AkzoNobel announces ?20 billion revenue ambition
(Thomson Reuters ONE) -
September 28, 2010
Highlights
· Medium-term "Value" ambitions - accelerated growth
§ Grow revenue to ?20 billion
§ Increase EBITDA each year, maintaining a 13 to 15 percent margin*
§ Reduce OWC year-on-year as % of revenue by 0.5 percent to 12 percent
level
§ Stable to rising dividend
· Medium-term "Values" ambitions - sustainable growth
§ Top quartile safety levels in peer group
§ Remain in the top three on Dow Jones Sustainability Indexes
§ Top quartile peer group in diversity, employee engagement and talent
development
§ Top quartile peer group eco-efficiency improvement rates
*Absolute earnings before interest, tax, depreciation and amortization, before
incidentals
AkzoNobel is entering a new era of accelerated and sustainable growth. That is
the message being delivered today at the company's "Tomorrow's Answers Today:
Making it happen" Capital Markets Day held in London.
Outlining the company's new medium-term strategy to financial markets, CEO Hans
Wijers explained that AkzoNobel will leverage global mega-trends, geographical
spread and leading market positions to realize its new ambitions.
"Having successfully transformed our portfolio and completed the phase of
integration and restructuring, we are now entering a new chapter of accelerated
and sustainable growth," he said.
The new ambitions relate to accelerated growth: increasing revenue to ?20
billion, growing EBITDA each year while maintaining a 13 to 15 percent margin
level, reducing OWC percent of revenue year-on-year by 0.5 percent towards a 12
percent level, and paying a stable to rising dividend.
The sustainability ambitions are: remaining in the top three on the Dow Jones
Sustainability Indexes, being in the top quartile of our peer group in terms of
safety levels, diversity, employee engagement and talent development and
eco-efficiency improvement rates.
"Recent economic developments have enabled us to develop a deeper 'understanding
of the shifting global marketplace and how we can seize opportunities to
capitalize on our diversified portfolio, leading market positions and worldwide
scale," continued Wijers.
"AkzoNobel is well positioned to benefit from global mega-trends affecting our
industry such as population growth, improvement in quality of life in high
growth markets, climate change and scarcity of natural resources. We have a
clear vision of the path ahead and are confident that we can achieve our
medium-term strategic ambitions."
AkzoNobel is well positioned to achieve its medium-term strategic ambitions:
· Strong leadership positions across its businesses
· Excellent geographical spread, with high growth markets representing close
to 40 percent of revenue
· Focus on organic growth, particularly in high growth markets
· Exciting innovation pipeline with current RD&I spend of around 2.5 percent
of revenue, making AkzoNobel the clear sector leader in absolute spend
· Ability to consider attractive acquisitions
· New Executive Committee leadership team
Aspirations for high growth markets
With high growth markets currently representing close to 40 percent of revenue,
AkzoNobel believes that these markets will become significantly more important
and intends to grow revenue to 50 percent during the course of the decade. The
company will focus most of its resources to also gain market share in the
mid-segments of these markets. Specific country targets were also outlined:
· Double revenue in China from $1.5 billion to $3 billion
· Create a significant footprint in India by growing revenue from ?0.25
billion to ?1 billion
· Outgrow the competition in Brazil by increasing revenue from ?0.75 billion
to ?1.5 billion
Exciting RD&I pipeline to drive growth with clear sustainability focus
AkzoNobel's innovation strategy currently delivers 9 percent of revenue from
"breakthrough"* innovations and 22 percent of revenue from eco-premium
solutions**. The company intends to increase big R&D spend to more than 60
percent of total R&D spend and focus on functional solutions. As a result,
AkzoNobel's medium-term ambition is to achieve more than 15 percent of revenue
from "breakthrough" innovations and more than 30 percent of revenue from
eco-premium solutions. AkzoNobel's innovation strategy will be underpinned by a
clear sustainability focus.
*Major innovations that result in a significant competitive advantage
**Higher eco-efficiency than main competitive product
Strong executive leadership team
AkzoNobel is to broaden its operational leadership team by establishing a new
Executive Committee to better drive common agendas and build capabilities across
AkzoNobel. Joining the five Board members on the Executive Committee will be
Marjan Oudeman (Human Resources and Organizational Development);
Graeme Armstrong (Research, Development & Innovation); Sven Dumoulin General
Counsel) and Werner Fuhrmann (Supply Chain/Sourcing).
Financial focus and discipline unchanged
AkzoNobel will continue to build on the benefits of its focus on customers, cost
and cash. The management intends to maintain its current EVA and cash
discipline; deliver further operating working capital improvement towards 12
percent of revenue; and maintain a disciplined approach to capital allocation.
Maintenance of strong balance sheet
In August, the company's credit ratings were confirmed at BBB+/Baa1 with outlook
improved to stable. The proceeds from the disposal of National Starch will fund
growth and will potentially partly be used to strengthen the company's capital
structure by, for example, re-paying 2011 debt maturity or de-risking pensions
where possible.
Stable to rising dividend
AkzoNobel has announced a simplified dividend policy and intends to pay a stable
to rising dividend, whereby a cash interim and final dividend will be paid. The
2010 interim dividend will be increased 6.7 percent to ?0.32 per share, which
will be paid on November 3, 2010. The ex-dividend date is October 25, 2010, and
the record date is October 27, 2010.
AkzoNobel's intention is to grow the 2010 total dividend by around ?0.05 per
share, therefore, the company is guiding towards a total 2010 dividend of
?1.40.*
*The new dividend and payout will be discussed at the 2011 Annual General
Meeting
2010 outlook - cautiously optimistic
The uncertain global economic outlook, consumer caution and construction and
housing markets give reason for caution. However, AkzoNobel's leading positions,
scale and presence in diversified markets, strong balance sheet to fund future
growth and evidence of sustained industrial demand beyond re-stocking give
reasons for cautious optimism.
- - -
AkzoNobel is the largest 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 a
Global Fortune 500 company and are consistently ranked as one of the leaders on
the Dow Jones Sustainability Indexes. With operations in more than 80 countries,
our 55,000 people around the world are committed to excellence and delivering
Tomorrow's Answers Today(TM).
Not for publication - for more information
Corporate Media Relations Corporate Investor Relations
Tel. +31 20 502 7833 Tel. +31 20 502 7854
Contact: Tim van der Zanden Contacts: Huib Wurfbain and Ivar
Smits
[HUG#1447140]
Pdf file AkzoNobel press release:
http://hugin.info/130660/R/1447140/389917.pdf
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Source: Akzo Nobel NV via Thomson Reuters ONE
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Datum: 28.09.2010 - 08:00 Uhr
Sprache: Deutsch
News-ID 43107
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