03b softwareag innoday14-akzonobel breakoutinfo.softwareag.com/rs/softwareag/images/03b...
TRANSCRIPT
Meet AkzoNobelLeading market positions delivering leading perform ance
Company presentationMarch, 2013
AkzoNobel today
• Revenue €15.4 billion• 50,610 employees• 44% of revenue from high growth markets• Major producer of Paints, Coatings and
Specialty Chemicals• Leadership positions in many markets
*2012 excluding impairment (€2.1 billion) **New definition including incidentals and after IAS19
38%
15%
47%
PerformanceCoatings
DecorativePaints
SpecialtyChemicals
48%
8%
44%37%
27%
36%
Revenue by Business Area
Operating income*by Business Area
EBITDA** by Business Area
5.4% Growth
2012 vs. 2011
5.9% Return on sales
(operating income/revenue)
10.4% EBITDA/revenue
2
High growth markets are 44% of revenue and their importance will increase
Our goal: Greater than 50% of revenues from high growth markets
% of 2012 revenue, excluding Decorative Paints Nort h America
38%Mature Europe
26%Asia Pacific2%
Middle Eastand Africa
11%Latin America
15%North America
8%Emerging Europe
3
The vision and new targets
Vision: Leading market positions delivering leading performance
To be a leader in :
• Operating efficiency and customer service
• Innovation
• Sustainability
New targets
• Return on sales (ROS, operating income/revenue)
• Return on investment (ROI, operating income/average 12 months invested capital)
• Carbon emissions across the value chain
• Eco-premium products
5
Strategy on a page
Strategic focus areas
• Care for the customer• Reduction of product
and process complexity• Cash and return on
investment• Embedded safety
and sustainability• Diverse and inclusive
talent development
Processes
• Behavior-based and process safety
• Operational control cycle
• Continuous improvement
• Innovation• Procurement• Talent management
Actions
• Deliver dependably• Grow organically• Innovate• Simplify• Standardize• Continuously
improve
End-user segmentation
• Buildings and Infrastructure
• Transportation• Consumer Goods• Industrial
6
We will drive five strategic focus areas
1. Care for the customer
3. Focus on cash and return on investment
4. Embedded safety and sustainability
5. Diverse and inclusive talent development
1. Care for the customer
2. Reduction of productand process complexity
3. Cash and return on investment
4. Embedded safety and sustainability
5. Diverse and inclusivetalent development
7
Core processes Process owner
The company core processes will support our strategic focus areas
Integrated Supply Chain (HSE)
CEO/CFO
Integrated Supply Chain (Operations)
RDI
Integrated Supply Chain (Procurement)
HR
Behavior-based and process safety
Operational control cycle
Continuous improvement
Innovation
Procurement
Talent management
8
Actions
> Grow organically
> Innovate
> Standardize
> Simplify
> Continuously improve
> Deliver dependably
9
Market segments
~43% of revenues
New Build Projects
Maintenance, Renovation and Repair
Building Products and Components
~16% of revenues
Automotive OEM, Parts and Assembly
Automotive Repair
Marine and Air Transport
~16% of revenues
Consumer Durables
Consumer Packaged Goods
~25% of revenues
Natural Resource and Energy Industries
Process Industries
10
Our sustainability strategy: Creating more value with fewer resources
More customer value in our end-user segmentation
Resource scarcity across the value chain will creat e opportunities
Scope 3 upstream
Raw materials
Scope 1 and 2
Own operations,including energy use
Scope 3 downstream
Customer operations End-user End of life
Scope 4 Energy/ resource benefits in use
11
• ‘Downstream eco-premium solutions’:
20% of our revenues by 2020
We will increase the revenue from solutions that generate direct resource and energy benefits for our customers, consumers and users
• Reduction of carbon emissions
25-30% reduction per ton by 2020 (2012 base)
We will reduce our carbon emissions through the value chain
• Resource efficiency
As of 2014 AkzoNobel will report on an innovative new index measuring how we improve resource efficiency across the full value chain - compared to the value we generate
Sustainability is business; Business is sustainability
12
End-user segment trends, combined with sustainability, direct our innovation spend
End-user segments
Sustainability
Sustainability = BusinessBusiness = Sustainability
Direction ofinnovation
spend(2.5% of 2012
revenue)
13
Our proposition: Leading market positions delivering leading performance
AkzoNobel has gone through a significant amount of strategic change over the past five years
Today, the company has
• Excellent portfolio of businesses
• Good long term growth potential on the basis of end-user segment growth
• Strong positions in high growth markets (44% of revenue)
• Leadership positions in many markets
• Clear leader in sustainability
• Track record of delivering sustainable innovations and products
• Strong brands, both in consumer and industrial markets
Clear focus to deliver on our significant potential
• Improved returns and cash flow
• Leveraging scale
• Simplification and standardization
• Continued innovation
14
BA-level core processes and capabilities• Branding
• Distributor, wholesaler, retail management
• Understanding and serving professional painters
• Consumer inspiration
• Quality management, including product portfolio management
Revenue by geographic region
Decorative Paints overview
€ million 2012*
Revenue 4,297 EBITDA 284 Operating income 94Return on sales 2.2%Return on investment 3.0%# Employees 17,020
Revenue by end-usersub-segment
*After the divestment of Decorative Paints North America, excluding impairment (€2.1 billion)
Decorative Paints key figures(new definition)
49%
25%
14%
8%4% Mature Europe
Asia Pacif ic
Latin America
Emerging Europe
Other regions
18
84%
16% Maintenance, renovation and repair
New build projects
Decorative Paints
• AkzoNobel is a leading decorative paints company with strong positions across the world
• Our Decorative Paints business supplies a full range of interior and exterior decoration and protection products for both the professional and the do-it-yourself markets
• The product range includes paints, lacquers and varnishes as well as products for surface preparation (pre-deco products)
• We also supply building adhesives and floor leveling compounds for tile, floor and parquet layers.
19
Decorative Paints
20
Architectural coatings• Interior and exterior wall paints and trim paints (lacquers)
Woodcare and specialty products
• Lacquers and varnishes for wood protection and decoration
• Specialty coatings for metal, concrete and other critical building materials
Industry leading brands
21
Pre-deco products
• Fillers, wall treatments, sealants and putties for consumers and professional
Adhesives for the building and renovation industry
• Tile and floor adhesives and floor leveling compounds used for building and renovation
World leader
22
• Geographic expansion into high growth markets
• Leadership position in developed markets
• World’s leading decorative paints company
27%
20%30%
11%
8%4%Mature Europe
North America
Asia Pacific
Emerging EuropeLatin America
Other regions
36%
27%
23%
14%Transportation
Consumer Goods
Buildings and Infrastructure
Industrial
Performance Coatings overview
Performance Coatingskey figures (new definition)
Revenue by end-user segment Revenue by geographic re gion
€ million 2012
Revenue 5,702
EBITDA 673
Operating income 542
Return on sales 9.5%
Return on investment 21.7%
# Employees 21,310
BA-level core processes and capabilities• Industrial key account management
• Technical support and service
• Design, color and color matching
• Continuous innovation in functionality and ease-of-use
• Sustainable, safe solutions
24
Performance Coatings
• We’re world leaders when it comes to performance coatings
• Performance coatings have hundreds of uses and we’ve divided them into four businesses: Industrial Coatings, Powder Coatings, Automotive and Aerospace Coatings and Marine and Protective Coatings
• We supply a wide range of industries and sectors including automotive, consumer electronics, aviation, shipping and leisure craft, sport equipment, construction, furniture, and food and beverage
25
Marine and Protective Coatings
• We are the global market leader for marine paints, antifoulings and protective coatings
• We produce paints and antifouling materials used in shipbuilding,ship maintenance and repair, and by yachts and other pleasure craft
• We also supply protective coatings for bridges and buildings, and fire protection products for large plants and off-shore installations
• Our International® brand has been used by famous customers including Sydney Harbor Bridge, the London Eye in the UK and seven of the stadiums used in the 2010 FIFA World Cup in South Africa
27
Automotive and Aerospace Coatings
• AkzoNobel Automotive and Aerospace Coatings is one of the world’s leading suppliers of paints and services for vehicle repair, OEM commercial vehicles, automotive plastics and aerospace coatings markets.
• We provide coatings for original equipment and refinishing applications to body shops, aircraft manufacturers, fleet owners, automotive suppliers and major bus and truck producers.
• Our portfolio includes strong brands such as Sikkens®, Lesonal®, Dynacoat®, Wanda®, and Sikkens Autocoat® BT
• We are active in more than 130 countries and offer outstanding customer service, top-notch training, full technical and logistical support, and detailed local knowledge.
29
Industrial Coatings
AkzoNobel Industrial Coatings protect and enhance thousands of products made from steel, aluminum and wood
30
Industrial Coatings
Coil coatings applied to coiled steel and aluminum prior to fabrication:
• Used in roofing, siding, garage and entry doors and gutters, air conditioners, heaters, furnaces and ventilation units and appliance markets
• Extrusion coatings applied to some of the world’s most prestigious high-rise buildings
Packaging Coatings delivers:
• Hi-tech internal and external coatings and inks for food and drink packaging
• Consistent high quality visual appearance for caps and closures
Wood Finishes and Adhesives supply to:
• Four key market sectors: cabinetry, furniture, flooring and building products
• Wood finishes – including stains, glazes, clear coats and primers – provide lasting beauty and protection to wood products
• Our wood adhesives and board resins are the bonding agents in engineered wood and laminates
31
Wood Finishes and Adhesives
• AkzoNobel is the world’s leading supplier of wood finishes and adhesives.
• We supply four key market sectors: cabinetry, furniture, flooring and building products.
• Our industrial wood finishes – including stains, glazes, clear coats and primers –provide lasting beauty and protection to wood products.
• We offer a comprehensive selection of sustainable wood coatings including high solids, waterborne, UV and VOC-free.
• Our market-leading wood adhesives and board resins are the preferred bonding agents in engineered wood and laminates.
• Proprietary adhesives application equipment maximizes productivity and performance and minimizes environmental impact
• Our expansive geographic footprint enables us to meet the global requirements of our customers.
33
Powder Coatings
• We are the largest global manufacturer of powder coatings and a world leader in powder coatings technology
• Powder coatings are solvent-free paints applied to metal and other conductive surfaces. They are used on metal furniture, window frames, radiators, pipes and cars, and even wood and plastic
• We supply eight key market sectors – appliance, architectural, automotive, functional, furniture, general industry, general trade coaters and IT – with our global brands Interpon® and Resicoat®
35
Specialty Chemicals overview
Specialty Chemicals key figures (new definition)
Revenue by end-user segment Revenue by geographic sp read
€ million 2012
Revenue 5,543
EBITDA 830
Operating income 500
Return on sales 9.0%
Return on investment 13.6%
# Employees 10,750
18%
6%
18%58%
Buildings and InfrastructureTransportation
Consumer GoodsIndustrial
40%
21%
22%
10%4%3% Mature Europe
North America
Asia Pacific
Latin America
Emerging Europe
Other regions
BA-level core processes and capabilities• Management of integrated value chains
• Continuous technological advancement
• Engineering and project management
• Process safety
• Product and margin management
• Managing capital intensive businesses and expansions
37
Strong platforms for growth
• AkzoNobel is a major supplier of specialty chemicals with leading positions in selected market segments
• Our products are used in a wide variety of everyday products such as ice cream, soups, disinfectants, plastics, soaps, detergents, cosmetics, paper and asphalt
38
Functional Chemicals
• Very diverse product offering, used in many end-use applications
• Our Functional Chemicals business makes chemical intermediates, performance chemicals and end-products
• Our portfolio includes cellulosic specialties, chelates, ethylene amines, metal alkyls, micronutrients, organic peroxides, polysulfides, redispersible powder polymers, salt specialties and sulfur products
• These chemicals are used in everyday items such as detergents, vinyl, automotive parts, agricultural products, pharmaceutical products, food products, wallpaper adhesives, plastic bags and cosmetics
40
Pulp and Performance Chemicals
• We are a leading global force in pulp bleaching technologies, paper chemicals, colloidal silica and expandable microspheres.
• Our brand names include Eka, Expancel, Purate, Kromasil, Bindzil, Cembinder, Levasil and Bevasil.
42
Industrial Chemicals
• Our Industrial Chemicals business makes salt, chlor-alkali products and derivatives such as monochloracetic acid (MCA)
• These products are essential for the success of the chemical, detergent, construction, food, paper and plastic industries
• Our portfolio includes chlorine, hydrochloric acid, caustic lye and water treatment chemicals. We’re also Europe’s largest producer of vacuum salt
• We supply electricity, gas and steam to plants, mainly through combined heat and power generation plants
44
Surface Chemistry
• We are a leading global supplier of surface-active agents and specialty polymers
• Surface Chemistry are chemicals that combine or separate two different materials, they are remarkably flexible and can be used to emulsify, disperse, clean, wet, aggregate, foam, defoam, disinfect or soften
• They’re used in a huge range of industrial and consumer products including cleaning goods, oil field applications, printing, paints, fabric softeners, flooring, food packaging and electronics
• They can also reduce the need for solvents in paints and cleaning products
• Specialty polymers for personal care provide the holding power in hair sprays and gels and add softness to mousses, conditioners, shampoos and other styling aids. They are also used in cosmetic and beauty products, like sunscreens, hand and body creams and lotions
• Specialty polymer products also include dispersants, anti-scalants for water treatment and detergent builders, as well as thickeners for the carpet, adhesive and detergent industries
46
OneHUB is . . .
Ready-to-use solution & full blown serviceThe common e-channel of AkzoNobel to the outside wor ld for electronic business transactions • Based on Business Scenarios for supporting Partner Integration, notably
eWarehouse, VMI, OTC/PTP, e-Logistics, eCustoms, HR, Treasury, and many more
Business Drivers:
OWC # of manual trans supply chain coststransportation costsIT Costs
Service qualityEfficiencyProductivityNumber of perfects
Reduce
Increase
A THREE Pronged Strategy
Integration tools (middleware) is used. . .
1. To build flexible and agile integrated business processes (e.g. simplify the
on boarding process as with PTP)
2. To leverage IT functionality and utilize capacity more efficiently (e.g. reuse of
defined processes and tools)
3. To facilitate the expansion or contraction of the IT landscape (e.g. reducing
the number of ERP systems while focusing on increasing analytical and
reporting abilities)
Change is constant
53Business unit | Footer
• How can we make the business agile?
• How can we control support costs?
• How can we control project costs?
MY Integration Hierarchy
54Business unit | Footer
Organizational Agility
Reuse
Standardized
Secure
Available and Stable
• Agility requires a solid and broad foundation
• Speed to delivery requires reuse
• Quality is linked to preventing errors
• No solid foundation NO-GO
The Approach
56Business unit | Footer
• Focus on testing to ensure a solid foundation – NEW Must not Break OLD
• Test the basics – know what you are testing
• Establish clear processes – challenge the process
• Keep focused on the goals – perfection in testing is not the goal