Winning together: 15 by 20 Investor update Q3 2018

Transcription

1 Winning together: 15 by 20 Investor update Q October 17, 2018

2 Agenda Strategy: Winning Together Thierry Vanlancker Commercial: Passion for paint Ruud Joosten Operations: Precise processes David Allen Financial: Powerful performance Maarten de Vries Investor update Q Winning Together March

3 Strategy: Winning Together Thierry Vanlancker Winning Together March

4 A focused Paints and Coatings company Key regions by revenue 9.6bn revenue 1.2bn EBITDA 0.9bn EBIT 9.4% ROS 13.9% ROI 35,700 people North America 12% Mature Europe 33% Emerging Europe 9% Asia Pacific 32% Latin America 9% Other countries 5% All figures are based on year-end 2017, including unallocated corporate center costs and invested capital Winning Together March

5 Top 3 player with leading positions in large and attractive markets Global paints and coatings by market sector ~ 110 billion, 2017 Decorative paints Powder coatings General Industrial and Other; 14% North America; 10% Global paints and coatings market ~ 110 bn Protective coatings Wood finishes Vehicle refinish Specialty / plastics Marine coatings Coil coatings Packaging coatings Automotive OEM (metal) Automotive OEM (metal); 7% 2% 3% 3% 4% 6% 7% 7% 8% 30% AkzoNobel active markets ~ 70 bn AkzoNobel market share ~ 10 bn General Industrial / Other Source: KNG, Internal estimates Top 3 players ~30% total market Top 20 players ~60% total market Winning Together March

6 Performance versus peers improved; potential for further improvement remains ROS 15% 10% AkzoNobel Paints and Coatings 5% 0% Source: Company data, internal estimates Winning Together March

7 Well positioned to accelerate growth and enhance profitability Return on sales 1 % Unallocated corporate cost Return on investment 1 % Unallocated corporate cost and invested capital > guidance² guidance² 1) ROS% = EBIT/revenue and moving average ROI% = 12 months EBIT/12 months average invested capital 2) Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption Winning Together March

8 Winning together: 15 by 20 Passion for Paint Precise processes 2020 guidance* ROS 15% ROI >25% Powerful performance Proud people *Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption Winning Together March

9 Management team in place to deliver Thierry Vanlancker CEO Maarten de Vries CFO Ruud Joosten Chief Operating Officer David Allen Chief Supply Chain Officer Maëlys Castella Chief Corporate Development Officer Marten Booisma Chief Human Resources Officer Isabelle Deschamps General Counsel Winning Together March

10 Business Business Business Business Customer Customer Customer Customer Business Business Business Business Business Business Business Business New fit for purpose structure to increase customer focus and drive efficiency From To Customers Integrated business planning SC SC SC SC Integrated supply chain Winning Together March

11 Clear path to deliver on 2020 guidance 10.6% Growth and net price/ mix Continuous Improvement Integrated Supply Chain Transformation SG&A and RD&I Transformation 15% 2020 guidance* ROS 15% ROI >25% Fixed cost inflation *Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption Unallocated corporate cost Winning Together March

12 Commercial: Passion for paint Ruud Joosten Winning Together March

13 Price increases implemented and building future capability for pricing acceleration Current and critical challenge ROS development*: Raw material headwind 9.8% ~ 300m 9.4% Oil price quarterly average TIO2 price quarterly average World oil price, Brent crude spot, $ per barrel vs. global average TiO2 prices Index (2017 average = 100) * Including unallocated corporate costs Cost control protected margins in short-term Pricing acceleration Standardized pricing methodology Differentiated approach to pricing actions Centralized and detailed action tracking Surgical analysis and full transparency Winning Together March

14 Strong portfolio of businesses with leading positions in all segments Segment Decorative Paints Marine and Protective Coatings Market size ~ bn, 2017¹ Market growth 2-3%², Position by revenue 1 1 Strengths and opportunities #1/#2 market positions where we play Strong brands and product portfolio Leverage global to win local! Marine: consolidated market Protective: few global players Global technology leadership 50% revenue from emerging markets Powder Coatings 8 1 Interpon #1 global brand Sustainable coatings conversions Strong product/ technology capabilities Industrial Coatings 12 1/2 Extensive product offering Strong position with top tier customers Urbanization and construction growth Automotive and Specialty Coatings 11 2/3 Growth of emerging market consumers Leader in digital color 1) Excluding ~ 40 billion in regions/segments where we are not present 2) Total market growth (revenue weighted) Source: KNG, internal estimate Winning Together March

15 Decorative Europe: Winning model to capture benefits in recovering market Largest player in fragmented market Market expected to continue recovery Others AkzoNobel Peer 1 Peer 2 Peer 3 50% #1 positions 30% #2 positions Decorative Paints Europe Market Size Index* % CAGR Grow market share and improve profitability: Build winning brands and leading positions Reduce complexity Leverage scale Optimize portfolio and route to market Opportunities for consolidation Leverage global to win local! Smart packaging design Global guidelines Local brand assets *Source: KNG 2017, internal estimate Winning Together March

16 Decorative Asia: continued expansion in highly profitable and fast growing markets 10bn market Strong growth drivers #1 or #2 positions in many countries Highly profitable and cash generative (despite lower ASP) Leveraging global brands and innovation Local expertise and strong customer understanding Profitable growth in mass market and project business China Growing demand for eco-premium products Leader in sustainability Doubled in 10 years 1000 Revenue Decorative Paints Asia ( million) South East Asia Developing a successful exterior proposition and leveraging best practice from Europe Winning Together March

17 Marine and Protective Coatings: ongoing restructuring and portfolio rebalancing Industry headwinds in marine and oil and gas industries Rebalancing portfolio for Protective Coatings 140, , ,000 80,000 Oil and gas capital expenditure ($ bn) Marine order book CGT* Oil & Gas Infrastructure, Power, Mining 60, Revenue development Marine and Protective coatings demonstrates lag effect 13% -5% 2% 11% -7% -11% Global market leader, defending strong positions Focus on value pricing; restructuring ongoing Maintain technology leadership, e.g. Intersleek UV-LED Source: Clarkson Research. *Compensated gross tonnage Winning Together March

18 Powder Coatings: Clear global #1 in fastest growing and highly profitable market AkzoNobel Multiple sources of growth (examples): Peer 1 Peer 2 New applications Architectural and automotive coatings Others Peer 3 Increased capacity Chengdu Biggest powder coatings plant in the world ~ 8bn market Growth 2x industrial GDP #1 with 2x relative market share Geographic expansion Product innovation Northern and Western India and Western China OneWheel, Interpon Cr Sustainability advantages of powder coatings over liquid coatings: Zero Volatile Organic Compounds (VOCs) Bolt-on acquisitions V.Powdertech, Thailand Less waste during application (>95% usage efficiency) Winning Together March

19 Operations: Precise processes David Allen Winning Together March

20 One organization with a common way of working and aligned set of targets 15,000 people 123 sites 448 warehouses 250m CAPEX/ yr AkzoNobel Leading Performance System: ALPS Customer excellence Operational excellence Leading edge technology Note: Total reportable rate (TRR) 1.0 is equivalent to 0.2, in line with OSHA guidelines 2020 targets: Safety TRR <1.0 (Top quartile) Service 98.5% Perfect Order Index (OTIF) Cost 4% annual cost productivity Capital Inventories 25% lower People Top quartile engagement Winning Together March

21 Journey to build a world-class integrated supply chain Today End to end ALPS customer and supplier focused processes to support delivery of 15% ROS by 2020 Integrated ALPS Integrated Business Planning process for all business units to improve financial performance Total quality and service excellence Supplier collaboration ALPS Digitization Organization transformation ALPS Integrated Business Planning Purchase to pay (procurement) + 200m annual cost savings by Functional ALPS continuous improvement processes and standardized ways of working Global functional strategy Common safety platform ALPS Plan, Source, Make, Deliver 120m cost savings annually Winning Together March

22 1 ALPS continuous improvement Implementation status (%) Plan 35% planning entities Source 60% organization Make 75% sites Deliver 20% warehouses 48 ALPS processes designed and deployed 3800 employees trained and certified ~700 ALPS improvement projects per year 67 site and warehouse closures Safety TRR 1.0 (Top quartile) Service >95.5% OTIF (Top quartile) 120m annual cost savings run rate Winning Together March

23 2 ALPS Integrated Business Planning +75% Forecast accuracy Organization transformation: One operating model Integrated Business Planning: One end-to-end business process 95.5% 98.5% Service (OTIF) 25% Inventory reduction Top Quartile Performance Winning Together March

24 One operating model and Integrated Business Planning 3 End to end processes Cost of sales ~ 5.4bn in 2017 Total quality and service excellence Supplier collaboration ALPS Digitization Asset network optimization Resource productivity Further 200m annual cost savings by 2020 in addition to ALPS continuous improvement Winning Together March

25 Financial: Powerful performance Maarten de Vries Winning Together March

26 Winning together strategy leverages greater focus to accelerate improvements Passion for Paint From Decentralized businesses Differing levels of maturity To Centrally driven sales excellence and margin management Consistent across all businesses Precise processes Fragmented process and system landscape Simplified ERP and system platform... Integrated end-to-end processes Powerful performance Proud people Independent businesses with dedicated supply chain Many KPIs... Diverse cultures Fragmented incentive schemes Lean fit-for-purpose organization Laser sharp focus on 15% ROS! One single global team Aligned incentives High-performance culture Winning Together March

27 Transformation plans in place with most projects already being initiated Sales force effectiveness Margin management Innovation excellence Global Business Services Integrated Business Planning ERP and systems platform ALPS continuous improvement Fit-for-purpose organization Procurement excellence High performance culture Career and capability development Core principles Initiate Implement Complete Winning Together March

28 Clear path to deliver on 2020 guidance 10.6% Growth and net price/ mix ~2%/ yr Continuous Improvement Integrated Supply Chain Transformation 200m by 2020 SG&A and RD&I Transformation 15% 2020 guidance* ROS 15% ROI >25% Fixed cost inflation ~ 100m/ yr Key initiatives: Fit-for-purpose organization ( 110m in 2018) Sales force effectiveness Innovation excellence Global Business Services ERP and systems platform *Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption Unallocated corporate cost Winning Together March

29 Continued focus on cash flow and increased shareholder returns Working capital 8.9% 8.7% 9.1% 10.2% OWC Cash conversion (EBITDA - capital expenditure)/ebitda 77% 79% * Specialty Chemicals separation 0% 100% 0% OWC % of revenue EBITDA Capital Expenditure -100% Cash conversion Significant returns to shareholders: 50% higher dividend for bn special cash dividend (paid) Vast majority of net proceeds returned* Winning Together March

30 Strong bolt-on acquisitions completed during recent years BASF Industrial Coatings Expands our (technology) portfolio and strengthens our market positions, particularly in coil, protective and wood coatings sectors Feb 2016: BASF Industrial Coatings V.Powdertech Strengthens our leading global market position in powder coatings November 2017: V.Powdertech Fabryo Agreement to acquire Fabryo, becoming the leader in the Romanian decorative paints market June 2018: Fabryo Flexcrete Expands our offering in key industrial markets of downstream oil and gas, chemical processing, commercial infrastructure, power and water Note: Timeline shows date of acquisition announcement July 2017: Disatech July 2017: Flexcrete Disatech Brings new technologies and services that complement existing portfolio of coatings and films for the aerospace and transport sectors Sept 2018: Xylazel Xylazel Strengthens our position as a leader in the decorative paints market in Spain and means we are now the leader in the country s woodcare segment Acquisition criteria: Strategically aligned and value generating Adding segment, geography and/or technology to the portfolio Disciplined approach 30

31 Capital allocation priorities for long-term value creation 1. Chemicals separation Vast majority of net proceeds returned to shareholders 2. Profitable organic growth Enhanced profitability while investing in growth 3. Acquisitions Strategically aligned and value generating acquisitions 4. Dividend Stable to rising dividend ( 1.65 per share for 2018) 5. Manage pension liabilities Limit risk and reduce uncertainty 6. Balance sheet Retain strong investment grade credit rating Winning Together March

32 A focused, high performing paints and coatings company Strong global brands Leading positions in large and attractive markets Balanced geographic exposure: 50% revenue from emerging markets Well positioned to accelerate growth and enhance profitability Transformation plans in place and clear path to deliver Significant returns to shareholders 2020 guidance* ROS 15% ROI >25% * Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption 32

33 Investor update Q October 17, 2018 Spiced Honey has been unveiled by AkzoNobel as the Color of the Year for It was selected following expert research into global trends, insights and consumer behavior. The warm amber tone which perfectly captures the theme of Let the light in is being marketed under well-known decorative paints brands such as Dulux, Coral, Levis and Flexa.

34 Continued progress on transformation into a focused paints and coatings company Paints ROS up at 12.1% (2017: 9.4%) and Coatings ROS up at 12.2% (2017: 10.3%) Price/mix increased further to 6% overall Lower volumes, partly driven by moving away from lower margins given our value over volume strategy Continued progress on transformation delivered 35 million cost savings in Q3 Taking next step in our transformation to deliver next 200 million cost savings by 2020 Sale of Specialty Chemicals completed; returning a total of 6.5 billion to shareholders Acquired Xylazel in Spain and completed acquisition of Fabryo in Romania Investor update Q

35 Q delivering towards our Winning together: 15 by 20 strategy Sales force effectiveness Margin management Innovation excellence Price/mix increased further to 6% in Q3 ROS* up at 12.3% (Q3 2017: 10.0%) Global Business Services Integrated Business Planning ERP and systems platform ALPS continuous improvement Fit-for-purpose organization Procurement excellence High performance culture Career and capability development Core principles Continued progress on IBP implementation: Coatings started monthly cycle; Paints in training > 30m continuous improvement savings in Q3 35m cost savings in Q3 from fit-for-purpose Taking the next step in our transformation Focusing on value over volume #4 DJSI (13 th consecutive year in sector top 10) *Excluding unallocated corporate center costs Investor update Q

36 Taking next step in our transformation to deliver next 200m cost savings by 2020 Sales force effectiveness Margin management Innovation excellence Global Business Services Integrated Business Planning ERP and systems platform ALPS continuous improvement Fit-for-purpose organization Procurement excellence High performance culture Career and capability development Core principles Total quality and service excellence Supplier collaboration ALPS Digitization Asset network optimization Resource productivity 200m annual cost savings by 2020* (from ISC, SG&A and R&D) 350m total one-off costs between 2018 and 2020 including 60m non-cash items related to asset network optimization * Estimated run rate savings of around 240m in 2021 Investor update Q

37 Focusing on value over volume; Dealing with market headwinds EMEA Powder Coatings Marine and Protective Coatings China ~ Industrial Coatings ~ South and South East Asia Latin America Automotive and Specialty Coatings Foreign exchange Raw materials Investor update Q

38 Robust pricing initiatives continue in Q3; ROS* increased 230 basis points Revenue Flat in constant currencies Lower volumes, partly due to focus on value over volume Price/mix 6% higher Completed sale of Specialty Chemicals; returning a total of 6.5 billion to shareholders ROS* Increased to 12.3% (Q3 2017: 10.0%) Interim dividend 0.37 per share Rebased for Paints and Coatings Acquired Xylazel in Spain; completed acquisition of Fabryo in Romania *Excluding unallocated corporate center costs Investor update Q

39 Focusing on value over volume: Continued progress on pricing initiatives Decorative Paints Performance Coatings* Paints and Coatings* Quarterly price/mix development in % year-on-year Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Quarterly volume development in % year-on-year Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 * Includes impact from acquisitions Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 (continuing operations) Investor update Q

40 Pricing initiatives and cost savings compensating for higher raw material costs million Q3 2017¹ Q Δ% Δ%CC Revenue 2,419 2,326 (4%) 0% Adjusted EBITDA % Adjusted operating income % Operating income % ROS% excluding unallocated corporate center costs ROS%² ROI%² Revenue development Q (%) Increase Decrease Revenue flat in constant currencies, with positive price/mix offset by lower volumes Volumes were lower, partly due to focus on value over volume Adjusted operating income up 18m at 243m driven by pricing initiatives and cost saving programs despite 10 million adverse impact from foreign currencies Operating income was up 22m at 237m and includes a 6m adverse impact from identified items, mainly related to the transformation 1. Represented to present the Specialty Chemicals business as discontinued operations. 2. ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. (continuing operations) Investor update Q

41 Positive price/mix and cost savings offsetting higher raw materials Adjusted operating income bridge: Q to Q Positive impact Negative impact Q Adjusted operating income FX Volumes Price/mix Raw materials/ Variable cost Cost savings and other items Q Adjusted operating income (continuing operations) Investor update Q

42 Decorative Paints ROS% up driven by selling prices and cost savings million Q Q Δ% Δ%CC Revenue 1, (6%) 0% Adjusted EBITDA % Adjusted operating income % Operating income % ROS%* ROI%* Revenue development Q (%) Increase Decrease Colorful Yunnan Happy World, the first theme park in southwest China, opened to the public in Kunming, Yunnan province, after collaborating with AkzoNobel s Dulux Pro brand to paint around 180,000 square meters of attractions and facilities in approximately 80 different colors. *ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. (continuing operations) Investor update Q

43 Performance Coatings ROS% up for all businesses million Q Q Δ% Δ%CC Revenue 1,428 1,388 (3%) 0% Adjusted EBITDA % Adjusted operating income % Operating income % ROS%* ROI%* Revenue development Q (%) Increase Decrease *ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. Animal attraction has drawn AkzoNobel and Embraer together to develop stunning livery for three of the aircraft maker s latest line of E2 commercial jets. The eyecatching trio of designs depicting an eagle, a tiger and a shark were created using aerospace coatings from the company s Alumigrip and Aerodur ranges. (continuing operations) Investor update Q

44 Specialty Chemicals revenue up; Adverse impact from one-off items million Q Q Δ% Δ%CC Revenue 1,209 1,287 6% 9% Adjusted EBITDA (4%) Adjusted operating income (7%) Operating income (7%) ROS%* ROI%* Revenue development Q (%) Increase Decrease Revenue up 9% in constant currencies, mainly due to positive price/mix Adjusted operating income 7% lower at 145m; strong pricing and productivity improvements were more than offset by environmental and other one-off items (totaling 35m) and adverse currencies *ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. (reported as discontinued operations) Investor update Q

45 Sale of Specialty Chemicals completed; returning a total of 6.5 billion to shareholders Apr 19, 2017 Dec 7, 2017 Oct 1, 2018 Q mid 2020 Announced separation of Specialty Chemicals business within 12 months Advance proceeds of separation paid as special dividend of 1 billion ( 4/ share) Closed sale of Specialty Chemicals to The Carlyle Group and GIC 2 billion capital repayment and share consolidation 2.5 billion share buyback program Nov 30, 2017 Mar 27, 2018 Nov 13, 2018 Q EGM to approve separation of Specialty Chemicals Announced sale of Specialty Chemicals for 10.1 billion to The Carlyle Group and GIC EGM to approve capital repayment and share consolidation 1 billion special cash dividend Investor update Q

46 Total operations Q3 net income higher for continuing and discontinued operations million Q3 2017* Q Operating income Net financing expenses (31) (20) Results from associates and joint ventures 3 4 Profit before tax Income tax (57) (66) Profit from continuing operations Profit from discontinued operations Profit for the period Non-controlling interests (10) (7) Net income from total operations Earnings per share (in ) Q3 2017* Q Total operations Continuing operations Adjusted earnings per share (in ) Q3 2017* Q Total operations Continuing operations * Represented to present the Specialty Chemicals business at discontinued operations. (continuing and discontinued operations) Investor update Q

47 Paints and Coatings free cash flow impacted by higher OWC; CAPEX lower Q Q in millions YTD Q YTD Q Profit for the period Amortization and depreciation Changes in working capital (344) (427) (66) (45) Changes in provisions (329) (248) (5) (1) Of which pension top-up payments (219) (186) (25) (27) Interest paid (37) (41) (80) (74) Income tax paid (204) (111) Other changes Net cash from operating activities (24) (157) (59) (36) Capital expenditures (165) (106) Free cash flow (from operations) (189) (263) Free cash flow, excluding pension top-up payments 30 (77) Net Debt 1,691 2,700 (continuing operations) Investor update Q

48 Interim dividend of 0.37 per share; Suspending scrip option Dividend per share Final dividend Interim dividend 2.5% 2.5% 2.8% 3.4% Yield* 0.85 represented the Specialty Chemicals portion of the dividend Dividend rebased for AkzoNobel as a focused paints and coatings company Dividend policy remains to pay a stable to rising dividend Dividend paid in cash (scrip option suspended) * Based on year-end share price (continuing operations) Investor update Q

49 Outlook 2020 guidance* ROS 15% ROI >25% We are delivering towards our "Winning together: 15 by 20" strategy and continue creating a fit-for-purpose organization for a focused paints and coatings company, contributing to the achievement of our 2020 guidance. Demand trends differ per region and segment. Raw material inflation is projected to continue for the remainder of 2018, although at a slower rate than during the start of the year. Robust pricing initiatives and cost saving programs are in place to address the current challenges. We are taking the next step in our transformation to deliver the next 200 million cost savings by 2020, incurring total one-off costs of 350 million between 2018 and * Excluding unallocated corporate center costs and invested capital: assumes no significant market disruption Investor update Q

50 Appendix

51 Price increases and cost savings not yet fully compensating for higher raw materials million H1 2017¹ H Δ% Revenue 4,910 4,622 (6) Adjusted EBITDA (24) Adjusted operating income (25) Operating income (36) ROS% excluding unallocated corporate center costs ROS%² ROI%² Revenue development H (%) Increase Decrease Selling prices up 3% overall and for all businesses Revenue up 1% in constant currencies Volumes lower, mainly due to Marine and Protective Coatings Adjusted operating income impacted by adverse currencies, higher raw material costs and lower volumes, partly compensated by pricing initiatives and cost savings Operating income includes identified items, mainly related to the transformation 1. Represented to present the Specialty Chemicals business as discontinued operations. 2. ROS% = Adjusted operating income/revenue. ROI % = 12 months adjusted operating income/12 months average invested capital. (continuing operations) Investor update Q2 and half-year

52 Decorative Paints price realization gaining momentum; up 4% overall in H1 million H H Δ% Revenue 1,968 1,852 (6) Adjusted EBITDA (14) Adjusted operating income (10) Operating income (20) ROS%* ROI%* Revenue development H (%) Increase Decrease *ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. (continuing operations) Investor update Q2 and half-year

53 Performance Coatings revenue growth¹ excluding Marine and Protective Coatings million H H Δ% Revenue 2,975 2,796 (6) Adjusted EBITDA (19) Adjusted operating income (21) Operating income (27) ROS%² ROI%² Revenue development H (%) Increase Decrease 1) In constant currencies. 2) ROS% = Adjusted operating income/revenue. ROI% = 12 months adjusted operating income/12 months average invested capital. (continuing operations) Investor update Q2 and half-year

54 Performance Coatings Revenue by business Revenue million as reported before Industrial and Powder Coatings 2,974 Marine and Protective Coatings 1,299 Automotive and Specialty Coatings 1,551 Other/intragroup eliminations (49) Total 5,775 Figures for 2017 have been represented for the new business unit structure. Revenue million as reported 2018 onwards Q1 17 Q2 17 Q3 17 Q Q1 18 Q2 18 Powder Coatings , Marine and Protective Coatings , Automotive and Specialty Coatings , Industrial Coatings , Other/intragroup eliminations (11) (13) (13) (16) (53) (19) (18) Total 1,471 1,504 1,428 1,372 5,775 1,342 1,454 (continuing operations) Appendix 54

55 Disclaimer/ forward-looking statements This presentation does not constitute or form a part of any offer to sell, or any invitation or other solicitation of any offer, to buy or subscribe for any securities in the United States or any other jurisdiction. Some statements in this presentation are 'forward-looking statements'. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are outside of our control and impossible to predict and may cause actual results to differ materially from any future results expressed or implied. These forward-looking statements are based on current expectations, estimates, forecasts, analyses and projections about the industries in which we operate and management's beliefs and assumptions about possible future events. You are cautioned not to put undue reliance on these forward-looking statements, which only speak as of the date of this presentation and are neither predictions nor guarantees of possible future events or circumstances. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. This presentation also 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, as well as the separation of Specialty Chemicals. 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 55