Amsterdam, the Netherlands, April 22, 2008 - Akzo Nobel has upgraded
the estimated annual synergies target resulting from its recent
acquisition of ICI to EUR 340 million, a 20 percent increase on the
previously announced EUR 280 million.
 
Speaking at this afternoon's Annual General Meeting of Shareholders
(AGM), CEO Hans Wijers explained that the integration is making good
progress and the company is benefiting from the complimentary
cultures of both businesses.
 
"The ICI integration process is well underway," he said. "After
reviewing the available synergies from the transaction and former
cost reduction programs of both companies, we now expect to realize
estimated annual pre-tax cost synergies of EUR 340 million per annum.
This breaks down as EUR 180 million from Decorative Paints, EUR 85
million from corporate savings and EUR 75 million from procurement
costs." Akzo Nobel expects to realize 85 percent of the synergies in
the first three years. This is a cumulative total, represented as
follows: 2008, 15 percent; 2009, 55 percent; 2010, 85 percent.
 
Also on track and reconfirmed are the transaction's other - non-cost
savings related - synergies, representing an estimated post-tax net
present value of EUR 375 million, of which 75 percent is cash
related. The company has already identified a reduction in working
capital of EUR 100 million, consolidation of manufacturing sites of
EUR 100 million and opportunity costs of building a position in Asia
of EUR 100 million.
 
The restructuring costs are not expected to exceed EUR 300 million.
The breakdown of these costs is: 2008, 35 percent; 2009, 45 percent;
and most of the remaining 20 percent in 2010. The majority of the
2008 restructuring costs will be reported in the first quarter.
 
"Our transformation into a focused coatings and chemicals company is
progressing well," continued Wijers. "Although trading conditions are
challenging at the moment, with a strong currency impact, there is an
ongoing trend of underlying growth in most of our businesses - in
local currencies - especially in the emerging markets.
 
The economic slowdown continues to be more evident in our retail
businesses in the US and Europe and, as indicated in 2007, within
Performance Coatings in our Industrial Coatings business. Marine &
Protective continue to perform strongly. Specialty Chemicals also
continues to perform well, with steady demand and continuing high
asset utilization, despite increased energy costs at Base Chemicals.
Overall, we remain confident that we will deliver on our promise of
outgrowing our markets and further improving the bottom line. Our
first quarter results will be announced on May 7."
 
During this afternoon's AGM, Hans Wijers also updated shareholders on
the outcome of a recent global brand assessment, which has been used
to review Akzo Nobel's corporate name and visual identity.
 
"Following an extensive study conducted by The Reputation Institute,
we have decided to continue using the Akzo Nobel name for the newly
enlarged company," he revealed. "Our research findings confirmed that
the Akzo Nobel name is well respected and trusted among our key
stakeholders and commands significant brand equity. Its use, combined
with our products, adds a high degree of value. Therefore, while all
strong product brand names such as Dulux® and Glidden® will remain,
ICI will be discontinued as a corporate name."
 
Further details regarding changes to visual aspects of Akzo Nobel's
corporate brand and information relating to brand architecture will
be announced during the next few days.
 
For 2008 the focus will remain on making significant progress on the
integration with ICI, capturing the first round of synergies,
outgrowing its markets and improving the EBITDA margin to the upper
half of the new peer group.
 
- - -
 
Note to editors
Akzo Nobel is one of the world's leading industrial companies. We are
the largest global coatings manufacturer and the number one in
decorative paints and performance coatings, as well as being a major
worldwide supplier of specialty chemicals.
We employ around 60,000 people in more than 80 countries and are
committed to developing innovative products and cutting-edge
sustainable technologies. We endeavor to deliver whatever our
customers require, wherever and whenever they need it. Based in the
Netherlands, Akzo Nobel is a Fortune Global 500 company and is listed
on the Euronext Amsterdam stock exchange. We are the Chemicals
industry leader on the Dow Jones Sustainability Indexes, as well as
being included on the FTSE4Good Index. Pro forma combined revenue for
2007 totaled EUR 14.4 billion. The financial results for the first
quarter will be published on May 7, 2008.
 
Internet: www.akzonobel.com
 
Not for publication - for more information
Akzo Nobel nv
Corporate Media Relations, tel. +31 20 502 7833                  
Corporate Investor Relations, tel. +31 20 502 7854
Contact: Tim van der
Zanden                                                  Contact: Dick
Luijckx
 


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