Supervisory Board Chairman’s statement

2020 was a difficult year for the whole world due to the global pandemic, although it turned into a good year for AkzoNobel.

Nils Smedegaard Andersen, Chairman (photo)

Nils Smedegaard Andersen
(1958, DK) Chairman
Initial appointment: 2018
Term of office: 2018-2022

Chairman of the Board of Directors of Unilever plc.; Former non-executive Director of BP plc.; Former CEO of A.P. Moller-Maersk A/S; Former CEO and President of Carlsberg A/S.

With COVID-19 impacting the company’s revenue, Decorative Paints delivered a very strong performance, while Performance Coatings experienced more headwinds, especially during the first half of the year. Profitability increased further as a result of significant efforts to reduce costs, improve product mix and margins, as well as strengthen and standardize the company’s processes and systems.

The Supervisory Board has been impressed by the way AkzoNobel responded to the unprecedented challenges posed during the year and how the organization was able to generate positive momentum and deliver on its Winning together: 15 by 20 ambition, despite facing considerable hurdles due to the pandemic. As well as ensuring the safety and well-being of employees, the company continued to serve and support its customers around the world, while at the same time creating a stronger foundation for the future. It was a clear sign of AkzoNobel’s resilience and ability to adapt.

Many employees had to change their ways of working – relying heavily on technology to stay connected – which worked surprisingly well. The sudden increase in demand for decorative paints, and declines in several other segments, put significant pressure on the flexibility of the company’s supply chain and employees had to put in extra effort to cope. So it was encouraging to see everyone’s pride in the organization as AkzoNobel rose to the challenge and took significant strides forward.

Through it all, the organization held firm on its core values, focusing on safety, acting with integrity and further improving sustainability. Extra special efforts were also made to support local communities in dealing with the global pandemic. The company’s People. Planet. Paint. approach to sustainable business will ensure that AkzoNobel continues to lead the way when it comes to environmental and social impact. The success and further expansion of the Paint the Future innovation ecosystem also caught the eye of many in the industry and beyond.

During a difficult year for us all, it was especially pleasing to see employee engagement improve. This remains a key focus area, with a clear ambition to become top quartile.

Throughout much of 2020, many colleagues and key stakeholders were involved in uncovering a new purpose statement. The successful outcome – Pioneering a world of possibilities to bring surfaces to life – will help to further build engagement and drive the company’s continued transformation.

Everyone at AkzoNobel is rightfully proud to have delivered on the 15 by 20 ambition launched in 2017, closing the year with – excluding unallocated cost – of 15%, despite the challenging business environment. The changes implemented throughout the organization have been significant and successful. Both the management team and employees deserve sincere compliments and thanks.

Having restored competitiveness and strengthened profitability, AkzoNobel is now ready for the next stage of its journey, represented by the Grow & Deliver strategy. There are still multiple levers – such as increased commercial excellence and network optimization – for the company to save costs and enable increased investments in growth, paving the way for a future which can excite all stakeholders. Management has clearly shown they can balance delivering short-term results with achieving long-term sustainability. This ability to address today’s challenges while driving the changes necessary to thrive tomorrow will prove vital and the Supervisory Board is looking forward to the next chapter.

I want to thank my Supervisory Board colleagues, the Board of Management and Executive Committee for all their efforts during an extraordinary year, when nearly all our contact took place by video calls. The frequency of meetings was high throughout the year, which allowed the Supervisory Board to be closely involved, including in the development of plans for the future.

Most importantly, I want to thank AkzoNobel’s employees around the world for their continued passion and commitment, which helped to deliver an exceptional result during an unprecedented year.

Nils Smedegaard Andersen, Chairman of the Supervisory Board – signature (handwriting)

Amsterdam, February 16, 2021
Nils Smedegaard Andersen
Chairman of the Supervisory Board

ROS (return on sales)

ROS is adjusted operating income as a percentage of revenue. ROS excluding unallocated cost is adjusted operating income as a percentage of revenue for Decorative Paints and Performance Coatings. It excludes unallocated corporate center cost.

ROS (return on sales)

January 2020 - December 2020

 

in €millions

2019

2020

Total revenue

9,276

8,530

Less: revenue unallocated

(57)

(15)

Revenue excluding unallocated revenue

9,219

8,515

 

 

 

Adjusted operating income excluding unallocated cost

1,106

1,273

 

 

 

ROS% excluding unallocated cost

12.0

15.0