20th March 2019

AKZONOBEL PLANS SPLIT OF BUSINESSES

Following two rebuffed attempts at a buyout by PPG, AkzoNobel has outlined a new strategy to accelerate growth and value creation with two of its businesses, Paints and Coatings and Specialty Chemicals. The intent is to produce a step change in value creation for shareholders and all stakeholders.
The company states, "The logical next phase of creating two separate companies builds on the strong financial and operational foundation developed in recent years. It will generate superior, faster and more certain value creation than the alternatives and with substantially fewer risks, uncertainties and social costs."
It intends the separation of Specialty Chemicals to take place within 12 months, and has project teams in place. This will entail a dual-track process with active consideration of a separately listed entity, or a sale.

AkzoNobel aims also for a "focused Paints and Coatings business, with fit-for-purpose structure and processes." It also wants to accelerate sustainable growth and profitability, and expects to achieve €150-million in annual savings from ongoing continuous improvement programs in Paints and Coatings.

An additional €50-million is expected cost savings related to the separation of Specialty Chemicals, and it is underlining a continued commitment to sustainability, with an ambition to use 100 percent 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

The 2017 EBIT, the company states, should to be around €100-million ahead of that for 2016, due to significant growth momentum across all business areas.

Ton Büchner, CEO of AkzoNobel, said in a statement, "Our commitment to substantial shareholder returns reinforces our belief that the plan we are outlining today 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.
"During recent years, we have consistently delivered on our commitments to improve profitability and growth, while building momentum within our company. We have world class teams and a solid financial and operational foundation."
"The industry-leading performance and outlook of our Specialty Chemicals business gives us the confidence to return proceeds to shareholders in advance of the separation. In addition, we see extensive growth momentum in our Paints and Coatings business, which we expect to keep growing faster than market rates, allowing us to improve our long-term financial guidance.
"Now is the right time to create two focused, high-performing businesses. This strategy will create substantial value for shareholders with significant less risks and uncertainties compared to alternatives."

www.akzonobel.com