Amsterdam, March 29, 2012 ING SRI conference The business case of sustainability Andre Veneman. Corporate Director Sustainability

Transcription

1 Amsterdam, March 29, 2012 ING SRI conference Andre Veneman Corporate Director Sustainability

2 Agenda AkzoNobel at a glance Strategic ambitions Eco-premium solutions Sustainability throughout the supply-chain Sustainable solutions for our end markets Creating sustainable shareholder value Questions 1

3 AkzoNobel key facts 2011 Revenue 15.7 billion 57,240 employees EBITDA: 1.8 billion* Net income: 0.5 billion 40 percent of revenue from high growth markets A leader in sustainability Revenue by business area EBITDA* by business area 34% 33% 31% Performance Coatings 46% Decorative Paints Specialty Chemicals 33% 23% * Before incidentals 2

4 How global megatrends affect our industry Population growth 7.0 billion people today to over 9 billion in 2050 Climate change Increase the need for energy efficiency and low carbon & renewable energy sources Quality of life A new middle class 3 billion people emerging over the next 20 years Scarcity of natural resources Drives innovation Td Today we use replenishment capacity of 1.5 planets * Sources: UN World Population prospects, OECD, IPCC, World resources institute, WBCSD 3

5 Our strategic ambition is to be 4

6 Our medium term strategic goals Grow to 20 billion revenues Increase EBITDA each year, maintaining 13-15% 15% margin Reduce OWC/revenues by 0.5 p.a. towards a 12% level Pay a stable to rising dividend Top pquartile safety performance Top 3 position in sustainability Top quartile performance in diversity, it employee engagement, and talent development Top quartile eco-efficiency improvement rate Sustainable growth is a prerequisite for future profitability 5

7 Clear sustainability focus Accelerated sustainability strategy will deliver: Safety at 2.0 injuries/ million hours 30% of revenue from Eco-premium solutions Sustainable fresh water management 30% eco-efficiency improvement on our operations 10% carbon footprint reduction cradle to gate (25% by 2020) 20% executives from high-growth economies Key supplier partnerships delivering footprint reduction Embed safety and sustainability in everything we do 6

8 Our sustainability framework Examples Level of development Environmental Economic Social Invent Integrate sustainable value propositions Carbon and Eco-premium water policies solutions Leadership training Manage Include sustainability in all aspects of the value chain Improve Continue to comply pyand ensure a license to operate Market research Eco-premium Zero VOC R&D Environmental / product stewardship Investment decisions Required eco-analysis Supportive supplier visits Manufacturing Sourcing Code of Conduct Operational eco-efficiency Market propositions Sales and marketing Stretched safety targets Aspect of sustainability (linked to SAM) 7

9 Exciting RD&I pipeline with innovative solutions for key market segments How innovation will support our growth agenda: Functional solutions in key market segments Increase spend in Big R&D >15% of revenue from breakthrough innovations* >30% of revenue from Eco-premium solutions** Revenue by key market segment 13% 12% 43% 32% Residential construction Consumer goods Non-residential construction Transport Major innovations that result in a significant competitive advantage ** Higher eco-efficiency than main competitive product 8

10 Eco-premium solutions have a superior growth rate and profitability Eco-premium solutions In % of revenue 30% Eco-premium solutions* Are products that have a higher eco-efficiency than the main competitive product 18% 21% 22% Give us a competitive edge, are more profitable and have a superior growth rate compared to other products ambition The 30% ambition is a moving target, requires a significant RD&I investment * An eco-premium solution is measured using a quantitative analysis or a qualitative assessment focusing on six categories: toxicity, energy efficiency, use of natural resources/raw materials, emissions and waste, land use and risks (eg accidents). The eco-premium solution must be significantly better than currently available solutions in at least one criterion, and not significantly worse in any. 9

11 Carbon intensity in our own scope is relatively low But the picture changes when we take a supply chain view Million tons CO2 equivalents, , ,9 12,0 4,5 0 Suppliers AkzoNobel Use / end of life* CO2(e) GHG protocol VOC... Making it necessary to work collaboratively * estimate 10

12 Solutions for our end markets Construction Transport & Mobility Personal care/consumer goods 11

13 Sustainable solutions in construction: the zero carbon house "The BASF House" in Nottingham, UK 12

14 How Decorative Paints contributes to the zero carbon house Dulux Forest Breath Addresses consumer concern about health Super air purification, anti-germ functionality and a flawless finish Sikkens SanoProtex Applicable in hospitals, nursing homes and other health care facilities Anti bacterial, actively prevents bacterial growth Dulux WeatherShield Keep Cool Increased reflectance reduces internal temperatures by up to 5 C and saves up to 15% on energy used for air conditioning Ecosure Sikkens Optimal balance between low environmental impact, high quality & total lifecycle footprint Light & Space Custom specialist paint developed to meet customer needs Energy saving & increased space perception 13

15 How Performance Coatings contributes to the zero carbon house Casco Adhesives MF 1263/9563 GREENGUARD Children & Schools Certified Used for applications in the wood working industry, where there is demand for light-colored glue-lines with high water and weather resistance. Interchar 1120 Forms an insulating layer in reaction to intense heat Extends structural integrity for up to 4 hours Ensures building is sustainable, during construction and occupation MCL painting Allows the coater/steel company to offer already primed steel for use in general industry applications With zero VOC and low curing temperature, this product can be coated on the metal coating line (MCL) after the galvanizing process. Interpon D series for aluminum window frames Application with a high durability sustainable solution compared to competing solutions like liquid id paints and anodized d frames. smaller carbon footprint t and no solvents (no VOC) 14

16 Institutional change required 15

17 New coalitions - new opportunities NGOs Business Universities Government Sustainable innovation Finance 16

18 We need to put our heads together to come up with more innovative, sustainable solutions 17

19 Sustainability makes a great business case Eco-premium solutions give us a competitive edge and superior growth rates compared to other products Sustainability requires collaboration throughout the supply chain, in order to deliver successful products in our end-markets Sustainability helps us to attract & develop talent in order to achieve our growth ambition Sustainability helps reducing risks Therefore we will continue to use sustainability as an important measure in management remuneration 18

20 Sustainability and long-term shareholder value go hand in hand Source: SAM (Sustainability Asset Management) 19

21 Questions 20

22 Appendix 21

23 Decorative Paints key facts 2011 Revenue 5.3 billion 22,340 employees EBITDA: 440 million* 40 percent of revenue from high growth markets Largest global supplier of decorative paints Many leading positions, strong brands Some of our strong brands Revenue by geography 20% 12% 3% Mature Europe Emerging Europe 40% Asia Pacific North America Latin America Other regions 18% 7% * Before incidentals 22

24 Performance Coatings key facts 2011 Revenue 5.2 billion 21,960 employees EBITDA: 611 million* 47 percent of revenue from high growth markets Leading positions in performance coatings industry Innovative technologies, strong brands Revenue by business unit Revenue by geography 18% 15% 20% 27% 20% Marine and Protective Coatings Automotive and Aerospace Coatings Industrial Coatings Powder Coatings Wood Finishes and Adhesives 20% 8% 4% Mature Europe 30% Emerging Europe Asia Pacific North America Latin America 10% Other regions 28% * Before incidentals 23

25 Specialty Chemicals key facts 2011 Revenue 5.3 billion 11,510 employees EBITDA: 906 million* 33 percent of revenue from high growth markets Major producer of specialty chemicals Leadership positions in many markets Revenue by business unit Revenue by geography 6% Functional Chemicals 17% Industrial Chemicals 35% Pulp and Paper Chemicals 21% Surface Chemistry 21% 20% 9% 2% Chemicals Pakistan 22% 4% 43% Mature Europe Emerging Europe Asia Pacific North America Latin America Other Regions * Before incidentals 24

26 The global paints and coatings market is around 70 billion % of market 100% is around 70 billion Wood Finishes 6% General Industrial Coatings 10% Decorative 44% Performance 56% 7% 3% Car Refinishes Marine and Yacht 6% 2% Protective coatings 9% Special purpose 8% 2% 3% Auto OEM, metal, plastics Powder Coatings Coil Coatings Packaging Coatings Source: Company Reports 25

27 AkzoNobel is the world s largest Coatings supplier 2010 revenue in billion

28 Leading positions and strong brands 2011 Revenue by market position Some of our strong brands No. 2 or 3 32% Decorative Paints No. 1 position 59% Other 9% Performance Coatings Specialty Chemicals 27

29 Excellent geographic spread of both revenue and profits High growth markets are important (40% of revenue) % of 2011 revenue 38% Mature Europe 20% North America 10% Latin America 7% Emerging Europe 3% Middle East and Africa 22% Asia Pacific High growth markets profitability is above average 28

30 Aspirations for high growth markets (currently around 40 percent of our revenue) Double revenues in China Grow from $1.5 to $3 billion of revenues Already the biggest paint, coatings and specialty chemicals company in China Create significant footprint in India Grow from 0.25 to 1 billion in revenue Increasing footprint for all business areas Outgrow the competition in Brazil Grow from 0.75 to 1.5 billion in revenue Become clear market leader in all our activities Expand in the Middle East 29

31 High growth markets will become significantly more important % of revenue, indicative 32% Mature Europe 18% North America 11% Latin America 9% Emerging Europe 5% Middle East and Africa 25% Asia Pacific High growth markets will be around 50% of revenue in this decade 30

32 FY 2011 revenue and EBITDA million FY 2011 Δ% Revenue 15,697 7 EBITDA* 1,796 (9) Ratio, % FY 2011 FY 2010 EBITDA* margin Revenue development FY 2011 vs. FY % -1% 5 +2% +5% +7% 0 Volume Price/Mix Acquisitions/ divestments Exchange rates Total * Before incidentals Increase Decrease 31

33 Price increases coming through Quarterly volume development in % year-on-year % Decorative Paints -2% -4% -2% Performance Specialty AkzoNobel Coatings Chemicals Quarterly price/mix development in % year-on-year % 7% 5% 6% Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel

34 Achieved price increases have caught up with most raw material price inflation EBITDA* bridge FY 2010 FY 2011 million ,964 1, Currency Volume Price Raw materials Mix Other 2011 * Before incidentals Increase Decrease 33

35 Variable costs represent 54.3% of revenue % of 2011 annual revenue* 100% Raw materials, energy, and other variable costs Fixed production costs Selling, advertising, administration, R&D costs EBIT margin Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel 0% * Rounded percentages, all data excluding incidentals 34

36 Raw materials: both risk and opportunity 2011 Solvents Packaging 7% Energy & other variable costs* Raw materials Chemicals and intermediates*** 13% 7% 28% 8% Additives 2% Pigments 12% Resins 8% 8% Coatings specialties 7% Titanium dioxide Other raw materials** * Other variable costs include variable selling costs (e.g. freight) and products for resale ** Other raw materials include cardolite, hylar etc. *** Chemicals and intermediates include caustic soda, acetic acid, tallow, ethylene, ethylene oxide, sulfur, amines etc. 35

37 Raw Materials Strategy Short-term Maintaining safety margin of stocks Leveraging strong relationships with existing major suppliers Creating partnerships with the emerging suppliers in our growth markets Medium- to long-term Developing drop-in alternatives with suppliers Developing alternative building blocks for resins & latexes Increasing use of renewable raw materials (already 9% have a renewable content vs. industry average of 3%) 36

38 Renewable raw materials in action Products & on-going product development Dissolvine GL Functional Chemicals Biodegradable cleaning agent which eliminates use of phosphates Hybrid Polymers - Surface Chemistry Incorporate starch-based polymers to make biodegradable materials for cleaning and personal care applications Bio-based Latexes Decorative Paints Drop in replacement latexes for water based paints 37

39 Raw material case study TiO 2 is a challenge US$/Ton Regional TiO 2 Pricing in US$/tonne North America +91% Europe Asia Source: ICIS Pricing Pricing has increased steadily over the last decade, across all regions 38

40 TiO 2 case study: There has been a lag in new extraction capacity coming on stream Global supply & demand outlook for Ti mineral F Although there is no shortage of feedstock in the ground (mostly ilmenite and rutile), the market fears an expected shortage in TiO 2 supply Consumption Likely new projects (not yet approved) Approved new projects Existing production High current prices are bound to drive new investment in capacity we have already seen ample evidence of this, particularly in China Source: TZMI 39

41 TiO 2 case study: We are actively working to both increase security of supply and reduce dependence Sourcing Leveraging strong relationships with major suppliers, including the emerging suppliers in China Maintaining a safety margin of stock Partnering with China-based Guangxi CAVA Titanium Industry to manufacture and distribute TiO 2 With this deal a new TiO 2 facility will be developed in Qinzhou with a production capacity of 100,000 tons p.a., pa,saed slated to begin operation o in 2014 Further guarantees security of supply for the Asian market Research & Development Using our formulation science expertise and our highthroughput experimentation capability to reduce our TiO 2 dependence in 3 ways: Using existing replacement technology Working with key suppliers to develop new technologies Increasing efficiency of use through formulation improvements Combined, these initiatives mean we can reduce our total TiO 2 usage while maintaining cost efficiency and product attributes 40

42 Talent development, engagement and diversity are important Talent development AkzoNobel is focused on best-in-class talent management, with the aim of ensuring AkzoNobel is recognized internally and externally as an employer of choice. A number of new initiatives are in place to ensure we improve our performance, including: strong employer value proposition to attract the right people; improving strategic planning; building capability among key talents via the AkzoNobel Academy; improving transparency of where our key talents are. Employee engagement To further improve our performance, we have put in place the ViewPoint Employee Engagement program. This is based on the Gallup Q12 survey, with additional specific AkzoNobel questions. Good progress is being made. Last year, we made a bigger than average increase in our engagement levels compared to other companies in the 2 nd year of the Gallup program. Diversity To achieve our growth ambitions, we need to create a working environment where differences are valued and where everyone has the opportunity to develop their skills and talents. We have had a dedicated Diversity & Inclusion (D&I) Program in place since The goals of the program are to create awareness and engagement around diversity, to embed the concept in the organization, to establish company-wide metrics and to make AkzoNobel a true reflection of the markets that we operate in. Good progress is being made against our main KPIs (women and HGM executives). These important t topics are centrally managed from ExCo 41

43 Strong operating returns on invested capital 30% 27.7% 25% 23.2% 22.3% 20% 15% 10% 5% 0% 9.2% 10.8% 8.9% * Operating ROI is calculated as EBIT before amortization divided by average invested capital excluding intangible assets Moving average ROI % Operating ROI %* 42

44 Cash flows 2011 million Profit for the period Amortization and depreciation Change working capital (344) (124) - Pension provisions (410) (434) - Restructuring - Other provisions (4) (84) (101) (116) Change provisions i (498) (651) Other operating cash flows 1 (93) Operating cash flows Capex (708) (534) Changes from borrowings (470) (33) Dividends (362) (403) Discontinued operations 11 1,095 Other changes (133) 10 Total cash flows (1,337)

45 Pension deficit decreases to 0.5 billion Key pension metrics Q Q Discount rate 46% 4.6% 50% 5.0% Inflation assumptions 2.5% 2.7% Pension deficit development during Q billion 02 0,2 0,0-0,2-0,4 (661) 661 (508) 203 (208) (505) -0,6 8-0,8 Deficit end Q Top-ups Increased plan assets Discount rates Inflation Other Deficit end Q Increase Decrease 44

46 Pension deficit decreases to 0.5 billion Key pension metrics Q Q Discount rate 46% 4.6% 54% 5.4% Inflation assumptions 2.5% 3.0% Pension deficit development during 2011 billion 02 0,2 0,0-0,2-0,4-0,6-0,8-1,0-1,2 (1,049) Deficit end Top-ups 840 Increased plan assets (1,233) Discount rates 622 (39) (505) Inflation Other Deficit end 2011 Increase Decrease 45

47 Triennial actuarial valuation of the ICI Pension Fund completed in January 2012 Funding deficit has reduced reflecting trustees liability driven investment strategy and cash top-ups paid Compared to the current, 6 year deficit recovery e plan: Top-up contributions over the remaining 6 years of the recovery plan are expected to be million lower in total Phased recovery plan savings: 62.5 million p.a. in 2012 and 2013, 19 million p.a. in 2014 to 2016 and 16.5m in million contingent asset structure on our balance sheet terminated and 200 million ( 239m) of assets transferred to the Fund in 2012 to accelerate de-risking per pension strategy 46

48 Pension cash contributions expected to reduce in 2012 million E Regular Top-up Total The one-off off cash costs related to the termination of the contingent asset is expected to be 239 million in 2012 The non-cash IAS 19 corridor method of pension accounting impact in 2011 was 92 million, of which h 59 million is on the interest line and 33 million in EBITDA The expected non-cash IAS 19 corridor method of pension accounting impact in 2012 is 100 million, of which h 63 million is on the interest line and 37 million in EBITDA 47

49 Performance improvement program: stepping up operational and functional excellence Underpin our growth and margin objectives Enhance our ability to grow Expected to bring us at or above the mid-point of our percent EBITDA margin guidance. Deliver structural competitive advantage Leveraging scale, simplify support structures, reduce cost base Transfer best practices, standardize key processes Restructuring of underperforming parts of the portfolio Full EBITDA impact of 500 million in 2014 Expected total incidental costs 425 million 2012: 200 million EBITDA, incidental costs of 200 million Reporting on program deliverables every six months 48

50 A comprehensive program Comprehensive all functions, all businesses Margin management, R&D and restructuring (~50%) Supply Chain and Sourcing projects (~40%) Finance Decorative Paints Perf. Coatings Specialty Chemicals Improvements implemented over three years (2012 to 2014) All business areas contribute to delivering the 500 million >40 percent Decorative Paints >30 percent Performance Coatings Close to 25 percent Specialty Chemicals Information Management Research, Dev t & Innov. Human Resources Integrated Supply Chain Margin Management Academy 49

51 The performance improvement program is on track to deliver 500 million EBITDA in 2014 Development of 2012 overall plan on track 28 million of restructuring provisions taken in Q with around 200 million expected in 2012 Further restructuring underway within Decorative Paints Europe Additional actions announced in Decorative Paints North America Close to 800 employees have been made redundant Confidence in delivery of 200 million EBITDA in

52 Capital expenditure prioritization for growth Capex 2011 was 708 million (including Ningbo 45) Medium term: Capex level to be at least 4 percent of revenues Capex as a % of revenue 2011 Capex split % 3% 3 52% 2 29% 1 Specialty Chemicals Decorative Paints Performance Coatings Base capex Ningbo National Starch Other 51

53 Year-on-year Operating Working Capital % of revenue to be reduced towards 12% OWC million % 17% % 15.0% 14.1% 13.9% 15.3% 14.5% 14.9% 14.4% 16% 15% 14% ,037 2,346 2,191 2,016 2,317 2,389 2,433 2,196 Q Q Q Q Q Q Q Q % 12% 11% 10% OWC OWC as % of LQ revenue*4 52

54 Debt duration lengthened to 3.6 years and no refinancing needed in 2012 Debt maturities* million (nominal amounts) bonds $ bonds bonds Strong liquidity position to support growth Undrawn revolving credit facility of 1.8 billion (2016) or 1.5 and $3 billion commercial paper programs available Net cash and cash equivalents 1.3 billion* * At the end of

55 Revenue growth and EBITDA margin performance Reported quarterly revenue growth in % year-on-year % 7% 2% 5% 0 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel Quarterly EBITDA* margin in % % 10.6% % 7.9% 5 0 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel * Before incidentals Target range 54

56 Unchanged ambition to maintain strong balance sheet million Dec 31, 2011 Dec 31, 2010 Total equity 9,743 9,509 Net debt* 1, Credit ratings unchanged at BBB+/Baa1, outlook stable Net debt increased mainly due to capital expenditures of 708 million, dividend payments of 362 million, operating cash inflow of 321 million and net cash outflow for acquisitions of 138 million In September 2011, we renewed our five year multi-currency syndicated revolving credit facility for 1.8 billion (previously 1.5 billion) * Before net pension deficit of 0.5 billion December 31, 2011 (December 31, billion) 55

57 2011 EBITDA Cash bridge million EBITDA before incidentals 1,796 1,964 Incidentals (cash) (120) (128) Change working capital (344) (124) Change provisions (498) (651) Interest paid (282) (265) Income tax paid (227) (277) Net cash from operating activities Lower profit from continuing operations Fair value changes and cash settlements for foreign currency hedging activities iti Lower payments related to provisions Lower payments for tax and interest 56

58 Eco Premium Solutions Decorative Paints - Dulux Weathershield (SunReflect & Keep Cool ) Solar reflectance feature Ordinary paints absorb heat new pigment technology reflects more of the solar, without affecting the color. Increased reflectance reduces internal temperatures by up to 5 C. Customer benefits Savings of up to 15% on the energy used for air conditioning Available across 60% of the color range Growth potential t SunReflect launched in India and Keep Cool in SEAP. Roll-outs planned in similar climates. 57

59 Eco Premium Solutions Performance Coatings - Sikkens Autosurfacer UV Key application features 50% less energy consumption 2 coats instead of 3 Extremely short drying times Reduced process time Benefits for body-shop owners Less paint consumption Increased throughput Reduced labor and energy costs Strengthens market position by Completing our UV-cure system offering 58

60 Eco Premium Solutions Specialty Chemicals High Filler Concept Replaces tree fiber with nonwood filler de-watering/retention system using novel on-line treatment of fillers Cost of filler up to 10x lower than fiber Growth potential Sales to customer higher than standard papermaking additives Growth potential in both highgrowth and mature markets Of interest to all fine paper producers Helping customers save costs ~10% less tree fiber to purchase up to 50% lower energy for drying 59

61 Recent innovations Protective Coatings Interchar 1120 Intumescent Coating A water based Intumescent coating for on-site application Key Features Reacts in the presence of intense heat to form an insulating layer Extend structural integrity for up to 4 hours Applied easily on-site during construction Customer Benefits Ensures building is sustainable, during construction and occupation Compliant with VOC regulations Growth potential Sustainable, green building becoming increasingly important in high growth areas such as China and India Launched in the UK, Europe and China, soon in the United-States 60

62 Pipeline 2011 Powder Coatings LAT Pipe Coating In-situ powder coating of pipe joints made possible Key Features Lower Application Temperature (LAT) reduces pre-heating temperature from 230 C to 180 C Makes in-field coating of pipe joints with powder coatings an economic proposition Customer Benefits Lower temperature cure will result in energy savings for customers Powder coated field joints offer better protection than current alternatives Growth Potential Following successful trialing, product launch will occur in late 2011 Immediate potential sale for coating 37,000 joints on a 225 km pipeline Allows penetration of new markets for single layer fusion bonded epoxies: e.g. higher grade steels, sensitive to temperatures above 200 C 61

63 Recent innovations Powder Coatings - Interpon A 5000 First full-body monocoat powder coating used on a passenger vehicle in Europe Key Features Unique matt black textured finish, developed with OEM stylists A high performance system with unique environmental advantages AkzoNobel supply both powder coatings and plastic components matching paint system through AAC Customer Benefits Fewer process steps reduces both complexity and energy consumption Improved environmental footprint Growth Potential Commercial launch by PSA is under discussion following successful trials with prototype vehicle Potential penetration of the automotive body-shell market Innovative design options open up for automotive manufacturers 62

64 Recent innovations Surface Chemistry - STRUCTURE CEL Polymers Naturally-derived rheology control polymers Features Thicken and texturize shampoos, conditioners, styling products and skin care systems Enhance aesthetic properties in cleansing and conditioning products Use of coatings chemistry in personal care applications Customer Benefits Thicken personal care products more naturally Attractive cost in use Performance equivalent to synthetic benchmarks Growth Potential Launched April 2011 First sales to customers in US and Europe 63

65 Recent innovations Surface Chemistry - Recentia TP Zeta Fraction Technology Features Based on Tanacetum Parthenium (Feverfew) leaf/flower/stem juice a safe and efficacious i sustainable bio-active material Process isolates active components from living gplant using gpatented solvent-free electrokinetic (zeta) potential fractionating technology No chemical modifications Customer Benefits Effectively diminish multiple skin irritant pathways Potent antioxidant activity Growth Potential Launched in US by J&J in 2009, Launched in Europe in multiple brands & applications in 2011 Non-exclusive fraction; new promotional channels under evaluation 64

66 Recent innovations Surface Chemistry Hybrid polymers Used in cleaning and personal care applications Key features Growth potential Advantages include: reliability Major players in consumer of supply, sustainability and cleaning markets showing interest cost Biggest opportunity is in laundry Biodegradable and and the second in automatic environmentally friendly dishwasher detergents Customer benefits Cut back on CO2 emissions Improving their green credentials 65

67 Recent innovations Industrial Chemicals Meso tartrate (mta) The next green generation anti-caking agent for salt Key Features Fully biodegradable and safe Superior performance in membrane electrolysis chlorine production Full dosing & application technology package Customer Benefits 5% lower power consumption in Cl 2 production Increased membrane and electrode lifetimes Explosive NCl 3 formation risk eliminated Growth potential Successful launch into the European market Being trialed in China a 28M tonne/annum vacuum salt market Extension into de-icing and edible salt applications 67

68 Recent innovations Decorative Paints Sikkens EcoSure An eco-friendly product range, supporting a fully integrated sustainability concept for the professional market Key Features A full range of interior and exterior wall, trim and woodcare products Optimal balance between low environmental impact, high quality & total lifecycle footprint Minimized VOC (zero where possible) and low embodied carbon Customer Benefits All products meet the criteria of the European Ecolabel and offer at least one additional eco-benefit (identified by the eco-droplet on the can for easy recognition) Similar application characteristics as alternative solvent-based products Growth potential Full range launched in the Netherlands and Belgium; roll-out elsewhere in Europe in progress Further additions to the range expected from the end of 2012 onwards 67

69 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 68