UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K/A
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REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
DECEMBER 22, 2004
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AKZO NOBEL N.V.
(Translation of registrant's name into English)
76, Velperweg, 6824 BM Arnhem, the Netherlands
(Address of principal executive offices)
0 - 017444
(Commission file number)
------------
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
================================================================================
This amendment Form 6-K/A filing is being made due to a missing cover page and
signature page, the original filing was timely filed on October 19, 2004
Report for the 3rd quarter of 2004
Key figures
3rd quarter Millions of euros (EUR) January-September
--------------------- ------------------------------ ------------------------------
2004 2003* Ch. % 2004 2003* Ch. %
----- ----- ----- ----- ----- -----
213 178 20 Net income excl. nonrec. items 605 543 11
0.75 0.62 - per share, in EUR 2.12 1.90
521 178 193 Net income 766 497 54
1.82 0.62 - per share, in EUR 2.68 1.74
Sales
801 877 (9) Pharma 2,430 2,649 (8)
1,381 1,323 4 Coatings 4,009 3,996 -
1,033 1,087 (5)/5*** Chemicals 3,298 3,395 (3)/-***
(30) (33) Other (89) (100)
----- ----- ----- -----
3,185 3,254 (2) Total 9,648 9,940 (3)
===== ===== ===== =====
Operating income** (EBIT)
131 120 9 Pharma 403 407 (1)
137 125 10 Coatings 365 332 10
80 76 5/36*** Chemicals 266 252 6/18***
(19) (17) Other (78) (85)
----- ----- ----- -----
329 304 8 Total 956 906 6
===== ===== ===== =====
10.3 9.3 Return on sales**, in % 9.9 9.1
12.2 6.6 Interest coverage 10.1 7.1
Gearing 0.46 1.09****
0.92*****
Number of employees 62,990 65,240****
64,580*****
Operational performance clearly up; significant net nonrecurring profit
- Pharma - cost savings contributing
- Coatings - clearly up due to growth and acquisitions
- Chemicals - substantially up
- Net nonrecurring profit of EUR 308 million - mainly from divestments
- Further settlement in Remeron (R) court cases
- Divestment program at Chemicals - nearing completion
- Strong financial position
- Interim dividend unchanged - EUR 0.30
- Outlook - net income, excluding nonrecurring items and special benefits,
around 2003 level
* 2003 figures have been adjusted for a minor regrouping of activities
between Coatings and Chemicals.
** Excluding nonrecurring items.
*** Continued operations.
**** At September 30.
*****At December 31.
1
Report for the 3rd quarter of 2004
CONDENSED CONSOLIDATED STATEMENT OF INCOME
3rd quarter Millions of euros January-September
---------------------- ---------------------------------------------------- --------------------
2004 2003 Ch. % 2004 2003 Ch. %
----- ----- ----- ----- ----- -----
3,185 3,254 (2) Sales 9,648 9,940 (3)
(2,856) (2,950) Operating costs (8,692) (9,034)
------ ------ ----- ------
329 304 8 Operating income* (EBIT) 956 906 6
(27) (46) Financing charges (95) (128)
------ ------ ----- ------
302 258 Operating income* less financing charges 861 778
(87) (79) Taxes (251) (236)
------ ------ ----- ------
215 179 20 Earnings* of consolidated companies, after taxes 610 542 13
7 10 Earnings* from nonconsolidated companies 23 30
------ ------ ----- ------
222 189 Earnings* before minority interest 633 572
(9) (11) Minority interest (28) (29)
------ ------ ----- ------
213 178 20 Net income excluding nonrecurring items 605 543 11
308 Nonrecurring items, after taxes and minority interest 161 (46)
------ ------ ----- ------
521 178 193 Net income 766 497 54
====== ====== ===== ======
10.3 9.3 Return on sales*, in % 9.9 9.1
12.2 6.6 Interest coverage 10.1 7.1
Net income excl. nonrecurring items per share, in EUR
0.75 0.62 - basic 2.12 1.90
0.74 0.62 - diluted 2.11 1.90
Net income per share, in EUR
1.82 0.62 - basic 2.68 1.74
1.82 0.62 - diluted 2.67 1.74
475 461 3 EBITDA 1,414 1,392 2
138 123 Capital expenditures 379 380
132 145 Depreciation 419 451
*Excluding nonrecurring items.
2
Report for the 3rd quarter of 2004
Operational performance clearly up; significant net nonrecurring profit
Net income excluding nonrecurring items in the third quarter rose 20% to EUR
213 million. Net income* per share was EUR 0.75 (2003: EUR 0.62). All three
groups turned in an improved performance. Including a net nonrecurring profit
of EUR 308 million, mainly as a result of divestments, third-quarter net income
was EUR 521 million (2003: EUR 178 million).
For the first nine months of 2004, net income excluding nonrecurring items
amounted to EUR 605 million, up 11% on 2003. Taking into account net
nonrecurring profits of EUR 161 million, net income was up 54% to EUR 766
million.
Autonomous sales growth of 2%
Third-quarter sales of EUR 3.2 billion were somewhat below last year.
Autonomous growth at Coatings and Chemicals was more than offset by lower
Pharma volumes, negative currency translation effects, and divestments. Sales
developed as follows:
Currency Acquisitions/
In % Total Volume Price translation divestments
---------------- ---------- ------- ----------- ------------ -----------------
Pharma (9) (6) (1) (2) -
Coatings 4 3 1 (2) 2
Chemicals (5) 3 3 (2) (9)
Akzo Nobel (2) 1 1 (2) (2)
Operating income - up 8%
Operating income of EUR 329 million was up 8% on last year. All three groups
achieved improved operational performance and benefited from lower pension
charges. Currency translation had a decreasing negative effect. Return on sales
was 10.3%, against 9.3% in the third quarter of 2003. Earnings developed as
follows:
Change from 3rd quarter of 2003
Operating --------------------------------------------------------------------
income* for 3rd Operational Currency Lower pension
Millions of euros quarter of 2004 Total performance Divestments translation charges
----------------- --------------- --------- ------------- ------------- ------------- --------------
Pharma 131 11 11 - (3) 3
Coatings 137 12 13 - (4) 3
Chemicals 80 4 17 (16) - 3
Other** (19) (2) (5) - 3
--------------- --------- ------------- ------------- ------------- --------------
Akzo Nobel 329 25 36 (16) (7) 12
* Excluding nonrecurring items.
** "Other" mainly comprises pension costs related to former employees of
divested operations and results of the (intermediate) holding companies
and the captive insurance companies.
3
Report for the 3rd quarter of 2004
Currency translation effects were mainly caused by the weaker U.S. dollar and
various Asian currencies.
Financing charges decreased substantially as a result of significantly reduced
net borrowings due to the proceeds from divestments and lower foreign currency
exchange rates. Interest coverage in the third quarter jumped to 12.2 (2003:
6.6).
The effective tax rate decreased from 31% to 29%, reflecting changes in the
geographic distribution of the Company's results.
Earnings from nonconsolidated companies decreased from EUR 10 million to EUR 7
million, mainly attributable to Eka Polymer Latex and the divested Catalysts
joint ventures.
Workforce - down 1,910 from restructurings
At September 30, 2004, the Company had 62,990 employees, compared with 64,580
at year-end 2003. Restructurings at all three groups caused a reduction of
1,910. Acquisitions and divestments on balance resulted in a decrease of 690.
Growth of certain businesses caused a workforce expansion of 1,010.
Developments were as follows:
September 30, Acquisitions/ Other December 31,
2004 Restructurings divestments changes 2003
------------- -------------- --------------- -------------- ---------- --------------
Pharma 19,680 (1,130) (60) 190 20,680
Coatings 29,310 (420) 610 780 28,340
Chemicals 12,890 (320) (1,240) 40 14,410
Other 1,110 (40) 1,150
-------------- --------------- -------------- ---------- --------------
Akzo Nobel 62,990 (1,910) (690) 1,010 64,580
Nonrecurring items
In the third quarter of 2004, the Company registered a net nonrecurring profit
of EUR 308 million, which breaks down as follows:
Millions of euros
------------------------------------ ---------------
Gain on divestments 458
Remeron (R) court cases (58)
Restructuring and impairment charges (42)
---------------
Gross 358
Taxes (42)
Nonconsolidated companies (8)
---------------
Total 308
4
Report for the 3rd quarter of 2004
The gain on divestments primarily relates to the sale of Catalysts and
Phosphorus Chemicals in July 2004*
Restructuring and impairment charges pertain to the closure of the chlorine
production in Bohus, Sweden, and restructurings at Polymer Chemicals, mainly in
Germany.
The charge for the Remeron (R) court cases in the United States mainly concerns
the settlements and legal fees to resolve alleged claims brought by state
attorneys general and by a class of consumers and third party payers (the
"indirect purchaser class"). The latter settlement is still subject to certain
conditions. The charge also relates to claims brought by nine large chain store
and grocery store pharmacies having opted out of a class of direct purchasers.
This class action brought by direct purchasers remains pending in the Federal
District Court of New Jersey, for which no provision has been recognized**.
The loss for nonconsolidated companies predominantly relates to antitrust cases
of Flexsys.
Divestment program at Chemicals - nearing completion
In September 2003, the Company announced its plan to sell Catalysts, Coating
Resins, and Phosphorus Chemicals from its Chemicals portfolio in order to
strengthen the balance sheet and to create more financial room to maneuver. In
the mean time, Catalysts and Phosphorus Chemicals have been divested. Early in
October 2004, the agreement for the sale of the Ultra Violet/Electron Beam
(UV/EB) Resins activities, part of the Coating Resins business, was announced.
Recently, Nuplex Industries Limited, New Zealand, made an offer of EUR 110
million, for the other (major) part of the Coating Resins business, free of
cash and debt. Completion of this transaction is foreseen in the last quarter
of 2004. At closing the total divestment program will have generated some EUR 1
billion.
Interim dividend unchanged - EUR 0.30
Akzo Nobel will declare an interim dividend for 2004 of EUR 0.30 per common
share, unchanged from last year. Starting October 20, 2004, Akzo Nobel shares
will trade ex-dividend. The interim dividend will be made payable on November
1, 2004.
Outlook - net income, excluding nonrecurring items and special benefits, around
2003 level
The Company has turned in a clearly improved performance in the first three
quarters of 2004. However, we are facing steeply increasing raw material and
energy prices and there are increasing uncertainties due to softening
macroeconomic conditions. In addition, we do not expect that Pharma will be
able to match its very strong fourth quarter of 2003, also in view of the
developments at Diosynth.
Taking all this into account, we now expect that full-year net income,
excluding nonrecurring items, will be around the 2003 level. The special
benefit in 2003 from the asenapine cooperation of EUR 70 million, after taxes,
is excluded in this comparison.
* It should be noted that no final settlement has been reached yet for these
divestments, so that the amounts recognized at this moment are best
estimates and could change at a later stage, once the final settlement has
been reached.
** Reference is made to the disclosures on pages 98 and 99 in the Akzo Nobel
Annual Report 2003.
5
Report for the 3rd quarter of 2004
Pharma - cost savings contributing
3rd quarter Millions of euros January-September
--------------------- ------------------------- ---------------------------
2004 2003 Ch. % 2004 2003 Ch. %
----- ------ ------ -------- ------- ------
Sales
492 551 Organon 1,501 1,691
252 258 Intervet 763 754
85 114 Diosynth 283 345
(28) (46) Intragroup sales/other (117) (141)
----- ------ -------- --------
801 877 (9) Total 2,430 2,649 (8)
131 120 9 Operating income* (EBIT) 403 407 (1)
16.4 13.7 Return on sales*, in % 16.6 15.4
31.0 31.2 S&D expenses as % of sales 31.8 32.0
15.8 16.1 R&D expenses as % of sales 15.5 16.3
174 164 6 EBITDA 532 536 (1)
33 35 Capital expenditures 111 145
Invested capital 2,484 2,506**
Number of employees 19,680 20,680**
* Excluding nonrecurring items.
** At December 31.
- Sales down - due to lower volumes at Organon and Diosynth and currencies
- Organon
- cost saving programs - successful
- Remeron(R)- major decline due to generic competition in U.S.; still
holding up in rest of world
- HT products - sales under pressure
- contraceptives - NuvaRing (R) continuous growth
- Diosynth - severely suffering from overcapacity; restructurings progressing
well
- Integration of Organon and Diosynth announced
- Intervet - improved performance
6
Report for the 3rd quarter of 2004
Sales in the third quarter decreased 9% to EUR 0.8 billion, due to generic
competition in the United States for Remeron (R) weaker key currencies, and
lower sales for HT products. The Company is actively pursuing restructuring and
cost saving measures, which are now clearly paying off. Including incidental
benefits of some EUR 15 million, operating income rose 9% to EUR 131 million.
Return on sales was 16.4% (2003: 13.7%). In the first nine months of 2004, the
workforce was reduced by 1,130 due to restructuring.
The main products in Organon (Human Healthcare) developed as follows:
Autonomous growth relative to, in %
Sales -----------------------------------
Millions of euros 3rd quarter 2004 3rd quarter 2003 2nd quarter 2004
-------------------- ---------------- ----------------
Remeron (R) in U.S. 10 (74) (32)
Remeron (R) in rest of world 77 (2) (2)
Contraceptives 132 4 -
- of which NuvaRing (R) 23 100 21
Puregon (R)/Follistim (R) 70 (3) (3)
Livial (R) 39 (20) (2)
In the United States, the effects of the generic competition for
antidepressants Remeron (R) and Remeron (R) SolTab (R) have virtually bottomed
out. In the rest of the world, Remeron volumes were somewhat below the third
quarter of 2003 and the second quarter of 2004, but on balance still holding
up. Sales for contraceptives were up, as NuvaRing (R) (contraceptive ring)
continues to grow. The launch of Follistim (R)-AQ (TM) cartridge in the United
States is progressing well. Livial (R) sales were impacted by the ongoing
discussions about the results of studies on hormone therapies.
Diosynth (active pharmaceutical ingredients) is severely suffering from
overcapacity in the industry and lower (captive) demand, with performance
around break-even level. The earlier announced restructuring program affecting
350 jobs is nearly completed.
Akzo Nobel intends to integrate Organon and Diosynth into one human healthcare
business unit. The new organization will leverage its combined know-how,
technologies, people, and facilities to capitalize on market opportunities. The
integration will also reduce complexity and thus support the strategy of
partnerships in development and marketing and sales. In addition, it will allow
the Company to combine biotechnology activities into one platform. A new
biotechnology research facility in Cambridge, Massachusetts, United States,
will also be created.
Akzo Nobel will invest EUR 60 million in Oss, the Netherlands, to build a
state-of-the-art parenteral production facility.
Akzo Nobel's animal healthcare activities Intervet turned in an improved
performance, especially in Europe. Business in Asia remains somewhat under
pressure from the impact of avian influenza.
7
Report for the 3rd quarter of 2004
Coatings - clearly up due to growth and acquisitions
3rd quarter Millions of euros January-September
---------------------------- ------------------------------- ----------------------------
2004 2003* Ch. % 2004 2003* Ch. %
-------- -------- -------- ------ --------- --------
Sales
538 516 Decorative Coatings 1,510 1,468
420 379 Industrial activities 1,201 1,114
225 223 Car Refinishes/Nobilas 678 669
216 209 Marine & Protective Coatings 662 627
(18) (4) Intragroup sales/other (42) (11)
-------- -------- ------ ---------
1,381 1,323 4 Total continued operations 4,009 3,867 4
Impregnated papers 129
-------- -------- ------ ---------
1,381 1,323 4 Total 4,009 3,996 -
137 125 10 Operating income** (EBIT) 365 332 10
9.9 9.4 Return on sales**, in % 9.1 8.3
170 159 7 EBITDA 467 442 6
33 25 Capital expenditures 83 73
Invested capital 2,193 2,043***
Number of employees 29,310 28,340***
* 2003 figures have been adjusted for a minor regrouping of activities
between Coatings and Chemicals.
** Excluding nonrecurring items.
*** At December 31.
- Autonomous growth 4% - mainly Asia Pacific and United States
- Steep increase of raw material prices - pressure on margins
- Decorative Coatings - improved performance from cost savings
- Marine & Protective and industrial activities - still going strong
- Car Refinishes - major worldwide restructuring set in motion
- Capital expenditures focused on high-growth markets
- Various bolt-on acquisitions to improve distribution in Europe
8
Report for the 3rd quarter of 2004
In the third quarter, sales grew 4% to EUR 1.4 billion. Autonomous sales growth
was 4%, mainly attributable to volume growth. The negative currency impact was
2%, while acquisitions, mainly relating to the German coatings distributor
Timpe & Mock, added 2%.
Operating income rose 10% to EUR 137 million. Return on sales was 9.9% (2003:
9.4%). The contributions from cost savings, acquisitions, and lower pension
charges more than offset the negative impact of higher raw material prices and
weaker currencies. Raw material prices are now steeply increasing.
Marine & Protective Coatings, Industrial Finishes, and Powder Coatings improved
further, albeit that they are increasingly affected by higher raw material
costs. The performance of Decorative Coatings improved, mainly due to cost
savings. Car Refinishes' earnings are under pressure. To address this
situation, a major worldwide restructuring program at this business unit,
affecting 600 jobs, has been set in motion.
The restructuring programs continue to make good progress, resulting in a
workforce reduction of 420 during January-September 2004. In high-growth areas,
such as Asia and Eastern Europe, the workforce was expanded by 780.
Capital expenditures of EUR 33 million (115% of depreciation) were up compared
to last year's level. Expenditures are especially directed toward participation
in the high-growth markets in Asia and Eastern Europe.
Akzo Nobel has signed an agreement to take a 30%-stake in one of the leading
German decorative paint distributors, Peters, while this company will take over
the Akzo Nobel owned distributors Beissel and Kerstin. As a result, Akzo Nobel
will have access to 17 additional outlets in the western part of Germany and
improve its position in this strategic market.
Akzo Nobel has agreed to divest part of its liquid coatings activities in the
agricultural and construction equipment (ACE) segment to BASF. In a separate
deal, Akzo Nobel will acquire BASF Coatings' Wood Construction business
(joinery).
9
Report for the 3rd quarter of 2004
Chemicals -substantially up
3rd quarter Millions of euros January-September
---------------------------- ------------------------------- ----------------------------
2004 2003* Ch. % 2004 2003* Ch. %
-------- -------- -------- -------- --------- --------
Sales
243 241 Pulp & Paper Chemicals 721 761
213 210 Surface Chemistry 660 665
153 144 Functional Chemicals 463 461
142 134 Base Chemicals 421 411
125 119 Polymer Chemicals 366 371
77 71 Resins 227 217
64 58 Salt 199 200
45 41 Energy 131 127
(66) (65) Intragroup sales/other (210) (225)
-------- ------- --------- ----------
996 953 5 Total continued operations 2,978 2,988 -
37 134 Divested operations 320 407
-------- ------- --------- ----------
1,033 1,087 (5) Total 3,298 3,395 (3)
76 56 36 Operating income** continued operations 232 197 18
4 20 Divested operations 34 55
-------- ------- --------- ----------
80 76 5 Total operating income** (EBIT) 266 252 6
Return on sales** continued operations,
7.6 5.9 in % 7.8 6.6
7.7 7.0 Return on sales**, in % 8.1 7.4
148 153 (3)/11*** EBITDA 487 492 (1)/4***
69 60 Capital expenditures 181 153
Invested capital 2,206 2,604****
Number of employees 12,890 14,410****
* 2003 figures have been adjusted for a minor regrouping of activities
between Coatings and Chemicals.
** Excluding nonrecurring items.
*** Continued operations.
**** At December 31.
- Continued operations - autonomous growth 8%; operating income up 36%
- All units benefiting from improved business climate
- Cost saving programs paying off
- Increasing raw material and energy prices - increasing pressure on margins
- Divestment program - nearing completion
10
Report for the 3rd quarter of 2004
For the continued operations, third-quarter sales of EUR 1.0 billion were 5%
higher than last year. Autonomous growth was 8%; volumes and prices were both
up 4% from last year. Currency translation had a negative effect of 3%.
Operating income jumped 36%, from EUR 56 million to EUR 76 million. Return on
sales was 7.6% (2003: 5.9%). The contributions from autonomous growth and cost
savings as well as lower pension costs more than offset the negative effects of
higher raw material and energy prices.
Almost all units turned in improved performances, benefiting from the
restructuring and cost saving programs as well as from growth of their
activities. This especially goes for Polymer Chemicals, Functional Chemicals,
and Base Chemicals.
The restructuring programs are progressing well and resulted in a workforce
decrease of 320 in the first nine months of 2004, while divestments resulted in
a reduction of 1,240.
Capital expenditures were up to EUR 69 million, equivalent to 110% of
depreciation. The increase in expenditures primarily relates to major
investment projects in Brazil and the Netherlands.
At the end of July 2004, Catalysts and Phosphorus Chemicals were divested.
Early in October 2004, Akzo Nobel announced that it had signed an agreement to
sell its Ultra Violet/Electron Beam (UV/EB) Resins activities, part of the
Coating Resins business. The transaction is expected to be closed in the final
quarter of 2004.
Recently, Akzo Nobel announced that it had received an offer of EUR 110 million
from Nuplex Industries Limited, New Zealand, for the other (major) part of the
Coating Resins business, free of cash and debt. Completion of this transaction
is foreseen in the last quarter of 2004.
This transaction would complete the major divestment program in Chemicals,
which was initiated in 2003 to strengthen the Company's balance sheet and to
create more financial room to maneuver. The program will, at closing, have
generated some EUR 1 billion.
11
Report for the 3rd quarter of 2004
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Millions of euros January-September
------------------------------------------------------ ----------------- -------------------
2004 2003
----------------- -------------------
Total earnings before minority interest 794 535
Depreciation and amortization 458 486
------- --------
Cash flow 1,252 1,021
Pre-tax gain on divestments (458)
Changes in working capital (36) (118)
Impairments 39 5
Changes in provisions, deferred tax assets and accrued
prepaid pension costs (24) (18)
Retained income of nonconsolidated companies (11) (22)
Other changes (5) -
------- --------
Net cash provided by operations 757 868
Capital expenditures (379) (380)
Acquisitions (57) (89)
Proceeds from divestments 870 159
Repayments nonconsolidated companies 84 88
Other changes (12) 5
------- --------
Net cash generated by/(used for) investing activities 506 (217)
Dividends paid (273) (271)
------ ------
Funds balance 990 380
Net cash (used for)/generated by financing activities (164) 204
Effect of exchange rate changes on cash and cash
equivalents 6 (14)
------ ------
Change in cash and cash equivalents 832 570
------ ------
12
Report for the 3rd quarter of 2004
Funds balance of EUR 1.0 billion - mainly proceeds from divestments
The funds balance for January-September 2004 was EUR 1.0 billion (2003: EUR 0.4
billion).
Cash flow from operations decreased from EUR 0.9 billion to EUR 0.8 billion in
2004, mainly due to higher payments for restructurings. The seasonal increase
of working capital was lower than last year.
Capital expenditures of EUR 379 million (90% of depreciation) were virtually
unchanged from last year.
Proceeds from divestments primarily concern the sale of Catalysts and
Phosphorus Chemicals.
13
Report for the 3rd quarter of 2004
CONDENSED CONDOLIDATED BALANCE SHEET
Millions of euros September 30, 2004 December 31, 2003
----------------------------------------------- -------------------- -------------------
Intangible assets* 598 590
Property, plant and equipment 3,663 3,967
Deferred tax assets 423 429
Deferred tax asset for minimum pension liability 364 361
Other financial noncurrent assets 985 1,076
Inventories 2,100 2,133
Receivables 3,071 2,671
Cash and cash equivalents 1,559 727
-------------------- -------------------
Total 12,763 11,954
-------------------- -------------------
Capital and reserves 3,877 3,326
Minimum pension liability (834) (824)
-------------------- -------------------
Akzo Nobel N.V. shareholders' equity 3,043 2,502
Minority interest 144 140
-------------------- -------------------
Equity 3,187 2,642
Provisions 2,520 2,581
Provision for minimum pension liability 1,356 1,342
Long-term borrowings 2,737 2,717
Short-term borrowings 282 441
Current liabilities 2,681 2,231
-------------------- -------------------
Total 12,763 11,954
-------------------- -------------------
Gearing 0.46 0.92
Shareholders' equity per share, in EUR 10.65 8.76
Number of shares outstanding, in millions 285.8 285.7
* Intangible assets include capitalized prior service costs related to the
minimum pension liability of EUR 166 million at September 30, 2004, and of
EUR 165 million at December 31, 2003.
14
Report for the 3rd quarter of 2004
CHANGES IN EQUITY
Minimum Share-
Capital and pension holders' Minority
Millions of euros reserves liability equity interest Equity
----------------------------- ------------ ----------- ----------- ------------ ----------
Balance at December 31, 2003 3,326 (824) 2,502 140 2,642
Income 766 766 28 794
Dividend (257) (257) (16) (273)
Changes in exchange rates 42 (10) 32 2 34
Changes in minority interest
in subsidiaries (10) (10)
----------- ----------- ------------ ------------ ----------
Balance at September 30, 2004 3,877 (834) 3,043 144 3,187
----------- ----------- ------------ ------------ ----------
Strong financial position
Invested capital at September 30, 2004, amounted to EUR 7.7 billion, EUR 0.4
billion lower than at December 31, 2003, mainly due to the divestments of
Catalysts and Phosphorus Chemicals.
Equity was up EUR 0.5 billion, because January-September income more than
offset dividends paid. Net interest-bearing borrowings were down EUR 1.0
billion. Gearing improved strongly to 0.46 (December 31, 2003: 0.92; September
30, 2003: 1.09).
Arnhem, October 19, 2004 The Board of Management
15
Report for the 3rd quarter of 2004
The final results for 2004 will be published on February 4, 2005.
Note
The data in this report are unaudited.
(R) or (TM) indicates trademarks in one or more countries.
The 2003 comparative figures for Coatings and Chemicals have been adjusted for
a minor regrouping of activities between these two segments.
Unless indicated otherwise, discussions in this report, such as on earnings
developments, exclude nonrecurring items.
Nonrecurring items relate to income and expenses resulting from normal business
operations, which, because of their size or nature, are disclosed separately to
give a better understanding of the underlying result for the period. These
include items such as restructurings and impairment charges, significant gains
and losses on the disposal of businesses, and costs related to law suits and
antitrust cases, not meeting the requirements for extraordinary items.
Operating income before nonrecurring items is one of the key figures management
uses to assess the performance of the Company, as these figures better reflect
the underlying trends in the results of the activities.
Autonomous sales growth is defined as the change in sales attributable to
changed volumes and selling prices. It excludes currency, acquisition, and
divestment effects.
Safe Harbor Statement*
This report contains statements which address such key issues as Akzo Nobel's
growth strategy, future financial results, market positions, product
development, pharmaceutical products in the pipeline, and product approvals.
Such statements, including but not limited to the "Outlook", should be
carefully considered, and it should be understood that many factors could cause
forecasted and actual results to differ from these statements. These factors
include, but are not limited to price fluctuations, currency fluctuations,
developments in raw material and personnel costs, pensions, physical and
environmental risks, legal issues, and legislative, fiscal, and other
regulatory measures. Stated competitive positions are based on management
estimates supported by information provided by specialized external agencies.
For a more complete discussion of the risk factors affecting our business
please refer to our Annual Report on Form 20-F filed with the United States
Securities and Exchange Commission, a copy of which can be found on the
Company's website www.akzonobel.com.
* Pursuant to the U.S. Private Securities Litigation Reform Act 1995
Additional Information Akzo Nobel N.V.
The explanatory sheets used by the CFO during Velperweg 76
the press conference can be viewed on Akzo P.O. Box 9300
Nobel's Internet site at: 6800 SB Arnhem
www.akzonobel.com/news/presentations.asp The Netherlands
Tel. + 31 26 366 4433
Fax + 31 26 366 3250
E-mail ACC@akzonobel.com
Internetwww.akzonobel.com
16
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf of
the undersigned, thereto duly authorized.
Akzo Nobel N.V.
Name : F.H. Hensel Name : J.J.M. Derckx
Title : Senior Vice President Title : Director Corporate Control
Finance
Dated : December 22, 2004