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Costs


Restructuring costs

  • Major restructuring projects in Decorative Paints during 2009 were related to supply chain and integration projects in Europe, Canada and Latin America, and to closing stores in the US
  • In Performance Coatings, we incurred costs for headcount reduction programs in all businesses, the most significant being in Industrial Activities and Car Refinishes
  • In Specialty Chemicals, we announced the closure of four sites including the Skoghall site in Sweden and the Mo I Rana site in Norway
  • Corporate cost savings are on track.

Restructuring costs in € millions

 

 

 

 

2008

2009

 

 

 

Decorative Paints

(189)

(158)

Performance Coatings

(20)

(55)

Specialty Chemicals

(29)

(103)

Other

(37)

(37)

 

 

 

Total restructuring costs

(275)

(353)

Incidental items included in operating income

Apart from restructuring costs, incidental items were related to a fine imposed by the European Commission. Incidental gains were realized from changing conditions in certain pension plans (€58 million) and the divestment of PTA Pakistan (€23 million).

Incidental charges included in operating income in € millions

 

 

 

 

2008

2009

 

 

 

Impairment of ICI intangibles

(1,275)

Restructuring costs

(275)

(353)

Costs of pensions and post-retirement

(38)

58

Transformation costs

(190)

(14)

Results related to major legal, antitrust and environmental cases

(32)

(38)

Results on acquisitions and divestments

(23)

48

Other incidental results

(5)

18

Fair value adjustments of acquired inventories

(54)

 

 

 

Incidentals included in operating income

(1,892)

(281)

Interest

The net financing charges increased by €177 million to €409 million:

  • Financing income decreased by €92 million to €62 million (2008: €154 million) due to significantly lower market interest rates and cash utilized for the share buyback program in 2008
  • Financing expenses on pensions increased by €125 million to €174 million (2008: €49 million) due to lower expected returns on plan assets
  • Other financing expenses decreased by €40 million to €297 million (2008: €337 million). Higher interest expense for our refinanced debt during 2009 was offset by lower costs for fair value changes of financial instruments.
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