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