AkzoNobel Q3 2013 Media Presentation
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Media Update Q3 2013 results Keith Nichols, CFO October 21, 2013
description
View the Media presentation for the third quarter of 2013.
Transcript of AkzoNobel Q3 2013 Media Presentation
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Media Update Q3 2013 results
Keith Nichols, CFO
October 21, 2013
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Q3 2013 highlights
Media Update Q3 2013 results
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• Revenue down 5 percent, mainly due to adverse currency effects and divestments
• Operating income at €303 million (2012: €248 million excluding impairment), mainly driven by lower
restructuring costs and higher volumes
• Net income attributable to shareholders €155 million (2012: €110 million excluding impairment)
• Adjusted EPS stable at €0.74
• Interim dividend of €0.33 declared
• AkzoNobel ranked first in the Dow Jones Sustainability Index in the Materials industry group
• Divestment of Building Adhesives completed on October 1
• Performance improvement program on track with estimated €160 million restructuring charges in Q4
• Expected higher restructuring charges, and continued weak markets, mean that full-year operating
income before incidental items is unlikely to exceed €908 million
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Q3 2013 revenue and operating income: End markets remain fragile
Media Update Q3 2013 results
€ million Q3 2013 Δ%
Revenue 3,778 -5
Operating income 303 22*
Ratio, % Q3 2013 Q3 2012*
Return on sales 8.0 6.3
Return on sales (excluding PIP costs) 10.0 8.8
Moving average return on investment 8.6 8.0
Increase
Decrease
-2% +2% +1%
-6% -5%
Volume Price/Mix Acquisitions/divestments
Exchange rates Total
Revenue development Q3 2013 vs. Q3 2012
3 *2012 excluding impairment (€2.1 billion)
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Market conditions remain challenging but volumes are stabilizing
Media Update Q3 2013 results
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Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel
Quarterly volume development in % year-on-year
-2
1
4
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Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel
Quarterly price/mix development in % year-on-year
+5%
+2% +2% 0%
+2%
0% 0% +1%
2012
2013
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5 Media Update Q3 2013 results
= • Revenues stable with adverse
currency effects compensated by
higher volume
• Operating income more than doubled
compared to the previous year, due
to lower costs and lower restructuring
charges
• Positive volume development in Asia
and Latin America, offsetting the
adverse currency effects
• Streamlining management structure
to increase competitiveness
Decorative Paints Q3 2013 highlights
€ million Q3 2013 Δ%
Revenue 1,136 -
Operating income 107 123
Ratio, % Q3 2013 Q3 2012*
Return on sales 9.4 4.2
Return on sales (excluding PIP costs) 10.1 7.2
Increase
Decrease Revenue development Q3 2013 vs. Q3 2012
-7% +5%
+2% 0%
0%
Volume Price/Mix Acquisitions/divestments
Exchange rates Total
*2012 excluding impairment (€2.1 billion)
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6 Media Update Q3 2013 results
Performance Coatings Q3 2013 highlights
€ million Q3 2013 Δ%
Revenue 1,415 -4
Operating income 160 23
Ratio, % Q3 2013 Q3 2012
Return on sales 11.3 8.9
Return on sales (excluding PIP costs) 11.9 11.3
Increase
Decrease
0% 0% +2%
-6% -4%
Volume Price/Mix Acquisitions/divestments
Exchange rates Total
Revenue development Q3 2013 vs. Q3 2012
• Revenue down 4 percent, due to
adverse currency effects
• Slowdown in Europe continued to
impact all businesses
• Operating income up 23 percent due
to lower restructuring costs
• Continued focus on cost control and
operational efficiencies
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7 Media Update Q3 2013 results
• Revenues down 10 percent due to
Chemicals Pakistan divestment and
adverse currency effects
• Volumes during the quarter were
stable compared to the previous year
• Operating income down 20 percent,
mainly due to restructuring costs
• Performance improvement measures
continue to be carried out in all
businesses
Specialty Chemicals Q3 2013 highlights
€ million Q3 2013 Δ%
Revenue 1,252 -10
Operating income 107 -20
Ratio, % Q3 2013 Q3 2012
Return on sales 8.5 9.5
Return on sales (excluding PIP costs) 12.2 10.8
Increase
Decrease
0% 0%
-6%
-4% -10%
Volume Price/Mix Acquisitions/divestments
Exchange rates Total
Revenue development Q3 2013 vs. Q3 2012
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Cash flows Q3 2013 improved on last year due to positive one-offs
Media Update Q3 2013 results
€ million Q3 2013 Q3 2012*
Profit for the period from continuing operations 168 139
Amortization and depreciation 153 156
Change working capital 183 246
• Pension provisions
• Restructuring
• Other provisions
(29)
13
(21)
(25)
9
(118)
Change provisions (37) (134)
Other changes 85 53
Net cash from operating activities 552 460
Capital expenditures (133) (195)
Acquisitions and divestments net of cash acquired 10 3
Changes from borrowings 5 70
Dividends (30) (8)
Other changes 7 (33)
Cash flows from discontinued operations - 12
Total cash flows 411 309
8 *2012 excluding impairment (€2.1 billion)
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Conclusion
Media Update Q3 2013 results
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• Foreign exchange rates were a major headwind in Q3
• Demand remains soft, however Performance Improvement actions are
contributing to improved return on sales before restructuring charges in all
Businesses Areas
• Performance Improvement Program is on track, with estimated €160 million
restructuring charges in Q4 and delivering the full €500 million EBITDA
benefits by year end 2013
• Expected higher restructuring charges, and continued weak
markets mean that full year 2013 operating income before
incidental items is unlikely to exceed €908 million
• We remain confident in the delivery of our 2015 targets
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Questions
Media Update Q3 2013 results 10
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Safe Harbor Statement
Media Update Q3 2013 results
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.
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