Discontinued operations (including Specialty Chemicals)

Successfully completed the dual-track process for the separation of Specialty Chemicals; AkzoNobel to sell Specialty Chemicals to the Carlyle Group and GIC for €10.1 billion

Discontinued operations and held for sale

The results and cash flows from discontinued operations in 2018, as well as 2017, and the assets and liabilities held for sale at March 31, 2018, and December 31, 2017, almost completely relate to the Specialty Chemicals business.

The Specialty Chemicals business consists of the Specialty Chemicals Business Area and certain other assets and liabilities and income and expenses which are directly attributed to the Specialty Chemicals business from the Other activities. As from December 22, 2017, the Specialty Chemicals business is classified as held for sale and discontinued operations, therefore the consolidated statement of income for 2017 has been represented to show the results of the Specialty Chemicals business as discontinued operations.

Revenue

Revenue of discontinued operations consists of revenue of Specialty Chemicals and eliminations of intercompany revenue.

Adjusted operating income

In Q1 2018, adjusted operating income was up 24% at €208 million (2017: €168 million).

  • In Specialty Chemicals, adjusted operating income was lower, mainly due to the impact of adverse currencies, restructuring costs of €32 million related to manufacturing network optimization projects, partly offset by stronger price/mix effects and productivity improvement
  • Held for sale effects/other mainly relates to the impact of ceasing depreciation and amortization, partly offset by the related impact on inventory valuation following IFRS 5 assets held for sale accounting

Operating income

In Q1 2018, operating income was negatively impacted by identified items totaling €14 million relating to separation costs.

Summary of financial outcomes discontinued operations

First quarter

 

 

 

in € millions

2017 1

2018

∆%

1

Represented to present the Specialty Chemicals business as discontinued operations

2

2017 figures include allocations from Other activities

Revenue

1,284

1,246

(3)

Adjusted operating income

168

208

24

Operating income

168

194

15

ROS%

13.1

16.7

 

OPI margin%

13.1

15.6

 

 

 

 

 

Average invested capital

3,663

3,587

 

ROI%

15.8

18.4

 

 

 

 

 

Capital expenditures

75

63

 

Net cash from operating activities

92

82

 

 

 

 

 

Profit for the period

116

142

 

Number of employees

9,900

9,500

 

Profit and loss discontinued operations

First quarter

 

 

in € millions

2017 1

2018

Revenues

1,284

1,246

Expenses

(1,119)

(1,057)

Profit before tax

165

189

Income tax

(49)

(47)

Profit for the period

116

142

Adjusted operating income of discontinued operations

First quarter

 

 

 

in € millions

2017 1

2018

∆%

Specialty Chemicals 2

166

150

(10)

Held for sale effects/other

2

58

 

Total

168

208

24

Operating income of discontinued operations

First quarter

 

 

 

in € millions

2017 1

2018

∆%

Specialty Chemicals 2

166

150

(10)

Held for sale effects/other

2

44

 

Total

168

194

15

Assets and liabilities held for sale

in € millions

December 31, 2017

March 31, 2018

Intangible assets

787

771

Property, plant and equipment

2,266

2,285

Financial non-current assets

205

214

Inventories

503

501

Receivables

840

952

Assets held for sale

4,601

4,723

Non-current liabilities

765

779

Short-term borrowings

341

325

Current payables

1,090

1,093

Liabilities held for sale

2,196

2,197

Cash flows from discontinued operations

in € millions

2017

2018

Net cash from operating activities

92

82

Net cash from investing activities

(79)

(60)

Net cash from financing activities

(3)

(22)

Cash flows from discontinued operations

10