Change

Strategic ambitions


Value ambition

 

Progress and Overview 2009

 

Plans 2010

 

 

 

 

 

 

 

 

Outgrow our markets.
A measure of growth. Measured by growing faster than the markets we participate in.

 

Revenue growth in % (bar chart)

A difficult year from a volume perspective due to the market downturn and de-stocking effects

 

Ensure delivery of volume growth expectations from significant investments (for example in China and in technology)

 

Some market share gains; limited evidence of market share loss

 

Continue to aggressively invest in high growth markets

 

Strong performance from margin management

 

Continue to redirect investment to bigger research and development projects.

 

Continued to invest in future growth in high growth markets.

 

 

 

EBITDA margin
> 14 percent by end 2011.

A measure of operational effectiveness. On a corporate level, we use 14 percent as a proxy measure performance for top quartile.

 

EBITDA in € millions (bar chart)

Exceeded the 14 percent EBITDA margin target in two quarters, despite the difficult economic climate

 

Continue to focus on the three Cs (Customers, Costs and Cash)

 

Strong performance in gross profit margins due to margin management

 

Continue to professionalize the procurement function and ensure we best leverage our scale

 

Major cost reductions delivered from ICI synergies and other restructuring.

 

Deliver remaining ICI synergies and restructuring savings

 

 

 

 

Increase focus on absolute EBITDA growth, consistent with the focus on volume and market share gains.

Operating working capital percent of sales level decreasing by 0.5 per annum
A measure of capital efficiency and operational effectiveness.

 

With a reduction of operating working capital as a percentage of revenue by 2.8 basis points, outperformed our ambitions

 

Continue to reinforce and leverage processes, systems and tools for operating working capital improvement

 

Control of inventory levels and receivables particularly noteworthy

 

Increase focus on inventory improvement through greater emphasis on complexity reduction.

 

Achieved improvements virtually across the board with 13 of the 15 businesses showing improvement.

 

 

 

Remain in the top three on the Dow Jones Sustainability Index
A measure of long-term performance potential. Measured by external assessment of performance versus our peer group by Dow Jones.

 

Remained in the top three (top two)

 

Focus strongly on operational eco-efficiency improvement (e.g. energy, raw materials efficiency, waste, water, emissions)

 

Key areas of strong performance were corporate governance, risk management, supplier aspects and climate policy

 

Embed the Carbon Policy

 

Key areas for improvement identified as operational eco-efficiency improvement, aspects of people development and implementation of R&D processes.

 

Pursue safety and people development actions as identified below.

Top quartile safety performance
A measure of how we look after our people and operational effectiveness. Best-in-class performance in total reportable injuries for employees and contractors per million hours worked; proxy for best-in-class performance defined as 2.

 

Significantly improved performance versus 2008; nearing our target of 2

 

Continue roll-out of behavior-based safety, safety leadership training and HSE&S audits to fully cover AkzoNobel sites

 

Greatly increased number of sites using behavior-based safety

 

Develop and roll out a more consistent and professional approach to process safety.

 

Began to implement safety leadership training and enhanced HSE&S (Health, Safety, Environmental and Security) audits.

 

 

 

Step change in people development
A measure of how we look after our people and long-term performance potential. Measured by improvement on key metrics in our employee engagement survey.

 

Strong performance in many employee engagement measures

 

Roll out new leadership development series for our senior executives and executive potentials

 

Improvement required in our people management focus

 

Implement the Talent Factory scorecard and monitor and drive action plans for improvements on key metrics

 

Agreed a comprehensive company-wide strategy agenda for HR

 

Continue activities to significantly enhance diversity and inclusion levels

 

Continued to deliver key management development training programs

 

Establish regular company-wide employee engagement survey.

 

Began taking irreversible steps in diversity and inclusion.

 

 

 

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