-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DGUrFUABL+R+fqWxtSVoA8PNgekY+GgxG3Q9e5JVoE6jgYmGSMlu+IXAklvOOkdr jGy80KFtbpjRpap62K08tQ== 0001208646-04-000515.txt : 20041222 0001208646-04-000515.hdr.sgml : 20041222 20041222083023 ACCESSION NUMBER: 0001208646-04-000515 CONFORMED SUBMISSION TYPE: 6-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20041222 FILED AS OF DATE: 20041222 DATE AS OF CHANGE: 20041222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AKZO NOBEL NV CENTRAL INDEX KEY: 0000003124 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-17444 FILM NUMBER: 041219103 BUSINESS ADDRESS: STREET 1: 76 VELPERWEG 6824 BM CITY: ARNHEM NETHERLANDS STATE: P8 ZIP: 00000 MAIL ADDRESS: STREET 1: 76 VELPERWEG 6824 BM CITY: NETHERLANDS STATE: P8 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: AKZO N V DATE OF NAME CHANGE: 19940809 FORMER COMPANY: FORMER CONFORMED NAME: AKO N V DATE OF NAME CHANGE: 19691127 FORMER COMPANY: FORMER CONFORMED NAME: ALGEMENE KUNSTZIJDE UNIE N V DATE OF NAME CHANGE: 19691106 6-K/A 1 c90670.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 6-K/A ------------ REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 of The Securities Exchange Act of 1934 DECEMBER 22, 2004 ------------ AKZO NOBEL N.V. (Translation of registrant's name into English) 76, Velperweg, 6824 BM Arnhem, the Netherlands (Address of principal executive offices) 0 - 017444 (Commission file number) ------------ Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F [X] Form 40-F [ ] Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] ================================================================================ This amendment Form 6-K/A filing is being made due to a missing cover page and signature page, the original filing was timely filed on October 19, 2004 Report for the 3rd quarter of 2004 Key figures
3rd quarter Millions of euros (EUR) January-September - --------------------- ------------------------------ ------------------------------ 2004 2003* Ch. % 2004 2003* Ch. % - ----- ----- ----- ----- ----- ----- 213 178 20 Net income excl. nonrec. items 605 543 11 0.75 0.62 - per share, in EUR 2.12 1.90 521 178 193 Net income 766 497 54 1.82 0.62 - per share, in EUR 2.68 1.74 Sales 801 877 (9) Pharma 2,430 2,649 (8) 1,381 1,323 4 Coatings 4,009 3,996 - 1,033 1,087 (5)/5*** Chemicals 3,298 3,395 (3)/-*** (30) (33) Other (89) (100) - ----- ----- ----- ----- 3,185 3,254 (2) Total 9,648 9,940 (3) ===== ===== ===== ===== Operating income** (EBIT) 131 120 9 Pharma 403 407 (1) 137 125 10 Coatings 365 332 10 80 76 5/36*** Chemicals 266 252 6/18*** (19) (17) Other (78) (85) - ----- ----- ----- ----- 329 304 8 Total 956 906 6 ===== ===== ===== ===== 10.3 9.3 Return on sales**, in % 9.9 9.1 12.2 6.6 Interest coverage 10.1 7.1 Gearing 0.46 1.09**** 0.92***** Number of employees 62,990 65,240**** 64,580*****
Operational performance clearly up; significant net nonrecurring profit - - Pharma - cost savings contributing - - Coatings - clearly up due to growth and acquisitions - - Chemicals - substantially up - - Net nonrecurring profit of EUR 308 million - mainly from divestments - - Further settlement in Remeron (R) court cases - - Divestment program at Chemicals - nearing completion - - Strong financial position - - Interim dividend unchanged - EUR 0.30 - - Outlook - net income, excluding nonrecurring items and special benefits, around 2003 level * 2003 figures have been adjusted for a minor regrouping of activities between Coatings and Chemicals. ** Excluding nonrecurring items. *** Continued operations. **** At September 30. *****At December 31. 1 Report for the 3rd quarter of 2004
CONDENSED CONSOLIDATED STATEMENT OF INCOME 3rd quarter Millions of euros January-September - ---------------------- ---------------------------------------------------- -------------------- 2004 2003 Ch. % 2004 2003 Ch. % ----- ----- ----- ----- ----- ----- 3,185 3,254 (2) Sales 9,648 9,940 (3) (2,856) (2,950) Operating costs (8,692) (9,034) - ------ ------ ----- ------ 329 304 8 Operating income* (EBIT) 956 906 6 (27) (46) Financing charges (95) (128) - ------ ------ ----- ------ 302 258 Operating income* less financing charges 861 778 (87) (79) Taxes (251) (236) - ------ ------ ----- ------ 215 179 20 Earnings* of consolidated companies, after taxes 610 542 13 7 10 Earnings* from nonconsolidated companies 23 30 - ------ ------ ----- ------ 222 189 Earnings* before minority interest 633 572 (9) (11) Minority interest (28) (29) - ------ ------ ----- ------ 213 178 20 Net income excluding nonrecurring items 605 543 11 308 Nonrecurring items, after taxes and minority interest 161 (46) - ------ ------ ----- ------ 521 178 193 Net income 766 497 54 ====== ====== ===== ====== 10.3 9.3 Return on sales*, in % 9.9 9.1 12.2 6.6 Interest coverage 10.1 7.1 Net income excl. nonrecurring items per share, in EUR 0.75 0.62 - basic 2.12 1.90 0.74 0.62 - diluted 2.11 1.90 Net income per share, in EUR 1.82 0.62 - basic 2.68 1.74 1.82 0.62 - diluted 2.67 1.74 475 461 3 EBITDA 1,414 1,392 2 138 123 Capital expenditures 379 380 132 145 Depreciation 419 451
*Excluding nonrecurring items. 2 Report for the 3rd quarter of 2004 Operational performance clearly up; significant net nonrecurring profit Net income excluding nonrecurring items in the third quarter rose 20% to EUR 213 million. Net income* per share was EUR 0.75 (2003: EUR 0.62). All three groups turned in an improved performance. Including a net nonrecurring profit of EUR 308 million, mainly as a result of divestments, third-quarter net income was EUR 521 million (2003: EUR 178 million). For the first nine months of 2004, net income excluding nonrecurring items amounted to EUR 605 million, up 11% on 2003. Taking into account net nonrecurring profits of EUR 161 million, net income was up 54% to EUR 766 million. Autonomous sales growth of 2% Third-quarter sales of EUR 3.2 billion were somewhat below last year. Autonomous growth at Coatings and Chemicals was more than offset by lower Pharma volumes, negative currency translation effects, and divestments. Sales developed as follows:
Currency Acquisitions/ In % Total Volume Price translation divestments - ---------------- ---------- ------- ----------- ------------ ----------------- Pharma (9) (6) (1) (2) - Coatings 4 3 1 (2) 2 Chemicals (5) 3 3 (2) (9) Akzo Nobel (2) 1 1 (2) (2)
Operating income - up 8% Operating income of EUR 329 million was up 8% on last year. All three groups achieved improved operational performance and benefited from lower pension charges. Currency translation had a decreasing negative effect. Return on sales was 10.3%, against 9.3% in the third quarter of 2003. Earnings developed as follows:
Change from 3rd quarter of 2003 Operating -------------------------------------------------------------------- income* for 3rd Operational Currency Lower pension Millions of euros quarter of 2004 Total performance Divestments translation charges - ----------------- --------------- --------- ------------- ------------- ------------- -------------- Pharma 131 11 11 - (3) 3 Coatings 137 12 13 - (4) 3 Chemicals 80 4 17 (16) - 3 Other** (19) (2) (5) - 3 --------------- --------- ------------- ------------- ------------- -------------- Akzo Nobel 329 25 36 (16) (7) 12
* Excluding nonrecurring items. ** "Other" mainly comprises pension costs related to former employees of divested operations and results of the (intermediate) holding companies and the captive insurance companies. 3 Report for the 3rd quarter of 2004 Currency translation effects were mainly caused by the weaker U.S. dollar and various Asian currencies. Financing charges decreased substantially as a result of significantly reduced net borrowings due to the proceeds from divestments and lower foreign currency exchange rates. Interest coverage in the third quarter jumped to 12.2 (2003: 6.6). The effective tax rate decreased from 31% to 29%, reflecting changes in the geographic distribution of the Company's results. Earnings from nonconsolidated companies decreased from EUR 10 million to EUR 7 million, mainly attributable to Eka Polymer Latex and the divested Catalysts joint ventures. Workforce - down 1,910 from restructurings At September 30, 2004, the Company had 62,990 employees, compared with 64,580 at year-end 2003. Restructurings at all three groups caused a reduction of 1,910. Acquisitions and divestments on balance resulted in a decrease of 690. Growth of certain businesses caused a workforce expansion of 1,010. Developments were as follows:
September 30, Acquisitions/ Other December 31, 2004 Restructurings divestments changes 2003 - ------------- -------------- --------------- -------------- ---------- -------------- Pharma 19,680 (1,130) (60) 190 20,680 Coatings 29,310 (420) 610 780 28,340 Chemicals 12,890 (320) (1,240) 40 14,410 Other 1,110 (40) 1,150 -------------- --------------- -------------- ---------- -------------- Akzo Nobel 62,990 (1,910) (690) 1,010 64,580
Nonrecurring items In the third quarter of 2004, the Company registered a net nonrecurring profit of EUR 308 million, which breaks down as follows:
Millions of euros - ------------------------------------ --------------- Gain on divestments 458 Remeron (R) court cases (58) Restructuring and impairment charges (42) --------------- Gross 358 Taxes (42) Nonconsolidated companies (8) --------------- Total 308
4 Report for the 3rd quarter of 2004 The gain on divestments primarily relates to the sale of Catalysts and Phosphorus Chemicals in July 2004* Restructuring and impairment charges pertain to the closure of the chlorine production in Bohus, Sweden, and restructurings at Polymer Chemicals, mainly in Germany. The charge for the Remeron (R) court cases in the United States mainly concerns the settlements and legal fees to resolve alleged claims brought by state attorneys general and by a class of consumers and third party payers (the "indirect purchaser class"). The latter settlement is still subject to certain conditions. The charge also relates to claims brought by nine large chain store and grocery store pharmacies having opted out of a class of direct purchasers. This class action brought by direct purchasers remains pending in the Federal District Court of New Jersey, for which no provision has been recognized**. The loss for nonconsolidated companies predominantly relates to antitrust cases of Flexsys. Divestment program at Chemicals - nearing completion In September 2003, the Company announced its plan to sell Catalysts, Coating Resins, and Phosphorus Chemicals from its Chemicals portfolio in order to strengthen the balance sheet and to create more financial room to maneuver. In the mean time, Catalysts and Phosphorus Chemicals have been divested. Early in October 2004, the agreement for the sale of the Ultra Violet/Electron Beam (UV/EB) Resins activities, part of the Coating Resins business, was announced. Recently, Nuplex Industries Limited, New Zealand, made an offer of EUR 110 million, for the other (major) part of the Coating Resins business, free of cash and debt. Completion of this transaction is foreseen in the last quarter of 2004. At closing the total divestment program will have generated some EUR 1 billion. Interim dividend unchanged - EUR 0.30 Akzo Nobel will declare an interim dividend for 2004 of EUR 0.30 per common share, unchanged from last year. Starting October 20, 2004, Akzo Nobel shares will trade ex-dividend. The interim dividend will be made payable on November 1, 2004. Outlook - net income, excluding nonrecurring items and special benefits, around 2003 level The Company has turned in a clearly improved performance in the first three quarters of 2004. However, we are facing steeply increasing raw material and energy prices and there are increasing uncertainties due to softening macroeconomic conditions. In addition, we do not expect that Pharma will be able to match its very strong fourth quarter of 2003, also in view of the developments at Diosynth. Taking all this into account, we now expect that full-year net income, excluding nonrecurring items, will be around the 2003 level. The special benefit in 2003 from the asenapine cooperation of EUR 70 million, after taxes, is excluded in this comparison. * It should be noted that no final settlement has been reached yet for these divestments, so that the amounts recognized at this moment are best estimates and could change at a later stage, once the final settlement has been reached. ** Reference is made to the disclosures on pages 98 and 99 in the Akzo Nobel Annual Report 2003. 5 Report for the 3rd quarter of 2004 Pharma - cost savings contributing
3rd quarter Millions of euros January-September - --------------------- ------------------------- --------------------------- 2004 2003 Ch. % 2004 2003 Ch. % - ----- ------ ------ -------- ------- ------ Sales 492 551 Organon 1,501 1,691 252 258 Intervet 763 754 85 114 Diosynth 283 345 (28) (46) Intragroup sales/other (117) (141) - ----- ------ -------- -------- 801 877 (9) Total 2,430 2,649 (8) 131 120 9 Operating income* (EBIT) 403 407 (1) 16.4 13.7 Return on sales*, in % 16.6 15.4 31.0 31.2 S&D expenses as % of sales 31.8 32.0 15.8 16.1 R&D expenses as % of sales 15.5 16.3 174 164 6 EBITDA 532 536 (1) 33 35 Capital expenditures 111 145 Invested capital 2,484 2,506** Number of employees 19,680 20,680**
* Excluding nonrecurring items. ** At December 31. - - Sales down - due to lower volumes at Organon and Diosynth and currencies - - Organon - cost saving programs - successful - Remeron(R)- major decline due to generic competition in U.S.; still holding up in rest of world - HT products - sales under pressure - contraceptives - NuvaRing (R) continuous growth - - Diosynth - severely suffering from overcapacity; restructurings progressing well - - Integration of Organon and Diosynth announced - - Intervet - improved performance 6 Report for the 3rd quarter of 2004 Sales in the third quarter decreased 9% to EUR 0.8 billion, due to generic competition in the United States for Remeron (R) weaker key currencies, and lower sales for HT products. The Company is actively pursuing restructuring and cost saving measures, which are now clearly paying off. Including incidental benefits of some EUR 15 million, operating income rose 9% to EUR 131 million. Return on sales was 16.4% (2003: 13.7%). In the first nine months of 2004, the workforce was reduced by 1,130 due to restructuring. The main products in Organon (Human Healthcare) developed as follows:
Autonomous growth relative to, in % Sales ----------------------------------- Millions of euros 3rd quarter 2004 3rd quarter 2003 2nd quarter 2004 -------------------- ---------------- ---------------- Remeron (R) in U.S. 10 (74) (32) Remeron (R) in rest of world 77 (2) (2) Contraceptives 132 4 - - of which NuvaRing (R) 23 100 21 Puregon (R)/Follistim (R) 70 (3) (3) Livial (R) 39 (20) (2)
In the United States, the effects of the generic competition for antidepressants Remeron (R) and Remeron (R) SolTab (R) have virtually bottomed out. In the rest of the world, Remeron volumes were somewhat below the third quarter of 2003 and the second quarter of 2004, but on balance still holding up. Sales for contraceptives were up, as NuvaRing (R) (contraceptive ring) continues to grow. The launch of Follistim (R)-AQ (TM) cartridge in the United States is progressing well. Livial (R) sales were impacted by the ongoing discussions about the results of studies on hormone therapies. Diosynth (active pharmaceutical ingredients) is severely suffering from overcapacity in the industry and lower (captive) demand, with performance around break-even level. The earlier announced restructuring program affecting 350 jobs is nearly completed. Akzo Nobel intends to integrate Organon and Diosynth into one human healthcare business unit. The new organization will leverage its combined know-how, technologies, people, and facilities to capitalize on market opportunities. The integration will also reduce complexity and thus support the strategy of partnerships in development and marketing and sales. In addition, it will allow the Company to combine biotechnology activities into one platform. A new biotechnology research facility in Cambridge, Massachusetts, United States, will also be created. Akzo Nobel will invest EUR 60 million in Oss, the Netherlands, to build a state-of-the-art parenteral production facility. Akzo Nobel's animal healthcare activities Intervet turned in an improved performance, especially in Europe. Business in Asia remains somewhat under pressure from the impact of avian influenza. 7 Report for the 3rd quarter of 2004 Coatings - clearly up due to growth and acquisitions
3rd quarter Millions of euros January-September - ---------------------------- ------------------------------- ---------------------------- 2004 2003* Ch. % 2004 2003* Ch. % - -------- -------- -------- ------ --------- -------- Sales 538 516 Decorative Coatings 1,510 1,468 420 379 Industrial activities 1,201 1,114 225 223 Car Refinishes/Nobilas 678 669 216 209 Marine & Protective Coatings 662 627 (18) (4) Intragroup sales/other (42) (11) - -------- -------- ------ --------- 1,381 1,323 4 Total continued operations 4,009 3,867 4 Impregnated papers 129 - -------- -------- ------ --------- 1,381 1,323 4 Total 4,009 3,996 - 137 125 10 Operating income** (EBIT) 365 332 10 9.9 9.4 Return on sales**, in % 9.1 8.3 170 159 7 EBITDA 467 442 6 33 25 Capital expenditures 83 73 Invested capital 2,193 2,043*** Number of employees 29,310 28,340***
* 2003 figures have been adjusted for a minor regrouping of activities between Coatings and Chemicals. ** Excluding nonrecurring items. *** At December 31. - - Autonomous growth 4% - mainly Asia Pacific and United States - - Steep increase of raw material prices - pressure on margins - - Decorative Coatings - improved performance from cost savings - - Marine & Protective and industrial activities - still going strong - - Car Refinishes - major worldwide restructuring set in motion - - Capital expenditures focused on high-growth markets - - Various bolt-on acquisitions to improve distribution in Europe 8 Report for the 3rd quarter of 2004 In the third quarter, sales grew 4% to EUR 1.4 billion. Autonomous sales growth was 4%, mainly attributable to volume growth. The negative currency impact was 2%, while acquisitions, mainly relating to the German coatings distributor Timpe & Mock, added 2%. Operating income rose 10% to EUR 137 million. Return on sales was 9.9% (2003: 9.4%). The contributions from cost savings, acquisitions, and lower pension charges more than offset the negative impact of higher raw material prices and weaker currencies. Raw material prices are now steeply increasing. Marine & Protective Coatings, Industrial Finishes, and Powder Coatings improved further, albeit that they are increasingly affected by higher raw material costs. The performance of Decorative Coatings improved, mainly due to cost savings. Car Refinishes' earnings are under pressure. To address this situation, a major worldwide restructuring program at this business unit, affecting 600 jobs, has been set in motion. The restructuring programs continue to make good progress, resulting in a workforce reduction of 420 during January-September 2004. In high-growth areas, such as Asia and Eastern Europe, the workforce was expanded by 780. Capital expenditures of EUR 33 million (115% of depreciation) were up compared to last year's level. Expenditures are especially directed toward participation in the high-growth markets in Asia and Eastern Europe. Akzo Nobel has signed an agreement to take a 30%-stake in one of the leading German decorative paint distributors, Peters, while this company will take over the Akzo Nobel owned distributors Beissel and Kerstin. As a result, Akzo Nobel will have access to 17 additional outlets in the western part of Germany and improve its position in this strategic market. Akzo Nobel has agreed to divest part of its liquid coatings activities in the agricultural and construction equipment (ACE) segment to BASF. In a separate deal, Akzo Nobel will acquire BASF Coatings' Wood Construction business (joinery). 9 Report for the 3rd quarter of 2004 Chemicals -substantially up
3rd quarter Millions of euros January-September - ---------------------------- ------------------------------- ---------------------------- 2004 2003* Ch. % 2004 2003* Ch. % - -------- -------- -------- -------- --------- -------- Sales 243 241 Pulp & Paper Chemicals 721 761 213 210 Surface Chemistry 660 665 153 144 Functional Chemicals 463 461 142 134 Base Chemicals 421 411 125 119 Polymer Chemicals 366 371 77 71 Resins 227 217 64 58 Salt 199 200 45 41 Energy 131 127 (66) (65) Intragroup sales/other (210) (225) - -------- ------- --------- ---------- 996 953 5 Total continued operations 2,978 2,988 - 37 134 Divested operations 320 407 - -------- ------- --------- ---------- 1,033 1,087 (5) Total 3,298 3,395 (3) 76 56 36 Operating income** continued operations 232 197 18 4 20 Divested operations 34 55 - -------- ------- --------- ---------- 80 76 5 Total operating income** (EBIT) 266 252 6 Return on sales** continued operations, 7.6 5.9 in % 7.8 6.6 7.7 7.0 Return on sales**, in % 8.1 7.4 148 153 (3)/11*** EBITDA 487 492 (1)/4*** 69 60 Capital expenditures 181 153 Invested capital 2,206 2,604**** Number of employees 12,890 14,410****
* 2003 figures have been adjusted for a minor regrouping of activities between Coatings and Chemicals. ** Excluding nonrecurring items. *** Continued operations. **** At December 31. - - Continued operations - autonomous growth 8%; operating income up 36% - - All units benefiting from improved business climate - - Cost saving programs paying off - - Increasing raw material and energy prices - increasing pressure on margins - - Divestment program - nearing completion 10 Report for the 3rd quarter of 2004 For the continued operations, third-quarter sales of EUR 1.0 billion were 5% higher than last year. Autonomous growth was 8%; volumes and prices were both up 4% from last year. Currency translation had a negative effect of 3%. Operating income jumped 36%, from EUR 56 million to EUR 76 million. Return on sales was 7.6% (2003: 5.9%). The contributions from autonomous growth and cost savings as well as lower pension costs more than offset the negative effects of higher raw material and energy prices. Almost all units turned in improved performances, benefiting from the restructuring and cost saving programs as well as from growth of their activities. This especially goes for Polymer Chemicals, Functional Chemicals, and Base Chemicals. The restructuring programs are progressing well and resulted in a workforce decrease of 320 in the first nine months of 2004, while divestments resulted in a reduction of 1,240. Capital expenditures were up to EUR 69 million, equivalent to 110% of depreciation. The increase in expenditures primarily relates to major investment projects in Brazil and the Netherlands. At the end of July 2004, Catalysts and Phosphorus Chemicals were divested. Early in October 2004, Akzo Nobel announced that it had signed an agreement to sell its Ultra Violet/Electron Beam (UV/EB) Resins activities, part of the Coating Resins business. The transaction is expected to be closed in the final quarter of 2004. Recently, Akzo Nobel announced that it had received an offer of EUR 110 million from Nuplex Industries Limited, New Zealand, for the other (major) part of the Coating Resins business, free of cash and debt. Completion of this transaction is foreseen in the last quarter of 2004. This transaction would complete the major divestment program in Chemicals, which was initiated in 2003 to strengthen the Company's balance sheet and to create more financial room to maneuver. The program will, at closing, have generated some EUR 1 billion. 11 Report for the 3rd quarter of 2004
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Millions of euros January-September - ------------------------------------------------------ ----------------- ------------------- 2004 2003 ----------------- ------------------- Total earnings before minority interest 794 535 Depreciation and amortization 458 486 ------- -------- Cash flow 1,252 1,021 Pre-tax gain on divestments (458) Changes in working capital (36) (118) Impairments 39 5 Changes in provisions, deferred tax assets and accrued prepaid pension costs (24) (18) Retained income of nonconsolidated companies (11) (22) Other changes (5) - ------- -------- Net cash provided by operations 757 868 Capital expenditures (379) (380) Acquisitions (57) (89) Proceeds from divestments 870 159 Repayments nonconsolidated companies 84 88 Other changes (12) 5 ------- -------- Net cash generated by/(used for) investing activities 506 (217) Dividends paid (273) (271) ------ ------ Funds balance 990 380 Net cash (used for)/generated by financing activities (164) 204 Effect of exchange rate changes on cash and cash equivalents 6 (14) ------ ------ Change in cash and cash equivalents 832 570 ------ ------
12 Report for the 3rd quarter of 2004 Funds balance of EUR 1.0 billion - mainly proceeds from divestments The funds balance for January-September 2004 was EUR 1.0 billion (2003: EUR 0.4 billion). Cash flow from operations decreased from EUR 0.9 billion to EUR 0.8 billion in 2004, mainly due to higher payments for restructurings. The seasonal increase of working capital was lower than last year. Capital expenditures of EUR 379 million (90% of depreciation) were virtually unchanged from last year. Proceeds from divestments primarily concern the sale of Catalysts and Phosphorus Chemicals. 13 Report for the 3rd quarter of 2004
CONDENSED CONDOLIDATED BALANCE SHEET Millions of euros September 30, 2004 December 31, 2003 - ----------------------------------------------- -------------------- ------------------- Intangible assets* 598 590 Property, plant and equipment 3,663 3,967 Deferred tax assets 423 429 Deferred tax asset for minimum pension liability 364 361 Other financial noncurrent assets 985 1,076 Inventories 2,100 2,133 Receivables 3,071 2,671 Cash and cash equivalents 1,559 727 -------------------- ------------------- Total 12,763 11,954 -------------------- ------------------- Capital and reserves 3,877 3,326 Minimum pension liability (834) (824) -------------------- ------------------- Akzo Nobel N.V. shareholders' equity 3,043 2,502 Minority interest 144 140 -------------------- ------------------- Equity 3,187 2,642 Provisions 2,520 2,581 Provision for minimum pension liability 1,356 1,342 Long-term borrowings 2,737 2,717 Short-term borrowings 282 441 Current liabilities 2,681 2,231 -------------------- ------------------- Total 12,763 11,954 -------------------- ------------------- Gearing 0.46 0.92 Shareholders' equity per share, in EUR 10.65 8.76 Number of shares outstanding, in millions 285.8 285.7
* Intangible assets include capitalized prior service costs related to the minimum pension liability of EUR 166 million at September 30, 2004, and of EUR 165 million at December 31, 2003. 14 Report for the 3rd quarter of 2004
CHANGES IN EQUITY Minimum Share- Capital and pension holders' Minority Millions of euros reserves liability equity interest Equity - ----------------------------- ------------ ----------- ----------- ------------ ---------- Balance at December 31, 2003 3,326 (824) 2,502 140 2,642 Income 766 766 28 794 Dividend (257) (257) (16) (273) Changes in exchange rates 42 (10) 32 2 34 Changes in minority interest in subsidiaries (10) (10) ----------- ----------- ------------ ------------ ---------- Balance at September 30, 2004 3,877 (834) 3,043 144 3,187 ----------- ----------- ------------ ------------ ----------
Strong financial position Invested capital at September 30, 2004, amounted to EUR 7.7 billion, EUR 0.4 billion lower than at December 31, 2003, mainly due to the divestments of Catalysts and Phosphorus Chemicals. Equity was up EUR 0.5 billion, because January-September income more than offset dividends paid. Net interest-bearing borrowings were down EUR 1.0 billion. Gearing improved strongly to 0.46 (December 31, 2003: 0.92; September 30, 2003: 1.09). Arnhem, October 19, 2004 The Board of Management 15 Report for the 3rd quarter of 2004 The final results for 2004 will be published on February 4, 2005. Note The data in this report are unaudited. (R) or (TM) indicates trademarks in one or more countries. The 2003 comparative figures for Coatings and Chemicals have been adjusted for a minor regrouping of activities between these two segments. Unless indicated otherwise, discussions in this report, such as on earnings developments, exclude nonrecurring items. Nonrecurring items relate to income and expenses resulting from normal business operations, which, because of their size or nature, are disclosed separately to give a better understanding of the underlying result for the period. These include items such as restructurings and impairment charges, significant gains and losses on the disposal of businesses, and costs related to law suits and antitrust cases, not meeting the requirements for extraordinary items. Operating income before nonrecurring items is one of the key figures management uses to assess the performance of the Company, as these figures better reflect the underlying trends in the results of the activities. Autonomous sales growth is defined as the change in sales attributable to changed volumes and selling prices. It excludes currency, acquisition, and divestment effects. Safe Harbor Statement* This report contains statements which address such key issues as Akzo Nobel's growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements, including but not limited to the "Outlook", should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more complete discussion of the risk factors affecting our business please refer to our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission, a copy of which can be found on the Company's website www.akzonobel.com. * Pursuant to the U.S. Private Securities Litigation Reform Act 1995 Additional Information Akzo Nobel N.V. The explanatory sheets used by the CFO during Velperweg 76 the press conference can be viewed on Akzo P.O. Box 9300 Nobel's Internet site at: 6800 SB Arnhem www.akzonobel.com/news/presentations.asp The Netherlands Tel. + 31 26 366 4433 Fax + 31 26 366 3250 E-mail ACC@akzonobel.com Internetwww.akzonobel.com 16 SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf of the undersigned, thereto duly authorized. Akzo Nobel N.V. Name : F.H. Hensel Name : J.J.M. Derckx Title : Senior Vice President Title : Director Corporate Control Finance Dated : December 22, 2004 -----END PRIVACY-ENHANCED MESSAGE-----