonds
2018
$ bonds
2022
£ bonds
Average cost of long term bonds % 8
6 4
7.29
6.35
5.62
2011
2012
2 0 2010
* At the end of Q3 2012
Strategy Update 2013 60
IAS 19 pension accounting changes create positive impact on EBITDA and net income € million
2011 IAS19 impact
2012 IAS19 impact
Statement of income EBITDA
12
40
–
6
Financing expenses
25
62
After-tax impact in statement of income
29
77
Pension net liabilities/(asset)
331
1,486
Other post-retirement liabilities
(28)
(21)
Post-retirement liabilities/(asset)
303
1,465
Incidentals
Balance sheet
• Due to changes in IAS 19, the amortization charges in EBITDA will cease and the charges in financing expenses are significantly lower • The changes in IAS 19 no longer permit „corridor accounting‟. The reported funded status deficit excluding administration costs previously included in the defined benefit obligation (DBO) liability will become the new balance sheet liability, with an associated deferred tax impact (not shown on this slide). Strategy Update 2013 61
Pension cash flow guidance Defined benefit pension cash top-ups € million 2011 actual
353
2012 actual*
355
2013 estimated
~300
2014 -17 estimated
~330/year
2018 estimated
~100
• Top-ups relate mainly to the UK • Top-ups are based on prudent actuarial valuation of liabilities, which differs from accounting liability • Actuarial pension deficit of the 2 main UK plans is estimated at €1.5 – 2 billion • Recent actuarial funding reviews on ICI and CPS pension funds in the UK have resulted in reduced top-ups by €485 million over the next six years • The next triennial reviews will be completed in 2015
Regular contributions € million 2013 estimated Defined benefit
110
Defined contribution
180
*Excludes one-off cash transfer of €239 million to ICI Pension Fund in the UK being termination of a contingent asset structure.
Strategy Update 2013 62
New focus to improve performance and drive value creation € million
Revenue EBITDA Depreciation, amortization Restated incidentals Operating income EBITDA margin Return on sales Invested capital** Return on investment
2010
2011
2012*
2015 Target
13,605 14,604 15,390 1,915
1,717
1,597
(590)
(563)
(625)
(32)
3
(64)
1,293
1,157
908
14.1%
11.8%
10.4%
9.5%
7.9%
5.9%
• Benefits of new targets – Clear focus on value creation – Linked to remuneration of senior management
9.0%
11,467 11,537 10,238 11.3%
10.0%
8.9%
14.0%
*2012 excluding impairment (€2.1 billion) ** Average 12 month invested capital excluding full year impairment
Strategy Update 2013 63
6. Summary and conclusion 1. Introduction 2. Market environment 3. Group strategic update 4. Business Areas 5. Financial implications 6. Summary and conclusion
Strategy Update 2013 64
Dividends
• Our dividend policy is to pay a stable to rising dividend each year 1.08
1.05
1.12
1.12 • An interim and final dividend will be paid in cash unless shareholders elect to receive a stock dividend
0.30
0.32
0.33
0.33
2009
2010
2011
2012
Final dividend
Interim dividend
Strategy Update 2013 65
A smaller Executive Committee going forward*
Spelling and *
*With effect from the Annual General Meeting on April 26, 2013 **Until June 2013
Strategy Update 2013 66
Short term incentives have been aligned with our priorities Executive short term bonus 2013 Bonus Element
Metric
• Financial targets are set based on – Return on investment – Operating income – Operating cash flow
20%
Return on investment
20%
Operating income
30%
Operating cash flow
• More than 600 executives are affected by this change
30%
Personal targets – related to performance improvement plan
• Alignment of priorities
Strategy Update 2013 67
New and realistic 2015 financial targets focused on quality of earnings and value creation Return on sales (Operating income/revenue) %
Return on investment (Operating income/average 12 months invested capital) %
Net debt/EBITDA x
12
16
3
8
9.0 5.9 *
12
14.0 8.9 *
2
8
4
0 2012
2015
2.0
1.4
1
4
0
<
0 2012
2015
2012
2015
Assumes sales growth (CAGR) for the period of 4%
*2012 excluding impairment (€2.1 billion)
Strategy Update 2013 68
Summary • Clear end-user segment focus providing forward looking indicators and direction for our market initiatives and innovation spend • Challenging market conditions expected in the near future • Operational strategy on the basis of: – Well defined strategic focus areas – Core processes – Clear set of actions aimed at continuous efficiency improvements • Clear sustainability strategy and sustainability targets • Guidance and targets defined • A number of new management team members • Focus on operating income, return on investment and cash generation: remuneration aligned
Strategy Update 2013 69
Leading market positions delivering leading performance Today, the company has • Excellent portfolio of businesses • Good long term growth potential on the basis of end-user segment growth • Strong positions in high growth markets (44% of revenue) • Leadership positions in many markets • Clear leader in sustainability • Track record of delivering sustainable innovations and products • Strong brands, both in consumer and industrial markets Clear focus to deliver on our significant potential • Improved returns and cash flow • Leveraging scale • Simplification and standardization • Continued innovation
Strategy Update 2013 70
Thank you for your attention
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 understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business please see our latest Annual Report, a copy of which can be found on the company’s corporate website www.akzonobel.com.
Investor update Full-Year 2012 & Q4 results 72
Appendices
Strategy Update 2013 73
In Consumer Goods, our activities are spread evenly over consumer durables and consumer packaging Consumer electronics production $ billion, value added 2011 = 100
Furniture production
Food and beverage production $ billion, value added 2011 = 871
$ billion, value added 2011 = 109
+7.9% p.a. CAGR 2.6%
+2.2%
-1.2%
CAGR 1.8%
2011
12
13
Source: Oxford Economics
14
15
16
2011
12
13
14
Source: Oxford Economics
15
16
2011
12
13
14
15
16
Source: Oxford Economics
Strategy Update 2013 74
In Industrial, our activity is spread across the two sub-segments Brent crude futures price $, price per barrel Annual average spot price 2011 = $111
Energy and utilities construction $ billion, output 2011 = 360
Chemical production $ billion, output 2011 = 690 CAGR 3.8%
CAGR 9.4%
100
0 2011
12
13
Source: Oxford Economics
14
15
16
2011
12
13
14
15
Source: Business Monitor International
16
2011
12
13
14
15
16
Source: Oxford Economics
Strategy Update 2013 75
By focusing on the full value chain, we will drive business, resource and engagement benefits Scope 3 upstream
Scope 1 and 2
Raw materials
Own operations
Scope 3 downstream
Customer operations
End-user
End of life
Scope 4 Energy/resource benefits in use Sustainable business
Cost savings
Cost savings
Improve revenue and margin
Improve revenue and margin
Resource efficiency
Reduced material and energy use
Reduced energy used
Reduced material and energy use in customer processes, application
Reduced material and energy use in product use
Capable, engaged people
Engaged suppliers
Engaged employees
Engaged customers
Engaged customers and users
Strategy Update 2013 76
Decorative Paints restated financials, key assumptions and expected outcomes € million
Revenue EBITDA Depreciation, amortization Restated incidentals Operating income EBITDA margin Return on sales Invested capital** Return on investment
2010
2011
2012*
3,933
4,201
4,297
541
389
284
(205)
(152)
(176)
0
(2)
(14)
336
235
94
13.8%
9.3%
6.6%
8.5%
5.6%
2.2%
4,908
5,032
3,121
6.8%
4.7%
3.0%
2015 Outcome
• Financials are restated for changes to incidental treatment and exclusion of the North American Decorative Paints business • Expected outcomes – Return on sales of 7.5% by 2015 – Return on investment of 12% by 2015
7.5%
• Key assumption – Revenue CAGR of 5% to 2015
12.0%
*2012 excluding impairment (€2.1 billion) ** Average 12 month invested capital excluding full year impairment
Strategy Update 2013 77
Performance Coatings restated financials, key assumptions and expected outcomes € million
Revenue EBITDA Depreciation, amortization Restated incidentals Operating income EBITDA margin Return on sales Invested capital* Return on investment
2010
2011
2012
2015 Outcome
4,786
5,170
5,702
610
572
673
(107)
(116)
(131)
(16)
2
0
487
458
542
12.7%
11.1%
11.8%
10.2%
8.9%
9.5%
2,063
2,267
2,499
23.6%
20.2%
21.7%
*Average 12 month invested capital
• Financials are restated for changes to incidental treatment • Expected outcomes – Return on sales of 12% by 2015 – Return on investment of 25% by 2015 • Key assumption – Revenue CAGR of 5% to 2015 12.0%
25.0%
Strategy Update 2013 78
Specialty Chemicals restated financials, key assumptions and expected outcomes € million
Revenue EBITDA Depreciation, amortization Restated incidentals Operating income EBITDA margin Return on sales Invested capital* Return on investment
2010
2011
2012
4.943
5.335
5.543
915
909
830
(260)
(281)
(306)
(51)
(6)
(24)
604
622
500
18.5%
17.0%
15.0%
12.2%
11.7%
9.0%
3,464
3,406
3,678
17.4%
18.3% 13.6%
* New definition **Average 12 month invested capital
2015 Outcome
• Financials are restated for changes to incidental treatment • Expected outcomes – Return on sales of 12% by 2015 – Return on investment 15% by 2015 • Key assumptions – Revenue CAGR of 3% to 2015 12.0%
15.0%
Strategy Update 2013 79
Incidentals now included in EBITDA as part of ongoing business € million
2010
2011
2012
Restructuring costs
(104)
(129)
(324)
-
-
(2,106)
(49)
(9)
(36)
33
10
(45)
(19)
2
(9)
(139)
(126)
(2,520)
Restructuring costs
-
-
-
Impairment Deco
-
-
(2,106)
(49)
(9)
(20)
33
10
(30)
Other incidental results
(16)
2
(14)
Total Restated Incidentals (incl IAS 19 impact)
(32)
3
(2,170)
(107)
(129)
(350)
-
-
6
Remaining difference due to definition change)
(107)
(129)
(344)
EBITDA as reported
2,009
1,834
1,901
EBITDA adjustment due to new definitions
(107)
(129)
(344)
13
12
40
1,915
1,717
1,597
Impairment Deco Results related to major legal, anti-trust and environmental cases Results of acquisitions and divestments Other incidental results Total Incidentals as reported
Results related to major legal, anti-trust and environmental cases Results of acquisitions and divestments
Total difference Of which IAS 19 impact on incidentals
EBITDA adjustment due to IAS 19 impact Restated EBITDA (IAS 19 impact included)
Strategy Update 2013 80
Variable costs analysis 2012 (excluding Decorative North America) Packaging Energy & other variable costs* Raw materials
Solvents
6% 7% 30%
Chemicals and intermediates***
16%
3% Additives
9%
Other raw materials**
7% 3%
Pigments
14% Resins
5% Titanium dioxide
Coatings‟ specialties
* Other variable costs include variable selling costs (e.g. freight) and products for resale ** Other raw materials include cardolite, hylar etc. *** Chemicals and intermediates include caustic soda, acetic acid, tallow, ethylene, ethylene oxide, sulfur, amines etc.
Strategy Update 2013 81
Debt duration 4.2 years and no refinancing currently planned Debt maturities* € million (nominal amounts) € bonds
$ bonds
£ bonds 825
800
750
622
44 379
306 15 2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Strong liquidity position to support growth • Undrawn revolving credit facility of €1.7 billion (2017) and €0.1 billion (2016) • €1.5 and $3 billion commercial paper programs, backed by the revolving credit facility • Net cash and cash equivalents €1.6 billion*
* At the end of Q4 2012
Strategy Update 2013 82
Financial restatement summary for AkzoNobel Group FY2010 Revenues
As Reported (excluding NA Deco) FY2011 Q1-12 Q2-12 Q3-12 Q4-12
13.605
14.604
2.009
1.834
438
577
-435 -155
-419 -144
-114 -39
-115 -40
1.419
1.271
285
422
367
202
-139
-126
-52
-44
-2.229
-195
Operating Income
1.280
1.145
233
378
-1.862
7
-1.244
Operating Income excl. impaired goodwill
1.280
1.145
233
378
244
7
862
-327 25
-336 24
-65 4
-82 5
-66 5
-54 -1
-267 13
Finance Charges & Associates
-302
-312
-61
-77
-61
-55
Profit Before Tax Tax Minorities Discontinued Income
978 -174 -83 33
833 -233 -64 -59
172 -61 -14 -26
301 -82 -22 4
-1.923 -58 -9 -392
-48 29 -18 -22
Net Income
754
477
71
201
-2.382
-59
Adjusted Net Income
912
790
162
259
234
EPS
3,23
2,04
0,30
0,85
Adjusted EPS
3,91
3,10
0,69
1,09
14,8% 10,4%
12,6% 8,7%
11,8% 7,7%
9,4% 9,4%
7,8% 7,8%
12,1%
EBITDA Depreciation Amortisation EBIT Incidentals
Total Finance Charges Associates
EBITDA Margin% EBIT Margin % Return on Sales % Return on Sales % (excl. impaired goodwill) Moving Average ROI% Moving Average ROI% (excl. impaired goodwill) Capex Invested Capital average (12M) Invested Capital average (12M) (excl. impaired goodwill) OWC OWC%
3.707
4.044
3.966
FY2012
Restatements (Incidentals & IAS 19) FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012
FY2010
FY2011
New Format Q1-12 Q2-12
Q3-12
Q4-12
FY2012
3.707
3.966
3.673
15.390
3.673
15.390
-
-
-
-
-
-
-
13.605
14.604
4.044
523
363
1.901
-94
-117
-28
-23
-95
-158
-304
1.915
1.717
410
554
428
205
1.597
-115 -41
-119 -42
-463 -162
-
-
-
-
-
-
-
-435 -155
-419 -144
-114 -39
-115 -40
-115 -41
-119 -42
-463 -162
1.276
-94
-117
-28
-23
-95
-158
-304
1.325
1.154
257
399
272
44
972
-2.520
107
129
31
33
99
187
350
-32
3
-21
-11
-2.130
-8
-2.170
13
12
3
10
4
29
46
1.293
1.157
236
388
-1.858
36
-1.198
1.293
1.157
236
388
248
36
908
-2 -
25 -
15 -
15 -
16 -
16 -
62 -
-329 25
-311 24
-50 4
-67 5
-50 5
-38 -1
-205 13
-254
-2
25
15
15
16
16
62
-304
-287
-46
-62
-45
-39
-192
-1.498 -172 -63 -436
11 -2 25
37 -8 -
18 -5 -
25 -7 -
20 -6 -
45 -13 -
108 -31 -
989 -176 -83 58
870 -241 -64 -59
190 -66 -14 -26
326 -89 -22 4
-1.903 -64 -9 -392
-3 16 -18 -22
-1.390 -203 -63 -436
-2.169
34
29
13
18
14
32
77
788
506
84
219
-2.368
-27
-2.092
119
774
-66
-157
-10
-7
-57
-95
-169
846
633
152
252
177
24
605
-10,00
-0,25
-9,14
0,15
0,12
0,06
0,07
0,06
0,14
0,32
3,38
2,16
0,36
0,92
-9,94
-0,11
-8,82
0,98
0,50
3,26
-0,28
-0,27
-0,04
-0,03
-0,24
-0,40
-0,71
3,63
2,83
0,65
1,06
0,74
0,10
2,55
14,3% 10,4%
13,2% 9,3%
9,9% 5,5%
12,4% 8,3%
14,1% 9,7%
11,8% 7,9%
11,1% 6,9%
13,7% 9,9%
10,8% 6,9%
5,6% 1,2%
10,4% 6,3%
6,3% 6,3%
9,3% 9,3%
-46,9% 6,2%
0,2% 0,2%
-8,1% 5,6%
9,5% 9,5%
7,9% 7,9%
6,4% 6,4%
9,6% 9,6%
-46,8% 6,3%
1,0% 1,0%
-7,8% 5,9%
10,5%
10,2%
9,9%
9,7%
10,0%
10,0%
11,3% 11,3%
10,0% 10,0%
9,4%
8,7%
-9,2%
-10,1%
-10,1% 8,9%
492
658
135
166
195
330
826
-
-
-
-
-
-
-
492
658
135
166
195
330
826
11.721 11.721
12.088 12.088
12.447
12.882
13.107
12.781
12.781
-254
-551
-642
-763
-865
-964
-964
11.467 11.467
11.537 11.537
11.805
12.119
12.242
11.817
11.817 10.238
1.839
1.891
2.259
2.314
2.178
1.659
1.659
-147
-57
-62
-87
-76
-87
-87
1.692
1.834
2.197
2.227
2.102
1.572
1.572
13,5%
13,2%
15,1%
14,1%
13,6%
11,2%
11,2%
12,4%
12,9%
14,8%
13,8%
13,3%
10,7%
10,7%
Strategy update 2013 83
Financial restatement summary for Decorative Paints FY2010
As Reported (excluding NA Deco) FY2011 Q1-12 Q2-12 Q3-12 Q4-12
Restatements (Incidentals & IAS 19) FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012
Q3-12
Q4-12
FY2012
4.201
974
1.187
1.141
995
4.297
-
-
-
-
-
-
-
3.933
4.201
974
1.187
1.141
995
4.297
593
479
90
158
130
47
425
-52
-90
-22
-3
-33
-83
-141
541
389
68
155
97
-36
284
-124 -81
-91 -61
-27 -16
-26 -17
-26 -18
-27 -19
-106 -70
-
-
-
-
-
-
-
-124 -81
-91 -61
-27 -16
-26 -17
-26 -18
-27 -19
-106 -70
388
327
47
115
86
1
249
-52
-90
-22
-3
-33
-83
-141
336
237
25
112
53
-82
108
Incidentals
-52
-92
-22
-3
-2.144
-92
-2.261
52
90
22
3
33
83
141
-
-2
-
-
-2.111
-9
-2.120
Operating Income
336
235
25
112
-2.058
-91
-2.012
-
-
-
-
-
-
-
336
235
25
112
-2.058
-91
-2.012
Operating Income excl. impaired goodwill
336
235
25
112
48
-91
94
336
235
25
112
48
-91
94
15,1% 9,9%
11,4% 7,8%
9,2% 4,8%
13,3% 9,7%
11,4% 7,5%
4,7% 0,1%
9,9% 5,8%
13,8% 8,5%
9,3% 5,6%
7,0% 2,6%
13,1% 9,4%
8,5% 4,6%
-3,6% -8,2%
6,6% 2,5%
Return on Sales % Return on Sales % (excl. impaired goodwill)
8,5% 8,5%
5,6% 5,6%
2,6% 2,6%
9,4% 9,4%
-180,4% 4,2%
-9,1% -9,1%
-46,8% 2,2%
8,5% 8,5%
5,6% 5,6%
2,6% 2,6%
9,4% 9,4%
-180,4% 4,2%
-9,1% -9,1%
-46,8% 2,2%
Moving average ROI % Moving Average ROI% (excl. impaired goodwill)
7,2%
5,9%
5,9%
5,2%
4,7%
4,8%
4,8%
6,8% 6,8%
4,7% 4,7%
4,4%
3,7%
-37,4%
-42,7%
-42,8% 3,0%
127
155
29
41
44
92
206
-
-
-
-
-
-
-
127
155
29
41
44
92
206
5.407
5.500
5.614
5.738
5.658
5.151
5.151
-499
-468
-463
-463
-459
-450
-450
4.908 4.908
5.032 5.032
5.151
5.275
5.199
4.701
4.701 3.121
474
434
654
661
587
353
353
-71
-
-
-
-
-
-
403
434
654
661
587
353
353
OWC %
12,7%
11,2%
16,8%
13,9%
12,9%
8,9%
8,9%
10,8%
11,2%
16,8%
13,9%
12,9%
8,9%
8,9%
Number of Employees
16.865
17.120
17.320
17.430
17.220
17.020
17.020
16.685
17.120
17.320
17.430
17.220
17.020
17.020
EBITDA Depreciation Amortisation EBIT
EBITDA Margin % EBIT Margin %
Capex Invested Capital average (12M) Invested Capital average (12M) (excl. impaired goodwill) OWC
FY2010
FY2011
New Format Q1-12 Q2-12
3.933
Revenues
FY2012
Strategy update 2013 84
Financial restatement summary for Performance Coatings Revenues EBITDA Depreciation Amortisation EBIT Incidentals Operating Income
As Reported Q1-12 Q2-12
Q3-12
Q4-12
FY2012
5.170
1.369
1.472
1.467
1.394
5.702
-
-
-
-
-
-
647
611
164
213
202
190
769
-37
-39
-5
-9
-39
-81 -26
-86 -30
-23 -9
-25 -8
-23 -10
-24 -9
-95 -36
-
-
-
-
540
495
132
180
169
157
638
-37
-39
-5
-53
-37
-5
-9
-39
-43
-96
37
39
-
-
FY2010
FY2011
4.786
Restatements (Incidentals & IAS 19) FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012
New Format Q1-12 Q2-12
Q3-12
Q4-12
FY2012
5.170
1.369
1.472
1.467
1.394
5.702
610
572
159
204
163
147
673
-
-81 -26
-86 -30
-23 -9
-25 -8
-23 -10
-24 -9
-95 -36
-43
-96
503
456
127
171
130
114
542
39
43
96
-16
2
-
-
-
-
-
-
-
-
FY2010
FY2011
-
4.786
-43
-96
-
-
-9
-39
5
9
-
-
487
458
127
171
130
114
542
487
458
127
171
130
114
542
EBITDA Margin % EBIT Margin %
13,5% 11,3%
11,8% 9,6%
12,0% 9,6%
14,5% 12,2%
13,8% 11,5%
13,6% 11,3%
13,5% 11,2%
12,7% 10,5%
11,1% 8,8%
11,6% 9,3%
13,9% 11,6%
11,1% 8,9%
10,5% 8,2%
11,8% 9,5%
Return on Sales %
10,2%
8,9%
9,3%
11,6%
8,9%
8,2%
9,5%
10,2%
8,9%
9,3%
11,6%
8,9%
8,2%
9,5%
Moving average ROI %
26,3%
22,0%
22,0%
22,9%
23,9%
25,6%
25,6%
23,6%
20,2%
20,4%
20,5%
20,6%
21,7%
21,7%
Capex
87
116
18
25
23
57
123
-
-
-
-
-
-
-
87
116
18
25
23
57
123
2.054
2.253
2.326
2.397
2.471
2.488
2.488
9
14
10
9
9
11
11
2.063
2.267
2.336
2.406
2.480
2.499
2.499
714
772
852
871
857
742
742
-23
-
-
-
-
-
-
691
772
852
871
857
742
742
OWC %
14,4%
14,6%
15,6%
14,8%
14,6%
13,3%
13,3%
14,0%
14,6%
15,6%
14,8%
14,6%
13,3%
13,3%
Number of Employees
21.020
21.960
21.910
21.920
21.650
21.310
21.310
21.020
21.960
21.910
21.910
21.640
21.310
21.310
Invested Capital average (12M) OWC
Strategy update 2013 85
Financial restatement summary for Specialty Chemicals Revenues EBITDA Depreciation Amortisation EBIT Incidentals Operating Income
As Reported Q1-12 Q2-12
Q3-12
Q4-12
FY2012
5.335
1.399
1.431
1.393
1.320
5.543
-
-
-
-
-
-
939
906
235
255
227
172
889
-24
3
-
-20
-19
-214 -46
-228 -53
-61 -13
-63 -15
-62 -13
-65 -14
-251 -55
-
-
-
-
679
625
161
177
152
93
583
-24
3
-
-75
-3
-21
-23
-19
-20
-83
24
-3
-
-
FY2010
FY2011
4.943
Restatements (Incidentals & IAS 19) FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012
New Format Q1-12 Q2-12
Q3-12
Q4-12
FY2012
5.335
1.399
1.431
1.393
1.320
5.543
915
909
235
235
208
152
830
-
-214 -46
-228 -53
-61 -13
-63 -15
-62 -13
-65 -14
-251 -55
-20
-59
655
628
161
157
133
73
524
19
20
59
-51
-6
-21
-3
-
-
-24
-
-
-
FY2010
FY2011
-
4.943
-20
-59
-
-
-20
-19
-
20
-
-
604
622
140
154
133
73
500
604
622
140
154
133
73
500
EBITDA Margin % EBIT Margin %
19,0% 13,7%
17,0% 11,7%
16,8% 11,5%
17,8% 12,4%
16,3% 10,9%
13,0% 7,0%
16,0% 10,5%
18,5% 13,3%
17,0% 11,8%
16,8% 11,5%
16,4% 11,0%
14,9% 9,5%
11,5% 5,5%
15,0% 9,5%
Return on Sales %
12,2%
11,7%
10,0%
10,8%
9,5%
5,5%
9,0%
12,2%
11,7%
10,0%
10,8%
9,5%
5,5%
9,0%
Moving average ROI %
19,2%
17,8%
17,3%
17,6%
16,8%
15,6%
15,6%
17,4%
18,3%
16,9%
16,7%
15,5%
13,6%
13,6%
273
365
87
95
125
177
484
-
-
-
-
-
-
-
273
365
87
95
125
177
484
3.545
3.521
3.528
3.615
3.693
3.735
3.735
-81
-115
-54
-55
-57
-57
-57
3.464
3.406
3.474
3.560
3.636
3.678
3.678
651
685
754
783
734
564
564
-14
-
-
-
-
-
-
637
685
754
783
734
564
564
OWC %
12,9%
13,3%
13,5%
13,7%
13,2%
10,7%
10,7%
12,6%
13,3%
13,5%
13,7%
13,2%
10,7%
10,7%
Number of Employees
11.080
11.510
11.860
11.980
11.950
10.750
10.750
11.080
11.510
11.860
11.980
11.950
10.750
10.750
Capex Invested Capital average (12M) OWC
Strategy update 2013 86
Financial restatement summary for Other Activities FY2010 Revenues EBITDA Depreciation Amortisation EBIT Incidentals Operating Income Capex
As Reported (excluding NA Deco) FY2011 Q1-12 Q2-12 Q3-12 Q4-12
FY2012
Restatements (Incidentals & IAS 19) FY2010 FY2011 Q1-12 Q2-12 Q3-12 Q4-12 FY2012
FY2010
FY2011
New Format Q1-12 Q2-12
Q3-12
Q4-12
FY2012
-57
-102
-35
-46
-35
-36
-152
-
-
-
-
-
-
-
-57
-102
-35
-46
-35
-36
-152
-170
-162
-51
-49
-36
-46
-182
19
9
-1
9
-4
-12
-8
-151
-153
-52
-40
-40
-58
-190
-16 -2
-14 -
-3 -1
-1 -
-4 -
-3 -
-11 -1
-
-
-
-
-
-
-
-16 -2
-14 -
-3 -1
-1 -
-4 -
-3 -
-11 -1
-188
-176
-55
-50
-40
-49
-194
19
9
-1
9
-4
-12
-8
-169
-167
-56
-41
-44
-61
-202
41
6
-4
-9
-27
-40
-80
-6
3
4
1
8
41
54
35
9
-
-8
-19
1
-26
-147
-170
-59
-59
-67
-89
-274
13
12
3
10
4
29
46
-134
-158
-56
-49
-63
-60
-228
5
22
1
5
3
4
13
-
-
-
-
-
-
-
5
22
1
5
3
4
13
Strategy update 2013 87
