Integrated Reporting at AkzoNobel Ivar Smits – manager sustainability reporting

The Future of Corporate Reporting

March 27, 2014

AkzoNobel today

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• Revenue €14.6 billion

• 49,560 employees

• 44% of revenue from high growth markets

• Major producer of Paints, Coatings and

Specialty Chemicals

• Leadership positions in many markets

24%

28%

36%

12% PerformanceCoatings

DecorativePaints

SpecialtyChemicals

Other

43%

33%

24%

Revenue by

Business Area

Operating income

by Business Area

Invested capital by

Business Area

6.6%

Return on sales

(operating income/revenue)

38%

28%

34%

9.6%

Return on investment

(Operating income/average

12 months invested capital)

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Planet Possible: Creating more value with fewer resources

More customer value in our end-user segmentation

Resource constraints across the value chain will create opportunities

Raw materials

Own operations,

including energy use

Customer operations End-user End of life

Energy/ resource benefits in use

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• Improve Return on Sales (operating

income/revenue) to >9% by 2015

• Improve Return on investment

(Operating income/average 12 months

invested capital) to >14% by 2015

• Keep Net debt/EBITDA <2.0

• 20% of revenue by 2020 from products

that are more sustainable for our

customers than the products of our

competitors

• 25-30% more efficient resource and

energy use across the entire value

chain by 2020 (measured by carbon

footprint reduction)

• REI (Resource efficiency index): A new

financial indicator measuring more

value from fewer resources

Our integrated strategy

Financial targets Sustainability targets

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Integrated Reporting <IR>

The International Integrated Reporting Council (IIRC) framework:

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How the “<IR> capitals” translate into AkzoNobel business terms

Input & output for the capitals:

• Financial Capital (revenue, profits)

• Manufactured Capital (tangible assets)

• Intellectual Capital (RD&I, patents, brands & other

intangible assets)

• Human Capital (employee engagement, talent

development, diversity, training)

• Social and relationship Capital (Customers, Suppliers,

Community, NGOs, etc.)

• Natural Capital (energy, resource use, waste, CO2, water

etc.)

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Examples in AkzoNobel Report 2013: How we create value

• Visual representation of our business model, also per Business Area

• Summary of indicators that relate back to the various “capitals” in the IIRC

framework

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Examples in AkzoNobel Report 2013: Strategic targets section

• All six financial and sustainability targets presented together

• Link to company-wide “Planet Possible” concept that we use to create more

value from fewer resources

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Examples in AkzoNobel Report 2013: Progress on strategic targets

• All six financial and sustainability targets presented together in “Business

Performance section”

• Linking back to Strategy section

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Examples in AkzoNobel Report 2013: Business performance sections

• Clear link to company-wide and Business Area strategic targets

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Examples in AkzoNobel Report 2013: Case studies and animations

• Case studies provide clear examples, supported by video animations

• Link to company-wide strategic targets

Thank you for your attention

Safe Harbor Statement

Integrated Reporting at AkzoNobel 13

This presentation contains statements which address such key issues as

AkzoNobel’s growth strategy, future financial results, market positions, product

development, products in the pipeline, and product approvals. Such statements should be

carefully considered, and it should be understood that many factors could cause

forecasted and actual results to differ from these statements. These factors include, but

are not limited to, price fluctuations, currency fluctuations, developments in raw material

and personnel costs, pensions, physical and environmental risks, legal issues, and

legislative, fiscal, and other regulatory measures. Stated competitive positions are based

on management estimates supported by information provided by specialized external

agencies. For a more comprehensive discussion of the risk factors affecting our business

please see our latest Annual Report, a copy of which can be found on the company’s

corporate website www.akzonobel.com.