Year End Report 2004


Year End Report 2004 - Rackcdn.comhttps://84e1202b204d21a1cb9b-0e1ab5244fd095dbeb138ed6f973369e.ssl.cf3.rackcdn...

1 downloads 273 Views 456KB Size

HWNEY2004 1

Safe harbor statement* This report contains statements which address such key issues as Akzo Nobel’s growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements, including but not limited to the “Outlook for 2005”, 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 complete discussion of the risk factors affecting our business please see our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission, a copy of which can be found on the Company’s website www.akzonobel.com.

* Pursuant to the U.S. Private Securities Litigation Reform Act 1995.

HWNEY2004 2

Hans Wijers, CEO

Creating a platform for growth February 4, 2005

2004 Results Press Conference HWNEY2004 3

2004 – actions to strengthen the Company paid off Akzo Nobel tackled challenges with accelerated pace of change

Robust performance 2004 – actions paying off

2005 – facing the future from a position of strength

HWNEY2004 4

Robust performance in the face of headwind • Pharma: sales down 9%, but margins held steady thanks to restructuring and benefits of new alliances • Coatings: autonomous growth 5%, steady ROS and higher ROI despite steep rise in raw material costs • Chemicals: quantum leap in ROI, strong operating profit growth from continuing operations • Divestment program achieved EUR 1 billion proceeds • Operating leverage due to aggressive restructuring – cost lowered by EUR 150 million compared to 2003

HWNEY2004 5

Creating the platforms for growth

Pharma – ready for renewed top-line growth Coatings – expanding #1 position

Chemicals – further focused platform

HWNEY2004 6

2004 financial results

HWNEY2004 7

Net income substantially up 2004

2003

Sales

12,688

13,051

(3)

EBIT*

1,210

1,347

(10)

Net income excl. nonrec.

770

811

(5)

Net income

856

602

42

ROS*

9.5

10.3

EPS

3.00

2.11

EUR mln or %

∆%

Ratio or EUR

* Excluding nonrecurring items HWNEY2004 8

Outperformance against 2004 outlook 2004

EUR mln or %

2003**

∆%

Sales

12,688

13,051

(3)

EBIT*

1,210

1,259

(4)

Net income excl. nonrec.

770

741

4

Net income

856

542

58

ROS*

9.5

9.6

* Excluding nonrecurring items ** Excluding initial asenapine payment HWNEY2004 9

Autonomous growth 2% EUR bln

Pharma

Coatings

Chemicals

Sales

Δ%

12.7

(3)

3.2

(9)

5.2

4.3

2

Growth

+ 2%

Currencies

– 3%

Divestments/ acquisitions

– 2%

Total

– 3%

1*

2004

* Ongoing operations HWNEY2004 10

Operating income down EUR mln

Δ%

EBIT

Pensions

+ 4%

1,210

(10)

Currencies

– 4%

Pharma

522

(14)*

Divestments/ acquisitions

– 2%

Coatings

421

2

Performance

– 2%

Total

– 4%

Pfizer

– 6%

Total

– 10%

Chemicals

354

21**

2004 * Excluding asenapine. ** Ongoing operations. Excluding nonrecurring items.

HWNEY2004 11

Pharma – margin aggressively defended; benefiting from strategic realignments • Organon – turning point for top-line growth • Diosynth – overcapacity • Intervet – good results

HWNEY2004 12

Pharma – margin protection program mitigating effect top-line decline Sales

EBIT

900

350 300 250

600

200 150 300

100 50

0

0 Q-1

EUR mln

Q-2

Sales

Q-3

EBIT

Q-4 2003 2004

Excluding nonrecurring items; Q-4 dark top part concerns asenapine special benefit. HWNEY2004 13

Coatings – volume growth and improved efficiency offset rising raw materials costs • Steep increase in raw material costs in second half • Autonomous growth 5%, mainly Asia Pacific and U.S., 32% of sales now from emerging markets • ROS held steady at 8%, ROI improved to 20.5% • Marine & Protective and Powder Coatings led growth • Decorative Coatings – improved performance from cost savings • Car Refinishes – major worldwide restructuring set to pay off in 2005

HWNEY2004 14

Coatings – raw materials impact 2H, priority to obtain higher selling prices in 2005 Sales

EBIT

1.500

200

1.000 100 500

0

0 Q-1

EUR mln

Q-2

Sales

Q-3

EBIT

Q-4

2003 2004

Excluding nonrecurring items HWNEY2004 15

Chemicals – best performance in years • Benefits of cost savings programs combine with improved business conditions to lift performance • Continued operations – autonomous growth 5%; operating income up 21% • Steeply rising raw material and energy prices – increasing pressure on margins • EUR 1 bln divestment program – completed

HWNEY2004 16

Chemicals – superior performance from continuing operations Sales

EBIT

1.250

125

1.000

100

750

75

500

50

250

25

0

0 Q-1

EUR mln

Q-2

Sales

Q-3

EBIT

Q-4 2003 2004

Excluding nonrecurring items. Dark top part concerns Catalysts, Phosphorus Chemicals and Coating Resins. HWNEY2004 17

Restructuring in mature markets – growth in Asia Pacific December 31, 2003: 64,580 Restructuring 2,650 Divestments 1,610 Growth 1,130 December 31, 2004: 61,450

Number of employees HWNEY2004 18

Positive impact of nonrecurring items

• Net nonrecurring gain of EUR 86 million – divestments – restructuring and impairment charges – antitrust cases – settlement of Remeron® cases

HWNEY2004 19

Strong financial position, dividend maintained 2004

2003

Working capital

2.2

2.6

Equity

3.2

2.6

Net borrowings

1.1

2.4

1.20

1.20

45

42

December 31; EUR bln

EUR or %

Dividend Payout ratio

HWNEY2004 20

Q-4 operational performance • Q-4 earnings lower • Autonomous growth of 4% • Operating income down 42% • Good operational performance • Pharmaceuticals performance in line with expectations • Coatings impacted by raw material costs • Chemicals good

HWNEY2004 21

Actively Managing the Businesses

HWNEY2004 22

Strategic review Chemicals – conclusions • Focus portfolio on selected market segments meeting the following criteria: – Leading position and significant size – Competitive advantage and opportunity to grow – Sustainable above average financial performance – Good internal fit

HWNEY2004 23

Commitment to 5 core businesses with clear prospects for profitable leadership • Pulp & Paper Chemicals Pulp Bleaching and Paper Chemicals for global pulp & paper industry

• Polymer Chemicals Organic Peroxides and additives for polymer producers and processors around the world

• Surfactants Surfactants for cleaning, agro, mining and petroleum applications

• Functional Chemicals High value added specialties, intermediates and derivatives

• Base Chemicals Integrated Energy, Salt and Chlorine chain

HWNEY2004 24

Businesses to be divested • Ink & Adhesive Resins • Oleochemicals • Salt Specialties • PVC Additives • Solar Salt Australia • Methyl Amines / Choline Chloride • Others Total 2004 sales of about EUR 750 mln

HWNEY2004 25

Clarity of direction • Challenging restructuring necessary to secure a solid foundation for Akzo Nobel Chemicals • A clear commitment to support profitable growth in strategic areas • Manage divestments and rationalization in an efficient and responsible manner

HWNEY2004 26

2005

HWNEY2004 27

We enter 2005 in excellent shape, facing the future from a position of strength • Demonstrate Pharma pipeline progress • Active consideration of opportunities to expand leadership positions • Push volume growth and price increases to mitigate raw materials cost pressures • Execute new divestment program and reap benefits of further restructuring

HWNEY2004 28

2005 – cautiously optimistic • Top-line growth across portfolio • Continued external pressure on margins – raw material and energy prices – currencies • Costs to support future launches from Pharma pipeline – defending margins vs. R&D and pre-marketing costs

Æ Aspiring to achieve net income within range of 2004 excluding nonrecurring items

HWNEY2004 29

Operational performance 4th quarter of 2004

HWNEY2004 30

Q-4 operational performance • Q-4 earnings lower • Autonomous growth of 4% • Operating income down 42% • Good operational performance • Pharmaceuticals performance in line with expectations • Coatings impacted by raw material costs • Chemicals good

HWNEY2004 31

Q-4 earnings – at a first glance 2004

2003

Sales

3,040

3,111

(2)

EBIT*

254

441

(42)

Net income excl. nonrec

165

268

(38)

90

105

(14)

Q-4; EUR mln or %

Net income

∆%

* Excluding nonrecurring items HWNEY2004 32

Q-4 earnings – excluding asenapine payment 2004

2003**

Sales

3,040

3,111

(2)

EBIT*

254

353

(28)

Net income excl. nonrec

165

198

(17)

90

35

157

Q-4; EUR mln or %

Net income

∆%

* Excluding nonrecurring items ** Excluding initial asenapine payment HWNEY2004 33

Autonomous growth 4% Q-4, EUR bln

Pharma

Coatings

Chemicals

Sales

Δ%

3.0

(2)

0.8

(9)

1.2

1.0

7

Growth

+ 4%

Currencies

– 3%

Divestments/ acquisitions

– 3%

Total

– 2%

6*

2004

* Ongoing operations HWNEY2004 34

Operating income down 42% Q-4, EUR mln

Pharma

EBIT

Δ%

254

(42)

119

(40)*

Pensions

+ 3%

Performance

– 20%

Pfizer

– 20%

Divestments/ acquisitions

– 3% – 2%

Coatings

56

(32)

Currencies

Chemicals

88

24**

Total

– 42%

2004 * Excluding asenapine. ** Ongoing operations. Excluding nonrecurring items. HWNEY2004 35