Safe Harbor Statement

1
Safe Harbor Statement
This report contains statements which address
such key issues as Akzo Nobels 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 for 2003, 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, 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.
Pursuant to the U.S. Private Securities
Litigation Reform Act 1995
2
2002 strong start weak finish
EUR mln
Net income
2
9
3
Y-t-d 4
21
Excluding extraordinary and nonrecurring items.
3
Coatings Chemicals strong performancePharma
down
Q-4, EUR bln Sales ? EUR mln EBIT ?
3.4 314 (13 )
Pharma 1.0 (5 ) 180 (20 )
Coatings 1.3 1 81 23
Chemicals 1.1 3 79 7
Fourth quarter
4
Q-4 net income 21 down
EUR mln 2002 ? / 2001 Sales 3,383
EBIT 314 (13 ) Noncons. companies 20 Net
income 176 (21 ) ROS, 9.3 10.6 Interest
coverage 6.8 6.0 EPS, EUR 0.62 0.78
Excluding extraordinary and nonrecurring items.
Fourth quarter
5
2002 sales flat EBIT down 5
EUR bln Sales ? EUR mln EBIT ?
14.0 (1 ) 1,492 (5 )
Pharma 4.0 (1 ) 768 (8 )
Coatings 5.5 (1 ) 465 9
Chemicals 4.6 344 1
6
Euro strengthening throughout 2002
5
5
10
13
USD
Y-t-d 6
Changes of average rates.
2002
7
Sales internal growth in all groups
Total Autonomous Currencies Acquis./ growth
growth divest Pharma (1) 6 (4) (3) Coat
ings (1) 3 (3) (1) Chemicals
2 (3) 1 Akzo Nobel (1) 3 (3) (1)
2002
8
Pensions impacted by stock markets

• PL charges
• 2002 up EUR 80 mln
• 2003 up EUR 130 mln
• Cash
• EUR 100 mln extra in Q-4 2002
• Balance sheet
• EUR 1.1 bln net provision against equity

2002
9
EBIT increasingly affected by pensions and
currencies
EUR mln
Fullyear 80 80 160
2002
10
EBIT performance improvement exceeded by
pensions and currencies
EUR mln Change Performance Pensions
improvement currencies Pharma (63) 7 (70)
Coatings 39 74 (35) Chemicals 4
39 (35) Other (59) (39) (20) Akzo Nobel (79)
81 (160)
2002
11
2002 earnings slightly down dividend unchanged
EUR mln 2002 ? EBIT 1,492 (5 ) Noncons.
comps. 38 (45 ) Net income 892 (4 ) 2002 2001 ROS
, 10.7 11.1 Interest cover 7.3 6.1 EPS,
EUR 3.12 3.25 Dividend, EUR 1.20 1.20
Excluding extraordinary and nonrecurring items
2002
12
Pharma a challenging year

• EUR mln 2002 ?
• Sales 4,008 (1 )
• EBIT 768 (8 )
• ROS, 19.2 20.5
• RD sales 15.0 13.2
• ROI, 30.5 33.7
• EBITDA 948 (5 )
• Capex 297 (6 )

2002
13
Pharma a challenging year (2)

• Autonomous growth 6 - negative currency impact
  4
• Cost-cutting programs affecting 800 jobs
• Organon
• Remeron patent case U.S. lost
• new products delay / slow take-off
• Intervet under pressure
• Diosynth strong performance

2002
14
Coatings strong performance

• EUR mln 2002 ?
• Sales 5,521 (1 )
• EBIT 465 9
• ROS, 8.4 7.6
• ROI, 20.0 18.1
• EBITDA 623 6
• Capex 131 (28 )

2002
15
Coatings strong performance (2)

• Autonomous growth 3 negative currency impact
  3
• Restructurings extended and accelerated
• Continuous strengthening of portfolio
• Significant working capital reduction
• Decorative Coatings benefiting from cost
  savings
• Industrial activities improving despite weak
  business climate
• Marine Protective excellent performance

2002
16
Chemicals stable in difficult
business conditions

• EUR mln 2002 ?
• Sales 4,598
• EBIT 344 1
• ROS, 7.5 7.4
• ROI, 11.5 11.0
• EBITDA 672 (1 )
• Capex 248 (20 )

2002
17
Chemicals stable in difficult
business conditions (2)

• Autonomous growth 2 negative currency impact
  3
• Restructurings extended
• Further portfolio strengthening
• Catalysts great year
• Salt and Base Chemicals solid performance
• Pulp Paper, Surface, Polymer Chemicals fierce
  competition
• Agreement on termination of regular chlorine
  transport in Netherlands

2002
18
Moderate net nonrecurring charge

• In EUR mln
• Restructuring and impairment (236 )
• Divestment gains 91
• Others 7
• Gross (138 )
• Taxes 64
• Total (74 )

• Restructurings at all groups impacting 1,500
  jobs
• 500 jobs at Pharma not included
• Divestment Rosemont U.K.

2002
19
Number of employees restructurings expanded
Programs New Total Realized 2001 2002/2003
program so far Pharma 800 800 100
Coatings 2,000 500 2,500 1,400
Chemicals 1,500 700 2,200 700 Akzo
Nobel 3,500 2,000 5,500 2,200
2002
20
Balance sheet debt down EUR 0.8 bln

• EUR bln
  2002 ? 2001
• Noncurrent assets 7.3 0.3
• Working capital 2.6 (0.5 )
• 9.9 (0.2 )
• Equity 2.2 (0.8 )
• Provisions 4.4 1.4
• Net interest-bearing debt 3.3 (0.8 )
• 9.9 (0.2 )

2002
21
Outlook 2003

• Net income significantly below 2002
• Pensions costs EUR 130 mln higher
• Strong negative currency impact
• Generic competition Remeron in U.S.

Excluding extraordinary and nonrecurring items.
2003
22
Determined to deliver

• Focus on Customers, Costs and Cash
• Debt reduction program continued
• Capex at 2002 level
• Group priorities
• Pharma protect margins prepare for growth
• Coatings growth and margins up
• Chemicals focus on cost and cash

2003