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Year of Transformation

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Year of Transformation 2007: Year of transformation 2007 has been an incredible year. One of the most eventful and Year of transformation exciting in the long, proud history of Akzo Nobel. The company YEAR OF TRANSFORMATION AKZO NOBEL ANNUAL REPORT 2007 REPORT ANNUAL NOBEL AKZO TRANSFORMATION OF YEAR ANNUAL REPORT 2007 has been transformed. Akzo Nobel divested its pharmaceutical activities (Organon BioSciences) to Schering-Plough and acquired Imperial Chemical Industries plc (ICI) to create one of the world’s foremost industrial companies. We’re bigger, stronger, more focused. We are now not only the largest global industrial coatings manufacturer, but also the number one in decorative paints, as well as being a major worldwide supplier of specialty chemicals. The company has significantly increased its presence in key emerging markets and has strategically positioned itself for sustainable growth. We are stronger, not only in terms of revenue, market share, and geographical presence, but also in terms of our ability to develop innovative products, to satisfy the growing needs of our customers, and to skillfully manage and invest in our business. We’re evolving. We’re progressing. We adapt to change and are prepared to successfully meet the challenges – and exploit the opportunities – that the future may bring. We’re committed to making a better tomorrow. 2007: Year of transformation 2007 has been an incredible year. One of the most eventful and Year of transformation exciting in the long, proud history of Akzo Nobel. The company YEAR OF TRANSFORMATION AKZO NOBEL ANNUAL REPORT 2007 REPORT ANNUAL NOBEL AKZO TRANSFORMATION OF YEAR ANNUAL REPORT 2007 has been transformed. Akzo Nobel divested its pharmaceutical activities (Organon BioSciences) to Schering-Plough and acquired Imperial Chemical Industries plc (ICI) to create one of the world’s foremost industrial companies. We’re bigger, stronger, more focused. We are now not only the largest global industrial coatings manufacturer, but also the number one in decorative paints, as well as being a major worldwide supplier of specialty chemicals. The company has significantly increased its presence in key emerging markets and has strategically positioned itself for sustainable growth. We are stronger, not only in terms of revenue, market share, and geographical presence, but also in terms of our ability to develop innovative products, to satisfy the growing needs of our customers, and to skillfully manage and invest in our business. We’re evolving. We’re progressing. We adapt to change and are prepared to successfully meet the challenges – and exploit the opportunities – that the future may bring. We’re committed to making a better tomorrow. 2007: Transaction Expansion Key developments An offer of EUR 11 billion was accepted The company officially opened two sites for the sale of Organon BioSciences (OBS). in China. Decorative Coatings opened a As a result, Akzo Nobel abandoned facility in Langfang, while Functional plans to proceed with a partial IPO of Chemicals inaugurated a new polysulfides the OBS business. production plant in Taixing. Chairman Hans Wijers also announced new strategic targets for China including a revenue target of USD 2 billion by 2012. March June Q1 Q2 Q3 January August Relocation Acquisition Akzo Nobel announced that it would be Akzo Nobel announced that the company relocating its head office from Arnhem had made a recommended cash offer of in the Netherlands to the Dutch capital, EUR 11.5 billion (GBP 8.1 billion) for Amsterdam, in summer 2007. Imperial Chemical Industries plc (ICI). January April signing an agreement to acquire May details of a EUR 50 million investment in the industrial belt surrounding Akzo Nobel Car Refinishes was Akzo Nobel announced a EUR 250 the worldwide Ceilcote® business Akzo Nobel significantly broadened in Brazil to supply, store, and handle all Moscow at Orekhovo-Zuevo. awarded the privilege of becoming million Chemicals investment in from the German-based KCH Group. its position in the North American chemicals for a greenfield pulp mill Hyundai Motor Company’s first globally a new multi-site at Ningbo in wood coatings market after signing being built in Três Lagoas, Brazil. The company announced its intention to approved aftermarket supplier. China, with the first facilities to The Marine & Protective Coatings an agree ment to acquire Chemcraft delist from the NASDAQ stock exchange, be constructed by the company’s business’ International® Paint Holdings Corporation, North America’s Akzo Nobel’s first ever share buyback and deregister from the U.S. Securities February Functional Chemicals business. brand won the Queen’s Award largest privately-owned manufacturer program commenced. and Exchange Commission (SEC). The company’s Canadian Sico® for Innovation in the UK for the of industrial wood coatings. The more simplified structure of a coatings brand launched an even The company strengthened its success of its Intersleek® 700 July single listing in Amsterdam is expected greener range of its popular leading position in the global antifouling coating. The company’s Pulp & Paper Chemicals Powder Coatings officially opened its to generate cost savings of around environmentally-friendly product line. protective coatings market after business, Eka Chemicals, announced first production site in Russia, situated EUR 7 million per annum. 2007: Transaction Expansion Key developments An offer of EUR 11 billion was accepted The company officially opened two sites for the sale of Organon BioSciences (OBS). in China. Decorative Coatings opened a As a result, Akzo Nobel abandoned facility in Langfang, while Functional plans to proceed with a partial IPO of Chemicals inaugurated a new polysulfides the OBS business. production plant in Taixing. Chairman Hans Wijers also announced new strategic targets for China including a revenue target of USD 2 billion by 2012. March June Q1 Q2 Q3 January August Relocation Acquisition Akzo Nobel announced that it would be Akzo Nobel announced that the company relocating its head office from Arnhem had made a recommended cash offer of in the Netherlands to the Dutch capital, EUR 11.5 billion (GBP 8.1 billion) for Amsterdam, in summer 2007. Imperial Chemical Industries plc (ICI). January April signing an agreement to acquire May details of a EUR 50 million investment in the industrial belt surrounding Akzo Nobel Car Refinishes was Akzo Nobel announced a EUR 250 the worldwide Ceilcote® business Akzo Nobel significantly broadened in Brazil to supply, store, and handle all Moscow at Orekhovo-Zuevo. awarded the privilege of becoming million Chemicals investment in from the German-based KCH Group. its position in the North American chemicals for a greenfield pulp mill Hyundai Motor Company’s first globally a new multi-site at Ningbo in wood coatings market after signing being built in Três Lagoas, Brazil. The company announced its intention to approved aftermarket supplier. China, with the first facilities to The Marine & Protective Coatings an agree ment to acquire Chemcraft delist from the NASDAQ stock exchange, be constructed by the company’s business’ International® Paint Holdings Corporation, North America’s Akzo Nobel’s first ever share buyback and deregister from the U.S. Securities February Functional Chemicals business. brand won the Queen’s Award largest privately-owned manufacturer program commenced. and Exchange Commission (SEC). The company’s Canadian Sico® for Innovation in the UK for the of industrial wood coatings. The more simplified structure of a coatings brand launched an even The company strengthened its success of its Intersleek® 700 July single listing in Amsterdam is expected greener range of its popular leading position in the global antifouling coating. The company’s Pulp & Paper Chemicals Powder Coatings officially opened its to generate cost savings of around environmentally-friendly product line. protective coatings market after business, Eka Chemicals, announced first production site in Russia, situated EUR 7 million per annum. Recognition The company was ranked number one in the Chemicals sector on the prestigious Dow Jones Sustainability Indexes. September Q4 December Integration REVENUE BY SEGMENT Akzo Nobel finalized plans for new segments of the company. The integrated IN PERCENTAGES organization was set up to operate in Decorative Paints 36 three business areas – Decorative Paints, Performance Coatings 32 Performance Coatings, and Specialty Specialty Chemicals 32 Chemicals. September was being proposed – a minimum The divestment of Organon BioSciences Akzo Nobel’s Polymer Chemicals site in of 45 percent of net income before for EUR 11 billion was completed. Pasadena in the United States received incidentals. prestigious Star recognition for its December implementation of a comprehensive November Akzo Nobel announced that the health and safety management system. At Extraordinary General Meetings company had been selected to globally held in Amsterdam and London, supply a full range of coatings products October shareholders of Akzo Nobel and ICI for application to Shell’s worldwide retail At Analyst Meetings held in London approved Akzo Nobel’s proposed network of service stations and business and New York, the company announced acquisition of the UK-based company. signage. that a higher dividend payout ratio Akzo Nobel at a glance ■ Continued strong performance in transformational year ■ EBITDA1 up 15 percent to EUR 1,271 million ■ Net income1 up 29 percent to EUR 580 million ■ Dividend up 50 percent
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