Akzo Nobel N.V. — Earnings Release 2011

Feb 16, 2012

Akzo Nobel N.V. Corporate Communications Strawinskylaan 2555 P.O. Box 75730 1070 AS Amsterdam T +31 (0)20 502 7833 F +31 (0)20 502 7604 www.akzonobel.com

Press release

February 16, 2012

AkzoNobel publishes Q4 and full-year results

• 2011 revenue up 7 percent to €15.7 billion, driven mainly by pricing actions
• Weaker end markets and cost inflation impacted results
• 2011 EBITDA 9 percent lower at €1.8 billion
• Net income from continuing operations €469 million (2010: €664 million)
• Adjusted EPS €2.91 (2010: €3.71)
• Total dividend for 2011: increase to €1.45 proposed (2010: €1.40)
• Performance improvement program on track
• Economic environment and certain raw materials remain key sensitivities in 2012

Full-year 2011 in € million

	FY 2010	FY 2011	Δ%
Revenue	14,640	15,697	7
EBITDA	1,964	1,796	(9)
EBITDA margin (in %)	13.4	11.4
Net income continuing operations	664	469

Q4 2011 in € million

	Q4 2010	Q4 2011	Δ%
Revenue	3,620	3,787	5
EBITDA	377	301	(20)
EBITDA margin (in %)	10.4	7.9
Net income continuing operations	130	(62)

Akzo Nobel N.V. (AkzoNobel) today published Q4 and full-year results for 2011. The company reported revenue growth across all Business Areas, led by price/mix developments of 5 percent and a 2 percent volume increase.

CEO Hans Wijers

"2011 was a challenging year against the background of weaker global economic conditions and unprecedented raw material price inflation. The absolute impact of increased raw material prices for the year was approximately €1 billion. Despite this significant headwind, our reported pricing actions have now offset most of this, and for the year ahead we expect to see the full-year benefit of these increases. In addition, to further reduce our cost base and improve our competitiveness, we recently launched a performance improvement program, which is on track. Our strong fundamentals, geographical spread and commitment to deliver – in combination with the improvement program – give us confidence in the future."

Performance improvement program

AkzoNobel's performance improvement program, launched in October 2011, will strengthen competitiveness, enhance the company's ability to grow, simplify support structures and significantly reduce the cost base. This implies a significant change in the operating model and business culture. The comprehensive three-year plan – designed to improve performance and deliver €500 million EBITDA in 2014 – is already expected to deliver €200 million EBITDA in 2012. This implies higher restructuring costs for the coming year. Restructuring activities continue in Decorative Paints in Europe and the US.

The program is on track and the first update on progress and financial impact is due in the company's 2012 half-yearly report.

Business Area highlights in € million

			Decorative Paints
th Quarter 4			Full Year
2010	2011	Δ%		2010	2011	Δ%
1,139	1,204	6	Revenue	4,968	5,296	7
63	11	(83)	EBITDA	548	440	(20)
5.5	0.9		EBITDA margin (in %)	11.0	8.3

			Performance Coatings
th Quarter 4			Full Year
2010	2011	Δ%		2010	2011	Δ%
1,238	1,326	7	Revenue	4,786	5,170	8
147	141	(4)	EBITDA	647	611	(6)
11.9	10.6		EBITDA margin (in %)	13.5	11.8

Specialty Chemicals
th Quarter 4		Full Year
2010	2011	Δ%		2010	2011	Δ%
1,259	1,285	2	Revenue	4,943	5,335	8
221	207	(6)	EBITDA	939	906	(4)
17.6	16.1		EBITDA margin (in %)	19.0	17.0

Sustainability highlights

AkzoNobel has made significant progress on its strategic sustainability agenda. Once again, a number two position was achieved in the SAM benchmark in 2011. Other key ratios also improved:

Outlook for 2012 and medium-term ambitions

AkzoNobel aspires to be the world's leading coatings and specialty chemicals company. The medium-term ambitions are to grow to €20 billion in revenue, increase EBITDA each year while maintaining a 13 to 15 percent margin, reduce OWC percent of revenue yearon-year by 0.5 percent towards a 12 percent level, and pay a stable to rising dividend.

The sustainability ambitions are to remain a top three leader in our industry, to be top quartile in our peer group in terms of safety performance, diversity, employee engagement and development, and eco-efficiency improvement rates.

During 2011 the business faced many challenges, most notably the rapid price increases that affected most of our raw materials and the continuing economic headwinds in many of our major markets.

For the year ahead, the company expects to see the full-year benefit of the price rises that have been achieved so far, and which have now offset most of the raw material price increases. Currently, AkzoNobel is experiencing greater price stability in most raw materials, with the exception of TiO2, which is to continue to rise in price, and for which plans are in place to pass through further price rises in the future. In addition, the company is implementing its performance improvement program, which should bring significant benefits in 2012 and beyond, underpinning margins. As a result, close to 800 employees have been made redundant.

The major uncertainty remains the economic environment. The concerns are focused on the risk of recession in Europe, delayed recovery of the US property market and the potential for a slowdown in China. Each of these can have a significant impact on customers in these regions that would in turn impact AkzoNobel's sales volumes. These, together with certain raw materials, remain the key sensitivities in 2012.

AkzoNobel has a strong portfolio of complementary businesses, with many leading market positions and exposure to high growth markets. This, combined with ongoing management actions, means that the company is confident of delivering medium-term growth in line with its strategic ambitions.

The 2011 Q4 and full year report can be read on www.akzonobel.com/quarterlyresults.

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AkzoNobel is the largest global paint and coatings company and a major producer of specialty chemicals. We supply industries and consumers worldwide with innovative products and are passionate about developing sustainable answers for our customers. Our portfolio includes well known brands such as Dulux, Sikkens, International and Eka. Headquartered in Amsterdam, the Netherlands, we are a Global Fortune 500 company and are consistently ranked as one of the leaders in the area of sustainability. With operations in more than 80 countries, our 55,000 people around the world are committed to excellence and delivering Tomorrow's Answers Today™.

Not for publication – for more information

Contact: Tim van der Zanden Contacts: Jonathan Atack and Ivar Smits

Corporate Media Relations, tel. +31 20 502 7833 Corporate Investor Relations, tel. +31 20 502 7854

Safe Harbor Statement

This press release 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.