thierry vanlancker · 2020-05-08 · the paints and coatings company 2017 key figures €9.6 bln...
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Thierry Vanlancker - CEO AkzoNobel
A Global Perspective: Coatings in China
The paints and coatings company
2017 key figures
€9.6 bln revenue
€1.2 bln EBITDA
€0.9 bln EBIT
9.4% ROS
13.9% ROI
35,700 employees
Business activities
Decorative Paints
Powder Coatings
Marine and Protective Coatings
Automotive and Specialty Coatings
Industrial Coatings
2020 financial
guidance:
15%Return on sales
(EBIT/revenue)
>25%Return on investment
(EBIT/average invested capital)
3
AkzoNobel in China
Decorative Paints
Performance Coatings
Decorative Paints Brands:
Performance Coatings Brands:
Key BrandsYear end 2017
€1,5 bln Revenue
6,000 Employees
15 Production sites
4 Offices
4
0305
06
2018.03 BeijingAkzoNobel becomes
Recommended Supplier
of Automotive Refinishes
for Mercedes-Benz China
2018.05 ChangzhouAkzoNobel’s largest
powder coatings plant
opens in China
2018.06 ShanghaiNew Marine & Protective
Coatings Development
Lab Opens in China
2018.07 BeijingDulux EPS & CNIS
launch re-paints
standards
07
AkzoNobel in China
08
2018.08 ShanghaiDulux launches National
Talent-training Program
10
2018.09 ShanghaiDulux launches the
colour futures 2019
11
2018.12 GlobalForest Breath
awarded as
innovation of 2018
2018.11 ShanghaiAkzoNobel celebrates the 7th
anniversary of its China
student sustainability award
12
2018.12 China‘AkzoNobel acquires full
ownership of ANSP Joint Venture’
12
Economic growth rates in China remain high despite slowdown compared to other countries/region
US China Brazil
-10%
-5%
0%
5%
10%
15%
08 09 10 11 12 13 14 15 16 17 18
Real GDP (% change pa)
Eurozone
5
The manufacturing industry continually located in the expansion interval, while the pace of expansion has slowed down
Source: EIU / Source: China National Statistic Bureau Source: China National Statistic Bureau
26,6
5,4
5 %
10 %
15 %
20 %
25 %
30 %
2010 2011 2012 2013 2014 2015 2016 2017 2018
China’s fixed-asset investment (FAI) growth
cooled to 5.4 percent in first 9 months of 2018
YOY Growth rate of FAI
55,8
50,8
45 %
50 %
55 %
60 %
2010 2011 2012 2013 2014 2015 2016 2017 2018
Manufacturing Purchasing Managers' Index (%)
Total retail sales of consumer goods remained flat growth in recent years, with single digital growth rate since 2018
9,2
5 %
10 %
15 %
20 %
25 %
2010 2011 2012 2013 2014 2015 2016 2017 2018
Monthly Growth Rate of Total Retail Sales of Consumer Goods
Macro-economy in China
6
• Housing bubble slow down?
• China-US trade issues
• Speculation debt crisis/ de-leverage impact
Key challenges in Chinese Economy
7
• Capital flee debate not helping
• Fast changing sustainability policy
• Rising costs for skilled labor
Key challenges in Chinese Economy
8
China Existing House Sell-out Area YOY Growth(6 months lag)
China Decorative Paints Market Size (mn EUR) & Growth
Real-estate and Paints Market in China
Opportunities and Risks
Downward trend in decorative paint since 2018
Continuous signs of softening in real estate market
Growing demand for eco-premium products
9
Automotive OEM
CAGR Expectations in 2018 could be flat
Strong production growth 1st half year of 2018
2nd half shows decline. YTD -1.02% vs. PY
Trade tensions between China and USA brings
further uncertainty particularly for those spare parts
maker with export business
Vehicle refinishes
Car Parc expectations in 04-2018 were CAGR of
7,4% majorly contributed to Tier 2, 3 and 4 cities
3rd round insurance policy reform implemented
resulting in assumed – 5% to -10% repair rate
correction
Intensified competition at distribution level
*SOURCE: National Bureau of Statistic
Automotive and Refinish in China
Vehicle Output*
Car (and Light Commercial
Vehicle) Production YOY%2016 8%
2017 2%
2018 YTD(sep.) 0.9%
10
Market Size
Market is very fragmented with 4,000 players
Opportunities and Risks
Legislation change (VOC, pollution control) and Liquid to Powder conversion opportunity
Market upgrade/new tech/new application creates opportunity, but requires speed to market
Powder Coatings in ChinaFragmented and dynamic
6%
2%2%
2%
1%
1%
1% 1%
1%
1%1%
1%
1%1%
1%
1%
1%0%
74%
AkzoNobel
Peer 1
Peer 2
Peer 3
Peer 4
Peer 5
Peer 6
Peer 7
Peer 8
Peer 9
Peer 10
Peer 11
Peer 12
Peer 13
Peer 14
Peer 15
Peer 16
Peer 17
Others
China Powder Market *
10
*: China Powder Coating Association revenue data 2017
Looking forward – coatings in China
• China continuous to be a strategic growth market for AkzoNobel
• Global political developments will continue to influence the dynamics
• Local players grow aggressively
• Eco & high performance products become more trendy
• Intensive consolidation at end-user market
• Paint the future
Dulux Forest Breath
Colors and protects interior walls while keeping the air clean and fresh. Absorbs and destroys atmospheric particles such as formaldehyde.
Helping to meet growing demand in Asia for more sustainable paint products.
Q&A
Bringing color to aerospace customers The Embraer artwork is the latest in a series of striking aircraft designs created using AkzoNobel’s aerospace coatings. Recent examples
include a save the coral reefs message for the Mirpuri Foundation which was applied to Hi Fly-owned Airbus A380, and colorful livery
developed for Wizz Air’s 100th aircraft.
Thank you
AquasilkWater-based wood coating which contains substantially lower levels of VOCs. Specially developed for the Chinese furniture industry.
Delivers the highest standards of color and protection while meeting stricter sustainability standards.