RevenueIn € millions  EBITDAIn € millions  Returns on invested capital |
AkzoNobel around the world
|
RevenueIn € millions EBITDAIn € millions Returns on invested capital |
AkzoNobel around the world
|
Revenue was up 6 percent, mainly due to favorable currency effects. Volumes were down 3 percent, primarily due to the economic slowdown in Europe. EBITDA was 7 percent up at €540 million (2011: €507 million). While we are reporting a solid set of results in the quarter, we recorded an impairment of €2.5 billion in Decorative Paints, mainly in mature markets. The performance improvement program is on track.
|
Continuing operations before incidentals | ||||||||||||
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
4,051 |
4,280 |
6 |
Revenue |
11,910 |
12,658 |
6 | ||||||
|
507 |
540 |
7 |
EBITDA |
1,495 |
1,556 |
4 | ||||||
|
12.5 |
12.6 |
|
EBITDA margin (in %) |
12.6 |
12.3 |
| ||||||
|
352 |
368 |
5 |
EBIT |
1,042 |
1,046 |
– | ||||||
|
8.7 |
8.6 |
|
EBIT margin (in %) |
8.7 |
8.3 |
| ||||||
|
|
|
|
Moving average ROI (in %) |
9.7 |
8.3 |
| ||||||
|
|
|
|
Operating ROI (in %) |
24.4 |
19.6 |
| ||||||
|
0.91 |
1.01 |
|
Adjusted earnings per share (in €) |
2.73 |
2.76 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
Continuing operations after incidentals | ||||||||||||
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
301 |
(2,233) |
|
Operating income |
1,006 |
(1,667) |
| ||||||
|
148 |
(2,360) |
|
Net income/(loss) from continuing operations |
531 |
(2,093) |
| ||||||
|
1 |
(22) |
|
Net income/(loss) from discontinued operations |
14 |
(17) |
| ||||||
|
149 |
(2,382) |
|
Net income/(loss) total operations |
545 |
(2,110) |
| ||||||
|
0.63 |
(9.91) |
|
Earnings per share from continuing operations (in €) |
2.27 |
(8.84) |
| ||||||
|
0.63 |
(10.00) |
|
Earnings per share from total operations (in €) |
2.33 |
(8.91) |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
158 |
198 |
|
Capital expenditures |
452 |
514 |
| ||||||
|
409 |
480 |
|
Net cash from operating activities |
55 |
120 |
| ||||||
|
|
|
|
Invested capital |
13,194 |
12,076 |
| ||||||
|
|
|
|
Net debt |
1,595 |
2,597 |
| ||||||
|
|
|
|
Number of employees |
56,350 |
57,050 |
| ||||||
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
1,435 |
1,456 |
1 |
Decorative Paints |
4,092 |
4,249 |
4 | ||||||
|
1,295 |
1,467 |
13 |
Performance Coatings |
3,844 |
4,308 |
12 | ||||||
|
1,349 |
1,393 |
3 |
Specialty Chemicals |
4,050 |
4,223 |
4 | ||||||
|
(28) |
(36) |
|
Other activities/eliminations |
(76) |
(122) |
| ||||||
|
4,051 |
4,280 |
6 |
Total |
11,910 |
12,658 |
6 | ||||||
|
in % versus Q3 2011 |
Volume |
Price/mix |
Acquisitions |
Exchange |
Total | |||||
|
Decorative Paints |
(6) |
2 |
– |
5 |
1 | |||||
|
Performance Coatings |
– |
3 |
3 |
7 |
13 | |||||
|
Specialty Chemicals |
(2) |
(1) |
1 |
5 |
3 | |||||
|
Total |
(3) |
2 |
1 |
6 |
6 |
|
Volume development per quarter |
Q3 11 |
Q4 11 |
Q1 12 |
Q2 12 |
Q3 12 | |||||
|
Decorative Paints |
4 |
2 |
(4) |
(2) |
(6) | |||||
|
Performance Coatings |
1 |
(2) |
(1) |
(2) |
– | |||||
|
Specialty Chemicals |
(1) |
(4) |
(1) |
(2) |
(2) | |||||
|
Total |
1 |
(2) |
(3) |
(2) |
(3) |
|
Price/mix development per quarter |
Q3 11 |
Q4 11 |
Q1 12 |
Q2 12 |
Q3 12 | |||||
|
Decorative Paints |
3 |
4 |
6 |
5 |
2 | |||||
|
Performance Coatings |
7 |
7 |
8 |
6 |
3 | |||||
|
Specialty Chemicals |
8 |
5 |
1 |
2 |
(1) | |||||
|
Total |
6 |
6 |
5 |
4 |
2 |
In Q1 2012, we closed the acquisition of Boxing Oleochemicals in Specialty Chemicals, the leading supplier of nitrile amines and derivatives in China and throughout Asia. The Schramm/SSCP acquisition accounted for the acquisition effect in Performance Coatings as these activities were consolidated from Q4 2011.
EBITDA was 7 percent higher at €540 million. The EBITDA margin was 12.6 percent (2011: 12.5 percent).
|
3rd quarter |
|
January - September | ||||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
148 |
147 |
(1) |
Decorative Paints |
429 |
398 |
(7) | ||||||
|
157 |
202 |
29 |
Performance Coatings |
470 |
579 |
23 | ||||||
|
238 |
227 |
(5) |
Specialty Chemicals |
699 |
717 |
3 | ||||||
|
(36) |
(36) |
|
Other activities/eliminations |
(103) |
(138) |
| ||||||
|
507 |
540 |
7 |
Total |
1,495 |
1,556 |
4 | ||||||
The cost of our raw materials in Q3 was slightly above last year, but has leveled off versus Q2. TiO2 prices have reduced but are still higher than the previous year and there has been some volatility from oil-related feedstock. We expect average raw material costs for the year slightly up due to the oil price increase in Q2.
We have undertaken a prudent review, excluding restructuring effects, of the balance sheet, taking into account lower expected growth rates. This has resulted in a non-cash impairment charge against our Decorative Paint assets, primarily in Europe. In Europe, we recognized an impairment charge of €1.9 billion, in North America €0.4 billion and in South America €0.2 billion. In addition, we incurred higher restructuring costs across the businesses, mainly in mature markets, as we implement the performance improvement program.
|
3rd quarter |
|
January - September | ||||||
|
2011 |
2012 |
in € millions |
2011 |
2012 | ||||
|
(47) |
(101) |
Restructuring costs |
(76) |
(191) | ||||
|
– |
(2,478) |
Impairment |
– |
(2,478) | ||||
|
2 |
(5) |
Results related to major legal and environmental cases |
24 |
(24) | ||||
|
(5) |
(6) |
Results on acquisitions and divestments |
21 |
(6) | ||||
|
(1) |
(11) |
Other incidental results |
(5) |
(14) | ||||
|
(51) |
(2,601) |
Incidentals included in operating income |
(36) |
(2,713) | ||||
During this year, the economic slowdown, particularly in Europe, is having an adverse impact on our volumes. Additional restructuring activities are being initiated to further reduce costs in the businesses that are most affected. Furthermore, our performance improvement program and the turnaround of our US paints business are on track.
AkzoNobel has a strong portfolio of complementary businesses with many leading market positions and exposure to growth markets. Whilst we are therefore confident with regard to the long-term growth of our business, we remain cautious with respect to the shorter term development of our markets.
Amsterdam, October 18, 2012
Board of Management
October 22, 2012
Ex-dividend date of 2012 interim dividend
October 24, 2012
Record date of 2012 interim dividend
October 25, 2012 - November 16, 2012
Election period cash or stock interim dividend
November 23, 2012
Payment date of cash dividend and delivery of new shares
February 20, 2013
Report for 2012 and the 4th quarter
April 18, 2013
Report for the 1st quarter 2013
April 26, 2013
Annual General Meeting
July 18, 2013
Report for the 2nd quarter 2013
October 21, 2013
Report for the 3rd quarter 2013
Revenue grew 1 percent, mainly due to price/mix and positive currency effects. Volumes continued to be negatively affected by the general economic slowdown in global markets, with the exception of China where we achieved strong volume growth. Despite the volume decline, we have been able to maintain or increase our relative market share in most of our markets. We were able to reverse the negative EBITDA trend from 8 percent negative in Q2 to flat in Q3. Additional restructuring actions are being initiated in Europe. Revenue development Q3 2012 |
 |
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
739 |
698 |
(6) |
Decorative Paints Europe |
2,123 |
2,096 |
(1) | ||||||
|
447 |
479 |
7 |
Decorative Paints Americas |
1,269 |
1,384 |
9 | ||||||
|
248 |
271 |
9 |
Decorative Paints Asia |
702 |
769 |
10 | ||||||
|
1 |
8 |
|
Other/intragroup eliminations |
(2) |
– |
| ||||||
|
1,435 |
1,456 |
1 |
Total |
4,092 |
4,249 |
4 | ||||||
|
|
|
|
|
|
|
| ||||||
|
Before incidentals | ||||||||||||
|
148 |
147 |
(1) |
EBITDA |
429 |
398 |
(7) | ||||||
|
10.3 |
10.1 |
|
EBITDA margin (in %) |
10.5 |
9.4 |
| ||||||
|
95 |
87 |
(8) |
EBIT |
275 |
223 |
(19) | ||||||
|
6.6 |
6.0 |
|
EBIT margin (in %) |
6.7 |
5.2 |
| ||||||
|
|
|
|
Moving average ROI (in %) |
4.3 |
2.6 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
After incidentals | ||||||||||||
|
57 |
(2,429) |
|
Operating income |
231 |
(2,334) |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
44 |
37 |
|
Capital expenditures |
128 |
132 |
| ||||||
|
|
|
|
Invested capital |
6,605 |
4,454 |
| ||||||
|
|
|
|
Number of employees |
22,520 |
21,960 |
| ||||||
In € millions
In € millions
Revenue was down across all regions, reflecting severe weakness of demand. We are speeding up our restructuring and cost reduction actions across Europe in response to the difficult market circumstances we are facing.
North America continued to show revenue growth compared with 2011, driven by price gains and favorable mix. The retail channels reported higher results during the quarter, with price gains and currency effects offsetting the volume decline. Stores in Canada posted another strong quarter, with revenue up 6 percent. Revenue at our US stores was higher due to pricing actions and customer segmentation strategies, despite the negative impact of lower volumes. Our US operations were profitable at the EBITDA level in Q3. The business is continuing to benefit from restructuring efforts and production optimization.
Latin America’s revenue was lower than last year due to the pressure of declining volumes and negative currency effects, which offset the positive price impact. The general economic slowdown in the region continues to negatively affect our volumes.
China’s revenue increased, with strong volume growth especially in project and professional channels. The campaign “A million colorful starts” continued its successful run. The business also launched Dulux Guardian, a premium, low-VOC, low-odor emulsion for interior walls.
Our South East Asia Pacific markets continued to suffer from volume and revenue decline, reflecting the weak market conditions in the region. Strong cost control partially compensated for the negative volume trends.
Revenue in India and South Asia grew, mainly driven by margin management offset by lower volumes. The business successfully launched the Dulux Rainbow & Guardian range.
Revenue increased by 13 percent compared with the previous year. The strongest growth came from Industrial Coatings (due to acquisitions) and Marine and Protective Coatings (from strong demand in Protective Coatings). Volumes were flat with continued variability between individual markets. Overall margins improved due to a combination of margin management activities and ongoing cost control. The major restructuring activities in the quarter focused on Marine and Protective Coatings, Automotive and Aerospace Coatings Europe and the ongoing integration of the Schramm acquisition. Revenue development Q3 2012 |
 |
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
344 |
405 |
18 |
Marine and Protective Coatings |
1,025 |
1,185 |
16 | ||||||
|
197 |
211 |
7 |
Wood Finishes and Adhesives |
586 |
628 |
7 | ||||||
|
248 |
263 |
6 |
Automotive and Aerospace Coatings |
772 |
786 |
2 | ||||||
|
236 |
253 |
7 |
Powder Coatings |
705 |
752 |
7 | ||||||
|
275 |
343 |
25 |
Industrial Coatings |
776 |
978 |
26 | ||||||
|
(5) |
(8) |
|
Other/intragroup eliminations |
(20) |
(21) |
| ||||||
|
1,295 |
1,467 |
13 |
Total |
3,844 |
4,308 |
12 | ||||||
|
|
|
|
|
|
|
| ||||||
|
Before incidentals | ||||||||||||
|
157 |
202 |
29 |
EBITDA |
470 |
579 |
23 | ||||||
|
12.1 |
13.8 |
|
EBITDA margin (in %) |
12.2 |
13.4 |
| ||||||
|
129 |
169 |
31 |
EBIT |
386 |
481 |
25 | ||||||
|
10.0 |
11.5 |
|
EBIT margin (in %) |
10.0 |
11.2 |
| ||||||
|
|
|
|
Moving average ROI (in %) |
23.0 |
23.9 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
After incidentals | ||||||||||||
|
114 |
130 |
|
Operating income |
375 |
428 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
27 |
23 |
|
Capital expenditures |
73 |
66 |
| ||||||
|
|
|
|
Invested capital |
2,327 |
2,543 |
| ||||||
|
|
|
|
Number of employees |
21,000 |
21,650 |
| ||||||
In € millions
In € millions
Revenue was up 18 percent over the previous year, positively supported by price/mix and currencies. Overall volumes increased marginally, with Marine volumes impacted due to the slowdown in the new construction market. Protective Coatings achieved increased volumes in all regions, especially in the oil and gas segments. In Korea, an order was secured for Shell’s Prelude, the world largest floating LNG platform. In Yacht, overall activity remained in line with 2011 across all segments.
Revenue increased by 7 percent compared with 2011, mainly due to currencies and price/mix. Demand levels in North America were flat, with modest recovery being witnessed in the US housing market. While Asia experienced slightly improved demand over the previous year, we experienced a stronger decline in demand across most of the European region in both finishes and adhesives. Cost control mitigated the impact of reduced volumes.
Revenue increased 6 percent supported by currencies and price/mix. Performance was impacted by continuing weak demand in Vehicle Refinish in the US and Europe. Strong margin management, together with cost control and growth in other regions, offset the impact of lower sales volumes. During the quarter, Nissan approved a Sikkens system in India and construction started on a new Chinese manufacturing site in Changzhou.
Revenue was up 7 percent, supported by price/mix and currencies. Lower European demand was offset by growth in other regions. The domestic appliance and furniture activities continued to suffer from the weaker economic situation, but architectural activities continued to be strong in our growth markets. Automotive remained solid in all regions, with good growth. During Q3, AkzoNobel Powder Coatings was chosen as an approved and preferred supplier by Volvo in South America for parts coated in Brazil. Meanwhile, our powder coatings operations in South Africa are now fully owned by AkzoNobel following the buy-out of the minority interest in that country.
Revenue was up 25 percent mainly due to acquisitions, further supported by higher volumes, price/mix and currencies. The Coil Coatings construction-related business showed similar revenue levels as 2011, while Packaging Coatings’ beverage and food-related business continued to increase its revenue, with Asia being the main driver for growth. Specialty Finishes achieved growth in its main automotive and consumer electronics markets. Delivery of synergies from the Schramm/SSCP acquisition is on track and the integration is progressing well. Q3 was also notable for the start of a supply agreement for our coatings to be used on the Samsung Galaxy series of mobile devices.
Specialty Chemicals is facing softer volumes in most product lines, with volumes during the quarter being 2 percent below the previous year. The continued focus on cost control, restructuring and margin management, plus the weaker euro, mitigated the margin impact. All businesses performed ahead of 2011, except for Functional Chemicals, which remained impacted by the supply/demand imbalance in Ethylene Amines, combined with low demand in products for building and construction segments. Chemicals Pakistan also posted a lower result for the quarter. Revenue development Q3 2012 |
 |
|
3rd quarter |
|
|
January - September | |||||||||
|
2011 |
2012 |
Δ% |
in € millions |
2011 |
2012 |
Δ% | ||||||
|
481 |
489 |
2 |
Functional Chemicals |
1,460 |
1,506 |
3 | ||||||
|
291 |
298 |
2 |
Industrial Chemicals |
880 |
892 |
1 | ||||||
|
243 |
279 |
15 |
Surface Chemistry |
725 |
856 |
18 | ||||||
|
290 |
287 |
(1) |
Pulp and Performance Chemicals |
840 |
858 |
2 | ||||||
|
81 |
74 |
(9) |
Chemicals Pakistan |
249 |
215 |
(14) | ||||||
|
(37) |
(34) |
|
Other/intragroup eliminations |
(104) |
(104) |
| ||||||
|
1,349 |
1,393 |
3 |
Total |
4,050 |
4,223 |
4 | ||||||
|
|
|
|
|
|
|
| ||||||
|
Before incidentals | ||||||||||||
|
238 |
227 |
(5) |
EBITDA |
699 |
717 |
3 | ||||||
|
17.6 |
16.3 |
|
EBITDA margin (in %) |
17.3 |
17.0 |
| ||||||
|
169 |
152 |
(10) |
EBIT |
494 |
490 |
(1) | ||||||
|
12.5 |
10.9 |
|
EBIT margin (in %) |
12.2 |
11.6 |
| ||||||
|
|
|
|
Moving average ROI (in %) |
18.6 |
16.8 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
After incidentals | ||||||||||||
|
169 |
133 |
|
Operating income |
489 |
427 |
| ||||||
|
|
|
|
|
|
|
| ||||||
|
79 |
125 |
|
Capital expenditures |
233 |
307 |
| ||||||
|
|
|
|
Invested capital |
3,594 |
3,765 |
| ||||||
|
|
|
|
Number of employees |
11,430 |
11,950 |
| ||||||
In € millions
In € millions
Revenue was up 2 percent, but overall volumes were down, mainly in Performance Additives and Organic Peroxides. The business is facing a weak European market, with North America showing more stable performance. However, there is growth in Latin America and in some segments in Asia Pacific. The Ethylene Amines market continues to be impacted by sales price erosion due to overcapacity in the market.
Industrial Chemicals delivered a solid performance driven by stable market demand, with revenue showing a 2 percent increase, based on positive volume and price/mix effects. Overall volumes were up, mainly in Chlor Alkali, as well as the Monochloroacetic business. Market conditions remained challenging for the gas-fired cogeneration units at our Energy business.
The business achieved another good quarter, with revenue up 15 percent due to favorable currency effects and the Boxing Oleochemicals acquisition in China. Margin management remained the key driver behind performance during the quarter.
Pulp and Performance Chemicals delivered a strong performance during Q3, although demand has slowed down and impacted revenue, which was down 1 percent on 2011. However, revenue was positively supported by effective margin management and the strengthening of the US dollar versus the euro.
The energy crisis continues to impact the downstream industry for the Soda Ash and Polyester activities. In addition, market conditions in the Polyester business remain slow as a result of economics favoring cotton. The Chemicals Pakistan divestment process took place during the quarter, with the business being acquired by Yunus Brothers Group. The transaction is expected to be completed towards the end of the year.
|
3rd quarter |
|
January - September | ||||||
|
2011 |
2012 |
in € millions |
2011 |
2012 | ||||
|
|
|
|
|
| ||||
|
Continuing operations | ||||||||
|
4,051 |
4,280 |
Revenue |
11,910 |
12,658 | ||||
|
(2,511) |
(2,624) |
Cost of sales |
(7,247) |
(7,764) | ||||
|
1,540 |
1,656 |
Gross profit |
4,663 |
4,894 | ||||
|
– |
(2,478) |
Impairment |
– |
(2,478) | ||||
|
(857) |
(943) |
Selling expenses |
(2,539) |
(2,735) | ||||
|
(293) |
(336) |
General and administrative expenses |
(887) |
(1,011) | ||||
|
(87) |
(100) |
Research and development expenses |
(258) |
(293) | ||||
|
(2) |
(32) |
Other operating income/(expenses) |
27 |
(44) | ||||
|
301 |
(2,233) |
Operating income/(loss) |
1,006 |
(1,667) | ||||
|
(70) |
(66) |
Net financing expenses |
(197) |
(213) | ||||
|
9 |
5 |
Results from associates and joint ventures |
24 |
14 | ||||
|
240 |
(2,294) |
Profit/(loss) before tax |
833 |
(1,866) | ||||
|
(74) |
(56) |
Income tax |
(246) |
(182) | ||||
|
166 |
(2,350) |
Profit/(loss) for the period from continuing operations |
587 |
(2,048) | ||||
|
|
|
|
|
| ||||
|
Discontinued operations | ||||||||
|
1 |
(22) |
Profit/(loss) for the period from discontinued operations |
14 |
(17) | ||||
|
167 |
(2,372) |
Profit/(loss) for the period |
601 |
(2,065) | ||||
|
|
|
|
|
| ||||
|
Attributable to | ||||||||
|
149 |
(2,382) |
Shareholders of the company |
545 |
(2,110) | ||||
|
18 |
10 |
Non-controlling interests |
56 |
45 | ||||
|
167 |
(2,372) |
Profit/(loss) for the period |
601 |
(2,065) | ||||
|
3rd quarter |
|
January - September | ||||||
|
2011 |
2012 |
in € millions |
2011 |
2012 | ||||
|
167 |
(2,372) |
Profit/(loss) for the period |
601 |
(2,065) | ||||
|
|
|
|
|
| ||||
|
Other comprehensive income | ||||||||
|
108 |
(1) |
Exchange differences arising on translation of foreign operations |
(261) |
130 | ||||
|
6 |
7 |
Cash flow hedges |
(33) |
(6) | ||||
|
(4) |
3 |
Tax relating to components of other comprehensive income |
16 |
1 | ||||
|
110 |
9 |
Other comprehensive income for the period (net of tax) |
(278) |
125 | ||||
|
277 |
(2,363) |
Comprehensive income for the period |
323 |
(1,940) | ||||
|
|
|
|
|
| ||||
|
Comprehensive income attributable to | ||||||||
|
239 |
(2,368) |
Shareholders of the company |
284 |
(1,983) | ||||
|
38 |
5 |
Non-controlling interests |
39 |
43 | ||||
|
277 |
(2,363) |
Comprehensive income for the period |
323 |
(1,940) | ||||
|
in € millions |
December 31, 2011 |
September 30, 2012 | ||
|
Assets |
|
| ||
|
Non-current assets |
|
| ||
|
Intangible assets |
7,392 |
4,897 | ||
|
Property, plant and equipment |
3,705 |
3,792 | ||
|
Other financial non-current assets |
2,198 |
2,753 | ||
|
Total non-current assets |
13,295 |
11,442 | ||
|
|
|
| ||
|
Current assets |
|
| ||
|
Inventories |
1,924 |
1,912 | ||
|
Trade and other receivables |
2,917 |
3,224 | ||
|
Cash and cash equivalents |
1,635 |
1,543 | ||
|
Other current assets |
98 |
116 | ||
|
Assets held for sale |
– |
144 | ||
|
Total current assets |
6,574 |
6,939 | ||
|
Total assets |
19,869 |
18,381 | ||
|
|
|
| ||
|
Equity and liabilities | ||||
|
Total equity |
9,743 |
7,590 | ||
|
|
|
| ||
|
Non-current liabilities |
|
| ||
|
Provisions and deferred tax liabilities |
2,284 |
2,298 | ||
|
Long-term borrowings |
3,035 |
3,793 | ||
|
Total non-current liabilities |
5,319 |
6,091 | ||
|
|
|
| ||
|
Current liabilities |
|
| ||
|
Short-term borrowings |
494 |
347 | ||
|
Trade and other payables |
3,349 |
3,471 | ||
|
Other short-term liabilities |
964 |
882 | ||
|
Total current liabilities |
4,807 |
4,700 | ||
|
Total equity and liabilities |
19,869 |
18,381 | ||
|
in € millions |
Subscribed share capital |
Additional paid-in capital |
Cashflow hedge reserve |
Cumulative translation reserves |
Other reserves |
Share- |
Non- |
Total equity | ||||||||
|
Balance at January 1, 2011 |
467 |
9 |
29 |
(43) |
8,522 |
8,984 |
525 |
9,509 | ||||||||
|
Profit for the period |
– |
– |
– |
– |
545 |
545 |
56 |
601 | ||||||||
|
Other comprehensive income |
– |
– |
(22) |
(239) |
– |
(261) |
(17) |
(278) | ||||||||
|
Comprehensive income for the period |
– |
– |
(22) |
(239) |
545 |
284 |
39 |
323 | ||||||||
|
Dividend paid |
– |
– |
– |
– |
(253) |
(253) |
(29) |
(282) | ||||||||
|
Equity-settled transactions |
– |
– |
– |
– |
26 |
26 |
– |
26 | ||||||||
|
Issue of common shares |
1 |
14 |
– |
– |
– |
15 |
– |
15 | ||||||||
|
Acquisitions and divestments |
– |
– |
– |
– |
– |
– |
(2) |
(2) | ||||||||
|
Balance at September 30, 2011 |
468 |
23 |
7 |
(282) |
8,840 |
9,056 |
533 |
9,589 | ||||||||
|
Balance at January 1, 2012 |
469 |
47 |
(9) |
4 |
8,701 |
9,212 |
531 |
9,743 | ||||||||
|
Profit/(loss) for the period |
– |
– |
– |
– |
(2,110) |
(2,110) |
45 |
(2,065) | ||||||||
|
Other comprehensive income |
– |
– |
(6) |
133 |
– |
127 |
(2) |
125 | ||||||||
|
Comprehensive income for the period |
– |
– |
(6) |
133 |
(2,110) |
(1,983) |
43 |
(1,940) | ||||||||
|
Dividend paid |
5 |
90 |
– |
– |
(263) |
(168) |
(28) |
(196) | ||||||||
|
Equity-settled transactions |
– |
– |
– |
– |
30 |
30 |
– |
30 | ||||||||
|
Issue of common shares |
2 |
4 |
– |
– |
– |
6 |
– |
6 | ||||||||
|
Acquisitions and divestments |
– |
– |
– |
– |
(14) |
(14) |
(39) |
(53) | ||||||||
|
Balance at September 30, 2012 |
476 |
141 |
(15) |
137 |
6,344 |
7,083 |
507 |
7,590 |
|
3rd quarter |
|
|
January - September | |||||
|
2011 |
2012 |
in € millions |
2011 |
2012 | ||||
|
1,194 |
993 |
Cash and cash equivalents at beginning of period |
2,683 |
1,335 | ||||
|
|
|
|
|
| ||||
|
|
Adjustments to reconcile earnings to cash generated |
| ||||||
|
166 |
(2,350) |
Profit/(loss) for the period from continuing operations |
587 |
(2,048) | ||||
|
157 |
2,672 |
Amortization, depreciation and impairments |
460 |
3,031 | ||||
|
41 |
256 |
Changes in working capital |
(553) |
(200) | ||||
|
(27) |
(139) |
Changes in provisions |
(455) |
(715) | ||||
|
72 |
41 |
Other changes |
16 |
52 | ||||
|
409 |
480 |
Net cash from operating activities |
55 |
120 | ||||
|
(158) |
(198) |
Capital expenditures |
(452) |
(514) | ||||
|
5 |
3 |
Acquisitions and divestments net of cash acquired |
29 |
(9) | ||||
|
3 |
5 |
Other changes |
6 |
18 | ||||
|
(150) |
(190) |
Net cash from investing activities |
(417) |
(505) | ||||
|
– |
70 |
Changes from borrowings |
(550) |
582 | ||||
|
(10) |
(8) |
Dividends |
(282) |
(189) | ||||
|
(3) |
(38) |
Other changes |
7 |
(47) | ||||
|
(13) |
24 |
Net cash from financing activities |
(825) |
346 | ||||
|
246 |
314 |
Net cash used for continuing operations |
(1,187) |
(39) | ||||
|
(7) |
(4) |
Cash flows from discontinued operations |
4 |
(10) | ||||
|
239 |
310 |
Net change in cash and cash equivalents of total operations |
(1,183) |
(49) | ||||
|
20 |
4 |
Effect of exchange rate changes on cash and cash equivalents |
(47) |
21 | ||||
|
1,453 |
1,307 |
Cash and cash equivalents at balance sheet date |
1,453 |
1,307 | ||||
|
2011 |
|
|
|
|
2012 | |||||||||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
year |
in € millions |
Q1 |
Q2 |
Q3 |
year- | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Revenue | ||||||||||||||||||
|
1,196 |
1,461 |
1,435 |
1,204 |
5,296 |
Decorative Paints |
1,242 |
1,551 |
1,456 |
4,249 | |||||||||
|
1,237 |
1,312 |
1,295 |
1,326 |
5,170 |
Performance Coatings |
1,369 |
1,472 |
1,467 |
4,308 | |||||||||
|
1,351 |
1,350 |
1,349 |
1,285 |
5,335 |
Specialty Chemicals |
1,399 |
1,431 |
1,393 |
4,223 | |||||||||
|
(22) |
(26) |
(28) |
(28) |
(104) |
Other activities/eliminations |
(38) |
(48) |
(36) |
(122) | |||||||||
|
3,762 |
4,097 |
4,051 |
3,787 |
15,697 |
Total |
3,972 |
4,406 |
4,280 |
12,658 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
EBITDA | ||||||||||||||||||
|
90 |
191 |
148 |
11 |
440 |
Decorative Paints |
76 |
175 |
147 |
398 | |||||||||
|
143 |
170 |
157 |
141 |
611 |
Performance Coatings |
164 |
213 |
202 |
579 | |||||||||
|
241 |
220 |
238 |
207 |
906 |
Specialty Chemicals |
235 |
255 |
227 |
717 | |||||||||
|
(37) |
(30) |
(36) |
(58) |
(161) |
Other activities/eliminations |
(52) |
(50) |
(36) |
(138) | |||||||||
|
437 |
551 |
507 |
301 |
1,796 |
Total |
423 |
593 |
540 |
1,556 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
11.6 |
13.4 |
12.5 |
7.9 |
11.4 |
EBITDA margin (in %) |
10.6 |
13.5 |
12.6 |
12.3 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Depreciation | ||||||||||||||||||
|
(30) |
(30) |
(33) |
(33) |
(126) |
Decorative Paints |
(33) |
(34) |
(35) |
(102) | |||||||||
|
(21) |
(21) |
(21) |
(24) |
(87) |
Performance Coatings |
(23) |
(25) |
(23) |
(71) | |||||||||
|
(55) |
(56) |
(56) |
(60) |
(227) |
Specialty Chemicals |
(61) |
(63) |
(62) |
(186) | |||||||||
|
(2) |
(3) |
(4) |
(2) |
(11) |
Other activities/eliminations |
(5) |
(1) |
(3) |
(9) | |||||||||
|
(108) |
(110) |
(114) |
(119) |
(451) |
Total |
(122) |
(123) |
(123) |
(368) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Amortization | ||||||||||||||||||
|
(21) |
(20) |
(20) |
(23) |
(84) |
Decorative Paints |
(24) |
(24) |
(25) |
(73) | |||||||||
|
(7) |
(7) |
(7) |
(8) |
(29) |
Performance Coatings |
(9) |
(8) |
(10) |
(27) | |||||||||
|
(12) |
(13) |
(13) |
(16) |
(54) |
Specialty Chemicals |
(13) |
(15) |
(13) |
(41) | |||||||||
|
– |
– |
(1) |
(2) |
(3) |
Other activities/eliminations |
– |
– |
(1) |
(1) | |||||||||
|
(40) |
(40) |
(41) |
(49) |
(170) |
Total |
(46) |
(47) |
(49) |
(142) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
EBIT | ||||||||||||||||||
|
39 |
141 |
95 |
(45) |
230 |
Decorative Paints |
19 |
117 |
87 |
223 | |||||||||
|
115 |
142 |
129 |
109 |
495 |
Performance Coatings |
132 |
180 |
169 |
481 | |||||||||
|
174 |
151 |
169 |
131 |
625 |
Specialty Chemicals |
161 |
177 |
152 |
490 | |||||||||
|
(39) |
(33) |
(41) |
(62) |
(175) |
Other activities/eliminations |
(57) |
(51) |
(40) |
(148) | |||||||||
|
289 |
401 |
352 |
133 |
1,175 |
Total |
255 |
423 |
368 |
1,046 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
7.7 |
9.8 |
8.7 |
3.5 |
7.5 |
EBIT margin (in %) |
6.4 |
9.6 |
8.6 |
8.3 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Operating income/(loss) | ||||||||||||||||||
|
37 |
137 |
57 |
(94) |
137 |
Decorative Paints |
(15) |
110 |
(2,429) |
(2,334) | |||||||||
|
106 |
155 |
114 |
83 |
458 |
Performance Coatings |
127 |
171 |
130 |
428 | |||||||||
|
173 |
147 |
169 |
133 |
622 |
Specialty Chemicals |
140 |
154 |
133 |
427 | |||||||||
|
(39) |
(11) |
(39) |
(86) |
(175) |
Other activities/eliminations |
(61) |
(60) |
(67) |
(188) | |||||||||
|
277 |
428 |
301 |
36 |
1,042 |
Total |
191 |
375 |
(2,233) |
(1,667) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Incidentals per Business Area | ||||||||||||||||||
|
(2) |
(4) |
(38) |
(49) |
(93) |
Decorative Paints |
(34) |
(7) |
(2,516) |
(2,557) | |||||||||
|
(9) |
13 |
(15) |
(26) |
(37) |
Performance Coatings |
(5) |
(9) |
(39) |
(53) | |||||||||
|
(1) |
(4) |
– |
2 |
(3) |
Specialty Chemicals |
(21) |
(23) |
(19) |
(63) | |||||||||
|
– |
22 |
2 |
(24) |
- |
Other activities/eliminations |
(4) |
(9) |
(27) |
(40) | |||||||||
|
(12) |
27 |
(51) |
(97) |
(133) |
Total |
(64) |
(48) |
(2,601) |
(2,713) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Incidentals included in operating income/(loss) | ||||||||||||||||||
|
(9) |
(20) |
(47) |
(55) |
(131) |
Restructuring costs |
(46) |
(44) |
(101) |
(191) | |||||||||
|
– |
– |
– |
– |
– |
Impairment |
– |
– |
(2,478) |
(2,478) | |||||||||
|
1 |
21 |
2 |
(33) |
(9) |
Results related to major legal and environmental cases |
(22) |
3 |
(5) |
(24) | |||||||||
|
– |
26 |
(5) |
(11) |
10 |
Results on acquisitions and divestments |
– |
– |
(6) |
(6) | |||||||||
|
(4) |
– |
(1) |
2 |
(3) |
Other incidental results |
4 |
(7) |
(11) |
(14) | |||||||||
|
(12) |
27 |
(51) |
(97) |
(133) |
Total |
(64) |
(48) |
(2,601) |
(2,713) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Incidentals per line item | ||||||||||||||||||
|
(4) |
(5) |
(25) |
(18) |
(52) |
Cost of sales |
(35) |
(10) |
(21) |
(66) | |||||||||
|
– |
– |
– |
– |
– |
Impairment |
– |
– |
(2,478) |
(2,478) | |||||||||
|
(3) |
(9) |
(20) |
(34) |
(66) |
Selling expenses |
(9) |
(21) |
(51) |
(81) | |||||||||
|
(1) |
(4) |
(1) |
(18) |
(24) |
General and administrative expenses |
(20) |
(10) |
(20) |
(50) | |||||||||
|
– |
– |
(1) |
(8) |
(9) |
Research and development expenses |
(1) |
(2) |
(5) |
(8) | |||||||||
|
(4) |
45 |
(4) |
(19) |
18 |
Other operating income/(expenses) |
1 |
(5) |
(26) |
(30) | |||||||||
|
(12) |
27 |
(51) |
(97) |
(133) |
Total |
(64) |
(48) |
(2,601) |
(2,713) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Reconciliation net financing expense | ||||||||||||||||||
|
14 |
17 |
14 |
12 |
57 |
Financing income |
15 |
17 |
16 |
48 | |||||||||
|
(61) |
(59) |
(57) |
(125) |
(302) |
Financing expenses |
(57) |
(65) |
(58) |
(180) | |||||||||
|
(47) |
(42) |
(43) |
(113) |
(245) |
Net interest on net debt |
(42) |
(48) |
(42) |
(132) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Other interest movements | ||||||||||||||||||
|
(16) |
(13) |
(15) |
(15) |
(59) |
Financing expenses related |
(16) |
(16) |
(16) |
(48) | |||||||||
|
(5) |
(12) |
(13) |
(16) |
(46) |
Interest on provisions |
(3) |
(18) |
(9) |
(30) | |||||||||
|
5 |
3 |
1 |
3 |
12 |
Other items |
(4) |
– |
1 |
(3) | |||||||||
|
(16) |
(22) |
(27) |
(28) |
(93) |
Net other financing charges |
(23) |
(34) |
(24) |
(81) | |||||||||
|
(63) |
(64) |
(70) |
(141) |
(338) |
Net financing expenses |
(65) |
(82) |
(66) |
(213) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Quarterly net income analysis | ||||||||||||||||||
|
7 |
8 |
9 |
(1) |
23 |
Results from associates and joint ventures |
4 |
5 |
5 |
14 | |||||||||
|
(16) |
(22) |
(18) |
(8) |
(64) |
Profit attributable to |
(14) |
(21) |
(10) |
(45) | |||||||||
|
221 |
372 |
240 |
(106) |
727 |
Profit/(loss) before tax |
130 |
298 |
(2,294) |
(1,866) | |||||||||
|
(73) |
(99) |
(74) |
52 |
(194) |
Income tax |
(46) |
(80) |
(56) |
(182) | |||||||||
|
148 |
273 |
166 |
(54) |
533 |
Profit/(loss) for the period from continuing operations |
84 |
218 |
(2,350) |
(2,048) | |||||||||
|
33 |
27 |
31 |
49 |
27 |
Effective tax rate (in %) |
35 |
27 |
(2) |
(10) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Earnings per share from continuing operations (in €) | ||||||||||||||||||
|
0.57 |
1.07 |
0.63 |
(0.26) |
2.01 |
Basic |
0.30 |
0.83 |
(9.91) |
(8.84) | |||||||||
|
0.56 |
1.07 |
0.63 |
(0.26) |
1.99 |
Diluted |
0.30 |
0.82 |
(9.91) |
(8.84) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Earnings per share from discontinued operations (in €) | ||||||||||||||||||
|
(0.02) |
0.07 |
– |
(0.03) |
0.03 |
Basic |
– |
0.02 |
(0.09) |
(0.07) | |||||||||
|
(0.02) |
0.07 |
– |
(0.03) |
0.03 |
Diluted |
– |
0.02 |
(0.09) |
(0.07) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Earnings per share from total operations (in €) | ||||||||||||||||||
|
0.55 |
1.14 |
0.63 |
(0.29) |
2.04 |
Basic |
0.30 |
0.85 |
(10.00) |
(8.91) | |||||||||
|
0.54 |
1.14 |
0.63 |
(0.29) |
2.02 |
Diluted |
0.30 |
0.84 |
(10.00) |
(8.91) | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Number of shares (in millions) | ||||||||||||||||||
|
233.6 |
233.9 |
234.0 |
234.3 |
233.9 |
Weighted average number of shares |
235.1 |
236.9 |
238.2 |
236.8 | |||||||||
|
233.7 |
234.0 |
234.0 |
234.7 |
234.7 |
Number of shares at end of quarter |
235.6 |
238.2 |
238.2 |
238.2 | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Adjusted earnings (in € millions) | ||||||||||||||||||
|
221 |
372 |
240 |
(106) |
727 |
Profit/(loss) before tax from continuing operations |
130 |
298 |
(2,294) |
(1,866) | |||||||||
|
12 |
(27) |
51 |
97 |
133 |
Incidentals reported in |
64 |
48 |
2,601 |
2,713 | |||||||||
|
40 |
40 |
41 |
49 |
170 |
Amortization of intangible assets |
46 |
47 |
49 |
142 | |||||||||
|
(88) |
(107) |
(100) |
9 |
(286) |
Adjusted income tax |
(78) |
(106) |
(106) |
(290) | |||||||||
|
(16) |
(22) |
(18) |
(8) |
(64) |
Non-controlling interests |
(14) |
(21) |
(10) |
(45) | |||||||||
|
169 |
256 |
214 |
41 |
680 |
Adjusted net income for continuing operations |
148 |
266 |
240 |
654 | |||||||||
|
0.72 |
1.09 |
0.91 |
0.17 |
2.91 |
Adjusted earnings per share (in €) |
0.63 |
1.12 |
1.01 |
2.76 | |||||||||
Corporate costs in the quarter were above the previous year due to higher legal and supply chain costs. The result of our captive insurance companies was positive in the quarter due to a low number of claims. Year-to-date the number of claims is still higher than the previous year. Other costs were in line with last year.
|
3rd quarter |
|
January - September | ||||||
|
2011 |
2012 |
in € millions |
2011 |
2012 | ||||
|
(19) |
(26) |
Corporate costs |
(69) |
(82) | ||||
|
(4) |
(2) |
Pensions |
(11) |
(3) | ||||
|
2 |
5 |
Insurances |
10 |
(5) | ||||
|
(20) |
(17) |
Other |
(43) |
(58) | ||||
|
(41) |
(40) |
EBIT in “other” |
(113) |
(148) | ||||
Net financing charges for Q3 2012 decreased by €4 million to €66 million driven by:
Excluding the impairment, the tax rate would have been 34 percent (2011: 31 percent) which is higher than normal due to several adjustments to previous years. The year-to-date tax rate is 30 percent (2011: 30 percent).
Shareholders’ equity as at the end of Q3 2012 decreased to €7.1 billion, mainly due to the net effect of:
An interim dividend of €0.33 per share (2011: €0.33) will be paid out, please refer to the financial calendar for dividend payment dates. In light of the current trading conditions, you will be updated on the final dividend proposal in February next year.
The funded status of the pension plans at the end of Q3 2012 was estimated to be a deficit of €0.9 billion (year-end 2011: €0.5 billion; Q2 2012: €0.6 billion).
The movement compared with year-end 2011 is primarily due to:
Offset by:
At September 30, 2012, we employed 57,050 staff (year-end 2011: 57,240 employees). The net decrease was due to:
|
in € millions |
September 30, 2011 |
December 31, 2011 |
September 30, 2012 | |||
|
Trade receivables |
2,558 |
2,368 |
2,637 | |||
|
Inventories |
1,889 |
1,924 |
1,912 | |||
|
Trade payables |
(2,106) |
(2,213) |
(2,158) | |||
|
Operating working capital in Business Areas |
2,341 |
2,079 |
2,391 | |||
|
Other working capital items |
(1,036) |
(901) |
(1,017) | |||
|
Non-current assets |
12,647 |
13,295 |
11,442 | |||
|
Less investments in associates and joint ventures |
(197) |
(198) |
(192) | |||
|
Deferred tax liabilities |
(561) |
(567) |
(548) | |||
|
Invested capital |
13,194 |
13,708 |
12,076 |
Invested capital at the end of Q3 2012 totaled €12.1 billion, €1.6 billion lower than at year-end 2011. Invested capital was impacted by the net effect of:
|
in € millions, % of revenue |
September 30, 2011 |
December 31, 2011 |
September 30, 2012 | |||||||||
|
Decorative Paints |
789 |
13.7 |
622 |
12.9 |
800 |
13.7 | ||||||
|
Performance Coatings |
836 |
16.1 |
772 |
14.6 |
857 |
14.6 | ||||||
|
Specialty Chemicals |
716 |
13.3 |
685 |
13.3 |
734 |
13.2 | ||||||
|
Total |
2,341 |
14.3 |
2,079 |
13.6 |
2,391 |
13.9 | ||||||
In % of revenue
Operating activities in Q3 2012 resulted in a cash inflow of €480 million (2011: €409 million). The change is mainly due to a net effect of:
Net debt decreased in the quarter to €2,597 million (Q2 2012: €2,844 million) due to the net balance of the cash inflow from operating activities and capital expenditures in Q3.
In Q3 we issued a 10-year bond of €750 million at a coupon of 2.625 percent.
This interim financial report is in compliance with IAS 34 “Interim Financial Reporting”. This report is unaudited. The accounting principles are as applied in the 2011 financial statements.
Operating working capital is defined as the sum of inventories, trade receivables and trade payables in the Business Areas. We have adjusted the definitions of trade receivables as well as trade payables to include supplier related receivables and customer related payables. The 2011 figures have been adjusted accordingly.
As from 2013, the amended IAS 19 on pensions will become effective and the impact will be disclosed in our 2012 financial statements. Implementation of this amendment will result amongst others in including the non-cash movements in the pension deficit, as disclosed in Pensions, in other comprehensive income in shareholders’ equity. In addition, we expect a limited positive effect on EBITDA and financing expenses.
Revenue and results in Decorative Paints are impacted by seasonal influences. Revenue and profitability tend to be higher in the second and third quarter of the year as weather conditions determine whether paints and coatings can be applied. In Performance Coatings, revenue and profitability vary with building patterns from original equipment manufacturers. In Specialty Chemicals, the Functional Chemicals and the Surface Chemistry businesses experience seasonal influences. Revenue and profitability are affected by developments in the agricultural season and tend to be higher in the first half of the year.
In the category “other” we report activities which are not allocated to a particular business area. Corporate costs are the unallocated costs of our head office and shared services center in the Netherlands. Pensions reflects pension costs after the elimination of interest cost (reported as financing expenses). Insurances are the results from our captive insurance companies. Other includes the cost of share-based compensation and company projects, the results of treasury and legacy operations as well as the unallocated cost of some country organizations.
Adjusted earnings per share are the basic earnings per share from continuing operations excluding incidentals in operating income, amortization of intangible assets and tax on these adjustments.
Comprehensive income is the change in equity during a period resulting from transactions and other events other than those changes resulting from transactions with shareholders in their capacity as shareholders.
EBIT is operating income before incidentals.
EBIT margin is EBIT as percentage of revenue.
EBITDA is EBIT before depreciation and amortization and refers to EBITDA before incidentals.
EBITDA margin is EBITDA as percentage of revenue.
Emerging Europe: Central and Eastern Europe (excluding Austria), Baltic States and Turkey.
Incidentals are special charges and benefits, results on acquisitions and divestments, restructuring and impairment charges, and charges related to major legal, anti-trust, and environmental cases. EBITDA and EBIT before incidentals are key figures we use to assess our performance, as these figures better reflect the underlying trends in the results of the activities.
Invested capital is total assets (excluding cash and cash equivalents, investments in associates, assets held for sale) less current income tax payable, deferred tax liabilities and trade and other payables.
Mature markets comprise of Western Europe, the US, Canada, Japan and Oceania.s
Moving average ROI is calculated as EBIT of the last twelve months divided by average invested capital.
Net debt is defined as long-term borrowings plus short-term borrowings less cash and cash equivalents.
Operating income is defined in accordance with IFRS and includes the relevant incidental results.
Operating ROI is calculated as EBIT before amortization of the last twelve months divided by average invested capital excluding intangible assets.
Operating working capital is defined as the sum of inventories, trade receivables and trade payables in the Business Areas. Starting 2012 we have changed the definitions of trade receivables as well as trade payables. Trade receivables now include supplier related receivables while in trade payables customer related payables have been included. The 2011 figures have been adjusted to align with the 2012 definitions. When expressed as a ratio, operating working capital is measured against four times last quarter revenue.
