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Media Update
Q3 2013 results
Keith Nichols, CFO
October 21, 2013
Q3 2013 highlights
•

Revenue down 5 percent, mainly due to adverse currency effects and divestments

•

Operating income ...
Q3 2013 revenue and operating income:
End markets remain fragile
€ million

Q3 2013

Δ%

Revenue

3,778

-5

303

22*

Q3 ...
Market conditions remain challenging
but volumes are stabilizing
Quarterly volume development in % year-on-year

2012
2013...
Decorative Paints
Q3 2013 highlights
=

€ million

-

107

123

Operating income
Ratio, %

• Revenues stable with adverse
...
Performance Coatings
Q3 2013 highlights
€ million

Q3 2013

Δ%

Revenue

1,415

-4

160

23

Q3 2013

Q3 2012

Return on s...
Specialty Chemicals
Q3 2013 highlights
€ million

Q3 2013

Δ%

Revenue

1,252

-10

107

-20

Q3 2013

Q3 2012

8.5

9.5

...
Cash flows Q3 2013
improved on last year due to positive one-offs
€ million

Q3 2013

Q3 2012*

Profit for the period from...
Conclusion
• Foreign exchange rates were a major headwind in Q3
• Demand remains soft, however Performance Improvement act...
Questions

Media Update Q3 2013 results 10
Safe Harbor Statement
This presentation contains statements which address such key issues as
AkzoNobel’s growth strategy, ...
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AkzoNobel Q3 2013 Media Presentation

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View the Media presentation for the third quarter of 2013.

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Transcript of "AkzoNobel Q3 2013 Media Presentation"

  1. 1. Media Update Q3 2013 results Keith Nichols, CFO October 21, 2013
  2. 2. Q3 2013 highlights • 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 Media Update Q3 2013 results 2
  3. 3. Q3 2013 revenue and operating income: End markets remain fragile € million Q3 2013 Δ% Revenue 3,778 -5 303 22* Q3 2013 Q3 2012* 8.0 6.3 Return on sales (excluding PIP costs) 10.0 8.8 Moving average return on investment 8.6 8.0 Operating income Ratio, % Return on sales Increase Decrease Revenue development Q3 2013 vs. Q3 2012 +1% +2% -2% -6% Volume *2012 excluding impairment (€2.1 billion) Price/Mix Acquisitions/ divestments -5% Exchange rates Total Media Update Q3 2013 results 3
  4. 4. Market conditions remain challenging but volumes are stabilizing Quarterly volume development in % year-on-year 2012 2013 6 +5% +2% 2 +2% 0% -2 -6 Decorative Paints Performance Coatings Specialty Chemicals AkzoNobel Quarterly price/mix development in % year-on-year 7 4 +2% 0% 1 -2 Decorative Paints Performance Coatings +1% 0% Specialty Chemicals AkzoNobel Media Update Q3 2013 results 4
  5. 5. Decorative Paints Q3 2013 highlights = € million - 107 123 Operating income Ratio, % • Revenues stable with adverse currency effects compensated by higher volume Δ% 1,136 Revenue Q3 2013 • Operating income more than doubled compared to the previous year, due to lower costs and lower restructuring charges Q3 2013 Q3 2012* Return on sales 9.4 Return on sales (excluding PIP costs) 4.2 10.1 7.2 • Positive volume development in Asia and Latin America, offsetting the adverse currency effects • Streamlining management structure to increase competitiveness Increase Revenue development Q3 2013 vs. Q3 2012 Decrease 0% +2% -7% +5% 0% Volume *2012 excluding impairment (€2.1 billion) Price/Mix Acquisitions/ divestments Exchange rates Total Media Update Q3 2013 results 5
  6. 6. Performance Coatings Q3 2013 highlights € million Q3 2013 Δ% Revenue 1,415 -4 160 23 Q3 2013 Q3 2012 Return on sales 11.3 8.9 Return on sales (excluding PIP costs) 11.9 11.3 Operating income Ratio, % • 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 Increase Revenue development Q3 2013 vs. Q3 2012 Decrease +2% 0% 0% -6% Volume Price/Mix Acquisitions/ divestments -4% Exchange rates Total Media Update Q3 2013 results 6
  7. 7. Specialty Chemicals Q3 2013 highlights € million Q3 2013 Δ% Revenue 1,252 -10 107 -20 Q3 2013 Q3 2012 8.5 9.5 12.2 10.8 Operating income Ratio, % Return on sales Return on sales (excluding PIP costs) • 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 Increase Revenue development Q3 2013 vs. Q3 2012 0% Decrease 0% -6% -10% -4% Volume Price/Mix Acquisitions/ divestments Exchange rates Total Media Update Q3 2013 results 7
  8. 8. Cash flows Q3 2013 improved on last year due to positive one-offs € 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 Change provisions (29) (25) 13 9 (21) (118) (37) (134) 85 53 552 460 (133) (195) 10 3 5 70 (30) (8) Other changes 7 (33) Cash flows from discontinued operations - 12 411 309 Other changes Net cash from operating activities Capital expenditures Acquisitions and divestments net of cash acquired Changes from borrowings Dividends Total cash flows *2012 excluding impairment (€2.1 billion) Media Update Q3 2013 results 8
  9. 9. Conclusion • 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 Media Update Q3 2013 results 9
  10. 10. Questions Media Update Q3 2013 results 10
  11. 11. 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. Media Update Q3 2013 results 11
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