AkzoNobel Investor Meet 130307 Tcm130-78676

7/23/2019 AkzoNobel Investor Meet 130307 Tcm130-78676

http://slidepdf.com/reader/full/akzonobel-investor-meet-130307-tcm130-78676 1/48

AkzoNobel India- building the future….

Mumbai

March 7, 2013



Welcome to AkzoNobel in India

Hyderabad Plant

Bangalore Plant

Mohali Plant

Mahad Plant

Corporate Office.

Gurgaon Thane Plant



Current AkzoNobel footprint in India

•1,633 employees• 5 plants

• 14 offices

• 75 warehouses

• 8,500 dealers

• 2 World Class Research

Centres- Thane & B’lore

•

Mohali : Decorative

Paints, A&A Coatings

Hyderabad : Decorative

Paints, A&A Coatings

Hoskote :

MPC Coating, Powder Coatings

Industrial Finishes, PackagingCoatings, A&A Coatings

Thane : DecorativePaints

Mumbai : Functional

Chemicals, Surface

Chemistry

Mahad: Polymer

Chemicals

Gurgaon

One AN Office



AkzoNobel in India post merger…aportfolio to reckon with..

96%

4%

Coatings

Others (inclSpecialtyChemicals)

Deco Paints

Automotive Coatings

Marine Coatings

Powder Coatings

Coil Coatings

Protective Coatings

Powder Coatings

Automotive Coatings



Current Shareholding Pattern (Feb 2013)

AkzoNobelGroup73%

Mutual Funds4%

InsuranceCompanies

7%

BodiesCorporate

6%

FII2%

Others8%

World’s largest

Coatings

player…



Indian Coatings Market and Consumer Trends



Coatings market – anticipated blip ingrowth story

Market growth drivers

Inherent growth in the

construction industry • Demographic changes

• Greater prosperity

• Infrastructure investment

Shift to mid and premium tier

as consumers trade up• GDP/capita to increase 3.5x by

2020 touching same levels as

Brazil today

•

Faster internal repaint cyclesexpected

16,70020,000

23,00025,000

33,000

63,000

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2015 2020

Rs. Crs

CAGR 14%

10-12%?20%

14%



Macro Trends for Coatings Industry



How global megatrends affect our industry



Coatings Industry needs to deliver the products for achanging world



Evolving the sustainability of living spaces

ANI’s WeatherShield SunReflect reduces temperatures of external surfaces by almost 5 degree Celsius & result

in energy savings by almost 10%

New living spaces globally will increasingly become carbon zero with sustainability built into their DNA.



Rapidly Advancing Technologies

Nano technology, Memory Polymers – stretching the possibilities of what coatings cando

Mono functional to Multi functional RM

Structural shift to water-based coatings



Changing Retail Environment

Experiential

Inspirational

Targeted

Use of augmented reality

Decorator Centers empowering consumers on decoration decisions



This is an exciting industry

Colour

Growth

Innovation

Collaboration

Room for most players to grow



AkzoNobel India – Lines of Businesses

- Coatings

- Specialty Chemicals



Decorative Paints

3 Manufacturing Sites

Servicing 8,000+ Retailers63 Warehouses

Products Range



Decorative Industry doubling in 5 years

Demand driven by

• urbanization and revival of realty industry

• Shift towards higher margin water-based products

and premium emulsions

Market anticipated to bounce back in late2013, early 2014 due to

• Softening of input cost

• Increasing sophistication of retail

environment

Market Growth Drivers

11,50014,000

16,00018,000

24,000

46,000

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2010 2011 2012 2013 2015 2020

CAGR 15%

In INR cr

1.32.8 4.0 4.2 5.0

10.011.8 12.0

14.5

India SE Asia China EastEurope

MiddleEast

CentralEurope

Australia Japan North America

Per Capita Consumption

AkzoNobel India: Premium portfolio



Performance Coatings

Manufacturing Sites at

Bangalore and Mohali

Our Brands

Our Businesses

Powder

Coatings

Protective

Coatings

Industrial

Automotive

Coatings

International

Research Center

at Bangalore



Automotive Outlook in India


• Technology shift from 1K to 2K and from solvent to

water-base

• One of the fastest growing automobile market –

emerging auto hub

• Emergence of MSO (Multi shop operators) chainse.g My TVS, Carz, Bosch.

1100 1200 13001500

1800

3900

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2015 2020

CAGR 12%

In INR cr

AkzoNobel India: End-to-end coatings solution for the car refinish sector



Powder Coatings Outlook in India

In INR cr

• Conversion from Liquid to powder

• Investment by Global companies

• Expanded capacity for autobody,

commercial and monumental

constructions

GTC

39%

GI

16%

Auto

11%

DA

12%

Func

10%

Furniture

6%

Arch

3%

IT

3%


600700

800

1000

1400

2800

0

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2015 2020

CAGR 16%

AkzoNobel India: Eco friendly technology



Coil Coatings Outlook in India

• Infrastructure investment will lead mid

tier segment to grow at CAGR 12%

• 20 Coil Lines to grow to 25 lines by 2015

Roofing85%

Building7%

Domestic Appliances

8%


290 325390

525

700

960

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2015 2020

CAGR 12%

AkzoNobel India: Global track record of product range



Protective Coatings Outlook in India

• Planned power capacity of 15-20 Giga-

watt p.a.

• Infrastructure investment

• Investments in high growing segments

lead to OEM growth that supplyequipment

10%

19%

13%

19%

12%

27%

MktPotential - PC

infra

Power

O&G

OEM

Mining & Oth

SME


1800 2000 2300 24003300

7800

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2010 2011 2012 2013 2015 2020

CAGR 16%

AkzoNobel India: Key coatings supplier for wind sector/ thermal projects



Specialty Chemicals

Manufacturing Site at Mahad

•Organic Peroxides (HPOP)

•Metal Alkyl (HPMA)

•Sale XTP & HPOP Products

Surface Chemistry

Functional Chemistry



Specialty Chemicals Outlook in India

Market size for 3 active BU’s is

expected to grow to around

INR 8,400 cr by 2020

All end user segment growth

projected ~12%


2700 29003200 3400

4600

8400

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2010 2011 2012 2013 2015 2020

CAGR 12%

Petrochem

17%

Polymers13%

Org5%Inorg

10% APIs

8%

Speciality18%

Agrochem2%

Syn fibres8%

Fert

11%

Soaps& Det8%

Market Segments

AkzoNobel India: Diverse Portfolio



Leading market positions deliveringleading performance

• Comprehensive coatings portfolio• Strong brands, both in B2B and B2C

segments

• Good long-term growth potential

• Technology & Innovations flowing

through global Business Units

• Adequate capacities to support growth

• Excellent customer relationships



Key Financial Parameters



Margins reflecting Industry trends…

Net Revenue

(INR Crores)

EBIT

(INR Crores)

1,009

1,655

90

116

YTD Q3

2011-12

YTD Q3

2012-13

The results for PY do not include numbers of merging companies and are not comparable

48% 49%47%

43%41% 42%40%

39%

25%

35%

45%

55%

FY09 FY10 FY11 FY12

Gross Margins

Akzo Nobel Industry Average

6.4

4.2

0

1

2

3

4

5

6

7

Akzo Nobel Industry

Degree of Operating Leverage

PAT

(INR Crores)

123

156

Dec 2012



Robust Financial parameters

Source: Company annual reports, analyst reports

21

8798

10

Debtors Days Inventory Days Supplier Days CashConversion

Cycle

Cash Conversion Cycle (FY12)

28%

18%

ROCE - Business ROCE - Reported

ROCE (as at Dec 31, 2012)



Consistent growth in shareholder value

7 ,

6 3 0

9 ,

7 1 1

9 ,

9 2 1

1 0 ,

9 1 6

1 4 ,

4 1 0

8

16 1618

20

-

5

10

15

20

25

-

2,000

4,000

6,000

8,00010,000

12,000

14,000

16,000

2007-08 2008-09 2009-10 2010-11 2011-12 Year

Shareholders' Funds (INR million) & Dividend (INR)

Shareholders' Funds

Share Price Movement (INR)

4,5305,086

5,560

4,924

5,914

440

595

856 876

990

-

200

400

600

800

1,000

1,200

0

1000

2000

3000

4000

5000

6000

7000

May-09 May-10 May-11 May-12 Mar-13

Nifty AN India



Building the growth momentum



# 1 in AutoCoatings &

Functional Chem

# 2 in Deco andProtectiveCoatings

Customerfocusedsolutions

Leader inSustainability

Employer ofChoice

Euro 1 Billion

Our 5 year aspiration …



Opportunities for Scale Benefits

Opportunity toinvest ahead of

market

Comfortablecash position

Unified face tocustomers

Synergized centres ofexcellence – Finance,HR , SCM

Provided scale

to compete

efficiently

Merger has enabled customerfocus and a more responsive

organisation



Going forward…our medium-term priorities



AkzoNobel India – Key Priorities

1. Care for the customer

4. Embedded safety and sustainability

3. Focus on cash and return on investment

2. Reduction of product and pro cess complexity

5. Diverse and inclusive talent development

1. Customer focused

solutions

2. Merger advantage –

operating efficiency

3. Cash and return

on investment

4. Embedded safetyand sustainability

5. Diversity and inclusive

talent development



• Organic growth

• Focus on Construction & Transportation segments

• Mid-market new product launches

• True sales force effectiveness management

• Value sales and margin management

“Customer focused solutions” create competitive advantage

1. Customer

focused solutions



One - Stop Solution

Marine &ProtectiveCoatings

DecorativeCoatings

IndustrialCoatings

AutomotiveCoatings

PowderCoatings

WoodFinishes and Adhesives



New Build Projects

Maintenance, Renovation and Repair

Building Products and Components

Automotive OEM, Parts and Assembly

Automotive Repair



• Intense cooperation between multi business unit

sales, RD&I, operations and procurement

• Combined warehousing and logistics

• Multi site manufacturing flexibility

• Platform for new business launches

One AkzoNobel operations leverage

2. Merger advantage -

operating efficiencies



Creating a Platform for New Businesses

Packaging Coatings & Wood Finishes & Adhesives

• Leveraged One AN footprint to be closer to customer

• Supported by Excellence Centres-Finance, HR, Supply

Chain, Legal

• Shared production sites (Packaging Coatings at Thane,

Wood Finishes at Mohali)

• Low Cost / Rapid Market Entry

• Supply Chain Leverage

Customer/Channel

Contacts byDeco

Supported byPurchaseand RD&I

Site &Engineering

by Deco

RD&I helps localize portfolio

• Import Substitution

• Local Manufacturing

• New launches



Research, Development & Innovation

Making it happen | RD&I 40

Leverage color

expertise in A&ACto other BUs

Lead in color for Indian

customers – Deco

Color lab for Asia

Integrate technical skills in performance coatings

and deco to develop mid segment products

Local raw materials and

manufacturing for

speed and cost

Develop sustainable

products for India’sgrowing mid market

Leverage on global

strengths – ECGs,

CoPs, BU labs

Strengthen the technical skills in Chemical

for providing better services locally

Set-up RD&I organization to work on focused areas

(Transport, Construction, Color)

Regulatory affairs like MSDS

and labels locally for Indian

market



• Value creation from formulations and indigenization

• Cash consideration in decision making

• Capital expenditure and cost management

• One cash management, working capital improvement

Generate improved returns

3. Cash and return

on investment



• Behavior-based and process safety

• Reduce carbon foot-print

• Sustainable business

• Renewables (raw materials and energy)

Safety and Sustainability

4. Embedded safety

and sustainability



Pursue Sustainability opportunity……collectively

Highlights:

Sustained Energy Conservation efforts by

plants

Wash Water recycling system in factories

Energy efficient systems implemented in

the new plants

Future Plans

Rainwater Harvesting

Non conventional energy sources

Embed safety and sustainability in everything we do



• Active drive for management to be a

reflection of our geographical presenceand gender participation

• Continuous learning and development

• Employee engagement

• Employer of choice

Talent development

5. Diverse and

inclusive talent

development



AkzoNobel India Board – Ensuring Strong Corporate Governance

Amit Jain

Managing Director

Partha Basu

CFO & Wholetime Director

Dr Sanjiv Misra

Non Executive Director

R Gopalakrishnan

Non Executive DirectorRenu S Karnad


Sucheta Govil

Alternate Director

Arvind Uppal


Graeme Armstrong


Nihal Kaviratne CBE

Chairman



We have everything we need to make it happen

• Our people• Our brands

• Our products

• Our market positions

• Sustainability



47

Disclaimer:

Some of the statements in this presentation, describing the Company's objectives and

expectations expressed in good faith, may constitute 'forward looking statements'

within the meaning of applicable laws and regulations.

Actual results might differ materially from those, in the event of changes in market

conditions.



Thank you!

Documents

AkzoNobel Investor Meet 130307 Tcm130-78676