AkzoNobel Unveils Strategy to Accelerate Growth and Value Creation

AkzoNobel has revealed a strategy to accelerate growth and value creation with two focused, high-performing businesses—Paints and Coatings and Specialty Chemicals—that is intended to lead to a step change in value creation for shareholders and all stakeholders.

Creating two separate businesses, according to AkzoNobel, will generate superior, faster, and more certain value creation than the alternatives and with substantially fewer risks, uncertainties, and social costs, as outlined below.

Strategy: create two focused businesses

  • Separation of Specialty Chemicals to take place within 12 months; project teams in place
  • Dual-track process with active consideration of a separate listed entity or sale
  • Focused Paints and Coatings business, with fit-for-purpose structure and processes

Accelerating sustainable growth and profitability

  • €150 million annual savings resulting from ongoing continuous improvement programs in Paints and Coatings
  • Additional €50 million expected cost savings related to the separation of Specialty Chemicals
  • Continued commitment to sustainability with ambition to use 100% renewable energy and be carbon neutral by 2050
  • Investment of €1 billion in research and development by 2020 to maintain focus on innovation and new product development

Enhanced financial guidance*

  • 2017 EBIT to be around €100 million ahead of 2016 due to significant growth momentum across all Business Areas
  • Increased 2020 guidance: Paints and Coatings 15% ROS, ROI >25%; Specialty Chemicals 16% ROS, ROI >20%, reflecting continued growth in profitability equivalent to AkzoNobel’s current portfolio of 14% ROS and >20% ROI**

Increased shareholder returns

  • 50% increase to the regular dividend per share to €2.50 per share, reinforcing confidence in the future plan to further drive growth and profitability
  • Vast majority of net proceeds from the separation of Specialty Chemicals to be returned to shareholders
  • €1 billion special dividend to be paid in November reflecting confidence in the planned separation

“Our commitment to substantial shareholder returns reinforces our belief that the plan we are

outlining . . . will create a step change in value creation, generating significant shareholder value in the short, medium, and long term. It will be delivered at pace, with a clear timeline and is in the best interest of all stakeholders,” said Ton Büchner, CEO of AkzoNobel.