Mumbai March 7, 2013sds-bionic-worldwide.com/docs/asia/SDS Trade Rpt INDIA...Current AkzoNobel...
Transcript of Mumbai March 7, 2013sds-bionic-worldwide.com/docs/asia/SDS Trade Rpt INDIA...Current AkzoNobel...
AkzoNobel India- building the future….
Mumbai
March 7, 2013
Welcome to AkzoNobel in India
Hyderabad Plant
Bangalore Plant
Mohali Plant
Mahad Plant
Corporate Office.
Gurgaon Thane Plant
Current AkzoNobel footprint in India
•1,633 employees • 5 plants • 14 offices • 75 warehouses • 8,500 dealers • 2 World Class Research Centres- Thane & B’lore •
Mohali : Decorative Paints, A&A Coatings
Hyderabad : Decorative Paints, A&A Coatings
Hoskote : MPC Coating, Powder Coatings Industrial Finishes, Packaging
Coatings, A&A Coatings
Thane : Decorative Paints
Mumbai : Functional Chemicals, Surface
Chemistry
Mahad: Polymer
Chemicals
Gurgaon
One AN Office
AkzoNobel in India post merger…a portfolio to reckon with..
96%
4%
Coatings
Others (inclSpecialtyChemicals)
Deco Paints
Automotive Coatings
Marine Coatings
Powder Coatings
Coil Coatings
Protective Coatings
Powder Coatings
Automotive Coatings
Current Shareholding Pattern (Feb 2013)
AkzoNobel Group 73%
Mutual Funds 4%
Insurance Companies
7%
Bodies Corporate
6%
FII 2%
Others 8%
World’s largest
Coatings
player…
Indian Coatings Market and Consumer Trends
Coatings market – anticipated blip in growth story
Market growth drivers
Inherent growth in the
construction industry • Demographic changes
• Greater prosperity
• Infrastructure investment
Shift to mid and premium tier
as consumers trade up • GDP/capita to increase 3.5x by
2020 touching same levels as
Brazil today
• Faster internal repaint cycles
expected
16,700 20,000
23,000 25,000
33,000
63,000
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 2011 2012 2013 2015 2020
Rs. Crs
CAGR 14%
10-12%? 20%
14%
Macro Trends for Coatings Industry
How global megatrends affect our industry
Evolving the sustainability of living spaces
ANI’s WeatherShield SunReflect reduces temperatures of external surfaces by almost 5 degree Celsius & result
in energy savings by almost 10%
New living spaces globally will increasingly become carbon zero with sustainability built into their DNA.
Rapidly Advancing Technologies
Nano technology, Memory Polymers – stretching the possibilities of what coatings can
do
Mono functional to Multi functional RM
Structural shift to water-based coatings
Changing Retail Environment
Experiential
Inspirational
Targeted
Use of augmented reality
Decorator Centers empowering consumers on decoration decisions
This is an exciting industry
Colour
Growth
Innovation
Collaboration
Room for most players to grow
AkzoNobel India – Lines of Businesses
- Coatings
- Specialty Chemicals
Decorative Paints
3 Manufacturing Sites
Servicing 8,000+ Retailers 63 Warehouses
Products Range
Decorative Industry doubling in 5 years
Demand driven by
• urbanization and revival of realty industry
• Shift towards higher margin water-based products
and premium emulsions
Market anticipated to bounce back in late
2013, early 2014 due to
• Softening of input cost
• Increasing sophistication of retail
environment
Source: Internal estimates for Organized Paints Industry
Market Growth Drivers
11,500 14,000
16,000 18,000
24,000
46,000
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2010 2011 2012 2013 2015 2020
CAGR 15%
In INR cr
1.3 2.8 4.0 4.2 5.0
10.0 11.8 12.0
14.5
India SE Asia China EastEurope
MiddleEast
CentralEurope
Australia Japan NorthAmerica
Per Capita Consumption
AkzoNobel India: Premium portfolio
Performance Coatings
Manufacturing Sites at
Bangalore and Mohali
Our Brands
Our Businesses
Powder
Coatings
Protective
Coatings
Industrial
Automotive
Coatings
International
Research Center
at Bangalore
Automotive Outlook in India
Market Growth Drivers
• Technology shift from 1K to 2K and from solvent to
water-base
• One of the fastest growing automobile market –
emerging auto hub
• Emergence of MSO (Multi shop operators) chains
e.g My TVS, Carz, Bosch.
1100 1200 1300 1500
1800
3900
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2010 2011 2012 2013 2015 2020
CAGR 12%
In INR cr
AkzoNobel India: End-to-end coatings solution for the car refinish sector
Powder Coatings Outlook in India
In INR cr
• Conversion from Liquid to powder
• Investment by Global companies
• Expanded capacity for autobody,
commercial and monumental
constructions
GTC39%
GI16%
Auto11%
DA12%
Func10%
Furniture6%
Arch3%
IT3%
Market Growth Drivers
600 700
800
1000
1400
2800
0
500
1,000
1,500
2,000
2,500
3,000
2010 2011 2012 2013 2015 2020
CAGR 16%
AkzoNobel India: Eco friendly technology
Coil Coatings Outlook in India
• Infrastructure investment will lead mid
tier segment to grow at CAGR 12%
• 20 Coil Lines to grow to 25 lines by 2015
Roofing 85%
Building 7%
Domestic Appliances
8%
Market Growth Drivers
290 325 390
525
700
960
0
200
400
600
800
1000
1200
2010 2011 2012 2013 2015 2020
CAGR 12%
AkzoNobel India: Global track record of product range
Protective Coatings Outlook in India
• Planned power capacity of 15-20 Giga-
watt p.a.
• Infrastructure investment
• Investments in high growing segments
lead to OEM growth that supply
equipment
10%
19%
13%
19%
12%
27%
Mkt Potential - PC
infra
Power
O&G
OEM
Mining & Oth
SME
Market Growth Drivers
1800 2000 2300 2400
3300
7800
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013 2015 2020
CAGR 16%
AkzoNobel India: Key coatings supplier for wind sector/ thermal projects
Specialty Chemicals
Manufacturing Site at Mahad
•Organic Peroxides (HPOP)
•Metal Alkyl (HPMA)
•Sale XTP & HPOP Products
Surface Chemistry
Functional Chemistry
Specialty Chemicals Outlook in India
Market size for 3 active BU’s is
expected to grow to around
INR 8,400 cr by 2020
All end user segment growth
projected ~12%
Market Growth Drivers
2700 2900 3200 3400
4600
8400
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013 2015 2020
CAGR 12%
Petrochem
17%
Polymers 13%
Org 5% Inorg
10% APIs 8%
Speciality 18%
Agrochem 2%
Syn fibres 8%
Fert 11%
Soaps & Det 8%
Market Segments
AkzoNobel India: Diverse Portfolio
Leading market positions delivering leading performance
• Comprehensive coatings portfolio
• Strong brands, both in B2B and B2C
segments
• Good long-term growth potential
• Technology & Innovations flowing
through global Business Units
• Adequate capacities to support growth
• Excellent customer relationships
Key Financial Parameters
Margins reflecting Industry trends…
Net Revenue
(INR Crores)
EBIT
(INR Crores)
1,009
1,655
90
116
YTD Q3
2011-12
YTD Q3
2012-13
The results for PY do not include numbers of merging companies and are not comparable
48% 49% 47%
43% 41% 42% 40%
39%
25%
35%
45%
55%
FY09 FY10 FY11 FY12
Gross Margins
Akzo Nobel Industry Average
6.4
4.2
0
1
2
3
4
5
6
7
Akzo Nobel Industry
Degree of Operating Leverage
PAT
(INR Crores)
123
156
Dec 2012
Robust Financial parameters
Source: Company annual reports, analyst reports
21
87 98
10
Debtors Days Inventory Days Supplier Days CashConversion
Cycle
Cash Conversion Cycle (FY12)
28%
18%
ROCE - Business ROCE - Reported
ROCE (as at Dec 31, 2012)
Consistent growth in shareholder value
7,6
30
9,7
11
9,9
21
10,9
16
14,4
10 8
16 16 18
20
-
5
10
15
20
25
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2007-08 2008-09 2009-10 2010-11 2011-12Year
Shareholders' Funds (INR million) & Dividend (INR)
Shareholders' Funds
Share Price Movement (INR)
4,530 5,086
5,560
4,924
5,914
440
595
856 876
990
-
200
400
600
800
1,000
1,200
0
1000
2000
3000
4000
5000
6000
7000
May-09 May-10 May-11 May-12 Mar-13
Nifty AN India
Building the growth momentum
# 1 in Auto Coatings &
Functional Chem
# 2 in Deco and Protective Coatings
Customer focused
solutions
Leader in Sustainability
Employer of Choice
Euro 1 Billion
Our 5 year aspiration …
Opportunities for Scale Benefits
Opportunity to invest ahead of
market
Comfortable cash position
Unified face to customers
Synergized centres of excellence – Finance,
HR , SCM
Provided scale
to compete
efficiently
Merger has enabled customer
focus and a more responsive
organisation
Going forward…our medium-term priorities
AkzoNobel India – Key Priorities
1. Care for the customer
4. Embedded safety and sustainability
3. Focus on cash and return on investment
2. Reduction of product and pro cess complexity
5. Diverse and inclusive talent development
1. Customer focused
solutions
2. Merger advantage –
operating efficiency
3. Cash and return
on investment
4. Embedded safety
and sustainability
5. Diversity and inclusive
talent development
• Organic growth
• Focus on Construction & Transportation segments
• Mid-market new product launches
• True sales force effectiveness management
• Value sales and margin management
“Customer focused solutions” create competitive advantage
1. Customer
focused solutions
One - Stop Solution
Marine & Protective Coatings
Decorative Coatings
Industrial Coatings
Automotive Coatings
Powder Coatings
Wood Finishes and Adhesives
New Build Projects
Maintenance, Renovation and Repair
Building Products and Components
Automotive OEM, Parts and Assembly
Automotive Repair
• Intense cooperation between multi business unit
sales, RD&I, operations and procurement
• Combined warehousing and logistics
• Multi site manufacturing flexibility
• Platform for new business launches
One AkzoNobel operations leverage
2. Merger advantage -
operating efficiencies
Creating a Platform for New Businesses
Packaging Coatings & Wood Finishes & Adhesives
• Leveraged One AN footprint to be closer to customer
• Supported by Excellence Centres-Finance, HR, Supply
Chain, Legal
• Shared production sites (Packaging Coatings at Thane,
Wood Finishes at Mohali)
• Low Cost / Rapid Market Entry
• Supply Chain Leverage
Customer/ Channel
Contacts by Deco
Supported by Purchase and RD&I
Site & Engineering
by Deco
RD&I helps localize portfolio
• Import Substitution
• Local Manufacturing
• New launches
Research, Development & Innovation
Making it happen | RD&I 39
Leverage color
expertise in A&AC
to other BUs
Lead in color for Indian
customers – Deco
Color lab for Asia
Integrate technical skills in performance coatings
and deco to develop mid segment products
Local raw materials and
manufacturing for
speed and cost
Develop sustainable
products for India’s
growing mid market
Leverage on global
strengths – ECGs,
CoPs, BU labs
Strengthen the technical skills in Chemicals
for providing better services locally
Set-up RD&I organization to work on focused areas
(Transport, Construction, Color)
Regulatory affairs like MSDS
and labels locally for Indian
market
• Value creation from formulations and indigenization
• Cash consideration in decision making
• Capital expenditure and cost management
• One cash management, working capital improvement
Generate improved returns
3. Cash and return
on investment
• Behavior-based and process safety
• Reduce carbon foot-print
• Sustainable business
• Renewables (raw materials and energy)
Safety and Sustainability
4. Embedded safety
and sustainability
Pursue Sustainability opportunity… …collectively
Highlights:
Sustained Energy Conservation efforts by
plants
Wash Water recycling system in factories
Energy efficient systems implemented in
the new plants
Future Plans
Rainwater Harvesting
Non conventional energy sources
Embed safety and sustainability in everything we do
• Active drive for management to be a
reflection of our geographical presence
and gender participation
• Continuous learning and development
• Employee engagement
• Employer of choice
Talent development
5. Diverse and
inclusive talent
development
AkzoNobel India Board – Ensuring Strong Corporate Governance
Amit Jain
Managing Director Partha Basu
Finance
Dr Sanjiv Misra
Non Executive Director
R Gopalakrishnan
Non Executive Director Renu S Karnad
Non Executive Director
Sucheta Dalal
Alternate Director
Arvind Uppal
Non Executive Director
Graeme Armstrong
Non Executive Director
Nihal Kaviratne CBE
Chairman
We have everything we need to make it happen
• Our people
• Our brands
• Our products
• Our market positions
• Sustainability
46
Disclaimer:
Some of the statements in this presentation, describing the Company's objectives and
expectations expressed in good faith, may constitute 'forward looking statements'
within the meaning of applicable laws and regulations.
Actual results might differ materially from those, in the event of changes in market
conditions.
Thank you!