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Performance improvement program

The performance improvement program announced in October 2011 is making good progress. Conceptually, it consists of three main building blocks, being operational professionalization, functional standardization and business unit specific adaptations. Operational professionalization addresses issues such as product complexity reduction, procurement, manufacturing and distribution excellence, and margin management. Business unit adaptations and operational professionalization are expected to contribute around 90 percent of the expected 2012 benefits of €200 million, while functional standardization will primarily be an important enabler. The combined cost of the program in the first half year equals €90 million, booked under incidentals.

The benefits of the program included in the first half year results, both in contribution margin and in cost savings, equal €65 million. Since the announcement of the program, around 1,000 people have left the company, of which around 800 left in 2012. The program is on track, with the main benefits for 2012 occurring in the second half of the year.

Copyright © 2012 Akzo Nobel N.V.