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AkzoNobel announces new strategy and financial targets

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© Marketwire 2013
2013-02-20 07:16:44 -

AMSTERDAM, NETHERLANDS -- (Marketwire) -- 02/20/13 --

Leading market positions delivering leading performance


* AkzoNobel's vision is to deliver the full potential of its leading
positions in mature and high-growth markets

* Strategy centers around customer focus, operational excellence and

* New financial targets to be achieved by the end of 2015

* Acceleration of performance improvement program: full EUR500m EBITDA
to be delivered one year early, in 2013

* Focus on four end-user segments: Buildings and Infrastructure,
Transportation, Industrial and Consumer Goods - increasing insight into
leading indicators, making the company more responsive to market

* Smaller executive leadership team; remuneration aligned with targets

AkzoNobel today announced a new strategy that will build on its leading
positions in mature and high-growth markets to achieve new financial
The strategy focuses on end-user segments, operational excellence and
sustainability and is summarized by the company's new vision: Leading
positions delivering leading performance.

Commenting on AkzoNobel's new strategy and financial targets ahead of a
presentation to the investment community in London today, CEO Ton
explained: "AkzoNobel has leading market positions and brands in paints,
coatings and specialty chemicals. With our global scale and sustainability
leadership, we will focus our strategy on customer service and operational
excellence, creating value for all our stakeholders."

Delivering its full potential

To deliver its full potential, AkzoNobel has identified the following
focus areas: care for the customer, reduction of product and process
cash and return on investment, embedded safety and sustainability, and
and inclusive talent development.

AkzoNobel has company-wide core processes, which will support and drive the
strategic focus areas. These processes include: a more rigorous operational
control cycle to drive and monitor delivery of its targets, behaviour based
process safety, talent management, innovation and procurement.

AkzoNobel has four key end-user segments that it sells into: Buildings and
Infrastructure, Transportation, Industrial and Consumer Goods. Better
and understanding of the leading indicators of these segments will make
AkzoNobel more responsive to market developments.

AkzoNobel's focus on end-user segments will also allow for further growth
both mature and high-growth markets. The company will build on its
leadership in
high-growth markets, which already account for 44 percent of revenue - a
percentage that is expected to grow further in the years ahead.

Sustainability is business; business is sustainability
AkzoNobel's drive for operational excellence and performance improvement is
supported by its sustainability and innovation strategy focussed at:
more value from fewer resources'.
AkzoNobel has defined the following sustainability ambitions:

* In 2020, AkzoNobel's downstream eco-premium products will account for
percent of revenue

* Carbon emissions will be reduced by 25 to 30 percent per ton of product
2020 (base 2012)

Acceleration of the performance improvement program

Since the announcement of the performance improvement program in October
AkzoNobel has delivered structural EBITDA gains of EUR250 million, while
costs amounted to EUR292 million*. AkzoNobel will accelerate the program
expects to achieve the full EBITDA benefit of EUR500 million, a year early,
2013, with associated costs estimated at EUR205 million.

* Gains and costs are excluding North America Decorative Paints.

New financial targets

AkzoNobel's new financial targets are designed to drive operational
cash generation and accountability and demonstrate a clear focus on
value for shareholders.

* Return on sales, defined as operating income divided by revenue,
targeted at
9 percent by the end of 2015.

* Return on investment target of 14 percent by the end of 2015. This
AkzoNobel's focus on delivering value through achieving returns in
excess of
its cost of capital.

* Net debt / EBITDA less than 2.0 times by the end of 2015. This will
give a
fuller measure of cash generation and not just one component.

Based on the market environment and the leading indicators in its end-user
segments - Buildings and Infrastructure, Transportation, Industrial and
Goods - AkzoNobel is assuming sales growth (CAGR) of around 4 percent per
between 2012 and 2015.

Financial implications and pensions

In order to increase accountability, incidental items such as restructuring
charges will now be included in EBITDA unless genuinely one-off and not
to normal or ongoing business. Pro-forma data will be made publicly
available on
the company website reflecting these and other restatements.

AkzoNobel's pension top-ups relate mainly to pension liabilities in the UK.
actuarial funding deficit of the two main UK plans (ICI and CPS) is
estimated at
EUR1.5 billion to EUR2 billion. The recent CPS triennial actuarial funding
has resulted in a reduction of top-up payments of EUR40 million per annum,
representing cumulative savings of EUR240 million over the remaining six
years of
the agreed funding recovery plan. Combined with the earlier ICI funding
this represents total savings of EUR485 million over the next 6 years.

Executive leadership alignment

Going forward AkzoNobel will have a smaller Executive Committee.
Remuneration of
the top executives will be aligned with the new targets, with the new
incentive bonus targets to include operating income, return on investment
operating cash flow.

- - -

AkzoNobel is a leading global paints and coatings company and a major
of specialty chemicals. We supply industries and consumers worldwide with
innovative products and are passionate about developing sustainable answers
our customers. Our portfolio includes well-known brands such as Dulux,
International and Eka. Headquartered in Amsterdam, the Netherlands, we are
consistently ranked as one of the leaders in the area of sustainability.
operations in more than 80 countries, our 55,000 people around the world
committed to excellence and delivering Tomorrow's Answers Today™.

Pdf file AkzoNobel press release: :

This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Akzo Nobel NV via Thomson Reuters ONE


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tel. +31 20 502 78 33
Contact: Marcel van de Hoef

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tel. +31 20 502 7854
Contacts: Jonathan Atack and Sheryl Stokes

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