By André Veneman, Sustainability Director, Akzo Nobel Systems division Today businesses face a market transition to a more inclusive and resource efficient economy. It’s a game change with winners and losers. Responsible business leaders act on their challenges and opportunities to improve the living standards of the world’s population while preserving the environment. Leading companies deeply embed sustainability into their company strategy – as a way to strenghthen their value and values. Sustainability has emerged as a key driver for industrial innovation: it requires new ways of cooperation across all segments of the supply chain

1. Innovation and Sustainability
in the midst of the economic crisis
Sustainability across supply chains:
there is no alternative
André Veneman
Sustainability Gala 2010
Noordwijk June 2, 2010

2. Sustainability Gala 2010 2
Global recession

3. Sustainability Gala 2010 3
Nikolai Dmyitriyevich Kondratieff (1892 - 1938)
• Cycles of 50 – 60 years
• Divided in 4 periods
- Spring: stage of expansion and growth
- Summer: stagflation
- Fall: deflationary growth
- Winter: severe depression

4. Sustainability Gala 2010 4
Source: Oxford Economics; World Bank; IMF; EIU
Global
GDP
Growth
Global GDP Forecast
Note: GDP figures are based on % real change y/y
Back to business as usual?
Year
2.7%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014

5. Sustainability Gala 2010 5
Growth in emerging markets

6. Sustainability Gala 2010 6 6
From…

7. Sustainability Gala 2010 7 7
To…

8. Sustainability Gala 2010 8How sustainability is shaping our business 8
From…

9. Sustainability Gala 2010 9How sustainability is shaping our business 9
To…

10. Sustainability Gala 2010 10How sustainability is shaping our business 10
2008: 900 million cars worldwide

11. Sustainability Gala 2010 11How sustainability is shaping our business 11
2050: 2 billion cars worldwide

12. Sustainability Gala 2010 12
Experiencing major shift in geo-economic
power
Source: Economist Intelligence Unit
China
China
India
India
United States
United States
Germany
Germany
0 5.000 10.000 15.000 20.000 25.000 30.000
2030
2007
Year
Real GDP (PPP US$ bln at 2005 prices)

13. Sustainability Gala 2010 13
Result is a rapidly emerging middle class
of the BRICs
Number of people with income over $3,000 in the BRICs (in billions)
Source: Goldman Sachs Report, UN Global Compact
2010 2020 2030 2040 2050
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0

14. Sustainability Gala 2010 14
Sustainability – there is no alternative

15. Sustainability Gala 2010 15
Three ecological footprint scenarios
Source: Living Planet Report, WWF 2006
Number of planet Earths

16. Sustainability Gala 2010 16
Increasing Global Energy Consumption

17. Sustainability Gala 2010 17
Sustainability is the essential element in
the period of new growth
Dematerialization
Recycling
Global emission rights
Renewable energy
Demographics/
globalization
Scarcity of natural resources
Climate change
Quality of life
Requires paradigm
shifts in technology and
our institutions

18. Sustainability Gala 2010 18
From macro world to company strategy

19. Sustainability Gala 2010 19
AkzoNobel
2009
• Revenue €13.0 billion
• 54,738 employees
• EBITDA: €1.7 billion*
• 37% of our revenue in emerging markets
* Before incidentals. All data after reclassification of National Starch
Revenue by business area EBITDA* by business area
Performance Coatings
Decorative Paints
Specialty Chemicals
32%
35%
33% 32%
27%
41%
The largest paints and coatings company
and a major producer of specialty chemicals

20. Sustainability Gala 2010 20
In 2015, 50 percent of our business could
be in emerging markets
1995 2015
88%
12%
Eur-NA Other
50%50%
Eur-NA Emerging

21. Sustainability Gala 2010 21
AkzoNobel strategic ambitions
Today – what we are
The world’s largest
Coatings and Specialty
Chemicals company
Tomorrow – what we want to be
The world’s leading Coatings and Specialty
Chemicals company
• Most value creating (4-year targets)
Outgrow our markets (weighted avg)
Best 5 EBITDA margin
Best 3 OWC percentage to sales
Year-on-year EVA growth
• Most sustainable (4-year targets)
Best 3 DJ sustainability index
Step change in people development
Full compliance with the Code of Conduct
Best 5 in recordable injury rate

22. 22
Sustainability is part of everything we do
We have set ambitious sustainability targets:
• Remain in the top three in the Dow Jones Sustainability Indexes
• Reduce our total recordable injury rate
• Deliver a step change in people development
We focus on long-term performance. Our ambition is:
• That Eco-premium* products will make up 30 percent of sales (2015)
• To reduce our cradle-to-gate carbon footprint with 25 percent (2020)
• To achieve sustainable fresh water use on all our sites (2015)
We have linked remuneration to these targets and ambitions:
• 50% of our long-term incentive program is linked to performance in the
leading sustainability index (DJSI)
* Higher eco-efficiency than main competitive product

23. Sustainability Gala 2010 232323
The sustainability framework
Invent (tomorrow)
Manage (today)
Improve (yesterday)
Manu-
facturing
SourcingR&D
Sales
and
marketing
Market
research
Investment
decisions
Level of development
Environmental Economic Social
Carbon and
water policies
Eco-premium
Code of
Conduct
Stretched
safety targets
Aspect of sustainability (linked to DJSI)
Examples
Leadership
training
Product
Stewardship

24. Sustainability Gala 2010 24
Sustainability & procurement
Vendor policy
Supportive
supplier visits
Carbon
reduction
Open
innovation

25. Sustainability Gala 2010 2525
Estimate of total CO2 emissions per
business area
0
2
4
6
8
10
12
Supply Operations Use/ end of life
mlntonsCO2_eq
Decorative Paints Performance Coatings Specialty Chemicals

26. Sustainability Gala 2010 26
UV LED spray gun for Autoclear® UV
•Automotive spray gun introduced in May which paints and cures at the
same time. No warm up time, up to 25 percent less energy used during
total repair.
Dissolvine® GL
•Leading the next generation of products in cosmetics and personal
care. It’s free from genetically modified raw materials, not irritating to
skin or eyes and readily biodegradable.
Rediset™ asphalt additive
•Significantly reduces the mixing and paving temperatures, creating
fuel savings and reducing operational costs. Results in lower asphalt
fumes, providing better working conditions for the paving crew.
Freashaire - Colors that take your breath away. Paint that won’tTM.
•The Freshaire Choice™ Paint contains no volatile organic compounds —
commonly known as VOCs — harmful chemicals that contribute to poor air
quality
Intersleek 900
•Our very latest innovation in foul release coatings. Its
exceptionally smooth, slippery, low friction surface prevents
organisms attaching, saving you time and money at sea.
Developing innovative, eco-premium
products – target 2015 being 30%

27. Sustainability Gala 2010 27How sustainability is shaping our business 27
People Development
Unleash the talent,
creativity and
motivation to drive
sustainable
success.

28. Sustainability Gala 2010 28
Sustainability and shareholder value go
hand in hand
Source: SAM (Sustainability Asset Management)

29. Sustainability Gala 2010 29
A new promise to all our stakeholders