ton büchner and maëlys castella july 19, 2016… · € million q2 2015 q2 2016 Δ% revenue 3,949...
TRANSCRIPT
Media update
Ton Büchner and Maëlys Castella
July 19, 2016
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Higher volumes although revenue lower due to adverse currencies
EBIT up 9 percent at €491 million, reflecting continuous improvement initiatives and lower costs
Return on sales and return on investments improved overall and for all Business Areas
We achieved significant progress in our key focus areas – sustainability, innovation and Human Cities
Continued volume growth and further profitability improvement
Media update second quarter 2016 2
Crop picture
Select picture > click on tab
“Picture Tools > Format”
Click on the icon
above “Crop”
You will see crop
and scale markers
on the corners
Use the “circular scale icon”
to scale your picture within
the cropped region.
Highlights from a profitable quarter
EBIT – up 9%
Volumes – up 1%
ROS – up to 13.2%
(2015 11.4%)
ROI – up to 15.1%
(2015 12.2%)
Decorative Paints
• Higher volumes and profitability
Performance Coatings
• Volumes increased in all reporting units
Specialty Chemicals
• EBIT up 10 percent while volumes flat
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons % based on 2015 revenue Media update second quarter 2016 4
Consumer Goods
New build projects
Maintenance, renovation and repair
Building products and components
Automotive OEM,
parts and assembly
Automotive repair
Marine and air transport
Consumer durables
Consumer packaged goods
Natural resource and energy industries
Process industries
18%
Industrial
Building and Infrastructure
22%
43% 17%
Transportation
Outlook
Market environment
remains uncertain
Challenging
conditions in several
countries and
segments
Deflationary
pressures and
currency headwinds
are expected to
continue
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Media update second quarter 2016 5
Maëlys Castella – CFO
Insert image via
Format Background >
Picture or texture fill >
Click “File” to browse to
your image
Make sure “Tile picture
as texture” is ticked
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons 6 Media update second quarter 2016
Profitability up, reflecting continuous improvement initiatives and lower costs
€ million Q2 2015 Q2 2016 Δ%
Revenue 3,949 3,711 (6)
Operating income 486 491 1
EBIT (Operating income excluding incidental items) 452 491 9
Ratio, % Q2 2015 Q2 2016
ROS* 11.4 13.2
Moving average ROI* 12.2 15.1
Revenue development Q2 2016 vs. Q2 2015
6
5
2
1
Increase
Decrease
Volume Price/mix Acquisitions/divestments Exchange rates Total
0
*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12
months average invested capital
Insert image via
Format Background >
Picture or texture fill >
Click “File” to browse to
your image
Make sure “Tile picture
as texture” is ticked
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons = 7 Media update second quarter 2016
Decorative Paints Q2 2016: Higher volumes and profitability
Decrease
Increase
Volumes were up in Asia,
continued to be down in
Latin America and were
slightly lower in Europe
Revenue down due to
unfavorable currency
effects
EBIT and operating
income up, mainly due to
higher volumes and lower
costs, partly offset by
adverse currency effects
€ million Q2 2015 Q2 2016 Δ%
Revenue 1,134 1,055 (7)
Operating income 128 131 2
EBIT (Operating income excluding incidental items) 128 131 2
Ratio, % Q2 2015 Q2 2016
ROS* 11.3 12.4
Moving average ROI* 10.4 12.3
Revenue development Q2 2016 vs. Q2 2015
7
7
Volume Price/mix Acq/div Exchange rates Total
0 1 1
*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12
months average invested capital
Insert image via
Format Background >
Picture or texture fill >
Click “File” to browse to
your image
Make sure “Tile picture
as texture” is ticked
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons 8 Media update second quarter 2016
Performance Coatings Q2 2016: Volumes increased in all reporting units
Increase
Decrease
Volumes were up with
positive developments in
all reporting units
Revenue down due to
adverse currencies
EBIT and operating
income up due to higher
volumes, continuous
improvement initiatives
and lower costs
€ million Q2 2015 Q2 2016 Δ%
Revenue 1,550 1,473 (5)
Operating income 220 222 1
EBIT (Operating income excluding incidental items)
220 222 1
Ratio, % Q2 2015 Q2 2016
ROS* 14.2 15.1
Moving average return ROI* 23.9 31.0
Revenue development Q2 2016 vs. Q2 2015
5
5
2 2 0
*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12
months average invested capital
Volume Price/mix Acq/div Exchange rates Total
Insert image via
Format Background >
Picture or texture fill >
Click “File” to browse to
your image
Make sure “Tile picture
as texture” is ticked
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons 9 Media update second quarter 2016
Specialty Chemicals Q2 2016: EBIT up 10 percent while volumes flat
Volumes were flat with
positive developments in
some segments offset by
lower demand in oil related
segments
Revenue down mainly due to
adverse currency effects,
divestments and price
deflation in several segments
EBIT up due to operational
efficiencies. The divestment
of Paper Chemicals resulted
in €30 million profit in
operating income (Q2 2015)
Decrease
Increase
€ million Q2 2015 Q2 2016 Δ%
Revenue 1,290 1,206 (7)
Operating income 192 179 (7)
EBIT (Operating income excluding incidental items)
162 179 10
Ratio, % Q2 2015 Q2 2016
ROS* 12.6 14.8
Moving average ROI* 16.1 17.1
Revenue development Q2 2016 vs. Q2 2015
Volume Price/mix Acq/div Exchange rates Total
7
0
3
3
1
*ROS% = EBIT/revenue. Moving average ROI (in %) = 12 months EBIT/12
months average invested capital
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Media update second quarter 2016 10
Ton Büchner – CEO
11 Media update second quarter 2016
Essential
color
Essential
ingredients
Essential
protection
WE CREATE EVERYDAY ESSENTIALS TO MAKE PEOPLE’S LIVES MORE LIVEABLE AND INSPIRING
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
12 Media update second quarter 2016
Continued progress in sustainability and innovation
Specialty Chemicals
Corks made with Expancel help keep
your wine perfect
Decorative Paints
We brought new digital innovations to
our customers
Performance Coatings
Reducing costs and improving
sustainability for automotive customers
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
13 Media update second quarter 2016
Continued progress in sustainability and innovation
We formed a partnership to develop
sustainable cellulose products from
sugar beet processing
We were ranked best in our industry
in the FTSE4GOOD index of
sustainable companies
We opened a new state-of-the-art
technology center to serve our
customers in China
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
14 Media update second quarter 2016
Human Cities making an impact
Our color and coatings expertise will play
a major role in restoring the historic old
town of Jakarta
Kids can learn about sustainability
at an off-grid classroom set up by our
US employees
Unexpected Courts bringing inspiration
to cities by creating sporting areas in
surprising places
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Media update second quarter 2016 15
We successfully grew profitability despite currency headwinds
Volumes were up overall, driven by Decorative Paints and Performance Coatings
Revenue down 6 percent, strongly adversely affected by currencies
EBIT up 9 percent, reflecting continuous improvement initiatives and lower costs
ROS* and ROI* improved and for all Business Areas
We achieved significant progress in our key focus areas – sustainability, innovation and Human Cities
The market environment remains uncertain with challenging conditions in several countries and
segments. Deflationary pressures and currency headwinds are expected to continue
Continued volume growth and further profitability improvement
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
16 Media update second quarter 2016
Questions
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Media update second quarter 2016 17
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 www.akzonobel.com.
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
18 Media update second quarter 2016
Appendix
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
19 Media update second quarter 2016
Vision confirmed; financial guidance 2016-2018
ROS = EBIT/revenue ROI = 12 months EBIT/average 12 months invested capital
Guidance 2016-2018:
Return on sales: 9-11%
Return on investment: 13-16.5%
Clear aim to build on the foundation we have created and grow in line with, or faster than, our relevant market segments
Vision: Leading market positions delivering leading performance
Key assumptions:
Currencies versus €: $1.1, £0.71, ¥7.1
Oil price ~$60/bbl; no significant market disruption
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons Media update second quarter 2016 20
AkzoNobel 2015 at a glance
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Purchase Managers’ Index (PMI)*
Figures below 50 indicate pessimism
Purchase Managers’ Index (PMI)*
June 2016
Q2 shows some recovery in Europe, but recent events may change this
40
50
60
Jun-14 Jun-15 Jun-16
US
Eurozone
ChinaBrazil
Japan France China
US Russia
India
Indonesia
Netherlands
UK
Vietnam
Sweden
Germany
40
50
60
Operational review
*Bubble size=manufacturing output, 2016e (US$bn: 2010 prices) Sources: Oxford Economics, Caixin (China), Markit (incl. US) Investor update 21
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Investor update Operational review
Consumer confidence high in Asia and US, while lower in Europe and Latin America
Consumer confidence, Q1 2016
Figures below 100 indicate some degree of pessimism
Recent trends compared
to Q4 2015
134 117 110 109 105 97 97 96 85 82 82 75 74 64 63
0
20
40
60
80
100
120
140
India Indonesia US Vietnam China UK Germany Turkey Netherlands Poland Belgium SouthAfrica
Brazil France Russia
22
Crop picture
Select picture > click on tab
“Picture Tools > Format”
Click on the icon
above “Crop”
You will see crop
and scale markers
on the corners
Use the “circular scale icon”
to scale your picture within
the cropped region.
Too early to determine future impact as a result of the recent UK referendum
UK presence
Potential impact on Europe
UK pension liabilities
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
9%
22%
15%
4%
23%
9%
7% 1%
10%
Breakdown of total raw material spend
2015
* Other raw materials include cardolite, hylar etc.
** Chemicals and intermediates include caustic soda, acetic acid, tallow, ethylene,
ethylene oxide, sulfur, amines etc.
Other raw materials*
Titanium
dioxide
Coatings
specialties
Resins
Pigments
Additives
Solvents
Chemicals and
intermediates**
Packaging
24 Media update second quarter 2016
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
The net impact of a sustained lower oil price
25
Inventories
GDP
Fre
igh
t an
d lo
gis
tics
F
reig
ht a
nd
log
istic
s
Sales Raw materials Production
Media update second quarter 2016
Title area
max over 2 lines
Insert Topic Icons
Click on the picture icon
and browse to the location
of the Topic Icons
AkzoNobel Bullets
Only use the List Level
buttons to apply the
AkzoNobel Branded Bullets
Downstream oil related products have clearly different dynamics
26
Monomers,
Precursors, etc.
Feedstocks Base (petro)chemicals
Intermediates and more complex molecules
Methanol
Ethylene
Ethanol
Propylene
Benzene
Xylenes
Etc.
Intermediates More complex
molecules
Monomers & Latex
Resins
Packaging
Additives
Solvents
Crude Oil
(Shale) Gas
Coal
Bio based
Renewables
Media update second quarter 2016
Thank you