Akzo Nobel - 2000: Building coherence, creating value

Akzo Nobel - 2000: Building coherence, creating value Arnhem, the Netherlands, January 13, 2000. - The year 2000 will be a year of building more coherence and creating value in a fundamentally refocused Akzo Nobel, according to Cees J.A. van Lede, Chairman of the Board of Management, at the Company's annual New Year's Conference today. "1999 was a historic year for Akzo Nobel - we divested our fibers activities and substantially expanded our position in pharmaceuticals, both in line with our stated strategic priorities," said Mr. Van Lede. Following a thirty-year involvement in the fibers industry, Akzo Nobel completed the sale of Acordis, its Fibers Group, to CVC Capital partners by year-end 1999 as planned. Akzo Nobel holds 21 percent of the shares in the new Acordis. In the same year, Akzo Nobel acquired Hoechst Roussel Vet and doubled its sales in animal healthcare, where it now occupies the number four position worldwide. The ultimate effect of these two transactions is a transfer of resources of some EUR 1 billion from Fibers to Pharma, fully in line with the company's strategy of prioritizing growth in its pharmaceutical businesses. "In consequence of our achievements in 1999, Akzo Nobel starts the new millennium in a totally new form. We have a significant position in healthcare - a leading player particularly in female healthcare, a world player in animal healthcare - the world's largest Coatings company with a sound platform for further growth, and a number of leading positions in specialty chemicals delivering robust margins. All of these activities contribute substantially to operating income: Pharma by some 40 percent and Chemicals and Coatings each in the order of 25 to 30 percent," said Mr. Van Lede. The challenge to which the refocused company is now committed is that of increasing coherence internally - and in doing so, creating further value. A number of specific measures will be taken in this respect, among them the establishment of one single Decorative Coatings Business Unit in Europe in order to extract full value from the leading position Akzo Nobel has acquired on this continent. At the same time, Coatings and Chemicals operations will be aligned further in view of their similarities. This is particularly applicable to the areas of Industrial Coatings and Specialty and Functional Chemicals. As the logical consequence of this approach, the Business Unit Resins, which produces raw materials for several coatings products, will be transferred from Coatings to Chemicals. "The company will also be better geared for a more stable and higher growth path. The divestment of Fibers and of most cyclical chemical activities - the latest was the sale of our 50 percent participation in Rovin - results in more stability. The consistent priority for high growth sectors such as Pharma, and high growth regions such as Asia, where we now have the former Courtaulds network, should contribute to this ambition," said Mr. Van Lede. "We want to further align shareholders' and employees' interests. To this end, a pilot project on Economic Value Added (EVA) - a means to measure value creation - is under way in three Business Units with the intention to roll out the system Company-wide in 2001. EVA is believed to be a better tool to assess real capital productivity, taking into account the full cost of capital," Mr. Van Lede said. "A second significant change is the switch from writing off the goodwill paid in acquisitions against equity to the practice of capitalizing and depreciating it over a period of maximum 20 years. This change brings our accounting practices more in line with our international competitors," he added. "Finally, to bring the interests of employees and shareholders into coherence in the fullest possible sense, analyses are now being made on how to introduce ownership of the company on a broader scale - through employee share ownership schemes -- among the people who are Akzo Nobel," he concluded. - - - Akzo Nobel, based in the Netherlands, serves customers throughout the world with healthcare products, coatings and chemicals. The company currently employs approximately 68,000 people in 75 countries. Consolidated sales for 1999, excluding Acordis, will total about EUR 12 billion / USD 13 billion / GBP 8 billion. Acordis, the former fibers business of Akzo Nobel, has been divested to CVC Capital Partners as of the end of 1999. The financial results for the year 1999 will be announced on February 25, 2000. Internet: http://www.akzonobel.com Note for the editor / not for publication For more information please contact: Akzo Nobel nv John C.S. Jennings, Head Corporate Media Relations, tel. +31 26 366 4343 Akzo Nobel: Appointments Arnhem, the Netherlands, January 13, 2000. - Akzo Nobel announces the following Supervisory Board, Board of Management, Corporate and Business Unit appointments: Supervisory Board At the Annual Meeting of Shareholders of Akzo Nobel nv on April 26, 2000, it is the intention to recommend Virginia Bottomley for appointment to the Supervisory Board, effective May 1, 2000. The Rt. Hon. Virginia Bottomley JP MP, former Secretary of State for Health and Member of the British Cabinet, is currently Vice Chairman of the British Council and a Governor of the London School of Economics. Aarnout A. Loudon and Hilmar Kopper, in accordance with the rotation schedule established by the Supervisory Board, will step down at the same meeting, and be recommended for reelection. Dieter Wendelstadt, who has served on the Supervisory Board for seven years, will step down having reached retirement age. Mr. Wendelstadt (1929) is a former Chairman of the Supervisory Board of Axa Colonia Konzern. In his capacity as Member of the Supervisory Board of Akzo Nobel nv, in addition to serving on the Nomination and Remuneration Committee, he has rendered invaluable advice during a period spanning the merger with Nobel Industries, the acquisition of Courtaulds and more recently the divestment of Acordis. Board of Management Ove Mattsson, Member of the Board of Management responsible for Coatings, will retire with effect from July 1, 2000. Mr. Mattsson, a Chemist and Agronomist, joined the Board in 1994, following the merging of the Akzo and Nobel organizations. Mr. Mattsson was President and CEO of Nobel Industries AB at the time of the merger. Since then, in line with the Company's stated strategy, Akzo Nobel's Coatings portfolio has continually grown from a significant market position in the European region to a global leadership position, following the acquisition of Courtaulds in 1998. Rudy M.J. van der Meer, currently Member of the Board of Management responsible for Chemicals, will succeed Ove Mattsson as of the same date. Dag Strömqvist, currently Business Unit Manager Pulp & Paper Chemicals (which trades as Eka Chemicals), will at the Annual Meeting of Shareholders be recommended for appointment to the Board of Management to succeed Rudy M.J. van der Meer as Board Member responsible for Chemicals. Mr. Strömqvist (1942), a Chemical Engineer, graduated from Chalmer's University of Technology, Sweden in 1964. He began his career in 1965 at Astra, a Swedish pharmaceutical company. In 1967 he joined KemaNord and was appointed Division Manager KemaNord Bleaching Chemicals (which later became part of Eka Nobel AB) in 1979. He then served for a number of years in North America, and in 1988 took over as President of Eka Nobel AB, now known as Eka Chemicals AB. Corporate and Business Unit Appointments Pharma Lout Lourens, currently Director Control and Administration Headquarters, is appointed Director Control and Administration Pharma effective September 1, 2000, succeeding Marc Rijn, who will retire as of the same date. Coatings Neville Petersen, Senior Group Director Coatings, will retire with effect from May 1, 2000. Rinus Rooseboom, currently Business Unit Manager Decorative Coatings South, is appointed Senior Group Director Coatings with effect from April 1, 2000. Leif Abildgaard, currently Sub Business Unit Manager Decorative Coatings for the United Kingdom and Eire, with effect from April 1, 2000, is appointed Business Unit Manager Decorative Coatings Europe, the newly combined European activities of the former Decorative Coatings North and South Business Units, with headquarters in Sassenheim, the Netherlands. Mr. Abildgaard (1943) started his career at Sadolin (Denmark) in 1969. Sadolin was acquired by Nobel in 1987 and Nobel merged with Akzo in early 1994. Mr. Abildgaard holds a BA in Economics and has studied at INSEAD. Jan Andersson is appointed Business Unit Manager for the areas not covered by the new Business Unit Decorative Coatings Europe and in particular is entrusted with the task of realizing further expansion in the Americas and Asia. Jan Andersson's Business Unit will be headquartered in Stockholm, Sweden. Derek Welch, currently Business Development Manager Coatings, is appointed Director Strategy and Planning Coatings as of April 1, 2000. Chemicals Conrad S. Kent, currently Group Director Technology Chemicals, is appointed Senior Group Director Chemicals. Jan Svärd, currently Business Unit Manager Surface Chemistry, will succeed Dag Strömqvist as Business Unit Manager Pulp and Paper Chemicals with effect from April 1, 2000. Mr. Svärd (1959) a science graduate from Chalmer's University of Technology, Sweden, has held several positions within Akzo Nobel and in December 1995 was appointed Business Unit Manager Surface Chemistry. Rob Frohn, at present Sub Business Unit Manager Oleochemicals, will succeed Jan Svärd as Business Unit Manager Surface Chemistry as of the same date. Mr. Frohn (1960), graduated in 1984 at the University of Groningen (NL), receiving a masters degree in Business Economics and has followed various post-graduate courses including one at INSEAD in Fontainebleau. He joined Akzo Nobel in 1984. Co-determination The above plans may be subject to co-determination procedures in the countries concerned. - - - Akzo Nobel, based in the Netherlands, serves customers throughout the world with healthcare products, coatings, and chemicals. The company currently employs approximately 68,000 people in 75 countries. Consolidated sales excluding Acordis, for 1999 will total about EUR 12 billion (USD 13 billion, GBP 8 billion). Acordis, the former fibers business of Akzo Nobel, has been divested to CVC Capital Partners as of the end of 1999. The financial results for the year 1999 will be announced on February 25, 2000. Internet: http://www.akzonobel.com Note for the editor / not for publication For more information please contact: Akzo Nobel nv J.C.S Jennings, Head Corporate Media Relations, tel. +31 26 366 4343 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/01/13/20000113BIT00170/bit0001.DOC http://www.bit.se/bitonline/2000/01/13/20000113BIT00170/bit0002.pdf