Statement of Chair of Supervisory Board
2022 was an eventful and demanding year for AkzoNobel. In November, we officially welcomed our new CEO, Greg Poux-Guillaume, and said goodbye to Thierry Vanlancker. Thierry led the company through a period of significant change. He took over in 2017, when the company was under attack from shareholders due to years of underperformance, which culminated in a hostile takeover bid from a competitor.
During Thierry’s five years as CEO, AkzoNobel was transformed. The Specialty Chemicals business was sold – with the proceeds being distributed to shareholders – and we became a focused paints and coatings company. The new AkzoNobel was organizationally simplified, integrated business processes were installed and employee engagement was lifted to a high level. The company focused on profitability, and margins were increased to standard industry levels through cost discipline and strong focus on pricing. On behalf of the whole Supervisory Board, I want to thank Thierry for his leadership and wish him every success for the future.
We were very pleased to welcome Greg as our new CEO. He’s an experienced business leader with an impressive track record and we’re confident we found the best match for the company. In the short term, Greg and his team will focus on lifting both productivity and the competitiveness of the supply chain, and strengthening our market positions. The Supervisory Board is confident Greg and the Executive Committee will be successful in leading the company on the next phase of its journey.
After three years of strong progress on our financial results, 2022 was very challenging. Markets contracted from Q2 onwards, as the end of COVID-19 restrictions in Europe impacted the do-it-yourself sector, and continued lockdowns in China caused additional pressure. The war in Ukraine also sent energy prices soaring and significantly reduced economic activity in our main markets. Like other companies in our industry, we’d benefited from strong demand for decorative paints during COVID-19. However, global supply chain challenges forced us to increase stocks of raw materials, finished products and staffing to secure stable supplies to customers. As a result of the macro-economic turmoil and sudden market downturn, major efforts were made during the second half of 2022 to adjust working capital and costs to the new realities. Unfortunately, these challenges weren’t fully resolved before year-end and we couldn’t avoid a significant negative impact on profitability.
Nevertheless, our teams were able to defend AkzoNobel’s market positions, while implementing the necessary price increases. The company also continued to move forward and remained focused on its strategic ambitions. Despite the global uncertainty, AkzoNobel is investing in its long-term growth potential, evidenced by two acquisitions completed during the year – Grupo Orbis in Latin America and the wheel liquid coatings business of Lankwitzer Lackfabrik GmbH. We also signed an agreement to acquire the African paints and coatings activities of Kansai Paint (expected to be completed in 2023, pending the relevant approvals).
These acquisitions represent significant undertakings, especially during a period of global economic uncertainty. They’ll require additional investments in the short to medium term, but will also boost AkzoNobel’s leading positions, offering important long-term growth opportunities. The Supervisory Board was pleased to see the company making continued efforts to further strengthen its global activities. It was also encouraging to see progress being made in sustainability and innovation, which will be key to accelerating growth.
During the year, as well as engaging in a thorough process to find Thierry Vanlancker’s successor, we also strengthened the Supervisory Board by recruiting two new colleagues with significant chemicals industry insight – Ester Baiget and Hans Van Bylen. They both bring a wealth of knowledge and expertise. We also announced our intention to nominate Ben Noteboom as my successor at the AGM in April 2023.
The management team and all our employees should be proud of the results achieved in recent years. Admittedly, the last three quarters of 2022 were difficult and we can’t be fully satisfied with the financial results. However, the Supervisory Board is convinced the right measures have been taken to prepare for 2023. I’d like to thank my Supervisory Board colleagues, the Board of Management and Executive Committee for all their efforts during a challenging year. Most importantly, I want to thank all our employees for their unwavering support and commitment.
Finally, thank you to everyone for supporting me during my tenure. Having joined at a time when the company was under significant external pressure, I’ve had the privilege of working with you to create a strong, focused paints and coatings company with an exciting future. With a new CEO in place, the company is well positioned for the next stage of its journey. I’m therefore happy to step down at the 2023 AGM and hand over to Ben Noteboom, who will lead the organization with the new CEO. I’m confident that with your support, they’ll successfully take the company forward.
Amsterdam, February 27, 2023
Nils Smedegaard Andersen
Chair of the Supervisory Board
Annual General Meeting of shareholders; Extraordinary General Meeting of shareholders.