Q3 2015 Analyst Factsheet


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Akzo Nobel N.V.

AkzoNobel Q3 2015 Analyst Factsheet 22 October 2015 Q3 • Revenue up 2 percent at €3.8 billion (2014: €3.7 billion), due to 4 percent favorable currency effects, offset by divestments and slightly lower volumes • Operating income up 30 percent at €436 million (2014: €335 million), reflecting the positive effects of process optimization, lower costs, reduced restructuring expenses and favorable currency developments • ROS improved to 11.6 percent (2014: 9.1 percent); ROI improved to 12.5 percent (2014:10.5 percent) • Net income attributable to shareholders up 39 percent at €285 million (2014: €205 million) • Adjusted EPS increased 35 percent to €1.24 (2014: €0.92) • Net cash inflow from operating activities €583 million (2014: €489 million) • Interim dividend up 6% to €0.35 per share (2014: €0.33)

Outlook • Market outlook is unchanged: positive trends in North America, no improvement for Europe overall as well as a challenging environment in some countries, including Russia, Brazil and China. Based on th current rates, the positive impact of foreign currency is expected to moderate in the 4 quarter • On track to deliver 2015 targets € million unless stated otherwise

2014 Q3

Q4

Q1

2015 Q2

Q3

Decorative Paints

1,050

920

890

1,134

1,052

Performance Coatings

1,420

1,416

1,430

1,550

1,493

Specialty Chemicals

1,239

1,194

1,296

1,290

1,235

(23)

(13)

(25)

(25)

(20)

3,686

3,517

3,591

3,949

3,760

487

330

462

610

590

(152)

(162)

(156)

(158)

(154)

335

168

306

452

436

Other Group Revenue EBITDA D&A Operating income excl. inc. Incidentals

-

(85)

-

34

0

Decorative Paints

113

16

50

128

121

Performance Coatings

135

106

170

220

210

Specialty Chemicals

156

93

163

192

163

Other

(69)

(132)

(77)

(54)

(58)

Operating Income

335

83

306

486

436

Finance Income/expenses

(38)

(41)

(41)

(27)

(28)

Associates

6

3

(2)

8

6

PBT

303

45

263

467

414

Tax Charge

(84)

(36)

(82)

(108)

(114)

Non-controlling interests

(16)

(16)

(18)

(27)

(16)

2

14

(3)

(1)

1

205 28%

7 80%

160 31%

331 23%

285 28%

Discontinued operations Net Income attributable to shareholders Tax Rate

Q3 2015 highlights 

Decorative Paints: revenue was flat. Favorable currency effects were offset by adverse price/mix. Volumes were up in Asia, while volumes were down for Latin America and Europe, which includes amongst others Russia and Turkey. Operating income improved by 7 percent due to the new operating model, lower costs and currency developments



Performance Coatings: revenue was up 5 percent, benefitting from favorable currencies and continued strong demand for premium products. Volumes declined in the quarter due to ongoing capital spending declines in the global oil and gas industry and further weakening in some markets, most notably Brazil and China. Operating income increased 56 percent driven by cost reductions from performance improvement initiatives, lower costs, favorable product mix, lower restructuring charges and favorable currency developments



Specialty Chemicals: revenue flat due to favorable currency effects offsetting the impact of the divested Paper Chemicals business and adverse price/mix in several segments, mostly due to lower oil prices. Volumes overall were flat. Growth in some segments compensated for lower demand in oil drilling segments, which mainly impacted Surface Chemistry and Functional Chemicals. North America and Europe continued to show a positive trend in some selected segments, while growth in China and Russia was subdued. Although the recent incident at the port of Tianjin, China, did not affect us directly, it did result in severe logistical constraints. Operating income was up 4 percent supported by the benefits from further increased production at the new Frankfurt plant, lower costs and operational efficiencies throughout the business



Restructuring charges were €15 million in Q3 2015, compared to €55 million in Q3 2014



Operating income in other activities higher than the previous year mainly due to lower corporate costs and insurance claims



Raw material prices lower, although in certain regions foreign currency effects adversely impacted raw material costs in local currencies



Operating activities in Q3 resulted in a cash inflow of €583 million (€489 million) and net debt decreased to €1,727 million from €2,138 at Q2 2015



An interim dividend of €0.35 per share (2014: €0.33) will be paid out, with the option to elect stock dividend.

Restructuring charges by quarter Decorative Paints Performance Coatings Specialty Chemicals Other Total

Q1

Q2

2014 Q3

Q4

FY

Q1

2015 Q2

Q3

22 15 7 0 44

23 17 2 3 45

1 41 6 7 55

34 75 2 (2) 109

80 148 17 8 253

5 6 0 0 11

11 10 3 0 24

5 7 1 2 15

Q3 revenue development in % versus Q3 2014 Volume

Decorative Paints Performance Coatings Specialty Chemicals Average development

(2) (1)

Price/mix

Divestments

FX rates

(2) 2 (2) -

(3) (1)

2 5 5 4

Total

5 2

2