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AkzoNobel in Asia Singapore June 3, 2015
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Page 1: Text Bk D1 AkzoNobel in Asia…mid-market segment through the launch of Dulux Catylac • Leverage new forms of communication and activation such as Let’s Color TV Show and YouTube

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AkzoNobel in Asia

Singapore

June 3, 2015

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Agenda main

Agenda main 2nd

• Introduction, Maëlys Castella

• Decorative Paints, Jeremy Rowe

• Performance Coatings, Thijs Bakker

• Specialty Chemicals, Maëlys Castella

• Summary, Maëlys Castella

• Q&A

Agenda

2 AkzoNobel in Asia | Singapore June 2015

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3 AkzoNobel in Asia | Singapore June 2015

Introduction Maëlys Castella

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4 AkzoNobel in Asia | Singapore June 2015

AkzoNobel strategy introduced in 2013

• Organic growth

• Operational excellence

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Our proposition: Leading market

positions delivering leading performance

5 AkzoNobel in Asia | Singapore June 2015

AkzoNobel has gone through a significant amount of

strategic change over the past five years

Today, the company has

• Excellent portfolio of businesses

• Good long term growth potential on the basis of end-user segment growth

• Strong positions in high growth markets (44% of revenue)

• Leadership positions in many markets

• Clear leader in sustainability

• Track record of delivering sustainable innovations and products

• Strong brands, both in consumer and industrial markets

Clear focus to deliver on our significant potential

• Improved returns and cash flow

• Leveraging scale

• Simplification and standardization

• Continued innovation

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< 8.9 9.6

10.0 14.0

0

4

8

12

16

2012 2013 2014 2015

Return on sales

(Operating income/revenue)

%

6

Return on investment

(Operating income/average

12 months invested capital)

%

Net debt/EBITDA

x

2015 financial targets focused on quality of earnings and value creation

Q1 2015 - ROS 8.5% and ROI 10.6%

On track to achieve 2015 targets

* 2012 excluding impairment (€2.1 billion) and after IAS19

5.9 6.6

6.9 9.0

0

4

8

12

2012 2013 2014 2015

1.4 1.0 1.0

2.0

0

1

2

3

2012 2013 2014 2015

* *

AkzoNobel in Asia | Singapore June 2015

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7

High growth markets are 44% of revenue and their importance will increase

% of 2014 revenue

37%

Mature Europe

26%

Asia Pacific

4%

Other regions

10%

Latin America

15%

North America 8%

Emerging Europe

Share of revenues from high growth markets will increase over time

AkzoNobel in Asia | Singapore June 2015

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Overall market conditions remain challenging in many countries

8 AkzoNobel in Asia | Singapore June 2015

Brazil Indonesia

France

Turkey

China

Taiwan

Japan India

Germany

Vietnam Mexico

US

40

50

60

Man

ufa

ctu

rin

g P

MI

*Bubble size=manufacturing value-added output, 2015e (US$bn: 2010 prices)

Source: Markit, Oxford Economics

Purchase Managers’ Index (PMI)*

April 2015

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Consumer confidence is high and increasing for most Asian countries

9

Consumer confidence, Q1 2015

Figures below 100 indicate some degree of pessimism

Source: Nielsen AkzoNobel in Asia | Singapore June 2015

130 123 112 107 106 100 97 89 88 87 86 79 73 72 60

0

20

40

60

80

100

120

140

Recent trends compared

to Q4 2014

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Economic growth rates in Asia remain above other regions

10 AkzoNobel in Asia | Singapore June 2015

Regional GDP forecast

Source: Economist Intelligence Unit

North America

Latin America

Western Europe

Eastern Europe

Asia-Pacific

Middle East & North Africa

-1%

0%

1%

2%

3%

4%

5%

2012 2013 2014 2015 2016 2017 2018

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Agenda main

Agenda main 2nd

2014

• Revenue €3.7 billion (26% total)

• 14,300 Employees

• CapEx €109 million

Revenue by Business Area %

11 AkzoNobel in Asia | Singapore June 2015

We have a large presence in Asia with all business areas represented

29%

47%

24%

Decorative Paints

Performance Coatings

Specialty Chemicals

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Agenda main

Agenda main 2nd

Decorative Paints

Up to 10% annual energy savings

Planet possible

We recently launched Dulux

Powerflexx with superior

protection for exterior walls and

“Keep Cool” feature to reduce

temperature of the interior and

deliver energy savings.

12 AkzoNobel in Asia | Singapore June 2015

Performance Coatings

Major project secured

Driving innovation

We will protect with over 500,000

liters of coatings a Floating

Production Unit fabricated in

South Korea and operating in the

Jangkrik gas field in Indonesia.

Recent business highlights

Specialty Chemicals

Ningbo investment passes

€400million

Organic growth

We broke ground on a

new alkoxylation facility at

our Ningbo multi-site, strengthening

our position as one of the leading

surfactant producers in China.

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13 AkzoNobel in Asia | Singapore June 2015

Our Human Cities initiative

• By 2050, more than 75 percent of the world’s

population will live in cities. 60 percent of our

products are in the Buildings & Infrastructure

and Transportation

• In 2014, we launched our Human Cities

initiative, which is designed to engage with the

challenges and opportunities of the 21st

century city via color, heritage, transport,

education, sport & leisure, and sustainability

• We made a commitment to the Clinton Global

Initiative by establishing a partnership with The

Rockefeller Foundation through its 100

Resilient Cities program

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AkzoNobel Human Cities – Heritage – Malacca

AkzoNobel in Asia | Singapore June 2015 14

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15 AkzoNobel in Asia | Singapore June 2015

Decorative Paints – plans for profitable growth in Asia Jeremy Rowe

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0

10

20

30

40

50

60

2008 2013 2018

EMEA North America Latin America Asia Pacific

16 AkzoNobel in Asia | Singapore June 2015

• Used for protection

as well as decoration

• Consumption per capita

driven primarily by the

frequency of repainting

• Demand growth

closely correlated

with GDP growth,

consumer expectations

• In high-growth markets,

tends to outstrip GDP growth

by up to 1.5x

• Urbanisation, housing

development and infrastructure

development all contribute to

growth

Decorative Paints sales*

€ billion

The Decorative Paints market is attractive in terms of size and growth

Source: Orr & Boss

* At YTD December 2013 constant currency exchange rate, EUR 1 = USD 1.32779

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17 AkzoNobel in Asia | Singapore June 2015

0%

25%

50%

75%

100%

2010 2015

Economy Mid-market Premium

Paint market composition

% of total, by value

High growth markets are increasingly ‘trading up’

Source: Orr & Boss, AkzoNobel estimates

• Paint markets in high-growth markets are still showing significant opportunities for growth

• Spending power of the middle class in high-growth markets is increasing

• Premium market will still grow, but the mid-market is expected to grow fastest

• Trading up from the economy tier means that this is likely to shrink, along with the unorganised sector

Page 18: Text Bk D1 AkzoNobel in Asia…mid-market segment through the launch of Dulux Catylac • Leverage new forms of communication and activation such as Let’s Color TV Show and YouTube

We have strong positions in the main Decorative Paints markets

18 AkzoNobel in Asia | Singapore June 2015

• Strong positions in China, Indonesia, Vietnam and a number of

smaller countries. Strong position in premium in India

• Strong recent organic growth trajectory, based on brand

investment, painter connect and distribution expansion

• Strong financial performance

• Strong brand presence, image and reputation

Source: Orr & Boss, AkzoNobel estimates

* At YTD December 2014 exchange rate, EUR 1 = USD 1.32779

€ billion 2014

Market size where AkzoNobel is represented 12.8

AkzoNobel revenue 1.1

Employees 4,700

Controlled, franchised or owned stores ~4,000

Asia Key messages

20%

80%

Professional (Projects)

Retail (SSO and LSO)53%

26%

21% China andNorth Asia

Southeast Asiaand Pacific

India andSouth Asia

18

Revenue by region

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19 AkzoNobel in Asia | Singapore June 2015

Our strategy to grow profitably in Asia

Objectives:

• Outgrow the market

• Ensure that we leverage our (global) scale to ensure

that we improve relative profitability while we grow

Actions:

• Develop profitable mid-market business model(s)

• Build and implement a robust distribution strategy framework

• Leverage global marketing and innovation scale to win locally

• Leverage our strong brands

• Create and implement a digital marketing strategy

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20 AkzoNobel in Asia | Singapore June 2015

China

AkzoNobel position

Extensive geographic coverage across all regions

Key actions

• Drive further expansion outside the eastern region

with investments in manufacturing footprint:

– New plant opened in Guangzhou (2013)

– Plant under construction in Chengdu (West)

• Drive growth in project channel

• Continue to develop emerging channels such

as e-commerce and Easy Paint Services channels

• Continuously optimize our product range

– Launch of Dulux Ambiance in premium segment

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21 AkzoNobel in Asia | Singapore June 2015

AkzoNobel position

The leading paints company in the Indonesian market with

a strong market share

Key actions

• Continue to build our premium portfolio through strong brands

including Dulux Weathershield and Dulux EasyClean

• Extend the reach of our Dulux brand and bring it to the

mid-market segment through the launch of Dulux Catylac

• Leverage new forms of communication and activation such as

Let’s Color TV Show and YouTube as well as digital activation

• Leverage our new, nationwide distribution model

• Win a higher share in Professional (Projects) segment with a

focused and differentiated model

• Major manufacturing plant upgrade completed in 2011

Indonesia

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Confidential: Not to be shared

Dulux EasyClean

22 22 AkzoNobel in Asia | Singapore June 2015

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23 AkzoNobel in Asia | Singapore June 2015

Vietnam – recent Projects win

• One of Vietnam’s largest

urban development

projects

• Mixed-use project spread

over 128 ha, to be

completed in 3 phases

over 8 years

• Ho Chi Minh City’s new

financial district plus

apartment blocks,

shopping malls, villas,

retail blocks and an

education campus

• Won bid for the first

phase

• Dulux Weathershield

Powerflexx for exteriors

and Dulux Inspire for

interiors

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24 AkzoNobel in Asia | Singapore June 2015

India

AkzoNobel position

• Strong position in premium segment

Key actions

• Continue to build our premium portfolio through strong brands

including Dulux Weathershield and Dulux Velvet Touch

• Grow the mid-market segment

• Build on strength of equity among larger painters and create a

digital platform to engage with them

• Further develop Professional (Projects) segment with a focused

and differentiated model

• New manufacturing plant in Gwalior completed in 2014

Page 25: Text Bk D1 AkzoNobel in Asia…mid-market segment through the launch of Dulux Catylac • Leverage new forms of communication and activation such as Let’s Color TV Show and YouTube

Customer Benefits

• Enables users to see in real-

time what a room would look

like in a wide range of colors

– without the use of paint

• Easy to use and

visualizations can be saved

Key Features

• A world first consumer

application of augmented reality

technology for visualizing

decorated backgrounds

• Developed in collaboration with

String, Tessella and Webcredible

• Winner of 2014 UK Innovative

Mobile App of the Year Award

• Compatible with iOS and

Android devices

Growth Potential

• Downloaded more than 2.7 million

times in 125+ countries since its

launch Q2 2014

• Launched globally, including all

major markets in Asia, outpacing all

competition

Visualizer App – global innovation delivered locally

AkzoNobel in Asia | Singapore June 2015 25

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Summary

26 AkzoNobel in Asia | Singapore June 2015

• Decorative Paints market in Asia is attractive in terms of size and growth

• Asia will continue to grow well and is ‘trading up’

• Strong positions in the main, growing, Decorative Paints markets of Asia

• Capability to invest globally and deliver locally, with regional offices in Singapore and

Shanghai to leverage campaigns, know-how and best practices across the countries

• Country specific plans for profitable organic growth

• Significant investment to support growth, in particular manufacturing footprint expansion

and optimization

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27

Performance Coatings – leading through sustainable innovation Thijs Bakker

AkzoNobel in Asia | Singapore June 2015

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28

Our performance coatings business is balanced across four end-user segments

Buildings and

Infrastructure

Consumer

Goods Industrial

Transportation

21%

28% 14%

37%

AkzoNobel in Asia | Singapore June 2015

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29 AkzoNobel in Asia | Singapore June 2015

Outgrow the market organically

• Marine

• Protective

• Powder

• Specialty Finishes

Improve performance by

driving operational excellence

• Industrial (Wood, Coil, Packaging)

• Vehicle Refinishes

• Yacht

• Aerospace

Expected outcomes

• Improved market share

• Costs don’t grow as fast as revenue

• Improved return on sales

in percentage terms

Expected outcomes

• Growth with the market

• Reduced absolute operating expenditure

• Improved return on sales based on

cost reduction

Differentiated growth strategies exist for each market segment

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• New organization structure with fewer management layers and clearer accountability

• Strategic Market Units more customer focused, agile and lean

• Lowering Selling, General & Administrative costs

• Manufacturing footprint optimization continues worldwide

30 AkzoNobel in Asia | Singapore June 2015

Recent transformation makes us fit for growth

12 sub Business Units

Performance Coatings

4 Business Units

Performance Coatings

7 Strategic Market Units

8 sites closed in 2014 and 9 intended site closures for 2015

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We have a significant local footprint and continue to invest in Asia

31

Marine Headquarters and Technology Center

• Based in Singapore since 2012

New polymer plant in Songjiang

• Investment of €14 million in epoxy and polyester resins

New R,D&I Centre in Songjiang

• Base to more than 200 scientists and second largest

research lab for Performance Coatings globally

New coatings production in Changzhou

• €75 million unit adds capacity for vehicle refinishes

New manufacturing facility in Chonburi, Thailand

• €30 million unit to produce Metal Coatings, Protective

Coatings, Specialty Coatings, Marine Coatings and

selected Decorative Paints

AkzoNobel in Asia | Singapore June 2015

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32

Key features:

• Intersleek foul release marine coatings reduce fuel

consumption and emissions by an average of 9%

• Shipping industry’s first methodology for generating

carbon credits

Customer benefits:

• Lower fuel consumption generates fuel saving

• Customers switching from biocidal to Intersleek

technology can generate carbon credits

• Customers incentivized to use premium hull coatings;

win/ win scenario

Award-winning technology:

• Queen’s Award for Enterprise; Innovation 2007

(Intersleek 700)

• 2013 RINA QinetiQ Maritime Innovation Award

(Intersleek 1100SR)

• 2014 Seatrade Clean Shipping Award (Intersleek

1100SR)

Intersleek helps marine customers to save fuel and reduce emissions

AkzoNobel in Asia | Singapore June 2015

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We are a key player in both premium and mid-market Vehicle Refinishes for Asia

33 AkzoNobel in Asia | Singapore June 2015 Souirce: IHS

2014 2015 2016 2017 2018 2019

North America 2.2% p.a.

Europe 2.1% p.a.

China 5.3% p.a.

Passenger cars and light vehicles (units)

2014 2015 2016 2017 2018 2019

Europe 0.9% p.a.

North America 1.3% p.a.

Brazil, Russia, India, China 9.2% p.a.

Lig

ht

vehic

le p

roduction

Vehic

le c

ar

park

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Summary

34 AkzoNobel in Asia | Singapore June 2015

• World-leading position in performance coatings technology and innovation

• Global reputation for quality and reliability

• Supply market-leading brands to many of the world’s leading companies

• Flatter organization makes us more customer focused, agile and lean

• Investing around the world to enhance our supply and innovation capabilities

• In-depth knowledge and wide-ranging expertise

• Leading through sustainable innovation

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35 AkzoNobel in Asia | Singapore June 2015

Specialty Chemicals Maëlys Castella

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36 AkzoNobel in Asia | Singapore June 2015

• $3.5 trillion market

• Solution provider for society

– manufacturing

– food production

– climate change

• Continuous growth

• Strong growth in Asia

1990 2000 2012 2020

Other

China

Asia Pacific

North America

Western Europe

0.9

1.3

3.4

6.3

Chemicals industry over time, by geography

$ trillion

The chemical industry is large and growing, especially in Asia

Source: McKinsey

6.6%

%

6.8%

%

7.4%

% CAGR (nominal)

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Specialty Chemicals is well positioned to capitalize on our current position

37

Key messages

• Serve international and local customers

• Leading positions in five main platforms

• 18% of revenues generated in Asia

• Significant expansion investments in China now operational

• Local presence in Asia, including manufacturing footprint in China, India, Japan, and Singapore

and Ethylene and Sulfur Derivatives head office in Shanghai

• Driving functional excellence and operational leverage

Revenue by end user segment

Revenue by geographic spread

18%

6%

19%57%

Buildings and

infrastructure

Transportation

Consumer

goods

Industrial

43%

22%

18%

10%

5%2%

Mature Europe

North America

Asia Pacific

Latin America

Emerging Europe

Other regions

AkzoNobel in Asia | Singapore June 2015

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Major projects and timing of spend

38 AkzoNobel in Asia | Singapore June 2015

Increased footprint

• Ningbo was our largest ever one-site investment,

inaugurated in November 2010

• Operational infrastructure in place and ready to

supply additional demand

• Ethylene and Sulfur Derivatives head office now

located in Shanghai

• We continue to invest and leverage scale

Opportunities exist for operational leverage

• Organic growth from strong customer base

• Process innovation

• Easy debottlenecking

• Better yields (lower waste and variable costs)

Recent investments provide a foundation for future growth

38

Investment project 2010 11 12 13 14 15

Ningbo Infrastructure

Ningbo Ethylene Amines

Ningbo Chelates

Ningbo Cellulosics

Ningbo Organic Peroxides1

Boxing Surfactants Acq’n

Boxing & Ningbo Surfactants

Ningbo Organic Peroxides2

Taixing MCA

Guangzhou Colloidal Silica

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39 AkzoNobel in Asia | Singapore June 2015

Summary Maëlys Castella

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AkzoNobel is well positioned for continued growth in Asia

40 AkzoNobel in Asia | Singapore June 2015

• Established and profitable business

• Broad range of activities in the region

• Addressing a wide variety of end user segments

• Strong brands and leading market positions

• Several business headquartered in Singapore and Shanghai

• Benefit from global/ regional scale and efficiencies

• Significant recent investment

• Continued innovation

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Questions

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Safe Harbor Statement

AkzoNobel in Asia | Singapore June 2015

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.

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43 AkzoNobel in Asia | Singapore June 2015

Appendix

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AkzoNobel today

44

• Revenue €14.3 billion

• 47,200 employees

• 44% of revenue from high growth markets

• Major producer of Paints, Coatings and

Specialty Chemicals

• Leadership positions in many markets

25%

29%

35%

11% PerformanceCoatings

DecorativePaints

SpecialtyChemicals

Other

42%

19%

39% 39%

27%

34%

Revenue by

Business Area

Operating income

by Business Area

Invested capital by

Business Area

6.9%

Return on sales

(operating income/revenue)

10.0%

Return on investment

(Operating income/average

12 months invested capital)

AkzoNobel in Asia | Singapore June 2015

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45 AkzoNobel in Asia | Singapore June 2015

~42% of revenues

New Build Projects

Maintenance, Renovation & Repair

Building Products & Components

~16% of revenues

Automotive OEM, Parts and Assembly

Automotive Repair

Marine and Air Transport

~17% of revenues

Consumer Durables

Consumer Packaged Goods

~25% of revenues

Natural Resource and Energy Industries

Process Industries

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AkzoNobel in Asia | Singapore June 2015

Strategy on a page

Strategic focus areas

• Care for the customer

• Reduction of product

and process complexity

• Cash and return on

investment

• Embedded safety

and sustainability

• Diverse and inclusive

talent development

Processes

• People, process and

product safety

• Operational

control cycle

• Continuous

improvement

• Innovation

• Procurement

• Talent management

Actions

• Deliver dependably

• Grow organically

• Innovate

• Simplify

• Standardize

• Continuously

improve

End-user segments

• Buildings and

Infrastructure

• Transportation

• Consumer Goods

• Industrial

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47 AkzoNobel in Asia | Singapore June 2015

AkzoNobel values drive cultural change

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48 AkzoNobel in Asia | Singapore June 2015

Sustainability is business; business is sustainability

(Resource Efficiency Index)

A new indicator measuring how efficiently we generate value

(expressed as gross profit divided by cradle-to-grave carbon footprint)

of revenue by 2020 from products that are more sustainable for

our customers than the products of our competitors

more efficient resource and energy use across the entire value chain

by 2020 (measured by carbon footprint reduction)

AkzoNobel ranked #1 again in the Dow Jones Sustainability Index for the Materials Industry group

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49 AkzoNobel in Asia | Singapore June 2015

A new report developed by the

Economist Intelligence Unit and AkzoNobel

is now available which explores how cities

create optimal environments for citizens.

Called Tomorrow’s cities, we worked

together to collect opinions from leading

city experts and executives, who share their

views on a number or important themes

and topics.

To download the report visit:

www.akzonobel.com/humancities

Human Cities in action

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46%

28%

14%

8% 4%

Mature Europe

Asia Pacific

Latin America

Emerging Europe

Other regions

Decorative Paints at a glance

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Revenue by geographic spread

• We are the global leader in size in the attractive global

Decorative Paints market

• We are pursuing a vision of becoming the leading

global Decorative Paints company in size and performance

• Strategic priorities:

– Fix Europe

– Grow profitably in high-growth markets

€ million 2014

Revenue 3,909

EBITDA 405

Operating income 248

Return on sales 6.3%

Return on investment 8.8%

Employees 15,200

Revenue by end-user

sub-segment

Decorative Paints key figures Key messages

75%

25% Maintenance,renovation and repair

New build projects

AkzoNobel in Asia | Singapore June 2015

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51 AkzoNobel in Asia | Singapore June 2015

Our manufacturing footprint is changing to address our market environment

Existing Plants

Plants under construction

Megaplants

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52 AkzoNobel in Asia | Singapore June 2015

New greenfield Paints Manufacturing Plant in

China west region – Chengdu City

Total investment €44 million from 2014

Focus on water-based paints with 2

construction phases:

Phase 1.1 - 50ML capacity by 2016

Phase 1.2 - total 100ML capacity in 2019

Proven paint making technology including

Advanced Manufacturing System and

high speed filling

Project permits and engineering design

completed, construction on schedule

Capital expenditure supports growth and manufacturing footprint optimization

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Decorative Paints vision and targets

Decorative Paints vision

The leading global Decorative Paints company in size and performance

Expected outcomes (2015):

• Return on sales: 7.5%

• Return on investment: 12%

AkzoNobel in Asia | Singapore June 2015

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Actions Per the company agenda

Business area actions

• Fix Europe

• Grow profitably in high-growth

markets

• Leverage investments in

marketing, sales, innovation

• Improve supply chain

performance

• Generate more value with fewer

resources

Processes Per the company agenda

Business area capabilities

• Branding

• Distributor, wholesaler, retail

management

• Understanding and serving

professional painters

• Consumer inspiration

• Quality management

Strategic

focus areas Per the company

agenda

End-user

segments • Buildings and

Infrastructure

• Transportation

• Consumer Goods

• Industrial

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Decorative Paints strategy on a page

AkzoNobel in Asia | Singapore June 2015

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27%

20% 31%

8%

11% 3% Mature Europe

North America

Asia Pacific

Latin America

Emerging Europe

Other regions

21%

37%

28%

14% Buildings andInfrastructure

Transportation

ConsumerGoods

Industrial

Performance Coatings at a glance

Key messages

• We have leading market positions

• Strategic priorities include:

– Performance improvement initiatives

– Differentiated growth strategies

Performance Coatings key figures

Revenue by end-user segment

Revenue by geographic spread

€ million 2014

Revenue 5,589

EBITDA 687

Operating income 545

Return on sales 9.8%

Return on investment 22.0%

Employees 20,500

55 AkzoNobel in Asia | Singapore June 2015

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25%

26%

49%

Marine & ProtectiveCoatings

Automotive & SpecialtyCoatings

Industrial & PowderCoatings

2014 revenue by Reporting Unit

We cover a uniquely broad set of markets with leading global brands

Marine & Protective

Coatings

• Protective

• Marine

• Yacht

Automotive &

Aerospace Coatings

• Vehicle Refinishes

• Specialty Finishes

• Aerospace

Industrial Coatings • Wood

• Coil

• Packaging

Powder Coatings • Powder

Business Unit Market sectors

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• Vehicle Refinishes

• Specialty Finishes

• Aerospace

• Yacht

Automotive &

Specialty Coatings

• Protective

• Marine

Marine &

Protective Coatings

• Wood

• Coil

• Packaging

• Powder

Industrial & Powder

Coatings

AkzoNobel in Asia | Singapore June 2015

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We are well positioned globally in terms of revenue and manufacturing locations

BU manufacturing locations

Automotive & Aerospace

Marine & Protective

Industrial

Powder

Multi-BU site

57

% of 2014 revenue

27%

Mature Europe

31%

Asia Pacific

3%

Middle East

and Africa 8%

Latin America

20%

North America

11%

Emerging Europe

AkzoNobel in Asia | Singapore June 2015

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Performance Coatings vision and targets

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Performance Coatings vision:

The leading coatings

company from a

performance

perspective

Expected outcomes 2015:

• Return on sales: 12%

• Return on investment: 25%

AkzoNobel in Asia | Singapore June 2015 58

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End-user

segments • Buildings and

Infrastructure

• Transportation

• Consumer Goods

• Industrial

Actions Per the company agenda

Business area actions

• Drive overarching performance

improvement initiatives

• Pursue differentiated growth

strategies

– Outgrow the market organically

– Improve performance by

driving operational excellence

Processes Per the company agenda

Business area capabilities

• Key account management

• Coatings technology and product

innovation

• Footprint in growth markets

Strategic

focus areas Per the company

agenda

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Performance Coatings strategy on a page

AkzoNobel in Asia | Singapore June 2015 59

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Specialty Chemicals at a glance

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Key messages

• Serving attractive markets, growing over the cycle

• Leading positions in five main platforms

• 57% of revenues generated outside of mature Europe

• Significant expansion investments now operational

• Driving functional excellence

Specialty Chemicals key figures

Revenue by end user segment

Revenue by geographic spread

18%

6%

19%57%

Buildings and

infrastructure

Transportation

Consumer

goods

Industrial

43%

22%

18%

10%

5%2%

Mature Europe

North America

Asia Pacific

Latin America

Emerging Europe

Other regions

€ million 2014

Revenue 4,883

EBITDA 815

Operating income 508

Return on sales 10.4%

Return on investment 14.8%

Employees 9,800

AkzoNobel in Asia | Singapore June 2015

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Salt-chlorine chain

100% of Industrial Chemicals

Ethylene Oxide Network

40% of Functional Chemicals

Surfactants

85% of Surface Chemistry

Bleaching Chemicals

60% of Pulp & Performance chemicals

61 AkzoNobel in Asia | Singapore June 2015

Our Business Units Our Platforms

Five well positioned platforms in their industries

Industrial Chemicals

Pulp & Performance chemicals

Surface Chemistry

Polymer catalysts

40% of Functional Chemicals

Functional Chemicals

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Our platforms build on value chains

Raw materials

Base chemicals

Chemical inter-mediates

Performance/ functional chemicals

‘End’ products

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Bleaching chemicals

Salt-chlorine chain

Ethylene oxide network

Polymer catalysts

Surfactants

AkzoNobel in Asia | Singapore June 2015

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Global manufacturing network serves both regional and global customers

Asia Pacific

18%

Latin America

10%

Emerging Europe

5%

North America

22%

Mature Europe

43%

Middle East and

Africa

2%

Multi-site

Site

% of 2014 revenue

AkzoNobel in Asia | Singapore June 2015 63

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Specialty Chemicals vision:

Delivering leading

performance based on

sustainable chemical

platforms driving

profitable growth in

selected markets

Expected outcomes (2015):

• Return on sales: 12%

• Return on investment: 15%

Specialty Chemicals vision and targets

64 AkzoNobel in Asia | Singapore June 2015

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Actions

Per the company agenda

Business area actions

• Drive functional excellence

– Supply chain and operations

– Commercial excellence

– Talent management

• Reduce organizational complexity

• Strengthen product & process

innovation

• Capitalize on industry changes

• Build on our strong chemical

platforms to deliver profitable

growth in selected markets

Processes

Per the company agenda

Business area capabilities

• Understanding customer needs

• Management of integrated value

chains

• Continuous technological

advancement

• Engineering and project

management

Strategic

focus areas Per the company

agenda

End-user

segments • Buildings and

Infrastructure

• Transportation

• Consumer Goods

• Industrial

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Specialty Chemicals strategy on a page

AkzoNobel in Asia | Singapore June 2015

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Improve performance by driving

operational excellence

~50% of portfolio

Main platforms

• Salt-chlorine chain

• Polymer catalysts

• Ethylene oxide network

66 AkzoNobel in Asia | Singapore June 2015

Outgrow the market organically

~ 50% of portfolio

Main platforms

• Bleaching chemicals

• Surfactants

Actions

• Reduce costs and further

improve productivity in

operations

• Improve raw material

(cost) position

Differentiated strategies per platform

Actions

• Capitalize on investments

• Grow by successfully

commercializing products

for attractive applications

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185-201-208

068-105-125

085-190-207

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000-081-146

134-134-136

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000-139-197

000-081-146

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183-185-186

185-201-208

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Color 6

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