AkzoNobel India- building the future.

Mumbai
March 7, 2013

Welcome to AkzoNobel in India

Mohali Plant
Hyderabad Plant

Corporate Office.
Gurgaon

Thane Plant

Mahad Plant
Bangalore Plant

Current AkzoNobel footprint in India

Mohali : Decorative
Paints, A&A Coatings

1,633 employees
5 plants
14 offices
75 warehouses
8,500 dealers
2 World Class Research
Centres- Thane & Blore

Gurgaon
One AN Office

Mumbai : Functional
Chemicals, Surface
Chemistry
Thane : Decorative
Paints

Mahad: Polymer
Chemicals

Hyderabad : Decorative
Paints, A&A Coatings

Hoskote :
MPC Coating, Powder Coatings
Industrial Finishes, Packaging
Coatings, A&A Coatings

AkzoNobel in India post mergera

portfolio to reckon with..
Coil Coatings

Marine Coatings
4%
Coatings

Deco Paints

Powder Coatings
96%

Others (incl
Specialty
Chemicals)

Automotive Coatings
Powder Coatings
Protective Coatings
Automotive Coatings

Current Shareholding Pattern (Feb 2013)

Bodies
Corporate
6%

FII
2%

Others
8%

Insurance
Companies
7%
Mutual Funds
4%

AkzoNobel
Group
73%

Worlds largest
Coatings
player

Indian Coatings Market and Consumer Trends

Coatings market anticipated blip in

growth story
Market growth drivers
Rs. Crs
70,000

63,000

60,000

Demographic changes
Greater prosperity
Infrastructure investment

CAGR 14%
50,000
40,000

14%

20%
30,000
20,000

16,700

20,000

10-12%?
23,000

33,000
25,000

Shift to mid and premium tier

as consumers trade up

10,000
2010

2011

Inherent growth in the

construction industry

2012

2013

2015

2020

GDP/capita to increase 3.5x by

2020 touching same levels as
Brazil today
Faster internal repaint cycles
expected

Macro Trends for Coatings Industry

How global megatrends affect our industry

Coatings Industry needs to deliver the products for a

changing world

Evolving the sustainability of living spaces

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

ANIs WeatherShield SunReflect reduces temperatures of external surfaces by almost 5 degree Celsius & result
in energy savings by almost 10%

Rapidly Advancing Technologies

Nano technology, Memory Polymers stretching the possibilities of what coatings can
do
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

Products Range

3 Manufacturing Sites

63 Warehouses

Servicing 8,000+ Retailers

Decorative Industry doubling in 5 years

Market Growth

Drivers

50,000

46,000

45,000
40,000
35,000
30,000

CAGR 15%

24,000

25,000
20,000
15,000

11,500

14,000

16,000

18,000

Per Capita Consumption

10,000
14.5

In INR cr
5,000
10.0

2010

2011

2012

2013

2015

2020

Market anticipated to bounce back in late

2013, early 2014 due to
Softening of input cost
Increasing sophistication of retail
environment

1.3
India

2.8
SE Asia

4.0

4.2

5.0

China

East
Europe

Middle
East

11.8

12.0

Central Australia Japan

North
Europe
America

Demand driven by
urbanization and revival of realty industry
Shift towards higher margin water-based products
and premium emulsions

AkzoNobel India: Premium portfolio

Performance Coatings
Our Businesses

Industrial
Manufacturing Sites at
Bangalore and Mohali

Automotive
Coatings
Powder
Coatings

Our Brands

International
Research Center
at Bangalore

Protective
Coatings

Automotive Outlook in India

Market Growth

Drivers

4,500
3900

4,000

3,500
3,000
CAGR 12%

2,500

1800

2,000
1,500

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) chains
e.g My TVS, Carz, Bosch.

1100

1200

1300

2010

2011

2012

1500

1,000
In INR cr
500

0
2013

2015

2020

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

Powder Coatings Outlook in India

Market Growth

Drivers

3,000

2800

2,500
2,000
CAGR 16%

1,500

Conversion from Liquid to powder

Investment by Global companies
Expanded capacity for autobody,
commercial and monumental
constructions

1400
DA
12%

1000

1,000
600

700

Func
10%

Auto
11%

800

Furniture
6%

500
In INR cr

Arch
3%

GI
16%

0
2010

2011

2012

2013

2015

IT
3%

2020
GTC
39%

AkzoNobel India: Eco friendly technology

Coil Coatings Outlook in India

Market Growth

Drivers

1200

960

1000
800

700

CAGR 12%
525

600
400

Infrastructure investment will lead mid

tier segment to grow at CAGR 12%
20 Coil Lines to grow to 25 lines by 2015

290

325

Domestic
Appliances
8%

390
Building
7%

200
0
2010

2011

2012

2013

2015

2020

Roofing
85%

AkzoNobel India: Global track record of product range

Protective Coatings Outlook in India

Market Growth

Drivers

9000

7800

8000
7000
6000

CAGR 16%

5000
4000
3000
2000

3300

1800

2000

2300

2400

Planned power capacity of 15-20 Gigawatt p.a.

Infrastructure investment
Investments in high growing segments
lead to OEM growth that supply
equipment

Mkt Potential - PC

1000
0
2010

2011

2012

2013

2015

2020

10%

27%

19%

12%

13%
19%

infra
Power
O&G
OEM
Mining & Oth
SME

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

Specialty Chemicals

Surface Chemistry

Manufacturing Site at Mahad

Organic Peroxides (HPOP)
Metal Alkyl (HPMA)
Sale XTP & HPOP Products

Functional Chemistry

Specialty Chemicals Outlook in India

Market Growth

Drivers

9000

8400

8000
7000
6000

4600

4000
3000

All end user segment growth

projected ~12%

CAGR 12%

5000

2700

2900

3200

Market size for 3 active BUs is

expected to grow to around
INR 8,400 cr by 2020

3400

Market Segments

2000
1000
0

2010

2011

2012

2013

2015

2020

Fert
11%

Soaps
& Det
8%

Petroche
m
17%

Syn fibres
Agrochem 8%
2%

Polymers
13%

Speciality
18%
APIs
8%

AkzoNobel India: Diverse Portfolio

Inorg
10%

Org
5%

Leading market positions delivering

leading 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

YTD Q3
2011-12

YTD Q3
2012-13
1,655

Gross Margins
55%
45%

48%

49%
42%

41%

1,009

Net Revenue
(INR Crores)

47%
40%

43%
39%

35%
25%
FY09
116

FY10

Akzo Nobel

FY11

FY12

Industry Average

90
Degree of Operating Leverage

EBIT
(INR Crores)

6.4

6
5
156
123

4.2

4
3
2

PAT
(INR Crores)

1
0
Akzo Nobel

Industry
Dec 2012

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

Robust Financial parameters

ROCE (as at Dec 31, 2012)

Cash Conversion Cycle (FY12)

28%

18%

87

98

10
21
ROCE - Business

ROCE - Reported

Source: Company annual reports, analyst reports

Debtors Days Inventory Days Supplier Days

Cash
Conversion
Cycle

Consistent growth in shareholder value

Share Price Movement (INR)

Nifty

7000
5,086

4,924

4,530
856

4000

1,200
5,914

5,560

6000
5000

AN India

1,000
990

800

876

600
3000

400

440

200

May-10

May-11

May-12

Mar-13

16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-

16

18

16

2008-09

2009-10
Year

20

25
20

14,410

May-09

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

10,916

9,921

9,711

1000

7,630

2000

595

15
10
5
-

2007-08

2010-11

Shareholders' Funds

2011-12

Building the growth momentum

Our 5 year aspiration

Euro 1 Billion

# 1 in Auto
Coatings &
Functional Chem

Leader in
Sustainability

# 2 in Deco and
Protective
Coatings

Employer of
Choice

Customer
focused
solutions

Opportunities for Scale Benefits

Merger has enabled customer
focus and a more responsive
organisation
Opportunity to
invest ahead of
market

Unified face to
customers

Synergized centres of
excellence Finance,
HR , SCM

Comfortable
cash position

Provided scale
to compete
efficiently

Going forwardour medium-term priorities

AkzoNobel India Key Priorities

1. Care for the customer

1. Customer focused
solutions
2.ofMerger
2. Reduction
productadvantage
and pro cesscomplexity
operating efficiency

3. Cash
and return
3. Focus on cash
and return
on investment
on investment

4. Embedded safety and sustainability

4. Embedded safety

and sustainability
5. Diverse and inclusive talent development

5. Diversity and inclusive

talent development

Customer focused solutions create competitive advantage

1. Customer
focused solutions

Organic growth

Focus on Construction & Transportation segments

Mid-market new product launches

True sales force effectiveness management

Value sales and margin management

One - Stop Solution

Marine &
Protective
Coatings

Wood
Finishes and
Adhesives

Decorative
Coatings

Powder
Coatings

Industrial
Coatings

Automotive
Coatings

New Build Projects

Maintenance, Renovation and Repair
Building Products and Components

Automotive OEM, Parts and Assembly

Automotive Repair

One AkzoNobel operations leverage

2. Merger advantage operating efficiencies

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

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)

Supported by
Purchase
and RD&I

Site &
Engineering
by Deco

RD&I helps localize portfolio

Import Substitution

Customer/
Channel
Contacts by
Deco

Local Manufacturing
New launches
Low Cost / Rapid Market Entry
Supply Chain Leverage

Research, Development & Innovation

Regulatory affairs like MSDS
and labels locally for Indian
market

Develop sustainable
products for Indias
growing mid market

Lead in color for Indian

customers Deco
Color lab for Asia

Local raw materials and

manufacturing for
speed and cost

Leverage on global
strengths ECGs,
CoPs, BU labs

Strengthen the technical skills in Chemical

for providing better services locally

Leverage color
expertise in A&AC
to other BUs

Integrate technical skills in performance coatings

and deco to develop mid segment products

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

(Transport, Construction, Color)

Making it happen | RD&I 40

Generate improved returns

3. Cash and return

on investment

Value creation from formulations and indigenization

Cash consideration in decision making

Capital expenditure and cost management

One cash management, working capital improvement

Safety and Sustainability

4. Embedded safety
and sustainability

Behavior-based and process safety

Reduce carbon foot-print

Sustainable business

Renewables (raw materials and energy)

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

Talent development

5. Diverse and
inclusive talent
development

Active drive for management to be a

reflection of our geographical presence
and gender participation

Continuous learning and development

Employee engagement

Employer of choice

AkzoNobel India Board Ensuring Strong Corporate Governance

Nihal Kaviratne CBE

Chairman

R Gopalakrishnan
Non Executive Director

Amit Jain
Managing Director

Renu S Karnad
Non Executive Director

Dr Sanjiv Misra
Non Executive Director

Partha Basu
CFO & Wholetime Director

Graeme Armstrong
Non Executive Director

Arvind Uppal
Non Executive Director

Sucheta Govil
Alternate Director

We have everything we need to make it happen

Our people
Our brands
Our products
Our market positions
Sustainability

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.

47

Thank you!