Akzo Nobel NV
amsterdam : AKZA

February 16, 2012 01:15 ET

AkzoNobel publishes Q4 and full-year results

AMSTERDAM, THE NETHERLANDS--(Marketwire - Feb 16, 2012) -

  * 2011 revenue up 7 percent to EUR15.7 billion, driven mainly by pricing
  * Weaker end markets and cost inflation impacted results
  * 2011 EBITDA 9 percent lower at EUR1.8 billion
  * Net income from continuing operations EUR469 million (2010: EUR664
  * Adjusted EPS EUR2.91 (2010: EUR3.71)
  * Total dividend for 2011: increase to EUR1.45 proposed (2010: EUR1.40)
  * Performance improvement program on track
  * Economic environment and certain raw materials remain key sensitivities
    in 2012

Full-year 2011 in EUR million

                                    FY 2010   FY 2011    D%

 Revenue                             14,640    15,697     7

 EBITDA                               1,964     1,796   (9)

 EBITDA margin (in %)                  13.4      11.4

 Net income continuing operations       664       469

Q4 2011 in EUR million

                                    Q4 2010   Q4 2011     D%

 Revenue                              3,620     3,787      5

 EBITDA                                 377       301   (20)

 EBITDA margin (in %)                  10.4       7.9

 Net income continuing operations       130      (62)

Akzo Nobel N.V. (AkzoNobel) today published Q4 and full-year results for 2011. The company reported revenue growth across all Business Areas, led by price/mix developments of 5 percent and a 2 percent volume increase.

CEO Hans Wijers

"2011 was a challenging year against the background of weaker global economic conditions and unprecedented raw material price inflation. The absolute impact of increased raw material prices for the year was approximately EUR1 billion. Despite this significant headwind, our reported pricing actions have now offset most of this, and for the year ahead we expect to see the full-year benefit of these increases. In addition, to further reduce our cost base and improve our competitiveness, we recently launched a performance improvement program, which is on track. Our strong fundamentals, geographical spread and commitment to deliver - in combination with the improvement program - give us confidence in the future."

Performance improvement program

AkzoNobel's performance improvement program, launched in October 2011, will strengthen competitiveness, enhance the company's ability to grow, simplify support structures and significantly reduce the cost base. This implies a significant change in the operating model and business culture. The comprehensive three-year plan - designed to improve performance and deliver EUR500 million EBITDA in 2014 - is already expected to deliver EUR200 million EBITDA in 2012. This implies higher restructuring costs for the coming year. Restructuring activities continue in Decorative Paints in Europe and the US.

The program is on track and the first update on progress and financial impact is due in the company's 2012 half-yearly report.

Business Area highlights in EUR million

                         Decorative Paints

 4(th) Quarter                                    Full Year

  2010     2011    D%                            2010    2011     D%

 1,139    1,204    6     Revenue                4,968   5,296      7

    63       11   (83)   EBITDA                   548     440   (20)

   5.5      0.9          EBITDA margin (in %)    11.0     8.3

                        Performance Coatings

 4(th) Quarter                                   Full Year

  2010     2011   D%                            2010    2011    D%

 1,238    1,326    7    Revenue                4,786   5,170     8

   147      141   (4)   EBITDA                   647     611   (6)

  11.9     10.6         EBITDA margin (in %)    13.5    11.8

                        Specialty Chemicals

 4(th) Quarter                                   Full Year

  2010     2011   D%                            2010    2011    D%

 1,259    1,285    2    Revenue                4,943   5,335     8

   221      207   (6)   EBITDA                   939     906   (4)

  17.6     16.1         EBITDA margin (in %)    19.0    17.0

Sustainability highlights

AkzoNobel has made significant progress on its strategic sustainability agenda. Once again, a number two position was achieved in the SAM benchmark in 2011. For tables please see the pdf version of the press release.

Outlook for 2012 and medium-term ambitions

AkzoNobel aspires to be the world's leading coatings and specialty chemicals company. The medium-term ambitions are to grow to EUR20 billion in revenue, increase EBITDA each year while maintaining a 13 to 15 percent margin, reduce OWC percent of revenue year-on-year by 0.5 percent towards a 12 percent level, and pay a stable to rising dividend.

The sustainability ambitions are to remain a top three leader in our industry, to be top quartile in our peer group in terms of safety performance, diversity, employee engagement and development, and eco-efficiency improvement rates.

During 2011 the business faced many challenges, most notably the rapid price increases that affected most of our raw materials and the continuing economic headwinds in many of our major markets.

For the year ahead, the company expects to see the full-year benefit of the price rises that have been achieved so far, and which have now offset most of the raw material price increases. Currently, AkzoNobel is experiencing greater price stability in most raw materials, with the exception of TiO(2), which is to continue to rise in price, and for which plans are in place to pass through further price rises in the future. In addition, the company is implementing its performance improvement program, which should bring significant benefits in 2012 and beyond, underpinning margins. As a result, close to 800 employees have been made redundant.

The major uncertainty remains the economic environment. The concerns are focused on the risk of recession in Europe, delayed recovery of the US property market and the potential for a slowdown in China. Each of these can have a significant impact on customers in these regions that would in turn impact AkzoNobel's sales volumes.

These, together with certain raw materials, remain the key sensitivities in 2012.

AkzoNobel has a strong portfolio of complementary businesses, with many leading market positions and exposure to high growth markets. This, combined with ongoing management actions, means that the company is confident of delivering medium-term growth in line with its strategic ambitions.

The 2011 Q4 and full year report can be read on www.akzonobel.com/quarterlyresults.

- - -

AkzoNobel is the largest global paint and coatings company and a major producer of specialty chemicals. We supply industries and consumers worldwide with innovative products and are passionate about developing sustainable answers for our customers. Our portfolio includes well known brands such as Dulux, Sikkens, International and Eka. Headquartered in Amsterdam, the Netherlands, we are a Global Fortune 500 company and are consistently ranked as one of the leaders in the area of sustainability. With operations in more than 80 countries, our 55,000 people around the world are committed to excellence and delivering Tomorrow's Answers Today™.

AkzoNobel Report for the year 2011 and Q4: http://hugin.info/130660/R/1586230/497063.pdf

Pdf file AkzoNobel press release Q4 and FY 2011: http://hugin.info/130660/R/1586230/497266.pdf

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(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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