Media update

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Media update Ton Büchner and Maëlys Castella February 15, 2017

Q4

20 16

Ton Büchner CEO

Media update

2

Delivering on our strategy

Media update

3

Strong track record of performance improvement €200+ Record ROS and ROI

Volume growth

Employee engagement

up for 6th year

Acquisition of BASF’s Industrial Coatings business

Continuous improvement

million savings

75% sites

20%

Progress on a new model for support services

300+

Eco-premium solutions Carbon

Footprint reduced

Human Cities projects

Strategy focused on delivering continuous improvement and growth Hardwire new organization model

Deliver continuous improvement culture

Build further operational excellence

Drive organic growth and innovation

Pursue value generating acquisitions

Next steps

Culture Core principles, purpose and values Sustainability – Planet Possible Society – Human Cities

Operational review

Media update

5

Structurally improved to achieve record levels of financial performance in 2016 Return on sales %

Return on investment %

Continuous improvement

€200+ million savings Delivering

13-16.5 9-11

Engagement

7.5

2014

9.8

14.0

10.6

15.0

4.17

10.9

(2015 4.03) 2015

2016

Guidance 2016-2018

2014

2015

2016

Guidance 2016-2018

Hardwiring new organization model ROS% = EBIT/Revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital

Operational review

Media update

6

In 2016, seized opportunities for growth and adapted to challenging markets China

EMEA Latin America

Specialty Chemicals Oil and gas industries

Marine industry

~

Automotive and Specialty Coatings

South and SE Asia

Powder Coatings

Updated expected growth rates for our relevant markets 2017 <0%

Marine and Protective Coatings

0-3%

>3%

Mature Europe Latin America

Asia Emerging Europe and Africa

Industrial Coatings Automotive and Specialty Coatings

Powder Coatings

Bleaching chemicals Salt-chlorine chain Ethylene oxide network Surfactants

Polymer chemistry

Clear aim to build on the foundation we have created and grow in line or faster than our relevant market segments Highlights 2016

Investor update

8

Value generating acquisitions and joint ventures supporting growth Joint Ventures:

BASF’s Industrial Coatings business

Completed for €425

million

Portion of production transferred

2017

#1 in coil coatings

Cooperation for Salt production in Spain Partnership with Atul to produce MCA in India

Revenue

~€280 million

Acquired outstanding shares in Eko Peroxide

Synergies and production efficiencies

Production JV with Evonik for Chlorine in Germany Acquired controlling share in Egypt JV for Powder Coatings

Full profitability by end 2018

Operational review

Media update

9

€634 million invested in sites to support organic growth and operational excellence Ashington, UK

Shanghai, China

Strongsville, U.S.

Pasadena, U.S.

Ibbenburen, Germany

Chengdu, China Mumbai, India

Decorative Paints Performance Coatings Specialty Chemicals

Chonburi, Thailand

Gujurat,India

Los Reyes, Mexico

Operational review

Cikarang, Indonesia

Ningbo, China

Media update 10

€363 million invested in driving innovation to support organic growth

Launched AquaSilk in China, an innovative waterborne anti-scuff

Introduced Dissolvine M-40 for the detergent industry

Launched forest breath in China. It contains anti-bacterial properties that improve indoor air quality

Visualizer App – over 13 million downloads

Virtual reality customer Centre in the UK

Intertrac Vision, an award winning digital tool which predicts hull performance

Operational review

Media update 11

Further progress made towards our 2020 sustainability ambitions Eco-premium solutions with downstream benefits (in % of revenue)

17

18

19

19

20

Cradle-to-Grave, Carbon Footprint

REI – Resource Efficiency Index

(% reduction CO2(e) per ton of sales from 2012)

(Gross margin/CO2(e) indexed)

20

0

2

3

25-30

100

98

96

2020

2012

2013

2014

113

112

2015

2016

6

-4 2012

2013

2014

2015

2016

…

2020

2012

2013

2014

2015

2016

…

Progress on our Planet Possible agenda Shipping industry’s largest ever number of carbon credits

Consortium exploring waste-to-chemicals facilities in Europe

Leading a consortium for purchase of wind power

Sustainable steam delivered from a project in Delfzijl (NL)

Media update 12

Maëlys Castella CFO

Media update 13

Strong financial position provides foundation for growth Media update 14

Highlights from a record year Decorative Paints Full-year volumes up 3% with positive developments in Asia and EMEA Performance Coatings Volumes flat with growth in some segments offset by adverse conditions in marine and oil & gas

Increases in: Volumes EBIT

ROS ROI Adjusted EPS

Specialty Chemicals Full-year volumes up 1% with positive developments mainly driven by Asia and Europe

Dividend Cash inflow

Strong financial performance improvement continued in 2016 Full-year

Q4

Volumes

EBIT

1% higher Adjusted EPS

3% At €4.15

Record ROS and ROI

Up 3% Up 6% excluding currencies

ROS 10.6% (2015 9.8%) ROI 15.0% (2015 14.0%)

Total dividend

Net cash inflow

proposed for 2016

from operating activities

Up 6% at €1.65 (2015: €1.55)

Volumes

Up 2% Completed acquisition BASF's Industrial Coatings business

Up 14% €1,297 million (2015: €1,136)

Announced share buyback to neutralize the dilutive effect of stock dividends paid in 2016 Financial review

Investor update 16

EBIT growth driven by higher volumes and continuous improvement € million

FY 2015

FY 2016

Δ%

Revenue

14,859

14,197

(4)

EBIT (Operating income excluding incidental items)

1,462

1,502

3

Operating income

1,573

1,519

(3)

FY 2015

FY 2016

9.8

10.6

14.0

15.0

Ratio, % ROS* Moving average ROI*

Revenue development full-year 2016

1

-2

0 -3

Volume

Price/Mix

Acquisitions/Divestments

Exchange rates

-4 Total

*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital Investor update

20

Free cash flow continues to improve FY2013

FY2014

FY2015

FY2016

€ million

EBITDA Interest paid Tax paid Changes in working capital, provision* and other

1,513 -228 -230 69

1,690 -206 -258 -145

2,088 -151 -261 -224

2,108 -87 -285 -175

Capital expenditures (including intangible assets)

-695

-612

-688

-651

Free cash flow, excluding pension top-up payments Pension top-up payments Free cash flow (from operations)

429 -408 21

469 -270 199

764 -316 448

910 -264 646

448 21 2013

646

199 2014

2015

2016

*Provisions include recurring pension contributions Free cash flow (from operations) = Net cash from operating activities minus Capital expenditures and Investment in intangibles

Financial review

Media update 18

Decorative Paints full-year 2016: Higher volumes and profitability € million

FY 2015

FY 2016

Δ%

Revenue

4,007

3,835

(4)

EBIT (Operating income excluding incidental items)

345

357

3

Operating income

345

366

6

FY 2015

FY 2016

8.6

9.3

11.7

12.8

Ratio, % ROS* Moving average ROI*

Flexa Color Tester - winner of the Our Color of the Dutch Best Product of Year, the Year 2016Denim Drift, was launched 2017

Increase Decrease

Revenue development full-year 2016

3

-1

0 -6

3 Volume

Price/Mix

Acquisitions/Divestments

-5

Exchange rates

-4 -3

Total

Launched in Rio, our Unexpected Courts project uses paint to create Courts and spaces in surprising places

*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital

Financial review

Investor update 19

Performance Coatings full-year 2016: Maintained structurally higher profitability € million

FY 2015

FY 2016

Δ%

Revenue

5,955

5,665

(5)

EBIT (Operating income excluding incidental items)

792

759

(4)

Operating income

792

735

(7)

FY 2015

FY 2016

ROS*

13.3

13.4

Moving average ROI*

29.4

29.4

Ratio, %

Revenue development full-year 2016

0

-2

Increase Decrease

0

-2 Volume

-3 Price/Mix

Acquisitions/Divestments

Exchange rates

-2

-5 Total -6

We broke ground on a powder coatings Mumbai,Colorvationplant digitalin technology which will provide new lines, increases speed and accuracy in color matching. including products for pipes

*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital

Financial review

Investor update 20

Specialty Chemicals full-year 2016: Volume and profitability improvement € million

FY 2015

FY 2016

Δ%

Revenue

4,988

4,783

(4)

EBIT (Operating income excluding incidental items)

578

629

9

Operating income

609

629

3

FY 2015

FY 2016

ROS*

11.6

13.2

Moving average ROI*

16.3

17.9

Ratio, %

Increase Decrease

Revenue development full-year 2016

1

-3 -3

Volume

Inaugurated two new specialty chemicals plants at the multi-site in Ningbo, China.

Price/Mix

-1 Acquisitions/Divestments

-4 -1 -1 rates Exchange

-3

Total

*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital

Financial review

Investor update 21

Ton Büchner CEO

Media update 22

Continued progress in Sustainability and innovation AkzoNobel has won the Dutch Best Product of the Year 2016-2017 award in the paints category for the Flexa Color Tester, a mini roller to test color choices. Also available in France, the wet tester will soon be rolled out in other markets

AkzoNobel’s Vehicle Refinishes business has launched its Colorvation digital technology which increases speed and accuracy in color matching.

In China, we recently launched our Dulux Forest Breath Eco-sense range of indoor decorative paints. It contains anti-bacterial properties that improve indoor air quality by absorbing and destroying atmospheric particles such as formaldehyde and benzene.

Media update 23

Over 9 million people positively impacted by our Human Cities program At the UN Habitat Conference III, a vertical garden was created with a hydroponic system, that uses micronutrients supplied by AkzoNobel to provide essential minerals for the plants.

Eighty artists helped to transform a neighborhood in Montevideo, Uruguay, as part of a Human Cities initiative developed by our Inca paint brand.

We will contribute to the Rotterdam Resilience Strategy with projects inlcuding repainting four primary schools, refurbishing areas of a local park and a pilot project for paint recycling.

Media update 24

We are stronger, more agile, better able to adapt and grow We anticipate positive developments for EMEA, North America and Asia, improving during the year, while Latin America is expected to stabilize. Some economic and political uncertainty is expected to remain. Market trends experienced in the second part of 2016, including for the marine and oil & gas industries, are expected to continue during the first half of 2017.

We have structurally improved our ability to respond to developments in our markets. We are taking appropriate measures to deal with higher raw material prices in an inflationary environment. Our stronger operational and financial foundation means we are more agile and better able to seize growth opportunities, including acquisitions.

We maintain our financial guidance for 2016-2018 Media update 25

We are stronger, more agile, better able to adapt and grow €200+ Record ROS and ROI

Volume growth

Employee engagement

up for 6th year

Acquisition of BASF’s Industrial Coatings business

Continuous improvement

million savings

75% sites

20%

Progress on a new services model

300+

Eco-premium solutions Carbon

Footprint reduced

Human Cities projects

And now for questions

Media update 27

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.

Media update 28

Appendix

Media update 29

2017 Financial assumptions

A

Category

Comments / assumption

FY Revenue

FY EBIT

Acquisition

BASF’s Industrial Coatings business. The full profitability of the acquisition will be realized by the end of 2018, in line with the stated financial guidance for the Performance Coatings business

~€280 mln

Transition during 2017

Currencies

Assuming December 2016 exchange rates (€: $1.05, £0.86, RMB 7.3)

=/+

=/+

Continuous improvement

Seek year-on-year productivity gains from continuous improvement (e.g. ALPS and GBS) to at least offset inflation

N/A

€100 - €200 mln (positive effect)

Inflation

Inflation on fixed cost base around 2-3%

N/A

€100 - €150 mln (negative effect)

Restructuring

Medium term guidance 0.5 - 1% of revenue; 2017 in line with 2016

N/A

~€70 mln

Market growth

2-3% (volume and price/mix), based on relevant geographic and market presence. Market trends in marine and oil & gas experienced in the second part of 2016 are expected to continue during the first half of 2017

Raw materials

We are likely to see higher year-over-year input costs in 2017 due to the inflationary environment, while there are various supply and demand dynamics related to our raw materials basket. We are taking appropriate measures to deal with higher raw material prices in an inflationary environment

Tax rate

ETR 28-29%

Cash deployment

Capital expenditures at ~4% of revenue and RD&I at ~2.5% of revenue, share buyback of up to 2.5 mln shares (~€150 mln)

Other

WACC ~7%, interest rate ~3.3%, OWC 10-12% of revenue

Appendix

Investor update 30