Leading market positions delivering leading performance

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Leading market positions delivering leading performance Keith Nichols - CFO March 12, 2013 VBDO analyst network meeting

AkzoNobel today • • • •

Revenue €15.4 €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* income by Business Area

EBITDA by EBITDA** Business Area Performance Coatings g

36%

37%

38%

44%

27%

5.4% Growth 2012 vs 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%

15%

Specialty Ch i l Chemicals

10.4% EBITDA/revenue

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High growth markets are 44% of revenue and their importance will increase % of 2012 revenue 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

2013

2% Middle East and Africa

USA

Latin America 2014

China

Developing p g 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

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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

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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 Eco premium products

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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 8 9*

2

8

4

0 2012

2015

2,0

14 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)

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AkzoNobel strategy

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Strategy on a page

Strategic focus areas

Processes

Actions

End-user segmentation

• Care for the customer • Reduction of product and process complexity • Cash C h and d return t 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 C G Goods d • Industrial

Deliver dependably Grow organically Innovate Simplify Standardize Continuously improve p

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~43% of revenues

~16% of revenues

New Build Projects

Automotive OEM, Parts and Assembly

Maintenance Renovation and Repair Maintenance, 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

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Buildings and Infrastructure 2050 Energy efficient and comfortable living and working spaces

• Mandatory thermal integrity standards in OECD countries by 2020 • 95% of new building stock uses zero net energy • Huge increase in energy efficiency retrofitting • <6% 6% buildings heated with fossil fuels • 70% of people live in urban areas ~43% of AkzoNobel revenue

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Transportation p 2050 Low carbon • • • •

Universal access to low carbon transport Near zero transport related deaths Super efficient and aerodynamic planes 80% reduction in GHG intensity of light-duty vehicles • 50% reduction in GHG intensity of shipping and freight ~16% % of AkzoNobel revenue

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Industrial 2050 Closed-loop • 4 -10 fold improvement in eco-efficiency of resources and materials from 2000 • Closed loop processes • Co-innovation with the value chain is widespread • ‘Landfill’ is obsolete • Use of oil by the chemical industry goes beyond fuel • Major cooperation across sectors to harmonise standards • Material supply sector offers environmental services ~25% of AkzoNobel revenue

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Consumer Goods 2050 Efficient and meet needs • Global education connects people and raises awareness • People use only 5 tonnes of non-renewable materials (down from 85 in the US) • All appliances are energy efficient • Customers expect longer lasting, efficient products with veryy low embedded impacts p • Recycling is integrated into business models • Life expectancy continues to rise globally ~16% of AkzoNobel revenue 13 VBDO analyst network meeting 13

Our sustainability strategy: Creating more value with fewer resources More customer value in our end-user segmentation g

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

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Sustainability is business; Business is sustainability •

‘Downstream Downstream eco-premium eco premium solutions’: solutions : 20% of our revenues by 2020 We will increase the revenue from solutions that generate direct resource and energy benefits f our customers, for t consumers and d 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

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End-user segment trends, combined with sustainability, sustainability direct our innovation spend

End-user segments g

Sustainability Sustainability = Business Business = Sustainability

Direction of innovation spend (2.5% of 2012 revenue)

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AkzoNobel delivers innovation Buildings and Infrastructure Dulux Guardian

Transportation Aerobase Coating g System y

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™ y 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

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Summary • Clear end-user end user segment focus providing forward looking indicators and direction for our market initiatives and innovation spend • Focus on operating income, return on investment and cash generation: remuneration ti aligned li d • Operational strategy on the basis of: – Well defined strategic g focus areas – Core processes – Clear set of actions aimed at continuous efficiency improvements • Clear sustainability strategy and sustainability targets

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Thank you for your attention

Safe Harbor Statement This presentation Thi t ti contains t i statements t t t which hi h address dd such h kkey iissues 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 include, but are not limited to to, price fluctuations fluctuations, currency fluctuations 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 Report, a copy of which can be found on the company’s corporate website www.akzonobel.com.

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