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AkzoNobel Car Refinishes


It was a solid year in turbulent times. Careful attention to performance excellence ensured strong cost control and reduced working capital, which enabled us to outpace the market in North America and Europe, as well as the emerging markets. Margins held up well given the considerable raw material price pressure we experienced in the second half of the year, while we also had to contend with swings in currency valuations in numerous countries.

Business overview

Our vehicle refinishes activities performed well in what started as a strong year. Demand fell off in the second half of 2008, especially in the mature markets, due to high petrol prices and an overall decline in the economy. In EMEA1, we enjoyed a solid year due to our ability to deliver a mix of product and support solutions that drove market share gains. Despite Eastern Europe’s slow move to eco-efficient premium products, and the difficult US dollar-based export conditions, results for EMEA were solid, partly helped by ongoing cost reductions. Even with a 20-year low in miles driven and a stagnant US economy, overall we grew volume and share in the Americas, particularly in Mexico and Brazil. Asia achieved another strong year in terms of revenue growth, mainly in the emerging markets of China, India and Indonesia. Central to our growth in Asia was the increased power from our brands and distribution footprint.

Our two businesses which are closest to the pressurized automotive OEM sector – Automotive Plastic Coatings and Commercial Vehicles – were significantly affected by the downturn in unit builds. In fact, the second half of the year proved especially difficult, but due to strong leadership positions – notably in Europe and Latin America – and our flexible costs, we were able to compensate to a certain extent. There’s no doubt that within the industry it was a very difficult year, with new car builds falling to an all-time low. But our biggest activity – vehicle refinish – is not directly connected to the manufacture of new cars. So we benefited from the strength of our commercial offer and segment approach. We are differentiated by our product portfolio, our marketing package, our distribution and connection to the insurer networks, OEM automobile aftermarket and our key account management program. All of this gave us power in a difficult market.

1 Europe, Middle East and Africa.

Jim Rees, Managing Director Car Refinishes (photo)

Jim Rees
Managing Director Car Refinishes

Revenue
In € millions

Revenue – Car Refinishes (bar chart)
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