Akzo Nobel NV : AkzoNobel Q2 results 2013

                  Akzo Nobel NV : AkzoNobel Q2 results 2013

  *Revenue down 4 percent, mainly due to divestments
  *Operating income at €322 million (2012: €388 million) driven by adverse
    price/mix developments
  *Net income attributable to shareholders €429 million (2012: €219 million)
    due to recognition of a deferred tax asset and the divestment of
    Decorative Paints in North America
  *Adjusted EPS €1.37 (2012: €1.06)
  *Performance improvement program on track to be completed in 2013,
    delivering €500 million EBITDA benefit a year early
  *Operational focus of strategy update announced in February is the right
    approach for continuing challenging market conditions; 2015 targets
  *Restructuring activities being stepped up, full-year charges expected to
    be in the order of €325 million (initial estimate: €205 million), with the
    benefits of these additional €120 million costs realized in 2014 and
  *Expected higher restructuring charges and continued weak markets mean that
    full-year operating income is unlikely to exceed the €908 million of 2012

Q2 2013 in € million

                                        Q2 2012 Q2 2013  D %
Revenue                                   4,044   3,865  (4)
Operating income                            388     322 (17)
Return on Sales (ROS) %                     9.6     8.3
EBITDA                                      554     474 (14)
Net income attributable to shareholders     219     429   96

H1 2013 in € million

                                        H1 2012 H1 2013   D%
Revenue                                   7,751   7,330  (5)
Operating income                            624     539 (14)
Return on Sales (ROS) %                     8.1     7.4
EBITDA                                      964     849 (12)
Net income attributable to shareholders     303     518   71

Akzo Nobel N.V. (AkzoNobel) today reported a 4 percent decrease in revenues in
the second quarter compared with the same period last year. This was due to
divestments and adverse currencies against a backdrop of continued challenging
market conditions. Operating income for Q2 was 17 percent lower at €322
million. Net income attributable to shareholders for the quarter rose to €429
million, buoyed by recognition of a deferred tax asset and profit on the
divestment of Decorative Paints North America. The acceleration of AkzoNobel's
performance improvement program is on track to achieve the full EBITDA benefit
of €500 million by the end of this year, whilst additional charges are
expected in the second half of the year as restructuring activities are
stepped up.

At Decorative Paints second quarter revenue declined 1 percent, mainly due to
negative price/mix and unfavorable currency effects. The slowdown in global
markets continues to affect the top line. In general volumes stabilized, with
some markets, in particular China, making a positive contribution in the
quarter. Operating income for the second quarter totaled €102 million, 9
percent lower than the previous year, mainly as a result of restructuring
costs in mature markets.

Revenue in Performance Coatings declined 1 percent on largely stable overall
volumes compared with the previous year as a result of adverse currency
effects. Operating income was down
5 percent at €163 million due to investments in growth and business excellence
initiatives, partially mitigated by margin management and structural cost

Revenue in Specialty Chemicals was 12 percent lower as a result of the
divestment of Chemicals Pakistan and lower overall volumes. Operating income
was down 21 percent at €121 million, mainly due to the lower volumes and the
conclusion of value chain issues from the previous quarter. During the
quarter, the Functional Chemicals Business Unit initiated a large
restructuring program as part of the performance improvement program, the
implementation of which will start as of Q3.

CEO Ton Büchner
"While I am pleased to report that our Decorative Paints and Performance
Coatings businesses have reported an improved or stable return on sales for
the first half of the year, our end markets remain challenging and this was
particularly visible at the end of this second quarter. Conditions remain
tough and, as we have previously indicated, we do not expect an early
improvement in the external trends our businesses are facing. With this
pressure on our top line, we are stepping up our restructuring activities to
secure the delivery of our 2015 targets which drive cash generation and
quality of earnings. As a consequence, full year restructuring costs are
expected to be higher, with the benefits of these additional restructuring
costs visible in 2014. These expected higher restructuring charges and
continued weak markets mean that our full year operating income is unlikely to
exceed last year."

Performance improvement program
The performance improvement program announced in October 2011 is making good
progress with positive impact on both variable and fixed costs. The
initiatives have cumulatively resulted in
€381 million savings and AkzoNobel is on track to deliver the full €500
million in EBITDA at the end of this year, a year early. The program is
structured around business unit adaptations and operational excellence, which
contribute the majority of the benefits, while functional excellence is an
important enabler. Various actions taken in operational excellence address
product complexity reduction, sourcing optimization, manufacturing and
distribution excellence, and margin management across the entire organization.

Since the announcement of the program, the number of employees has been
reduced by over 2,500 FTE, of which around 800 in 2013. In the first half of
2013, €69 million was spent on restructuring activities. Costs for the full
year 2013 are expected to be in the order of €325 million, with the additional
benefits becoming visible in 2014. Examples of additional restructuring
activities include the upcoming initiatives in European Decorative Paints and
Functional Chemicals.

AkzoNobel will continue to implement new opportunities to optimize performance
as it moves to a culture of continuous improvement and embedded operational

Raw materials
In the second quarter, AkzoNobel saw lower input prices as a result of lower
TiO2 costs and the lower oil price, which has begun to impact some raw
materials. Overall, raw materials costs for the year are expected to be down
marginally on a like for like basis compared with 2012.

The economic environment remains challenging and AkzoNobel does not expect an
early improvement in the trends faced in its end-user market segments.
AkzoNobel expects to increase restructuring charges in the second half of 2013
by €120 million to around €325 million to secure the delivery of its 2015
targets. This means that full year operating income is unlikely to exceed the
€908 million of 2012. The acceleration of the performance improvement program
and the strategic priorities announced in February are the right focus to have
in these markets.

Business area highlights

                   Decorative Paints
Q2 2012 Q2 2013 D%                  H1 2012 H1 2013  D%
  1,187   1,179 (1)  Revenue          2,161   2,104 (3)
    112     102 (9)  Operating Income   137     145   6
    9.4     8.7      ROS %              6.3     6.9
    155     141 (9)  EBITDA             223     229   3

                  Performance Coatings
Q2 2012 Q2 2013 D%                  H1 2012 H1 2013   D%
  1,472   1,458 (1)  Revenue          2,841   2,789  (2)
    171     163 (5)  Operating Income   298     292  (2)
   11.6    11.2      ROS %             10.5    10.5
    204     197 (3)  EBITDA             363     360  (1)
                   Specialty Chemicals
Q2 2012 Q2 2013 D%                  H1 2012 H1 2013   D%
  1,431   1,253 (12) Revenue          2,830   2,497 (12)
    154     121 (21) Operating Income   294     220 (25)
   10.8     9.7      ROS %             10.4     8.8
    235     198 (16) EBITDA             470     372 (21)

The 2013 Q2 report can be downloaded via the AkzoNobel Report iPad app
http://bit.ly/obljrf or read online at www.akzonobel.com/quarterlyresults.

- - -

AkzoNobel is a leading global paints 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 consistently ranked as one of the leaders in the area of
sustainability. With operations in more than 80 countries, our 50,000 people
around the world are committed to excellence and delivering Tomorrow's Answers

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Contacts: Stephen Hufton, Jeroen Pul Contacts:
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Press release Q2 2013 results


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