Strategy | Sustainability |
Leadership and governance
|
Financial statements
2
AkzoNobel Report 2024
Contents
About AkzoNobel
4
2024 results at a glance
5
CEO statement
6
How we created value
8
Strategy and operations
12
Sustainability statements
20
AkzoNobel Cares case study
80
Leadership and governance
82
Financial statements
127
Other information
201
Disclaimer: This PDF of AkzoNobel’s annual report is derived from the official
version of the company’s Report 2024. The European Single Electronic Filing
format (the ESEF reporting package) is the official version. The ESEF reporting
package is available on our website. In case of discrepancies between this
PDF version and the ESEF reporting package, the latter prevails. The auditor’s
report and limited assurance report of the independent auditor included in this
PDF version relate only to the ESEF reporting package.
True Joy is our 2025 Color of the Year. It’s an
optimistic, yellow shade which was selected after
extensive research into design, cultural, economic
and social trends.
On the cover: Around 1,500 liters of our Sikkens
paint was used to restore the iconic Erasmus
Bridge in Rotterdam, the Netherlands, to its
original shade of blue.
Speeding up innovation in Felling p.47
The sky’s the limit for airline partnership
p.92
Ashington site wins top
awards
p.16
Powder Coatings in the
fast lane
p.18
Supporting Sinopec’s
global expansion
p.41
Huge solar energy plant
goes live in Poland
p.40
Como project completed p.13
Strategy | Sustainability |
Leadership and governance
|
Financial statements
3
2024 HIGHLIGHTS
AkzoNobel Report 2024
Strategy | Sustainability |
Leadership and governance
|
Financial statements
4
ABOUT AKZONOBEL
AkzoNobel Report 2024
Let’s paint the future together
As experts in making paints and coatings, chances are you’re only ever a few
meters away from one of our products.
Active in over 150 countries, we’ve set our sights on becoming the global industry
leader. It’s what you’d expect from one of the world's most sustainable paints
companies, which has been inventing the future since 1792.
Our world class portfolio of brands – including Dulux, International, Sikkens and
Interpon – is trusted by customers around the globe. Helping us to color people’s
lives and protect what matters most.
From deep beneath the ocean, to homes, cities, transport and even outer space,
our products and technologies are exploring new frontiers. Because every surface
is an opportunity.
Let’s paint the future together.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
5
2024 RESULTS AT A GLANCE
REVENUE BY DESTINATION
AkzoNobel Report 2024
REVENUE
ADJUSTED EBITDA*
€10,711 mln
€1,478 mln
Revenue development in € millions
Adjusted EBITDA development in € millions
10,846 / 10,668 / 10,711 1,157 / 1,429 / 1,478
2022
2023
2024
2022
2023
2024
ADJUSTED EBITDA MARGIN*
CARBON FOOTPRINT SCOPE 1 AND 2
13.8%
41%
Adjusted EBITDA margin development in %
Percentage reduction versus 2018 baseline
10.7 / 13.4 / 13.8
28 / 38 / 41
2022
2023
2024
2022
2023
2024
South Asia Pacific
12%
Financial summary
€917 mln operating income
13.3% return on investment (ROI)*
€3.17 earnings per share
34,600 employees (FTE)
* Alternative Performance Measures (APMs). AkzoNobel uses APM
adjustments to the IFRS measures to provide supplementary information on
the reporting of the underlying developments of the business. APMs include,
but are not limited to, adjusted operating income, (adjusted) EBITDA, adjusted
earnings per share, ROS and ROI. A reconciliation of the Alternative
Performance Measures to the most directly comparable IFRS measures can
be found in Note 3 of the Consolidated financial statements.
North America
13%
Latin America
12%
EMEA
47%
North Asia
16%
2024 was a year of solid organic growth for
AkzoNobel as we demonstrated our ability to
grow in mixed market conditions. We faced a
complex operating environment, with
continued inflationary pressure, adverse
currency impacts and unstable markets.
Although these headwinds spurred
competitive intensity and tested our
resilience, they also strengthened our
determination to control our own destiny by
stepping up self-help measures that
ultimately boosted our performance.
During the year, we maintained our focus on innovation, developing
and bringing to market leading products and services that offer
significant benefits to our customers. They included low-bake
architectural powder coatings that can withstand harsh weather
conditions, combining the ability to perform in the toughest
environments while helping customers to lower their carbon
emissions. We also introduced an inside spray coating for beverage
cans which is free of all intentionally added bisphenols – anticipating
evolving regulations – and new coatings specifically designed for use
on recycled plastics.
Sustainability continues to drive our innovation, demonstrated by the
opening of the world’s first purpose-built wind turbine blade testing
facility at our Felling site in the UK, and the installation of one of the
automotive industry’s first hydrogen-powered spray booths at a new
training center in Belgium. These pioneering efforts to paint the
future highlight the fundamental role of sustainability-driven
innovation in our company strategy. AkzoNobel is widely recognized
as one of the most environmentally aware companies in the field of
paints and coatings. And we’re showing it to the world by aligning
our ESG disclosures with the Corporate Sustainability Reporting
Directive. All the relevant information is available in the Sustainability
statements.
Looking at 2024 in more detail, it was a year of mixed market
conditions, which became softer as the year progressed. Despite
this lack of tailwind, we achieved volume growth of 1%, somewhat
below our expectations for the full-year, but ahead of most of our
competitors.
Within Coatings, our Marine and Protective business experienced
strong demand and clear share gains in marine new-build, with a
particularly dynamic Chinese market. Powder Coatings performed
very well in flat market conditions, growing volumes and
outperforming the market, particularly in the US and China.
Automotive and Specialty Coatings started out strong, but slowed
down in the second half, due to softer demand in vehicle refinish and
lower production rates at the big aircraft manufacturers, despite
overflowing backlogs. Our Industrial Coatings business was flat in
soft market conditions.
Our Decorative Paints businesses delivered strong volume growth in
Latin America and South East Asia, while China experienced a steep
decline, due to its real estate market crisis and lower domestic
consumption. Deco EMEA was flat, with mixed local conditions
delaying the market’s return to pre-Covid levels.
Although the operating environment was challenging, we were able
to fully restore our ability to deliver, with service levels – measured as
on-time, in-full (OTIF) – now at 90%. This was achieved despite
driving a host of industrial transformation measures across our
manufacturing assets. We’re currently optimizing our network, with
three Deco EMEA sites having closed in 2024, along with three other
sites in Europe and Asia, while we continue to make strategic
investments to enhance and modernize our anchor sites around the
world. Additional rationalizations will be announced in 2025 and
2026, fully in line with our industrial transformation program, which
will outperform its initial €250 million objective by €50 million, and
most of which is still to – positively – impact our P&L.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
6
CEO STATEMENT
AkzoNobel Report 2024
Throughout the year, we focused on removing complexity to
become leaner and more agile, eliminating internal roadblocks to
growth. This allowed us to simplify our organization and gain new-
found efficiencies, leading to a program designed to reduce staffing
in our functions by 2,200 people across the company. This SG&A
efficiency program – announced at the end of Q3 2024 – is
progressing quickly, with most consultations already completed.
Implementation will largely be effective by mid-2025. We expect
these measures to deliver more than €150 million of gross annual
cost savings.
While these are painful measures to implement, with regrettable
people impact, their need is well understood across the company,
as shown by our Voices survey. We achieved a global participation
rate of 89%, with close to 32,000 employees providing feedback.
Our employee engagement scored 4 out of 5, consistent with 2023
and well above the external benchmark. Our employee net promoter
score (eNPS) – which measures the likelihood of recommending
AkzoNobel as a workplace – was above the benchmark by seven
points. The input we received will help us create an even better work
environment.
Finally, we continue to dynamically manage our portfolio as we work
towards higher capital efficiency. We’re conducting a strategic
review of our business in South Asia, which will explore various
strategic options, ranging from partnerships or joint ventures through
to mergers or divestments. It represents a major step towards
focusing our portfolio on positions of differentiating scale in key
markets, enabling better capital allocation.
Looking ahead, we don’t expect a significant market rebound in
2025. Our self-help approach is clearly working, and those measures
will increasingly contribute to the bottom line while we test our
pricing power in flattish end markets. We’re making AkzoNobel
stronger, more dynamic and more competitive. This will serve us well
when our end markets start growing again, putting us on track to
deliver on our mid-term ambitions. Our direction is clear and our
strengths are real.
On behalf of the entire Executive Committee, I want to thank all our
shareholders, customers, partners and other stakeholders for your
support throughout 2024. And I also want to thank our people
across the world for their ongoing effort and dedication. They
continued to demonstrate their wholehearted passion and
commitment, and I’m proud to work with them as we take
AkzoNobel forward to a new level of success and achievement.
Greg Poux-Guillaume
CEO and Chair of the Board of Management
Strategy | Sustainability |
Leadership and governance
|
Financial statements
7
CEO STATEMENT
AkzoNobel Report 2024
Our CEO, Greg Poux-Guillaume, had the honor of writing his name into the
illustrious history of Rembrandt’s The Night Watch. A small group of people who
contribute to the ongoing restoration of the painting were invited to the
Rijksmuseum in Amsterdam to add their signatures to the artwork’s new backing
board. As a main partner of Operation Night Watch, we’re playing an important
role in the painting’s extensive conservation and are now woven into its future.
We deliver profitable growth by developing
innovative, high-performance and more
sustainable products that create value for
our customers, shareholders, employees and
society in general.
Revenue from third parties
in € millions
Decorative Paints
Performance Coatings
4,344
4,300
4,301
6,499
6,368
6,410
2022
2023
2024
Innovation investment
Research and development expenses in € millions
258
270
296
2022
2023
2024
Summary of financial outcomes
in € millions/%
2023
2024
∆%
Revenue
10,668
10,711
—%
EBITDA*
1,386
1,288
(7%)
Operating income
1,029
917
(11%)
Identified items*
(45)
(196)
Adjusted operating income*
1,074
1,113
4%
Adjusted EBITDA*
1,429
1,478
3%
Adjusted EBITDA margin (%)*
13.4
13.8
Average invested capital*
8,233
8,350
1%
ROI (%)*
13.0
13.3
Capital expenditures*
286
306
Net debt*
3,785
3,901
Net debt/EBITDA*
2.7
3.0
Net debt/Adjusted EBITDA*
2.6
2.6
Net cash from operating activities
1,126
673
Free cash flow*
840
367
Net income attributable to
shareholders
442
542
Weighted average number of shares
(in millions)
170.6
170.7
Earnings per share from total
operations (in €)
2.59
3.17
Adjusted earnings per share from
continuing operations (in €)*
3.07
3.88
* Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
Revenue development full-year 2024
1%
1%
2%
—%
-1%
-1%
—%
Volume Price/mix Organic
sales
Acq./div.
FX
Other
Revenue
Revenue by destination in %
A North Asia
16%
B South Asia Pacific
12%
C EMEA
47%
D North America
13%
E Latin America
12%
Based on full-year 2024.
Capital expenditures* 2024: Total €306 million
A Decorative Paints
87
B Performance Coatings
197
C Corporate and other
22
Capital expenditures are guided to be €350 million for 2025.
* Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for
more details, including a reconciliation to the most directly comparable IFRS measure.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
8
HOW WE CREATED VALUE
AkzoNobel Report 2024
A
B
C
A
B
C
D
E
Financial overview
Organic sales were up 2% due to 1% volume growth and 1% higher
price/mix. Volume growth was driven by Coatings, with continued
growth in Marine and Protective Coatings and Powder Coatings,
particularly in China. Volumes in Deco were flat, with growth in
LATAM and SESA offset by continued weakness in China. Adverse
currencies impacted revenue by 1%.
Operating income at €917 million (2023: €1,029 million) was
impacted by identified items of negative €196 million (2023: negative
€45 million). Excluding identified items, gross margin expansion
more than offset operating cost inflation.
Identified items mainly included restructuring related costs, while
identified items in 2023 also included gains from property
divestments.
Adjusted EBITDA increased to €1,478 million (2023: €1,429 million).
Adjusted EBITDA margin increased to 13.8% (2023: 13.4%).
For business results, refer to Strategy and operations.
Sustainability progress
At AkzoNobel, we’re focused on ensuring that the pioneering paints
and coatings we supply continue to protect what matters – both
now and in the future. We innovate with and for customers and play
a progressive and collaborative role in energizing entire industries to
advance towards a more sustainable future.
During 2024, we made further progress towards our 2030 key
sustainability ambitions. This progress is highlighted in charts
throughout this section and further detailed in the Sustainability
statements.
Financing income and expenses
Financing income and expenses amounted to negative €102 million
(2023: negative €272 million). The €170 million decrease in expenses
is mainly due to hyperinflation accounting, the interest impact related
to the release of provisions for uncertain tax positions and lower
negative exchange rate results.
Income tax
The effective tax rate was 29.4% (2023: 37.8%). The tax rate in 2024
was impacted by the release of provisions for uncertain tax
positions, derecognition of deferred tax positions and hyperinflation
accounting. The net impact of these was an increase in tax rate of
4%.
Shareholders’ equity
Shareholders’ equity amounted to €4.6 billion at December 31,
2024, compared with €4.3 billion at year-end 2023. The main
movements in 2024 related to profit for the period of €542 million,
currency effects of €132 million positive (net of taxes), offset by
movements from dividend of €338 million and actuarial losses of
€104 million (net of taxes).
Dividend in €
1.98
1.98
1.98
2022
2023
2024*
*Proposed
Earnings per share from total operations in €
2.01
2.59
3.17
2022
2023
2024
Adjusted earnings per share from continuing operations* in €
2.45
3.07
3.88
2022
2023
2024
* Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
9
HOW WE CREATED VALUE
AkzoNobel Report 2024
ENVIRONMENTAL AND SOCIAL
Outstanding share capital
The outstanding share capital was 170.8 million common shares at
the end of December 2024. The weighted average number of shares
in 2024 was 170.7 million shares.
Cash flow and net debt
Net cash from operating activities in 2024 was an inflow of €673
million (2023: inflow of €1,126 million). The lower inflow was mainly
due to higher working capital resulting in an outflow of €206 million
(2023: inflow of €254 million).
Net cash from investing activities in 2024 was an outflow of €132
million (2023: outflow of €144 million), which is in line with prior year.
Net cash from financing activities in 2024 was an outflow of €684
million (2023: outflow of €827 million). The decrease in outflow is
mainly related to lower outflow from changes from borrowings.
At December 31, 2024, net debt increased to €3,901 million (2023:
€3,785 million) due to lower net cash generated from operating
activities for the period (€673 million), mainly due to lower payables
resulting from inventory reduction. Net debt/EBITDA at December
31, 2024, was 3.0 (December 31, 2023: 2.7), while net debt/
adjusted EBITDA was 2.6 (December 31, 2023: 2.6).
Dividend
The dividend policy remains unchanged and is to pay a stable to
rising dividend. The final 2023 dividend of €1.54 per common share
(2022: €1.54) was adopted at the AGM on April 25, 2024, which
resulted in a total 2023 dividend of €1.98 per share (2022: €1.98).
In 2024, an interim dividend of €0.44 per share was paid (2023:
€0.44). A final 2024 dividend of €1.54 (2023: €1.54) per common
share is proposed.
Invested capital
Invested capital1 at December 31, 2024, totaled €8.3 billion, up €0.5
billion from year-end 2023. This increase was mainly caused by
higher trade working capital (mainly due to lower payables),
investments in property, plant and equipment and lower current tax
liabilities.
Operating working capital
Operating working capital (Trade)1 was €1.6 billion at December 31,
2024 (December 31, 2023: €1.5 billion). Operating working capital
(Trade) as a percentage of revenue was 15.7% in Q4 2024,
compared with 15.1% in Q4 2023, driven by lower trade payables
and higher inventories, partly offset by lower trade receivables.
Operating working capital (Trade) in € millions1
2023
2024
Trade receivables
2,187
2,144
Inventories
1,649
1,721
Trade payables
(2,312)
(2,220)
Operating working capital (Trade)
1,524
1,645
Strategy | Sustainability |
Leadership and governance
|
Financial statements
10
HOW WE CREATED VALUE
AkzoNobel Report 2024
1 Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more details.
41%
50 %
2024
2030 target
Carbon emission reduction
Own operations (baseline 2018, absolute)
12%
50 %
2024
2030 target
Carbon emission reduction value chain
Scope 3 emissions, selected Scope 3 upstream and downstream
(baseline 2018, absolute)
65%
100 %
2024
2030 target
Renewable electricity
Of total electricity used in own operations
26%
30 %
2024
2025 target
Female executives
Pensions
The net balance sheet position (according to IAS19) of the pension
plans at the end of Q4 was a surplus of €0.6 billion (year-end 2023:
surplus of €0.7 billion). The development during 2024 was mainly the
net effect of higher discount rates and lower plan asset returns in key
countries.
Employees
At December 31, 2024, the number of employees (in FTEs) was
34,600 (December 31, 2023: 35,200).
2025 Outlook*
Based on current market conditions and constant currencies,
AkzoNobel expects to deliver 2025 adjusted EBITDA above €1.55
billion.
For the mid-term, AkzoNobel aims to expand profitability to deliver
an adjusted EBITDA margin of above 16% and a return on
investment between 16% and 19%, underpinned by organic growth
and industrial excellence.
The company targets leverage below 2.5 times net debt/adjusted
EBITDA (below 2.9 times net debt/EBITDA) by the end of 2025 and
around 2 times in the mid-term, while remaining committed to
retaining a strong investment grade credit rating.
* Outlook is based on organic volumes and constant currencies, and assumes no significant market
disruptions.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
11
HOW WE CREATED VALUE
AkzoNobel Report 2024
The streets of Mustafabad in Pakistan became a kaleidoscope of color after
we transformed the town as part of a major “Let’s Colour” project. A team of
67 mural artists, painters and volunteers used more than 8,000 liters of our
Dulux paint (in 51 different colors) to help give the town a vibrant new
identity. More than 1,000 houses were coated with Dulux Weathershield –
which can reduce surface temperatures by up to 5°C.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
12
AkzoNobel Report 2024
A fantastic way to make the ordinary extraordinary.
This vibrant artwork brought a sports court bursting
to life in Colombia. It was the first of 20 courts to be
renovated across the country as part of a project
launched by our Pintuco brand. Created by urban
artist José López Rincón, the delightfully colorful
design transformed the Belén Zafra neighborhood in
Medellín. A great example of helping to promote
healthy living by painting a brighter future.
STRATEGY AND OPERATIONS
An overview of our strategy, approach to innovation
and the performance of our Paints and Coatings
businesses during the year.
Strategy
13
Decorative Paints
15
Performance Coatings
17
Innovation
19
For more details on key 2024 figures, see the
previous How we created value pages and the
segment information in Note 3 of the Consolidated
financial statements.
At AkzoNobel, we operate a global portfolio of Paints and Coatings
businesses. Our strategic approach is therefore focused on the
specific requirements of different markets and customers, which
results in distinct and effective strategies to outperform in the areas
where we’re active.
We’ve established the following overarching strategic pillars across
our portfolio of businesses:
• Sustainability-driven innovation
• Growth in focus segments and markets
• Industrial excellence and simplifying our execution model
• Active portfolio management
These pillars provide the foundation for our sustainable long-term
value creation moving forward and are described in more detail in
this chapter.
A major expansion of our largest powder coatings plant was completed during
the year. Four new manufacturing lines have been added to our Como facility in
Italy, which will help secure supply to customers across Europe, the Middle East
and Africa. The extra capacity has been installed in a renovated building – a
sustainable reuse of an existing part of the site.
Sustainability-driven innovation
We’re committed to capturing the opportunities that sustainability
presents as a catalyst for innovation. We recognize that sustainability
is driving changes in our industry and believe this aligns with our
strengths in innovation and our leadership position in sustainability.
We’re developing more sustainable products that differentiate us
from competitors, allowing us to gain market share and generate
higher margins. We’re also focused on accelerating our development
efforts and reducing time to market.
During the year, we launched several solutions that demonstrate our
focus on driving industry change, especially in our three key end-
user segments – the built environment, consumer goods and
transport:
• Superdurable low-bake Interpon powder coatings that help
protect building surfaces in more challenging environments,
supporting our customers in reducing their carbon emissions
• High-performance internal can coating technology which is free of
all bisphenols, styrene, PFAS and formaldehyde
• Innovative Resicoat powder coatings technology that provides
improved electrical protection for EV battery systems
Growth in focus segments and markets
Our growth strategy focuses on continued investment in growth
markets and in segments where we have differentiated positions,
such as powder coatings, marine and protective coatings and
emerging decorative paints end markets.
As well as complementing our leading positions in the premium
segment, we also understand the importance of solid positions in
our mid-market segments. This enables us to drive growth, increase
scale, achieve higher absolute profit and protect the profitability of
our premium offerings. Our approach is tailored to the uniqueness of
each segment and focuses on existing AkzoNobel brands, while
improving asset utilization of our integrated supply chain.
Our enhanced operational performance is helping us achieve our
mid-term growth ambitions. During the year, we invested in
capturing these key growth opportunities:
• We significantly increased our capacity for powder coatings
through a capacity boost in North America and an expansion of
our Como plant in Italy. This helped us deliver on significant
specification wins throughout the year
• We also completed a major investment project at our Bac Ninh
production plant in Vietnam, which will strengthen our position in
Asia and sharpen our focus on more sustainable manufacturing.
With total investments exceeding €18 million, five new powder
coating lines were added to the multi-site, along with a line for
water-based products for the consumer electronics market
• We upgraded an automated production line at our Suzhou site in
China to accelerate growth and double capacity for our Marine
and Protective Coatings business by 2025
Industrial excellence and simplifying our
execution model
We know there’s significant value to be gained through improving
our operations. We’re addressing the bottlenecks in business-critical
supply chains, under-investment in key sites and low-capacity
utilization, as laid out last year.
During 2024, our industrial excellence program gained traction as we
continued to progress towards unleashing the full benefits by 2027.
The program aims to deliver cost reduction, enhanced efficiency,
improved service levels and heightened overall competitiveness.
Our focus on reducing complexity, enhancing productivity and
optimizing our network was demonstrated by the closure of six sites.
We're making progress on improving operational efficiency and the
debottlenecking of critical assets. This was necessary to address
Strategy | Sustainability |
Leadership and governance
|
Financial statements
13
STRATEGY
AkzoNobel Report 2024
supply chain constraints that impacted our ability to meet customer
demand. As a result, OTIF (on-time, in-full) for the company overall
returned to 90%, a significant annual improvement.
A newly updated and automated production line was opened at our Suzhou site
in China. The improvements were part of a €14 million investment to accelerate
growth and double the plant’s marine and protective coatings capacity before the
end of 2025. The continuous investments in Suzhou reaffirm our commitment to
delivering the best solutions, quality and service to our customers.
Incremental to the industrial excellence program, where we’re
optimizing our manufacturing sites, we’re also looking to improve our
functional organization. To enhance the efficiency of our functions,
we’re simplifying operations, accelerating decision-making and
streamlining the company’s management structure. The plan
involves a reduction of 2,200 positions globally. This is a testament
to our organization’s continued agility amidst an incrementally
tougher market backdrop.
We aim to create a seamless experience for both our customers and
employees. To achieve this, we’re aligning the commercial and
industrial sides of our business, simplifying our operating model and
decision-making processes, and fostering a culture of end-to-end
accountability and efficient implementation.
Active portfolio management
We’re actively looking for ways to improve our portfolio in pursuit of
synergies and scale, to redeploy capital towards growing our core
Coatings businesses. In October, we announced a strategic review
of our portfolio with an initial focus on South Asia, where AkzoNobel
has a premium, highly profitable position in Decorative Paints, with a
strong track record of growth. This portfolio review represents a key
step towards focusing our portfolio on positions of differentiating
scale in key coatings markets.
Mid-term ambitions:
Adjusted
EBITDA margin*
Return on
investment (ROI)*
>16%
16-19%
Adjusted EBITDA*
growth
Industrial excellence
benefit
CAGR: >6%
€300 mln by 2027
Volume growth
Leverage
CAGR:
+ Low single digit %
~2x, strong
investment grade
Outlook is based on organic volumes and constant currencies, assumes no
significant market disruptions. CAGR on 2023 baseline.
* Alternative Performance Measure: refer to Note 3 of the Consolidated
financial statements for more details, including a reconciliation to the most
directly comparable IFRS measure.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
14
STRATEGY
AkzoNobel Report 2024
A EMEA
57%
B Latin America
19%
C Asia
24%
2024 OVERVIEW
2024 presented a varied landscape for
Decorative Paints, with performance
differing across regions. EMEA
demonstrated resilience, maintaining
performance in flat market conditions. Latin
America delivered strong growth, led by
Brazil. South East Asia achieved the highest
volume growth across regions, driven by
robust demand in India and Indonesia. In
contrast, China faced significant market
weakness, impacting overall performance in
Asia.
Organic sales for Decorative Paints were up 1%, due to an increase
in price/mix. Volumes were flat, with higher volumes in SESA and
LATAM offset by continued market weakness in China. The
acquisition of Huarun in China (completed in August 2023) added
1%, while adverse currencies negatively impacted revenue by 1%,
resulting in revenue being flat.
Operating income came in at €405 million (2023: €500 million),
mainly impacted by identified items of negative €80 million (2023:
nil). Identified items in 2024 mainly contained restructuring related
costs, while identified items in 2023 also included gains from
property divestments. Excluding identified items, margin expansion
partly mitigated operating cost inflation.
Adjusted EBITDA at €635 million (2023: €645 million). Adjusted
EBITDA margin at 14.8% (2023: 15.0%).
Revenue in € millions
2023
2024
∆% ∆% Organic*
Decorative Paints
EMEA
2,413
2,462
2%
2%
Decorative Paints
Latin America
780
825
6%
11%
Decorative Paints
Asia
1,107
1,014
(8%)
(9%)
Total
4,300
4,301
—%
1%
* Alternative performance measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
Key financial figures
in € millions/%
2023
2024
∆%
Operating income
500
405
(19%)
Identified items1
—
(80)
Depreciation and amortization2
(145)
(150)
Adjusted EBITDA1
645
635
(2%)
Adjusted EBITDA margin (%)1
15.0
14.8
Average invested capital1
3,755
3,921
4%
ROI (%)1
13.3
12.4
1 Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
2 Excluding identified items.
Decorative Paints revenue by destination in %
A
B
C
Key brands
Strategy | Sustainability |
Leadership and governance
|
Financial statements
15
DECORATIVE PAINTS
AkzoNobel Report 2024
Decorative Paints is comprised of businesses that focus on a full range of interior and exterior decoration
and protection products for both the professional and do-it-yourself channels. These include paints,
enamels and varnishes, as well as products for surface preparation. We also offer services such as mixing
machines, color concepts and advice, along with training courses for applicators. AkzoNobel operates its
own sales distribution network in addition to selling through agents and distributors, across three
geographical regions.
EMEA
Volumes in 2024 remained flat across Decorative Paints EMEA, with
no material market recovery observed. While we anticipated a
progressive rebound in demand, the year was marked by unusually
wet weather across various parts of Europe, which affected our
exterior painting season – particularly in the trade segment. These
headwinds were offset by resilient demand in our DIY segment.
Latin America
Low single-digit volume growth was achieved in 2024, with
momentum gradually building after volumes remained largely flat in
the first half-year. Higher volumes were driven by strong growth in
Brazil, although this was partially offset by impact from adverse
currencies and challenging macro-economic conditions in
neighboring countries, including Colombia and Argentina.
Asia
China proved challenging for the Decorative Paints business in 2024,
with market demand remaining depressed due to a weak real estate
sector and low consumer confidence. Our 2023 acquisition of the
Huarun business expanded our access to distribution channels all
the way to smaller cities. The integration is progressing ahead of
plan and has generated cost synergies, despite these challenging
markets. In contrast to China, South East and South Asia saw high
single-digit volume growth amid an increasingly competitive
environment, which intensified pricing pressure. Demand in India and
Indonesia was strong, while Vietnam stabilized after a difficult first
half of the year.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
16
DECORATIVE PAINTS
AkzoNobel Report 2024
Our Ashington site in the UK received two industry awards from the British
Coatings Federation. As well as being presented with the Coatings Care Overall
Best Performer honor, the site also scooped the Excellence in Training award. The
prize for Overall Best Performer was in recognition of outstanding performance,
with Ashington having never recorded a lost time injury in 12 years of operation.
A Powder Coatings
21%
B Marine and
Protective Coatings
25%
C Automotive and
Specialty Coatings
22%
D Industrial Coatings
32%
2024 OVERVIEW
Performance Coatings delivered a solid
performance in a year marked by dynamic
market conditions, showcasing resilience
and adaptability across diverse end markets.
Despite varying demand trends in sectors
such as automotive and industrial, the
business achieved volume growth.
Robust new-build order books drove further recovery in Marine and
Protective Coatings, while Powder Coatings maintained growth
momentum, despite softer automotive markets in the latter half of
the year. Industrial Coatings started the year strong, particularly in
Coil and Packaging, although industrial demand softened in the latter
half. In Automotive and Specialty Coatings, Aerospace was resilient
and overcame OEM challenges. Geographically, China delivered
strong performance across most Coatings businesses – in contrast
to what we saw in Decorative Paints.
Organic sales were up 2%, driven by higher volumes in most
businesses. Price/mix was flat. Unfavorable exchange rates were a
headwind, reducing revenue by 1%. Revenue was up 1% compared
with the previous year, at €6,410 million.
Operating income of €679 million (2023: €698 million) was impacted
by identified items of negative €56 million, mainly due to restructuring
related costs (2023: positive €13 million, including gains from
property divestments). Gross margin expansion excluding identified
items more than offset operating cost inflation. Adjusted EBITDA
increased to €913 million (2023: €854 million). Adjusted EBITDA
margin increased to 14.2% (2023: 13.4%).
Revenue in € millions
2023
2024
∆% ∆% Organic*
Powder Coatings
1,377
1,365
(1%)
1%
Marine and
Protective
Coatings
1,482
1,575
6%
8%
Automotive and
Specialty Coatings
1,422
1,434
1%
2%
Industrial Coatings
2,087
2,036
(2%)
(1%)
Total
6,368
6,410
1%
2%
* Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
Key financial figures
in € millions/%
2023
2024
∆%
Operating income
698
679
(3%)
Identified items1
13
(56)
Depreciation and amortization2
(169)
(178)
Adjusted EBITDA1
854
913
7%
Adjusted EBITDA margin (%)1
13.4
14.2
Average invested capital1
3,725
3,773
1%
ROI (%)1
18.4
19.5
1 Alternative Performance Measure: refer to Note 3 of the Consolidated financial statements for more
details, including a reconciliation to the most directly comparable IFRS measure.
2 Excluding identified items.
Performance Coatings revenue by business unit in %
A
B
C
D
Key brands
Strategy | Sustainability |
Leadership and governance
|
Financial statements
17
PERFORMANCE COATINGS
AkzoNobel Report 2024
AkzoNobel is one of the world’s leading manufacturers and suppliers of performance coatings. Our
products are engineered to achieve functional properties such as corrosion control, fouling control, anti-
scratch and passive fire protection, while delivering step changes in sustainability. Our Performance
Coatings activities are organized into four main businesses: Automotive and Specialty; Industrial; Marine
and Protective; and Powder Coatings. Key end markets include general industrials (agricultural and
construction equipment, construction-related steel and metal fabrication, pipes, appliances and
transportation), energy, packaging, infrastructure and shipbuilding and maintenance.
Powder Coatings
The business delivered resilient performance throughout the year,
despite flat overall markets and a notable slowdown in the
automotive sector in the second half. We achieved mid single-digit
volume growth, driven by our market leadership and product
differentiation, particularly in North America and Asia. With strong
sustainability benefits, the shift from liquid to powder coatings
continued to accelerate across various end markets. Our leadership
in lower temperature cure technology – supported by the launch of a
new patented technology designed to meet rising customer demand
for more sustainable metal effect architectural finishes – further
positioned us well for future growth in this business.
Marine and Protective Coatings
Our Performance Coatings portfolio saw the strongest organic
growth within the Marine and Protective Coatings business, boasting
high single-digit volume growth. This impressive growth was
particularly evident in our marine segment, where we captured a
larger share in technical new-builds, driven by our customers’
increased focus on sustainability. Amid shifting macro-economic
conditions and evolving regulatory landscapes, particularly in the US,
our Protective Coatings business remained resilient, delivering strong
performance across diverse markets and regions, with notable
growth in South Asia and the Middle East. Our technology
leadership positions also demonstrated strength, especially Chartek
passive fire protection and Intersleek, our biocide-free marine foul
release coating, which continues to be highly regarded for its fuel
and emissions saving benefits. In addition, we launched innovative
solutions throughout the year, including Chartek One, Interline
704HS, and Awlcraft 3000, all designed to support customers with
reducing complexity, improving productivity and supporting
decarbonization.
Automotive and Specialty Coatings
The business saw a slight decline in volume for the year. Our
Aerospace Coatings activities performed well, driven by increased
demand in aircraft maintenance, although our OEM business faced
market challenges. In the second half of 2024, a marked slowdown
in EMEA weighed on our Automotive business, while volume
performance in Vehicle Refinishes softened throughout the second
half, particularly in North America and Europe. Our Consumer
Electronics business introduced new soft touch technologies such
as Velvet Excimer and Silky Smooth, as well as water-based
products that offer enhanced durability.
Industrial Coatings
Volumes for Industrial Coatings remained flat for the year. Although
Wood Adhesives achieved volume growth, demand remained muted
for Wood Finishes. Packaging and Coil Coatings demonstrated
resilience in the first half-year, but this weakened in the second half
due to softer industrial demand. Throughout 2024, we expanded
our range of next generation, bisphenol-free, PFAS-free and
styrene-free technologies to meet and exceed the metal
packaging industry’s demanding long-term regulatory and
sustainability needs.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
18
PERFORMANCE COATINGS
AkzoNobel Report 2024
Our coatings expertise was used to help construct the first large cruise
ship ever to be built in China. The 5,246-passenger Adora Magic City
features our International brand’s Intersmooth fouling control technology,
which was specified on the hull of the milestone vessel.
Motorcycle manufacturers can kick start improved cost and
energy savings following the introduction of Interpon A3000
– our first single layer powder coating for two-wheelers.
Launched with a specific focus on the Indian market,
it helps customers accelerate their efficiency gains
without compromising on performance or aesthetics.
Transforming industries with sustainability-
driven innovation
Nobody understands surfaces like we do. Our extensive expertise
enables us to make the things we see and use every day do more
than expected.
We also play a progressive and collaborative role in energizing entire
industries to advance towards a more sustainable future. By using
the power of paints and coatings, we help customers reduce energy
consumption, increase overall efficiency, lower waste and improve
safety. This will play an important role in helping them to achieve
their own sustainability ambitions.
Our non-stop innovation will help drive us towards our science-
based target of reducing carbon emissions across our entire value
chain by 50% by 2030 (baseline 2018). We’re focused on
decarbonizing our value chain, supporting a circular economy and
providing our customers with more sustainable solutions. In 2024,
we made significant progress in advancing these priorities,
developing innovative solutions that support our three major end-
user segments – the built environment, consumer goods and
transport.
Built environment
This segment accounts for around 39% of global energy-related
carbon emissions, and we believe that green buildings will play a vital
role in driving a more sustainable future. To support this vision, we
continue to develop innovative technologies and solutions that help
reduce the environmental footprint of the built environment:
• Architectural customers can now benefit from a new superdurable
low-bake powder coating. Interpon D2525 Low-E has been
specifically designed to withstand conditions in extreme
environments
• Rising demand for more sustainable metal effect architectural
finishes prompted us to develop patented particle technology for
our new Interpon D Natural Metals range of powder coatings
• We continued to develop and launch solutions that have a positive
impact, such as the Angel edition of our Dulux Anndru series, an
innovative wall paint which helps to improve indoor air quality and
is composed of 48% bio-based ingredients
Consumer goods
We’re committed to a future without the use of bisphenols to protect
metal packaging. In response to changing legislation and the
European food packaging industry’s shift towards more sustainable
alternatives, we developed new products that meet these needs:
• We launched the Securshield 500 series of easy-open end
coatings, as well as Accelshield 300, an inside spray coating for
beverage cans which delivers advanced corrosion protection,
flexibility and sensory performance. These formulations are free of
all bisphenols
• We also developed a professional grade series of coatings
designed for products made from post-consumer recycled (PCR)
plastics. They offer long-lasting protection for items such as
computers, mobile phones and household appliances
Transport
The transport sector is undergoing a rapid transformation, driving the
need for innovative coatings that can enhance performance and
contribute to energy savings. Our 2024 product launches included:
• Our Resicoat brand developed advanced powder coatings
technology which offers improved electrical protection for EV
battery systems in just one spray
• Boat owners can now benefit from a revolutionary 3D Color
Visualizer, which was introduced by our Awlgrip yacht brand
Driving progress through strategic partnerships
We actively seek to share our knowledge and work with others to
overcome many of the challenges our customers and the wider
world are facing. We’ve started a unique collaboration with two
industry-leading raw material suppliers to explore how existing
formulation practices can be enhanced to significantly reduce the
carbon footprint of decorative wall paint. We’ve also taken on a
leading role in the Dutch SusInkCoat project, which is exploring how
to make inks and coatings more sustainable.
Investing in our innovation infrastructure
Our ongoing commitment to innovate with impact and bring more
sustainable products to the market has been further strengthened by
investments in our own infrastructure. At our largest global R&D
Center in Sassenheim, the Netherlands, we started building a new
technology center for powder coatings and opened a new polymer
lab to develop innovative resin technologies. In the UK, we
inaugurated the world’s first purpose-built wind turbine blade testing
facility, which is capable of running simulations at half the speed of
sound.
Innovation lies at the heart of our journey to a more sustainable
future. By continuously pushing the boundaries of what’s possible in
paints and coatings, we’re not just responding to the challenges of
today, but shaping the solutions of tomorrow. As we move forward,
our focus on collaboration and decarbonization will remain key to
driving progress within and beyond our industry.
Innovation in numbers
~2,900
R&D professionals worldwide
€1.29 bln
spent on R&D (last five years)
2,300+
patents/patent applications
70 laboratories worldwide
Strategy | Sustainability |
Leadership and governance
|
Financial statements
19
INNOVATION
AkzoNobel Report 2024
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
20
AkzoNobel Report 2024
SUSTAINABILITY STATEMENTS
This section details our sustainability performance. It
explains our ambitions, outlines our approach to
creating shared value and shows our performance on
key environmental and social indicators.
Introduction
21
General disclosures
22
Basis for preparation
22
Governance
25
Strategy
28
Impact, risk and opportunity management
28
Environmental
34
Climate change
34
Pollution
42
Water and marine resources
43
Circular economy
44
EU taxonomy
48
Social
54
Own workforce
54
Workers in our value chain
61
Governance
63
Business conduct
63
Summary table
66
ESRS 2: EU legislation disclosure
72
Methodology and definitions
74
For additional information, visit: akzonobel.com
Some of the most iconic windmills in the Netherlands are
being preserved with help from our Sikkens brand.
We’ve signed a six-year partnership to protect the 18th
century windmills at Kinderdijk – a UNESCO World
Heritage Site – and restore all 19 to their original colors.
Most of them are still inhabited, with one family having
been resident for ten generations.
Our Director of Sustainability, Wijnand Bruinsma, spoke to customers in Taiwan
about the importance of value chain collaboration when it comes to reducing our
Scope 3 carbon footprint.
Setting the standard in sustainability
At AkzoNobel, we’re focused on ensuring that the pioneering paints
and coatings we supply continue to protect what matters – both
now and in the future. We innovate with and for customers and play
a progressive and collaborative role in energizing entire industries to
advance towards a more sustainable future.
By using the power of paints and coatings – to harness energy,
reflect heat, protect surfaces for longer, improve indoor air quality
and reduce drag in ships, for example – we can help customers cut
their energy consumption, increase overall efficiency, lower waste
and improve safety. This will play an important role in driving them
towards their own sustainability ambitions. It’s about developing real
solutions for real-life problems and finding inventive ways to
collectively make a positive contribution to our ever-changing world.
We’re focused on realizing our target of halving carbon emissions
across our value chain by 2030 (baseline 2018). It’s one of several
ambitions we have, which also include achieving 100% circular use
of materials in our own operations by 2030 and having 30% female
executives by 2025. During 2024, we reached our target of
empowering more than 100,000 people in local communities with
new skills. We're proud to have achieved this six years ahead of our
original 2030 planning.
Our ambitions are built on three strategic pillars: producing durable
solutions in a more sustainable manner; helping our customers
become more sustainable; empowering communities and our
employees.
Collaborative innovation is essential to our vision. To make the kind
of progress we’re so determined to achieve, we need to engage in
collective action and merge our brainpower with start-ups,
academia, suppliers and customers.
By looking beyond the surface and radically rethinking paints and
coatings, we can color people’s lives, protect what matters and
Paint the Future together.
ESG ratings and benchmarks
We constantly monitor our progress to ensure we remain on the
right track and work hard to maintain our high standards with leading
rating agencies, such as Sustainalytics, EcoVadis and MSCI. This
independent acknowledgement recognizes our ambitions and
programs and our sustainability leadership in our industry. We
annually review the benchmarks we actively participate in, taking into
account stakeholder preference, such as investors, suppliers and
customers. We prioritize active participation in those benchmarks
that help drive continuous improvement and rely mostly on publicly
available information. We’re proud that we remained a frontrunner in
the paints and coatings industry throughout 2024, based on the
following ESG rating agencies and benchmarks.
ESG rating
agency
Key achievements
EcoVadis
Maintained our highest ever rating from EcoVadis – 82/100 and
earned a platinum medal – placing us in the top 1% of 130,000+
companies assessed across all industries around the world
MSCI
Maintained highest possible rating (AAA) for nine consecutive years
Sustainalytics
Maintained the ESG low-risk and top-rated in our industry
FTSE4Good
We featured in the FTSE4Good Index Series for the 19th year running.
The series measures performance across environmental, social and
governance (ESG) practices
Key partnerships
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
21
OUR APPROACH TO SUSTAINABILITY
AkzoNobel Report 2024
BASIS FOR PREPARATION
The Sustainability statements of AkzoNobel N.V. are prepared in
accordance with the requirements as included in the Corporate
Sustainability Reporting Directive (CSRD), article 29(a) of EU Directive
2013/34/EU, including compliance with the European Sustainability
Reporting Standards (ESRS) and the Taxonomy Regulation, Article 8
of EU Regulation 2020/852. On the publication date of our 2024
Sustainability statements, the CSRD had not yet been transposed in
national Dutch law. We therefore report in line with CSRD on a
voluntary basis. The Sustainability statements are prepared on a
consolidated basis. The scope of the consolidation is equal to the
scope of consolidation for the Financial statements.
The material impacts, risks and opportunities connected to our own
operations and our value chain have been assessed as part of our
double materiality assessment (see Impact, risk and opportunity
management). A description of the double materiality process is also
included in the same chapter.
Time horizons
The reporting period applicable to the Sustainability statements is
equal to the reporting period for the financial statements.
Metrics and targets in relation to material
sustainability matters
Reported metrics for material sustainability matters as included in the
Sustainability statements are derived from several different source
data files and reporting systems used by AkzoNobel. The reported
metrics have not been assured by an external body other than our
assurance provider.
An overview of reporting systems and definitions is included in the
Methodology and definitions chapter.
The setting of targets on material topics was approved by the
Executive Committee. Factors considered when setting targets
include historical conduct and the availability of a baseline. There
was no direct external stakeholder involvement in setting targets.
The targets we’ve set are voluntary, apart from the gender diversity
target of at least one-third female and one-third male representation
of the Supervisory Board, which follows the Dutch Gender Diversity
Bill.
Sources of estimation and outcome
uncertainty
The preparation of the Sustainability statements requires
management to make judgments, estimates and assumptions that
affect amounts reported. The estimates and assumptions are based
on experience and various other factors that are believed to be
reasonable under current circumstances. The estimates and
underlying assumptions are reviewed on an ongoing basis. The
following metrics have a higher degree of judgment and complexity,
for which changes in the assumptions and estimates could result in
different results than those recorded in the Sustainability statements:
• Scope 3 emissions (see Climate change)
• Percentage of PCR in plastic packaging (see Circularity)
• Durability of our products (see Circularity)
• Gender pay gap ratio (see Own workforce)
A detailed description of the calculation methodology of metrics can
be found in the Methodology and definitions chapter.
Value chain estimation
For the calculation of our Scope 3 emissions, we make use of
estimations by means of industry averages. The sources we use to
retrieve the industry averages are the CEPE (European Council of the
Paint, Printing Ink and Artists’ Colours Industry) and Ecoinvent
databases (see Climate change for more details). Replacing industry
average data to calculate the Scope 3 emissions attributed to our
suppliers with supplier specific carbon footprint data is a key driver
to improve our data quality. For 2024, 14% of our total Scope 3
carbon footprint (which equates to 31% of our total upstream
emissions) was calculated using supplier specific data.
Changes in preparation or presentation
versus prior periods
For CSRD disclosure in 2024, we built on the foundation we laid out
in the annual report for the previous year. As a result, the
Sustainability statements are aligned with the Environmental, Social
and Governance presentation requirements of the CSRD. Several
metrics have been materially changed, added or eliminated
compared with 2023.
In preparing towards CSRD, we decided to discontinue external
reporting of the Sustainable solutions metric. This is described in
detail on the next page under Sustainable solutions phase out.
The introduction of CSRD also brings new reportable metrics and
definitions and/or scope changes to previously reported metrics.
These are described in detail in the Methodology and definitions
chapter.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
22
GENERAL DISCLOSURES
AkzoNobel Report 2024
Sustainable solutions phase out
AkzoNobel has a solid track record in sustainability reporting. For
many years, we’ve analyzed our product portfolio, using our
Sustainable Product Portfolio Assessment (SPPA) framework. We’ve
already been reporting on our eco-premium solutions for more than
ten years.
Our SPPA framework is based on the World Business Council for
Sustainable Development’s (WBCSD) Portfolio Sustainability
Assessment. It provides a holistic view of the sustainability
characteristics of our product portfolio. This was a much-needed
framework at a time when no clear external guidelines existed for
measuring and analyzing our product portfolio.
Times have changed, and for the better. Sustainability reporting is
standardizing across the world, not least in the European Union with
the arrival of the CSRD and the EU Taxonomy. We also see
changing societal sentiment, shifting from holistic sustainability
statements to more specific sustainability characteristics, in
particular related to sustainable product claims. This provides us
with the opportunity to reshape how we analyze and report on our
product portfolio in a more granular way, following both legislation
and societal shifts in expectation.
The SPPA framework took into account the following criteria, the
majority of which have now been embedded into the different CSRD
reporting requirements: Reduced carbon and energy; Longer-lasting
performance; Health and well-being; Reduce, reuse and renew; Less
waste. The legislation also aims to provide more comparability
between companies, which was not achieved by SPPA due to a low
industry adoption rate.
This means we’re discontinuing the external reporting of our
Sustainable solutions metric. We’ll continue to use it as an internal
framework to steer our product roadmap development, innovation
and value selling to customers. However, from an external reporting
perspective, we’ll report in line with the CSRD requirements as
described above.
The table on the next page shows an overview of the different
material topics under CSRD, how they relate to our previous SPPA
reporting and where the disclosure can be found in this Report
2024.
Reporting adjustments related to prior
periods
No reporting adjustments for metrics such as restatements related
to prior periods have been identified.
Use of phase in and transitional provisions
For the reporting year 2024, the following phase in and transitional
provisions on Disclosure Requirements, as included in ESRS 1, are
applied to the Sustainability statements:
• The requirement as included in ESRS E1-9.67(c) in relation to a
breakdown of the carrying value of the undertaking’s real estate
assets by energy efficiency classes
• The requirements as included in ESRS E2-6 in relation to the share
of net revenue made with products and services that are, or
contain, substances of very high concern
• The requirement as included in ESRS E5-4 to disclose the
absolute weight of post-consumer recycled content in plastic
packaging
• The requirement as included in ESRS S1-7 and S1-14 on
disclosures related to non-employee workers
• The transitional provision to disclose comparative data as the
reporting year 2024 is the year of first-time application of CSRD.
Where comparative data is available (either due to historical
comparative reporting, or availability of reliable historical data) and
where comparative data assists users in understanding trends,
we’ve included comparative data
Incorporation by reference
Some disclosures are incorporated by reference to other parts of the
management report. Whenever this is the case, this is clearly
indicated. We incorporate the following metrics by reference:
• Description of business and markets served
• Integration of sustainability-related performance in incentive
schemes, as well as other compensation indicators
• Diversity in the Supervisory Board and Board of Management
• Role, expertise and independence of the Board of Management
and Supervisory Board
• Integration of sustainability risk management into the overall risk
management processes
• Note 19 of the Financial statements for the financial effects
(environmental costs) from material pollution-related risks
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
23
GENERAL DISCLOSURES
AkzoNobel Report 2024
Mapping table: Sustainable solutions categories and corresponding 2024 CSRD disclosure
SPPA category
Topic
Description
Disclosure 2024
Reduce, reuse and renew
Carbon Scope 3 – Circular
solutions
Reducing the end-of-life impact of the fossil-based materials in our products. This can mainly be achieved by increasing the amount of renewable materials in our
formulations, which can be done through applying bio-based, biomass balanced and recycled materials, among others.
Climate change mitigation –
Scope 3 carbon reduction levers
Low VOC
Carbon Scope 3 – Solvent
emissions
Release of solvents from our products is an important part of our Scope 3 emissions, which means reduction of solvent emissions represents a key reduction lever.
This can be done by switching to water-based products, flat reduction of solvents in our formulations and by thinking along with customers to capture and oxidize
the solvents we supply to them, which can be a key area for the application of renewable solvents.
Climate change mitigation –
Scope 3 carbon reduction levers
Less waste
Carbon Scope 3 – Process
efficiency
Providing customers with the most efficient solution in terms of carbon footprint. For example, we can provide solutions that require less and thinner layers, reduce
overspray and increase efficiency.
Climate change mitigation –
Scope 3 carbon reduction levers
Reduced carbon and energy
Carbon Scope 3 – Circular
solutions; Solvent emissions;
Process efficiency and Energy
transition
Carbon reduction opportunities resulting from energy transition in our value chain. There's growing availability of raw materials with a reduced carbon footprint.
Through our projects and programs on energy transition, we aim to offer our customers lower carbon footprint solutions.
Climate change mitigation –
Scope 3 carbon reduction levers
Health and well-being
Priority substances
Under our double materiality, we’ve assessed “priority substances” as a material topic. Our Priority Substance Program, which we use to identify and control the use
of hazardous substances, has been embedded into AkzoNobel’s processes for many years. This year, we provide additional transparency in line with CSRD.
Pollution – Priority substances
Longer-lasting performance
Durability
The protection of surfaces and products is a priority for our customers, and our paints and coatings play a pivotal role in meeting their needs. Our work includes
developing innovative solutions such as anti-corrosive technologies, enhanced durability, application to new substrates and digital inspection services.
Circularity – Durability and longevity
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
24
GENERAL DISCLOSURES
AkzoNobel Report 2024
GOVERNANCE
The role of the management and supervisory
bodies
The composition of the management and supervisory bodies
ensures sufficient access to expertise and skills with regard to
sustainability matters. The composition of the Board of Management
is included in the chapter Our Board of Management and Executive
Committee, and further information relating to their skills is included
under Sustainability on page 97. The composition of the Supervisory
Board is described in Our Supervisory Board. The expertise and
skills of its members are included in the Supervisory Board skills and
profiles. In addition, the oversight of impacts, risks and opportunities
by the Supervisory Board is included in the Sustainability paragraph
on page 88. The oversight of the impacts, risks and opportunities by
the Board of Management is included under Sustainability on page
97 in the Corporate governance statement. The independence of the
Supervisory Board is discussed on page 90.
With regards to the naming of our administrative, management and
supervisory bodies, as defined by CSRD:
• Administrative and management body: We refer to our Board of
Management, consisting of the CEO and CFO
• Supervisory body: We refer to our Supervisory Board
The company’s management and supervision are organized under
Dutch law in a so-called two-tier system, comprising a Board of
Management (solely composed of executive directors) and a
Supervisory Board (solely composed of non-executive directors). The
Board of Management, operating in the context of the Executive
Committee, is responsible for incorporating our sustainability agenda
into the company strategy and monitoring the performance through
the Operational Control Cycle, as described in the Corporate
governance statement. Within the Executive Committee, the Chief
Human Resources Officer is responsible for sustainability.
Sustainability is on the agenda of the Supervisory Board on a
quarterly basis. Separately, the Audit Committee is kept up-to-date
with sustainability reporting developments, including developments
in relation to risk management and internal control processes. More
information, including on the topics discussed, can be found in the
Report of the Supervisory Board and the Corporate governance
statement.
Integration of sustainability-related
performance in incentive schemes
Goals related to ESG aspects are included in both the long-term
incentive (LTI) and the short-term incentive (STI) performance targets
for the Board of Management. The LTI ESG targets can be found on
page 116 of the Remuneration report in the second table under
Performance metrics 2022-2024 LTI Share Plan. The STI ESG
targets can be found on page 115 of the Remuneration report in the
table STI on personal objectives. Goals related to ESG aspects in
remuneration from 2025 onwards can be found in the Remuneration
report from page 123 onwards.
Statement on due diligence
The outcomes of the different due diligence processes we have in
place with regard to sustainability matters, as described in more
detail below, inform us of our material impacts, risks and
opportunities. The identification, prevention, mitigation and reporting
of these actual and potential impacts is embedded in the way we
conduct business.
Included below is a description of the specific due diligence
processes in relation to human rights and environmental due
diligence. For the due diligence process performed to determine our
material impacts, risks and opportunities, see Impact, risk and
opportunity management.
Human rights due diligence
As part of our core values of safety, integrity and sustainability, we’re
committed to respecting internationally recognized human rights in
all our operations and throughout our value chain. We recognize our
responsibility to respect the human rights, including labor rights, of
all stakeholders in our own workforce and across our value chain.
We’re committed to actively and systematically assessing actual and
potential human rights impacts, taking action where needed to
ensure our impact on people’s lives is as positive as possible.
This commitment is in line with the United Nations Guiding Principles
on Business and Human Rights (UNGPs), the International Bill of
Human Rights (consisting of the Universal Declaration of Human
Rights, the International Covenant on Civil and Political Rights and
the International Covenant on Economic, Social and Cultural Rights)
and the International Labour Organization (ILO) Declaration on
Fundamental Principles and Rights at Work. We support the
Organization for Economic Co-operation and Development (OECD)
Guidelines for Multinational Enterprises.
Further support is provided by our human rights framework. It
includes policies, a governance structure, a focus on salient issues
and (topic-specific) due diligence processes to continuously identify
and mitigate (potential) human rights risks and remediate actual
impacts. The framework also includes a grievance mechanism to
enable, remedy and report on risks and actions. Read more in our
Human rights position paper.
Modern slavery statement
We’re aware that multiple risks come with a complex and long
supply chain, including the risk that modern slavery may exist in
these supply chains. Our Modern slavery statement sets out our
commitment to prevent modern slavery in our business and supply
chain. AkzoNobel has a zero tolerance approach to modern slavery
of any kind. We define modern slavery to include child labor, debt
bondage, forced labor, human trafficking, servitude, slavery and
slavery-like practices.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
25
GENERAL DISCLOSURES
AkzoNobel Report 2024
Global salient human rights issues assessment
From 2023, we’ve integrated our global salient human rights issues
assessment into our yearly CSRD double materiality assessment
process (covered in the Strategy section). While we respect all
human rights equally, we prioritized certain issues based on severity
and likelihood. This has resulted in the salient human rights issues
(see table below) for us to focus on and conduct further due
diligence. Health and safety and Working time (the latter is part of the
salient issue Working conditions) have also been identified as a
material topic under the CSRD’s double materiality assessment.
Salient human rights assessment
Upstream
supply chain
(suppliers)
Own
operations
Logistics
Downstream
(customers,
end-users)
Health and safety
l
l
l
l
Working conditions
l
l
l
Discrimination and
harassment
l
Negative impact on
local communities
l
Modern slavery
l
l
Topic-specific due diligence process
We operate continuous topic-specific due diligence processes that
help us identify (potential) human rights impacts, on which we both
engage and communicate. For example, our Health, Safety,
Environment and Security (HSE&S) audits assess the health and
safety conditions at our manufacturing sites and stand-alone RD&I
locations. Through that same process, we require every location to
have a procedure in place that covers processes for stakeholder
outreach and external complaints regarding surrounding
communities. If members of surrounding communities have a
complaint, they can file it directly with the site manager of the
relevant location (any complaints are registered and tracked in a
central tool), or raise their concerns through our SpeakUp! grievance
mechanism.
Another example is our Supplier Sustainability Framework, which
includes assessments, surveys and audits of our high-risk suppliers,
and is designed to identify and assess sustainability practices,
including human rights, in our supply chain. For more information on
our high-risk suppliers, please refer to the Suppliers sustainability risk
analysis (baseline) definition in the Methodology and definitions
chapter.
Human rights due diligence related to modern slavery
With regard to addressing potential modern slavery in our supply
chain, we’re focusing on both our direct and indirect suppliers. For
our direct suppliers, we identify our high-risk suppliers according to
our Supplier Sustainability Framework and assess and audit them.
More details about this program and our membership of Together
for Sustainability (TfS) can be found in the Governance chapter. For
our indirect suppliers – where we have to look further in the supply
chain due to certain risks – we’ve conducted in-depth research into
our raw materials portfolio and prioritized high-risk supply chains,
based on publicly available information from NGOs and government
agencies. In 2024, we continued our focus on calcium carbonate,
cobalt, copper, fluorspar, mica, talcum and tin supply chains.
Cobalt and tin
As part of our due diligence program regarding materials with
potential human rights impacts, we measure the percentage of
responses received to our surveys. For cobalt and tin, we also
measure the percentage of smelters that are either listed as active or
conformant smelters in the Responsible Minerals Assurance
Process.
In 2024, we sent out 310 surveys on the minerals, to which 92%
responded (2023: 80%).
Of the 112 suppliers who confirmed using tin and/or cobalt
necessary for the functionality of the product, 75% disclosed their
smelters. In total, 82% of these smelters were either listed as active
or conformant smelters in the Responsible Minerals Assurance
Process.
Mica minerals
For mica, we’ve identified 11 mica processors, of which seven
participated in the Global Workplace Standard (GWS) program from
the Responsible Mica Initiative. Out of the participating processors,
four are compliant with this standard. We’re working with our
suppliers to bring all their processors onto this program and improve
towards compliance with this standard.
In addition, through our Responsible Mica Initiative (RMI)
membership, we delivered positive impact for workers in the mica
value chain in India. The Community Empowerment program is
transforming communities in the mica region with initiatives that
provide long-term and self-sustainable remedies to the underlying
causes of child labor and poor working conditions. Launched in
2018, more than 180 villages and 16,000 households are now
benefiting from various programs, including better schools and
healthcare delivery, access to more diverse sources of livelihood and
receipt of government services.
Through our RMI membership, we – together with many
stakeholders and peer companies – commit to:
• Having 100% of processors compliant with the RMI Global
Workplace Standard
• Establishing a fair and responsible mica supply chain (including fair
living income) in the Indian states of Jharkhand and Bihar
• Eliminating unacceptable working conditions and eradicating child
labor in India’s mica supply chains by 2030
In the Responsible Mica Initiative, a grievance mechanism is in place
with the aim of a fair, timely and objective resolution of grievances
relating to the implementation of its mission and operations. The
form used to file a complaint is available in English, French, Hindi and
Malagasy.
Other minerals
For all other minerals included in the survey (calcium carbonate,
copper, fluorspar and talcum), some suppliers confirmed that these
materials are sourced from known risk countries associated with
forced or child labor. If there are no controls in place, we request
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
26
GENERAL DISCLOSURES
AkzoNobel Report 2024
that these controls be put in place (e.g. by means of social audits or
visits). In 2024, we received evidence of controls in place or
requested site audits as a result of our 2023 human rights due
diligence.
Training
For suppliers who deliver raw materials that contain minerals as
described previously in this chapter – and who fall under our human
rights due diligence program for materials which have high risks of
negative impacts on human rights occurring in their supply chain –
we provided webinars to explain AkzoNobel’s efforts in this area and
what we expect from our suppliers. During these webinars, we
shared the Responsible Mineral Initiative templates that our suppliers
must use to collect information from their own suppliers, as well as
using them to share information requested by us. During 2024, a
total of 65 individuals attended one of the two webinar sessions
across the globe.
Site-level assessments
This year, we went a level deeper than the global approach to
identify (potential) human rights issues, and have surveyed 13 of our
production sites on topics such as overtime, forced labor, freedom
of association and collective bargaining, unequal treatment, and
negative impact on surrounding communities. These sites were
prioritized based on: a risk rating provided by a third-party supplier
(EcoVadis IQ Plus, sustainability intelligence for global supply chains);
the number of employees and the magnitude of operations. Findings
and follow-up actions from these assessments are expected during
the course of 2025.
Further information on our salient human rights issues, our related
due diligence activities and mitigating and remediating measures (for
example, related to health and safety and working time) can be
found in the relevant sections in the Social disclosures in the
Sustainability statements.
Incidents, complaints and severe human rights impacts
During 2024, no severe human rights impacts or incidents were
reported in our own operations. In addition, the site-level
assessments we carried out on 13 sites didn’t identify any adverse
human rights impacts. For an overview of cases registered through
our SpeakUp! mechanism, please see the Integrity and compliance
management chapter.
Environmental due diligence
Environmental due diligence is embedded in our HSE&S processes.
We have environmental due diligence processes in place for both
acquisitions and divestments.
These processes are usually carried out in collaboration with a third-
party specialist in the form of:
• HSE&S due diligence for overarching health, safety, environment
and security-related topics
• Phase 1 and 2 environmental site assessments for soil and
groundwater-related topics. This process is generally carried out in
accordance with current (inter)national standards
Risk management and internal controls over
sustainability reporting
For a general description of our risk and internal control processes,
refer to the Risk management chapter. Controls and procedures
related to the management of impacts, risks and opportunities and
the decision-making process are being integrated into the overall risk
management process as described in the Risk management
chapter. Dedicated controls and procedures related to impacts, risks
and opportunities are integrated in the relevant internal function.
Internal controls related to sustainability reporting are dependent on
the area of reporting, as multiple internal functions contribute to our
sustainability reporting, depending on the topic. The majority of
reported metrics are prepared by our HSE&S and HR functions. In
2023, we started our implementation plan to prepare a roadmap for
the pathway towards reasonable assurance readiness for our
sustainability metrics.
This implementation plan included the development of risk and
control matrices for the functions contributing to sustainability
reporting. These risk and control matrices include an overview of the
main risks associated with the underlying processes and metrics and
connected mitigating controls. Risks are prioritized depending on the
function involved and potential impact of the risk.
Main risks identified when preparing our internal control environment
relate to the accuracy and completeness of information, resulting
from the fact that the scope of CSRD requires data gathering on
multiple metrics that have not been reported in previous years.
These risks have been mitigated by implementing controls at both
the functional and group level. Controls mainly consist of
reconciliation of reported data to source files, analytical procedures
and IT general controls.
During 2024, we further developed our internal control frameworks
for sustainability reporting within the functions, as well as on group
level, to ensure the accuracy and completeness of underlying data in
light of the assurance requirements under CSRD. As 2024 was the
first year of implementing CSRD, further development of the control
environment is expected during the coming years.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
27
GENERAL DISCLOSURES
AkzoNobel Report 2024
STRATEGY
Strategy, business model and value chain
Markets served
AkzoNobel produces paints and coatings, which is classified under
NACE Code C20.3. This is a subset of C20 – Manufacture of
chemicals and chemical products. The chemicals sector is
considered a high climate impact sector in accordance with the
Commission Delegated Regulation (EU) 2022/1288.
AkzoNobel’s operations are grouped into two main businesses:
Paints and Coatings. For a description of our business model and
strategy, see the Strategy chapter in the Strategy and operations
section. For key markets served, refer to the boxed introduction text
at the start of the Decorative Paints and Performance Coatings
chapters (pages 15 and 17). We also provide an overview of our
business model and interaction with material topics on page 31.
For a breakdown of headcount by geographical area, as well as
revenue by destination, please refer to the Regional statistics in the
Financial summary.
Legislation on the use of chemical substances is constantly updated.
We monitor the permitted use of chemicals as part of our day-to-day
operations, to ensure compliance with legislation and adherence to
local legislation in relation to banned products.
Interaction with strategy and goals related to
product groups
The key element of our strategy that relates to sustainability is
halving carbon emissions across our value chain by 2030 (baseline
2018). The target relates to how we formulate, produce, market and
sell our products and will have an impact on the way we interact with
our suppliers and customers over the coming years. As the majority
of our emissions take place outside of our own operations,
collaborating with our suppliers and customers is key to achieving
our targets. More details can be found in Climate change.
Interests and views of stakeholders
In line with the Dutch Corporate Governance Code 2022, we’ve
published a Stakeholder Engagement Policy, which is available on
our website. As detailed in the policy, our key stakeholders are
customers, employees, governments and policy makers, industry
associations and other partners, investors, suppliers and wider
society. We use various methods to engage in dialog with our
stakeholders, depending on the nature, purpose and frequency of
the interaction.
Engagement methods with stakeholders include (depending on the
level of engagement): one-on-one meetings; calls; conferences;
roundtables; consultations; roadshows; assessment/audits; surveys;
multi-stakeholder initiatives/coalitions. Key topics of this engagement
include: company performance and strategy (financial and ESG);
business climate; investments; innovation; sustainability; regulation;
employee insights.
The main purpose of our stakeholder engagement is that it allows us
to foster meaningful relationships with those who play a crucial role
in our endeavors. It also helps us address pertinent issues effectively
and have a positive impact on the communities where we operate.
The views of these stakeholders shape our strategic decision-
making process. As part of our double materiality assessment, we
also consulted with representatives from these key stakeholder
groups on sustainability-related impacts, risks and opportunities.
IMPACT, RISK AND OPPORTUNITY MANAGEMENT
Material impacts, risks and opportunities
and their interaction with strategy and
business model
We assessed the impacts, risks and opportunities on environmental,
social and governance matters and how these interact with our
strategy and business model. This assessment is based on internal
and external stakeholder engagement for both impact and financial
materiality. It results in an overview of our material impacts, risks and
opportunities throughout our value chain.
For details on the material risks, impacts and opportunities, we refer
to the separate disclosures as included in the Environmental, Social
and Governance chapters. Details on the process steps taken in the
double materiality assessment are included in the next paragraph. A
mapping from the material risks, impacts and opportunities to the
associated ESRS disclosure requirements is also included in this
section.
The resilience of our strategy and business model to address our
material impacts, risks and opportunities is analyzed for the topics
where this is relevant; primarily for climate change mitigation and
climate change adaptation. Our resilience is analyzed for the short,
medium, and long term by describing how our business model and
strategy interact with our carbon reduction levers (for climate change
mitigation) and natural hazard impact management (for climate
change adaptation). See the chapter on Climate change for more
details.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
28
GENERAL DISCLOSURES
AkzoNobel Report 2024
Description of the process to identify and
assess material impacts, risks and
opportunities
Our risk assessment process to identify and assess material
impacts, risks and opportunities for ESG-related topics is structured
in line with the requirements of ESRSs. The process of identifying
sustainability-related impacts through our double materiality
assessment has been performed separately from our enterprise risk
management process, as described in the Risk management
chapter of the Leadership and governance section. Therefore, no
prioritization of sustainability-related impacts has taken place relative
to other types of risks.
In 2023, we performed a baseline of our assessment in preparation
for CSRD. The outcomes serve as a basis for the updated double
materiality assessment which we performed in 2024. Below we
provide a description of the process steps taken to prepare the
assessment.
In 2023, we gathered and analyzed the background research on
potentially material topics to AkzoNobel. For this, we reviewed
different sources:
• ESG raters, including their view on material topics for our broader
sector and our specific sector, as well as our suppliers and their
respective industries
• Sustainability reports of peers, as well as value chain partners,
such as suppliers and customers
• The outcomes of our salient human rights issues due diligence
process
• Previous years’ impact materiality assessments
This input shaped our view on the landscape of potentially material
environmental, social and governance impacts, risks and
opportunities for AkzoNobel.
During the second phase performed in 2023, we organized several
workshops with internal subject matter experts, with the aim of rating
and calibrating the potential and actual impacts, risks and
opportunities (IROs) for all topics included in the ESRSs1.
In the workshops, we rated the IROs on severity (scale, scope and
irremediability) and likelihood on a 1 to 5 scale. The total scoring per
topic (determined as the sum of the scoring on scale, scope and
irremediability, multiplied by the likelihood) served as the basis for
determining the material topics. Topics with a score of 50 or above
were deemed to be material. This assessment was split per value
chain area (upstream, own operations and downstream) and per
specific activity, business relationship or other factors where
relevant. The assessment was performed for the impact on people,
as well as the impact on the environment. Financial materiality was
also analyzed per topic, based on the same materiality thresholds
used for our Financial statements.
During the materiality assessment, we requested participants to
address potential entity-specific topics not included in the topics
provided in the ESRSs.
In the third phase we performed in 2023, we created a shortlist of
material topics based on the outcome of the workshops. We
validated the assessment with internal stakeholders (management
teams of subject matter experts involved, consisting of, among
others, representatives of our environmental, substances, legal,
health and safety, and procurement teams) and the CSRD Steering
Committee. The Executive Committee validated our double
materiality assessment during 2023 and the Audit Committee and
Supervisory Board were informed about the process and outcome.
Subsequently, the shortlist of topics has been validated with our
external stakeholders (see Interests and views of stakeholders in the
Strategy section of the Sustainability statements for an overview of
key stakeholders), both potentially impacted stakeholders, as well as
users of the information.
We’ll annually review the double materiality assessment and update
our material IROs based on the outcomes of this review. Every three
years, we aim to perform a thorough double materiality assessment,
unless an event triggers an early reassessment, for example larger
acquisitions or divestments.
In 2024, we updated the thorough double materiality assessment,
building on the assessment performed in 2023. The following
process steps were taken:
• We assessed whether we had significant changes to the
organization or operational structure which would warrant an
update of our IROs (e.g. major mergers and/or acquisitions,
significant changes in key suppliers, global events etc.). No such
events were identified
• We used our 2023 double materiality assessment as a basis and
reviewed the material IROs identified in 2023, as well as reviewing
the IROs that were not deemed material in 2023. Apart from
smaller changes in the definition of our IROs, this review didn’t
lead to changes to the topics assessed as being material for 2024
reporting
• We’ve validated the outcomes of the updated double materiality
assessment with our key external stakeholder groups (suppliers,
customers, investors and employees). This verification didn’t lead
to any changes to the outcomes of the double materiality
assessment
The resulting material topics applicable for reporting in 2024, and the
reference to the relevant chapter in the Sustainability statements, are
included on page 32.
The double materiality assessment process and the due diligence
process may be impacted by changes over time. Therefore, the
Sustainability statements and material IROs identified may be subject
to change.
We haven’t identified material topics related to biodiversity under our
double materiality assessment. We did identify indirect material
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
29
GENERAL DISCLOSURES
AkzoNobel Report 2024
1 Application Requirements (AR 16 of ESRS 1).
impacts, such as emissions and waste, which are covered in the
relevant chapters.
The land use of a paints and coatings factory is relatively small
compared with the footprint of other industries, such as extractive
industries or the broader chemicals industry. Based on the IUCN’s
Key biodiversity areas, none of our production sites are located in
areas of significant biodiversity value. We identified indirect impacts,
such as GHG emissions and waste, which are reported in the
relevant chapters.
We also assessed the dependence on biodiversity and ecosystems
in our upstream value chain. This is assumed to become more
important when we transition towards more bio-based materials.
However, it isn’t currently identified as a material topic under our
double materiality assessment. We haven’t consulted with affected
communities in particular on biodiversity. For general engagement
with affected communities, refer to the Human rights due diligence
paragraph in General disclosures. We haven’t considered systemic
risks in our assessment.
In addition to the material topics mentioned above, we’ve identified a
number of topics related to either legal requirements or other
relevant matters. The topics related to legal requirements mainly
consist of reporting requirements on human rights due diligence and
diversity and inclusion. Other relevant matters are those which we
deem necessary to understand the organizational context
AkzoNobel is operating in, and which we consider to be elementary
for organizations with our size and impact.
Because these topics aren’t considered material as a result of our
double materiality assessment for CSRD, we’ve not included all the
related ESRS disclosures to these topics in the Sustainability
statements, when implementing CSRD. The related disclosures
primarily consist of our policies and procedures in place. The
following other relevant matters are included in the Sustainability
statements, applicable to our own operations:
• Gender equality and equal pay
• Discrimination and harassment
• Diversity, equity and inclusion
• Freedom of association and collective bargaining
• Whistleblowers
• Bribery and corruption
• Political engagement and lobbying activities
In addition to these other relevant matters related to own operations,
we also report on the topic of modern slavery for our upstream
operations.
Current and anticipated financial effects of
material sustainability risks and
opportunities
The current and anticipated financial effects of the material risks and
opportunities have been assessed and are not expected to
significantly impact our financial position, financial performance and/
or cash flows over the short, medium and long term.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
30
GENERAL DISCLOSURES
AkzoNobel Report 2024
We partnered with the Kunstmuseum in The Hague to stage a major exhibition –
the first time works from our Art Foundation have been the main focus of a
museum show. They were displayed alongside iconic pieces from the
Kunstmuseum’s own collection.
Our business model, value chain and interaction with material topics
UPSTREAM
OWN OPERATIONS
DOWNSTREAM
We buy raw materials from suppliers around the
world, to mix into our paints and coatings.
In our factories, we mix raw materials together to
turn them into paints and coatings.
Our paints serve both professional and DIY markets
and include a full range of interior and exterior
products. Our coatings are designed to achieve
functional properties such as corrosion and fouling
control. They serve many end markets, from energy
and infrastructure, to transport and packaging.
Raw materials categories
in % of spend
~130
~40%
manufacturing sites
Paints revenue
~35,000
~60%
employees
Coatings revenue
46%
100+
1%
53%
of our value chain
emissions is upstream
countries where
we're active
of our value chain
emissions is own
operations
of our value chain emissions is downstream
Material topics
Material topics
Material topics
Environmental
Environmental
Environmental
Climate change mitigation and Energy
Climate change mitigation and Energy
Climate change mitigation and Energy
Priority substances
Climate change adaptation
Priority substances
Circularity and Waste
Priority substances
Circularity and Waste
Circularity and Waste
Social
Social
Social
Health and safety
Health and safety
Health and safety
Working time
Working time
Working time
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
31
GENERAL DISCLOSURES
AkzoNobel Report 2024
36%
14%
14%
11%
9%
8%
8%
Resins
Pigments and colorants
Other
Packaging
Additives
Solvents
Minerals
The table below includes the material impacts, risks and opportunities, as well as a reference to where the related disclosures are included in the Sustainability statements.
Topic – Impacts
Boundary (value
chain part)
Time
horizon
Description of the material potential impacts
Description of the material actual
impact(s)
Reference to chapter in
Sustainability statements
Disclosure requirements and associated page
numbers in the Sustainability statements
Climate change mitigation
and Energy
Upstream
S/M/L
Inability of suppliers to take remediating actions to reduce carbon
emissions and/or inability to reformulate to lower carbon
feedstocks
Contributes to global warming and not
able to contribute to the Paris
Agreement
Climate change
DR E1-1 (p. 34)
DR E1-2 (p. 34)
DR E1-3 (p. 34)
DR E1-4 (p. 66)
DR E1-5 (p. 66)
DR E1-6 (p. 66)
Own operations
S/M/L
Inability to reduce our carbon footprint through energy efficiency
improvements and renewable energy sources
Downstream
S/M/L
High-emitting customer segments not mitigating their climate
impact
Priority substances
Upstream
S/M/L
Potential impact of spillage, accidental release and/or emissions
Environmental pollution and potential
health impacts
Pollution
DR E2-1 (p. 42)
DR E2-2 (p. 42)
DR E2-3 (p. 42)
DR E2-4 (p. 42)
DR E2-5 (p. 42)
DR E2-6 (p. 42)
Own operations
S/M/L
The potential impact of accidental releases and/or discharges is
under evaluation
Downstream
S/M/L
Inappropriate or unsafe handling of our products
Circularity and Waste
Upstream
S/M/L
• Potential impact of not moving quickly enough to lower carbon
alternatives, such as bio-based raw materials
• Potential impact of not transitioning away from virgin raw
materials, in particular plastic packaging
Resource use having a negative
impact on climate and ecosystems
Circular economy
DR E5-1 (p. 44)
DR E5-2 (p. 44)
DR E5-3 (p. 44)
DR E5-4 (p. 44)
DR E5-5 (p. 44)
Own operations
S/M/L
Inefficient resource use, landfill and loss of potential heat
recovery from incineration
Resource use having a negative
impact on climate and ecosystems,
potential environmental contamination
Working time
Upstream, own
operations and
downstream
S/M/L
Excessive working hours for own workers and workers in the
value chain
Negative impacts on the health and
livelihoods of workers and the risk of
modern slavery
Own workforce (for own
operations) and Workers in the
value chain (for upstream and
downstream workers)
DR S1-1 (p. 56)
DR S1-2 (p. 56)
DR S1-3 (p. 56)
DR S1-4 (p. 56)
DR S1-5 (p. 56)
DR S2-1 (p. 61)
DR S2-2 (p. 61)
DR S2-3 (p. 61)
DR S2-4 (p. 61)
DR S2-5 (p. 61)
Health and safety
Upstream
S/M/L
Potential impact of occupational health and safety incidents
Negative impact on the health and
safety of people
Own workforce; Upstream and
downstream included in the
chapter on Workers in the value
chain
DR S1-1 (p. 55)
DR S1-14 (p. 55)
DR S2-1 (p. 61)
DR S2-2 (p. 61)
DR S2-5 (p. 61)
Own operations
S/M/L
Potential impact of occupational health and safety incidents
Downstream
S/M/L
Inappropriate or unsafe handling of our products
Topic – Risks and
opportunities
Boundary
Time
horizon
Description of the material risk/opportunity
Description of the material
impact(s)
Reference to chapter in
Sustainability statements
Disclosure requirements and associated page
numbers in the Sustainability statements
Climate change adaptation
Own operations
S/M/L
Risk of inadequate adaptation of own operations to natural
hazards occurring from climate change, including unavailability of
water in water scarce areas
Loss of assets and ceasing of
operations due to natural hazards
occurring
Climate change
DR E1-1 (p. 38)
DR E1-2 (p. 38)
DR E1-3 (p. 38, 43)
DR E1-4 (p. 38, 43)
Circularity and Waste
Downstream
S/M/L
Opportunity to extend durability of our products and therefore
durability of substrates
Adding durability to substrates, making
them longer-lasting
Circular economy
DR E5-1 (p. 46)
DR E5-5 (p. 46)
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
32
GENERAL DISCLOSURES
AkzoNobel Report 2024
Interaction of material topics with business
model and strategy
Climate change mitigation and Energy
In our own operations, as well as in our value chain, we’ve identified
the impact of contributing to climate change. As we, our suppliers
and customers emit carbon emissions, we need to ensure that we
do our best to meet our carbon reduction targets, which are in line
with the Paris Agreement. This plays into many parts of our
company strategy, such as the way we interact with our suppliers
and the educational webinars we run to find solutions together, as
well as how we do business with our customers. It also applies to
how we target energy efficiency programs and renewable electricity
deployment in our own operations. We’ve identified key levers for
our Scope 1, 2 and 3 to further reduce the carbon emissions in our
value chain.
Climate change adaptation
As a global company, we’re exposed to the risk of natural hazards
occurring. This risk might increase in the future, due to climate
change. This could lead to an increase in, for example, flooding, or
could cause heat stress at our manufacturing sites. It could also lead
to increased water scarcity. That’s why we have programs in place
to manage and mitigate these risks.
Priority substances
We use priority substances in certain parts of our portfolio. The
potential impact of spillage and accidental release poses the risk of
environmental pollution, including potential health impacts. It’s our
responsibility to mitigate these impacts, both in our own operations
and our portfolio, and at customer application level. Impacts related
to priority substances are mitigated by correct labelling and
appropriate documentation regarding safe handling and use –
including storage and disposal, as well as site specific preventive
actions to avoid soil pollution.
Circularity and waste
As a manufacturing company, we currently have waste flowing out of
our operations. We’ve set ambitions to minimize waste to landfill and
a target to increase circularity in the materials we use. This also
applies to the plastic packaging we buy from suppliers for our Paints
business. We've therefore set targets to increase the use of post-
consumer recycled content (PCR) in plastic packaging, as well as
setting targets on waste reduction.
Working time
As a global manufacturing company, we've identified the impact of
excessive working hours for both our own workers and workers in
our value chain, now and in the future. Although we have more direct
impact and responsibility over the workers in our own workforce, we
also have a responsibility to help mitigate the impact of working
excessive hours in our upstream supply chain. We’re addressing this
by monitoring adherence to our global working hours policy, as well
as monitoring of value chain impact through our sustainability
program.
Health and safety
Within our industry – in terms of both our own operations and our
suppliers and customers – we’ve identified the impact of
occupational health and safety incidents. This could negatively
impact the health and safety of people employed in our own
operations, as well as in our value chain. We have processes in
place in our own operations to help minimize and mitigate the impact
of occupational safety incidents occurring. We also monitor and
audit the occurrence of these incidents in our supply chain through
our sustainability program. We’re committed to ensuring that
business activities are conducted to prevent harm to our customers,
employees, contractors, the public and other stakeholders.
Circularity and waste opportunity
We have a role to play in making sure that our products help
increase the longevity of assets, thereby extending the lifespan of the
substrates on which they’re applied. As paints and coatings make a
vital contribution to extending the lifespan of substrates, our R&D
efforts and business model are focused on continuous improvement
of the quality of our products, which includes increasing durability.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
33
GENERAL DISCLOSURES
AkzoNobel Report 2024
CLIMATE CHANGE
Materiality and governance
Materiality
Our approach to determining material impacts, risks and
opportunities is described in General disclosures. Our assessment
identified climate change mitigation and adaptation as material
topics for AkzoNobel – mitigation for our entire value chain and
adaptation for our own operations only.
Our approach to climate change mitigation
Policy
We’re aware that climate change could affect our supply chain, our
customers and the way we operate. Therefore, in 2021, we
announced our target to reduce carbon emissions across our full
value chain by 50% by 2030 (taking 2018 as our baseline), which is
approved by the Science Based Targets initiative (SBTi)1. This is in
addition to our carbon neutral ambition for 2050.
Our targets are aligned with the Paris Agreement, which aims to limit
climate change and ensure the global temperature doesn’t rise more
than 1.5˚C above pre-industrial levels. Our targets will help drive our
innovation and collaboration with value chain partners, including
customers and suppliers.
Our scope includes two separate targets: halving our carbon
emissions from our own operations (Scope 1 and 2), as well as in
our Scope 3. Scope 3 covers purchased goods and services
(category 1 in the GHG protocol), application and use of our
products (categories 10 and 11, including VOC emissions), and end-
of-life (category 12). Our Scope 3 target covers around 96% of our
total Scope 3 emissions, the remainder consisting of non-material
categories.
We consider 2018 a representative baseline year for target-setting
for AkzoNobel as no material abnormalities in terms of volume or
energy mix occurred in 2018, neither for Scope 3, nor for Scope 1
and 2.
Our carbon emission reduction plan (which is part of our climate
change mitigation policy), target and transition plan have been
approved by our Board of Management and reviewed by our
Supervisory Board. AkzoNobel is not excluded from the EU Paris-
aligned Benchmarks.
Climate change mitigation in own operations:
Actions, resources and targets
Our decarbonization strategy for Scope 1 and 2 has been further
refined this year, as shown in the graph on the next page. For full
transparency, we’ve included the foreseen increase in carbon
emissions that come from running the solvent recovery units and
emission abatement systems to reduce our environmental impact at
our manufacturing sites. These are labelled license to operate (LTO)
projects.
Energy efficiency target update
This year we updated our target for energy efficiency from 30%
towards a 20% reduction in 2030 (baseline 2018; our carbon
reduction ambition remains unchanged). Through improved metering
and more granular portfolio-related data analysis, we concluded that
our energy efficiency improvement potential is not in line with our
ambition. We won’t reduce our efforts in energy efficiency programs,
however, we think it’s important to set targets in line with realistic
potential. We’ll further extend our focus on energy transition by
moving away from fossil fuels to renewables and reduce our carbon
footprint.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
34
ENVIRONMENTAL
AkzoNobel Report 2024
1 The SBTi validated our 42% reduction ambition versus a 2020 baseline. Our 50% reduction ambition versus the 2018 baseline refers to the same target.
Three key levers for Scope 1 and 2 reduction
First key lever: Scope 1 and 2 emissions reduction through
energy efficiency
We aim to improve our energy efficiency with the following
programs:
• Operational excellence by increasing our digital maturity and using
energy benchmarking to drive opportunities in shutdown
management and operational energy efficiency
• Upgrading assets, based on a multi-year Capex plan for all our
major production sites. We ensure that all equipment replacement
projects come with energy efficiency upgrades, and we’ll prioritize
projects that reduce our Scope 1 and 2 carbon emissions
• Production footprint optimization by relocating production from
less efficient sites to more efficient sites
Second key lever: Scope 1 and 2 emissions reduction through
renewable electricity production and procurement
We aim to maximize our renewable energy production through the
installation of on-site solar panels at our locations and prioritize
where our electricity-related carbon footprint is the highest. To meet
our renewable electricity targets, we’re working on contracting
additional renewable electricity via Power Purchase Agreements
(PPAs) with external parties and will continue to purchase renewable
electricity certificates.
Third key lever: Scope 1 and 2 emissions reduction by
transition from fossil to renewable fuels
To become carbon neutral in 2050, we’ll shift our fossil fuel
consumption towards renewable alternatives, e.g. heat recovery
from our compressors and smart electrification with heat pumps.
Currently, our fossil fuels are primarily used for building heating and
process heating.
Upstream and downstream operations: Scope 3
emissions – Actions, resources and targets
For Scope 3, we’re taking action by increasing our sustainable
product offering, by innovating in the development of new products
and by engaging with our suppliers and customers around the world
to collectively find solutions towards our target of halving carbon
emissions in our value chain by 2030 (baseline 2018). Because
reducing our value chain emissions is, for the most part, outside of
our direct control, working together with our value chain partners is
key to collectively decarbonize.
We recognize that AkzoNobel is highly dependent on the level of
commitment demonstrated by both our upstream and downstream
value chain partners in reducing their own carbon emissions. In this
chapter, we indicate the key levers and highlight the dependencies
identified in our value chain. While we continue to push for
decarbonization, we continue to operate within a complex value
chain consisting of many interdependencies. We recognize this
means that both acceleration, as well as deceleration, of our Scope
3 target is – at least partially – outside of our direct control.
During 2024, we continued to integrate sustainability and innovation
into our daily business to work towards our targets.
Four key levers for Scope 3 reduction
When it comes to reducing carbon emissions across our value
chain, we’ve identified four key levers that should help us achieve the
50% reduction. These levers are: Energy transition; Process
efficiency; Reduced solvent emissions; and Circular solutions.
Projects related to our Scope 3 reduction are grouped under these
four key levers. Although we believe it’s important to set strong
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
35
ENVIRONMENTAL
AkzoNobel Report 2024
Carbon emissions reduction Scope 1 and 2 towards our 2050 carbon neutral ambition
Scope 3 targets, we’ve not yet disclosed detailed plans for 2030 to
2050, to support our 2050 carbon neutral ambition. As we focus our
efforts towards halving our emissions by 2030, the plans we’ve put
in place to support our Scope 3 carbon emission reduction levers
serve as a base for continued decarbonization post-2030.
Energy transition
Making the materials we buy, and applying and curing the products
we sell, requires significant amounts of energy. When suppliers and
customers choose to switch to greener forms of energy, we group
those initiatives under the Energy transition carbon reduction lever.
Many of our suppliers and customers are setting targets for
decarbonization themselves, moving to renewable electricity and
cleaner sources of powering their processes. This is increasingly
leading to growing availability of raw materials with a reduced carbon
footprint. Through our projects and programs on energy transition,
we aim to offer our customers lower carbon footprint solutions. This
lever represents 39% of our overall planned reduction for 2030. This
program has been developed to have specific sub-levers for our
different regions and segments.
Process efficiency
The processes our customers use to apply and cure the coatings we
sell to them has a large impact on our Scope 3 carbon footprint,
which we can help reduce by focusing on process efficiency at our
customers’ locations. Many of our coatings customers use natural
gas to cure our products. By collaborating on developing coatings
that require less energy to cure, we can offer our customers
products that can help lower their carbon footprint and save energy
costs. In our Automotive and Specialty Coatings business, demand
for ambient and UV curing coatings – which don’t require heat to
cure – is rising. A 2024 example was coatingAI, a revolutionary
software co-developed by our Powder Coatings business. The
solution uses artificial intelligence to help customers improve the
application process and reduce their carbon footprint. We’re looking
to collaborate with customers and advise them on carbon reduction
strategies for their coating processes, thereby becoming the partner
of choice for carbon conscious customers. This lever represents
33% of our overall planned reduction for 2030. This program runs
across our different segments, but mostly impacts customers in our
Coatings segments, as they have a significant downstream energy
consumption impact.
Reduced solvent emissions
Release of solvents from our products is a key part of our Scope 3
emissions, which means reduction of solvent emissions represents a
key reduction lever. Projects in this area are focused on reducing the
carbon footprint of customers who apply our products that contain
VOCs. This can be done by switching to water-based products, flat
reduction of solvents in our formulations and by thinking along with
customers to capture and oxidize the solvents we supply to them,
which can be a key area for the application of renewable solvents. A
key achievement in this area is our continued efforts to reduce our
solvent emissions, through programs such as Waterway. This lever
represents 13% of our overall planned reduction for 2030. This
program runs across our different segments.
Circular solutions
This lever focuses on reducing the end-of-life impact of the fossil-
based materials in our products. This can mainly be achieved by
increasing the amount of renewable materials in our formulations,
which can be done through applying bio-based, biomass balanced
and recycled materials, among others. This lever represents 15% of
our overall planned reduction for 2030. This program runs across
our different segments.
We’re actively running carbon reduction projects throughout the
company in these key focus areas, and set up a clear governance
structure in 2023 to ensure they’re embedded in future plans, such
as our R&D pipeline and supplier engagements. We also coupled
our executive remuneration to Scope 3 carbon emission reduction
for the first time in 2024, marking a key milestone for our company
to move towards our 2030 target. More information can be found in
the Remuneration report.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
36
ENVIRONMENTAL
AkzoNobel Report 2024
The carbon footprint in our value chain
in % of contribution to overall carbon footprint
12%
46%
1%
26%
15%
The costs for moving towards our 2030 target are mostly captured
in the CapEx investments of our suppliers and, for our Coatings
business units, our customers, with limited direct investments
required for our own operations. The financial effects, if any, would
be captured in our cost of sales.
Supplier engagement
We actively engage with our suppliers to share our ambitions and
encourage these key partners to do the same. Key impact areas for
suppliers are: increasing process efficiency; moving to renewable
energy; and reducing the use of fossil materials and fuels. We also
see more intensive collaboration with suppliers on developing new
innovative solutions as a key driver towards reducing our full value
chain carbon footprint. We held in-depth discussions with more than
20 key suppliers in 2024 on how their plans can support our
ambition and how we can collaborate to close any gaps. We
continue to work together on joint programs with key suppliers to
achieve further carbon emission reduction in our full value chain.
In 2022, Together for Sustainability (TfS) launched the Product
Carbon Footprint (PCF) Guideline for the Chemical Industry to ensure
a consistent measure of carbon emissions along the value chain in
the chemical industry and beyond. To support the secure and
trustworthy exchange of PCF data throughout the chemical supply
chain, TfS has piloted a PCF data-sharing solution (using Siemens’
“SiGREEN” software). The PCF data-sharing solution allows TfS
members to request PCF information from their suppliers on
purchased materials. We were involved in piloting the solution during
2023 and 2024. We rolled out the solution during 2024 to collect
PCF from our suppliers in an efficient way on a larger scale. A total of
158 suppliers are now onboarded on SiGREEN. For 2024, 14% of
our total Scope 3 carbon footprint (which equates to 31% of our
total upstream emissions) was calculated using supplier specific
data.
In 2024, we continued to work with suppliers participating in our
Supplier Sustainability Balanced Scorecard (SSBS) program, who
represent 80% of our upstream carbon emissions. We request
product carbon footprint, waste, energy and greenhouse gas
emissions information, to monitor progress versus our suppliers’
sustainability goals. The SSBS helped us hold constructive meetings
and discussions with our suppliers to better understand their plans
and challenges. We held a live webinar for our top 200 suppliers,
when we explained our expectations, such as providing us with
supplier specific PCF data, setting their own ambitious targets and
engaging with their own suppliers. We also asked them to increase
their capabilities through the decarbonization courses offered by the
TfS academy. The results of these engagements serve as continued
input for our strategy and decision-making processes. For more
information on how we work with our suppliers, see Management of
relationships with suppliers.
Progress year-end 2024: Scope 3
Our 2024 Scope 3 carbon footprint was down 3% from 2023 (from a
rounded 13.1 million tons in 2023 to a rounded 12.8 million tons in
2024). This was driven by mix improvements in our portfolio, as well
as more specific carbon footprint data from suppliers, thereby more
than offsetting higher purchase and sales volumes. Our Scope 3
carbon footprint was down 12% versus our 2018 baseline. As the
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
37
ENVIRONMENTAL
AkzoNobel Report 2024
100
88
50
2018
2024
Energy transition
Process efficiency
Reduce solvent
emissions
Circular solutions
2030 target
Carbon emissions reduction pathway – Scope 3 (in percentages)
development of new solutions, investments in the value chain and
market acceptance take time, we expect the majority of the
reduction of our Scope 3 carbon footprint towards the latter part of
the decade.
Climate change adaptation
Materiality
We identified climate change adaptation as a critical aspect of our
operations. The primary risk involves insufficient adaptation to natural
hazards resulting from climate change. This could lead to asset loss
and operational disruptions.
Risk assessment
In 2023, we performed a desktop study with the help of Zurich
Insurance Group, assessing all our manufacturing sites (~130), as
well as a selection of key supplier locations (~50), with regards to
physical climate hazards.
To assess criticality, we used the total insured value for our own
locations and the total spend value for supplier locations. Our
analysis concentrated on high and very high hazard levels across our
portfolio, considering various climate scenarios and future time
horizons. The climate scenarios applied were SSP2-4.5 (middle
road) and SSP5-8.5 (fossil fuel development), with time horizons set
for 2030 (near term, combining short and medium term) and 2050
(mid to long term). SSP (Shared Socio-economic Pathways) are
scenarios that help model future changes, including climate change.
The scenarios used are consistent with AR6, the sixth report from
the IPCC. We chose these scenarios as they’re widely accepted by
the scientific community.
Our locations were analyzed for multiple natural hazards related to
climate change, some of which have a higher inherent potential
physical risk to our operations than others. In scope were:
precipitation, thunderstorms, wind, heat, flood, drought, wildfire,
cold waves and hail. The outcome of this assessment has been
used as a basis for further analysis around climate risk management,
including for future resilience planning. The risk assessment as
performed in 2023 was not repeated in 2024.
Risk management: Physical risks
Emergency response planning
In 2024, we began integrating these risks into our enterprise risk
management processes. We shared the detailed outcome of the
physical climate risk assessment with all our manufacturing site
managers. Consequently, we require all sites to update their
emergency response plans using the climate risk assessment,
detailing the site’s exposure to the above-mentioned extreme
weather events as a guide. Each site must identify its top three risks
and prioritize them in future risk mitigation planning. As part of our
regular HSE&S audit process, each site will be audited every three to
five years. This evaluation will include an assessment of emergency
preparedness, particularly regarding climate change-related
increases in natural hazards.
Physical risks and impacts own operations: Environmental
and social
We identified two material topics related to environmental and social
factors: environmental – water scarcity at water intensive sites; and
social – heat stress.
Environmental: Water scarcity
While overall water consumption is not material for AkzoNobel, as
indicated in our Report 2023, we’ll concentrate our water
consumption reduction efforts on our top water intensive sites in
areas of high water stress. See the Water and marine resources
chapter for more details.
Social: Heat stress
Our employees often work in hot conditions, where they’re at risk of
heat stress-related illnesses, especially during the summer months.
Climate change puts workers at an increased risk, requiring
additional health and safety support. To that end, heat stress
management guidance was added to our occupational health
management system.
The related policy states that our line management is responsible for
both ensuring that all employees receive heat stress-related training
and for adjusting work practices to address heat stress concerns.
This can include, for example, providing drinkable water in adequate
quantities, scheduling hot work for cooler periods of the day and
offering provisions for workers wearing personal protective
equipment (PPE). All relevant employees are required to follow work
instructions and training related to heat stress. Currently, we don't
have quantified targets related to this impact. The global policy is
owned by the HSE&S team.
Upstream physical climate risks
Even though not in scope for materiality, we’ve carried out natural
hazard risk surveys to suppliers that are located in those risk
locations to learn what mitigation actions they have in place.
Physical risks own operations: Financial impacts
We assessed the potential occurrence of material financial impacts
to our own operations, resulting from climate change. For this
assessment, we analyzed the risks of both property damage and
business interruption.
Given our approximately 130 manufacturing sites, we assess our risk
of business interruption as low and our operations as resilient. This is
primarily due to our extensive global distribution network and the
relatively low revenue exposure per site, allowing us to shift
production when a natural hazard occurs.
We also analyzed historic insurance claims related to natural
hazards. Over a period of 20 years, the total indemnity paid related
to natural catastrophes was below €10 million. This is the combined
sum of property damage and business interruption. Therefore, we
don't currently anticipate a material financial effect.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
38
ENVIRONMENTAL
AkzoNobel Report 2024
Transition risks
We operate a global portfolio of Paints and Coatings businesses
and, as laid out in our Strategy section, our strategic approach is
therefore focused on the specific requirements of different markets
and customers.
One of our strategic pillars is sustainability-driven innovation. We’re
committed to capturing the opportunities that sustainability presents
as a catalyst for innovation. We recognize that sustainability is driving
changes in our industry and believe this aligns with our strengths in
innovation and our leadership position in sustainability. For example,
our commitment to carbon reduction throughout our value chain has
proven to be a catalyst for customer dialog.
We’re developing sustainable products that differentiate us from
competitors, allowing us to gain market share and command higher
margins. We’re also focused on accelerating our development efforts
and reducing time to market.
When analyzing our climate-related transition risks, we take into
account climate change mitigation, technology, market and
reputation. Climate change mitigation is reported on separately
earlier in this chapter.
We further analyzed potential transition risks during an assessment
of long-term trends in 2024. As part of these long-term trends,
environmental transition risks were considered, including, but not
limited to, climate change. The risks listed below are not considered
(acute) material risks following our double materiality assessment,
but are provided for information purposes. We also don't anticipate
any direct material financial effects from these risks.
The top five transition risks are in:
• The lack of availability of (precious) raw (e.g. bio-based) materials
slowing down the use of more sustainable raw materials and more
sustainable products
• Infrastructure limitations (e.g. electricity network capacity) hindering
us from reaching our sustainability objectives
• Changing legislation (sustainability-driven product or environmental
legislation) impacting the company’s ability to achieve strategic
objectives and its ability to move production (different
requirements in different countries/regions)
• Divergence between societal scrutiny and legislation, leading to
shifting customer and investor expectations
• Increased divergence in the potentially conflicting trade-off
between increased demand for recyclability and inherent long-
lasting aspects of our products
Enterprise risk management
Climate risk is also part of our enterprise risk management process,
as a strategic risk. In this process, we assess the key risks that could
hinder us from achieving our strategic objectives – such as a lack of
resilience – and prioritize these risks based on our risk appetite. This
proactive approach allows us to identify relevant risks and adapt to,
or mitigate, these risks. In addition to our risk management
approach, the other focus areas that influence our resilience are
(sustainable) operations, innovation and the ability to adapt.
As mitigations we have the following in place:
• A balanced geographic presence with revenue generated from all
regions and continued investment focus on higher growth markets
to optimize geographic spread and reduce the risk of a certain
region (or business) being impacted by climate risk
• Measures to improve our industrial operations by focusing on
reducing complexity, improving capacity utilization and investing in
the modernization of our sites, helping to mitigate climate risk
• Constant re-engineering of our products and enhancements to our
product lifecycle and product change management, increasing our
resilience
Internal carbon pricing
We have sustainability assessments in place for all material
investment projects. For the last eight years, we’ve implemented an
internal carbon price for these investment decisions, anticipating the
impact of any future carbon pricing. Annually, we quantify the
potential transition risk impact of any global carbon taxation by
multiplying our carbon footprint (Scopes 1 and 2) with the internal
carbon price. To analyze different potential scenarios, we calculate
the impact using a carbon price ranging from €50 to €150 (per ton),
the latter being the suggested UN price on carbon. That range
results in an impact well below 1% of 2024 revenues. Our suppliers
and customers might be impacted by carbon pricing, which creates
both risks and opportunities. For example, we can mitigate the
carbon cost impact for our customers by offering sustainable
solutions.
GHG emission reduction targets: Scope and
methodology
We have a target of 50% carbon emission reduction for Scope 1 and
Scope 2 (market-based) by 2030 (baseline 2018, absolute) and a
target of 50% carbon emission reduction for Scope 3 by 2030
(baseline 2018, absolute). This is validated by the Science Based
Targets initiative and is in line with a 1.5˚C scenario.
Breakdown Scope 1 and 2
Our GHG emissions under Scope 1 are spread over the fuels we use
at our sites, with natural gas being the largest contributor. The
material emissions from Scope 2 are almost all related to our non-
renewable electricity, with only some sites purchasing steam and hot
water from external suppliers. We currently have ten sites using
electricity generators with non-renewable fuels.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
39
ENVIRONMENTAL
AkzoNobel Report 2024
Regional split energy consumption in %
A North America
20
B Latin America
14
C North Asia
16
D South Asia Pacific
8
E EMEA
42
2024 Scope 1, 2 energy and GHG footprint
Scope 1 - Direct emissions
GWh
GHG
(kTCO2eq)
Crude oil and petroleum products
36.5
9.2
Natural gas
239.7
48.4
Other fossil sources
0.0
0.0
Renewable fuel sources
1.6
0.0
Self-generated renewable electricity
16.6
0.0
Total
294.4
57.6
Scope 2 - Indirect emissions
GWh
GHG
(kTCO2eq)
Electricity from fossil fuels
177.2
107.2
Steam and hot water from fossil fuels
22.5
4.5
Electricity from nuclear
11.0
0.0
Electricity and hot water from renewables
342.0
0.0
Total
552.7
111.7
Breakdown Scope 3
Our 50% (absolute) reduction target for 2030 encompasses the
following categories, covering around 96% of our total Scope 3
emissions:
• Upstream: Category 1 (purchased goods and services, including
packaging)
• Downstream: Category 10 and 11 (application and use of sold
products), VOC emissions and Category 12 (end-of-life)
Our 2024 Scope 3 data can be found in the Summary table (GHG
emissions table) on page 66.
Energy consumption reduction and solar
energy
For 2024 versus our 2018 baseline year, our absolute energy
consumption (own operations) reduced by 4.8% and our relative
energy consumption per ton of production reduced by 8.7%. For
2024 compared with 2023, our absolute energy consumption
increased by 0.5%, while our relative energy consumption reduced
by 0.8%.
Several energy efficiency measures were taken at our sites in 2024.
This included carrying out environmental projects to abate emissions
by using regenerative thermal oxidizers (RTOs) and solvent recovery
units (SRUs). We also relocated production to more efficient sites,
although the full energy efficiency improvements resulting from this
won’t take effect until 2025. In addition, we’ll stop producing resins
at some of our resins manufacturing locations in 2025 (e.g. resins
manufacturing in Felling in the UK), but since we'll be purchasing
more resins, the energy and related GHG emissions will move from
Scope 1 and 2 towards Scope 3.
The next two graphs show our regional energy split and energy
consumption, absolute and relative, in GWh.
A
B
C
D
E
In 2024, 3% of our consumed electricity was produced at our sites
through solar panels. Generating renewable electricity on-site
alleviates pressure on the electricity grid and reduces our carbon
footprint and energy costs. In total, 83 of our locations now use
100% renewable electricity and 33 locations are using solar panels
to produce renewable electricity. We’ve currently installed about
33% of our solar on-site potential and have a healthy pipeline of
projects for the coming years.
Energy consumption in gigawatt hours (GWh)
Energy consumption
u
KWh per ton of production
906
845
843
847
271
272
253
251
2021
2022
2023
2024
Our largest solar energy plant in Europe was inaugurated at the Decorative Paints
site in Pilawa, Poland. Covering nearly three hectares, there are 3,551 solar
panels, with an installed capacity of 1.9 MWp. They’ll provide nearly a quarter of
the facility’s electricity needs – further powering the company’s efforts to
transition all our production locations to renewable electricity.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
40
ENVIRONMENTAL
AkzoNobel Report 2024
Renewable electricity certificates were purchased in the Americas
and Europe and equaled our electricity consumption during the year;
no balance or remaining obligation to purchase remained at year-
end. Our bundled certificates represent 28% of our electricity
consumption and our unbundled certificates 35%. This resulted in a
total renewable electricity percentage of 65% at the end of 2024
(2023: 62%). We also transitioned to 100% renewable electricity at
all our manufacturing sites in Latin America, and started renewable
purchasing in North Asia, now covering 16% of our electricity
consumption in the region.
Our Marine and Protective Coatings business signed a Memorandum of
Cooperation with Sinopec to support the Chinese energy and chemical
company’s global expansion while jointly promoting the ongoing transition to
green energy. The partnership – which builds on a relationship that first started in
the early 2000s – will leverage our global presence and centers on the supply of
International high-performance coatings products to Sinopec and its affiliated
institutions for overseas construction projects.
Gross Scopes 1, 2, 3 and total GHG
emissions
Scope 1 and 2 emissions
In 2024, our combined Scope 1 and 2 emissions (market-based)
reduced by 41.4% versus our 2018 baseline. We’ve already
achieved our 2025 interim target of reducing our carbon footprint for
our own operations by 25% versus our 2018 baseline. Compared
with 2023, we reduced carbon emissions by 5.7%, mainly through
purchasing renewable electricity for our China and Latin America
regions and improved energy efficiency. Our Scope 1 has reduced
by 8.3% since 2018, while our Scope 2 (market-based) has reduced
by 50.6%.
Direct CO2 (Scope 1) in kilotons
2018
2021
2022
2023
2024
62.9
64.5
60.1
59.2
57.6
Indirect CO2 (Scope 2) in kilotons
2018
2023
2024
Location-based
N/A
195.3
202.9
Market-based
226.0
120.4
111.7
Scope 3 emissions
A breakdown of Scope 3 emissions, including targets and
performance, is included in the relevant chapter and the Summary
table.
GHG removals, projects financed through
carbon credits and revenue intensity
AkzoNobel does not make use of financed carbon credits outside
our value chain. Currently, we don’t perform or purchase any
offsetting activities for our GHG emissions and we don’t make use of
carbon removals or storage in our own operations.
Our GHG intensity for both location-based and market-based
emissions, measured as total GHG emissions per net revenue, is
included in the Summary table.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
41
ENVIRONMENTAL
AkzoNobel Report 2024
POLLUTION
Materiality
Our approach to determining our material impacts, risks and
opportunities is described in General disclosures. Following our
double materiality assessment for ESRS E2 (pollution), Substances
of Very High Concern (SVHCs) (ESRS E2-5) has been identified as a
material topic for AkzoNobel. The financial effects from material
pollution-related risks are included in our environmental costs. See
Note 19 of the Financial statements. The impact of SVHCs on our
supply chain processes and policies, including the impact of spillage,
is included in the chapter on Workers in our value chain.
Our approach to pollution
AkzoNobel commercializes paints and coatings for many different
industries and end-markets. The production of paints and coatings
by definition entails the use of a large variety of chemicals. Correct
classification of our end products is based on detailed information,
received from our suppliers, of the components (substances) present
in the raw materials we use, which are then incorporated into the
paints and coatings formulations. This information includes, but is
not limited to, regulatory status, hazard and the amount of the
substance present.
This process of correct labelling and appropriate documentation
safeguards the availability of necessary information regarding safe
handling and use – including storage and disposal.
Pollution of air, water and soil
All our operations are subject to country specific applicable
environmental regulations. They therefore operate with an
environmental permit or under environmental legislation and are
required to comply with applicable discharge criteria for air and
water. These permits do not necessarily align with ESRS disclosure
requirements for emissions to water and air. In order to gain further
insights into the impact of SVHC emissions to water and air, we’ve
engaged an external consultant to design and carry out a monitoring
campaign to investigate this further, which might impact our
materiality assessment in the future.
In relation to the topic of soil pollution through accidental releases,
our existing manufacturing locations have primary containment/
sealed floors that prevent contact with the soil. In addition, we have
a secondary containment system and mature process safety
management systems in place. Therefore, we don't consider soil
pollution as material for our own operations. Despite pollution of air
and water not being identified as material under our double
materiality assessment, the levels of pollution are currently under
assessment through environmental sampling with the help of a third
party. We’ll re-assess our materiality if the results deem it necessary
in the next reporting year. Legacy soil remediation efforts, including
the financial provision for remediation, are disclosed in Note 19 of
the Financial statements.
Substances of Very High Concern
Substances of Very High Concern (SVHCs) are defined under
REACH ((EC) No 1907/2006) and are disclosed through the safety
data sheet (SDS) when present above levels of 0.1%. REACH stands
for Registration, Evaluation, Authorization and Restriction of
Chemicals, a regulation of the European Union, adopted to improve
the protection of human health and the environment from the risks
that can be posed by chemicals, while enhancing the
competitiveness of the EU chemicals industry. The regulation came
into force on June 1, 2007.
Policy, actions and targets
At AkzoNobel, SVHCs are only used in our products when it’s both
permitted by applicable legislation and required by the need for the
unique properties and performance. Our policy relates to SVHCs
purchased and used in our own operations. The policy is reviewed
and updated, if necessary, on an annual basis. Monitoring of the
substances used in our products is a continuous process conducted
by our Product Safety and Regulatory Affairs (PSRA) department.
The Executive Committee is accountable for implementation of the
policy. Currently, we don’t have a generic policy or target for the
phase out of all SVHCs, as these add to the unique properties and
performance of some of our products.
The total amount of SVHCs procured in 2024 amounted to 23,234
tons, representing <1% of total purchased volumes, based on the
substances of very high concern as included in the REACH list as
per January 1 of the reporting year. The total amount in the table
below doesn't reconcile to this number as certain substances have
multiple end-point hazard classes. The total quantity of SVHCs that
leave our facilities as products are estimated at 20-40% of the
procured quantity of SVHCs and mainly relate to SVHCs with
mutagenic and carcinogenic hazard classes.
SVHCs purchased, per hazard class
Hazard class
acronym
Hazard class/End-point full name
SVHC volume
2024 (in tons)
ED ENV
Endocrine disrupting properties (Article 57(f)
- environment)
8,808
Repro
Toxic for reproduction (Article 57c)
8,721
ED HH
Endocrine disrupting properties (Article 57(f)
- human health)
8,168
Eq. LoC ENV
Equivalent level of concern having probable
serious effects to the environment (Article
57(f) - environment)
7,356
Eq. LoC HH
Equivalent level of concern having probable
serious effects to human health (Article 57(f)
7,356
Muta
Mutagenic (Article 57b)
3,273
Resp. Sens.
Respiratory sensitising properties (Article
57(f) - human health)
1,979
Carc
Carcinogenic (Article 57a)
1,299
vPvB
vPvB (Article 57e)
110
PBT
PBT (Article 57d)
86
The vast majority (>95%) of our SVHC purchases relate to our
Performance Coatings business.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
42
ENVIRONMENTAL
AkzoNobel Report 2024
Water use in % (split by water use purpose)
A Cooling
72
B Product
10
C Other
18
WATER AND MARINE RESOURCES
Materiality
Our approach to determining our material impacts, risks and
opportunities is described in General disclosures. Considering the
relatively low water footprint of the paints and coatings industry, our
overall water consumption is considered not material following our
double materiality assessment. However, we do strive for continuous
improvement in our water usage efficiency at our sites in high water
stress areas (HWSAs), as identified in the overall risk assessment of
our climate change adaptation.
Policy, actions and targets
We’re committed to the responsible use and conservation of water.
We strive to reduce water use and encourage the reuse and
recycling of water at all our manufacturing sites. Our current focus is
on our top ten water withdrawing sites in HWSAs. We’ll implement a
water focus program in 2025 to analyze the water-saving
opportunities of the ten focus sites and site-specific reduction
targets will be identified. The water focus program is carried out by a
dedicated resource within the Corporate HSE&S team.
The Water and Marine Resources Policy is part of the annual
communication of HSE&S objectives and targets. It’s reviewed
annually and signed off by the leadership team within the HSE&S
function.
Water use and consumption in own operations
Overall, the majority of our water is used for cooling purposes (72%
in 2024), which is discharged back to the environment. Additionally,
we use water as a raw material in (waterborne) paints and coatings
(10% of water use in 2024), as well as for general household and
sanitation purposes, such as cleaning.
During 2024, we aligned our water definitions with the ESRS
requirements. We updated the number of sites located in HWSAs
using the Aqueduct water risk atlas developed by the World
Resources Institute. For 2024, 59 sites are located in HWSAs under
the 2030 Business as usual (BAU) scenario.
The overall company water withdrawal was 7.7 million m³ in 2024.
The withdrawal at sites located in HWSAs was 13% of total
withdrawal.
Our relative water withdrawal was 2.3 m³/ton of product for 2024
and the relative withdrawal in HWSAs was significantly lower at 0.65
m³/ton. Our overall water consumption in HWSAs was 0.4 million m³
in 2024. This represents 52% of the total water consumption. Our
water consumption is mainly represented by the water included in
our products.
Our exposure to (future) water scarcity was included as part of the
climate risk assessment performed during 2023. Currently, there’s
no potential material financial impact identified to our own operations
in water scarce areas. For further elaboration on methodology used,
please refer to the chapter on Climate change adaptation.
In the coming years, we intend to expand our water consumption
reduction efforts at our top ten water consuming sites in HWSAs.
We’ll also conduct focus studies at these sites to determine the local
impacts, including the impacted communities. Although we don’t
have a specific reduction target, we do have two key focus areas.
We'll focus on both further improving the efficiency of the equipment
used for cleaning activities and increasing the reuse of process water
within our manufacturing process. We’re also rolling out plans to
collect reliable measurement of our total water recycled and reused
to help us track the effectiveness of our actions. This will be a
phased approach starting with our focused sites. We’ve allocated
dedicated resources for the implementation of these actions within
our HSE&S team.
A
B
C
Total water withdrawal
Total water withdrawal (million m³)
u
Relative water withdrawal in m3 per ton of production
9.6
8.6
7.7
7.7
2.9
2.8
2.3
2.3
2021
2022
2023
2024
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
43
ENVIRONMENTAL
AkzoNobel Report 2024
CIRCULAR ECONOMY
Materiality
Our approach to determining our material impacts, risks and
opportunities is described in General disclosures.
For Circular economy, the outcome of our materiality assessment
focuses on:
• Waste: The impact of inefficient resource use, landfill and loss of
potential heat recovery from incineration. This is a material topic for
our own operations
• Resource inflows: The impact of not moving away from virgin raw
materials in our plastic packaging
• Resource outflows: Opportunity to extend the durability of our
products and therefore the durability of substrates
This chapter explains which circularity aspects are important to our
operations and value chain, including product portfolio. Actions,
resources and targets are detailed in the relevant value chain areas.
Bio-based and recycled materials are covered under our Scope 3
carbon footprint disclosure in the Climate change chapter.
For a description of our key products, refer to the boxed introduction
text at the start of the Decorative Paints and Performance Coatings
chapters (pages 15 and 17). A description of engagement with
affected communities is included under the Human rights due
diligence paragraph in General disclosures.
This chapter addresses waste first, then resource inflows and ends
with resource outflows.
Policies, actions and targets related to
resource use and circular economy
Waste management policy and targets
The objective of our waste policy is to minimize our waste by
preventing, reusing, recycling and recovering it. We aim to reduce
our waste to landfill as much as possible, with a particular focus on
reducing hazardous waste to landfill, through elimination, recycling or
incineration.
The Waste Management Policy is part of the annual communication
of HSE&S objectives and targets. This is reviewed annually and
signed off by the leadership team within the HSE&S function.
We also currently have a long-term incentive linked to our target of
achieving 100% circular use of materials by 2030. In light of new
ESRS definitions, this target will be replaced from 2025 onwards
once the vesting period has ended.
In 2025, we’ll measure our waste reduction efforts based on the
relative total waste (kg waste/ton of production volume), aiming for a
3% reduction versus the 2024 performance.
We’ll replace the circular use rate with the new waste disposal
intensity rate (WDI), which is defined as the amount of waste
directed to disposal (in kilograms) divided by the total production
volume in tons. We’ll use 2025 as the baseline year for the WDI and
a target will be introduced as of 2026 onwards.
Waste management program
In 2024, our overall approach and drive to circularity remained
unchanged and we continued to make progress. Our programs are
focused on reducing waste directed to disposal, with an emphasis
on recycling and reusing waste, while keeping the hierarchy of waste
reduction in mind and avoiding landfill where possible.
In 2024, we aligned our definitions and waste classes with the CSRD
ESRS E5 reporting requirements.
As a result of the CSRD alignment of the waste categories, for 2024,
reconditioned packaging waste (previously not reported) was added
to the waste diverted from disposal category.
The newly added waste streams also significantly impacted our total
waste produced and reduces comparability of the actual relative
waste per ton of product between 2024 and 2023.
During 2024, we continued to work on our ambition to reduce our
waste to landfill and increased our efforts to reduce the landfill use at
our Grupo Orbis sites, which were acquired in 2022.
Waste reporting process
AkzoNobel manufacturing sites record waste on a monthly basis
against ten waste classes (see Waste stream overview on the next
page). The numbers reported are based on shipped waste manifests
and invoices from service providers. All waste streams are assigned
to one of the overarching waste classes (W1-W10) and the sum of all
waste streams by waste class are reported and reconciled in our
central reporting tool.
Our waste streams
Our primary waste consists of packaging waste, residual paint
waste, sludges from waste water treatments, powder fines and
general household waste, such as waste from canteens and offices.
In 2024, we generated 96.9 kilotons of waste, of which 52.9% was
classified as hazardous waste and 30.6% of the total waste was
waste directed to disposal.
The newly added waste categories for reconditioned packaging
resulting from CSRD alignment of waste categories (and previously
not reported) led to a significant increase of the reported total waste,
because they represent 32.1% of the total waste. This also had a
positive impact on our annual percentage for circular use, which
increased to 73.9%, compared with 55.0% in 2023.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
44
ENVIRONMENTAL
AkzoNobel Report 2024
Material flow in kilotons
3,375
W7*
W8**
24.5
25.6
16.7
W9*
W10**
67.3
10.7
6.5
96.9
* Hazardous.
W1*
W4**
** Non-hazardous.
29.6
0.2
2.3
*** Recycling includes reconditioned packaging which is preparation
for reuse, totaling 31.1 kilotons. The reconditioned packaging
consists of 19.3 kilotons of hazardous and 11.8 kilotons of non-
hazardous reconditioned packaging waste.
W2*
W5**
12.6
9.6
W3*
W6**
3.3
1.6
For 2024, our waste directed to disposal (W1-W6) decreased by
12.5% (absolute) mainly through reallocation of waste streams to the
waste classes diverted from disposal. Our relative waste directed to
disposal per ton of production reduced by 13.6% compared with the
2023 performance.
Total waste diverted from disposal (W7-W10) increased by 23.6%
compared with 2023, not considering the reconditioned packaging
waste.
In 2024, our waste to landfill (W1&W4) decreased by 8.1% (from
2,766 tons in 2023 to 2,543 tons in 2024). The relative waste to
landfill decreased by 9.3% compared with 2023.
Our focused approach on the former Grupo Orbis sites led to a
waste to landfill reduction in the LATAM region.
Overall, we’ve reduced waste to landfill by 78% (absolute) versus the
2018 baseline and 75% of our manufacturing sites are now landfill
free.
We continued to work on reducing our waste streams through
numerous reduction initiatives carried out in 2024. This included
improving the efficiency of our solvent recovery units, which helps to
increase the amount of recovered and reused solvents that would
otherwise be disposed of as waste. In addition, we increased our
efforts to transfer more unintended outflow from our manufacturing
process to by-products reused by third parties. Another example of
our reduction efforts was our material optimization process, which is
focused on diverting slow-moving and obsolete materials (SLOBs)
from scrapping to internal reuse and third-party recyclers and
outlets. We drive waste reduction through multi-disciplinary
collaboration between our commercial teams, supply chain,
manufacturing, HSE&S, our innovation teams and third parties.
Waste stream overview (in kilotons)
Hazardous
Non-
hazardous
Waste disposed to landfill
0.2
2.3
Waste disposed through incineration
12.6
9.6
Waste disposed through other disposal operations
3.3
1.6
Total waste directed to disposal
16.1
13.5
Waste diverted from disposal through recycling
24.5
25.6
Waste diverted from disposal through other
recovery operations
10.7
6.5
Total waste diverted from disposal
35.2
32.1
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
45
ENVIRONMENTAL
AkzoNobel Report 2024
Resource inflows
Policy
We’re focused on increasing the recycled content in plastic
packaging used by our Decorative Paints business in Europe. The
policy, owned by our Decorative Paints EMEA sustainability team,
was adopted in 2020, formalized in 2024 and is reviewed annually.
The scope of the policy is the plastic packaging used by
AkzoNobel's Decorative Paints Europe business.
Introduction
An overview of the materials bought can be found in the visual Our
business model and interaction with material topics on page 31 in
the Impact, risk and opportunity chapter. This section on inflows
details the material topic of recycled content in plastic packaging.
Plastic packaging
Out of all plastic packaging used, the majority is used by our Paints
business in Europe, representing 48% of spend for 2024. In terms of
units, the Paints business in Europe represents 54% of units
bought1. Therefore, we set a target of increasing post-consumer
recycled content (PCR) in this specific segment.
Our target is to have at least 50% PCR content in plastic packaging
used by our Paints business in Europe by 2025. This target applies
to our buckets and excludes lids, as we're currently unable to
achieve the right quality of PCR for lids throughout the regions where
we operate, although we continue to investigate this. We’re also
working on trialing PCR lids and already have some signed off and in
use, for example in the UK and Spain. We already set this target in
2020, but we treat 2024 as the official baseline year under CSRD.
We continue our collaboration with suppliers to ensure we stay on
track to meet our target. If a supplier is unable to provide PCR
content in line with our target, we actively look for alternative
suppliers to help work towards our sustainability goal. In 2024, the
range of PCR in our packs was 25%-90%, and the percentage PCR
in all our Paints Europe buckets was on average 43%. We're on
track for our 2025 target.
For the regions outside Europe, we’ve currently set no targets. The
estimated range of percentage PCR in the Paints businesses outside
of Europe is between 15% and 25%.
Resource outflows: Making substrates
last longer
Policy
We’re focused on extending the durability of assets we protect
through our products. The related policy is owned by the
sustainability team and the Director of Sustainability is accountable
for its implementation. It was adopted in 2024 and will be reviewed
annually. The scope is AkzoNobel's full product portfolio, although
by default some segments have an inherent characteristic, making
them less suitable for longevity and durability purposes.
Introduction
Paints and coatings make a vital contribution to extending the
lifespan of substrates, which effectively means that circularity is built
into the benefits they offer. Our products can play a significant role in
safeguarding assets by helping to expand the durability of
substrates. Therefore, the key opportunity for AkzoNobel, in many
market segments, is to extend and expand the durability of the
assets we protect through our products.
We aim to provide products with strong durability characteristics,
through innovation and value-selling opportunities. We aim to do so
through informing our stakeholders of our commitment to durability,
supporting the implementation of programs and initiatives with the
aim of increasing durability and longevity in the market segments
where we operate.
In addition, we continuously monitor the evolving landscape of
circularity requirements in our downstream markets, driven by
customer, societal and legislative trends (e.g. Ecodesign in the EU).
This information is fed into the strategic roadmaps of our
businesses.
The way we increase durability, innovate and make our products and
substrates last longer differs per end-user segment.
Transport
We supply performance coatings that protect and enhance the
durability of ships, cars, trucks, aircraft and yachts. Our products are
engineered to achieve functional properties such as corrosion
protection, weatherability and protection against wear and tear, all of
which enhance the durability of these modes of transport.
Consumer goods
The consumer goods end market includes electronics, appliances,
packaging and furniture. Within this sector, customers have set
performance requirements on the durability of coatings, such as
resistance to abrasion and scratching, heat resistance and the
resilience of the aesthetic finish.
For food and beverage packaging, we use our extensive experience
in the food contact and beverage markets to minimize the exposure
of risks to end-users, while ensuring that single-use items can be
recycled at end-of-life. Therefore, for this particular segment, the
longer-lasting requirements are not the same as other sectors.
Built environment
Our global portfolio offers solutions for both new-build and
renovation. Many of our products have specific functionalities, such
as anti-corrosion, weatherability, aesthetic, protection, easy-clean for
high traffic resistance, anti-mold technology and anti-microbial
properties.
Durability and longevity are essential for the built environment. As
well as the paints and coatings we provide to customers in the
construction and architectural segment, we also have innovative
service concepts that allow customers to inspect coated objects and
facilitate preventative maintenance over time.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
46
ENVIRONMENTAL
AkzoNobel Report 2024
1 Due to data quality reasons, we currently exclude Romania from our target. This reduces the coverage from 49% to the reported 48% of plastic packaging spend (based on 2024 spend). For units, the scoping excluding Romania reduced the coverage from 55% to the reported 54% of units bought.
In addition to the SPPA methodology used to evaluate longevity
(explained in the Methodology and definitions chapter), we comply
with stringent durability norms in the construction industry, for
example Qualicoat and AAMA, and we offer specific durability
warranties in this sector.
Industrial
Industrial buildings – including manufacturing sites and factories,
power sites, data centers and wind turbines – are crucial elements
for manufacturing and logistics. Our solutions are made to protect
these assets against harsh conditions and the test of time.
Functional properties relevant for the industrial sector include heat
and fire protection, chemical protection, anti-corrosion and weather
protection.
Targets, metrics and 2024 performance
A significant part of our innovation focuses on making products last
longer. However, we haven’t currently set specific targets for
increasing the durability in our portfolio, as we're transitioning to
CSRD implementation, so we haven’t yet formed a proper baseline
to perform our assessment.
In 2024, 15.5% of Paints and 11.8% of Coatings revenue was
considered to provide more durability versus the mainstream
product in the market for that category.
The assessment coverage of our portfolio was 84.3% for Paints and
76.6% for Coatings. For business units not yet analyzed in full, an
extrapolation was made, based on revenue of the analyzed business
units.
The methodology for this assessment can be found in the
Methodology and definitions chapter.
The world’s first purpose-built wind turbine blade testing facility – which is
capable of running simulations at half the speed of sound – was opened at our
Felling plant in the UK. The multi-million euro investment will support the
development of our International protective coatings brand, which supplies wind
farms around the globe.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
47
ENVIRONMENTAL
AkzoNobel Report 2024
EU TAXONOMY
The Taxonomy Regulation establishes the framework for the EU
taxonomy by setting out four conditions that an economic activity must
meet in order to qualify as environmentally sustainable.
A qualifying activity must:
1. Meet the definition of the economic activity, as included in the
Delegated Acts
2. Contribute substantially to one or more of six environmental
objectives, being:
– Climate change mitigation
– Climate change adaptation
– Sustainable use and protection of water and marine resources
– Transition to a circular economy
– Pollution prevention and control
– Protection and restoration of biodiversity and ecosystems
3. Do no significant harm to any of the other environmental objectives
4. Be carried out in compliance with minimum (social) safeguards
The technical screening criteria specify the performance requirements for
any economic activity that determine under what conditions that activity
makes a substantial contribution to a given environmental objective and
does not significantly harm the other objectives. In 2023, all six
objectives listed above were further detailed out and are applicable for
reporting. Companies are required to report on the proportion of
turnover (revenues), capital expenditures (CapEx) and operating
expenditures (OpEx) that’s associated with environmentally sustainable
economic activities, and to what extent these activities are aligned (i.e.
contributing to one or more environmental objectives).
The key performance indicators relevant under EU taxonomy are
turnover, CapEx and OpEx. For the purpose of the calculation of eligible
activities, the following financial information has been derived from
AkzoNobel’s Consolidated financial statements:
• Turnover under EU taxonomy is equal to consolidated external
revenues as reported in our Consolidated statement of income,
amounting to €10,711 million
• CapEx under EU taxonomy is the sum of additions in property, plant
and equipment (see Note 11 of the Consolidated financial statements),
intangible assets (see Note 10 of the Consolidated financial
statements) and right-of-use assets (see Note 12 of the Consolidated
financial statements) from both investments and acquisitions resulting
from business combinations, amounting to €429 million. CapEx as
included in the Consolidated financial statements, which amounts to
€306 million, includes investments in intangible assets and investments
in property, plant and equipment, and excludes the impact from
additions to right-of-use assets of €121 million, as well as the impact
from acquisitions resulting from business combinations of €2 million.
Additions to right-of-use assets are included in the movement
schedule on right-of-use assets, as included in Note 12 of the
Consolidated financial statements
• OpEx is calculated in accordance with the EU taxonomy as direct non-
capitalized costs incurred for the day-to-day servicing of assets,
consisting of research and development costs, short-term leases,
maintenance and repair costs and other similar costs, amounting to
€404 million. This definition differs from OpEx as included in our
Consolidated statement of income. The taxonomy OpEx (per EU
taxonomy definition above) represents an insignificant portion of our
total OpEx (€9,794 million). The EU taxonomy OpEx denominator
equals €404 million. As a result, we make use of the materiality
exemption for the OpEx KPI as per the Disclosure Delegated Act
Annex I, Section 1.1.3.2 and disclose the numerator as equal to zero.
No further assessment is performed regarding taxonomy OpEx
eligibility or alignment
AkzoNobel’s core activity, manufacturing paints and coatings (NACE
Code C20.3), is currently not defined as an eligible activity for EU
taxonomy, and hence no technical screening criteria have been
developed to measure alignment to the environmental objectives. As a
consequence, eligible activities were limited in 2024 and mainly related
to revenues from activities such as coatings for low carbon technologies
and renewable energy and CapEx related to investment in, and
renovation of, buildings.
For the determination of eligible revenues and CapEx, we’ve performed
the following activities:
• Reviewed AkzoNobel’s activities and pre-identified potential eligible
activities
• Provided trainings to personnel involved in data-gathering, explaining
key characteristics of the EU taxonomy guidelines and potential eligible
activities
• Performed a detailed analysis of the individual taxonomy-eligible
economic activities in cooperation with key Finance and Sustainability
personnel
• Set up a multi-disciplinary team in charge of supporting and answering
questions from personnel involved in data-gathering, as well as
reviewing the reported data at a central level
• Consulted with external experts and peers to ensure a correct and
consistent interpretation of the legal requirements
The following activities have been identified as eligible (see also the
following tables):
• 3.1 Manufacture of renewable energy technologies
• 3.3 Manufacture of low carbon technologies for transport
• 3.6 Manufacture of other low carbon technologies
• 4.1 Provision of IT/OT data-driven solutions
• 5.3 Construction, extension and operation of waste water collection
and treatment
• 6.5 Transport by motorbikes, passenger cars and light commercial
vehicles
• 7.2 Renovation of existing buildings
• 7.6 Installation, maintenance and repair of renewable energy
technologies
• 7.7 Acquisition and ownership of buildings
• 8.2 Data-driven solutions for GHG emissions reductions
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
48
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Alignment has not been further assessed for these eligible activities,
primarily because the identified eligible activities are not material for our
business model. In addition, there is currently insufficient data to further
assess alignment criteria, due to the fact that it requires obtaining
information from third parties and various external verifications.
Therefore, no further work has been performed towards the Do no
significant harm (DNSH) and Minimum safeguards (MS) criteria. There
has been no change to our business model compared with last year.
However, we have performed a more thorough assessment of our
activities based on EU taxonomy legislation. As a consequence, we're
reporting eligible revenue and an increased amount of eligible CapEx.
Because the increases aren’t deemed material, we havent restated the
comparative figures.
The template disclosure tables as per Annex II of the Environmental
Delegated Act are included on the next page. The limited eligibility of our
activities is determined by the limited scope of the EU taxonomy for
2024. Despite this inherent non-eligibility, we continue to focus our
efforts towards providing more sustainable solutions for our customers.
EU taxonomy CapEx in € mln
Note in FS
2023
2024
Additions to property, plant and
equipment from capital
expenditures and acquisitions
11
271
282
Additions to intangible assets from
capital expenditures and
acquisitions
10
93
26
Additions to right-of-use assets
from additions and acquisitions
12
124
121
Total
488
429
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
49
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Financial year N
Year
Substantial Contribution Criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities (1)
Code
(2)
Turnover
(3)
Proportion
of
Turnover,
year N (4)
Climate
change
mitigation
(5)
Climate
change
adaptatio
n (6)
Water (7)
Pollution
(8)
Circular
Economy
(9)
Biodiversi
ty (10)
Climate
change
mitigation
(11)
Climate
change
adaptatio
n (12)
Water (13)
Pollution
(14)
Circular
economy
(15)
Bio-
diversity
(16)
Minimum
safeguard
s (17)
Proportion of
Taxonomy
aligned (A.1.)
or eligible
(A.2.)
Turnover,
year N-1 (18)
Category
enabling
activity
(19)
Category
transition
al activity
(20)
€ mln
%
Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Turnover of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
N/A
—
—%
—%
of which Enabling
—%
—%
of which Transitional
—%
—%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Manufacture of renewable energy
technologies
CCM
3.1
70
1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Manufacture of low carbon
technologies for transport
CCM
3.3
122
1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Manufacture of other low carbon
technologies
CCM
3.6
117
1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Turnover of Taxonomy-eligible
but not environmentally
sustainable activities (not
Taxonomy-aligned activities) (A.2)
309
3%
3%
—%
—%
—%
—%
—%
—%
A. Turnover of Taxonomy-eligible
activities (A.1 + A.2)
309
3%
3%
—%
—%
—%
—%
—%
—%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-
eligible activities (B)
10,402
97%
TOTAL
10,711
100%
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
50
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Financial year N
Year
Substantial Contribution Criteria
DNSH criteria ('Does Not Significantly Harm')
Economic Activities (1)
Code
(2)
CapEx (3)
Proportion
of CapEx,
year N (4)
Climate
change
mitigation
(5)
Climate
change
adaptatio
n (6)
Water (7)
Pollution
(8)
Circular
Economy
(9)
Biodiversi
ty (10)
Climate
change
mitigation
(11)
Climate
change
adaptatio
n (12)
Water (13)
Pollution
(14)
Circular
economy
(15)
Bio-
diversity
(16)
Minimum
safeguard
s (17)
Proportion of
Taxonomy
aligned (A.1.)
or eligible
(A.2.) CapEx,
year N-1 (18)
Category
enabling
activity
(19)
Category
transition
al activity
(20)
€ mln
%
Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
N/A
—
—%
—%
of which Enabling
—%
—%
of which Transitional
—%
—%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Provision of IT/OT data-driven
solutions
CE 4.1
1
—%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
—%
Construction, extension and
operation of waste water collection
and treatment
CCM
5.3
2
—%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
<1%
Transport by motorbikes, passenger
cars and light commercial vehicles
CCM
6.5
7
2%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Renovation of existing buildings
CCM
7.2
24
6%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Installation, maintenance and repair
of renewable energy technologies
CCM
7.6
2
—%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
<1%
Acquisition and ownership of
buildings
CCM
7.7
80
19%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
Data-driven solutions for GHG
emissions reductions
CCM
8.2
4
1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
—%
CapEx of Taxonomy-eligible but
not env. sustainable activities
(not Taxonomy-aligned) (A.2)
120
28%
28%
—%
—%
—%
—%
—%
<1%
A. CapEx of Taxonomy-eligible
activities (A.1 + A.2)
120
28%
28%
—%
—%
—%
—%
—%
<1%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible
activities (B)
309
72%
TOTAL
429
100%
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
51
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Financial year N
Year
Substantial Contribution Criteria
DNSH criteria ('Does Not Significantly Harm')
Economic Activities (1)
Code
(2)
OpEx (3)
Proportion
of OpEx,
year N (4)
Climate
change
mitigation
(5)
Climate
change
adaptatio
n (6)
Water (7)
Pollution
(8)
Circular
Economy
(9)
Biodiversi
ty (10)
Climate
change
mitigation
(11)
Climate
change
adaptatio
n (12)
Water (13)
Pollution
(14)
Circular
economy
(15)
Bio-
diversity
(16)
Minimum
safeguard
s (17)
Proportion of
Taxonomy
aligned (A.1.)
or eligible
(A.2.) OpEx,
year N-1 (18)
Category
enabling
activity
(19)
Category
transition
al activity
(20)
€ mln
%
Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
N/A
—
—%
—%
of which Enabling
—%
—%
of which Transitional
—%
—%
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Remediation of contaminated sites
and areas
PP 2.4
—
—%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
3%
OpEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned)
(A.2)
—
—%
—%
—%
—%
—%
—%
—%
3%
A. OpEx of Taxonomy-eligible
activities (A.1 + A.2)
—
—%
—%
—%
—%
—%
—%
—%
3%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible
activities (B)
404
100%
TOTAL
404
100%
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
52
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Nuclear and fossil gas related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and
deployment of innovative electricity generation facilities that produce energy from nuclear processes with
minimal waste from the fuel cycle.
No
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear
installations to produce electricity or process heat, including for the purposes of district heating or industrial
processes such as hydrogen production, as well as their safety upgrades, using best available
technologies.
No
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that
produce electricity or process heat, including for the purposes of district heating or industrial processes
such as hydrogen production from nuclear energy, as well as their safety upgrades.
No
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation
facilities that produce electricity using fossil gaseous fuels.
No
5
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of
combined heat/cool and power generation facilities using fossil gaseous fuels.
No
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat
generation facilities that produce heat/cool using fossil gaseous fuels.
No
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
53
EU TAXONOMY DISCLOSURE
AkzoNobel Report 2024
Characteristics of own workforce, in headcount
Female
Male
Age distribution of our employees
A Under 30 years old
11 %
B 30-50 years old
62 %
C Over 50 years old
27 %
OWN WORKFORCE
Materiality and governance
Our approach to determining material impacts, risks and
opportunities is described in General disclosures. Our assessment
showed two material topics: Health and safety and Working time.
Both topics have been identified as material for our full value chain,
including our own workforce.
We also provide additional disclosures on topics which are required
by other applicable laws or regulations, or whenever the disclosures
serve the information requirement needs of our stakeholders. These
topics are: Gender equality and equal pay; Discrimination and
harassment (including violence); Diversity, equity and inclusion;
Freedom of association and collective bargaining.
For 2024, no material people-related impacts from climate change
transition plans have been identified.
The metrics related to the characteristics of our workforce can be
found in the Summary table at the end of the Sustainability
statements. We refer to the chapter Methodology and definitions for
details on data gathering and reporting systems.
8,912
866
8,910
870
23,874
1,658
24,828
706
Permanent
Temporary
Full-time
Part-time
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
54
SOCIAL
AkzoNobel Report 2024
A
B
C
Material topics
Health and safety
Safety, as one of our core values, is embedded into everything we
do. We care deeply about the safety of our colleagues and everyone
we work with.
Health and safety policy
Through our Health, Safety, Environment and Security (HSE&S)
Policy, we acknowledge our responsibility for protecting the health
and safety of our employees, contractors, customers and neighbors,
while maintaining the security of our people and assets and
protecting the environment. The policy is owned by the HSE&S
department and reviewed and updated on at least an annual basis.
We’re committed to ensuring that business activities are conducted
to prevent harm to our customers, employees, contractors, the
public, other stakeholders and the environment through rigorous
implementation of target setting and monitoring processes,
according to the AkzoNobel HSE&S management system.
It’s our vision to achieve zero injuries, waste and harm through
operational excellence. The environmental aspects, such as waste,
energy and emissions, are covered throughout the relevant chapters
in the Environmental section, while the health and safety elements
are covered in this chapter.
Management programs in the areas of people safety and health,
process safety and security help us live up to the highest standards
in our activities and at our sites. Our commitment to running our
operations safely is underpinned by our Life-Saving Rules and
Golden Principle to stop work if conditions or behavior are unsafe.
Processes for engaging with workers
Our workforce at all locations help to establish and implement annual
HSE&S plans through workers’ representative groups, such as
works councils and labor organizations. This ensures that we
conform to regulatory requirements and/or the requirements from
our ISO certified HSE&S management systems.
Targets related to health and safety
• Fatalities own workforce: Zero
• Fatalities other workers on our locations: Zero
• Serious injuries and fatality frequency own workforce (SIF-F): 3.0
For benchmarking purposes, we continue to monitor the total
recordable work-related accident rate for own workforce.
Learning from high potential events
In addition to learning from actual injuries and incidents, we put
special emphasis and processes in place to learn from high potential
events (HPEs). A high potential event is an incident with a potential
high impact, or a near miss (not causing loss or damage) that might
have, under different circumstances, resulted in high, major or
catastrophic impact.
People safety and health
In 2024, we made further progress with our life-critical procedures
and HSE&S roadmap program. We identified locations that need
improvement in our own operations and put them on a roadmap
with targeted plans and governance, in addition to our focus on
functional excellence and capability building.
During 2024, we stepped up the implementation of our lift truck/
pedestrian segregation program, taking a risk-based approach to
further reduce risk, while our Behavior Based Safety (BBS) approach
focused on maturity assessments to drive continuous improvement.
The company-wide monthly Safety Moments for safety awareness
also continued. They’re used by people managers in team meetings
to keep colleagues in all functions and levels of our organization
involved in – and aware of – everyday safety hazards and safe
behaviors.
We strengthened our life-critical procedures by launching the Guard
Your Hands campaign to encourage and engage people in
processes designed to help minimize hand injuries.
We also launched the Count On Me For Safety campaign, focused
on making every voice count to promote an open culture and team
collaboration for learning, finding solutions and improving safety.
Our industrial hygiene and ergonomic programs are actively
managed to support a safe work environment and reduce
occupational illness-related absenteeism.
Serious injuries and fatalities
We’re deeply saddened to report that one of our sales
representatives in Medellin, Colombia, lost their life in a traffic
incident after being hit from behind by a dump truck while riding a
motorbike.
There were no other serious injuries in 2024. The 2024 SIF-F was
1.4 (our target is less than 3.0).
Total recordable work-related accident rate own workforce
During 2024 there were 107 recordable work-related accidents for
our own workforce (2023: 110). The total recordable work-related
accident rate for our own workforce decreased to 1.46 (2023: 1.53).
The increase after 2022 is due to a relatively high number of work-
related accidents at acquired companies. The rate is still at an
industry-leading level and we continue to upgrade these acquired
sites to AkzoNobel standards as part of their integration.
In 2024, 63% of our manufacturing sites had been recordable work-
related accident free for over a year (2023: 63%).
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
55
SOCIAL
AkzoNobel Report 2024
Total recordable work-related accident rate own workforce
(per 1,000,000 hours)
1.07
1.18
1.53
1.46
2021
2022
2023
2024
The total recordable work-related accident rate is the number of accidents resulting in a medical
treatment case, restricted work case and lost time case or fatality, per 1,000,000 hours worked.
Recordable work-related ill health of employees
During 2024, there were two cases of recordable work-related ill
health of employees (2023: zero).
Process safety
We systematically assess, manage and communicate the
operational risks of injuries or harm that may result from the work we
do.
In 2024, we transitioned from our dedicated Process Safety
Management (PSM) improvement project and progressed towards
embedding process safety standards. We launched our three-year
process safety strategy and plans to achieve leading standards in
process safety.
To ensure our people, sites and environments stay as safe as
possible, we continued the deployment of our Process Safety
Fundamentals for frontline workers, establishing operational
practices that help prevent incidents.
During 2024, we continued the deployment of our Basis of Safety
standards, with a focus on resins, aluminum bonding and high-
speed dispersers. The standards define company expectations for
these higher risk activities. Our locations continue to implement
equipment modifications via a risk-based approach.
HSE&S management foundation
Our company-wide HSE&S management system is applicable to the
whole workforce and is globally certified against ISO 14001 and ISO
45001 standards. The management system consists of policies,
procedures, templates and best practices to promote learning
across the organization.
HSE&S audits are performed in three-year (for high hazard sites) to
five-year (other sites) cycles.
Compliance assurance is a key HSE&S priority because it ensures
our license to operate and our business continuity in a fast-changing
regulatory environment. Our company-wide HSE&S compliance
assurance process is proactive and digitally supported by tools from
a global third-party supplier.
Working time
Global Working Hours Standard Policy
As laid down in our Code of Conduct, our working hours and
remuneration comply with laws and are fair and just. In addition, in
2024 we finalized our Global Working Hours Standard Policy,
applicable to all employees that work under a time registering
system. We focused on this group because, based on our double
materiality assessment, the impact of excessive working time is
mainly applicable for our factory and warehouse employees.
This policy includes – alongside compliance with local laws and
regulations on working time – maximum working hours (including
overtime) of no longer than 12 hours a day and 60 hours a week for
a full-time employee, with at least one 24-hour consecutive period of
rest in every seven-day period. Managers of employees not on a
time registering system (such as most office workers) are responsible
for giving the right example in terms of working hours and helping
employees to manage their workload in an efficient and healthy way
to avoid excessive working hours. The policy became effective as of
January 1, 2025. AkzoNobel’s Global HR Director owns this policy,
which is reviewed annually.
Processes for engaging with workers on working time
In 2024, we measured our efforts based on Voices survey results for
the Workload topic. These results are a direct reflection of the
perception of our employees and cover both the employees under a
time registering system and those who don’t register their time.
We reviewed relevant questions in our Voices engagement survey
(reference is made to the Employee engagement paragraph in this
chapter). On a global level, the scores related to workload were
similar to last year (3.8 out of 5), and slightly higher than the
benchmark of manufacturing companies (3.7 out of 5). The survey
enabled us to gain insights into employee concerns and identify
areas for improvement.
In addition to existing local initiatives on well-being, we also launched
a global well-being portal this year, where employees can explore
our health and well-being resources. We started by rolling it out in
seven countries (Canada, Mexico, US, Brazil, UK, Ireland and the
Netherlands), covering almost 31% of our total employees. Going
forward, we’ll continue our efforts to develop existing portals and
expand beyond the above-mentioned countries.
During 2025, we’ll implement the Global Working Hours Standard
Policy and will start gathering the results and measure our efforts
towards compliance. Any findings will be followed up accordingly
and potential action plans put in place.
Targets for engaging with workers on working time
Currently, we don’t have targets in relation to working time for our
own workforce. We’re determining how to effectively track
compliance with our global working hours rules, which includes
considering the root causes.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
56
SOCIAL
AkzoNobel Report 2024
Other relevant topics
Diversity, equity and inclusion
We continue to work towards becoming a more diverse, equitable
and inclusive workplace. With a renewed strategy in place since
2023, we've continued to embed DE&I practices across our
processes and behaviors, where appropriate.
Our DE&I position paper can be found on our website. We’ve set
targets related to female executives and employee engagement,
both are explained below.
Our Vibe network aims to celebrate ethnicity, inclusivity and our cultural diversity.
Female executives
We’ve set a target of reaching 30% female representation at our
executive level1 by the end of 2025. Currently, the female executive
ratio is at 26% (78 female executives and 227 male executives). The
1% points increase of the ratio from 2023 showcases our intention
and efforts to achieve a female representation that better reflects the
organization we envision and communities we operate in. During the
year, we also included this target in our senior executive long-term
incentive plans (LTI), impacting 8.5% of their total value.
Our people managers have successfully collaborated with our talent
management and talent acquisition teams to prioritize internal hiring
decisions, further improving the promotion rate of our internal talent.
We’ve also set targets for female representation at middle
management levels. This has helped us to increase female
representation by 1.3% percentage points in our senior middle
management positions.
We also track female representation in our Supervisory Board, Board
of Management and Executive Committee. Our plans for reaching
our DE&I ambitions are further described in both the DE&I position
paper and the DE&I Policy for the executive level, Board of
Management and Supervisory Board, which are available on our
website. Further information on the targets applicable to the Board
of Management and the Supervisory Board can be found in the
Corporate governance statement and Summary table. Specifically,
the gender composition in the Supervisory Board is available on
page 98. The gender composition in the Board of Management is
detailed on page 96.
Female executives in %
Target
26%
25%
26%
30%
2022
2023
2024
2025
Percentage of women at executive level. Please refer to the Methodology and definitions chapter of
these Sustainability statements for the full definition.
DE&I networks
Our DE&I networks organized internal events to cover relevant
issues, celebrate diversity and increase awareness of various topics.
One of our networks, known as Vibe, addresses cultural, inclusivity
and ethnicity matters. During the year, it focused on highlighting
topics such as intersectionality, cultural awareness, religion and
migration, bringing together our employees who shared personal
and cultural insights. It’s now our largest network, with more than
2,000 members and continues to grow.
In addition, we’ve also launched the DE&I Site Ambassador role,
which is designed to connect our employees on the ground with the
DE&I topics being addressed in the corporate environment. This
group was trained and provided with material and resources to
facilitate conversations and increase knowledge and awareness. The
first wave onboarded 83 DE&I Site Ambassadors, covering most of
our manufacturing sites with more than 100 employees. The
remaining sites will be trained in 2025.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
57
SOCIAL
AkzoNobel Report 2024
1 Refer to the definition of executive level (top management) in the Methodology and definitions chapter of these Sustainability statements.
Diversity and inclusion employee networks
Building an inclusive workplace
We continue to focus on our manufacturing and supply chain sites to
make sure that our production population experience a healthy and
inclusive environment. To this end, investments were made to
improve the facilities, especially women’s bathrooms, showers,
uniforms and changing rooms.
In 2024, we took part in the Disability Equality Index together with
542 other companies, participating in India, the UK, the US and
Brazil.
Turnover rate
Overall employee turnover in 2024 was 12% (2023: 13%); voluntary
turnover remained stable at 7% (2023: 7%). For the definition of the
employee turnover rate, please refer to the Methodology and
definitions chapter.
Employee engagement
In 2023, we adopted a new employee engagement platform, called
Voices.
The Voices engagement survey is carried out once a year for our
entire own workforce, regardless of the employee lifecycle stage
they’re in, and featured 50 questions in 2024.
We achieved a participation rate of 89% (2023: 89%), with close to
32,000 employees taking part and providing their feedback. This
enables us to discuss and pinpoint follow-up actions to enhance our
work environment by identifying strengths and areas for
improvement, in addition to monitoring and analyzing trends.
Employee engagement scored 4.0 out of 5.0, consistent with last
year and above the external benchmark average of 3.8. The
employee net promoter score (eNPS) is a global standard for
organizations to measure employee satisfaction. For eNPS, 0-20 is
regarded as good, 20-50 very good, while higher than 50 is
excellent. This year, AkzoNobel's eNPS was rated 10, well above the
manufacturing companies benchmark by seven points.
While most of our engagement drivers remained stable, the health
driver increased by 0.2 at the organizational level from 2023, which
can be attributed to the improvements w’e’ve made since the
previous year.
To help monitor our progress, the 2024 survey also featured a
follow-up question asking employees if they’d observed
improvements in specific areas. The organization scored 3.5 out of
5.0, reflecting some of the improvements that have been
implemented. This score, however, also indicates that there’s room
for improvement in the follow-up of actions.
The organization’s result for the DE&I drivers was 4.1 out of 5.0,
among the highest scores across the company. Compared with
2023, the score was stable, showing an underlying increase of 0.1
for our female population.
The most senior role at AkzoNobel with operational responsibility for
ensuring that we properly engage with our employees is the Process
Owner Human Resources.
Global participation rate
Global engagement index
89%
11%
4
1.0
31,827 out of
35,810 Voices
Benchmark
(manufacturing) 3.8
Employee net promoter score (eNPS)
Benchmark for manufacturing companies2
AkzoNobel
3 10
Discrimination and harassment
As laid down in our Code of Conduct, we treat people with dignity
and respect, and we support diversity and inclusion. Our Code also
states that we don’t harass or discriminate, whether through culture,
nationality, race, religion, gender, disability, association, sexual
orientation or age. We strive to foster a culture of dignity and
respect, free of harassment and discrimination, as stated in our
Human Rights position paper.
Please refer to the Business conduct chapter of the Sustainability
statements for more details on the Code of Conduct and our
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
58
SOCIAL
AkzoNobel Report 2024
2 Based on data from Eletive, our employee engagement platform.
-100
0
100
SpeakUp! grievance mechanism, which are among the procedures
we have in place to ensure that discrimination is prevented and
diversity and inclusion is advanced.
In our Voices survey, we asked our employees whether they’re free
from bullying or harassment in their workplace, which can be
answered anonymously. The global average score on this question
was a 4.3 out of 5.0 (2023: 4.3). We also asked whether they felt
they were not discriminated against in their workplace, which scored
4.2 out of 5.0 (2023: 4.2) and whether they felt that people of all
backgrounds are given the same opportunities in their workplace,
which scored 4.1 out of 5.0 (2023: 4.0). If an employee scored this
question low (1 or 2 on a scale of 5), the manager and the relevant
HR manager would automatically be notified of this, without
disclosing the identity of the employee. They can then take
appropriate action to address the issue.
We also analyzed SpeakUp! cases related to (alleged) discrimination
or harassment in the workplace. In 2024, 84 cases were reported, of
which:
• 15 cases were found (partly) substantiated
• 9 were unsubstantiated cases
• 14 were referred to HR to address outside the SpeakUp! process
which, after review, were found to involve a separate HR matter
(e.g. complaints about noise in the open workspace), rather than a
(potential) discrimination and/or harassment related violation
• 2 cases did not have sufficient information, for example the caller
hang up or withdrew the call
• 44 cases are still under investigation
Actions taken on the (partly) substantiated cases involved three
dismissals, eight mandatory trainings, two warning letters and two
cases where the action was not needed, for example due to the
person resigning.
Processes for engaging with own workers
and workers’ representatives about impacts
and raising concerns
Our approach to materiality, including the engagement on impacts,
risks and opportunities, is described in Impact, risk and opportunity
management.
As described in the Integrity and compliance management chapter,
our SpeakUp! grievance mechanism offers employees a means to
raise allegations regarding compliance with our Code of Conduct
and violations of applicable laws and regulations. A dedicated team
follows an investigation protocol which adheres to strict principles of
confidentiality, respect for anonymity, non-retaliation, objectivity and
the right to be heard.
For other concerns that might fall outside the scope of our Code of
Conduct, employees can use other formal and informal channels to
raise their concerns. Examples of formal channels are the option to
raise a formal complaint to works councils, trade unions,
occupational health services or committees, trusted persons and
harassment committees. The availability of these aforementioned
channels can differ, depending on the region or country the
employee works in. Examples of informal channels include raising
concerns to the relevant line manager, HR or site manager,
suggestion boxes at locations, or during town halls held at locations.
Freedom of association and collective
bargaining
As laid down in our Code of Conduct, we respect individual rights to
freedom of opinion and association, and we respect the right to
collective bargaining and co-determination.
AkzoNobel’s current percentage of own employees covered by a
collective bargaining agreement (CBA) is 40%.
Gender pay gap and total compensation
The gender pay gap was not determined to be a material topic,
following our double materiality assessment. However, from a
stakeholder information requirement perspective, we include this
topic.
In 2024, we performed the calculation of gender pay gap within
AkzoNobel. The results found a 3.8% gap in favor of women. We
refer to the Methodology and definitions chapter for details on the
calculation.
During 2024, we began preparing for the implementation of the EU
Pay Transparency Directive, which will become applicable to us after
being transposed into national legislation.
For further compensation indicators, such as pay ratios, please refer
to page 120 in the Remuneration report.
Training and skills development indicators
Training and skills development was not determined to be a material
topic, following our double materiality assessment. However, as we
consider it good practice to provide this information, we include this
topic.
Talent development
In 2024, we expanded the coverage of our new talent management
framework, which is based on an experience-based talent
management approach. We believe in a culture that stimulates and
facilitates talent sharing, where internal opportunities are offered to
our employees. During 2024, the framework was extended to
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
59
SOCIAL
AkzoNobel Report 2024
around 14,000 employees, mostly in managerial roles (40% of the
total population as per year-end 2024). From this population, 31%
are considered key talent for the organization, and within the key
talent identification, 6% are considered high potential talent.
From a gender split perspective, 35.3% are female key talent and
32.5% are female high potential talent; while 64.7% are male key
talent and 67.5% are male high potential talent. Key talent
represents 11% of our total workforce, while high potential talent
represents 2%. Please refer to the Methodology chapter for the key
talent and high potential talent definitions.
For 2025, we aim to continue developing our assessed talent and
plan for filling the identified talent gaps.
Training hours
We believe that investing in our employees is crucial to our continued
growth and success, and we’re proud to offer comprehensive
training and development opportunities to our teams.
We designed our learning and development framework according to
our learning formula of 70:20:10. The most effective way to learn and
develop a new skill or behavior is to apply and practice on the job
and in real-life situations. When applying the formula, 70% relates to
experience and on-the-job learning – such as job shadowing and
stretch projects – 20% relates to exposure (e.g. through mentoring
and masterclasses) and 10% to formal education. Our total training
hours provided relate to the 10% formal education.
In 2024, we provided a total of 112,167 training hours to employees,
equipping them with the skills and knowledge necessary to excel in
their roles and contribute to the success of our organization. The
average number of training hours was 2.54. This only includes
training hours for registered learning efforts and excludes
compliance-based mandatory trainings.
Transforming the Learning and Development landscape
AkzoNobel is taking steps to evolve from traditional classroom or
simple e-learning offerings, to providing newer AI-driven learning
technology. In September 2024, we took significant steps to
transform our Learning and Development landscape by introducing a
new learning and career platform with an emphasis on learning in the
service of business and employee career growth. Through this
technology investment, we’re able to deliver more personalized,
data-centric learning experiences. This innovative approach not only
focuses on building vital skills the company needs, but also
enhances employee mobility within experiential and social learning
offerings.
We’ll continue to invest in targeted learning strategies which foster a
more future-ready workforce, in alignment with the learning needs of
our employees.
Performance reviews
The overall percentage of employees who participated in our regular
performance review was 96% (women: 98%; men: 96%).
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
60
SOCIAL
AkzoNobel Report 2024
WORKERS IN OUR VALUE CHAIN
Materiality
Our approach to determining our material impacts, risks and
opportunities is described in General disclosures. For workers in our
value chain, our assessment showed two material topics: Working
time and Health and safety. Please also refer to the Statement on
due diligence chapter in the General disclosures chapter for
disclosures on modern slavery, which serves an information
requirement of our stakeholders.
Workers in our value chain include the employees of our upstream
suppliers and downstream logistic service providers, as the identified
impacts are related to these workers.
Material topics
Policies related to workers in our value chain
The policies described below are relevant to both our material
topics, as well as the additional disclosures.
Business Partner Code of Conduct
Our business partners are expected to follow our company’s core
values of safety, integrity and sustainability. These are set out in our
Business Partner Code of Conduct (BP CoC). This code sets out the
ethical behavior we expect from anyone we do business with,
including our suppliers, distributors and agents. All new business
partners are expected to apply the principles laid down in the BP
CoC, or apply equivalent principles. These principles include, among
other things, respect for human rights, people, process and product
safety, fair and just working hours and remuneration, and grievance
mechanisms for their employees and other interested parties. Non-
compliance with the BP CoC may lead to measures being taken,
including termination of the business relationship.
Responsible Sourcing Policy
In 2024, we established a Responsible Sourcing Policy which is built
on our Business Partner Code of Conduct. It provides a set of
minimum expectations that all our business partners must comply
with to conduct business with AkzoNobel.
Partnerships based on responsible sourcing help us mitigate risk and
build trust among consumers and stakeholders. AkzoNobel’s
Responsible Sourcing Policy reflects our commitment of working
together with our suppliers towards a long-term, sustainable and
successful future for all parties.
The policy covers a wide range of sustainability topics, including but
not limited to, working time, health and safety, human rights,
environment and the responsible sourcing of minerals. The scope of
the policy refers to all direct suppliers with procurable spend across
all procurement categories in those regions where we buy materials
or services.
Through the implementation of this policy, we commit to respecting
the following: the International Labour Organization (ILO) Declaration
on Fundamental Principles and Rights at Work; the Organization for
Economic Co-operation and Development (OECD) Guidelines for
Multinational Enterprises; the Universal Declaration on Human
Rights; the UN Guiding Principles on Business and Human Rights;
and the Science Based Targets initiative (SBTi).
AkzoNobel’s Chief Procurement Officer (CPO) owns this policy,
which is reviewed annually.
Processes for engaging with value chain
workers about impacts
In the Governance chapter of these Sustainability statements, we
describe how we manage our relationships with suppliers. It also
describes how we perform EcoVadis assessments through our
membership of Together for Sustainability (TfS) on high-risk and/or
high-spend suppliers. In addition, we perform third party, on-site TfS
sustainability audits on selected direct raw material and packaging
suppliers in high-risk areas. The audits address our material topics,
including but not limited to, Occupational Health and Safety,
Emergency Preparedness and Working time. The third-party auditors
(approved by TfS) are requested to verify document reviews and
conduct individual and group interviews. Candidates for these
interviews are randomly selected by the auditor, without interference
from management.
Targets related to our material topics
EcoVadis assessments
As part of our TfS membership, we perform EcoVadis assessments
on high-risk and/or high-spend direct suppliers, as further described
in the Governance chapter of these Sustainability statements. In
addition to the minimum total assessment score of 45, our target
also includes a minimum score of 50 in the labor and human rights
sub-section of these assessments, which covers our material topics
of Health and safety and Working time. We ask our suppliers to
achieve these scores through an annual assessment. For suppliers
meeting our target scores, we grant a validity of three years.
We chose our score benchmark of 50 for the labor and human rights
sub-section (which includes metrics on Working time and Health and
safety) based on the EcoVadis scoring principles, where a score of
50 is rated as “good”. We track how many suppliers meet these
requirements through our Sustainability Supplier Program.
For 2024, both the total score and the labor and human rights score
were met by 67% of our suppliers (2023: 63%). Our target is to
reach 75% of our suppliers meeting both of these scores by 2030.
The labor and human rights score was met by 71% of our suppliers.
We don’t have a separate target for the percentage of suppliers
meeting the minimum score of 50 on the labor and human rights
sub-section, since 2024 was the first year we started reporting on
this.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
61
SOCIAL
AkzoNobel Report 2024
Suppliers meeting EcoVadis requirements (in %)
Target
67%
75%
2024
2030
We’re considering using the corrective action planning (CAP) tool in
EcoVadis for suppliers that have improvement areas on our material
topics under CSRD. The aim is to enhance the measurement and
follow up of supplier performance on the material topics of health
and safety, as well as working time. This is subject to an
enhancement of the tool as soon as it becomes available. During
2024, there were no suppliers with whom the contractual
relationship was terminated due to our impacts on value chain
workers.
Together for Sustainability (TfS) audits
For TfS on-site audits, we achieved a completion of 87% on major
and critical findings, of which our material topics on Working time
and Health and safety make up the largest share.
Processes to remediate negative impacts and
channels for value chain workers to raise
concerns
As described in the Integrity and compliance management chapter,
our SpeakUp! grievance mechanism offers employees and third
parties a means to raise allegations relating to compliance with our
BP CoC and violations of applicable laws and regulations. A
dedicated investigation team follows an investigation protocol which
adheres to strict principles of confidentially, respect for anonymity,
non-retaliation, objectivity and the right to be heard. Our partners
should provide their employees and other interested parties with a
mechanism to raise concerns about violation or potential violation of
laws and the values provided in this Code of Conduct. These
concerns must be addressed in a fair and transparent way. Our
business partners should protect confidentiality and prohibit
retaliation against those raising the concern. A review of adherence
to this requirement is part of the on-site audits.
In addition, as part of our EcoVadis assessments (described
previously), we also ask whether suppliers have implemented a
formal grievance mechanism encouraging employees and external
stakeholders to report potential violations of the partner’s external
stakeholder human rights policies.
Other relevant topics related to value chain
workers
In addition to our material topics, we also provide additional
disclosures on other relevant topics related to value chain workers.
One of these topics is modern slavery, as these disclosures serve an
information requirement of our stakeholders. Policies related to our
BP CoC and our Responsible Sourcing Policy are also applicable to
this topic.
The additional policies in place are described in the following
paragraphs.
Policies related to workers in our value chain
Conflict minerals and mica minerals
We have separate position statements on conflict and mica minerals.
In these statements, we describe our commitment to responsible
sourcing as an important part of AkzoNobel’s supplier sustainability
strategy. We do our best to ensure that our suppliers’ products and
components don’t contribute to adverse impacts on human rights.
We do that by conducting due diligence together with our suppliers
into the conflict minerals and mica minerals supply chains, and take
appropriate action when necessary. Please refer to the Statement on
due diligence under General disclosures for more information.
We’re a founding member of the Responsible Mica Initiative (RMI),
whose mission it is to establish a fair, responsible and sustainable
mica supply chain in India, that’s free of child labor by 2030. Via this
initiative, we engage with workers in the supply chain, for example
through the Supply Chain Mapping and Workplace Standards
program and the Community Empowerment program.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
62
SOCIAL
AkzoNobel Report 2024
BUSINESS CONDUCT
Materiality
We haven't identified any material outcomes related to business
conduct. However, in line with good practice, we provide
transparency on the matters below.
Corporate culture and business conduct
policies
We’re committed to leading with integrity in our industry. The
Integrity and compliance management chapter sets out in more
detail how we establish, develop and promote a corporate culture.
Our Code of Conduct
Our core values define the culture and behaviors that we’re
committed to embedding throughout AkzoNobel. We have three
core values – safety, integrity and sustainability. Our Code of
Conduct, which is available in 32 languages, defines the way we live
our core values every day. It covers various topics, including anti-
bribery and anti-corruption, competition law, conflicts of interest,
health and safety and human rights. In addition, our Code of
Conduct provides protection against retaliation, as there are no
repercussions for reporting breaches of the Code in good faith, even
if the report is unfounded.
We carry out Code of Conduct training for all our employees every
other year (both online and face-to-face, and tailored to online and
offline colleagues), as well as specific training on key risks to
targeted audiences. The progress on training is reported to our
Executive Committee and Audit Committee on a quarterly basis. This
is also supported by a communication program, which focuses on
having a strong tone at the top, raising greater awareness and
driving improvement. For more information on how we create
awareness of our Code of Conduct and SpeakUp! process, please
refer to the Integrity and compliance chapter.
Culture of integrity
The regional Integrity and Compliance Managers contribute to further
strengthening the culture of integrity. This includes identifying and
addressing local risks and cooperating with the business and
functional teams to tailor the program to local risks and follow up on
internal audit findings and SpeakUp! cases.
Protection of whistleblowers - SpeakUp!
Our SpeakUp! grievance mechanism offers employees and third
parties a means to raise concerns relating to compliance with our
Code of Conduct. Our dedicated investigation team follows an
investigation protocol which adheres to strict principles of
confidentiality, respect for anonymity, non-retaliation, objectivity and
the right to be heard.
Anyone who believes they’ve been retaliated against for making a
good faith concern can also report such retaliation, which will be
investigated as a potential Code of Conduct violation. As set out in
the Integrity and compliance management chapter, our Integrity and
Compliance SpeakUp! Committee reviews these investigations and
also decides on discipline and control improvement actions, as well
as monitoring and responding to any trends identified in
investigations. If a certain case is substantiated as a result of the
investigation, follow up actions and (potential) sanctions are put in
place. The number of reports and the status are reported quarterly
to the Executive Committee and Audit Committee.
All reports raised through our SpeakUp! channel are tracked and
monitored by responding and acting upon any trends identified in
the investigations. Additionally, the SpeakUp! process is audited by
our Internal Audit team to propose further improvements and ensure
its effectiveness. During 2024, no severe human rights impacts and
incidents were reported through our SpeakUp! mechanism relating
to own workforce and workers in our value chain.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
63
GOVERNANCE
AkzoNobel Report 2024
Management of relationships with suppliers
We work with our suppliers to create value and continuously improve
our sustainability performance and theirs. We have dedicated
programs in place to engage with suppliers on the various subjects.
With regard to social and environmental impacts, all direct suppliers
with an annual spend of more than €1,000 (one thousand euros) are
requested to sign our Business Partner Code of Conduct. This is a
core part of our commercial agreement with our suppliers and
enables us to do business based on our core values of safety,
integrity and sustainability. In 2023, we implemented an IT solution to
automate the collection and filing of the Code of Conduct
signatories, which we continued to use in 2024 for new suppliers, as
well as updating the Codes of Conduct signed more than three
years ago.
For direct suppliers with an annual spend between €250,000 and €1
million, we perform an annual risk analysis, reviewing the country and
industry risks our suppliers are exposed to, using a tool from a third-
party provider (IQ Plus from EcoVadis). The threshold has been set
to ensure it also covers small and medium sized companies. Any
suppliers identified as medium high, high or very high through this
annual approach are selected for the Together for Sustainability (TfS)
Assessment. Suppliers with a spend of more than €1 million are in
scope for the assessment irrespective of their abstract risks.
Supplier risk and spend approach
Spend classes
<€250K
>€250K to €1 mln
>€1 mln
Risk analysis
(through IQ plus)
abstract country
and industry risk
––
low/medium
low risk
medium high/
high risk
low to high risk
Applicable programs per spend classes
Spend classes
<€250K
>€250K to €1 mln
>€1 mln
BP CoC
All suppliers with an annual spend of €1K or more
EcoVadis
assessments
––
––
All suppliers
TfS audits
––
––
Selected suppliers
We tightened our risk analysis criteria in 2024, as mentioned above,
by starting to use the IQ Plus tool. We increased the number of
suppliers joining our sustainability program from 1,347 to 1,557,
covering 84% of our global spend and 97% of our upstream carbon
emissions.
Looking at carbon emission mitigation, because 46% of our carbon
emissions come from our upstream activities, this is an area where
we can make a big impact through collaboration and innovation with
our suppliers. More details can be found under Climate change
mitigation.
TfS (of which we’ve been a member since 2013), is a procurement-
driven initiative that improves the sustainability performance of
chemical companies and their suppliers. The program is based on
the UN Global Compact and Responsible Care® principles. The
sustainability assessments are performed by EcoVadis, a partner of
both TfS and AkzoNobel and covers topics in the areas of
environment, labor and human rights, ethics and sustainable
procurement, based on international standards.
Suppliers in sustainability program
bar size indicates total number of suppliers
Meet expectations
Under development
Not assessed/Lost validity
2022
2023
2024
Suppliers in this sustainability program are requested to achieve a
total score of 45 and a labor and human rights score of 50 through
an annual assessment. We're proud to see an increasing number of
suppliers in the program achieving above expectations. Suppliers
not yet meeting these thresholds are shown as “under development”
in the graph. Complementary to the assessment, we perform third
party TfS audits on selected supplier sites in risk regions. In 2024, a
total of 25 TfS site audits were performed on our suppliers.
All suppliers have access to the TfS and EcoVadis academy with
dedicated courses on sustainability topics in multiple languages. In
2024, 350 suppliers completed 2,225 trainings in either of the two
academies (TfS or EcoVadis academy) or attended one of the live
webinar sessions presented by AkzoNobel experts. For more
information about our approach to human rights in our upstream
value chain, see Workers in our value chain.
For indirect suppliers, the TfS program already addresses
sustainable procurement activities at our suppliers (our Tier 2
suppliers). In addition, we have a human rights due diligence
program to address potential impacts on human rights in our value
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
64
GOVERNANCE
AkzoNobel Report 2024
52%
63%
24%
19%
17%
67%
1,432
1,347
1,557
chain beyond our first tier suppliers. More information can be found
in the Statement on due diligence under General disclosures.
As part of our approach to managing our relationship with suppliers,
we provide various sustainability trainings to our buyers. These
trainings are available via our SuccessFactors learning academy and
the TfS academy. We also offered live trainings on carbon emission
reduction and the upcoming legislation. In total, 74% of people in
procurement completed one or more trainings in any of the formats.
Prevention and detection of bribery and
corruption
At AkzoNobel, we’re committed to conducting our business fairly,
transparently and with integrity. We don’t make, offer or authorize
bribes or conduct any other form of unethical business practice. We
believe in competing on the merits of our products.
Our rules and procedures related to anti-corruption or anti-bribery
can be found on our Policy Portal, which is accessible to our
employees. The regional Integrity and Compliance Managers provide
support for identifying and addressing local risks, and cooperating
with the business and functional teams to tailor the program to local
risks and follow up on internal audit findings and SpeakUp! cases.
In 2024, we further strengthened our Anti-Bribery and Anti-
Corruption program by launching the Donations, sponsorships and
hospitality registration and approval tool. We've deployed new online
training on critical anti-bribery and anti-corruption topics to increase
employee awareness.
Any alleged violation of our anti-corruption or anti-bribery rules and
procedures can be reported through our SpeakUp! process (as
previously described) and is then investigated by an independent
team.
Political engagement and lobbying activities
As a leading paints and coatings company, we participate in the
public debate about various topics within our industry. Collaborating
with stakeholders is fundamental to what we want to achieve. Our
lobbying activities and broader stakeholder engagement are guided
by our company strategy and governance and are based on material
impacts, including our approach to sustainability. Oversight for these
topics lies with the Communications function, reporting to the
Executive Committee. AkzoNobel representatives engage directly
and indirectly – via trade and industry associations, as well as
dedicated sustainability coalitions – with stakeholders globally.
Our main topics are:
• Relationships with (local) governments and communities where the
company has operations. This includes identifying trends,
obligations and expectations in relation to our license to operate,
as well as sharing views in support of a competitive company and
industry
• Contribute to the green transition, for example by sharing expertise
about value chain carbon footprint reduction and how our
products enable others to become more sustainable
• Chemicals and environmental regulation, including sharing our
view on risk-based substance management as relevant for paints
and coatings products and manufacturing
• Innovation and R&D, in support of an innovation-friendly
environment
• International corporate social responsibility, promoting sustainable
business practices and policies
We have a global policy in place around donations and sponsorships
rules and procedures. It states that we should not promise, offer,
give or authorize anything of value, directly or through others, with
the intent to improperly influence or reward a business decision. The
policy adds that all employees have a responsibility to make
decisions in the company’s best interest and to ensure that our
dealings with (business) partners are objective and not influenced by
donations or sponsorships. Our policy dictates that we do not
provide donations and/or sponsorships to organizations owned,
controlled by, associated with, or at the behest of government
officials.
For more information, see our position statements:
www.akzonobel.com/en/about-us/position-statements
Akzo Nobel N.V. is registered in the EU Transparency register: ID
number: 365563511941-15. Examples of collaborations can also be
found on our website: www.akzonobel.com/en/about-us/
collaborations-
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
65
GOVERNANCE
AkzoNobel Report 2024
SUSTAINABILITY PERFORMANCE SUMMARY1
Own workforce
ESRS 2
ESRS 2 General disclosures
Supervisory Board equal gender representation
%
33
Own workforce
ESRS 2
ESRS 2 General disclosures
Board of Management equal gender representation
%
0
Own workforce
ESRS 2
ESRS 2 General disclosures
Executive Committee equal gender representation
%
20
Own workforce
ESRS 2
ESRS 2 General disclosures
Number of employees at executive level
Number
305
Own workforce
ESRS 2
ESRS 2 General disclosures
Female executives
%
21
22
26
25
26
30 (by 2025)
Own workforce
ESRS 2
ESRS 2 General disclosures
Number of non-executive members
Number
9
Own workforce
ESRS 2
ESRS 2 General disclosures
Number of employees (headcount) at top management level
Number
305
Own workforce
ESRS 2
ESRS 2 General disclosures
Percentage of employees at top management level
%
1
Climate change
E1
E1-5
Total energy consumption related to own operations2
MWh
809,000
905,814
844,508
843,146
847,081
711,486
Climate change
E1
E1-5
Non-renewable energy production
MWh
1,475
Climate change
E1
E1-5
Renewable energy production
MWh
4,801
9,708
12,642
18,077
20,042
Climate change
E1
E1-5
Energy intensity from activities in high climate impact sectors (total energy
consumption per net revenue)
MWh/€
0.00008
Climate change
E1
E1-5
Total energy consumption from activities in high climate impact sectors
MWh
809,000
905,814
844,508
843,146
847,081
Climate change
E1
E1-5
Total energy consumption from fossil sources
MWh
475,835
Climate change
E1
E1-5
Total energy consumption from nuclear sources
MWh
11,092
Climate change
E1
E1-5
Total energy consumption from renewable sources
MWh
207,684
260,488
272,844
333,540
360,154
Climate change
E1
E1-5
Fuel consumption from renewable sources
MWh
1,562
Climate change
E1
E1-5
Consumption of purchased or acquired electricity, heat, steam, and cooling from
renewable sources
MWh
341,961
Climate change
E1
E1-5
Consumption of self-generated non-fuel renewable energy
MWh
4,380
8,759
11,139
15,957
16,631
Climate change
E1
E1-5
Fuel consumption from crude oil and petroleum products
MWh
36,516
Climate change
E1
E1-5
Fuel consumption from natural gas
MWh
238,237
270,391
253,859
246,523
239,643
Climate change
E1
E1-5
Fuel consumption from other fossil sources
MWh
0
Climate change
E1
E1-5
Consumption of purchased or acquired electricity, heat, steam, or cooling from fossil
sources
MWh
199,676
Climate change
E1
E1-5
Percentage of fossil sources in total energy consumption
%
56
Climate change
E1
E1-5
Percentage of energy consumption from nuclear sources in total energy consumption
%
1
Climate change
E1
E1-5
Percentage of renewable sources in total energy consumption
%
26
29
32
40
43
Climate change
E1
E1-5
Net revenue from activities in high climate impact sectors
€ millions
10,711
Climate change
E1
E1-5
Net revenue from activities other than in high climate impact sectors
€ millions
0
Chapter
ESRS
DR
Metric name
Unit of
measurement
2020
2021
2022
2023
2024
Target 2030
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
66
SUMMARY TABLE
AkzoNobel Report 2024
1 All data points with no data before 2024 are newly reported data points resulting from the first-year implementation of CSRD, with no availability of historical reliable and/or comparative data.
2 Baseline for total energy consumption as of 2018 is 889,357 MWh.
Climate change
E1
E1-6
Net revenue3
€ millions
10,711
Climate change
E1
E1-6
Net revenue used to calculate GHG intensity
€ millions
10,711
Climate change
E1
E1-6
GHG emissions intensity, location-based (total GHG emissions per net revenue)
tCO2eq/€
0.00126
Climate change
E1
E1-6
GHG emissions intensity, market-based (total GHG emissions per net revenue)
tCO2eq/€
0.00125
Climate change
E1
E1-6
Percentage of Scope 1 GHG emissions from regulated emission trading schemes
%
0
Climate change
E1
E1-6
Percentage of contractual instruments used for purchase of energy bundled with
attributes about energy generation in relation to Scope 2 GHG emissions
%
28
Climate change
E1
E1-6
Percentage of contractual instruments used for purchase of unbundled energy
attribute claims in relation to Scope 2 GHG emissions
%
35
Climate change
E1
E1-6
Percentage of contractual instruments, Scope 2 GHG emissions
%
63
Climate change
E1
E1-6
Percentage of GHG Scope 3 calculated using primary data
%
5
14
Climate change
E1
Other disclosures
Total energy consumption per ton of production
KWh/t
261
271
272
253
251
Climate change
E1
Other disclosures
Renewable electricity (own operations)
%
40
45
50
62
65
Pollution
E2
E2-5
Total amount of substances of very high concern that are generated or used during
production or that are procured
Metric ton
23,234
Water and marine
resources
E3
E3-4
Water intensity ratio
m3/€ millions
73
Water and marine
resources
E3
E3-4
Total water consumption
m3
737,079
804,983
781,087
Water and marine
resources
E3
E3-4
Total water consumption in areas at water risk, including areas of high water stress
m3
402,782
Circular economy
E5
E5-4
The % of post consumer recycled plastic (PCR) in plastic packaging Paints Europe
%
43
50 (by 2025)
Circular economy
E5
E5-5
Total waste generated
Metric ton
96,910
Circular economy
E5
E5-5
Total amount of hazardous waste
Metric ton
51,295
Circular economy
E5
E5-5
Hazardous waste diverted from disposal
Metric ton
35,231
Circular economy
E5
E5-5
Hazardous waste directed to disposal
Metric ton
16,065
Circular economy
E5
E5-5
Non-hazardous waste directed to disposal
Metric ton
13,546
Circular economy
E5
E5-5
Non-hazardous waste diverted from disposal
Metric ton
32,068
Circular economy
E5
E5-5
Hazardous waste directed to disposal by incineration
Metric ton
12,567
Circular economy
E5
E5-5
Non-hazardous waste directed to disposal by incineration
Metric ton
9,568
Circular economy
E5
E5-5
Hazardous waste directed to disposal by landfilling
Metric ton
190
Circular economy
E5
E5-5
Non-hazardous waste directed to disposal by landfilling
Metric ton
2,352
Circular economy
E5
E5-5
Hazardous waste directed to disposal by other disposal operations
Metric ton
3,307
Circular economy
E5
E5-5
Non-hazardous waste directed to disposal by other disposal operations
Metric ton
1,625
Circular economy
E5
E5-5
Hazardous waste diverted from disposal by recycling
Metric ton
24,546
Circular economy
E5
E5-5
Non-hazardous waste diverted from disposal by recycling
Metric ton
25,619
Circular economy
E5
E5-5
Hazardous waste diverted from disposal by other recovery operations
Metric ton
10,684
Circular economy
E5
E5-5
Non-hazardous waste diverted from disposal by other recovery operations
Metric ton
6,449
Circular economy
E5
E5-5
Non-recycled waste
Metric ton
46,744
Chapter
ESRS
DR
Metric name
Unit of
measurement
2020
2021
2022
2023
2024
Target 2030
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
67
SUMMARY TABLE
AkzoNobel Report 2024
3 This reconciles to revenue as included in the Consolidated statement of income of the Financial statements.
Circular economy
E5
E5-5
Percentage of non-recycled waste
%
48
Circular economy
E5
E5-5
Expected durability of the products placed on the market, in relation to the industry
average for each product group as % of revenue
%
13.3
Circular economy
E5
Other disclosures
Circular use of materials
%
57
58
54
55
74
100
Own workforce
S1
S1-6
Total number of employees (headcount)
Number
35,327
Own workforce
S1
S1-6
Total number of employees - China
Number
4,278
Own workforce
S1
S1-6
% of Total number of employees - China
%
12
Own workforce
S1
S1-6
Average number of employees
Number
35,427
Own workforce
S1
S1-6
Total employee turnover rate
%
13
12
Own workforce
S1
S1-6
Total employee turnover in headcount
Number
4,657
4,410
Own workforce
S1
S1-6
Voluntary employee turnover rate
%
7.0
6.5
Own workforce
S1
S1-6
Voices - employee score on workload
Number
3.8
3.8
Own workforce
S1
S1-8
Percentage of total employees covered by collective bargaining agreements
%
40
Own workforce
S1
S1-8
Percentage of employees covered by collective bargaining agreements are within
coverage rate by country (in the EEA)
%
62
Own workforce
S1
S1-8
Percentage of own employees covered by collective bargaining agreements (outside
EEA) by region: South APAC
%
28
Own workforce
S1
S1-8
Percentage of own employees covered by collective bargaining agreements (outside
EEA) by region: EMEA
%
59
Own workforce
S1
S1-8
Percentage of own employees covered by collective bargaining agreements (outside
EEA) by region: LATAM
%
56
Own workforce
S1
S1-8
Percentage of own employees covered by collective bargaining agreements (outside
EEA) by region: North America
%
11
Own workforce
S1
S1-8
Percentage of own employees covered by collective bargaining agreements (outside
EEA) by region: North Asia
%
4
Own workforce
S1
S1-8
Percentage of employees in country (EEA) covered by collective bargaining
agreement
%
60
Own workforce
S1
S1-8
Percentage of employees in country (Non-EEA) covered by collective bargaining
agreement
%
26
Own workforce
S1
S1-14
Percentage of people in own workforce who are covered by health and safety
management system based on legal requirements and (or) recognized standards or
guidelines
%
100
Own workforce
S1
S1-14
Number of fatalities in own workforce as a result of work-related injuries and work-
related ill health
Number
0
1
0
0
1
Own workforce
S1
S1-14
Number of fatalities as a result of work-related injuries and work-related ill health of
other workers working on undertaking's sites
Number
0
0
0
0
0
Own workforce
S1
S1-14
Number of recordable work-related accidents for own workforce
Number
78
75
81
110
107
Own workforce
S1
S1-14
Rate of recordable work-related accidents for own workforce
Number
1.15
1.07
1.18
1.53
1.46
Own workforce
S1
S1-14
Number of cases of recordable work-related ill health of employees
Number
3
1
1
0
2
Own workforce
S1
S1-14
Number of days lost to work-related injuries and fatalities from work-related
accidents, work-related ill health and fatalities from ill health related to employees
(capped at 180 days)
Number
1,550
Chapter
ESRS
DR
Metric name
Unit of
measurement
2020
2021
2022
2023
2024
Target 2030
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
68
SUMMARY TABLE
AkzoNobel Report 2024
Own workforce
S1
S1-16
Gender pay gap
%
(3.8)
Own workforce
S1
S1-17
Number of complaints filed to National Contact Points for OECD Multinational
Enterprises
Number
0
Own workforce
S1
S1-17
Number of severe human rights issues and incidents connected to own workforce
Number
0
Own workforce
S1
S1-17
Amount of material fines, penalties, and compensation for severe human rights issues
and incidents connected to Own workforce
Number
0
Own workforce
S1
Other disclosures
Serious injuries and fatalities frequency of employees and temporary workers (SIF-F)
Number
2.9
1.5
1.4
1.4
<3.0
Own workforce
S1
Other disclosures
Life-changing injuries of employees and temporary workers
Number
2
1
1
1
Own workforce
S1
Other disclosures
Training hours per employee
Number
3
Own workforce
S1
Other disclosures
Percentage of employees who participated in regular performance reviews
%
95
96
Own workforce
S1
Other disclosures
Voices - Overall employee engagement index
Number
4.0
4.0
Own workforce
S1
Other disclosures
Voices - Employee net promoter score (eNPS)
Number
11
10
Own workforce
S1
Other disclosures
Voices - Participation rate
%
89
89
Workers in value chain S2
Other disclosures
# Surveys sent on minerals
Number
310
Workers in value chain S2
Other disclosures
Mineral survey response rate (%)
%
80
92
Workers in value chain S2
Other disclosures
Working time in supply chain (suppliers with minimum score of 50 for the Human
rights and labor score)
%
71
Workers in value chain S2
Other disclosures
# of individuals from suppliers attending webinars on risk materials
Number
65
Workers in value chain S2
Other disclosures
TfS on-site audits performed (cumulative - absolute number)4
Number
305
303
Business conduct
G1
Other disclosures
Suppliers in sustainability program: Under development
%
24
19
17
Business conduct
G1
Other disclosures
Suppliers in sustainability program: Meets expectations
%
52
63
67
75
Business conduct
G1
Other disclosures
Suppliers in sustainability program: In program
%
77
82
84
Chapter
ESRS
DR
Metric name
Unit of
measurement
2020
2021
2022
2023
2024
Target 2030
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
69
SUMMARY TABLE
AkzoNobel Report 2024
4 Number of TfS audits including re-audits that have been requested by us or other TfS members.
GHG emissions in tCO2eq
Retrospective
Milestones and target year
Base year
(2018)
20235
2024
Change (2024
vs 2023)
% Change
(2024 vs
2023)
Change (2024
vs 2018)
% Change
(2024 vs
2018)
Reduction
intensity
(2024 vs 2018)
2030
Annual %
Target/Base
year
Scope 1 GHG emissions
Scope 1 GHG emissions
59,216
57,645
(1,572)
(3)
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
195,344
202,927
7,583
4
Gross market-based Scope 2 GHG emissions
120,421
111,738
(8,683)
(7)
Scope 1+ 2 GHG emissions
Gross location-based Scope 1+2 GHG emissions
254,560
260,572
6,012
2
Gross market-based Scope 1+2 GHG emissions6
288,919
179,637
169,382
(10,255)
(6)
(119,536)
(41)
(0.00001)
144,459
4
Total gross indirect (Scope 3) GHG emissions
Significant Scope 3 categories
14,438,628
13,124,387
12,761,437
(362,950)
(3)
(1,677,191)
(12)
(0.00016)
7,219,314
4
1 Purchased goods and services
6,771,061
6,133,564
5,988,301
(145,263)
(2)
(782,760)
(12)
10 Processing of sold products (including Category 11: Use of sold products)
5,827,185
5,168,995
4,900,094
(268,901)
(5)
(927,091)
(16)
12 End-of-life treatment of sold products
1,840,382
1,821,827
1,873,042
51,215
3
32,660
2
Other Scope 3 categories
466,316
636,219
478,570
(157,650)
(25)
12,254
3
Total GHG emissions
Total GHG emissions (location-based)
14,904,944
14,015,166
13,500,578
(514,588)
(4)
(1,404,366)
(9)
(0.00013)
Total GHG emissions (market-based)
15,193,863
13,940,243
13,409,389
(530,854)
(4)
(1,784,474)
(12)
(0.00017)
Age distribution of our employees
in headcount
Age group
Number of
employees
Percentage
Under 30 years old
4,044
11
30-50 years old
21,786
62
Over 50 years old
9,497
27
Total
35,327
Characteristics of own workforce
in headcount
Gender
Number of
employees
Percentage
Female
9,780
28
Male
25,534
72
Other
13
0
Total
35,327
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
70
SUMMARY TABLE
AkzoNobel Report 2024
5 The Scope 3 GHG emissions calculation for 2023 is based on data from October 1, 2022, until September 30, 2023.
6 Our carbon emissions reduction target of 50% relates to the combined impact of Scope 1 and 2 carbon emissions.
Characteristics of own workforce in headcount
Female
Male
Other
Total
Number of permanent employees
8,912
23,874
10
32,796
Number of temporary employees
866
1,658
3
2,527
Number of non-guaranteed employees
2
2
0
4
Number of full-time employees
8,910
24,828
13
33,751
Number of part-time employees
870
706
0
1,576
Characteristics of own workforce in headcount
EMEA
Latin
America
North
America
North Asia
South APAC
Total
Number of permanent employees
15,922
4,761
2,991
3,916
5,206
32,796
Number of temporary employees
543
261
1
1,325
397
2,527
Number of non-guaranteed employees
4
0
0
0
0
4
Number of full-time employees
15,008
4,926
2,985
5,241
5,591
33,751
Number of part-time employees
1,461
96
7
0
12
1,576
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
71
SUMMARY TABLE
AkzoNobel Report 2024
ESRS 2 GOV-1 Board's gender diversity paragraph 21 (d)
Yes
Mandatory disclosure
Corporate governance statement
ESRS 2 GOV-1 Percentage of board members who are independent paragraph 21 (e)
Yes
Mandatory disclosure
Corporate governance statement
ESRS 2 GOV-4 Statement on due diligence paragraph 30
Yes
Mandatory disclosure
General disclosures
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i
No
Mandatory disclosure
Not applicable
ESRS 2 SBM-1 Involvement in activities related to chemical production paragraph 40 (d) ii
Yes
Mandatory disclosure
General disclosures
ESRS 2 SBM-1 Involvement in activities related to controversial weapons paragraph 40 (d) iii
No
Mandatory disclosure
Not applicable
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv
No
Mandatory disclosure
Not applicable
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14
Yes
Yes
Climate change
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g)
Yes
Yes
Climate change
ESRS E1-4 GHG emission reduction targets paragraph 34
Yes
Yes
Climate change
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38
Yes
Yes
Climate change
ESRS E1-5 Energy consumption and mix paragraph 37
Yes
Yes
Climate change
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43
Yes
Yes
Summary table
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44
Yes
Yes
Climate change
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55
Yes
Yes
Climate change
ESRS E1-7 GHG removals and carbon credits paragraph 56
Yes
No
Climate change
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66
Yes
Yes
Climate change
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a) ESRS E1-9 Location of significant assets at material physical risk
paragraph 66 (c)
No
No
Not applicable
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c)
No
Yes
Subject to phase in
ESRS E1-9 Degree of exposure of the portfolio to climate-related opportunities paragraph 69
No
No
Not applicable
ESRS E2-4 Amount of each pollutant listed in Annex II of the EPRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil,
paragraph 28
No
No
Not applicable
ESRS E3-1 Water and marine resources paragraph 9
Yes
Only for water use in water
scarce areas
Water and marine resources
ESRS E3-1 Dedicated policy paragraph 13
Yes
Yes
Climate change; Water
ESRS E3-1 Sustainable oceans and seas paragraph 14
No
No
Not applicable
ESRS E3-4 Total water recycled and reused paragraph 28 (c)
No
No
Water and marine resources
ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29
Yes
No
Summary table
ESRS 2- SBM-3 - E4 paragraph 16 (a) (Biodiversity sensitive areas exposure)
No
No
Not applicable
ESRS 2- SBM-3 - E4 paragraph 16 (b) (Biodiversity land degradation, soil and desertification)
No
No
Not applicable
ESRS 2- SBM-3 - E4 paragraph 16 (c) (Biodiversity threatened species)
No
No
Not applicable
ESRS E4-2 Sustainable land/agriculture practices or policies paragraph 24 (b)
No
No
Not applicable
ESRS E4-2 Sustainable oceans/seas practices or policies paragraph 24 (c)
No
No
Not applicable
ESRS E4-2 Policies to address deforestation paragraph 24 (d)
No
No
Not applicable
ESRS E5-5 Non-recycled waste paragraph 37 (d) (the total amount and percentage of non-recycled waste)
Yes
Yes
Circular economy - Waste
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39
Yes
Yes
Circular economy - Waste
ESRS 2- SBM-3 - S1 Risk of incidents of forced labor paragraph 14 (f)
Yes
No
General disclosures
ESRS 2: EU legislation disclosure
Disclosure requirement
Included in Report
2024
Material in 2024
Chapter in Report 2024
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
72
ESRS 2: EU LEGISLATION DISCLOSURE
AkzoNobel Report 2024
ESRS 2- SBM-3 - S1 Risk of incidents of child labor paragraph 14 (g)
Yes
No
General disclosures
ESRS S1-1 Human rights policy commitments paragraph 20
Yes
No
General disclosures
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1 to 8, paragraph 21
Yes
No
General disclosures
ESRS S1-1 Processes and measures for preventing trafficking in human beings paragraph 22
Yes
No
Workers in our value chain
ESRS S1-1 Workplace accident prevention policy or management system paragraph 23
Yes
Yes
Own workforce (Safety)
ESRS S1-3 Grievance/complaints handling mechanism
Yes
No
Integrity and compliance management;
Governance
ESRS S1-14 Number of fatalities and number and rate of work-related accidents paragraph 88 (b) and (c)
Yes
Yes
Own workforce (Safety)
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)
Yes
Yes
Summary table
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)
Yes
No
Own workforce (Gender pay gap and total
compensation)
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)
Yes
No
Remuneration report
ESRS S1-17 Incidents of discrimination paragraph 103 (a)
No
No
Not applicable
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)
Yes
No
General disclosures
ESRS 2- SBM-3 – S2 Significant risk of child labor or forced labor in the value chain paragraph 11 (b)
Yes
No
General disclosures
ESRS S2-1 Human rights policy commitments paragraph 17
Yes
No
General disclosures
ESRS S2-1 Policies related to value chain workers paragraph 18
Yes
Yes
Workers in our value chain
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19
Yes
No
General disclosures
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1 to 8, paragraph 19
Yes
No
General disclosures
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36
Yes
No
General disclosures
ESRS S3-1 Human rights policy commitments paragraph 16
No
No
Not applicable
ESRS S3-1 Non-respect of UNGPs on Business and Human Rights, ILO principles or OECD guidelines paragraph 17
No
No
Not applicable
ESRS S3-4 Human rights issues and incidents paragraph 36
No
No
Not applicable
ESRS S4-1 Policies related to consumers and end-users paragraph 16
No
No
Not applicable
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17
No
No
Not applicable
ESRS S4-4 Human rights issues and incidents paragraph 35
No
No
Not applicable
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b)
Yes
No
Governance
ESRS G1-1 Protection of whistleblowers paragraph 10 (d)
Yes
No
Integrity and compliance management;
Governance
ESRS G1-4 Fines for violation of anti-corruption and anti-bribery laws paragraph 24 (a)
No
No
Not applicable
ESRS G1-4 Standards of anti-corruption and anti-bribery paragraph 24 (b)
No
No
Not applicable
ESRS 2: EU legislation disclosure
Disclosure requirement
Included in Report
2024
Material in 2024
Chapter in Report 2024
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
73
ESRS 2: EU LEGISLATION DISCLOSURE
AkzoNobel Report 2024
Methodology and definitions
The methodology and definition descriptions below are included to
provide supplementary information on reported metrics. For further
details on reported metrics and definitions, we refer to the European
Sustainability Reporting Standards (ESRSs).
Definitions
Environmental
Durability
The way we define durability differs per segment. This
can range from corrosion protection, weatherability
and protection against wear and tear to resistance to
abrasion and scratching and heat and fire protection.
We compare the durability of our product versus the
mainstream product in the market for that category,
as explained in the Reporting processes and
methodology in this chapter.
Direct CO2(e)
emissions
(Scope 1)
The total greenhouse gas emissions from processes
and combustion at our facilities and indirect
emissions from purchased energy in absolute
measures (Mt CO2e) and kg CO2e per ton of
production.
We apply company established emission factors to
calculate CO2 emissions, which are: Natural gas:
1,885g GHG/m³; Fuel oil: 3,101 kg/metric ton; LPG:
2,985 kg/metric ton; Other fossil fuels: 202 kg/MWh.
Hazardous
waste
Hazardous waste is waste that is classified and
regulated as such according to the national, state,
provincial or local legislation in place. Locations in
countries where no appropriate legislation exists
should consult their regional HSE&S manager for
advice on hazardous waste classification of the
different types of wastes generated.
Hazardous
waste to
landfill
All hazardous non-reusable waste (in absolute
measures (kilotons) and kg per ton of production) as
it leaves our premises in the reporting period, sent for
disposal to landfill.
Indirect CO2(e)
emissions
(Scope 2)
Emissions from transport in our own operations is
very limited and therefore not material compared with
our other Scope 1 and 2 emissions. As transport is
not material to Scope 1 and 2, these exclude
transport. We measure and report CO2 in line with the
GHG Protocol. We apply country emission factors
licensed through the International Energy Agency
(IEA) to calculate CO2 emissions from purchased
electricity from grid suppliers. For the purchased
steam and hot water (limited use), we apply a
standard company established conversion factor of
202 kg/MWh. The other gases from the GHG
Protocol are considered immaterial and not actively
measured. For Scope 2 we make a distinction
between market based and location-based.
Non-
hazardous
waste to
landfill
All non-hazardous non-reusable waste (in absolute
measures (kilotons) and kg per ton of production) as
it leaves our premises in the reporting period sent for
disposal to landfill.
Percentage
circular use of
materials
The amount of materials reused by AkzoNobel and
third parties (waste diverted from disposal, slow-
moving and obsolete materials (SLOB) sold to
preferred outlets for remanufacturing/reuse/
repurpose and by-products) divided by the sum of
total waste, by-products and SLOB (percentage).
Percentage
renewable
electricity
Percentage of renewable electricity used in our
operations. Renewable electricity is electricity that is
generated from inexhaustible resources, such as
wind, solar, hydro, biomass and tidal. Expressed as
the share of total renewable electricity (own
generated, plus imported from grid) AkzoNobel uses
in its own operations relative to the total electricity
consumption.
Total non-
reusable
waste
(number)
Total non-reusable waste is the sum of the quantities
of hazardous non-reusable waste and non-hazardous
non-reusable waste. Non-reusable waste is waste
which is not used for resource recovery, recycling,
reclamation, direct re-use or alternative uses (e.g.
composting).
Total reusable
waste
(number)
Total reusable waste is the sum of the quantities of
hazardous reusable waste and non-hazardous
reusable waste.
Total waste
Total waste in absolute measures (kilotons) and kg
per ton of production. Waste is reported as total
weight, not dry weight. Waste is any material arising
from our routine operations which is not incorporated
into final products and not directly released to
atmosphere or direct to surface water.
Total waste to
landfill
All hazardous and non-hazardous non-reusable
waste (in absolute measures (kilotons) and kg per ton
of production) as it leaves our premises in the
reporting period, sent for disposal to landfill.
Total water
consumption
Total water consumption is calculated by deducting
total water discharged from the amount of water
drawn into the boundaries of the undertaking or
facility, also referred to as total water withdrawal over
the course of the reporting period. Total water
withdrawal is a direct measurement. The total water
discharged is estimated based on the water included
in the finished product.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
74
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
Social
Business
Partner Code
of Conduct
Explains what we stand for as a company, what we
value and how we run our business. It brings our core
values of safety, integrity and sustainability to life and
shows what they mean in practice.
Code of
Conduct
Defines our core values and how we work;
incorporates fundamental principles on issues such
as business integrity, labor relations, human rights,
health, safety, environment and security and
community involvement.
Employee
turnover rate
Rate of leavers compared with total employees at the
end of the year. Leavers include the voluntary leavers
(early retirement, resignation, termination) and
involuntary leavers (dismissal, end of contract, mutual
agreement, retirement, death) and excludes leavers
due to restructuring.
Executives
(top
management)
Executive level includes all employees with an
executive position grade at AkzoNobel and its
subsidiaries, including the members of the Executive
Committee who are not members of the Board of
Management. Executive level further includes the
members of the Board of Management and the
Supervisory Board of each of Akzo Nobel Nederland
B.V., Akzo Nobel Decorative Coatings B.V., Akzo
Nobel Car Refinishes B.V. and International Paint
(Nederland) B.V. The company’s executives are
considered as AkzoNobel’s sub-top, as referred to in
the Dutch Gender Diversity Bill implemented in 2022.
Female
executives
Percentage of women at executive level.
Full-time
equivalent
(FTEs)
FTEs include the following classes: global assignees,
regular employees and trainees.
Key talent
Talent in our framework considered as high potential
and/or sustained performance (high potential, high
performer and solid potential talent).
Life-changing
injuries
The number of life-changing injuries of our own
employees and temporary workers. Injuries that are
considered life-changing include (but are not limited
to): fatalities; coma; some level of permanent disability
(including loss of sight or hearing); organ removal; the
requirement for ongoing multiple surgeries; lingering
trauma; any amputation of digits or limbs; skin grafts
and the insertion of plates, pins or screws.
Overall
employee
engagement
index and
employee net
promoter
score (eNPS)
Work engagement is defined as the employee’s
approach to their workplace. It’s the level of
commitment to the organization’s goals and values,
and the motivation to contribute to organizational
success with an enhanced sense of well-being.
eNPS stands for employee net promoter score. It’s a
universal way of measuring employee satisfaction and
engagement. eNPS is measured using one question:
“How likely is it that you would recommend your
employer to a friend or acquaintance?” It’s the only
question in the survey for which the answer options
range from 0 to 10, not 1 to 5 (with 10 indicating
“Extremely likely” and 0 indicating “Not at all likely”).
The purpose of eNPS is to get a quick overview of
employee satisfaction. Employees who give a rating
of 9 or 10 are defined as Promoters, while ratings of
7 or 8 are Passives and ratings of 0-6 are defined as
Detractors.
The eNPS is calculated as follows: eNPS = %
Promoters - % Detractors.
Serious
injuries and
fatality
frequency
(SIF-F)
The number of life-changing injuries of our own
employees and temporary workers per 100,000,000
(100 million) hours worked.
In the Social chapter, we show the annual
performance. This KPI is relevant for AkzoNobel long-
term incentives only and is measured against a three-
year average.
Suppliers
participating in
sustainability
program
Number of suppliers who performed an EcoVadis
online assessment or equivalent (sum of suppliers in
line with expectations and under development). In %
of baseline, as indicated under Sustainability risk
analysis.
Suppliers in
sustainability
program – in
line with
expectations
Number of suppliers who meet our expectations in
the EcoVadis assessment (in % of baseline as
indicated under Sustainability risk analysis): 45 total
score and human rights and labor score of 50.
Suppliers in
sustainability
program –
under
development
Suppliers who have performed the EcoVadis
assessment, but who don’t yet meet our
expectations. Suppliers have three years to reach the
minimum EcoVadis scores (see Suppliers in line with
our expectations).
Together for
Sustainability
(TfS) audits
On-site examination by an independent third-party
auditor looking at relevant sustainability practices.
Sustainability performance is verified against a
defined set of audit criteria on Management,
Environment, Health and Safety, Labor and Human
Rights, and Governance issues. These topics have
been defined by TfS and are tailored to the
requirements of the chemical industry.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
75
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
Governance
Government
officials
• An officer or employee of any government,
department, agency, bureau, authority, or state-
owned or state-controlled entity
• Acting in an official capacity for, or on behalf of, any
government, department, agency, bureau,
authority, or state-owned or state-controlled entity
• An official, employee, or person acting on behalf of
a government-sponsored or public international
organization, such as the European Union, the
United Nations or the World Bank
• Holding a legislative, administrative, executive, or
judicial position, whether appointed or elected; a
political candidate
• An officer or employee of a political party; a
member of a royal family; or a family member of, or
otherwise closely associated (whether family or
personal), with any of the foregoing
Some examples of government officials are public
servants, public officials, administrators, police
officers, military, judges, public prosecutors, tax or
customs officials, employees in state companies,
local politicians, political parties, political officials or
candidates for political office, members of the royal
family, mayors and city council members.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
76
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
Reporting processes and methodology
Environmental
HSE&S Suite (Enablon)
Each designated environmental location reports their environmental
data monthly via the HSE&S Suite, based on local source
documentation such as meter readings and invoices. The HSE&S
manual includes detailed reporting guidance. The data is authorized
at site and regional level and is reviewed by the HSE&S global team.
Renewable energy (electricity and heat)
Location data is extracted from the HSE&S Suite. We’re now moving
towards renewable electricity (aligning with international standards)
and centrally coordinate this in cooperation with our Procurement
department. This list is maintained in the HSE&S Suite as a basis for
calculation and is validated every year, with a distinction between
market-based vs location-based method.
Percentage PCR in plastic packaging
The percentage of recycled content is calculated based on actual
volumes, with a forecast for the last two months for the selected
MSU, MU or region from the demand organization. The weight is
split between virgin plastic and PCR, based on the documentation
provided by our suppliers. A check is then performed by our
packaging experts. This is a manually-intensive process, which
includes dependency on suppliers’ information. Currently, we don’t
disclose the absolute weight of plastic packaging. As this is value
chain information, we opt for the use of a phase-in provision.
Methodology portfolio durability assessment
For many years, AkzoNobel has analyzed its full product portfolio
using the method of SPPA: Sustainable Product Portfolio
Assessment. As indicated in General disclosures, we’ve phased out
the overarching SPPA metric of Sustainable solutions with the
implementation of CSRD.
However, we’ll continue to use this portfolio analysis tool to
determine certain aspects of our products. One of the categories we
use to analyze our product portfolio is the Longevity (longer lasting)
category, which measures the durability of the product versus the
mainstream product on the market.
The assessment is performed annually by dedicated teams in the
business units, using a company-wide methodology. A classification
for Durable/longer-lasting, compared with the mainstream, should
be justified quantitatively. This can be done, for example, by use of
lifecycle assessment, company tool, a standard industry test or
company measurement, or qualitatively by written justification.
The outcomes are verified at business unit level and reviewed by an
internal sustainability specialist. Financial data used in this template
is collected from business financial systems, with the main financial
data used for the durability percentage calculation being the revenue
per business unit.
Substances of Very High Concern
The total quantity of SVHCs that leave our facilities as products are
based on purchased volumes, extrapolated based on an
assessment of SVHCs with a coverage of ~85% of purchased
volumes. The estimations are based on the underlying chemical
processes that take place in our business units and the end-use,
causing SVHCs to either dissolve or remain in our end-products.
Procurement systems and databases
Business Partner Code of Conduct
The progress on signed Business Partner Code of Conduct (CoC)
declarations across AkzoNobel is reported on a monthly basis. All
suppliers with purchases over €1,000 annually must sign the CoC or
confirm in writing that it has equivalent business principles in place.
All data on suppliers covered by the Business Partner CoC are
consolidated at corporate level with the percentage of spend
covered extracted from master spend data. It is reviewed at
corporate level.
Together for Sustainability (TfS)
• EcoVadis assessment (online)
• TfS audit (on-site inspection)
Number of suppliers covered by assessments and audits is collected
and extracted from the EcoVadis and TfS online platform. It’s
reviewed and assessed at corporate level.
The EcoVadis assessment is a key component of our supplier
evaluation process for product related and non-product related
suppliers, and logistics providers. In scope are suppliers with global
spend >€250,000, those who work in a risk category or country, or
have a global spend above €1 million irrespective of their risk rating.
Suppliers with a total score <45 and human rights and labor score
<50 are required to perform an annual re-assessment until the target
score is reached.
The TfS audit is focused on important suppliers based on their
location (risk region) and the type of industry.
Scope 3 reporting
Scope 3 carbon emissions methodology
Our CO2(e) footprint in tons of CO2(e) including Scope 1 (own
operations), Scope 2 (energy consumption) and Scope 3 (upstream)
and Scope 3 (downstream).
The footprint includes the six main greenhouse gases defined in the
Greenhouse Gas Protocol. Our Scope 3 target relates to four
material categories:
• Upstream: Category 1 (Purchased goods and services, including
packaging)
• Downstream: Category 10 and 11 (Application and Use of sold
products), VOC emissions and Category 12 (End-of-life)
The climate change impact of VOC emissions is included in the
cradle-to-grave footprint, due to the impact VOC emissions have
within the paints and coatings industry.
We assess our cradle-to-grave carbon footprint annually in
accordance with the Greenhouse Gas Protocol Corporate Value
Chain Accounting and Reporting standard and the WBCSD
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
77
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
Chemical Sector Working Group Guidelines. Cradle-to-grave
includes Scope 1 and 2 and Scope 3 upstream and downstream
emissions. The results are given in metric tons of carbon dioxide
equivalents, independent of any GHG trades, such as purchases,
sales, or transfers of offsets or allowances.
In line with the GHG protocol, the CO₂ quantities calculated for these
categories (1, 10, 11, 12 and VOCs), are included in the Scope 3
data reported. The other categories are not included, based on the
fact that these categories include a small amount of CO₂ eq. for
AkzoNobel as a whole and are therefore considered immaterial.
VOC emissions for Processing and use of sold products, although
not mentioned as a separate category in the GHG protocol, has
been included as an additional category because VOC emissions
take up a significant part of the downstream emissions for the
majority of our products and, as a result, a significant enough
amount of the carbon emissions as a whole.
Inclusion of associates
Associates don’t have a material impact on our Scope 3 reporting.
Approach to incorporating growth
Our approach to incorporating inorganic growth is captured in our
internal re-baselining policy, which states that any acquisition
impacting our Scope 3 by more than 5% triggers a baseline
adjustment and will be disclosed in our annual report. Any impacts
below the 5% threshold are for management discretion. A baseline
adjustment was reported, for example, with the Grupo Orbis
acquisition, for which we disclosed the re-baselining exercise impact
in our Report 2023. Inorganic growth is currently not captured in our
reduction pathway, but will be compensated and absorbed by the
different segments.
Category 1. Purchased goods and services (incl. packaging)
Each of the purchased raw materials is matched with the CO₂ eq/kg
related factors of that material, extracted from the CEPE and
EcoInvent databases, taking into consideration the concentration of
water, solids and solvents. These databases are updated on a
regular basis, ensuring up-to-date kg CO₂ eq/kg factors for each of
the raw materials used. Supplier data for the Product Carbon
Footprint (PCF) can be used to overrule the database (CEPE and
EcoInvent) carbon footprint calculation for specific raw materials.
Overruling of the database carbon footprint calculation is only
performed when the PCF data complies with the GHG protocol and
is approved internally, which requires involvement from Procurement
and the Sustainability team to assess if the data is of sufficient
quality. The PCF numbers supplied by our suppliers are reviewed
annually.
Packaging materials are currently not included in our purchased
goods and services database and are therefore calculated
separately. The amount of CO₂ eq/kg related to packaging per kg of
sold product is fixed for each business unit. These data points are
validated by each BU annually.
Category 10 and 11. Processing of sold products and use of
sold products
For paints, processing and use of sold products is not reported,
since there’s no energy consumed for curing of these products, and
therefore assumes no energy consumption or other relevant carbon
dioxide emissions in the application and use phase.
For coatings, for each key value chain (KVC), the power use (MJ) per
kg of sold product and natural gas use (MJ) per kg of sold product,
and average share of VOC incineration versus open release in
application are included in the use-phase models for our segments.
These values are multiplied by the sales volumes per KVC to
calculate the Category 10 and 11 carbon emissions.
Emission factors for power use and natural gas for all products are
assumed to be equal. The CO₂ eq/kg factor for power use (kg/MJ) is
based on the IEA world average. The CO₂ eq/kg factor for natural
gas (kg/MJ) is taken from DEFRA: Conversion Factors 2019 Full set
for advanced users.
In addition, the emissions caused by VOC incineration in the curing
processes was added to the application and use stage. VOC carbon
content identified based on the raw materials and procurement
database was matched with the VOC incineration scenario per
business unit.
In 2023, an updated KVC model for the curing process in our
Powder Coatings business was implemented. The background and
impact for 2023 (and preceding years) is included in our Report
2023.
In 2024, we updated the KVC model for part of our Industrial
Coatings and Automotive and Specialty Coatings businesses, which
did not have a material impact on our Scope 3 emissions.
Category 12. End-of-life treatment of sold products
For all segments, KVCs indicate the share of raw material reaching
end-of-life as part of a product was identified as the mass of the raw
material not lost in application and use through release or
incineration of VOCs.
Primary data used to determine the end-of-life are the purchased
goods database and the sales breakdown for each KVC. The
material codes were used to identify fossil and biogenic carbon
content of the raw materials not attributed to VOC solvents. The
fossil carbon content is multiplied by the factor 3.67, based on the
molecular mass of CO2 (44) and atom of carbon (12).
Category A1. VOC emissions from processing and use of sold
products
Volatile organic compounds (VOCs) are emitted as gases from
certain solids or liquids, for example from solvent-based paints.
Based on IPCC 2013 data, the CO₂ eq/kg factor for VOCs is set by
the European Commission (PEF method) at 4.23kg CO₂ eq/kg of
VOCs.
All VOCs in raw materials are released in application and are either
emitted to the atmosphere or captured and incinerated. The
incineration of VOCs is included in the carbon footprint of Category
11 and 12 emissions. For all BUs, the share of VOCs released in
application and use are calculated based on the weighted average of
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
78
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
the VOCs procured and released to the atmosphere in each
considered KVC of the business unit.
Locked-in emissions are taken into account in our Scope 3
calculations.
Social
The Sustainability section of this Report 2024 details, among others,
the following themes and indicators.
Employee indicators
HR Data Management system (SuccessFactors)
SuccessFactors is our global HR system for managing employee
data, including talent and performance management, recruitment
and learning data. The system stores a range of personal and job
information, including gender, age, region, management line, salary,
job history, etc. SuccessFactors is a real-time system running our
processes and forms the basis of monthly or quarterly internal
reporting, as well as external HR reporting.
Data is entered and authorized at defined levels in country and
business organizations. There are monthly data checks for some
aspects, while data quality is being improved. Talent information is
updated annually following the end of year review process.
External reporting is managed by the HR reporting and analytics
manager, based on defined management reports. Output is
reviewed and audited at AkzoNobel HR corporate level. Crunchr, our
HR people analytics tool, is used for data visualization and analytics
on the source data derived from SuccessFactors.
In line with annual report disclosures under CSRD requirements, we
report information on a global scope, at year-end, in headcount.
Characteristics of employees in our own workforce
When reporting on our employees, we include our employees as
aligned with FTE reporting in our Financial statements (refer to Note
6 in our Financial statements) per December 31, 2024. No
estimation is applied for our employee workforce, as all data points
are actual. Our executives (or top management) information is
reported on a global scope, at year-end, in headcount. Data is
extracted from Crunchr, and is updated on a monthly basis with a
data feed from SAP SuccessFactors, our core HR solution.
All people in our workforce that can be materially impacted are
included in scope for our disclosures under ESRS 2.
Gender pay gap
When reporting the Gender pay gap, we follow the CSRD mandated
definition, which is the difference of average pay levels between
female and male employees, expressed as a percentage of the
average pay level of male employees.
Pay levels consists of base salary, bonuses (STI/SFI and LTI) and
allowances. The base salary is considered for a representative
month, and is taken from our HR data management system. For
bonuses (actual) and allowances (estimate), payroll data for a
representative month is used. We use an estimation for allowances
due to a lack of detailed information at central reporting level. We
extrapolate the full allowance based on locally applicable allowances
in our top five countries (China, Germany, Netherlands, UK and US),
covering approximately 60% of our total base salary cost. The
impact of allowances on total pay levels is not material.
Health and safety indicators
Reporting process
Each location reports its health and safety data on a monthly basis
via the HSE&S Suite (Enablon). The HSE&S manual includes detailed
reporting guidance. This includes performance data and progress
against company programs, e.g. Behavioral Based Safety and Life-
Saving Rules. The data is authorized at local and regional level and
internally reviewed and (partially) externally assured at AkzoNobel
corporate level. Locations cover the employee population in all our
premises, including manufacturing sites, offices, stores/sales offices,
etc.
HSE&S Audit summary
HSE&S Audits
The HSE&S Audit Manager monitors progress against an annual
plan. Results are reviewed and authorized at AkzoNobel corporate
level, then reported to business managers, the HSE&S leadership
group and Audit Committee.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
79
METHODOLOGY AND DEFINITIONS
AkzoNobel Report 2024
AKZONOBEL CARES
For many years, our various social programs have been
demonstrating to the world that AkzoNobel cares. People and
communities across the globe benefit from the initiatives and
programs under our AkzoNobel Cares umbrella, including “Let’s
Colour”, the Pintuco Foundation, Coral Institute, SOS Children’s
Villages and the Education Fund through our long-standing
partnership with Plan International. Local employee volunteers from
AkzoNobel work closely with partners to transform communities and
make a positive impact. As part of our key sustainability ambitions,
we aimed to empower more than 100,000 community members
with new skills by 2030. During the year, we were very proud to
achieve this ambition, six years ahead of the original planning.
Through our social programs, we’re able to positively impact lives
and communities in markets where we’re present, making the most
of our people and products. By using our decorative paints, many of
our social programs help to inspire, uplift and re-energize
communities, mainly through our global “Let’s Colour” initiative.
Thanks to the expertise of our people, we’re also actively educating,
mentoring and training future generations, making it possible for
them to broaden their expertise and improve their employment
opportunities. In 2024, we staged more than 250 projects and
trained over 30,000 people in painting, entrepreneurship,
professional skills and soft skills.
“Let’s Colour”
We believe in the power of paint to transform lives by uplifting
communities and making living spaces more fun, liveable and
enjoyable. Our global “Let’s Colour” initiative is all about bringing
color into people’s lives. With our passion for paint, we aim to
provide opportunities for people who want to learn, grow and
flourish. During 2024, we donated more than 100,000 liters of paint
to renovate community living spaces in 25 countries, with over 2,000
employees volunteering their time. A great example was our
Mustafabad project in Pakistan (see page 11).
Education Fund
Through our joint Education Fund, established in 1994, we
continued to support Plan International during the year. For example,
work continued on the Saksham project, in collaboration with the
AkzoNobel Paint Academy in Delhi, India. This economic
empowerment initiative targets marginalized young people,
particularly women, addressing the gap between high market
demand for skilled employees and the insufficient number of
qualified individuals. So far, the project has equipped 90 vulnerable
participants with market-driven skills, fostering sustained
employment in the painting sector for 59 young people.
SOS Children’s Villages
AkzoNobel is a global partner of SOS Children’s Villages. As a
member of the Global YouthCan! platform, we work together to
support young people at risk on their journey to self-reliance.
Through our painter academies and by offering soft skills training,
entrepreneurship programs, mentoring and traineeships, we
empowered 1,500 young people with new skills in 2024. We also
used our paint to refresh living spaces for children growing up in
family-like care. During 2024, Colombia joined the partnership,
bringing the total to 25 countries involved so far.
Local AkzoNobel Cares programs
Our societal initiatives in India benefited more than 30,000 people in
2024. Parivartan, our flagship education project, helped more than
7,000 children gain better access to education, while vocational
skills training empowered over 3,000 underprivileged and
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
80
PEOPLE AND SOCIETY
AkzoNobel Report 2024
Tourists attracted by the power of paint have been flocking to Usiacurí in Colombia. In 2023,
our Pintuco Foundation teamed up with the local Governor’s Office to decorate 18,200m² of
the town’s rooftops with a macro-mural featuring eye-catching images of birds. The facades of
a large number of homes were also repainted. Visitors have been winging their way to the
region ever since, with tourist numbers soaring from 400 a month to 24,000. It’s had a hugely
positive impact on the local economy – renowned for its iraca palm weaving – with 120 new
businesses being set up.
We’re helping residents in India cope with living in the world’s highest village
reachable by a motorable road. Komic is one of three remote communities in the
Spiti Valley being protected from the elements by our Dulux Weathershield paint.
disadvantaged youth. More than 22,000 teleconsultations were also
provided under our community healthcare program in villages across
the country. A key highlight was Project Indradhanush, which aims
to improve the livelihoods of women in rural India. In 2024, the
initiative raised awareness among more than 40,000 women about
opportunities in the paint sector, providing paint application training
and empowering 2,000 women with the necessary skills to become
independent paint retailers.
In Latin America, our Pintuco Foundation continued to champion the
ethos of AkzoNobel Cares, supporting many initiatives throughout
Colombia. The non-profit entity, part of the Grupo Orbis acquisition,
aims to transform lives by using the power of paint and offers social
sustainability projects that also provide (skills) training opportunities
for people in local communities. The social projects are developed
through alliances with public and private organizations.
We recently established the Coral Institute in Brazil. It was launched
as part of the 70th anniversary of our Coral decorative paints brand,
and to mark the 15th anniversary of the Tudo de Cor movement,
which has already benefited thousands of people across the
country. Its first initiative focused on assisting families in Rio Grande
do Sul who were recovering from devastating floods. Coral products
were used to paint the exteriors of around 130 houses in Vila dos
Farrapos, while an important public meeting place was also
renovated.
Strategy |
Sustainability
|
Leadership and governance
|
Financial statements
81
PEOPLE AND SOCIETY
AkzoNobel Report 2024
Strategy | Sustainability |
Leadership and governance
|
Financial statements
82
AkzoNobel Report 2024
Our commitment to safeguarding cultural heritage was
highlighted by a project to help preserve historical
buildings in the Malaysian city of Malacca. As well as
developing a special shade of red to repaint the
Stadthuys, our Dulux brand also coated shophouse
façades at the popular UNESCO World Heritage Site.
LEADERSHIP AND GOVERNANCE
An overview of our leadership and its activities during
the year, along with details of our corporate
governance structure, risk management, executive
remuneration, integrity and compliance management,
and AkzoNobel and the capital markets.
Our Board of Management and Executive
Committee
83
Statement of the Board of Management
85
Statement of Chair of Supervisory Board
86
Our Supervisory Board
87
Report of the Supervisory Board
88
Corporate governance statement
95
Risk management
102
Integrity and compliance management
105
Remuneration report
108
AkzoNobel and the capital markets
125
1. Grégoire (Greg) Poux-Guillaume • CEO and Chair of the Board
of Management and Executive Committee (1970, FR) • Greg joined
AkzoNobel in November 2022 as CEO and Chair of the Board of
Management, bringing with him 30 years of experience in various
industrial businesses and private equity. He was previously CEO of
Sulzer (2015 to 2022) and before that, CEO of GE Grid Solutions.
2. Maarten de Vries • CFO and member of the Board of
Management and Executive Committee (1962, NL) • Maarten joined
AkzoNobel in 2018. He spent the previous three years as CFO at
Intertrust Group and TNT Express. He was a member of the
Management Board of Intertrust Group and the Executive Board of
TNT Express. From 2011 to 2014, Maarten was CEO of TP Vision,
and prior to this, held senior positions at Royal Philips Electronics,
including Chief Information Officer and Chief Purchasing Officer at
Group Management Committee level.
3. Karen-Marie Katholm • Chief Integrated Supply Chain Officer
and member of the Executive Committee (1967, DK) • Karen-Marie
joined AkzoNobel in September 2021, having held various global
leadership roles across sourcing, supply chain and operations. She
was previously Integrated Operations Leader for DuPont Nutrition &
Biosciences – having joined Danisco A/S (later DuPont) in 2009.
Karen-Marie has over 20 years’ experience working at various food
manufacturers, such as Orkla, United Biscuits and Arla Foods. She’s
also a non-executive member of the Boards of Directors of NTG
Nordic Transport Group A/S and Chr. Augustinus Fabrikker.
4. Armand Sohet • Chief Human Resources Officer (CHRO) and
member of the Executive Committee (1965, FR) • Within the
Executive Committee, Armand is responsible for Human Resources,
Communications and Sustainability. He joined AkzoNobel in July
2023 and has extensive experience heading the HR function of
publicly traded companies. He has led transformations in industrial
businesses with complex manufacturing operations, but also as the
HR partner of multi-channel commercial organizations. Armand was
previously CHRO and Chief Sustainability Officer of Sulzer for seven
years.
5. Wiebe Wiechers • Chief Development Officer (CDO) and
member of the Executive Committee (1980, NL) • Wiebe joined the
Executive Committee in November 2024 as Chief Development
Officer, overseeing Strategy, M&A, Commercial Excellence, Digital,
R&D and the Global Resins business. Since joining the company in
2011, he has held various leadership positions in R&D, business and
operations, leading several major group transformation and
restructuring programs. Before joining AkzoNobel, Wiebe spent
seven years with strategy consulting firm Arthur D. Little in Europe
and the US.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
83
OUR BOARD OF MANAGEMENT AND EXECUTIVE COMMITTEE
AkzoNobel Report 2024
6. Charlotte van Meer • General Counsel and member of the
Executive Committee (1979, NL) • Charlotte rejoined AkzoNobel in
January 2024, having previously worked for the company for over
ten years, when she held various roles in the Legal function,
including Head of Legal EMEA, Director Legal Corporate and
Corporate Secretary. Before rejoining AkzoNobel, she was Chief
Legal Officer of metal packaging company Trivium for four years.
7. Daniel Campos • Member of the Executive Committee (1972,
BR) • Daniel joined AkzoNobel in September 2015 as business unit
Director for Decorative Paints Latin America. During 2024, he
assumed the additional responsibility of overseeing the Decorative
Paints businesses in Asia. Daniel previously worked at Natura for
three years, managing Global Personal Care for the Brazilian health
and beauty leader. Before that, Daniel spent 19 years at Procter &
Gamble, where he held several positions in general management,
sales and marketing.
8. Patrick Bourguignon • Member of the Executive Committee
(1965, BE) • Patrick joined AkzoNobel in October 2019 as business
unit Director for Automotive and Specialty Coatings. He has more
than 35 years of experience, having held several positions across
different industries in sales, distribution and general management.
Previously, Patrick was with UNILIN for 12 years.
9. Jan-Piet van Kesteren • Member of the Executive Committee
(1972, NL) • Jan-Piet joined AkzoNobel in March 2010. In 2017, he
was appointed business unit Director for Decorative Paints EMEA.
Previously, Jan-Piet was Vice President Foods & Beverages for
Unilever’s North Africa Middle East business, based in the UAE,
following eight years with Unilever in the Netherlands.
10. Simon Parker • Member of the Executive Committee (1966,
UK) • Simon has 33 years of experience in multinational businesses
and more than 25 years of experience within Coatings, having been
responsible for many business transformations and restructurings in
the operating units of AkzoNobel. He joined the company in 1997
and held various business leadership positions before taking over as
business unit Director for Marine and Protective Coatings in April
2022.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
84
OUR BOARD OF MANAGEMENT AND EXECUTIVE COMMITTEE
AkzoNobel Report 2024
The Board of Management’s statement on
the financial statements, the management
report and internal controls.
We prepared this Report 2024 in line with International Financial
Reporting Standards (IFRS), as adopted by the EU, and the financial
reporting requirements included in Part 9 of Book 2 of the Dutch Civil
Code.
To the best of our knowledge:
• The financial statements in this Report 2024 give a true and fair
view of the assets and liabilities, financial position and profit or loss
of our company, and the undertakings included in the
consolidation taken as a whole
• The management report in this Report 2024 includes a fair review
of the position at December 31, 2024, the development and
performance during the financial year 2024 of AkzoNobel, and the
undertakings included in the consolidation taken as a whole, and
describes our principal risks
The Board of Management is responsible for the establishment and
adequate functioning of a system of governance, risk management
and internal controls within our company. Consequently, a broad
range of processes and procedures has been implemented,
designed to provide control by the Board of Management over the
company’s operations. These include measures regarding the
general control environment, such as a Code of Conduct, policies
and procedures and authority rules, as well as specific measures,
such as a risk management system, a system of controls and a
system of letters of financial representation by responsible
management at various levels within our company.
All these processes and procedures are aimed at providing a
reasonable level of assurance that we have identified and managed
the significant risks of our company, and that we meet our
operational and financial objectives in compliance with applicable
laws and regulations. For a detailed description of the company’s
internal risk management, please refer to the Risk management
chapter.
The Integrity and Compliance function makes policies, rules and
procedures available through the Policy Portal, manages the online
and face-to-face compliance training program, provides legal expert
support and manages investigations related to our SpeakUp!
complaints procedure. For a more detailed description of the
integrity and compliance framework, please refer to the Integrity and
compliance management chapter.
The Internal Control function maintains AkzoNobel’s internal control
framework, monitors the compliance and includes updates regarding
the emergence of new risks. It supports the annual review of the
design and effectiveness of the system of governance, risk
management and internal controls of the Board of Management.
Internal Audit provides comfort to the Board of Management, as well
as the Supervisory Board, that our system of risk management and
internal controls – as designed and represented by management – is
adequate and effective.
While we routinely work towards continuous improvement of our
processes and procedures regarding financial reporting, the Board
of Management confirms that according to the current state of
affairs, to the best of its knowledge:
• The Report 2024 provides sufficient insights into any failings in the
effectiveness of the internal risk management and control systems
with regard to the risks associated with the strategy and activities
of AkzoNobel and the undertakings included in the consolidation,
including the strategic, operational, compliance and reporting
risks. There have been no material failings in the effectiveness of
internal risk management and control systems
• These systems provide reasonable assurance that the financial
reporting does not contain material inaccuracies
• It is justified that the financial reporting is prepared on a going
concern basis
• There are no material risks associated with the strategy and
activities of AkzoNobel and the undertakings included in the
consolidation, including the strategic, operational, compliance and
reporting risks, or uncertainties that could reasonably be expected
to have a material adverse effect on the continuity of the
company’s operations for the 12-month period after report
preparation
We have discussed the above opinion and conclusions with the
Audit Committee, the Supervisory Board and the external auditor.
Amsterdam, February 24, 2025
The Board of Management
Greg Poux-Guillaume, CEO and Chair of the Board of Management
Maarten de Vries, CFO and member of the Board of Management
Strategy | Sustainability |
Leadership and governance
|
Financial statements
85
STATEMENT OF THE BOARD OF MANAGEMENT
AkzoNobel Report 2024
BEN NOTEBOOM
Chair 1958, NL
Initial appointment:
2023
Term of office:
2023-2027
Chair of the Supervisory Board of Koninklijke Vopak N.V.;
Vice Chair of the Supervisory Board of Koninklijke KPN N.V.;
Chair of the Board of Trustees of the Cancer Center Amsterdam;
member of the Advisory Board of Stichting ADORE.
2024 was another year of unpredictable
markets which required AkzoNobel to
demonstrate agile thinking and take decisive
action to navigate through an increasingly
difficult business climate. Despite the
complex operating environment, it was a
year of good progress, boosted by
management’s implementation of a series of
targeted self-help measures. The
Supervisory Board is confident that the right
plans are in place and, while there’s still
work to do, AkzoNobel remains on track to
deliver on its mid-term ambitions.
During the year, it was clear we needed to rely on our own internal
improvement efforts and the measures we took enabled the
company to grow, despite unfavorable markets. For example, the
industrial excellence program introduced in 2023 picked up
momentum. It offers a significant opportunity to unlock value by
improving operations and there were some important developments
in terms of optimizing our network, while also making strategic
investments to enhance and modernize our anchor sites.
In addition, the Supervisory Board was pleased to see the company
benefit from new strategic initiatives, including the optimization of the
functional organization and the strategic portfolio review, which are
designed to help drive profitable growth. There’s a strong
determination to move forward and management is fully focused on
considerably improving performance.
From a sustainability perspective, the company made further
progress on its carbon reduction ambition, with Scope 1 and 2
decreasing by 41% and Scope 3 by 12%, versus the 2018 baseline.
It demonstrates that AkzoNobel is committed to realizing its ambition
of halving carbon emissions across the value chain by 2030
(baseline 2018). It’s one of several ambitions we have for 2030,
which include achieving 100% circular use of materials in our own
operations, while our ambition to empower more than 100,000
people in local communities with new skills was achieved in 2024 –
six years earlier than planned.
Another notable highlight was the company’s results in its Voices
survey. For the second year in a row, the level of employee
engagement exceeded the industry average, which is an excellent
achievement.
During 2024, we strengthened the Supervisory Board by recruiting
three new colleagues with significant industry insight – Jaska de
Bakker, Ute Wolf and Wouter Kolk. They bring with them a wealth of
knowledge and expertise. In the meantime, Jolanda Poots-Bijl and
Dr. Pamela Kirby stepped down as members of the Supervisory
Board. We thank them for their excellent contribution and total
dedication.
As the company moves forward, management continues to work
hard on positioning AkzoNobel as a leader in our industry. We have
the right momentum going into 2025 and the Supervisory Board is
convinced that the right measures are being taken to progress
further on our path to profitable growth.
On behalf of the Supervisory Board, I want to thank our shareholders
and all other stakeholders for their continued trust in the company,
and my Supervisory Board colleagues, the Board of Management
and Executive Committee for their efforts during 2024. I'd also like to
express deep appreciation for the continued hard work and
commitment of AkzoNobel’s employees across the world, who
helped us to deliver a strong performance in a far from ideal
business climate.
Amsterdam, February 24, 2025
Ben Noteboom
Chair of the Supervisory Board
Strategy | Sustainability |
Leadership and governance
|
Financial statements
86
STATEMENT OF THE CHAIR OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
BYRON
GROTE
Deputy Chair
1948,
US and UK
Initial appointment:
2014
Term of office:
2024-2025
Non-executive Director of IHG (InterContinental Hotels
Group plc.) and Inchcape plc.
ESTER
BAIGET
1971, ES
Initial appointment:
2022
Term of office:
2022-2026
CEO and President of Novozymes A/S; member of the Board of
United Nations Global Compact; member of Business Council
for the United Nations; member of the Board of Trustees of the
US Council for International Business (USCIB); member of the
Board of SBTi; Vice Chair of the B Team.
HANS
VAN BYLEN
1961, BE
Initial appointment:
2022
Term of office:
2022-2026
Independent Director and Chair of the Board of Directors of
Ontex Group NV; non-executive and Chair of the Board of
Directors of Etex NV; member of the Supervisory Board of
Lanxess AG.
DICK
SLUIMERS
1953, NL
Initial appointment:
2015
Term of office:
2023-2025
Deputy Chair of the Supervisory Board of Euronext N.V.; Chair
of the Supervisory Boards of Euronext Amsterdam N.V. and
NIBC Bank N.V.; member of the Board of Directors of FWD
Group Limited; member of the Board of Governors of the State
Academy of Finance and Economics; Trustee of the Erasmus
University Trust Fund; Senior Advisor to Bank of America
Europe DAC.
JASKA DE
BAKKER
1970, NL
Initial appointment:
2024
Term of office:
2024-2028
Non-executive member of the Boards of Directors of Prysmian
S.p.A. and Nobian Industrial Chemicals B.V.; member of the
Supervisory Boards of Redcare Pharmacy N.V. and Stichting
The Ocean Cleanup.
WOUTER KOLK
1966, NL
Initial appointment:
2024
Term of office:
2024-2028
Member of the Advisory Board of The LEAD Network to
advance diversity; member of the Amsterdam Economic Board.
PATRICK
THOMAS
1957, UK
Initial appointment:
2017
Term of office:
2021-2025
Chair of Johnson Matthey plc.; member of the Supervisory
Board of Covestro AG.
UTE WOLF
1968, DE
Initial appointment:
2024
Term of office:
2024-2028
Deputy Chair of the Supervisory Board of DWS Group GmbH &
Co. KGaA; member of the Supervisory Boards of Infineon
Technologies AG and MTU Aero Engines AG; member of the
Advisory Board of HSBC Trinkaus & Burkhardt.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
87
OUR SUPERVISORY BOARD
AkzoNobel Report 2024
Meetings and attendance
The Supervisory Board values the attendance of its meetings by all
members. If Supervisory Board members are unable to attend a
Supervisory Board or committee meeting, they inform the relevant
Chair of their reasons. Supervisory Board members always receive
the materials for each specific meeting, allowing them to offer input
and discuss any agenda items with the relevant Chair.
In 2024, the Board of Management attended all meetings of the
Supervisory Board. The Executive Committee attended the majority
of the meetings. Almost all plenary sessions of the Supervisory
Board were preceded or succeeded by executive sessions of the
Supervisory Board, with and without the CEO in attendance. The
Chair had regular one-on-one calls with all Supervisory Board
members to discuss individual impressions on the functioning of the
Supervisory Board and items covered.
The Supervisory Board aims for all (regular) meetings to be held
physically. When needed, virtual participation is made possible with
video conference capabilities, enabling Supervisory Board members
to perform their role appropriately.
Strategy updates
During 2024, the Supervisory Board continued to allocate adequate
time to discuss strategic activities focused on the overarching
strategic pillars across the portfolio of businesses. It received regular
updates from the Executive Committee on the progress made
towards the ambitions of the company’s strategy, as well as on the
underlying programs supporting the strategy. In September, the
Supervisory Board and Board of Management, together with the
other members of the Executive Committee, held a two-day strategy
meeting. With a focus on sustainable long-term value creation, the
Supervisory Board reviewed and advised on the direction and next
steps for the company strategy, including the strategic portfolio
review, as further described in the Strategy chapter.
Industrial excellence and simplifying execution
model
The Supervisory Board regularly received updates on the progress
made on the industrial excellence program, focused on reducing
complexity, enhancing productivity and optimizing our network
through investment and modernization at our anchor sites. The
Supervisory Board advised on the changes to the industrial
organizational models for the Decorative Paints and Performance
Coatings businesses and the improvement of industrial processes.
The Supervisory Board also reviewed and advised on simplifying the
execution model. Designed to enhance the efficiency of the
functional organization by simplifying operations, accelerating
decision-making and streamlining the company's management
structure, it involved a reduction of 2,200 positions globally. Further
details are included the Strategy chapter.
Functional and business updates
Throughout the year, the Supervisory Board reviewed and discussed
updates in Finance, Human Resources, Sustainability and
Information Technology. The Supervisory Board received
comprehensive market and business updates. In addition, regular
updates were received on Integrated Supply Chain performance and
the legal matter relating to the Ichthys Onshore LNG project in
Australia.
Sustainability
The Supervisory Board views sustainability as an intrinsic value driver
in the work of all businesses and functions. During 2024, the
Supervisory Board continued to assess sustainability as part of
strategy and targets and advised on further embedding related
considerations into decision-making. During quarterly updates on
sustainability, the Supervisory Board reviewed and advised on the
progress made towards the company’s sustainability ambitions. The
company’s response to climate change was reviewed, which is
focused on efforts to reduce emissions across the whole value chain
(including Scope 1, 2 and 3). Deep dives were carried out for specific
topics, such as the social programs, the carbon reduction glidepath
and the revision of the Sustainable Product Portfolio Assessment
(SPPA).
The company’s sustainability ambitions and progress are further
considered as part of the business reviews and functional updates,
and as part of the Supervisory Board’s review of the company’s
innovation efforts and programs. Further details are included in the
Sustainability statements.
Supervisory Board attendance record1
SB
AC
RC
NC
Ben Noteboom
9/9
4/4
5/5
Ester Baiget
8/9
7/8
Jaska de Bakker2
5/5
5/5
Hans Van Bylen
7/9
4/4
5/5
Byron Grote
9/9
8/8
Pamela Kirby3
4/4
1/1
1/1
Wouter Kolk4
5/5
3/3
4/4
Dick Sluimers
8/9
4/4
5/5
Patrick Thomas
8/9
7/8
Ute Wolf2
3/5
4/5
The table indicates the meeting attendance for the Supervisory Board (SB), the Audit Committee
(AC), the Remuneration Committee (RC) and the Nomination Committee (NC). The meetings of the
Supervisory Board concern the nine regular, scheduled meetings. No additional meetings were held.
1 Jolanda Poots-Bijl stepped down as per January 31, 2024. No meetings were held before that
time during 2024.
2 Appointed to the Supervisory Board as per April 25, 2024. Appointed to the Audit Committee as
per June 1, 2024.
3 Stepped down after the AGM held on April 25, 2024.
4 Appointed to the Supervisory Board as per April 25, 2024. Appointed to the Remuneration
Committee and Nomination Committee as per June 1, 2024.
Performance and management planning
Individual Board of Management and Executive Committee
performance was addressed in Supervisory Board meetings,
following recommendations from the Remuneration Committee. For
more details, see the report of the Remuneration Committee.
Discussions on corporate performance were held at each regular
Supervisory Board meeting and included business reviews and
Strategy | Sustainability |
Leadership and governance
|
Financial statements
88
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
performance updates from corporate functions. Forward-looking
targets were also addressed in light of these reviews. The
Supervisory Board diligently reviewed budgets and operating plans,
taking into account the macro-economic uncertainty. Following
assessments, the proposed budgets and operating plan for 2025
were approved.
During the year, the Supervisory Board was pleased to see the
company continuing to benefit from management’s strategic
initiatives, including optimization of the functional organization and
the strategic portfolio review to help drive profitable growth. The
nature of this performance and the company’s capital allocation
priorities were all considered in the Supervisory Board’s approval of
the dividend proposal. Further details on the 2024 dividend proposal
can be found in the Financial information.
Risk management
The Supervisory Board views risk management as an essential
mechanism to safeguard the business and assets of the company,
and to secure sustainable long-term performance and value
creation. As the Supervisory Board sought to assure itself of the
robustness of the company’s risk mitigation and internal controls, it
received multiple risk management updates during the year.
The Board of Management and Executive Committee maintain the
risk management framework and system of internal controls. The
Supervisory Board and the Audit Committee monitor the
implementation of risk mitigating measures for the key risks, as
identified by the Board of Management and the Executive
Committee during the year by means of risk updates and reviews.
Further details are included in the Risk management chapter.
Corporate governance
The Supervisory Board continuously reviews the company's
corporate governance and its compliance with the Dutch Corporate
Governance Code.
Talent management and succession planning
Throughout the year, the Supervisory Board discussed and
undertook detailed succession planning. This included taking the
time to discuss its own composition and succession plans in order
to ensure continued effectiveness.
With Jolanda Poots-Bijl stepping down as member of the
Supervisory Board as of January 31, 2024, and Pamela Kirby
stepping down after the 2024 AGM, the Supervisory Board
nominated Jaska de Bakker, Ute Wolf and Wouter Kolk for
appointment to the Supervisory Board. In addition, Byron Grote was
nominated for reappointment to the Supervisory Board for a fourth
term of one year. Mr. Grote was initially appointed to the Supervisory
Board in 2014. He was reappointed for a second four-year term in
2019 and reappointed for a third term of two years in 2022. He has
been Chair of the Audit Committee since April 2015 and Deputy
Chair of the Supervisory Board since October 2016. As Chair of the
Audit Committee, Mr. Grote led the supervision of the external
auditor selection process which was completed during 2024. His
reappointment also ensured continuity during the change of the PwC
lead partner. Mr. Grote did not take part in the deliberations and
voting regarding his own reappointment. The appointments and
reappointment were approved at the 2024 AGM.
The requirements of the Corporate Governance Code, the
Supervisory Board’s profile, skills matrix and its policy on diversity
and inclusion were considered throughout these processes. Further
information can be found in the report of the Nomination Committee.
The Supervisory Board further discussed and supported the
composition of the Executive Committee. This included the
appointment of Wiebe Wiechers as Chief Development Officer.
Supervisory Board activities 2024
Q1
Q2
Q3
Q4
• Q4 2023 report, financials and performance
• 2023 financial statements, annual report and profit allocation
• Assurance report sustainability statements 2023
• External audit report 2023
• Final dividend 2023
• Final budget 2024
• Investor Relations update
• Business updates
• HSE&S full-year report
• Sustainability/ESG update
• Integrated Supply Chain update
• Ichthys update
• Risk management risk session outcomes
• Supervisory Board succession planning
• Remuneration target setting
• Q1 2024 report, financials and performance
• External auditor rotation
• Investor Relations update
• Business updates
• HSE&S update
• Industrial excellence update
• Sustainability/ESG update
• IT strategy update including cybersecurity
• Enterprise risk management update
• Ichthys update
• Q2 2024 report, financials and performance
• Investor Relations update
• Business updates
• HSE&S update
• Strategy review
• Industrial excellence update
• Optimization functional organization
• Industrial organizational models Decorative Paints and
Performance Coatings
• Site visit Sassenheim, the Netherlands
• Ichthys update
• Q3 2024 report, financials and performance
• Dividend policy
• Interim dividend 2024
• Remuneration Board of Management 2025
• Investor Relations update
• Sustainability/ESG update
• HSE&S update
• Budget 2025
• M&A strategy update
• Industrial excellence update
• Human Resources strategy update (including Voices survey)
• Remuneration policies Board of Management and Supervisory
Board
• Supervisory Board succession planning
• Ichthys update
Strategy | Sustainability |
Leadership and governance
|
Financial statements
89
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
Independence of the Supervisory Board
Supervisory Board members are required to act critically and
independently of one another, the Board of Management, the
Executive Committee and the company’s stakeholders. Each
Supervisory Board member meets the independence requirements
of the Corporate Governance Code and completed the annual
independence questionnaire addressing the relevant requirements
for independence.
Supervisory Board evaluation
To assess its effectiveness, the Supervisory Board carried out an
internal performance evaluation of itself, its individual members, its
Audit, Remuneration and Nomination Committees, the Chair, as well
as the relationship with the Board of Management and the Executive
Committee. The process consisted of the Supervisory Board
members completing a confidential questionnaire.
In a separate meeting without the Board of Management, the
Supervisory Board discussed the results of the evaluation
questionnaires and reflected on the improvement areas raised during
last year’s evaluation. The Supervisory Board also discussed the
functioning of the Board of Management and the performance of its
individual members. Feedback was provided to, and discussed with,
the members of the Board of Management.
The evaluation concluded that the Supervisory Board and its
committees continue to operate proficiently. The selection process
for attracting and selecting new Supervisory Board members was
considered to be functioning well and there’s a dynamic and open
atmosphere between the Supervisory Board and the Board of
Management, as well as the other members of the Executive
Committee. Focus items going forward include continued attention
for executive succession planning and talent management and the
development of the group strategy taking into account stakeholder
views.
Financial statements and profit allocation
The Board of Management submitted the report and financial
statements, including the report of the Board of Management, to the
Supervisory Board for review and approval. The financial statements
of Akzo Nobel N.V. for the financial year 2024 were audited by
PricewaterhouseCoopers Accountants N.V. (PwC).
The financial statements and the report were extensively discussed
by the Audit Committee with the external auditors, in the presence of
the CFO, and by the full Supervisory Board with the Board of
Management and the Executive Committee. Based on these
discussions, the Supervisory Board is of the opinion that the 2024
financial statements of Akzo Nobel N.\/. form an adequate basis to
account for the supervision provided (see the Financial information).
The Audit Committee monitors the follow-up by management on the
recommendations made by the external auditors.
The Supervisory Board recommends that the AGM adopts the
financial statements as presented in this Report 2024 and, as
proposed by the Board of Management, the proposed total dividend
for 2024 of €1.98 (2023: €1.98), including a final dividend of €1.54
per share. An interim dividend of €0.44 (2023: €0.44) per share was
paid in November 2024. This reflects the continued commitment to
providing a stable to rising dividend. The dividend will be paid in
cash.
In addition, it is requested that the AGM discharges the Board of
Management members from their responsibility for the conduct of
business in 2024, and the Supervisory Board members for their
supervision in 2024.
Committees of the Supervisory Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Ben Noteboom (Chair)
Member
Chair
Byron Grote (Deputy Chair)
Chair
Ester Baiget
Member
Jaska de Bakker
Member
Hans Van Bylen
Member
Member
Wouter Kolk
Member
Member
Dick Sluimers
Chair
Member
Patrick Thomas
Member
Ute Wolf
Member
As a long-standing partner of the McLaren Formula 1 Team, we were delighted to
see them win the 2024 Constructors’ Championship. Our Sikkens brand is the
team’s Official Partner: Coatings Solutions, continuing a close relationship which
first began in 2008.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
90
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
Audit Committee
Audit Committee activities 2024
Q1
Q2
Q3
Q4
• Q4 2023 report, financials and performance
• 2023 financial statements, annual report and profit allocation
• External audit report 2023
• Assurance report sustainability statements 2023
• Final dividend 2023
• Review risk management and internal control report 2023
• Internal Audit Q4 2023 report
• Final budget 2024
• Investor Relations update
• HSE&S audit findings
• Pension update
• Integrity and Compliance report 2023
• Exposure report
• IT/cybersecurity update
• Q1 2024 report, financials and performance
• Appointment Head of Internal Audit
• Internal Audit Q1 2024 report
• Review evaluation external auditor
• Review year-to-date audit findings
• Review and approval PwC audit plan
• Audit fee 2024
• External auditor rotation
• Investor Relations update
• Treasury update
• Tax update
• ESG reporting update
• Internal Audit strategy update
• Integrity and Compliance update
• Exposure report
• IT/cybersecurity update
• Q2 2024 report, financials and performance
• Internal Audit Q2 2024 report
• Investor Relations update
• Review year-to-date audit findings
• Review Q3 2024 report, financials and performance
• Dividend Policy
• Interim dividend 2024
• Internal Audit Q3 2024 report
• ESG reporting update
• Integrity and Compliance update
• Budget 2025
• Internal Audit Plan 2025
• Hard close audit report
• Investor Relations update
• Tax update
• Finance transformation update
• External auditor transition update
All Audit Committee members have extensive accounting and
financial management expertise. Issues discussed in Audit
Committee meetings were reported back to the full Supervisory
Board in subsequent meetings.
External audit
PwC, AkzoNobel’s independent external auditor, reported in-depth
to the Audit Committee on the scope and outcome of the annual
audit of the financial statements, including the Consolidated financial
statements and the Company financial statements and related
notes, as well as on the scope and outcome of the limited assurance
engagement on the Sustainability statements. The Audit Committee
held independent meetings with the external auditor and critically
reviewed and constructively challenged their audit approach, fees,
risk assessment and audit plan. The Audit Committee performed an
annual review of the services of the external auditor, and at each
meeting considered and assessed the status of the auditor’s
independence. In line with mandatory audit rotation regulations, the
PwC lead partner in charge of the AkzoNobel account changed as
of the audit of the 2024 financial statements.
The selection process for a new external audit firm as part of the
mandatory auditor rotation was concluded in 2024. The process
was overseen by a selection committee, comprised of two members
of the Audit Committee, the CFO, the Head of Internal Audit and
other key stakeholders within the company. It encompassed a
careful assessment whereby candidate audit firms were evaluated
on a range of relevant criteria, including understanding of
AkzoNobel’s business, the proposed approaches to audit and ESG
assurance, the use of technology and the audit fees. For further
details on the selection process, the evaluation and the final
conclusions, reference is made to the proposal to be made at the
2025 AGM.
Further details on the external auditor can be found in the Corporate
governance statement.
Risk management and internal control systems
The Audit Committee reviewed the company’s overall approach to
governance, risk management and internal controls, its processes,
outcomes, financial and sustainability reporting and disclosures. It
received regular updates from internal auditors and functions, and
was provided with comprehensive risk and internal control reports
during the year. In addition, the Audit Committee received periodic
updates on the results of testing of internal control effectiveness,
related remediation plans and assessments of overall control
effectiveness. In its review, the Audit Committee considered the
impact of changes to systems, processes and organization, such as
the expansion of activities in the company's Global Business
Services centers. The Audit Committee also met regularly with senior
executives.
In fulfilling its oversight responsibilities in relation to risk management
and internal control systems, the Audit Committee also received
updates from functions such as Finance, Treasury, Information
Technology and Tax throughout the year. In addition, the Audit
Committee reviewed the proposed budget and operating plan.
During 2024, the Audit Committee received several updates on the
IT security framework, including the corporate security program and
the security program for the manufacturing sites.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
91
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
Integrity and compliance
The Executive Committee is responsible for maintaining a culture of
integrity and ensuring an effective integrity and compliance program
and control framework. Part of these responsibilities are delegated to
specific committees and the Integrity and Compliance function. The
Supervisory Board’s Audit Committee oversees this responsibility
and regularly reviews integrity and compliance reports.
Internal audit
The Internal Auditor presented all main audit findings to the Audit
Committee and discussed the progress of the audit plan. During the
year, the Audit Committee approved Internal Audit’s plan and
strategy, and also agreed on the budget and resource requirements
for the function. The Audit Committee met separately with the
Internal Auditor during the year to discuss the results of the audits
performed and the status of the follow-up on action plans identified.
In 2024, the Audit Committee was satisfied with the effectiveness of
the Internal Audit function. With the former Head of Internal Audit
taking on another position in the company, the Audit Committee
supported the succession of the Head of Internal Audit, which was
subsequently approved by the Supervisory Board.
Results and financial statements
Before each publication of the quarterly results and the financial
statements, the Audit Committee reviewed the financial results. In
addition, the Audit Committee reviewed and commented on the
interim and final dividend proposals and on reports and press
releases to be published. This was in addition to the work
undertaken by the company’s Disclosure Committee in reviewing the
company’s disclosure of potentially share price sensitive information.
Based on these discussions, the Audit Committee advised the
Supervisory Board on the publications and disclosures, as well as on
proposals regarding the interim and final dividends. All quarterly and
annual releases of financial results were approved by the full
Supervisory Board prior to publication and release.
To ensure its effectiveness and expertise, the Audit Committee was
provided with regular updates on IFRS developments and the
anticipated impact of these developments on the financial
statements. In addition, the Audit Committee reviewed and assessed
management assertions made in regard to relevant accounting
treatments. The external auditor, as required by auditing standards,
also considers the risk of management override of controls. Nothing
has come to the attention of the Audit Committee to suggest any
material misstatement related to suspected or actual fraud involving
management override of controls.
Sustainability reporting
As part of its oversight of the integrity and quality of the company’s
sustainability reporting, the Audit Committee received updates on
the various programs that have been initiated, and on progress
made in relation to Corporate Sustainability Reporting Directive
(CSRD) compliant reporting. The Audit Committee discussed the
approach to the double materiality assessment and the material
topics. For more information, see the Sustainability statements.
During 2024, we continued to create flying works of art for China Southern
Airlines – one of the largest airlines in China. To date, we’ve supplied aerospace
coatings for more than 650 of the company’s planes. The advanced paint
technology we supply doesn’t just look good, it also offers the kind of
performance and endurance that our customers rely on.
Remuneration Committee
Management performance review
The work of the Remuneration Committee during Q1 focused on
2023 performance, individual performance reviews of Board of
Management members and the Executive Committee. The
Remuneration Committee also reviewed various incentive plans, the
economic circumstances and the relative performance compared
with top peers.
Remuneration Policy review
The current remuneration policies for the Board of Management and
the Supervisory Board were last adopted in full at the 2021 AGM. As
required by Dutch law, the remuneration policies are submitted for
shareholders' adoption at least every four years. In 2024, the
Remuneration Committee and Supervisory Board reviewed the
remuneration policies for the Board of Management and the
Supervisory Board to assess whether these were still in line with the
company’s strategy and financial targets, while considering input
received from stakeholders. Following such review, the Supervisory
Board will submit updated remuneration policies for the Board of
Management and Supervisory Board for consideration by
shareholders at the 2025 AGM. Further information can be found in
the Remuneration report.
Management salary review
The Remuneration Committee reviewed the base salaries and
established relevant forward-looking target ranges for variable
remuneration of Board of Management members and other
Executive Committee members. The base salaries will continue to be
assessed in light of market conditions, the reward structures of peer
group companies and performance. The Remuneration Committee
considered the pay ratios within the company and how these
compare with peer group companies. Forward-looking target ranges
for variable remuneration of the Board of Management were
discussed. Further information can be found in the Remuneration
report.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
92
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
Remuneration Committee activities 2024
Q1
Q2 and Q3
Q4
• Review of management performance 2023
• Approval of 2023 pay-out under Short-term Incentive Plan and vesting of shares under
Long-term Incentive Plan
• 2023 Remuneration report
• Review Remuneration Policy for Board of Management
• Review of management base salaries for 2024
• Target setting 2024
• Review remuneration policies for Board of Management and Supervisory Board
• Target setting 2024
• Preparation of 2024 Remuneration report
• Review of 2024 (preliminary) performance outlook
• Review remuneration policies for Board of Management and Supervisory Board
Nomination Committee
Supervisory Board succession
During 2024, the Nomination Committee continued to discuss the
size, structure and composition of the Supervisory Board. Following
thorough consideration, the Nomination Committee recommended
the appointment of Jaska de Bakker, Ute Wolf and Wouter Kolk and
the reappointment of Byron Grote to the Supervisory Board for
consideration by the shareholders at the 2024 AGM. Following their
(re)appointments, and with Jolanda Poots-Bijl having stepped down
as member of the Supervisory Board as of January 31, 2024, and
the final term of Pamela Kirby having ended in 2024, the number of
Supervisory Board members increased to nine.
The Supervisory Board has updated its skills matrix, as shown on
the next page. It contains full details of the current Supervisory
Board composition. The schedule of Supervisory Board succession
and the profiles of the Supervisory Board members can also be
found on our website.
Board of Management and executive
succession
During 2024, the Nomination Committee was consulted and gave its
advice regarding the composition of the Executive Committee and
the appointment of Wiebe Wiechers as Chief Development Officer
(CDO). The Nomination Committee also considered executive
succession planning and talent management.
Nomination Committee activities 2024
Q1 and Q2
Q3 and Q4
• Supervisory Board succession
planning
• Review (re)appointment scheme
• Review composition Supervisory
Board committees
• Update skills matrix
• Supervisory Board succession
planning
• Board of Management and Executive
Committee succession planning and
talent management
Strategy | Sustainability |
Leadership and governance
|
Financial statements
93
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
Supervisory Board skills and profiles
B. Noteboom
(m)
E. Baiget
(f)
J. de Bakker
(f)
H. Van Bylen
(m)
B. Grote
(m)
W. Kolk
(m)
D. Sluimers
(m)
P. Thomas
(m)
U. Wolf
(f)
Independent
l
l
l
l
l
l
l
l
l
Consumer goods
l
l
l
l
l
Industrial
l
l
l
l
l
l
l
Buildings and infrastructure
l
l
l
l
l
Transport
l
l
l
l
(International) business, commerce, finance/economics
l
l
l
l
l
l
l
l
l
Scientific/information technology experience
l
l
l
l
l
Public sector experience
l
Management experience
l
l
l
l
l
l
l
l
l
Business strategy planning
l
l
l
l
l
l
l
l
l
Investor relations
l
l
l
l
l
l
l
l
l
Manufacturing experience
l
l
l
l
l
l
l
Supply chain/logistics experience
l
l
l
l
l
l
Social, environmental, sustainability experience (ESG)
l
l
l
l
l
l
l
l
l
Finance expert
l
l
l
l
l
Four or less external directorships
l
l
l
l
l
l
l
l
l
Dutch/EU national
l
l
l
l
l
l
l
Non-EU national
l
l
Pensions experience
l
l
l
Business-to-business sales experience
l
l
l
l
l
l
R&D experience
l
l
l
Legal experience
l
Industrial/employment relations
l
l
l
l
Risk management
l
l
l
l
l
Consulting
l
l
(f) = female, (m) = male
Additional remarks
The members of the Supervisory Board would like to reiterate their appreciation to the Board of
Management and Executive Committee, and to all the company’s employees around the world, for their
outstanding dedication and hard work during the year.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
94
REPORT OF THE SUPERVISORY BOARD
AkzoNobel Report 2024
AkzoNobel aspires to the highest standards
of corporate governance and seeks to
consistently enhance and improve corporate
governance performance, emphasizing
transparency and a culture of sustainable
long-term value creation.
Akzo Nobel N.V. is a public limited liability company (naamloze
vennootschap) established under the laws of the Netherlands, with
common shares listed on Euronext Amsterdam. AkzoNobel has a
sponsored level 1 American Depositary Receipt (ADR) program and
ADRs can be traded on the international OTCQX platform in the US.
The company’s management and supervision are organized under
Dutch law in a so-called two-tier system, comprising a Board of
Management (solely composed of executive directors) and a
Supervisory Board (solely composed of non-executive directors). The
Supervisory Board supervises and advises the Board of
Management and ensures a strong external presence in the
governance of the company. The two Boards are independent of
each other and are accountable to the Annual General Meeting of
shareholders (AGM) for the performance of their functions.
Our corporate governance framework is based on the company’s
Articles of Association, the requirements of the Dutch Civil Code, the
Dutch Corporate Governance Code (the “Code”) and all applicable
laws and regulations, including securities laws. The Code contains
principles and best practices for Dutch companies with listed shares.
Deviations from the Code are explained in accordance with the
Code’s “comply or explain” principle. For the full version of the Code,
visit www.mccg.nl
With the exception of those aspects of our governance which can
only be amended with the approval of the AGM, the Board of
Management and the Supervisory Board may make adjustments to
the way the Code is applied, if this is considered to be in the best
interests of the company. Where changes are made, these will be
reported and explained in the annual report for the relevant year and
discussed at the subsequent AGM.
The company also subscribes to, and applies, the principles of the
VNO-NCW Tax Governance Code. Further information on this is
available on our website: AkzoNobel’s approach to tax. For the full
version of the Tax Governance Code, visit www.vno-ncw.nl/
taxgovernancecode
Board of Management and Executive
Committee
The Board of Management is entrusted with the management of the
company. When it comes to the management of our business, it
operates in the context of an Executive Committee. The Executive
Committee comprises the Board of Management and other key
officers of the company, led by the CEO.
The composition of the Executive Committee ensures that functional,
operational and commercial expertise is entrenched at the highest
level of the organization. Among other responsibilities, the Board of
Management defines the company’s strategic direction. It
establishes and maintains internal policies and procedures for
effective risk management and control, manages the realization of
the company’s operational and financial targets, its sustainability
performance and its pursuit of sustainable long-term value creation.
In fulfilling their duties, Board of Management members are assisted
by the Executive Committee and guided by the interests of the
company and its affiliated enterprises, taking into consideration the
relevant interests of the company’s stakeholders.
The Board of Management takes precedence; all Executive
Committee decisions require a majority of the Board of Management
members. The Board of Management can decide to reserve
decisions for itself. The Board of Management members remain
accountable for all decisions made by the Executive Committee. The
Board of Management is accountable for its performance to the
Supervisory Board and is accountable to the shareholders of the
company at the AGM. All Executive Committee members, including
the CFO, report to the CEO.
The Supervisory Board has regular, direct interaction with Executive
Committee members, and all Executive Committee members attend
most Supervisory Board meetings.
The CEO leads the Executive Committee in its overall management
of the company. He is the main point of liaison with the Supervisory
Board. The CFO is responsible for overseeing AkzoNobel’s finances,
its corporate control, investor relations and information
management.
The tasks, responsibilities and procedures of the Board of
Management and Executive Committee are set out in their Rules of
Procedure. These rules have been approved by the Supervisory
Board and are available on our website. Authority to represent the
company is vested in the two members of the Board of
Management, acting jointly. The Board of Management has also
delegated a level of authority to corporate agents, including
members of the Executive Committee. The list of authorized
signatories is available from the Dutch Chamber of Commerce.
The Directors of the company’s business units and the Corporate
Directors in charge of the different functions report to individual
Executive Committee members with specific responsibility for their
activities and performance.
Appointment
Board of Management members are appointed and removed from
office by the AGM. The current Board of Management members
were first appointed by Extraordinary General Meetings (EGMs) held
in 2022 and 2017, with the CFO having been reappointed for
another four-year term at the 2022 AGM. The other Executive
Committee members are appointed by the CEO, after consultation
with the Supervisory Board. Members of the Board of Management
are in principle appointed for a term not exceeding four years, with
the possibility of reappointment.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
95
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
As described later in this chapter, the Meeting of Holders of Priority
Shares has the right to make binding nominations for the
appointment of members of the Board of Management and the
Supervisory Board. However, as the company subscribes to the
principles of the Code in general, members of the Supervisory Board
and the Board of Management are (with the exception of those
circumstances described later in this chapter) appointed on the
basis of non-binding nominations by the Supervisory Board. In such
cases, resolutions to appoint a member of the Supervisory Board or
the Board of Management require a simple majority of the votes cast
by shareholders.
Under certain conditions specified in the Articles of Association,
shareholders may also be entitled to nominate Supervisory Board or
Board of Management members for appointment. Such
appointments require a two-thirds majority, representing at least
50% of the outstanding share capital, in order to be adopted at an
AGM (or EGM).
Diversity and inclusion
AkzoNobel believes in the strength of diversity and inclusion and, in
accordance with the Code, a policy on diversity and inclusion has
been adopted for the composition of the Board of Management and
the Executive Committee.
The policy on diversity and inclusion for the composition of the
Board of Management and Executive Committee is recognized and
described in the Diversity, Equity and Inclusion Policy (DE&I Policy)
for the executive level, Board of Management and Supervisory
Board, as published on our website. The objective of this DE&I
Policy is to enrich the Board of Management and Executive
Committee’s perspective, improve performance, increase member
value and enhance the probability of achievement of the company’s
goals and objectives.
A consistent and structured approach is applied to succession
planning for the Board of Management and Executive Committee,
taking into account the implementation of the relevant DE&I Policy.
With 100% of the Board of Management members being male,
AkzoNobel currently diverges from the gender diversity target of at
least 30% female and at least 30% male representation in the Board
of Management. This is primarily due to the size of the Board of
Management being only two members. This divergence is justified
and has ensured the best candidates for the roles were nominated
by the Supervisory Board and appointed by shareholders.
AkzoNobel ended 2024 with a gender diversity of 20% female
representatives at Executive Committee level. This diverges from the
gender target of at least 30% female and at least 30% male
Executive Committee members. Succession planning efforts are in
place to ensure continued improvement of the gender balance in the
future.
Detailed information on DE&I, including targets and plans and
initiatives to reach such targets, can be found in the Sustainability
statements and on our website.
Outside directorships
Specific rules on outside board positions of the Executive Committee
members – which are more stringent than the requirements of the
Dutch Civil Code – can be found in the Rules of Procedure.
Conflicts of interest
During 2024, no transactions were reported under which a member
of the Board of Management or Executive Committee had a conflict
of interest which was of material significance to the company and to
the relevant member.
Remuneration
The current Remuneration Policy for the Board of Management was
last amended in full following adoption by the 2021 AGM, and last
updated at the 2024 AGM. The details of this policy can be found in
the Remuneration report. The service contracts of the Board of
Management members contain change of control provisions. Further
details can be found in the Remuneration report and Note 25 of the
Consolidated financial statements. The service contracts of the
Board of Management are compliant with the Code. The main
elements of these contracts are available on our website.
Operational Control Cycle
The Executive Committee holds regular meetings to discuss the
implementation of the company’s strategy and functional agendas.
Additional meetings are held to discuss specific topics as required.
The Board of Management and Executive Committee have
delegated authorities to individual Executive Committee members
and to certain committees. An Integrated Business Planning (IBP)
process is in place across the company’s global businesses and
functions. IBP provides visibility on the long-term integrated business
and financial plan, covering the product portfolio, demand and
supply. The monthly IBP cycle ends with a review by the Executive
Committee.
Culture
The Board of Management and Executive Committee promote
openness and engagement through a SpeakUp! grievance
mechanism and have established a Code of Conduct, policies, rules
and procedures incorporated in the company’s Policy framework, in
order to drive a culture of good governance, consistency and
functional excellence. The core values of safety, integrity and
sustainability adopted by the Board of Management are incorporated
in these documents. The Board of Management believes these
values contribute to a culture focused on sustainable long-term value
creation and actively encourages these values through leading by
example.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
96
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
A strong corporate culture fostering a solid and well-embedded
balance between performance and organizational health is highly
valued by the Board of Management and Supervisory Board, and is
fundamental to AkzoNobel’s strategic approach. Our corporate
culture forms an important part of discussions involving internal
organizational changes and Human Resources strategy updates, as
well as any functional updates. Since 2018, surveys have been
conducted involving all employees, covering a variety of focus areas,
such as our wider organizational health (see Employee engagement
in the Sustainability statements). The Executive Committee and
Supervisory Board regularly discuss the results of such surveys, the
targets and the actions taken to achieve those targets.
For more information on our culture, please refer to the Sustainability
statements and the Integrity and compliance management chapter.
Sustainability
The Board of Management, operating in the context of the Executive
Committee, is responsible for incorporating the sustainability agenda
into the company's strategic approach and monitoring the
performance through the Operational Control Cycle. Within the
Executive Committee, the Chief CHRO is responsible for
sustainability.
Progress regarding sustainability objectives, development, target
setting and implementation is reviewed on a quarterly basis by the
Executive Committee and the Supervisory Board. Several bodies
report via the Director of Sustainability to the Executive Committee
and Supervisory Board, including the Raw Material Sustainability
Group (RMSG) and the CSRD Steering Committee. Regular deep
dives on specific sustainability topics are carried out to ensure
there’s appropriate expertise in the Executive Committee and
Supervisory Board to manage and oversee sustainability-related
matters, and to assess any associated material impacts, risks and
opportunities (IROs). In addition, training or education for the
members of the Executive Committee or the Supervisory Board on
ESG-related topics can be arranged upon request. The broad
industrial experience from both the CEO and CFO, across multiple
regions, businesses and sectors, helps them leverage their expertise
and their ability to provide guidance on how AkzoNobel manages the
IROs as identified under the CSRD. The Board of Management is
kept up-to-date directly by both the Director of Sustainability and the
Head of ESG reporting on the process of identifying and managing
the IROs. Further details are included in the Sustainability
statements.
The Audit Committee takes an active role in assessing the quality
and reliability of sustainability reporting and receives bi-annual
updates from the CSRD Steering Committee. External auditor PwC
has been engaged to perform a limited assurance engagement on
the Sustainability statements. Their report can be found in the
Financial information.
Committees
Integrity and Compliance governance
committees
The Executive Committee is responsible for maintaining a culture of
integrity and ensuring an effective Integrity and Compliance program
and framework and has delegated part of the responsibilities to
specific committees. The Supervisory Board’s Audit Committee
oversees this responsibility. More details on the Integrity and
Compliance governance committees can be found on page 105.
Executive Pensions Committee
The Executive Pensions Committee oversees the general pension
policies of AkzoNobel’s various pension plans and their financial
consequences for the company. The committee is chaired by the
CFO and includes the CHRO and senior executives with a
background in corporate law, treasury, pensions and rewards.
Disclosure Committee
The Board of Management has established a Disclosure Committee,
which consists of senior executives with a background in corporate
law, finance and investor relations. The task of the Disclosure
Committee is to establish and maintain disclosure controls and
procedures, and to advise the CEO, CFO and General Counsel on
the accurate and timely disclosure of material financial and non-
financial information.
Supervisory Board
This chapter provides an overview of the responsibilities and
governance of the Supervisory Board. For an understanding of the
activities of the Supervisory Board over the past year, refer to the
Statement of the Chair of the Supervisory Board and the Report of
the Supervisory Board.
The responsibility of the Supervisory Board is to supervise the
policies adopted by the Board of Management and the Executive
Committee and to oversee the general conduct of the business of
the company. In practice, this means supervising:
• The corporate strategy and sustainable long-term value creation
• The achievement of the company’s operational and financial
objectives
• The design and effectiveness of internal risk management and
control systems
• The main financial parameters, compliance with applicable laws
and regulations and risk factors
The Supervisory Board advises the Board of Management and
Executive Committee, while taking into account the interests of the
company and its stakeholders. Major investments, acquisitions and
functional initiatives are subject to Supervisory Board approval.
The Supervisory Board is governed by its Rules of Procedure
(available on our website). The Rules of Procedure include the profile
and charters of the Committees, which set out the tasks and
responsibilities of the Supervisory Board, and its operational
processes.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
97
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
Composition
In compliance with the Dutch Civil Code, the Supervisory Board has
a balanced composition reflecting the nature and variety of the
company’s businesses, their international spread and expertise in
fields such as finance, economics, societal, environmental and legal
aspects of business, government and public administration.
The Supervisory Board maintains a skills matrix, which provides an
overview of the skills and experience of the individual members. The
skills matrix can be found on page 94.
In addition, in accordance with the Code, a policy on diversity and
inclusion has been adopted for the composition of the Supervisory
Board in the DE&I Policy for the executive level, Board of
Management and Supervisory Board. The objective of this policy is
to ensure a balanced composition, taking account of nationality, age,
gender, education and work background. For 2024, there are no
divergences to report. With six male and three female members, the
Supervisory Board complied with the requirements of the Dutch
Gender Diversity Bill.
Dutch law stipulates that a Supervisory Board member may not hold
more than five Supervisory Board positions in large companies or
large foundations (as defined by Dutch law), with chair positions
counting twice. The Supervisory Board annually reviews the external
positions held by its members and Board of Management members
to ensure they have adequate time to fulfill their duties and
responsibilities towards the company.
Supervisory Board
33%
67%
Female
Male
Tenure in years in %
A 0-4
67
B 5-8
11
C 9-11
22
Appointment
Supervisory Board members are nominated, appointed and
dismissed in accordance with procedures identical to those
previously outlined for the Board of Management members. When
nominating and selecting new candidates for the Supervisory Board,
we take into account the Supervisory Board profile and skills matrix,
the requirements of the Act on Management and Supervision, the
principles and provisions of the Code, as well as the DE&I Policy for
the executive level, Board of Management and Supervisory Board. In
accordance with the Code, Supervisory Board members are eligible
for re-election once for a period not exceeding four years. Members
may be re-elected a second time for a period of two years. This
period may be extended by two years at the most. In the event of a
reappointment after an eight-year period, reasons must be given in
the Report of the Supervisory Board. Terms of appointment are
based on a reappointment scheme, available on our website. Three
appointments and one reappointment to the Supervisory Board were
proposed to, and approved at, the AGM held in April 2024.
Induction and training
Following appointment to the Supervisory Board, new members
receive a comprehensive induction tailored to their individual needs.
This includes extensive briefings about all major business and
functional aspects of the company and its corporate governance
and compliance requirements. The induction includes meetings with
the CEO, CFO, all other Executive Committee members and relevant
members of senior management, as well as site visits. This enables
new Supervisory Board members to quickly build up an
understanding of AkzoNobel’s businesses and strategy, as well as
the key risks and issues the company faces. In addition, the Chair
ensures the Supervisory Board is provided with regular updates,
attends business unit deep dives and ensures that the Supervisory
Board undertakes training, for example in the area of compliance
and ethics and sustainability (reporting). To the extent required,
separate training sessions outside of regular Supervisory Board
meetings can be arranged by the company.
Conflict of interest
Supervisory Board members may not participate in the discussions
and decision-making on a subject or transaction in relation to which
they have a conflict of interest with the company. Decisions to enter
into transactions under which Supervisory Board members have
conflicts of interest that are of material significance to the company,
and/or to the relevant Supervisory Board member, require the
approval of the Supervisory Board. Any such decisions will be
recorded in the annual report for the relevant year, with reference to
the conflict of interest and a declaration that the relevant best
Strategy | Sustainability |
Leadership and governance
|
Financial statements
98
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
A
B
C
practice provisions of the Code have been complied with. During
2024, no transactions were reported under which a Supervisory
Board member had a conflict of interest which was of material
significance to the company and/or to the relevant member.
Remuneration of the Supervisory Board
Supervisory Board members receive a fixed annual remuneration
and attendance fee, which is determined by the AGM. According to
the Code, it is not possible for members to be remunerated in
shares. The current Remuneration Policy for the Supervisory Board
was last amended in full following adoption at the AGM in 2021, and
last updated at the AGM in 2024. More information on the
remuneration of Supervisory Board members and the Remuneration
Policy of the Supervisory Board can be found in the Remuneration
report and Note 25 of the Consolidated financial statements.
Supervisory Board committees
The Supervisory Board has established three permanent committees
– the Audit Committee, Nomination Committee and Remuneration
Committee. Information on the activities, composition and
attendance of the Supervisory Board members at the meetings of
the committees during the year is set out in the Report of the
Supervisory Board. Each committee has a charter describing its role
and responsibilities, as well as the manner in which it discharges its
duties and reports to the full Supervisory Board. These charters are
included in the Rules of Procedure of the Supervisory Board. The
committees report on their deliberations and findings to the full
Supervisory Board.
Shareholders and the Annual General
Meeting
The AGM is an integral part of the governance of the company and
its system of checks and balances. The AGM reviews the annual
report and decides on the adoption of the financial statements and
the dividend proposal, as well as the discharge and (re)appointment
of members of the Supervisory Board and Board of Management.
The AGM is convened by public notice and the agenda, notes to the
agenda and the procedure for attendance and voting at the meeting
are published in advance and posted on our website. Matters
proposed for consideration, approval or adoption are tabled as
separate agenda items and explained in writing in advance of the
meeting.
These proposals include, where relevant:
• Adoption of the financial statements
• Dividend proposal
• Discharge of members of the Supervisory Board and Board of
Management
• (Re-)election of members of the Board of Management and
Supervisory Board
• Advisory vote on Remuneration report
• Other important matters, such as major acquisitions or the sale or
demerger of a substantial part of the company, as required by law
• Authorization of the Board of Management to issue new shares
• Authorization of the Board of Management to repurchase shares
• Material changes to the remuneration policies of the Board of
Management and the Supervisory Board
• Amendments to the Articles of Association (for more details, see
art. 57 of the Articles of Association, available on our website)
The company provides remote voting possibilities to its
shareholders. Holding shares in the company on the record date
determines the right to exercise voting rights and other rights relating
to the AGM. All resolutions are made on the basis of the “one share,
one vote” principle (assuming an equal par value for each class of
shares). All resolutions are adopted by absolute majority, unless the
law or the company’s Articles of Association stipulate otherwise.
Holders of common shares in aggregate representing at least 1% of
the total issued capital, or, according to the Official List of Euronext
Amsterdam N.V., representing a value of at least €50 million, may
submit proposals for the AGM agenda. Such proposals must be
adequately substantiated and submitted in writing, or electronically,
to the company at least 60 calendar days in advance of the meeting.
Draft minutes of the AGM are made available on our website within
three months of the meeting date. The final minutes are made
available online within six months of the meeting date.
Share classes
AkzoNobel has three classes of shares: common shares, cumulative
preferred shares and priority shares. Common shares are traded on
the Euronext Amsterdam stock exchange. Common shares are also
traded over-the-counter on OTCQX in the US in the form of
American Depositary Receipts (each American Depositary Receipt
representing one-third of a common share). On December 31, 2024,
a total of 170.8 million common shares and 48 priority shares had
been issued. This includes shares held in treasury which cannot be
voted on and which are not eligible for dividend. Shareholders
owning 3% or more of the issued capital and/or voting rights must
report this to the Dutch Authority for the Financial Markets (AFM) as
soon as the threshold is reached or exceeded. Relevant reporting by
shareholders can be found in the “Register of substantial holdings
and gross short positions” at www.afm.nl
The majority of shares in AkzoNobel N.V. are included in a global
certificate and held through the system maintained by the Dutch
Central Securities Depository (Euroclear Nederland). In the past,
Akzo Nobel N.V. also issued (physical) bearer share certificates
(Bearer Certificates).
A limited number of Bearer Certificates have not yet been
surrendered to Akzo Nobel N.V., although holders of Bearer
Certificates are entitled to a corresponding number of shares in Akzo
Nobel N.V. It is noted that, as a result of Dutch legislation which
became effective as of July 2019, the relevant shares were
registered in the name of Akzo Nobel N.V. by operation of law as per
Strategy | Sustainability |
Leadership and governance
|
Financial statements
99
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
January 1, 2021. Pursuant to this legislation, owners of Bearer
Certificates will continue to be entitled to a corresponding number of
shares in Akzo Nobel N.V. until January 2, 2026. On that date, their
entitlement will expire by operation of law.
Related information
For more details about AkzoNobel shares and Bearer
Certificates, contact Investor Relations:
investor.relations@akzonobel.com
The priority shares are held by the Foundation Akzo Nobel (Stichting
Akzo Nobel). The priority shares are limited in transferability and
profit entitlement (see Note F of the Company financial statements).
The Foundation’s Board consists of AkzoNobel’s Supervisory Board
members who are not members of the Audit Committee. The
Meeting of Holders of Priority Shares has the nomination right for the
appointment of members of the Board of Management and the
Supervisory Board, as well as the right to approve amendments to
the Articles of Association of the company.
No cumulative preferred shares have been issued to date.
Cumulative preferred shares merely have a financing function, which
means if necessary, and possible, they will be issued at or near the
prevailing quoted price for common shares.
The 2024 AGM authorized the Board of Management for a period of
18 months after that date or, if earlier, until the date on which the
AGM again renews the authorization – subject to approval from the
Supervisory Board – to issue shares in the capital of the company
free from pre-emptive rights, up to a maximum of 10% of the issued
share capital. The Board of Management was also given a mandate
to acquire and to cancel held or acquired common shares in the
company’s share capital. The maximum number of shares that the
company will hold in its own share capital at any time shall not
exceed 10% of its issued share capital.
Anti-takeover provisions and control
According to the Code, the company is required to provide an
overview of its actual or potential anti-takeover measures, and to
indicate in what circumstances it’s expected they may be used. The
priority shares may be considered to constitute a form of anti-
takeover measure, in relation to the right of the Meeting of Holders of
Priority Shares to make binding nominations for appointments to the
Board of Management and the Supervisory Board. The Foundation
Akzo Nobel has confirmed that it intends to make use of such rights
in exceptional circumstances only. These circumstances include
situations where, in the opinion of the Board of the Foundation, the
continuity of the company’s management and policies is at stake.
This may be the case if a public bid for the common shares of the
company has been announced, or has been made, or the justified
expectation exists that such a bid will be made, without any
agreement having been reached in relation to such a bid with the
company. The same shall apply if one shareholder, or more
shareholders acting in a concerted way, hold a substantial
percentage of the issued common shares of the company without
making an offer. Or if, in the opinion of the Board of the Foundation
Akzo Nobel, the exercise of the voting rights by one shareholder or
more shareholders, acting in a concerted way, is materially in conflict
with the interests of the company. In such cases, the Supervisory
Board and the Board of Management, in accordance with their
statutory responsibility, will evaluate all available options with a view
to serving the best interests of the company, its shareholders and
other stakeholders.
The Board of the Foundation Akzo Nobel has reserved the right to
make use of its binding nomination rights for the appointment of
members of the Supervisory Board and of the Board of Management
in such circumstances. Although a deviation from provision 4.3.3 of
the Code, the Supervisory Board and the Board of Management are
of the opinion that these provisions will enhance the continuity of the
company’s management and policies. In the event of a hostile
takeover bid, or other action which the Board of Management and
Supervisory Board consider adverse to the company’s interests, the
two Boards reserve the right to use all available powers (including
the right to invoke a response time in accordance with provisions
4.1.6 and 4.1.7 of the Code), while taking into account the relevant
interests of the company and its affiliate enterprises and
stakeholders.
Auditors
The external auditor is appointed by the AGM on proposal of the
Supervisory Board. An annual evaluation of the external auditor is
reviewed by the Audit Committee and reported on to the Supervisory
Board. The external auditor attends all meetings of the Audit
Committee, and the meeting of the Supervisory Board at which the
financial statements are approved. During these meetings, the
auditor discusses the outcome of the audit procedures and the
reflections thereof in the auditors’ report. In particular, the key audit
matters are highlighted. The auditor receives the financial information
and underlying reports of the quarterly figures and can comment on
and respond to this information. The external auditor is present at
the AGM and shareholders may ask questions with regard to the
audit.
Auditor independence
The Audit Committee and Board of Management report their
dealings with the external auditor to the Supervisory Board annually,
and also discuss the external auditor’s independence.
Other services
One area of particular focus in corporate governance is the
independence of the auditors. The Audit Committee has been
delegated direct responsibility for the compensation and monitoring
of the auditors and the services they provide to the company.
Pursuant to the Audit Profession Act, the auditors are prohibited
from providing the company with services in the Netherlands other
than “audit services aimed at providing assurance concerning the
information supplied by the audited client for the benefit of external
Strategy | Sustainability |
Leadership and governance
|
Financial statements
100
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
users of this information and also for the benefit of the Supervisory
Board as referred to in the reports mentioned”.
The company has taken the position that no additional services may
be provided by the external auditor and its global network that do
not meet these requirements, unless local statutory requirements so
dictate. In order to anchor this in our procedures, the Supervisory
Board adopted the AkzoNobel Rules on External Auditor
Independence and Selection and the related AkzoNobeI Procedure
on Auditor Independence. The aforementioned rules are available on
our website.
Internal Audit
The Internal Audit function is mandated to provide the Board of
Management, Executive Committee and Audit Committee with
independent, objective assurance on the adequacy of the design
and operating effectiveness of the Internal Control Framework
described below. The Internal Auditor reports to the Board of
Management and has direct access to the Audit Committee and its
Chair. The function performs its mandate based on a risk-based
audit plan, which is approved by the Board of Management and the
Audit Committee. It reports the audit findings quarterly to the Board
of Management, Executive Committee and the Audit Committee,
which culminates in an annual assessment of the quality and
effectiveness of the company’s internal control systems.
Share dealing rules and rules on disclosure
control
In accordance with Dutch Iaw and regulations (including the
European Market Abuse Regulation), the company maintains insider
lists and exercises controls around the dissemination and disclosure
of potentially price sensitive information.
All employees and the members of the Board of Management,
Executive Committee and Supervisory Board, are subject to the
AkzoNobel Share Dealing Rules, which limit their opportunities to
trade in AkzoNobel securities. Transactions in AkzoNobeI shares
carried out by Board of Management, Executive Committee and
Supervisory Board members (including their closely associated
persons) are, as and when required, notified to the Dutch Authority
for the Financial Markets (AFM). The Board of Management,
Executive Committee and Supervisory Board members require
authorization from the General Counsel prior to carrying out any
transactions in respect of AkzoNobeI securities, even in a so-called
“open period”. In relevant cases, the General Counsel can prohibit
carrying out transactions in respect of other companies’ securities. In
addition, all employees are subject to the AkzoNobeI Rules on
Disclosure Control.
Internal controls and risk management
Internal controls
The company has adequate processes and procedures for internal
controls. The Board of Management and Executive Committee have
established several Risk, Control and Compliance Committees,
which are explained on page 105. In 2024, we continued to invest in
enhancing our Internal Control Framework and processes, including
further leveraging system embedded and system enabled controls,
standard role design and segregation of duties monitoring, helping
us to prevent fraud and reputational damage. An integrated Risk and
Internal Control department supports all businesses and functions in
their work.
Risk management
Our risk management system is explained in more detail in the next
chapter. Reference is made to the Statement of the Board of
Management relating to internal risk management and control
systems.
These head-turning murals were created in Sweden through our long-standing
partnership with Artscape. Venturing beyond the usual urban setting, various
buildings in the municipalities of Bromölla, Kristianstad, Kävlinge and Ystad were
used as a blank canvas. The artists, who were equipped with our Nordsjö
products, took their inspiration from other art forms, such as music, sculpture
and photography.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
101
CORPORATE GOVERNANCE STATEMENT
AkzoNobel Report 2024
Internal controls
Refer to the previous page for our processes and procedures
regarding internal control.
The AkzoNobel Internal Control Framework
Risk management vision and governance
AkzoNobel has a diverse portfolio of brands, geographic footprint
and business structure, which means it’s important for us to manage
risks in a proactive and responsible way. We strive to be a
successful and respected company and seek to take a balanced
and integrated risk management approach. Risk management is an
essential element of our corporate governance and strategy
development. We continuously strive to foster a high awareness of
business risks and internal control to provide transparency in our
processes and operations. AkzoNobel complies with the risk
management requirements of the Dutch Corporate Governance
Code 2022. The Board of Management and Executive Committee
are responsible for managing the risks associated with our strategic
objectives and the establishment and adequate functioning of
appropriate risk management and control systems (see Statement of
the Board of Management).
Risk management framework
Our risk management framework is in line with the Enterprise Risk
Management – Integrated Framework of COSO and the Corporate
Governance Code. It’s an embedded, company-wide activity,
focused on the areas of main risk exposure and provides reasonable
assurance that our business objectives can be achieved and our
obligations to customers, shareholders, employees and society can
be met. The process consists of risk appetite setting by the Board of
Management to serve as input for our strategy and general risk
management approach, followed by structured risk assessments
applying a top-down and bottom-up approach, and the
management and monitoring of identified risks. The risk
management framework is discussed twice a year with the
Supervisory Board. For more information on our risk management
framework, visit the Risk management section on our website.
Risk management in 2024
AkzoNobel’s risk appetite differs depending on the type of risk. We
believe we must operate within the dynamics of the paints and
coatings industry and take the risks needed to ensure our relevance
in the market. At the same time, topics related to our core values
and company purpose require a different risk appetite.
During 2024, we held a significant number of enterprise risk
workshops across the organization, as well as project, transition and
fraud risk workshops. Risks were identified by responsible
management teams and functional experts, followed by the definition
of adequate mitigating actions. We consider risk assessment and
mitigation to be a continuous process, carried out against the
background of an evolving risk landscape, which includes short,
medium and longer term challenges.
The symbols alongside the risk descriptions that follow represent
management’s assessment of risk development, compared with
2023. During the assessment, both our internal and external
environment were considered. For information related to financial risk
management, see Note 26 of the Consolidated financial statements.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
102
RISK MANAGEMENT
AkzoNobel Report 2024
Ability to execute =
The risk of misalignment between the business and functions and
short term versus long term, leading to inability to support and drive
the business agenda and growth plans, resulting in not delivering the
set targets.
Mitigating actions:
• Leadership team changed, flattening the organization, increasing
business representation in the Executive Committee and
consolidating the Commercial and Strategic functions
• Improving our industrial operations by focusing on reducing
complexity, improving capacity utilization and investing in the
modernization of our sites
• Streamlining the execution model by addressing over-
functionalization, including reintegrating R&D into the business
units and realigning the Coatings Integrated Supply Chain (ISC)
model. This will restore end-to-end accountability and further
simplify the structure through delayering
Business continuity 6
The risk of being unable to respond adequately to a significant
business interruption, leading to financial and reputational damage.
Mitigating actions:
• Continue to enhance our business continuity processes and plans,
supported by taking Integrated Business Planning to a next
maturity level and increasing cross-functional and business
collaboration
Cyber security 5
The risk of significant business disruption and/or inadequate
recovery following a cybersecurity attack, leading to production
interruption, unauthorized access and disclosure or loss of business
sensitive information, financial loss, and/or inability to align or comply
with laws, regulations and contractual obligations concerning
cybersecurity, which can limit our presence in some regions and
markets.
Mitigating actions:
• Continually reinforcing cybersecurity awareness and culture within
the entire organization (e.g. phishing tests)
• Strengthening protection, detection and response capabilities on
both IT and OT (operational technology) domains by leveraging
new technologies. In addition, accelerating the integration of the IT
and OT infrastructure from M&A entities where not fully completed
• Improving the capacity for reducing the impact from sophisticated
cyber attacks and quickly recovering from them
• Improving our capacity for assessing cyber risks in critical domains
and monitoring their remediation
• Increasing the level and quality of partnerships with public and
private institutions for improving the security level of our business
ecosystem
Geopolitical instability =
The risk that geopolitical turbulence results in declining customer
and industry confidence and a decline in key markets and significant
losses to our sales and profitability.
• Balanced geographic presence with revenue generated from all
regions and continued investment focus on higher growth markets
to optimize geographic spread
• Geopolitical assessment as part of investment decisions and
medium-term operational planning
• Continue to drive business unit strategic initiatives underpinning
the company strategy
• Diversifying our supply chain and managing redundancy
Integrated Business Planning (IBP) maturity =
The risk that we don't reach the required service levels due to
inadequate end-to-end planning processes and supply chain
infrastructure, leading to loss of existing business and inability to win
new business.
Mitigating actions:
• Focus on complexity reduction and improving efficiency of the
product portfolio and supply chain
• Increase agility and velocity in the end-to-end process through
simplification, cross-company initiatives, digitalization and data-
driven modeling
• Stronger performance management via aligned sets of lagging and
leading KPIs, and mature IBP governance
Strategy | Sustainability |
Leadership and governance
|
Financial statements
103
RISK MANAGEMENT
AkzoNobel Report 2024
Macro-economic crisis =
The risk of a prolonged macro-economic downturn, leading to local
currency devaluation, high inflation, customer destocking and a
reduction in volume and margin.
Mitigating actions:
• Balanced geographic presence with revenue generated from all
regions and continued investment focus on higher growth markets
to optimize geographic spread
• Continued focus on operational cost, complexity reduction, margin
management and commercial and procurement excellence
• Continue to drive business unit strategic initiatives underpinning
the company strategy
• Strategic portfolio review: Redeploy capital to create synergetic
scale in areas with clear path to leadership
Non-compliance and litigation 5
The risk of potential impact of current and future business conduct,
Environmental, Social and Governance (ESG) standards, product
compliance, safety and environmental regulations concerning
existing and legacy operations or assets, which may subject the
company to litigation, financial losses, or reputational harm.
Mitigating actions:
• Exposures over a defined threshold are reported, monitored and
managed by the AkzoNobel Legal Group (referred to as Legal
below) and Finance, and reported to the Audit Committee twice a
year
• Developments around business conduct, ESG, product
compliance, safety and environmental legislation and the impact
thereof on our current and legacy operations and assets are
reviewed regularly by Health, Safety and Environment,
Sustainability, Legal and Finance
• There's a quarterly process for review of our portfolio of legacy
operations and assets, including Integrated Supply Chain, Finance
and Legal
• Updates on significant claims and litigation are regularly provided
to the Board of Management and Supervisory Board
Pricing and margin management 5
The risk of lower margins resulting from lower price capture (price
execution/increased competitive pressure, as well as increasing
tariffs) and/or higher inflation and raw material cost versus plan.
Mitigating actions:
• More data-driven approach, based on value pricing
• Investment in sales capability and focus on commercial excellence
• Continue to closely monitor raw material prices and availability, as
well as potential tariff increases
Product portfolio 6
The risk of lacking a fit-for-purpose product portfolio, leading to a
cost base that’s too high and an inability to compete in the market.
Mitigating actions:
• Continuing to reduce our product portfolio complexity
• Constantly re-engineering our products
• Enhancement of our product lifecycle and product change
management
Supply shortages 6
The risk of supply shortages of key raw materials, packaging and/or
spare parts, resulting in production interruptions, additional cost and
muted organic growth.
Mitigating actions:
• Maintain and further improve strong industry and market
intelligence analysis of suppliers and raw material markets
• Drive supply chain network design, end-to-end, from supplier to
end customer
• Assess climate change impact and develop mitigation plans for
own operations, key suppliers’ locations and logistics (see the
Sustainability statements)
• Supply chain risk management tool implemented to secure early
warnings across the globe
• New raw material risk management approach being rolled out to
define risks across regions and business units to further improve
mitigation planning
Symbols indicate the following:
Risk assessed to increase.
5
Risk assessed to remain fairly stable.
=
Risk assessed to decrease.
6
Strategy | Sustainability |
Leadership and governance
|
Financial statements
104
RISK MANAGEMENT
AkzoNobel Report 2024
We’re committed to leading with integrity in
our industry. It’s one of our three core values
for doing business. We continue to further
advance and expand our Integrity and
Compliance program to help ensure
compliance with laws and regulations,
empower and enable our employees to make
fair and honest decisions and bring integrity
to life.
Below is a summary of the 2024 priorities and key activities, and the
outcomes thereof, as required pursuant to the Dutch Decree on the
publication of non-financial information.
Governance and organization
The Executive Committee is responsible for maintaining a culture of
integrity and ensuring an effective Integrity and Compliance program
and control framework at AkzoNobel. The Supervisory Board’s Audit
Committee oversees this responsibility. The Executive Committee
has delegated certain responsibilities to the following working
committees and Integrity and Compliance team:
Integrity and Compliance governance
committees
The Integrity and Compliance governance committees are at the
core of our Integrity and Compliance governance model. We assess
the need for committees depending on organizational changes,
changes in the risk profile of business units, and regulatory and
legislative changes. In 2024, we had committees in place in all eight
business units, the Integrated Supply Chain organization and certain
specific countries. The committees consist of business unit
leadership and key corporate function leaders, including the Integrity
and Compliance managers. The committees drive the
operationalization of the Integrity and Compliance program into the
organization, with a strong focus on prevention. The committees
discuss trends, identify, prioritize and address risks and share
learnings from investigations to drive continuous improvement. In
2024, each business unit committee conducted an Integrity and
Compliance risk assessment. For more information on the Integrity
and Compliance risk assessment, see the following Risk
management paragraph. The committees meet at least quarterly.
SpeakUp! Committee
The centrally established SpeakUp! Committee is responsible for
deciding investigations into SpeakUp! reports involving alleged
violations of our Code of Conduct and applicable laws, including
decisions on discipline and control improvement actions. The
committee ensures transparency and consistency of decisions,
including disciplinary actions, throughout the organization. The
committee also monitors and responds to trends identified during
investigations. SpeakUp! cases are generally decided by the
SpeakUp! Committee, with certain limited exceptions: (1) Certain
regulatory cases where subject matter expertise is needed, which go
to the General Counsel; or (2) Certain lower risk cases which may be
decided by the leader of the business unit or function in whose
organization the alleged violation occurred. The latter cases are
reviewed by the SpeakUp! Committee. In 2024, there were no
individual matters or disciplinary actions discussed with the
committee that would warrant separate disclosure in the annual
report. Should there be material compliance matters, or material
internal control weaknesses or improvements in the future, these will
be addressed through the Risk, Control and Compliance
Committees (see below) and discussed with the Audit Committee
and external auditor and, where appropriate, disclosed in
accordance with the applicable legal requirements.
Risk, Control and Compliance Committees
(RCC)
The RCCs are responsible for supervising the effectiveness of the
control environment and reviewing weaknesses in this environment,
enabling more robust prioritization and progress. There are eight
business unit RCCs and six functional RCCs, in addition to a Group
RCC. They each met quarterly in 2024.
Privacy Committee
Responsible for supervising the company’s privacy framework and
driving the further improvement of the Privacy program. For more
information on our key privacy activities, see the following Privacy
program paragraph.
Integrity and Compliance team
The day-to-day management of our Integrity and Compliance
program is delegated to the Integrity and Compliance team – which
is led by the Director of Integrity and Compliance, who reports to the
General Counsel. The team includes: experts in integrity and
compliance program design; legal experts in the fields of competition
law, anti-bribery and anti-corruption, data privacy and export
controls and sanctions (which, since 2024, reports into the Director
of Integrity and Compliance); as well as our Integrity and Compliance
managers in all regions, who drive the implementation and further
tailoring of the program to address local risks.
To ensure the company maintains and strengthens its culture of
integrity, the Integrity and Compliance team – together with various
other functions and stakeholders across the organization – focuses
its efforts on the following key areas:
• Help leaders set a strong tone at the top and lead by example
• Drive awareness and ownership of all employees through effective
policy management, training and communication
• Design and implement effective controls and monitoring
• Risk management
• Investigations of SpeakUp! matters with a focus on identifying
control action items and sharing lessons learned
• Driving continuous improvement
The regional Integrity and Compliance managers contribute to further
strengthening the culture of integrity. This includes identifying and
addressing local risks and cooperating with the business and
Strategy | Sustainability |
Leadership and governance
|
Financial statements
105
INTEGRITY AND COMPLIANCE MANAGEMENT
AkzoNobel Report 2024
functional teams to tailor the program to local risks and follow up on
internal audit findings and SpeakUp! cases. The heads of Integrity
and Compliance, Internal Control and Internal Audit meet at least
quarterly to discuss findings and trends, and to align actions. The
Director of Integrity and Compliance also meets at least quarterly
with the Human Rights and Sustainability teams to discuss the
priorities in these areas and maximize alignment and collaboration.
Risk management
The business unit Integrity and Compliance governance committees
play a key role in the Integrity and Compliance risk assessments,
which are led by the Integrity and Compliance team. In 2024, the
Integrity and Compliance risk assessment process launched the
previous year was further standardized and automated. The
business unit Integrity and Compliance governance committees
were able to vote electronically on key risks, captured in a risk
heatmap for each committee. The committees then identified their
top three risks during a workshop, after which they defined action
plans and owners to mitigate these risks. Each committee has
approved its business unit specific risk remediation plan, which were
all captured in the new electronic tool. The implementation of the risk
remediation plans is monitored quarterly through the same electronic
tool. The outcome of all Integrity and Compliance risk assessments
serves as the basis to identify the key priorities for 2025 and beyond.
Policy management
All AkzoNobel policies, rules and procedures are available on the
Policy Portal. In 2024, in addition to processing periodic revisions of
policies, rules and procedures, technology improvements were
made to make it easier for users to find and translate policies, rules
and procedures, and for the Integrity and Compliance team to
monitor policy portal usage.
Communication
In 2024, although no major risks or issues were identified in the
SpeakUp! cases, we continued releasing SpeakUp! videos to
continuously ensure a strong tone from the top and drive further
prevention of wrongdoing. These are short videos in which senior
leaders share lessons learned from SpeakUp! cases, as well as
guidance for employees on how to prevent future misconduct. In
addition, we continued to share ethical dilemmas and launched a
new online Integrity and Compliance game to help colleagues
address challenging situations and refresh their memory on key risks
in the areas of competition law, data privacy law and anti-bribery and
anti-corruption. To further strengthen our communications program,
a communication dissemination plan has been implemented to
ensure we target the relevant audiences via the most appropriate
channels.
Training and education
In 2024, a key focus was increasing integrity and compliance
awareness. As part of this, the Compliance Fitness Program was
launched. It includes “workout cards” designed to be easy to use,
understand and assist individuals/teams in addressing frequent
challenges related to integrity and compliance topics. The cards are
available through various channels, increasing ease of access to the
information. Our Code of Conduct training has been revamped and
was ready to assign to all new joiners as of January 1, 2025.
Competition law program
During the past year, we continued to prioritize compliance with
competition law and fostering a culture of fair competition. The
program focuses on educating employees about the importance of
competition law compliance through regular training sessions,
informative materials, detailed guidelines and bespoke workshops.
In 2024, we emphasized information exchange and market
intelligence practices. We've also maintained an open channel for
reporting and addressing potential concerns. The competition law
aspects of M&A activity and subsequent integrations remain a key
focus area.
Privacy program
Various initiatives have been introduced to continuously raise
awareness on data privacy. To help our employees adhere to data
privacy requirements they face in their respective jobs, we've
launched two targeted e-learnings. One is focused on handling
personal customer data, and the other on managing personal
employee data. To further strengthen our internal data protection
culture, we've also launched initiatives to enhance awareness
around the notification process for personal data breaches.
Anti-bribery and anti-corruption program
In addition to the previously launched anti-bribery and anti-corruption
registration and approval processes for gifts and conflicts of interest,
in 2024, we further strengthened our Anti-Bribery and Anti-
Corruption program by launching a donations, sponsorships and
hospitality registration and approval tool. We also deployed new
online training on critical anti-bribery and anti-corruption topics to
increase employee awareness.
Third party risk management (TPRM)
program
Following the successful pilot of the TPRM program focusing on
anti-bribery and anti-corruption in Q4 2023, the program has since
been successfully launched in selected business units globally.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
106
INTEGRITY AND COMPLIANCE MANAGEMENT
AkzoNobel Report 2024
The program is largely automated, with integrated continuous
screening software and enhanced due diligence reporting features.
Export controls and sanctions
In 2024, we updated our e-learning to reflect the dynamic global
export control landscape. As an in-house created training module, it
utilizes real world examples and provides employees with a general
understanding of export control regulations, how they impact their
roles and what to do when faced with such situations.
We continued to improve and expand our monitoring activity.
Conducted at order entry, the systems are designed to detect
suspicious addresses and sanctions related restrictions. Matches
and blocks are reviewed individually by the team and appropriate
actions taken.
Monitoring
We have several processes to monitor compliance with our rules and
procedures by employees and business partners. Employees are
informed about this through the Employee Privacy Statement.
Managers are also required to self-assess and confirm compliance
with key company controls as part of the internal control self-
assessment. The Internal Audit function performs numerous audits
on our operations. Their audit plan is risk-based and takes account
of prior compliance and internal control findings. Internal audits were
also held or covered specific risks – at the request of the Integrity
and Compliance team – to validate compliance with our rules and
procedures in certain units, or in certain risk areas.
Grievance and investigation
Our SpeakUp! grievance mechanism offers employees and third
parties a means to raise allegations relating to compliance with our
Code of Conduct and violations of applicable laws and regulations.
Our dedicated investigation team follows an investigation protocol
which adheres to strict principles of confidentiality, respect for
anonymity, non-retaliation, objectivity and the right to be heard.
Reporting
During 2024, the Director of Integrity and Compliance reported every
four months to the Executive Committee and the Audit Committee of
the Supervisory Board on material developments of the Integrity and
Compliance program. Material investigation matters, if any, are
discussed quarterly with our external auditor.
Art student Angelina Paršina’s incredible imagination helped our “Let’s Colour”
initiative go interstellar in Estonia. Her planet concept was selected from dozens
of colorful design ideas to transform the basketball court at the Juuru SOS
Children’s Village. More than 100 volunteers took part in the project, using
87 different colors supplied by our Sadolin brand.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
107
INTEGRITY AND COMPLIANCE MANAGEMENT
AkzoNobel Report 2024
SpeakUp! reports
2022
2023
2024
2023
Grupo Orbis
2024 Grupo
Orbis**
Total reports and alleged violations
350
426
438
19
18
• Integrity
140
174
192
7
7
• Safety
28
40
64
0
0
• Sustainability*
182
212
182
12
11
Dismissals resulting from SpeakUp! reports
25
39
55
3
7
Conclusions SpeakUp! reports:
• Substantiated
101
132
149
8
10
• Unsubstantiated
83
127
100
9
8
• Other (e.g. referred)
140
187
133
0
0
* Includes employee-related human resources concerns.
** Until September 30 (any cases after that date were registered in SpeakUp, but not separately tracked).
Letter from the Chair of the Remuneration
Committee
Dear stakeholders
On behalf of the Remuneration Committee, I’m pleased to
introduce AkzoNobel’s 2024 Remuneration report. In this
report, the company outlines the implementation of its
remuneration policies in 2024. The 2024 Remuneration report
will be subject to an advisory vote at our 2025 AGM.
Our business context in 2024
The economic environment in 2024 presented numerous
complexities, including persistent inflation and volatile exchange
rates. Market conditions proved unfavorable in regions such as
China and for Industrial Coatings. Despite these challenges, the
company achieved growth in Marine and Protective Coatings,
Powder Coatings and Decorative Paints in Latin America and South
East Asia. AkzoNobel sustained growth throughout each quarter in
2024.
Operationally, 2024 witnessed a significant enhancement in service
levels, with substantial improvements in on-time, in-full (OTIF)
performance. This achievement underscored the company’s
commitment to operational excellence, even amid ongoing industrial
transformation initiatives.
To enhance agility and streamline operations, the Board of
Management focused on reducing internal complexities that
hindered growth. A comprehensive organizational simplification
program was launched, resulting in the planned reduction of 2,200
functional roles. Announced at the end of Q3 2024, this Selling,
General and Administrative (SG&A) efficiency initiative is progressing
rapidly. While these measures have regrettable impacts on valued
employees, their necessity is broadly understood and supported
within the organization.
The company is also conducting a strategic review of its business in
South Asia. This review aims to evaluate strategic options, including
partnerships, joint ventures, mergers, or divestments. This significant
step underlines AkzoNobel’s commitment to optimizing its portfolio
by focusing on key markets where it holds a competitive and
differentiating scale, thereby enabling more effective capital
allocation.
Looking ahead, a substantial market rebound is not anticipated in
2025. AkzoNobel’s self-initiated measures are yielding positive
results and are expected to further strengthen financial performance.
In addition, the company is preparing to test its pricing power within
relatively stable market conditions. By becoming stronger, more
dynamic and more competitive, AkzoNobel is positioning itself for
long-term growth when market conditions eventually improve. These
strategic efforts reaffirm the Board of Management’s dedication to
achieving the company’s mid-term objectives.
Our stakeholder engagement
The Remuneration Committee is pleased that the 2023
Remuneration report received a positive advisory vote at the 2024
AGM, with a majority vote of 96.51%.
2024 AGM stakeholder engagement
AkzoNobel actively engaged with various stakeholders in preparation
for the 2024 AGM to ensure a transparent, inclusive and well-
informed decision-making process. This engagement included
consultations with shareholders, institutional investors and board
members to align on strategic priorities, governance matters and
financial performance.
In addition to formal meetings and advisory sessions, AkzoNobel has
conducted targeted outreach initiatives, including investor
roadshows and proxy advisor discussions. These efforts aim to
address stakeholder concerns, foster an open dialog, and
incorporate feedback from stakeholders where appropriate. By
maintaining an open and proactive approach, the company
reinforces trust and enhances stakeholder participation.
Remuneration report disclosure
Following the ongoing stakeholder dialogs, we implemented several
changes in our 2023 Remuneration report to improve transparency
and readability. Changes included using a new reporting format,
structuring the use of tabular and textual information, using more
visuals and providing additional context on Remuneration Committee
decision-making. We also changed the long-term incentive (LTI)
section in accordance with the vesting of the 2021-2023 LTI Plan, as
this was the first award for which the updated performance metrics
derived from the company's strategic plan were in place.
Decisions made on remuneration
Board of Management
The 2024 remuneration outcomes for the CEO and CFO are
determined in accordance with the Remuneration Policy for the
Board of Management, which was last amended in full following
adoption at the 2021 AGM, and last updated at the 2024 AGM.
In 2024, the CEO’s base salary was increased by 5.3% to reflect the
fact that the initial salary was set in 2022 and had not been adjusted
in 2023. The 5.3% is below the salary adjustments applied for
AkzoNobel employees in the Netherlands. Following the increase,
the CEO, Greg Poux-Guillaume, earned a base salary of €1,290,000.
No changes were made to the base salary of the CFO, Maarten de
Vries, as his salary was adjusted in line with the benchmark in May
2023. The CFO received a base salary of €830,000.
In 2024, the achievement on metrics for the short-term incentive
was below target for both financial objectives. The non-financial
Strategy | Sustainability |
Leadership and governance
|
Financial statements
108
REMUNERATION REPORT
AkzoNobel Report 2024
objectives for the members of the Board of Management were
evaluated above target on average for the CEO and just below target
on average for the CFO. More details can be found in the section on
short-term incentives.
The achievement on the metrics of the 2022-2024 LTI Plan was
above target on the financial objectives for adjusted EBITDA and
ROI, and just below target on revenue growth. Part of the
Environmental, Social and Governance (ESG) metrics also showed
good performance. Details are provided in the section on long-term
incentives.
Supervisory Board
The 2024 remuneration for Supervisory Board members is
determined in accordance with the Remuneration Policy for the
Supervisory Board, based on amended fees as approved by the
AGM in 2024. The Remuneration Committee carried out a
benchmark in 2023 on the Supervisory Board remuneration levels.
For comparability in board structure and responsibilities,
remuneration levels were only compared with those companies in
the peer group with a two-tier board. The benchmark used for this
exercise did not include US companies, but Dutch and European
companies only. Following the outcome of this review, AkzoNobel
submitted a proposal to increase the annual retainer and committee
fees of the Supervisory Board members at the 2024 AGM. The
amended fees take into consideration that the remuneration levels
for the Supervisory Board were last amended in 2021.
Implementation of our remuneration policies
in 2025
The current remuneration policies for the Board of Management and
the Supervisory Board were last adopted in full at the 2021 AGM. As
required by Dutch law, the remuneration policies are submitted in full
every four years. The Supervisory Board will submit the
Remuneration Policy for the Board of Management to shareholders
for adoption at the 2025 AGM.
The changes made compared with the previous policy include a
proposal to amend the LTI weighting to better align with the
company’s strategic priorities. Upon adoption of the updated
Remuneration Policy, vesting of the conditional grant will be linked to
adjusted EBITDA (40%), ROI (40%) and ESG (20%).
Covestro will be removed from the labor market peer group,
following the announcement of the intended take-over by state-
owned oil company ADNOC, United Arab Emirates.
For new Board of Management members who are attracted from
outside the company, the wording of “sign-on” is adjusted to “buy-
out” to reflect the practice to merely (partially) compensate new
members of the Board of Management for forfeited variable pay at
their previous employer.
Additional malus and claw-back triggers related to risk management,
individual misconduct and reasonableness and fairness have been
added to the updated policy.
Following approval by the AGM in 2024 to increase the annual
retainer and committee fees of the Supervisory Board members, no
further changes, other than some technical and non-substantial
textual updates, are envisioned for the Supervisory Board
Remuneration Policy, which will be submitted in full for adoption at
the 2025 AGM.
An overview of the remuneration in 2025 is included in the
Remuneration Policy for 2025 chapter.
Dick Sluimers
Chair of the Remuneration Committee
Strategy | Sustainability |
Leadership and governance
|
Financial statements
109
REMUNERATION REPORT
AkzoNobel Report 2024
Remuneration at a glance – 2024
Base salary
Short-term incentive
Long-term incentive
Total pay
Greg Poux-
Guillaume €1,290,000
Maarten
de Vries
€830,000
Both the CEO and the CFO have chosen to invest an additional 25% of net STI proceeds
in the Share-Matching Plan. Total investment of net STI proceeds equals 50% for both.
Total actual remuneration reflects full-year 2024 actual remuneration as reported in the
total remuneration table, whereby multi-year variable is on the basis of IFRS 2 expenses.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
110
REMUNERATION REPORT
AkzoNobel Report 2024
STI
Adjusted OPI
FCF
Personal
STI pay-out as % of target
0%
25%
50%
75%
100%
125%
150%
Vesting % of LTI award
LTI
Adjusted
EBITDA
ROI
Revenue growth
0%
25%
50%
75%
100% 125% 150%
ESG
Total actual remuneration
Fixed remuneration
One-year variable
Multi-year variable
CEO
CFO
€0
€1,000
€2,000
€3,000
€4,000
€5,000
€6,000
€7,000
€5,368
52%
17%
31%
50%
14%
36%
in € thousands
Investment of 50% net STI proceeds
€2,937
STI
Adjusted OPI
FCF
Personal
0%
25%
50%
75%
100%
125%
150%
2024 policy at a glance – Board of Management
The Remuneration Policy for the Board of Management is designed to incentivize the Board of
Management to achieve the company’s objectives while considering market competitive standards, the
ratio between fixed and variable pay, the perspective of shareholders and other key stakeholders, and ESG
related contributions of the company.
Purpose
Design and link to strategy
Value
Total direct compensation
Is the basis for benchmark efforts (i.e. the reference
to the labor market peer group).
Base salary and variable income. Variable income concerns the performance-related short-term incentive (STI), the long-term incentive (LTI) and the Share-
Matching Plan. In addition, Board of Management members are entitled to certain benefits.
Value of each respective item is specified in more
detail below.
Base salary
Basic pay for the job.
• Aims to provide a fair and competitive basis for the total pay level to attract high caliber leaders
• In-depth benchmark at least every three years
• Remuneration increases above the median market level are reserved for Board of Management members who consistently outperform their targets
• Annual amounts
CEO: €1,290,000
CFO: €830,000
Short-term incentive
Aligning short-term business objectives and business
drivers towards sustainable long-term value creation.
Driving pay for performance.
• The Supervisory Board sets strategically important operational targets for the respective performance year and determines the extent to which they have been
achieved
• By ensuring that sustainable long-term value creation is properly reflected in stretched yet achievable targets, the realization of strategic business objectives is
addressed
• For on-target STI, 70% is linked to financial objectives and 30% is related to quantifiable non-financial objectives
• On-target performance: 100% of annual base
salary for CEO and 80% for CFO
• Maximum opportunity of 150% of target, i.e. CEO
capped at 150% and CFO at 120% of annual
base salary
• Threshold: no STI pay-out below threshold
Long-term incentive
Encouraging sustainable long-term value creation –
both absolute and relative to competitors – and to
align Board of Management interests with those of
shareholders, as well as ensuring retention of the
members of the Board of Management.
• Performance shares are awarded every year, to be converted into shares upon realization of pre-defined targets, observing a three-year vesting period.
Performance is measured over three financial years, starting with the year of grant
• Performance targets are based on company strategy, driving sustainable long-term value creation. 66% of LTI targets are linked to financial goals and 34% are
linked to ESG goals
• An additional two-year holding period after vesting applies
• The on-target grant equals 200% of base salary
for the CEO and 150% for the CFO
• Maximum vesting opportunity is 150% of the
number of performance shares granted, which
equals 300% for the CEO and 225% for the CFO
• Threshold: no vesting if performance below
threshold
Shareholding requirement
Aligning reward to the interests of stakeholders and
emphasizing confidence in performance and
strategy.
• Members of the Board of Management are expected to build up a shareholding in the company; the minimum shareholding requirement must be accrued in five
years
• Considered are shares privately purchased and vested shares granted under AkzoNobel share-based compensation plans
• The minimum shareholding requirement is 300%
of annual base salary for the CEO and 150% for
the CFO
Share-Matching Plan
Aligning reward to the interests of stakeholders and
emphasizing confidence in performance and
strategy.
• The Share-Matching Plan awards shares to Board of Management members for shares they have invested in from their STI proceeds and held over a three-year
period
• When they retain these shares for three years, the company will match such shares one on one, subject to continued employment
• Members of the Board of Management are
required to invest 25% of their STI proceeds (net
after tax and other deductions)
• They may invest up to an additional 25%
(maximum investment is 50% of total net STI)
Pension and other benefits
Post-retirement remuneration and other benefits,
creates alignment with market practice.
• A company paid contribution, based on age, to allow participation in a private pension plan, as applicable to Netherlands-based employees
• Other benefits include sick pay (aligned with Netherlands-based employees) and a monthly transportation allowance of €2,000
• Greg Poux-Guillaume is also eligible for certain transitional benefits (temporary housing and travel reimbursements) to facilitate his transfer from Switzerland to
the Netherlands
• Pension contributions for the CEO equal 16.7% of
base salary and for the CFO equal 23.2% of base
salary
Strategy | Sustainability |
Leadership and governance
|
Financial statements
111
REMUNERATION REPORT
AkzoNobel Report 2024
External market context
Background of the peer group
• Air Liquide
• Arkema
• ASML
• Clariant
• Covestro
• DSM-Firmenich
• Evonik Industries
• Givaudan
• Henkel
• Holcim Group
• Philips
• Randstad
• RELX
• Signify
• Sika
• Solvay
• Wolters Kluwer
• The labor market peer group is used to compare AkzoNobel’s remuneration levels with
those in similar companies
• The group consists of companies of similar scale, complexity and geographic reach to
AkzoNobel. The composition is limited to European headquartered companies to reflect
local pay practices
• AkzoNobel aims to outperform its sector peers and attract and retain high caliber members
of the Board of Management. Therefore, the reference point is set at a total remuneration
package that positions between the median and third quartile of the peer group (around the
median for base salary and STI, between median and third quartile for LTI)
• Composition of the 2024 labor market peer group is presented on the left
Remuneration Policy pay-mix
CEO pay-mix in %
Base salary
LTI
STI
Share-Matching
100
24
17
24
26
46
51
6
6
Threshold
and below
Target
Maximum
CFO pay-mix in %
Base salary
LTI
STI
Share-Matching
100
29
21
23
25
42
48
6
6
Threshold
and below
Target
Maximum
Strategy | Sustainability |
Leadership and governance
|
Financial statements
112
REMUNERATION REPORT
AkzoNobel Report 2024
Remuneration for the Board of Management in 2024
Remuneration of Board of Management for the reported financial year in €
Fixed remuneration
Variable remuneration
Post-contract
compensation
Termination and other
benefits
Total remuneration
Fixed/
Variable
Base salary
Fringe benefits1
One-year STI
Multi-year variable LTI
Based on
2023
2024
2023
2024
20234
20244
2023
2024
2023
2024
2023
2024
2023
2024
2024
Greg Poux–
Guillaume
(CEO)2
IFRS 2
expenses5
1,225,000
1,290,000
153,800
154,700
1,549,380
934,928
1,802,210
2,773,163
204,600
215,400
—
—
4,934,990
5,368,191
31/69
Market value
at year-end6
1,225,000
1,290,000
153,800
154,700
1,549,380
934,928
N/A
1,411,906
204,600
215,400
—
—
3,132,780
4,006,934
41/59
Thierry
Vanlancker
(former
CEO)3
IFRS 2
expenses5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Market value
at year-end6
362,432
—
7,379
—
—
—
272,943
805,122
71,037
—
1,178,750
—
1,892,541
805,122
N/A
Maarten de
Vries (CFO)
IFRS 2
expenses5
803,200
830,000
34,500
35,400
812,678
421,474
937,038
1,457,838
186,300
192,600
—
—
2,773,716
2,937,312
36/64
Market value
at year-end6
803,200
830,000
34,500
35,400
812,678
421,474
122,256
838,797
186,300
192,600
—
—
1,958,934
2,318,271
46/54
1 Fringe benefits consist of car arrangements, social security contributions for Maarten de Vries and Greg Poux-Guillaume and for the latter also temporary housing contributions.
2 Appointed per November 1, 2022.
3 Stepped down per November 1, 2022. Financial elements already reported in the 2022 Remuneration report.
4 In 2023 and 2024, the Board of Management members will invest 50% of their STI proceeds (net after tax) under the Share-Matching Plan.
5 Costs relating to share awards include non-cash expenses of Performance-Related Share Plan and Share-Matching Plan.
6 Market value at year-end for multi-year variable LTI is based on the number of shares that became unconditional during the year, multiplied by the share price of €57.96 at December 31, 2024 (December 29, 2023: €74.82).
This section presents insights into how the Remuneration Policy for
the Board of Management was implemented in 2024. Actual
remuneration was determined in line with the Remuneration Policy
and no derogation of the policy has been applied. The Supervisory
Board has conducted scenario analyses when determining the
(variable) remuneration outcomes. This included the assessment on
remuneration outcomes under the various performance scenarios
and the impact of share price development (threshold and below, at-
target and maximum).
Base salary
In 2024, the salary of CEO Greg Poux-Guillaume was increased by
5.3% to €1,290,000, reflecting the fact that the initial salary was set
in 2022 and had not been adjusted in 2023. The 5.3% increase is
below the salary adjustments applied for AkzoNobel employees in
the Netherlands. The CFO’s salary did not require an increase as his
salary was adjusted in line with the benchmark in May 2023.
Maarten de Vries earned a base salary of €830,000 in 2024.
Short-term incentives (STI)
Seventy percent of the 2024 STI is measured on financial objectives
that reflect the profitable growth the strategy aims for. The remaining
30% is measured on quantifiable non-financial objectives. For the
financial objectives, 40% is based on adjusted operating income
(OPI) and 30% is based on free cash flow (FCF). For the non-
financial objectives, a combination of individual objectives for both
the CFO and CEO were selected. These objectives have been
organized around three priorities related to people, transformation
and portfolio management. The allocation of percentages to each
category suggests a balanced approach, reflecting a comprehensive
strategy aimed at organizational growth, simplification of the
execution model and sustainable innovation.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
113
REMUNERATION REPORT
AkzoNobel Report 2024
The first objective relates to people. It was measured on the
enhancement of organizational efficiency, employee engagement
and the percentage of female leaders in senior executive roles. This
objective, which accounted for 40% of the individual objectives, was
achieved at 120% by the CEO and 45% by the CFO. In terms of
measuring employee commitment, two indicators were used: (1) The
rate of commitment, with a target set at the benchmark for industrial
companies. This rate was exceeded, with an outcome of 4.0,
compared with a benchmark of 3.8. (2) The employee net promoter
score (eNPS) dropped by one point compared with last year to 10,
and is still well above the benchmark by seven points. The
participation rate was once again an impressive 89%. All indicators
were measured by an external and independent company.
In terms of increasing gender diversity, progress was made towards
achieving the target of 30% women at executive level. The female
executive ratio slightly increased to 26%. To create a talent pipeline
and be able to promote from within, recruitment of women at the
higher middle management levels was encouraged. The percentage
of female managers continued to rise in 2024, from 30% to 31.2%.
The third indicator related to organizational efficiency. To enhance
the efficiency of its functions, the company is simplifying operations,
accelerating decision-making and streamlining the company's
management structure. The plan involves a reduction of 2,200
positions globally.
The second objective was industrial excellence, which accounted for
30% of the individual objectives and was assessed at 120%. In May
2024, as part of a multi-year industrial transformation plan, the
company announced its intention to close the manufacturing sites of
Groot-Ammers (the Netherlands), Cork (Ireland) and Lusaka (Zambia)
and transfer the production to other locations in the region. The site
in the Netherlands was closed at the end of October 2024.
Productivity targets were set for the various AkzoNobel
organizations. OTIF (on-time, in-full) passed the 90% mark, a
significant annual improvement.
The final personal objective, portfolio management, accounted for
30% and was evaluated at 120%. The focus of this objective was to
increase exposure to higher growth segments and drive innovation
through sustainability. The company achieved growth in Marine and
Protective Coatings and Powder Coatings. During the year,
AkzoNobel launched several solutions that demonstrate our focus on
driving industry change, especially in our three key end-user
segments – the built environment, consumer goods and transport.
They included: (1) Superdurable low-bake Interpon powder coatings
that help protect building surfaces in more challenging environments,
supporting our customers in reducing carbon emissions; (2) High-
performance internal can coating technology which is free of all
bisphenols, styrene, PFAS and formaldehyde; (3) Innovative Resicoat
powder coatings technology that provides improved electrical
protection for EV battery systems.
Following the end of the performance year, the Supervisory Board
assessed the delivered performance against the targets set. The
tables below and on the next page summarize the achieved
performance.
STI on financial objectives
Performance metric
Weighting
Threshold
Maximum Performance
Pay-out (as a
% of target)
Adjusted OPI (in € mln)
40%
Corresponding target
673
1,423
1,113
Corresponding award
0%
150%
88%
35.20 %
FCF (in € mln)
30%
Corresponding target
350
950
367
Corresponding award
0%
150%
4%
1.28 %
Total financial
70%
52%
36.48 %
Strategy | Sustainability |
Leadership and governance
|
Financial statements
114
REMUNERATION REPORT
AkzoNobel Report 2024
STI on personal objectives
Objective
Weighting Metrics
Performance
CEO
Pay-out (as a %
of target) CEO
Performance
CFO
Pay-out (as a %
of target) CFO
People
12%
Employee engagement survey – outcome above benchmark for both employee commitment and the employee net promoter score (eNPS).
Put in place the means to achieve the target of 30% females at executive level and encourage recruitment of women at highest middle management levels to
create a talent pipeline.
Organizational efficiency – take out complexity, simplify the organizational structure and foster a performance culture to delayer the organization and reduce
cost.
120 %
14.4 %
45 %
5.4 %
Industrial
excellence
9%
Start the first plant closures in Europe in 2024. Closures were announced of the manufacturing sites in Groot-Ammers (the Netherlands), Cork (Ireland) and
Lusaka (Zambia). The site in the Netherlands was closed at the end of October 2024.
Continue to improve OTIF and bring it to an average level of 85%. OTIF passed the 90% mark in 2024, from 85% in 2023 and 70% in 2020.
Introduction of the concept of continuous improvement by setting productivity targets for the various AkzoNobel organizations.
120 %
10.8 %
120 %
10.8 %
Portfolio
management
9%
Increase exposure to high growth segments. The company achieved growth in Marine and Protective Coatings and Powder Coatings.
Sustainable product launches included: (1) Superdurable low-bake Interpon powder coatings that help protect building surfaces in more challenging
environments, supporting our customers in reducing carbon emissions; (2) High-performance internal can coating technology which is free of all bisphenols,
styrene, PFAS and formaldehyde; (3) Innovative Resicoat powder coatings technology that provides improved electrical protection for EV battery systems.
120 %
10.8 %
120 %
10.8 %
Total
personal
30%
120 %
36.0 %
90 %
27.0 %
Following the performance assessment conducted by the
Remuneration Committee, a total pay-out of 72.48% of target is
applied for the CEO and 63.48% of target is applied for the CFO.
The difference in the achievement on the personal objectives
between the CEO and CFO is due to the fact that for the CEO, the
People objective metrics were measured in terms of results for the
company as a whole, and for the CFO this was a combination of the
overall company performance and the finance organization. This
results in the following STI pay-out:
• Greg Poux-Guillaume: €934,928
• Maarten de Vries: €421,474
In determining the outcome of the STI elements, the Remuneration
Committee applied a reasonableness test in which the actual level of
performance was critically assessed in light of the assumptions
made at the beginning of the year.
Share-Matching Plan
The Share-Matching Plan reiterates the importance of share
ownership, which underpins alignment over the long term. In
addition to the required investment of 25% of STI proceeds (net after
tax and other deductions), both the CEO and CFO decided to invest
another 25%, totaling 50% of total net STI proceeds for 2024.
The Share-Matching Plan was suspended for STI payments made in
the years 2019, 2020 and 2021. For this reason, no matching shares
were received by Board of Management members in 2024.
Long-term incentives (LTI)
Vesting of the 2022-2024 LTI Plan
Under the 2022-2024 LTI Share Plan, a conditional share grant of
11,844 shares was made to the CFO. The CEO received a
conditional share grant of 19,936 shares. This conditional grant has
been pro-rated, calculated over the period from the start of
employment until the end of the conditional period in December
2024. Under the 2022-2024 LTI Plan, a conditional grant of 25,578
was also made to the former CEO. The 25,578 shares that were
conditionally granted in 2022 have been pro-rated, calculated over
the period until the end of the management agreement in April 2023,
to respectively 11,368 (16/36 of 25,578) conditional shares.
In line with the Remuneration Policy for the Board of Management
applicable at date of award, the performance measures (and
underlying metrics) were determined as included in the table on the
next page.
At date of award, the Supervisory Board has determined for each
measure (i) the performance level below which no shares vest; (ii) the
performance level at which the target number of shares vest; and (iii)
the performance level at which the maximum number of shares vest.
Following the end of the performance period of the 2022-2024 LTI
Share Plan, the Supervisory Board assessed the delivered
performance against the targets set.
The Supervisory Board set the threshold for adjusted EBITDA at
€850 million and the maximum at €1.6 billion. The threshold for ROI
was set at 7% and the maximum at 15%. As both adjusted EBITDA
and ROI performance were above target in 2024, the corresponding
vesting percentage for these specific parts of the LTI are 126% for
adjusted EBITDA and 122% on ROI.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
115
REMUNERATION REPORT
AkzoNobel Report 2024
Revenue growth as weighted average is compared with a defined
industry peer group, consisting of the following companies in the
paints and coatings sector: Sherwin-Williams, Nippon Paint, PPG,
Axalta and BASF Coatings. Organic growth rates to calculate the
performance take into consideration price, mix, volume growth and
exclude the effects of exchange rates and mergers and acquisitions.
For Axalta and Sherwin-Williams, only organic growth percentage of
the Performance Coatings business growth is taken into
consideration. Performance on this metric is measured against
33 months following the start of the conditional period for Nippon
Paint and BASF Coatings. The Supervisory Board set the threshold
for revenue growth at -10.0% and the maximum at 2.0%. With a
revenue growth of -0.11% compared with the market, the realization
on this metric is 99%.
The ESG targets consist of four equally weighted targets related to
our approach to sustainability. Actual performance on Total waste
(circular) and Renewable electricity was respectively 74% and 65%,
above the maximum target, which resulted in 150% vesting
percentage on these ESG metrics. Our Total recordable injury rate
landed at 0.28 at year-end, which means no payout will take place
on this metric. The performance on Energy use was 1.77, resulting in
60% vesting percentage on this final metric.
Following the performance assessment conducted by the
Remuneration Committee, a total vesting – after including the
dividend yield of 8.76% during the vesting period – of 122.19% of
the conditionally awarded number of shares is applied. This results in
the following number of shares vested:
• Greg Poux-Guillaume: 24,360 (based on the pro-rated conditional
grant)
• Thierry Vanlancker: 13,891 (based on the pro-rated conditional
grant)
• Maarten de Vries: 14,472
LTI on financial objectives
Performance metrics
2022-2024 LTI Share Plan
Measurement approach
Weighting
Threshold
Maximum Performance
Weighted vesting (as % of
conditional grant)
Adjusted EBITDA
(in € mln)
As is
40%
Corresponding target
850
1,600
1,478
94.3%
Corresponding award
0%
150%
126%
Return on investment
(ROI) (in %)
As is
20%
Corresponding target
7%
15%
13.3 %
Corresponding award
0%
150%
122%
Revenue growth
(in %)
Organic revenue growth compared with Sherwin-Williams, Nippon Paint, PPG, Axalta and BASF Coatings. For
Axalta and Sherwin-Williams, only performance for the coatings business is taken into consideration.
Performance on this metric is measured against 33 months following the start of the conditional period for
Nippon Paint and BASF Coatings.
20%
Corresponding target
(10%)
2%
(0.11%)
Corresponding award
0%
150%
99%
Performance metrics
2022-2024 LTI Share Plan
Measurement approach
Weighting
Threshold
Maximum Performance
Weighted vesting (as % of
conditional grant)
Total recordable injury rate
Per 200,000 hours, three-year average
5%
Corresponding target
0.25
0.20
0.28
18.0%
Corresponding award
0%
150%
0 %
Total waste – circular
As the percentage circular waste of total waste
5%
Corresponding target
60%
68%
74 %
Corresponding award
0%
150%
150%
Energy use (GJ/ton)
Per ton of production
5%
Corresponding target
1.83
1.67
1.77
Corresponding award
0%
150%
60 %
Renewable electricity
Use of renewable electricity (own operations)
5%
Corresponding target
45%
55%
65 %
Corresponding award
0%
150%
150 %
Strategy | Sustainability |
Leadership and governance
|
Financial statements
116
REMUNERATION REPORT
AkzoNobel Report 2024
Conditional grant 2024-2026 LTI Plan
As per the Remuneration Policy for the Board of Management,
shares are conditionally granted to the members of the Board of
Management on an annual basis, following approval from the
Supervisory Board upon the recommendation of the Remuneration
Committee. The grant level is 200% of base salary for the CEO and
150% of base salary for the CFO. In 2024, the CEO received a
conditional grant of shares equivalent to 200% of his annual base
salary and the CFO received a conditional grant of shares equivalent
to 150% of his annual base salary on January 1, 2024. The grant
price was determined based on the average share price of an
AkzoNobel common share in the two weeks following publication of
the annual results:
• 37,775 shares were conditionally granted to Greg Poux-Guillaume,
CEO
• 18,228 shares were conditionally granted to Maarten de Vries,
CFO
For both the financial and ESG metrics, the Supervisory Board
determined for each target: (i) the performance level below which no
shares vest; (ii) the performance level at which the target number of
shares vest and; (iii) the performance level at which the maximum
number of shares vest. The overview below also sets out the targets
as applicable for both our financial and ESG performance metrics.
Vesting of the conditional grant is linked to the three performance metrics presented below.
Performance metrics 2024-2026 LTI Plan
Metrics
Measurement approach
Target (100%)
Weighting
Adjusted EBITDA (in € mln)
As is
Not disclosed*
33%
Return on investment (ROI) (in %)
As is
Not disclosed*
33%
Environmental, social and governance (ESG)
Serious injuries and fatalities, measured over 100 million hours, three-year
average.
3
8.5%
Percentage of female executives as percentage of total executive population.
30%
8.5%
Final energy use per ton of production (kWh/ton).
251
8.5%
Cradle-to-grave carbon footprint (Scope 1, 2, and 3) measured as reduction
versus 2018 baseline.
13%
8.5%
* Targets for the financial metrics are not disclosed on ex-ante basis given commercial sensitivity. More details about pay-out curves and actual performance will be disclosed on ex-post basis.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
117
REMUNERATION REPORT
AkzoNobel Report 2024
Overview of share awards
Plan
Performance
/Vesting
period
Award date
End of performance period
End of holding period
Balance at
January 1,
20241
Awarded in
2024
Vested in
2024
Forfeited in
2024
Dividend in
2024
Balance at
December
31, 2024
Greg Poux-Guillaume
(CEO)
ANS2022
2022-2024
January 1, 2022
February 2025
February 2027
21,010
2,678
—
—
672
24,360
ANS2023
2023-2025
January 1, 2023
February 2026
February 2028
36,067
—
—
—
1,154
37,221
SMP2023
2023-2026
April 26, 2023
April 26, 2026
April 26, 2028
1,046
—
—
—
—
1,046
ANS2024
2024-2026
January 1, 2024
February 2027
February 2029
—
37,775
—
—
1,209
38,984
SMP2024
2024-2027
April 23, 2024
April 23, 2027
April 23, 2029
—
6,088
—
—
—
6,088
Thierry Vanlancker (former CEO)
ANS2021
2021-2023
January 1, 2021
February 7, 2024
February 7, 2026
2,745
—
(2,745)
—
—
—
ANS2022
2022-2024
January 1, 2022
February 2025
February 2027
11,981
1,527
—
—
383
13,891
Maarten de Vries
(CFO)
ANS2021
2021-2023
January 1, 2021
February 7, 2024
February 7, 2026
1,634
—
(1,634)
—
—
—
ANS2022
2022-2024
January 1, 2022
February 2025
February 2027
12,483
1,590
—
—
399
14,472
ANS2023
2023-2025
January 1, 2023
February 2026
February 2028
16,552
—
—
—
530
17,082
SMP2022
2022-2025
April 21, 2022
April 20, 2025
April 20, 2027
1,338
—
—
—
—
1,338
SMP2023
2023-2026
April 26, 2023
April 26, 2026
April 26, 2028
792
—
—
—
—
792
ANS2024
2024-2026
January 1, 2024
February 2027
February 2029
—
18,228
—
—
583
18,811
SMP2024
2024-2027
April 23, 2024
April 23, 2027
April 23, 2029
—
3,194
—
—
—
3,194
1 The balance of shares at January 1, 2024, includes cumulative dividend. For ANS2022, the cumulative dividend over 2022 and 2023 of 5.39% applies, and for ANS2023 the 2023 dividend yield of 2.74% applies.
Board of Management
Shareholding requirements
2024 base salary
Number of
shares held at
December 31, 2024
Ownership ratio
Greg Poux-Guillaume
300%
€1,290,000
7,134
32%
Maarten de Vries
150%
€830,000
26,617
186%
Strategy | Sustainability |
Leadership and governance
|
Financial statements
118
REMUNERATION REPORT
AkzoNobel Report 2024
Shareholding requirements
Board of Management members are expected to build up a
shareholding in the company. The minimum shareholding
requirement must be accrued within five years. This includes
privately purchased shares and vested shares granted under
AkzoNobel share-based compensation plans. The overview on the
previous page provides insight into Board of Management share
ownership as per December 31, 2024.
Claw back, value adjustment and loans
In 2024, there was no cause for a claw back or value adjustment by
the Remuneration Committee. The company does not grant loans,
advance payments or guarantees to members of the Board of
Management or any family member of such persons.
Former members of the Board of Management
Following the disclosure in the 2022 Remuneration report,
termination of Thierry Vanlancker’s management agreement was
executed in accordance with the management agreement and the
Remuneration Policy for the Board of Management. The 25,578
shares that were conditionally granted to Thierry Vanlancker under
the 2022-2024 LTI Plan have been pro-rated, calculated for the
period until the end of the management agreement in April 2023, to
respectively 11,368 (16/36 of 25,578) conditional shares, resulting in
a vesting of 13,891 shares as further explained in the LTI section.
The total value of all shares that became unconditional during the
year is €805,122. This concludes the remuneration due to former
CEO Thierry Vanlancker. No vesting of shares will take place in 2025
or thereafter.
Contractual arrangements
The overview below provides insight into the main contractual
arrangements of the Board of Management.
Comparative information
Pay ratios
Internal pay ratios are a relevant input factor for determining the
appropriateness of the implementation of the Remuneration Policy
for the Board of Management, as recognized in the Corporate
Governance Code. In 2024, the ratio between the annual total
compensation for the CEO and the average annual compensation for
an employee was 87.9 (2023: 85.8). This pay ratio was calculated in
accordance with the guidance as provided in the Corporate
Governance Code. In addition, CEO pay ratios on the basis of
median employee remuneration have been calculated.
Board of Management
Initial appointment
Start date current
appointment
Period of appointment
Notice period for
AkzoNobel
Notice period for the
Board of Management
Severance
Greg Poux-Guillaume
November 1, 2022
November 1, 2022
4.5 years*
6 months
6 months
1 time annual base salary
Maarten de Vries
January 1, 2018
April 22, 2022
4 years
6 months
6 months
1 time annual base salary
* Greg Poux-Guillaume was appointed as member of the Board of Management and CEO with effect from November 1, 2022, for an extended four-year term.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
119
REMUNERATION REPORT
AkzoNobel Report 2024
Further details on the development of these amounts and ratios over time can be found in the table below.
2020
2021
2022
2023
2024
Average salary per employee*
56,061
54,220
55,840
57,536
61,102
% change average remuneration
2%
(3%)
6%
3%
6%
CEO pay ratio (average)
99.2
115.7
59.8
85.8
87.9
CEO pay ratio % change
53%
17%
(48%)
43%
2 %
CEO pay ratio (median)
126.4
149.0
81.1
115.0
121.7
CEO pay ratio % change
54%
18%
(46%)
42%
6%
* Calculated as employee benefits on a full-time equivalent basis over average number of employees.
Five-year analysis
The overviews below and on the next page provide illustrative insights into the Board of Management
remuneration and company performance over the last five reported financial years.
Board of Management remuneration five-year analysis in € thousands
(based on IFRS 2 expenses for multi-year variable). Percentages indicate year-on-year changes.
CEO
CFO
5,562
6,271
3,337
4,935
5,368
3,560
2,583
1,129
2,774
2,937
2020
2021
2022
2023
2024
In years of transition, the compensation for the newly appointed Board of Management member has been annualized.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
120
REMUNERATION REPORT
AkzoNobel Report 2024
+56%
+13%
-47%
+48%
+93%
-27%
-56%
+146%
+9%
+6%
• In 2020, total rewards (including benefits) for the Board of
Management included a one-off special payment for the 2020
Performance Incentive Plan, which incentivized improvement on
the company’s return on sales (ROS). The plan was put in place
and approved by the AGM following the divestment of Specialty
Chemicals
• In 2021, total rewards (including benefits) for the CEO included a
one-off special share grant to compensate for the loss of shares
due to the two-year reappointment and the fact that shares
granted as from 2021 will only vest on a pro-rated basis
• 2022 presented us with the continued impact of the COVID-19
pandemic, the geo-political consequences of the war in Ukraine,
shortages and significant price increases in raw materials and
transportation. This volatile business climate had a severe impact
on the results of the company. Consequently, all financial
components of the short and long-term incentives did not meet
the threshold and delivered no pay-out. The annualized total
compensation for Thierry Vanlancker reduced by 65% compared
with 2021, to €1,912,210 versus €5,514,195 in the previous year.
This reflects the fact that his short-term incentive paid out around
half and no shares granted under the LTI plan 2020 vested.
Compared with 2021, the annualized total compensation for
Maarten de Vries reduced by 48%
• In 2023, in response to the challenges posed by an unpredictable
macro-economic landscape, we outlined a set of strategic
priorities designed to guide us with resilience and adaptability. This
resulted in above target pay-out on the financial metrics of the
short-term incentive. Vesting under the 2021-2023 LTI Plan was
minimal, but the total compensation levels showed a better
balance between our commitment to stakeholders and our ability
to reward and retain
• 2024 presented a complex economic environment with persistent
inflation, volatile exchange rates and unfavorable market
conditions in certain regions and segments. As a result, the
financial components of the short-term incentives delivered below
target pay-outs. Despite the difficult economic environment, we
sustained growth throughout each quarter of 2024, resulting in
above target pay-out on the 2022-2024 LTI plan
Adjusted EBITDA in € millions
(percentages indicate year-on-year changes)
1,442
1,436
1,157
1,429
1,478
2020
2021
2022
2023
2024
Adjusted OPI in € millions
(percentages indicate year-on-year changes)
1,099
1,092
789
1,074
1,113
2020
2021
2022
2023
2024
ROI in %
16.1%
16.0%
9.8%
13.0%
13.3%
2020
2021
2022
2023
2024
FCF in € millions
962
317
-29
840
367
2020
2021
2022
2023
2024
Strategy | Sustainability |
Leadership and governance
|
Financial statements
121
REMUNERATION REPORT
AkzoNobel Report 2024
+11%
-1%
-28%
+36%
+8%
+0%
-19%
+24%
+4%
+3%
Policy at a glance – Supervisory Board
Supervisory Board members receive a fixed annual fee for their membership and one or more fixed
committee fee(s). In addition, Supervisory Board members receive an attendance fee for Supervisory Board
or committee meetings attended outside their country of residence.
The overview below summarizes the key elements of the Remuneration Policy for the Supervisory Board,
following the approval of the 2024 AGM to increase the annual fee and committee fees of the Supervisory
Board members.
Fixed base fee
Audit Committee fee
Remuneration Committee/
Nomination Committee fee
Chair
Deputy Chair
Member
Chair
Member
Chair
Member
€162,000
€100,000
€86,000
€27,000
€22,000
€22,000
€16,000
Fees are benchmarked against a sample of AEX companies and AkzoNobel’s European remuneration peer group. In accordance with the Corporate
Governance Code, Supervisory Board members are not remunerated in shares.
Attendance fees for meetings outside country of residence and expenses
Continental meetings
Intercontinental meetings
Travel expenses and facilities are borne by
the company and reviewed by the Audit
Committee
€2,500 per meeting
€5,000 per meeting
Remuneration for the Supervisory Board in 2024
This section presents insights into how the Remuneration Policy for the Supervisory Board was
implemented in 2024. Actual remuneration was determined in line with the Remuneration Policy and no
derogation of the policy has been applied.
Actual remuneration of the members of the
Supervisory Board
in €
Remuneration
Attendance
fee
Committee
allowance
fees
Total
remuneration
Ester Baiget
86,000
12,500
22,000
120,500
Jaska de Bakker3
58,593
5,000
14,989
78,582
Byron Grote, Deputy Chair
100,000
15,000
27,000
142,000
Pamela Kirby2
27,407
2,500
5,099
35,006
Wouter Kolk3
58,593
—
10,901
69,494
Ben Noteboom, Chair
162,000
—
22,000
184,000
Jolanda Poots-Bijl1
7,324
—
1,874
9,198
Dick Sluimers
86,000
—
22,000
108,000
Patrick Thomas
86,000
12,500
22,000
120,500
Hans Van Bylen
86,000
10,000
16,000
112,000
Ute Wolf3
58,593
2,500
14,989
76,082
Total 2024
816,510
60,000
178,852
1,055,362
Total 2023
716,462
72,500
153,132
942,094
1 Until January 31 2024.
2 Until April 25, 2024.
3 As of April 25, 2024.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
122
REMUNERATION REPORT
AkzoNobel Report 2024
Comparative information
in €
2020
2021
2022
2023
2024
Nils Smedegaard Andersen, Chair1
157,500
172,500
182,500
62,308
—
Ester Baiget2
—
—
73,956
110,000
120,500
Jaska de Bakker8
—
—
—
—
78,582
Sue Clark5
87,500
29,492
—
—
—
Byron Grote, Deputy Chair
114,250
120,500
130,500
133,000
142,000
Michiel Jaski5
85,000
31,044
—
—
—
Pamela Kirby3
87,500
95,000
105,000
107,500
35,006
Wouter Kolk8
—
—
—
—
69,494
Ben Noteboom, Chair4
—
—
—
109,286
184,000
Jolanda Poots-Bijl6
85,000
100,000
100,000
100,000
9,198
Dick Sluimers
90,000
100,000
100,000
100,000
108,000
Patrick Thomas
92,500
102,500
105,000
112,500
120,500
Hans Van Bylen2
—
—
70,508
107,500
112,000
Ben Verwaayen7
32,775
—
—
—
—
Ute Wolf8
—
—
—
—
76,082
Total remuneration
832,025
751,036
867,465
942,094
1,055,362
% change total remuneration
(13.32)
(9.73)
15.50
8.60
12.02 %
1 Until April 21, 2023.
5 Until April 22, 2021.
2 As of April 23, 2022.
6 Until January 31, 2024.
3 Until April 25, 2024.
7 Until April 24, 2020.
4 As of April 21, 2023, elected as Chair with effect from May 26, 2023.
8 As of April 25, 2024.
Remuneration Policy for 2025
The current remuneration policies for the Board of Management and the Supervisory Board were last
adopted at the 2021 AGM. As required by Dutch law, the remuneration policies are submitted in full every
four years. In 2024, the Remuneration Committee and the Supervisory Board reviewed the remuneration
policies for the Board of Management and the Supervisory Board to assess whether these were still in line
with the company's strategy and financial targets, while considering input received from stakeholders.
Following such review, the Supervisory Board will submit updated remuneration policies for the Board of
Management and the Supervisory Board for consideration by shareholders at the 2025 AGM.
Remuneration Policy for the Board of Management
The Supervisory Board has concluded the Remuneration Policy for the Board of Management is in line with
the company’s objectives. The remuneration it provides is balanced and adequate. A revised
Remuneration Policy will be submitted to the AGM in April 2025, that takes into consideration:
• No change in base salary will be made for the CEO and CFO
• Metrics applied for STI will remain the same, to support the company’s strategy and will continue to
apply in 2025
• Metrics applied for LTI in 2024 were adjusted EBITDA, ROI, and ESG. Metrics applied for LTI in 2025 will
remain the same, but to better align with the company’s strategic priorities, a proposal will be made to
change the LTI weighting. Should shareholders approve the proposed amendment, vesting of the
conditional grant will be linked to adjusted EBITDA (40%), ROI (40%) and ESG (20%)
• Covestro will be removed from the labor market peer group, following the announcement of the intended
take-over by state-owned oil company ADNOC, United Arab Emirates
• For new members of the Board of Management who are attracted from outside the company, the
wording of “sign-on” is adjusted to “buy-out” to reflect the practice to merely (partially) compensate new
members of the Board of Management for forfeited variable pay at their previous employer
• Additional malus and claw-back triggers related to risk management, individual misconduct and
reasonableness and fairness have been added to the revised policy document
Strategy | Sustainability |
Leadership and governance
|
Financial statements
123
REMUNERATION REPORT
AkzoNobel Report 2024
Greg Poux-Guillaume
Maarten de Vries
Base salary
Base salary
€1,290,000
€830,000
Short-term incentives (STI)
Short-term incentives (STI)
2025 STI pay-out opportunity and performance objectives
CEO target: 100% of base
CEO maximum opportunity: 150% of base
2025 STI pay-out opportunity and performance objectives
CFO target: 80% of base
CFO maximum opportunity: 120% of base
Metrics
Measurement approach
Target (100%)
Weighting
Metrics
Measurement approach
Target (100%)
Weighting
Adjusted OPI
As is
Not disclosed1
40%
Adjusted OPI
As is
Not disclosed1
40%
FCF
As is
Not disclosed1
30%
FCF
As is
Not disclosed1
30%
Personal objective
Not disclosed1
Not disclosed1
30%
Personal objective
Not disclosed1
Not disclosed1
30%
Long-term incentives (LTI)2
Long-term incentives (LTI)2
2025-2027 LTI vesting opportunity and performance objectives
CEO target: 200% of base
CEO maximum opportunity: 300% of base
2025-2027 LTI vesting opportunity and performance objectives
CFO target: 150% of base
CFO maximum opportunity: 225% of base
Metrics
Measurement approach
Target (100%)
Weighting
Metrics
Measurement approach
Target (100%)
Weighting
Adjusted EBITDA
As is
Not disclosed1
40%
Adjusted EBITDA
As is
Not disclosed1
40%
Return on investment (ROI)
As is
Not disclosed1
40%
Return on investment (ROI)
As is
Not disclosed1
40%
Environmental, social and
governance (ESG)
20%
Environmental, social and
governance (ESG)
20%
Serious injuries and fatalities
Measured over 100 million
hours, three-year average
2.8
5%
Serious injuries and fatalities
Measured over 100 million
hours, three-year average
2.8
5%
Carbon footprint
Carbon footprint Scope 1 and 2
measured as reduction versus
2018 baseline
45%
10%
Carbon footprint
Carbon footprint Scope 1 and 2
measured as reduction versus
2018 baseline
45%
10%
Carbon footprint
Carbon footprint Scope 3 -
selected categories: 1,
10,11,12 and VOC, measured
as reduction versus 2018
baseline
17%
5%
Carbon footprint
Carbon footprint Scope 3 -
selected categories: 1,
10,11,12 and VOC, measured
as reduction versus 2018
baseline
17%
5%
1 Targets for the financial metrics and personal objectives are not disclosed on ex-ante basis given commercial sensitivity. More details about pay-out curves and actual performance will be disclosed on ex-post basis.
2 LTI performance measures subject to shareholder approval at the 2025 AGM.
Remuneration Policy Supervisory Board
The Supervisory Board concluded that the current Remuneration Policy for the Supervisory Board, as last
amended in full following adoption at the AGM in 2021 and last updated at the AGM in 2024, is in line with
the objectives of the company. Some technical and non-substantial textual updates will be included in the
Remuneration Policy that will be submitted to the AGM in April 2025.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
124
REMUNERATION REPORT
AkzoNobel Report 2024
Distribution of institutional shares in 2024 in %
A US
60
B UK
12
C Rest of Europe
24
D Rest of world
4
Analyst recommendations
A Buy
16
B Hold
5
C Sell
1
Shares
AkzoNobel’s common shares are listed on Euronext Amsterdam.
We’re included in the AEX® Index, which consists of the top 25 listed
companies in the Netherlands, ranked on the basis of stock market
turnover and free float. During 2024, 108 million AkzoNobel shares
were traded on Euronext Amsterdam, with €6.7 billion turnover
(2023: volume of 99 million, turnover of €7.0 billion).
We have a sponsored level 1 American Depositary Receipt (ADR)
program and ADRs can be traded on the international OTCQX
platform in the US. In 2024, 44 million ADRs were traded, with $989
million total turnover (2023: volume of 16 million, turnover of $393
million).
See the table below for stock codes and ticker symbols.
Euronext ticker symbol
AKZA
ISIN common share
NL0013267909
OTC ticker symbol
AKZOY
ISIN ADR
US0101995035
AkzoNobel has 100% free float and a broad base of international
shareholders. Based on an independent shareholder analysis, the
Distribution of institutional shares chart shows the geographical
spread of institutional shareholders, of which the majority are based
in the US (60%) and the UK (12%). Around 7% of the company’s
share capital is held by private investors, many of whom are resident
in the Netherlands. Approximately 27% of the company’s share
capital was held by ESG investors1.
Key share data*
2022
2023
2024
Year-end (share price in €)
62.56
74.82
57.96
Year-high (share price in €)**
98.50
78.82
75.24
Year-low (share price in €)**
56.22
61.42
52.82
Number of shares outstanding at
year-end (in millions)
174
171
171
Market capitalization at year-end (in
€ billions)
10.9
12.8
9.90
Dividend per share (in €)
1.98
1.98
1.98
Dividend yield (in %)
3.2
2.6
3.4
* Based on Bloomberg share data.
** Based on close value.
The AkzoNobel share price was down 23% at year-end 2024 when
compared with year-end 2023. This compares with the AEX, which
was up by 12% at year-end 2024. The Bloomberg Global Chemicals
Index was down 11%, Bloomberg Europe Chemical Index was down
by 12%, and our global coatings peers2 were down 3% over the
same period (see Share price performance graph on the right).
A
B
C
D
Benchmark performance indexed to AkzoNobel share price as
of December 29, 2023
AkzoNobel share price in €
AkzoNobel
Bloomberg Global Chemicals Index
AEX
Bloomberg Europe Chemicals Index
Global coatings peers2
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
50
60
70
80
90
Analyst recommendations
At year-end 2024, AkzoNobel was covered by 22 equity research
analysts. An overview of analyst recommendations is shown in the
graph below.
A
B
C
Strategy | Sustainability |
Leadership and governance
|
Financial statements
125
AKZONOBEL AND THE CAPITAL MARKETS
AkzoNobel Report 2024
1 As calculated by Nasdaq and includes investment funds that leverage ESG criteria as part of the investment process and measurement. In 2024, Nasdaq changed the calculation methodology, numbers are not comparable with prior periods.
2 Global coatings peer group includes Asian Paints, Axalta, Berger Paints, Chugoku, Kansai Paint, Masco, Nippon Paint, PPG, RPM, Sherwin-Williams, Skshu Paint.
A number of senior leaders, including our CEO and CFO, welcomed analysts and
investors to a special event held at our Powder Coatings site in Como, Italy. As
well as enjoying a tour of the facility – AkzoNobel’s largest powder coatings
factory – the itinerary also included several presentations and a Q&A session.
External benchmarks
Following 2024 reviews, our ESG performance was reaffirmed by
external rating agencies. For example, AkzoNobel maintained the
highest possible rating (AAA) from MSCI for the ninth consecutive
year, and the company is ESG top-rated by Sustainalytics – the best
performance level in the industry. Please refer to the Sustainability
statements for a full overview of external sustainability ratings.
Dividend
Our dividend policy is to pay a stable to rising dividend. In 2024, an
interim dividend of €0.44 per share (2023: €0.44) was paid. The
Board of Management proposes a 2024 final dividend of €1.54 per
share, which would equal a total 2024 dividend of €1.98 (2023:
€1.98) per share.
The dividend proposed to the 2025 Annual General Meeting of
shareholders, following adoption, will be payable as of May 7, 2025.
AkzoNobel’s shares will be trading ex-dividend as of April 29, 2025.
In compliance with the listing requirements of Euronext Amsterdam,
the record date for the final dividend will be April 30, 2025.
Dividend in € per share*
Interim dividend
Final dividend
1.98
1.98
1.98
0.44
0.44
0.44
2022
2023
2024
* Proposed
Credit rating and bonds
AkzoNobel is committed to a strong investment grade credit rating.
Regular review meetings are held between rating agencies and
AkzoNobel senior management. See the table below for the current
credit ratings and outlook.
The maturity schedule of outstanding bonds is also shown below.
Bonds maturity in € millions (nominal amounts)
500
600
750
600
500
500
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Rating agency
Long-term rating
Outlook
Moody's
Baa2
Stable
Standard & Poor's
BBB
Negative
Strategy | Sustainability |
Leadership and governance
|
Financial statements
126
AKZONOBEL AND THE CAPITAL MARKETS
AkzoNobel Report 2024
1.54
1.54*
1.54
Strategy | Sustainability |
Leadership and governance
|
Financial statements
127
AkzoNobel Report 2024
FINANCIAL STATEMENTS
This section includes a detailed overview of our 2024 financial
performance.
Consolidated financial statements
Consolidated statement of income
128
Consolidated statement of comprehensive income
128
Consolidated balance sheet
129
Consolidated statement of cash flows
130
Consolidated statement of changes in equity
131
Notes to the Consolidated financial statements
Note 1
General information
132
Note 2
Scope of consolidation
136
Note 3
Segment information
137
Note 4
Revenue
142
Note 5
Operating income
144
Note 6
Employee benefits
144
Note 7
Financing income and expenses
148
Note 8
Income tax
150
Note 9
Earnings per share
155
Note 10
Intangible assets
157
Note 11
Property, plant and equipment
161
Note 12
Leases
163
Note 13
Investments in associates
164
Note 14
Financial non-current assets
164
Note 15
Inventories
165
Note 16
Trade and other receivables
166
Note 17
Group equity
167
Note 18
Post-retirement benefit provisions
169
Note 19
Other provisions and contingent
liabilities
177
Note 20
Net debt
180
Note 21
Trade and other payables
183
Note 22
Cash flow
183
Note 23
Commitments
184
Note 24
Related party transactions
184
Note 25
Remuneration of the Supervisory Board
and the Board of Management
185
Note 26
Financial risk management
186
Note 27
Subsequent events
191
Company financial statements
Statement of income
192
Balance sheet
192
Note A
General information
193
Note B
Financing income and expenses
193
Note C
Intangible assets
194
Note D
Financial non-current assets
194
Note E
Short-term receivables
195
Note F
Shareholders' equity
196
Note G
Net debt
197
Note H
Other current liabilities
199
Note I
Financial instruments
199
Note J
Contingent liabilities
199
Note K
Independent auditor's fees
200
CONSOLIDATED STATEMENT OF INCOME
in € millions, for the year ended December 31
Note
2023
2024
Continuing operations
Revenue
4
10,668
10,711
Cost of sales
5
(6,434)
(6,374)
Gross profit
4,234
4,337
Selling and distribution expenses
5
(2,347)
(2,463)
General and administrative expenses
5
(648)
(655)
Research and development expenses
5
(270)
(296)
Other results
5
60
(6)
(3,205)
(3,420)
Operating income
1,029
917
Financing income and expenses
7
(272)
(102)
Results from associates
13
27
23
Profit before tax
784
838
Income tax
8
(296)
(246)
Profit for the period from continuing operations
488
592
Discontinued operations
Profit/(loss) for the period from discontinued
operations
(5)
—
Profit for the period
483
592
Attributable to
Shareholders of the company
442
542
Non-controlling interests
41
50
Profit for the period
483
592
Earnings per share, in €
Continuing operations
Basic
9
2.62
3.17
Diluted
9
2.61
3.16
Discontinued operations
Basic
9
(0.03)
0.00
Diluted
9
(0.03)
0.00
Total operations
Basic
9
2.59
3.17
Diluted
9
2.58
3.16
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
in € millions, for the year ended December 31
2023
2024
Profit for the period
483
592
Other comprehensive income/(expense)
Items that will not be reclassified to the statement of income:
Post-retirement benefits
(149)
(135)
Income tax
38
31
Net effect
(111)
(104)
Items that may be reclassified subsequently to the statement of income:
Exchange rate differences arising on translation of foreign operations
(61)
148
Cash flow hedges
34
—
Income tax
(1)
—
Net effect
(28)
148
Other comprehensive income/(expense) for the period
(139)
44
Comprehensive income/(expense) for the period
344
636
Comprehensive income attributable to
Shareholders of the company
310
570
Non-controlling interests
34
66
Comprehensive income/(expense) for the period
344
636
Strategy | Sustainability |
Leadership and governance
|
Financial statements
128
FINANCIAL STATEMENTS
AkzoNobel Report 2024
CONSOLIDATED BALANCE SHEET, BEFORE ALLOCATION OF PROFIT
in € millions, at December 31
Note
2023
2024
Assets
Non-current assets
Intangible assets
10
4,081
4,049
Property, plant and equipment
11
1,994
2,122
Right-of-use assets
12
302
318
Deferred tax assets
8
512
422
Investments in associates
13
216
228
Financial non-current assets
14
1,409
1,274
Total non-current assets
8,514
8,413
Current assets
Inventories
15
1,649
1,721
Trade and other receivables
16
2,483
2,498
Current tax assets
8
134
150
Short-term investments
20
265
165
Cash and cash equivalents
20
1,513
1,302
Total current assets
6,044
5,836
Total assets
14,558
14,249
Equity and liabilities
Equity
Shareholders' equity
17
4,322
4,574
Non-controlling interests
17
224
242
Group equity
4,546
4,816
Non-current liabilities
Post-retirement benefit provisions
18
423
381
Other provisions
19
161
160
Deferred tax liabilities
8
557
491
Long-term borrowings
20
3,165
3,671
Total non-current liabilities
4,306
4,703
Current liabilities
Short-term borrowings
20
2,398
1,697
Trade and other payables
21
2,933
2,740
Current tax liabilities
8
211
120
Current portion of provisions
18, 19
164
173
Total current liabilities
5,706
4,730
Total equity and liabilities
14,558
14,249
Strategy | Sustainability |
Leadership and governance
|
Financial statements
129
FINANCIAL STATEMENTS
AkzoNobel Report 2024
CONSOLIDATED STATEMENT OF CASH FLOWS
in € millions, for the year ended December 31
Note
2023
2024
Profit for the period from continuing operations
488
592
Adjustments to reconcile profit for the period to net cash generated from operating activities:
– Amortization and depreciation
10, 11, 12
357
371
– Impairment losses
10, 11, 12
4
—
– Financing income and expenses
7
272
102
– Results from associates
13
(27)
(23)
– Pre-tax result on acquisitions and divestments
2
(66)
3
– Income tax
8
296
246
Changes in working capital
22
254
(206)
Changes in post-retirement benefit provisions
18
(40)
(17)
Changes in other provisions
19
(13)
24
Interest paid
(167)
(174)
Income tax paid
(295)
(291)
Other changes
63
46
Net cash generated from/(used for) operating activities
1,126
673
Capital expenditures*
10, 11
(286)
(306)
Interest received
71
54
Dividends from associates
13
14
Acquisition of consolidated companies, net of cash acquired
2
(114)
2
Investments in short-term investments
20
(64)
(320)
Repayments of short-term investments
20
142
423
Proceeds from divestments, net of cash divested
96
1
Other changes
(2)
—
Net cash generated from/(used for) investing activities
(144)
(132)
Proceeds from borrowings
20
5,836
2,807
Borrowings repaid
20
(6,295)
(3,102)
Share buyback
17
—
—
Dividends paid
17
(368)
(385)
Buy-out of non-controlling interests
—
(4)
Net cash generated from/(used for) financing activities
(827)
(684)
Net cash generated from/(used for) continuing operations
155
(143)
Net cash generated from/(used for) discontinued operations
(6)
(5)
Net change in cash and cash equivalents from continued and discontinued operations
149
(148)
Net cash and cash equivalents at January 1
20
1,398
1,453
Effect of exchange rate changes on cash and cash equivalents
(94)
(32)
Net cash and cash equivalents at December 31
1,453
1,273
* Capital expenditures include investments in intangible assets (refer to Note 10) and investments in property, plant and equipment (refer to Note 11).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
130
FINANCIAL STATEMENTS
AkzoNobel Report 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
in € millions
Attributable to shareholders of the company
Subscribed share
capital
Cash flow
hedge reserve
Cumulative
translation reserve
Other (legal)
reserves and
undistributed
profit
Shareholders’
equity
Non-controlling
interests
Group equity
Balance at December 31, 2022
87
(34)
(656)
4,936
4,333
215
4,548
Profit for the period
—
—
—
442
442
41
483
Reclassification into the statement of income
—
46
(4)
—
42
—
42
Other comprehensive income/(expense)
—
(12)
(50)
(149)
(211)
(7)
(218)
Tax on other comprehensive income
—
—
(1)
38
37
—
37
Comprehensive income for the period
—
34
(55)
331
310
34
344
Dividend
—
—
—
(338)
(338)
(25)
(363)
Share buyback
(2)
—
—
2
—
—
—
Equity-settled transactions*
—
—
—
17
17
—
17
Balance at December 31, 2023
85
—
(711)
4,948
4,322
224
4,546
Profit for the period
—
—
—
542
542
50
592
Other comprehensive income/(expense)
—
—
132
(135)
(3)
16
13
Tax on other comprehensive income
—
—
—
31
31
—
31
Comprehensive income for the period
—
—
132
438
570
66
636
Dividend
—
—
—
(338)
(338)
(47)
(385)
Share buyback
—
—
—
—
—
—
—
Equity-settled transactions*
—
—
—
23
23
—
23
Acquisition of non-controlling interests
—
—
—
(3)
(3)
(1)
(4)
Balance at December 31, 2024
85
—
(579)
5,068
4,574
242
4,816
* No tax charge in 2024 (2023: €1 million).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
131
FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 1: General information
Reporting entity and its operations
Akzo Nobel N.V. is a public limited liability company headquartered in the Netherlands. The address of our
registered office is Christian Neefestraat 2, Amsterdam; the Chamber of Commerce number is 09007809.
We have attached a list of subsidiaries and associated companies, drawn up in conformity with Articles
379 and 414 of Book 2 of the Dutch Civil Code, as an appendix to our annual report. The principal activity
of AkzoNobel is the production and selling of paints and coatings.
Basis of preparation
We have prepared the Consolidated financial statements of Akzo Nobel N.V. in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board and as adopted by the
European Union. The Consolidated financial statements also comply with the financial reporting
requirements included in Title 9 of Book 2 of the Dutch Civil Code.
The management report within the meaning of Article 391 of Book 2 of the Dutch Civil Code consists of the
following parts of the annual report:
• 2024 results at a glance
• CEO statement
• How we created value
• Strategy and operations
• Sustainability statements
• Leadership and governance: Our Board of Management and Executive Committee
• Leadership and governance: Statement of the Board of Management
• Leadership and governance: Corporate governance statement
• Leadership and governance: Risk management
• Leadership and governance: Integrity and compliance management
• Leadership and governance: Remuneration report
• Financial statements: Note 5 Operating income
• Financial statements: Note 26 Financial risk management
On February 24, 2025, the Board of Management authorized the financial statements for issue. The
financial statements as presented in this report are subject to adoption by the Annual General Meeting of
shareholders on April 25, 2025.
Going concern
The Consolidated financial statements have been prepared on the going concern basis of accounting. To
determine the appropriateness of the going concern assumption, management has assessed the ability of
AkzoNobel to continue as a going concern for at least 12 months from the date of preparation of this
report (the going concern period) based on an evaluation of, among others, the financial position, expected
future cash flows and market developments.
At December 31, 2024, cash and cash equivalents were €1.3 billion. We also assessed the ability of the
company to obtain financing, taking into account the company's external credit rating, which we are
committed to retain at strong investment grade.
Expected future cash flows are based on the latest forecasts. These forecasts take into account internal
and external developments relevant in the assessment of the ability of AkzoNobel to continue as a going
concern, including but not limited to market developments, developments in the macro-economic
environment (e.g. inflation, see disclosure on impact of inflation in this Note) and climate-related
developments (see disclosure on impact of climate change in this Note).
Management's assessment did not lead to uncertainties in relation to AkzoNobel's ability to continue as a
going concern during the going concern period.
Impact of climate change
AkzoNobel assessed the impact of climate change on its operations, identifying climate change mitigation
and adaptation as key topics.
Climate change mitigation
For climate change mitigation in its own operations (Scope 1 and Scope 2) AkzoNobel focuses on three
key levers, being decarbonization through upgrading (energy) inefficient assets, prioritizing renewable
Strategy | Sustainability |
Leadership and governance
|
Financial statements
132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
electricity purchase and production, and reduction by transition from fossil to renewable fuels. Replaced
assets are either divested or impaired. The book value of these replaced assets is typically low.
Prioritizing renewable electricity purchase and production is driven by a focus on on-site solar panels and
renewable electricity purchasing agreements. We purchase Renewable Electricity Certificates or
Guarantees of Origin, only for actual energy off take, and actively look for off-site power purchasing
agreements where possible. During 2024 AkzoNobel did not enter into off-site power purchasing
agreements.
To become carbon neutral in 2050, we'll shift our fossil fuel consumption towards renewable alternatives,
e.g. heat recovery from our compressors and smart electrification with heat pumps. Currently, our fossil
fuels are primarily used for building heating and process heating.
Climate change mitigation measures within the entire value chain (Scope 3) focus on increasing our
sustainable product offering, the development of new products and engaging with our suppliers and
customers around the world to collectively find solutions towards our target of halving carbon emissions in
our value chain by 2030 through four key levers, being energy transition, process efficiency, reduced
solvent emissions and circular solutions.
Currently, this decarbonization has no material impact on our financial position and performance. The cost
for moving towards our 2030 target is mostly captured in the investments of our suppliers, with limited
direct investments required for our own operations. The financial effects, if any, would be captured in our
Cost of sales.
Climate change adaptation
Climate change adaptation is critical to our organization, with the primary risk involving insufficient
adaptation to natural hazards resulting from climate change, which include heat stress and water scarcity.
This risk could lead to loss of assets and operational disruptions.
From a financial perspective, we have assessed the physical risks for our own operations. We assessed
the potential occurrence of material financial impacts to our own operations, focusing on heat stress and
water scarcity. We currently see no risk of material financial impact. To reach this conclusion, we analyzed
the risk related to property damage, as well as the risk related to business interruption.
Given our approximately 130 manufacturing sites, the risk of any business interruption of one or a few sites
does not pose a significant interruption risk to AkzoNobel. This is primarily due to our extensive global
distribution network and the relatively low revenue exposure per site, allowing us to shift production when a
natural hazard occurs.
We also analyzed historic insurance claims related to natural hazards. Over a period of 20 years, the total
indemnity paid related to natural catastrophes was below €10 million. This is the combined sum of
property damage and business interruption.
Impact from the war in Ukraine and sanctions on Russia
In 2022, following the EU sanctions, the majority of our Performance Coatings activities in Russia were
suspended. The residual Russian business since then has been ringfenced. Since 2022, the EU has issued
further waves of sanctions against Russia. AkzoNobel continuously monitors sanction developments and
takes measures as required. Each year, the measures as implemented have been assessed for their
financial reporting impact, if any, under the applicable IFRS accounting standards. This includes, amongst
others, compliance with IFRS requirements on consolidation and asset impairment assessments. To date,
other than the suspension of the majority of our Performance Coating activities in 2022, there has been no
material financial reporting impact as a direct result of the measures implemented. Our business in Ukraine
and Russia combined represents less than 2% of our revenue both in 2024 and 2023, of which the vast
majority concerned Russia.
Material accounting policies
The material accounting policies as applied throughout the financial statements are described below.
Material accounting policies relating to specific financial statement items are included in the respective
notes to the financial statements.
Consolidation
The Consolidated financial statements include the accounts of Akzo Nobel N.V. and its subsidiaries.
Subsidiaries are companies over which Akzo Nobel N.V. has control, because it is exposed, or has rights,
to variable returns from its involvement with the subsidiary and it has the ability to affect returns through its
power over the subsidiary. Non-controlling interests in equity and in results are presented separately.
Changes in accounting policies and first-time application
Accounting pronouncements with potential relevance for AkzoNobel, which became effective for 2024,
include amendments to IAS 1 “Classification of Liabilities as Current or Non-current and Non-current
Liabilities with Covenants”, amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” and
Strategy | Sustainability |
Leadership and governance
|
Financial statements
133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
amendments to IAS 7 and IFRS 7 “Disclosures: Supplier Finance Arrangements”. These changes in
accounting policies did not have a material impact on our Consolidated financial statements.
Further, in 2024, Pillar Two regulations came into force. The implementation did not have a material impact
on the effective tax rate.
Discontinued operations/Held for sale
A discontinued operation is a component of our business that represents a separate major line of business
or geographical area of operations that has been disposed of, or is held for sale, or is a subsidiary acquired
exclusively with a view to resale. Assets and liabilities are classified as held for sale if it is highly probable
that the carrying value will be recovered through a sale transaction within one year, rather than through
continuing use.
Foreign currencies
Transactions in foreign currencies are translated into the functional currency using the foreign exchange
rate at transaction date. Monetary assets and liabilities denominated in foreign currencies are translated
into the functional currency using the exchange rates at the balance sheet date. The resulting foreign
currency differences are included in the statement of income in financing income and expenses. Non-
monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at acquisition date.
The assets and liabilities of entities with functional currencies other than euro, are translated into euros (the
functional currency of the parent entity) using the exchange rates at the balance sheet date. The income
and expenses of entities with functional currencies other than euro, are translated into the functional
currency using the exchange rates at transaction date.
Foreign exchange rate differences resulting from translation into the functional currency of investments in
subsidiaries and of intercompany loans of a permanent nature with functional currencies other than euro
are recorded as a separate component (cumulative translation reserve) within other comprehensive
income. These cumulative translation adjustments are reclassified (either fully or partly) to the statement of
income upon disposal (either fully or partly) or liquidation of the foreign subsidiary to which the investment
or the intercompany loan with a permanent nature relates. Foreign currency differences arising on the
translation of a financial liability designated as an effective hedge of a net investment in a foreign operation
are recognized in the cumulative translation reserve (in Other comprehensive income).
Exchange rates of key currencies
The principal exchange rates against the euro used in preparing the balance sheet and the statement of
income are:
Currency*
Balance sheet
Statement of income
2023
2024
%
2023
2024
%
US dollar
1.11
1.04
(6.1)
1.08
1.08
—
Pound sterling
0.87
0.83
(4.5)
0.87
0.85
(2.3)
Chinese yuan
7.86
7.62
(3.1)
7.67
7.80
1.7
* Foreign currency equivalent of €1.
Hyperinflation economies
When a subsidiary is operating in a hyperinflationary country, the financial statements of this entity are
restated into the current purchasing power at the end of the reporting period. In addition, exchange rates
at this balance sheet date are used to translate both the balance sheet and the statement of income into
euros. Hyperinflation accounting is applied for Argentina and Türkiye based on the historical cost approach
and using the Consumer Price Index (CPI). CPI developments for Argentina and Türkiye are included in the
table below. For reference, the balance sheet exchange rates for both countries have also been included.
CPI at December 31
Country
2022
2023
2024
Argentina
1,135
3,533
7,694
Türkiye
1,128
1,859
2,685
Balance sheet exchange rates* at December 31
Currency
2022
2023
2024
Argentinian peso
188.62
894.91
1,072.96
Turkish lira
19.97
32.73
36.80
* Foreign currency equivalent of €1.
For a consolidated overview of financial impacts from hyperinflation accounting, refer to Note 7 Financing
income and expenses.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
134
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Government grants
Government grants related to costs are deducted from the relevant costs in the same period. Government
grants to compensate for the cost of an asset are deducted from the cost of the related asset.
New IFRS accounting standards
IFRS accounting standards and interpretations thereof not yet in force, which may apply to our
Consolidated financial statements for 2025 and beyond, have been assessed for their potential impact.
These include, among others, amendments to IAS 21 "Lack of exchangeability", amendments to IFRS 9
and IFRS 7 "Classification and Measurement of Financial Instruments", amendments to IFRS 10 and
IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and
amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity". These changes
are not expected to have a material effect on AkzoNobel’s Consolidated financial statements.
Further, in 2024, the IASB published IFRS 18 "Presentation and Disclosure in Financial Statements".
IFRS 18 introduces, among others, a defined structure of the statement of profit or loss with required
subtotals, required disclosures in the financial statements for certain management defined performance
measures and enhanced principles on aggregation and disaggregation which apply to the primary financial
statements. The implementation date of IFRS 18 is January 1, 2027, with earlier application permitted. We
will start with our impact assessment in 2025.
Use of estimates
The preparation of the financial statements in compliance with IFRS accounting standards requires
management to make judgments, estimates and assumptions that affect amounts reported in the financial
statements. The estimates and assumptions are based on experience and various other factors that are
believed to be reasonable under the circumstances and are used to judge the carrying values of assets
and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions
are reviewed on an ongoing basis.
The most critical accounting policies involving a higher degree of judgment and complexity in applying
principles of valuation and for which changes in the assumptions and estimates could result in significantly
different results than those recorded in the financial statements, are the following:
• Scope of consolidation, including purchase price allocations for business combinations (Note 2)
• Income tax and deferred tax assets, including recoverability of deferred tax assets and uncertain tax
positions (Note 8)
• Impairment of intangible assets (Note 10)
• Post-retirement benefit provisions (Note 18)
• Provisions and contingent liabilities (Note 19)
More details related to the estimates and judgments for these financial statement items are, where relevant,
described in the respective notes.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
135
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 2: Scope of consolidation
Accounting policies
In business combinations, identifiable assets and liabilities, and contingent liabilities, are recognized at
their fair values at the acquisition date.
Goodwill in a business combination represents the excess of the consideration paid over the net fair
value of the acquired identifiable assets, liabilities and contingent liabilities. If the cost of an acquisition
is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized
directly in the statement of income.
Accounting estimates and judgments
Determining the fair value of acquisitions and individual assets and liabilities included therein, requires
significant judgment of amongst others future cash flows expected to be generated.
The fair value of brands, customer relationships and know-how acquired in a business combination is
estimated using generally accepted valuation methods. These include the relief-from-royalty method,
the incremental cash flow method and the multi-period excess earnings method.
The fair value of property, plant and equipment acquired in a business combination is based on
estimated market values.
The fair value of inventories acquired in a business combination is determined based on estimated
selling prices in the ordinary course of business, less the estimated costs of completion and sale and a
reasonable profit margin, based on the effort required to complete and sell the inventories.
Material subsidiaries
The Consolidated financial statements comprise the assets, liabilities, income and expenses of 227 legal
entities. We consider legal entities material when they represent, for at least two subsequent years, more
than 5% of either revenue, operating income or total assets. Material subsidiaries included in the table
below are fully owned at year-end 2024, except for Akzo Nobel India Limited (74.76% owned by
AkzoNobel). Refer to Note 17 Group equity for an overview of non-controlling interests.
Material subsidiaries related to continuing operations
Legal entity
Principal place of business
Akzo Nobel Coatings Inc.
US
Akzo Nobel India Limited
India
Imperial Chemical Industries Limited
UK
Akzo Nobel Decorative Coatings B.V.
The Netherlands
Akzo Nobel Coatings S.p.A.
Italy
Akzo Nobel Ltda
Brazil
Akzo Nobel Paints (Shanghai) Limited
China
Acquisitions
On August 1, 2023, AkzoNobel acquired 100% of the shares of Valspar Coatings Holding Co. Ltd., Hong
Kong (hereafter: "the Huarun business") for a final purchase price of €70 million (2023: €72 million). The
acquisition strengthens our position in China. It will allow us further market segmentation and reinforce our
position outside of the premium segment.
The final purchase price allocation as determined in 2024 resulted in €32 million of goodwill (2023: €32
million), non-deductible for tax purposes, €27 million of other intangible assets (2023: €28 million) and €42
million other fixed and current assets (2023: €42 million), excluding deferred taxes. Of the intangible assets,
€13 million relates to brands which have finite useful lives (2023: €13 million).
The goodwill is mainly attributable to synergies expected to be achieved from integrating the acquired
business into the group. The Huarun business has been integrated in business unit Decorative Paints
China and North Asia.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
136
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Divestments
In 2024, no material divestments occurred. In 2023, no material divestments occurred either, other than
property divestments. Please refer to Note 3 Segment information for more details on the property
divestments.
Note 3: Segment information
Accounting policies
We determine and present operating segments based on the information that is provided to the
Executive Committee, our chief operating decision-maker during 2024, to make decisions about
resources to be allocated to the segments and assess their performance. Segment results reported
to the Executive Committee include items directly attributable to a segment, as well as those items
that can be allocated on a reasonable basis.
General
In presenting and discussing segmental operating results AkzoNobel uses two operational segments,
Decorative Paints and Performance Coatings. Items which are not allocated to either one of these
segments, mainly comprise of corporate assets and corporate costs and are reported in “Corporate and
other”.
Decorative Paints
We provide decorative paints to both the professional and the do-it-yourself markets. We supply a variety
of quality products for every situation and surface, including paints, lacquers and varnishes. We also offer a
range of mixing machines and color concepts for the building and renovation industry.
The business units in the operating segment Decorative Paints are set up regionally, as the paints business
is managed per region. Refer to Note 4 Revenue for a disaggregation of revenues per region.
Performance Coatings
We are a supplier of performance coatings that protect and enhance ships, cars, aircraft, yachts and
architectural components (structural steel, building products, flooring), consumer goods (mobile devices,
appliances, beverage cans, furniture) and oil and gas facilities. The business units in the operating segment
Performance Coatings are set up per product/end market as the segment is managed based on product/
end market combinations. Refer to Note 4 Revenue for a disaggregation of revenues per product/end
market.
The tables in this Note include Alternative Performance Measures (APMs). For further information, refer to
the section Alternative Performance Measures in this Note.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
137
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Information per reportable segment
Revenue (third parties)
Organic sales growth*
Amortization and
depreciation
Operating income
Identified items
Adjusted operating
income
in € millions
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
Decorative Paints
4,300
4,301
2%
1%
(145)
(151)
500
405
—
(80)
500
485
Performance Coatings
6,368
6,410
2%
2%
(170)
(183)
698
679
13
(56)
685
735
Corporate and other
—
—
(42)
(37)
(169)
(167)
(58)
(60)
(111)
(107)
Total
10,668
10,711
2%
2%
(357)
(371)
1,029
917
(45)
(196)
1,074
1,113
Information per reportable segment
Adjusted EBITDA
Adjusted EBITDA
margin %*
Invested capital
Total assets
Total liabilities
Capital expenditures
ROI%*
in € millions
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
Decorative Paints
645
635
15.0
14.8
3,650
3,850
5,835
5,770
1,604
1,302
99
87
13.3
12.4
Performance Coatings
854
913
13.4
14.2
3,641
3,679
6,294
6,224
2,213
2,156
165
197
18.4
19.5
Corporate and other
(70)
(70)
555
745
2,429
2,255
6,195
5,975
22
22
Total
1,429
1,478
13.4
13.8
7,846
8,274
14,558
14,249
10,012
9,433
286
306
13.0
13.3
* Organic sales growth, Adjusted EBITDA margin and ROI% for Corporate and other is not shown, as this is not meaningful.
Regional information
Revenue by region of destination
Intangible assets and property, plant and
equipment
Invested capital
Capital expenditures
in € millions
2023
2024
2023
2024
2023
2024
2023
2024
The Netherlands
315
329
1,210
1,201
1,984
1,783
34
39
Other EMEA countries
4,672
4,727
1,730
1,770
2,474
2,764
102
121
North Asia
1,720
1,668
1,165
1,184
993
1,030
36
34
South Asia Pacific
1,304
1,311
523
554
597
720
63
37
North America
1,379
1,363
631
687
775
962
29
55
Latin America
1,278
1,313
816
775
1,023
1,015
22
20
Total
10,668
10,711
6,075
6,171
7,846
8,274
286
306
Strategy | Sustainability |
Leadership and governance
|
Financial statements
138
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Alternative Performance Measures
In presenting and discussing AkzoNobel’s (segmental) operating results, management uses certain
Alternative Performance Measures not defined by IFRS accounting standards, which exclude the so-called
identified items. ldentified items are special charges and benefits, results on acquisitions and divestments,
major restructuring and impairment charges, charges and benefits related to major legal, environmental
and tax cases, and hyperinflation accounting adjustments for inventory positions that exceed normal
operational levels.
As of 2024, identified items include hyperinflation accounting adjustments for inventory positions that
exceed normal operational levels. Excluding these removes the excessive shifts between financing income
and operating income and as such provides a clearer view of business performance in hyperinflationary
environments. Prior period figures have not been restated, as the impact was immaterial.
These Alternative Performance Measures should not be viewed in isolation as alternatives to the equivalent
IFRS measures and should be used as supplementary information in conjunction with the most directly
comparable IFRS measures. Alternative Performance Measures do not have a standardized meaning under
IFRS accounting standards and therefore may not be comparable to similar measures presented by other
companies. Where a non-financial measure is used to calculate an operational or statistical ratio, this ratio
is also considered an Alternative Performance Measure.
A reconciliation of the Alternative Performance Measures to the most directly comparable IFRS measures
can be found in the tables in the remainder of this Note, for those Alternative Performance Measures which
are used to assess segment performance.
Alternative Performance Measures related to overall AkzoNobel performance have been included in the
respective notes to the most directly comparable IFRS measures:
• Adjusted earnings per share, Note 9 Earnings per share
• Free cash flow, Note 22 Cash flow
• Leverage ratio and net debt, Note 26 Financial risk management
Adjusted EBITDA and Adjusted operating income
Adjusted EBITDA is operating income excluding depreciation, amortization and identified items. Adjusted
operating income is operating income excluding identified items. The measures are used to evaluate the
performance of the company and its segments. By excluding identified items, the comparability of the
operational results increases and financial performance can be evaluated more effectively. Management
sees adjusted EBITDA and adjusted operating income as appropriate measures for (segment)
performance.
2023
2024
Decorative
Paints
Perf.
Coatings
Other
activities
Total in € millions
Decorative
Paints
Perf.
Coatings
Other
activities
Total
500
698
(169)
1,029 Operating income
405
679
(167)
917
(20)
(30)
(30)
(80) Restructuring-related costs
(51)
(48)
(45)
(144)
21
49
(27)
43
Acquisition/divestment-related
results
(12)
(2)
(9)
(23)
—
—
—
— Hyperinflation
(15)
(4)
—
(19)
(1)
(6)
(1)
(8) Other
(2)
(2)
(6)
(10)
—
13
(58)
(45) Total identified items
(80)
(56)
(60)
(196)
500
685
(111)
1,074 Adjusted operating income
485
735
(107)
1,113
(145)
(169)
(41)
(355) Depreciation and amortization*
(150)
(178)
(37)
(365)
645
854
(70)
1,429 Adjusted EBITDA
635
913
(70)
1,478
* Excluding identified items.
Restructuring-related costs
Restructuring-related costs primarily relate to costs for accruals for certain employee benefits and for other
costs which are directly associated with plans to exit or cease specific activities, closing down of facilities
and right-sizing the organization.
In 2024, the restructuring-related costs primarily included costs for the industrial excellence and profitable
growth plan programs, whereas in 2023, the costs included various restructuring programs.
Acquisition/divestment-related results
Acquisition/divestment-related results include all results on acquisitions and divestments of businesses,
costs directly related to such acquisitions and divestments, and post-merger integration costs. It also
includes results of divestments not being part of a business divestment when certain materiality thresholds
are met.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
139
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
In 2024, these costs mainly relate to post-merger integration costs for Huarun and Grupo Orbis, whereas
in 2023 they primarily related to the gains on the divestment of the Offenbach site in Germany and the
Bangkok site in Thailand.
Hyperinflation
Hyperinflation relates to the hyperinflation accounting impact of inventory positions that exceed normal
operational levels. This adjustment is included as from 2024. Prior period figures have not been restated,
as the impact for prior periods was immaterial.
Adjusted EBITDA margin
Adjusted EBITDA margin is an operational profit margin. Adjusted EBITDA margin is adjusted EBITDA as a
percentage of revenue. The measure provides a clear picture of (the development of) profitability.
Adjusted EBITDA margin
in € millions
2023
2024
Revenue from third parties
Decorative Paints
4,300
4,301
Performance Coatings
6,368
6,410
Corporate and other
—
—
Total
10,668
10,711
Adjusted EBITDA
Decorative Paints
645
635
Performance Coatings
854
913
Corporate and other
(70)
(70)
Total
1,429
1,478
Adjusted EBITDA margin%
Decorative Paints
15.0
14.8
Performance Coatings
13.4
14.2
Corporate and other*
Total
13.4
13.8
* Adjusted EBITDA margin for Corporate and other is not shown, as this is not meaningful.
(Average) invested capital and Return on Investment (ROI)
Average invested capital is the average of the quarter-end invested capital balances for the last four
quarters. Invested capital is total assets (excluding cash and cash equivalents, short-term investments,
investments in associates, pension assets, and assets held for sale) less current tax liabilities, deferred tax
liabilities, and trade and other payables.
ROI is adjusted operating income of the last 12 months as a percentage of average invested capital.
Management uses ROI to assess the efficiency of investments and make informed decisions on how to
allocate capital to maximize returns and drive long-term growth.
ROI%
in € millions
2023
2024
Average invested capital
Decorative Paints
3,755
3,921
Performance Coatings
3,725
3,773
Corporate and other
753
656
Total
8,233
8,350
Adjusted operating income
Decorative Paints
500
485
Performance Coatings
685
735
Corporate and other
(111)
(107)
Total
1,074
1,113
ROI%
Decorative Paints
13.3
12.4
Performance Coatings
18.4
19.5
Corporate and other*
Total
13.0
13.3
* ROI% for Corporate and other is not shown, as this is not meaningful.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
140
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Invested capital
2023
2024
in € millions
Note
Decorative Paints
Performance
Coatings
Corporate and
Other
Total
Decorative Paints
Performance
Coatings
Corporate and
Other
Total
Intangible assets
10
2,465
1,511
105
4,081
2,445
1,514
90
4,049
Property, plant and equipment
11
828
1,133
33
1,994
819
1,270
33
2,122
Right-of-use assets
12
159
85
58
302
169
87
62
318
Deferred tax assets
8
96
115
301
512
71
98
253
422
Financial non-current assets (excluding pension assets)
14
34
174
184
392
43
141
161
345
Working capital*
314
672
136
1,122
544
616
349
1,509
Deferred tax liabilities
8
(246)
(49)
(262)
(557)
(241)
(47)
(203)
(491)
Invested capital
3,650
3,641
555
7,846
3,850
3,679
745
8,274
* (Working capital contains inventories, trade and other receivables, trade and other payables, current tax assets and current tax liabilities.
Organic sales development
Organic sales development excludes the impact of changes in consolidation, the impact of changes in
foreign exchange rates and the impact of hyperinflation accounting. The impact of changes in foreign
exchange rates is calculated by retranslating the prior year local currency amounts into euros at the current
year’s foreign exchange rates. Organic sales development provides a better understanding of underlying
revenue growth factors. The table below provides a reconciliation between organic sales development and
revenue development.
Organic sales development 2024
in % versus 2023
Volume
Price/mix
Organic
sales
Acq./div
FX
Other
Revenue
Decorative Paints
— %
1 %
1 %
1 %
(1) %
(1) %
— %
Performance Coatings
2 %
— %
2 %
— %
(1) %
— %
1 %
Total
1 %
1 %
2 %
— %
(1) %
(1) %
— %
Organic sales development 2023
in % versus 2022
Volume
Price/mix
Organic
sales
Acq./div
FX
Other
Revenue
Decorative Paints
— %
4 %
4 %
2 %
(7) %
— %
(1) %
Performance Coatings
— %
4 %
4 %
1 %
(6) %
(1) %
(2) %
Total
— %
4 %
4 %
2 %
(7) %
(1) %
(2) %
Capital expenditures
Capital expenditures is the total of investments in property, plant and equipment and investments in
intangible assets. Reporting on capital expenditures gives insight into the investment in long-term assets.
Capital expenditures
2023
2024
in € millions
Investments
in PP&E
Investments
in Intangible
assets
Capital
expenditures
Investments
in PP&E
Investments
in Intangible
assets
Capital
expenditures
Decorative Paints
97
—
97
87
—
87
Performance Coatings
163
3
166
190
7
197
Corporate and other
5
18
23
5
17
22
Total
265
21
286
282
24
306
Strategy | Sustainability |
Leadership and governance
|
Financial statements
141
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 4: Revenue
Accounting policies
Sale of goods
AkzoNobel's main business consists of straightforward selling of goods (paints and coatings) to
customers at contractually determined prices and conditions without any additional services. Although
the transfer of risks and rewards is not the only criterion to be considered to determine whether
control over the goods has transferred, it is in most situations considered to be the main indicator of
the customer's ability to direct the use of, and obtain the benefits from the asset, and largely also
coincides with the physical transfer of the goods and the obligation of the customer to pay.
Variable considerations, including among others rebates, bonuses, discounts and payments to
customers, are accrued for as performance obligations are satisfied and revenue is recognized.
Variable considerations are only recognized when it is highly probable that these are not subject to
significant reversal.
In case of expected returns, revenue is not recognized for such products. Instead, we record a liability
for the refund and an asset for the products that will be returned. A provision for warranties is
recognized when the underlying products or services are sold, generally based on historical warranty
data. Revenue is recognized net of rebates, discounts and similar allowances, and net of sales tax.
Equipment provided to customers
AkzoNobel regularly provides mixing machines, store interior and other assets to its customers at the
start of a paints or coatings delivery contract. The delivery of such assets qualifies as a separate
performance obligation. Revenue can only be recognized at the moment of transfer of such assets,
when there is an agreed sales price or when there is a binding take-or-pay commitment for a minimum
quantity of paints or coatings to be purchased by the customer.
Services
AkzoNobel provides certain training, technical and/or support services to customers, as well as
shipping and handling activities for its customers. Service revenue is recognized over time when the
related services are being provided. When not separately invoiced, part of the sales price of paints or
coatings is allocated to such services.
General
The major product lines and geographical regions are as disclosed in the table in this Note.
For the receivables, which are included in Trade and other receivables, reference is made to Note 16 Trade
and other receivables.
As at December 31, 2024, and at December 31, 2023, no significant contract assets were recognized.
As at December 31, 2024, the amount of contract liabilities deferred to be recognized over time in 2025
was €4 million (2023: €4 million). These contract liabilities primarily relate to shipping, training and certain
technical services, for which revenue is recognized over time. The amount of €4 million included in contract
liabilities at the beginning of the period has been recognized as revenue during the year 2024 (2023: €4
million).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
142
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Revenue disaggregation
Decorative Paints
Performance Coatings
Total
in € millions
2023
2024
2023
2024
2023
2024
Primary geographical markets - revenue from third parties
The Netherlands
214
222
101
107
315
329
Other EMEA countries
2,199
2,240
2,473
2,487
4,672
4,727
North Asia
543
459
1,177
1,209
1,720
1,668
South Asia Pacific
564
555
740
756
1,304
1,311
North America
—
—
1,379
1,363
1,379
1,363
Latin America
780
825
498
488
1,278
1,313
Total
4,300
4,301
6,368
6,410
10,668
10,711
Major goods/service lines - revenue from third parties
Decorative Paints Europe, Middle East and Africa
2,413
2,462
—
—
2,413
2,462
Decorative Paints Latin America
780
825
—
—
780
825
Decorative Paints China and North Asia
543
459
—
—
543
459
Decorative Paints South East and South Asia
564
555
—
—
564
555
Powder Coatings
—
—
1,377
1,365
1,377
1,365
Marine and Protective Coatings
—
—
1,482
1,575
1,482
1,575
Automotive and Specialty Coatings
—
—
1,422
1,434
1,422
1,434
Industrial Coatings
—
—
2,087
2,036
2,087
2,036
Corporate and other
—
—
—
—
—
—
Total
4,300
4,301
6,368
6,410
10,668
10,711
Timing of revenue recognition - revenue from third parties
Goods transferred at a point in time
4,220
4,237
6,169
6,196
10,389
10,433
Services transferred over time
80
64
199
214
279
278
Total
4,300
4,301
6,368
6,410
10,668
10,711
Strategy | Sustainability |
Leadership and governance
|
Financial statements
143
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 5: Operating income
Accounting policies
Operating income is the income generated from our core business activities, before financing
income and expenses, results from associates and income tax. Operating income includes identified
items.
Cost of sales
Cost of sales comprises the costs of purchase, conversion and other costs incurred to bring the
products sold into the condition and location to be ready for sale. This includes the cost of raw
materials, labor, warehousing of raw materials, production overhead and changes in inventory
provisions for raw materials and semi-finished goods.
Selling and distribution expenses
Selling and distribution expenses comprise the costs associated with promoting and selling
products or services, as well as delivering them to customers. These costs include sales, marketing,
distribution, warehousing of finished goods, supply chain management costs and changes in
inventory provisions related to finished goods.
General and administrative expenses
General and administrative expenses include costs for support functions and other general and
administrative expenses.
Research and development expenses
Research and development expenses include costs incurred in the process of developing new
products, or improving existing products. Development costs are capitalized as an internally
generated intangible asset, if it is probable that sufficient future economic benefits will be generated
by the development.
Other results
Other results include items not considered to be normal operational items (from ordinary activities); it
includes gains and losses that cannot be reported in any of the categories above, amongst others
impairment of goodwill and results on certain divestments.
Development of operating income
Operating income at €917 million (2023: €1,029 million) was impacted by €196 million negative identified
items, mainly related to restructuring related costs (2023: €45 million negative, which also included gains
from property divestments). Excluding these items, gross margin expansion more than offset operating
cost inflation.
Refer to Note 3, section Alternative Performance Measures, for more details on restructuring related costs
and acquisitions/divestments.
Costs by nature 2024
in € millions
Employee
benefits Amortization Depreciation
Purchases
and
other costs
Total
Cost of sales
(583)
(1)
(166)
(5,624)
(6,374)
Selling and distribution expenses
(1,078)
(51)
(94)
(1,240)
(2,463)
General and administrative expenses
(293)
(21)
(18)
(323)
(655)
Research and development expenses
(209)
(5)
(15)
(67)
(296)
Other results
—
—
—
(6)
(6)
Total
(2,163)
(78)
(293)
(7,260)
(9,794)
Costs by nature 2023
in € millions
Employee
benefits Amortization Depreciation
Purchases
and
other costs
Total
Cost of sales
(550)
(1)
(150)
(5,733)
(6,434)
Selling and distribution expenses
(991)
(52)
(94)
(1,210)
(2,347)
General and administrative expenses
(279)
(22)
(19)
(328)
(648)
Research and development expenses
(186)
(5)
(14)
(65)
(270)
Other results
(2)
—
—
62
60
Total
(2,008)
(80)
(277)
(7,274)
(9,639)
Strategy | Sustainability |
Leadership and governance
|
Financial statements
144
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 6: Employee benefits
Accounting policies
Salaries and wages are recognized in the statement of profit and loss in the period when an
employee has rendered services to AkzoNobel.
The accounting policies for post-retirement costs are described in Note 18 Post-retirement benefit
provisions.
AkzoNobel has a performance-related and a restricted share plan, as well as a share-matching plan,
under which equity-settled shares are granted to certain employees. The fair value is measured at
grant date and amortized over the three-year period during which the employees normally become
unconditionally entitled to the shares with a corresponding increase in shareholders' equity.
Amortization is accelerated in the event of earlier vesting or settlement.
Salaries, wages and other employee benefits
Salaries and wages increased in 2024, mainly due to wage bill inflation and an increase in severance costs.
Salaries, wages and other employee benefits in operating income
in € millions
2023
2024
Salaries and wages
(1,573)
(1,702)
Post-retirement cost
(138)
(145)
Other social charges
(297)
(316)
Total
(2,008)
(2,163)
Share-based compensation
Share-based compensation relates to the equity-settled performance-related share plan and the restricted
share plans, as well as the share-matching plan. Charges recognized in the 2024 statement of income for
share-based compensation amounted to €23 million and are included in salaries and wages (2023: €18
million).
Performance-related and restricted share plans
Under the performance-related share plan and the restricted share plans, a number of conditional shares
are granted to the members of the Board of Management, members of the Executive Committee,
executives and certain other employee categories each year. The number of participants of the
performance-related share plan and the restricted share plans at year-end 2024 was 694 (2023: 666). The
shares of the performance-related and restricted share plan series 2021-2023 have vested and were
delivered to the participants in 2024.
The performance targets for the conditional grant of performance-related shares of the Board of
Management and the Executive Committee (series 2022-2024 and 2023-2025) are linked to revenue
growth (20%), adjusted EBITDA (40%), ROI ( 20%), and Environmental, Social and Governance (ESG) KPIs
(20%). The performance targets for the conditional grant of performance-related shares of the Board of
Management, the Executive Committee, and the executives (series 2024-2026), are linked to adjusted
EBITDA (33%), ROI ( 33%), and Environmental, Social and Governance (ESG) KPIs (34%). For the Board of
Management and the Executive Committee, a two-year holding restriction after vesting applies. The
executives have no holding restriction.
The plans for the executives (series 2022-2024 and 2023-2025) and certain non-executive employee
categories are restricted share plans without any performance conditions, whereby the conditional grant of
shares will vest upon the condition that they remain in service with the company during the three-year
vesting period. A one-year holding restriction after vesting applies for the executives.
The conditional shares of the 2022-2024 performance share plan for the AkzoNobel participants vested for
112.35% (series 2021-2023: 12.30%), including dividend shares of 8.76% (series 2021-2023: 7.42%), the
final vesting percentage amounted to 122.19% (series 2021-2023: 13.21%).
The share price of a common AkzoNobel share at year end 2024 amounted to €57.96 (2023: €74.82).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
145
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Fair value of performance-related and restricted shares
The fair value of the performance shares of the 2024-2026 grant to executives, amounting to €63.75, is
based on the opening share price on April 2, 2024, of €69.52 and the expected dividend yield of 2.85%.
The fair value of the restricted shares of the 2024-2026 grant to non-executives, amounting to €50.87, is
based on the opening share price on July 1, 2024, of €56.60 and the expected dividend yield of 3.50%.
The fair value of the performance-related 2024-2026 grant for the Board of Management and the Executive
Committee, based on the opening share price on April 25, 2024, amounts to €62.80.
Fair value performance-related shares in €
Series
Opening share price per:
Fair Value5
Share price
Dividend yield
2021 - 2023
April 22, 20211
103.20
103.20
NA
2022 - 2024
February 23, 2022
88.28
88.28
NA
2022 - 2024
October 3, 20222
57.70
57.70
NA
2023 - 2025
February 23, 2023
69.26
69.26
NA
2023 - 2025
July 3, 20233
74.78
74.78
NA
2023 - 2025
January 2, 20243
74.82
74.82
NA
2024 - 2026
April 2, 2024
63.75
69.52
2.85 %
2024 - 2026
April 25, 20244
62.80
62.80
NA
1 Date of the AGM at which the new LTI performance criteria for the Board of Management were approved.
2 Date on which Mr. Poux-Guillaume started working for AkzoNobel.
3 Dates on which the member of the executive committee started working for AkzoNobel.
4 Date of the AGM at which the new LTI performance criteria for the Board of Management were approved.
5 No market conditions, hence the fair value is equal to share price taking into account dividend yield, if applicable.
Share-matching plan
The members of the Board of Management and the members of the Executive Committee are eligible to
participate in the share-matching plan. Under certain conditions, members who invest part of their short-
term incentive payment in AkzoNobel shares may have such shares matched by the company one-on-one.
During 2024, no potential matching shares were matched as the members of the Board of Management
and the members of the Executive Committee were not eligible for matching shares on the 2021 series. In
2024, the members of the Board of Management and the members of the Executive Committee invested
part of their 2023 short-term incentive in AkzoNobel shares, leading to 15,816 potential matching shares.
The total number of matching shares outstanding per December 31, 2024, is 19,329. For an overview of
the matching shares outstanding for the members of the Board of Management per December 31, 2024,
we refer to the Remuneration report.
Fair value of matching shares
The fair value of the matching shares of €61.59 was based on the opening share price on the investment
date of April 23, 2023, being €67.36, discounted for expected dividends over the vesting period (dividend
yield: 2.94%).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
146
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Share plans of AkzoNobel employees
Share plan
Performance/
Vesting
period
Award
date
Vesting
date
End of
holding
period
Balance at
January 1,
2024
Awarded
in 2024
Vested in
2024
Forfeited
in 2024
Dividend in
2024
Subject to
performance
condition
Unvested
in 2024
Subject to
holding
period
Balance at
December
31, 2024
2021 – 2023 Restricted Share Plan E*
3 years
1/4/2021
1/4/2024
1/4/2025
130,855
—
(130,707)
(148)
—
NA
—
130,707
—
2021 – 2023 Performance Share Plan
3 years
1/1/2021
1/1/2024
1/1/2026
8,663
—
(8,663)
—
—
—
—
8,663
—
2021 – 2023 Restricted Share Plan NE*
3 years
1/4/2021
1/4/2024
NA
24,020
—
(23,240)
(780)
—
NA
—
—
—
2022 – 2024 Restricted Share Plan E*
3 years
1/4/2022
1/4/2025
1/4/2026
143,425
173
(11,530)
(8,902)
—
NA
123,166
123,166
123,166
2022 – 2024 Performance Share Plan
3 years
1/1/2022
1/1/2025
1/1/2027
62,047
7,906
—
—
1,986
71,939
71,939
71,939
71,939
2022 – 2024 Restricted Share Plan NE*
3 years
1/4/2022
1/4/2025
NA
44,217
—
(696)
(2,765)
—
NA
40,756
—
40,756
2023 – 2025 Restricted Share Plan E*
3 years
1/4/2023
1/4/2026
1/4/2027
225,745
173
(8,284)
(25,476)
—
NA
192,158
192,158
192,158
2023 – 2025 Performance Share Plan
3 years
1/1/2023
1/1/2026
1/1/2028
104,795
8,196
—
—
3,850
116,841
116,841
116,841
116,841
2023 – 2025 Restricted Share Plan NE*
3 years
1/4/2023
1/4/2026
NA
63,025
—
(320)
(4,135)
—
NA
58,570
—
58,570
2024 – 2026 Performance Share Plan E*
3 years
2/4/2024
2/4/2027
NA
—
203,647
(410)
(21,838)
—
181,399
181,399
—
181,399
2024 – 2026 Performance Share Plan
3 years
1/1/2024
1/1/2027
1/1/2029
—
114,401
—
—
3,661
118,062
118,062
118,062
118,062
2024 – 2026 Restricted Share Plan NE*
3 years
2/4/2024
2/4/2027
NA
—
43,760
—
(540)
—
NA
43,220
—
43,220
Total
806,792
378,256
(183,850)
(64,584)
9,497
488,241
946,111
761,536
946,111
* E means executive plan; NE means non-executive plan.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
147
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Number of employees
Average number of employees during the year total AkzoNobel
In FTEs
2023
2024
Decorative Paints
14,000
14,100
Performance Coatings
17,600
17,800
Corporate and other
3,300
3,500
Total
34,900
35,400
Average number of employees during the year in the Netherlands
In FTEs
2023
2024
Decorative Paints
600
600
Performance Coatings
1,100
1,100
Corporate and other
700
700
Total
2,400
2,400
Number of employees at year-end
In FTEs
2023
2024
Decorative Paints
14,300
13,600
Performance Coatings
17,500
17,500
Corporate and other
3,400
3,500
Total
35,200
34,600
The average number of employees (in FTEs) working outside the Netherlands was 33,000 (2023: 32,500).
In 2024, the number of employees (in FTEs) decreased to 34,600 people (year-end 2023: 35,200 people).
Note 7: Financing income and expenses
Accounting policies
Net interest on net debt is measured using the effective interest method.
Financing income related to post-retirement benefits includes the interest on the net defined benefit
liability/asset. Interest on provisions contains the movement of provisions as a result of the passage
of time, as well as the impact from changes in discount rates.
Exchange rate results contain the FX results on derivatives, loans, receivables, payables and other
financial liabilities.
The gain or loss on net monetary position is a hyperinflation accounting metric and reflects the gain
or loss of purchase power by either having a net monetary liability or net monetary asset position. It
includes the restatement of non-monetary assets and liabilities, equity and items in the statement of
profit and loss.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Financing income and expenses
Financing income and expenses
in € millions
2023
2024
Net interest on net debt
Financing income
69
61
Financing expenses
(192)
(187)
Net interest on net debt
(123)
(126)
Other financing income and expenses
Financing income related to post-retirement benefits
33
27
Interest on provisions
(1)
(3)
Exchange rate results
(128)
(47)
Hyperinflation: gain/(loss) on net monetary position
(46)
15
Other items
(7)
32
Net other financing income and expenses
(149)
24
Total financing income and expenses
(272)
(102)
Net financing expenses for the year were €102 million (2023: €272 million). Significant variances include:
• Exchange rate results were negative €47 million (2023: negative €128 million). In 2023, these contained
€36 million negative result on cash flow hedging contracts, related to the previously anticipated
acquisition of Kansai Paints Africa (refer to Note 26 Financial risk management for more details); the
remainder of the decrease in exchange rate results is largely related to the Argentinian peso
• Hyperinflation: the net gain on monetary position was €15 million (2023: negative €46 million). The
change compared to prior year is the result of the company moving from a net monetary asset to a net
monetary liability position in hyperinflation economies
• Other items increased by €39 million, mainly due to the interest impact related to the release of
provisions for uncertain tax positions (refer to Note 8 Income tax for more details)
Interest income from financial assets measured at amortized cost (including the loan to Pension Fund APF
in the Netherlands) amounted to approximately €10 million in 2024 (2023: €5 million). The remainder was
generated by financial assets measured at fair value through profit and loss.
The average interest rate used for capitalized interest was 2.3% (2023: 2.1%). Capitalized interest was
negligible in both 2024 and 2023. The average interest rate on total debt was 3.4% (2023: 3.2%).
Impact hyperinflation accounting
The impact of the application of hyperinflation accounting and the use of end of period rates to translate
the statement of the income statement, is shown in the table below.
Hyperinflation accounting
in € millions
2023
2024
Revenue
(64)
67
Operating income
(54)
(47)
Net interest on net debt
17
—
Exchange rate results
54
(3)
Hyperinflation: gain/(loss) on net monetary position
(46)
15
Financing income and expenses
25
12
Profit before tax
(29)
(35)
Income tax
(48)
(18)
Profit for the period
(77)
(53)
Attributable to
Shareholders of the company
(65)
(43)
Non-controlling interests
(12)
(10)
Strategy | Sustainability |
Leadership and governance
|
Financial statements
149
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 8: Income tax
Accounting policies
Income tax expenses comprise both current and deferred tax, including the effects of changes in
tax rates. In determining the amount of current and deferred tax, we also take into account the
impact of uncertain tax positions and whether additional taxes may be due. Income tax is
recognized in the statement of income, unless it relates to items recognized in other comprehensive
income or equity.
Current tax includes the expected tax payable and receivable on the taxable income for the year,
using tax rates enacted or substantively enacted at reporting date, as well as (any adjustments to)
tax payables and receivables with respect to previous years.
Deferred tax is recognized using the liability method on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the Consolidated financial
statements. We do not recognize deferred tax for the initial recognition of goodwill, the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences
related to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future and we can control the timing of the reversal of the temporary difference.
Deferred tax assets are recognized for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which
they can be utilized.
AkzoNobel has applied the exemption for recognizing and disclosing information about deferred tax
assets and liabilities related to Pillar Two income taxes.
Measurement of deferred tax assets and liabilities is based upon the enacted or substantively
enacted tax rates expected to apply to taxable income in the years in which temporary differences
are expected to be reversed. Deferred tax positions are not discounted.
Accounting estimates and judgments
Recoverability of deferred tax assets
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income against which the deductible temporary differences, unused tax losses and unused tax
credits can be utilized. Significant judgment is involved in determining this future taxable income.
When assessing the recognition of deferred tax assets, management considers whether it is
probable that some portion or all of the deferred tax assets will be realized. Management considers
the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.
More details on the estimates and judgments related to the recoverability of deferred tax assets can
be found in the respective section of this Note.
Uncertain tax positions
Liabilities for uncertain tax positions are recognized if and to the extent it is probable that additional
taxes will become due, and the amount can be measured reliably.
Significant judgment is involved in the determination of such liabilities. Probability is assessed by
applying interpretation of legislation and relevant case law.
More details on the estimates and judgments related to uncertain tax positions can be found in the
respective section of this Note.
Effective tax rate
Pre-tax income from continuing operations for the year amounted to a profit of €838 million (2023: €784
million). The net tax charges related to continuing operations are included in the statement of income as
shown in this Note and amount to €246 million (2023: €296 million), leading to an effective tax rate of
29.4% (2023: 37.8%).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Classification of current and deferred tax result
A breakdown into current and deferred tax expenses and a split of the main categories is provided in the
table below.
Classification of current and deferred tax result
in € millions
2023
2024
Current tax expense for
The year
(277)
(259)
Adjustments for previous years
(28)
62
Total current tax expense
(305)
(197)
Deferred tax expense for
Origination and reversal of temporary differences and tax losses
57
14
(Derecognition)/recognition of deferred tax assets
(47)
(64)
Changes in tax rates
(1)
1
Total deferred tax expense
9
(49)
Total
(296)
(246)
Adjustments for previous years in 2024 were mainly related to the release of provisions for uncertain tax
positions, while in 2023 adjustments for prior years mainly related to true-ups as a result of tax audits.
Origination and reversal of temporary differences and tax losses is driven, among others, by timing
differences between recognition and payments for provisions, timing differences on depreciation and
amortization for tax purposes versus the consolidated financial statements and tax loss carryforwards
utilized against profits of the year or new tax losses incurred.
The derecognition of deferred tax assets in 2024 and 2023 mainly relates to technical tax limitations to
deduct interest. In 2024, it also includes the derecognition of tax losses carried forward outside of the
Netherlands, that could no longer be recognized because of reduced future interest income due to
(planned) repatriation of funds to The Netherlands.
Effective tax rate reconciliation
In 2024, the effective income tax rate based on the statement of income was 29.4% (2023: 37.8%). A
reconciliation between the effective tax rate and the weighted average statutory income tax rate is provided
in the table.
Effective tax rate reconciliation
in %
2023
2024
Corporate tax rate in the Netherlands
25.8
25.8
Effect of tax rates in other countries
(1.7)
(0.8)
Weighted average statutory income tax rate
24.1
25.0
Non-taxable income
(2.8)
(2.6)
Non-deductible expenses
2.2
1.6
Non-refundable withholding taxes
1.4
1.8
(Recognition)/derecognition of deferred tax assets
6.0
7.6
Adjustments for previous years
3.5
(7.4)
Hyperinflation impact
3.2
3.5
Deferred tax adjustment due to changes in tax rates
0.2
(0.1)
Effective tax rate
37.8
29.4
Non-taxable income in both 2024 and 2023 was mainly related to incentives in various countries.
Non-deductible expenses are related to certain non-deductible costs in various countries.
The impact of non-refundable withholding tax on the tax rate is dependent on our relative share in the profit
of subsidiaries in countries that levy withholding tax on dividends and on the timing of the remittance of
such dividends. Based on the Dutch tax system there is a limited credit for such taxes.
The derecognition of deferred tax assets in 2024 and 2023 mainly relates to technical tax limitations to
deduct interest. In 2024, it also includes the derecognition of tax losses carried forward that could no
longer be recognized because of reduced future interest income due to (planned) repatriation of funds to
the Netherlands.
Adjustments for previous years in 2024 were mainly related to the release of provisions for uncertain tax
positions, while in 2023 adjustments for prior years mainly related to true-ups as a result of tax audits.
The net effect of hyperinflation accounting in Argentina and Türkiye combined in 2024 is an increase in tax
rate of 3.5% (2023: 3.2%). This mainly relates to the restatement of reserves, which results in a non-
taxable, non-cash impact on the effective tax rate.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
151
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Origination of deferred tax assets and liabilities
Deferred tax assets and liabilities originate from temporary differences in various balance sheet line items,
as well as from tax credits and tax loss carryforwards. The tables show the origination of deferred tax
assets and liabilities, and the movements thereof, for the financial years 2024 and 2023.
Origination of deferred tax assets and liabilities 2024
in € millions
Balance at January 1,
2024
Changes in exchange
rate
Recognized in
income
Recognized in
equity/Other
comprehensive
income
Acquisitions
Balance at
December 31, 2024
Intangible assets
(533)
1
4
—
—
(528)
Property, plant and equipment
49
1
(23)
—
—
27
Financial non-current assets
(247)
(12)
(6)
41
—
(224)
Post-retirement benefit provisions
85
—
(2)
(10)
—
73
Other provisions
28
—
(5)
—
—
23
Other items
91
—
6
—
—
97
Temporary differences
(527)
(10)
(26)
31
—
(532)
Tax credits
222
—
12
—
—
234
Tax loss carryforwards
260
4
(35)
—
—
229
Deferred tax assets (liabilities)
(45)
(6)
(49)
31
—
(69)
Origination of deferred tax assets and liabilities 2023
in € millions
Balance at January 1,
2023
Changes in exchange
rate
Recognized in
income
Recognized in
equity/Other
comprehensive
income
Acquisitions
Balance at
December 31, 2023
Intangible assets
(521)
9
(16)
—
(5)
(533)
Property, plant and equipment
57
17
(24)
—
(1)
49
Financial non-current assets
(272)
(4)
7
22
—
(247)
Post-retirement benefit provisions
76
—
(7)
16
—
85
Other provisions
25
(1)
4
—
—
28
Other items
126
(3)
(28)
(1)
(3)
91
Temporary differences
(509)
18
(64)
37
(9)
(527)
Tax credits
206
—
16
—
—
222
Tax loss carryforwards
240
(37)
57
—
—
260
Deferred tax assets (liabilities)
(63)
(19)
9
37
(9)
(45)
Strategy | Sustainability |
Leadership and governance
|
Financial statements
152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Reconciliation deferred tax assets and liabilities to the balance sheet
The table below provides a reconciliation of the total deferred tax amounts for each of the originating items
to the deferred tax asset and liability positions as included in the balance sheet.
Deferred tax assets and liabilities per balance sheet item
December 31, 2023
December 31, 2024
in € millions
Net balance
Assets
Liabilities
Net balance
Assets
Liabilities
Intangible assets
(533)
9
542
(528)
14
542
Property, plant and equipment
49
123
74
27
174
147
Financial non-current assets
(247)
11
258
(224)
14
238
Post-retirement benefit provisions
85
88
3
73
76
3
Other provisions
28
38
10
23
34
11
Other items
91
107
16
97
118
21
Temporary differences
(527)
376
903
(532)
430
962
Tax credits
222
222
—
234
234
—
Tax loss carryforwards
260
260
—
229
229
—
Tax assets/liabilities
(45)
858
903
(69)
893
962
Set-off of tax
—
(346)
(346)
—
(471)
(471)
Net deferred tax positions
(45)
512
557
(69)
422
491
Deferred tax assets recoverability assessment
The projections used to assess recoverability are, in general, based on a projection of ten years. Specific
facts and circumstances per country may lead to shorter or longer projection periods being used. Growth
in profitability is projected using GDP growth, adjusting for specific factors affecting profitability of our
operations within the country.
The amount of deferred tax assets considered realizable could change if future estimates of projected
taxable income during the carryforward period, or other variables, are revised. The majority of the amount
of the non-current portion of deferred and current taxes will be recovered or settled after more than
12 months.
The derecognition of deferred tax assets in 2024 and 2023 mainly relates to technical tax limitations to
deduct interest. In 2024, it also includes the derecognition of tax losses carried forward that could no
longer be recognized because of reduced future interest income due to (planned) repatriation of funds to
the Netherlands.
At year-end 2024, approximately 75% (2023: approximately 70%) of the recognized deferred assets
concerned the UK, the Netherlands and Germany.
The vast majority of the tax credits of €234 million (2023: €222 million) is related to withholding tax credits
in the Netherlands. While we expect that we are able to generate sufficient profits in the Dutch fiscal unity
to realize these credits, the amount which can be utilized per year is limited due to additional criteria which
apply for tax credit utilization. As these tax credits have an unlimited expiration period, we have applied a
projection period beyond our normal 10-year horizon.
From the total amount of recognized net deferred tax assets, €102 million (2023: €151 million) is related to
entities that have suffered a loss in either the current or the previous year and where utilization is
dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable
temporary differences. This assessment is based on management’s long-term projections and tax planning
strategies.
In 2024 and 2023, deferred tax assets not recognized include €638 million of tax loss carryforwards (2023:
€548 million) and €74 million of non-deductible interest (2023: €44 million). The losses in the tables on tax
losses carried forward hereafter are gross amounts, with the tax impact included in the last column of the
table.
A deferred tax liability is recognized for taxable temporary differences related to investments in subsidiaries,
branches and associates and interests in joint arrangements, to the extent that it is probable that these will
reverse in the foreseeable future. The expected net tax impact of the remaining differences for which no
deferred tax liabilities have been recognized is €56 million (2023: €47 million).
Strategy | Sustainability |
Leadership and governance
|
Financial statements
153
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Expiration year of loss carryforwards 2024
in € millions
2025
2026
2027
2028
2029
Later
Unlimited
Total Deferred tax
Total loss carryforwards
1
4
6
59
26
40
3,149
3,285
844
Loss carryforwards not recognized in deferred tax assets
(1)
(1)
(5)
(10)
(11)
(27)
(2,389)
(2,444)
(615)
Total loss carryforwards recognized
—
3
1
49
15
13
760
841
229
Expiration year of loss carryforwards 2023
in € millions
2024
2025
2026
2027
2028
Later
Unlimited
Total Deferred tax
Total loss carryforwards
1
1
4
5
76
51
3,009
3,147
808
Loss carryforwards not recognized in deferred tax assets
—
—
(1)
(1)
(1)
(17)
(2,153)
(2,173)
(548)
Total loss carryforwards recognized
1
1
3
4
75
34
856
974
260
Uncertain tax positions
Our assessments of uncertain tax positions are based on our best estimate of how the tax authorities
concerned are likely to evaluate and respond to the cases in question, taking into account expert advice.
Uncertain tax positions for which liabilities have been recorded, mainly relate to international transfer pricing
and deductibility of expenses.
In certain cases, uncertain tax positions are related to disputes with tax authorities. Such cases are usually
strongly contested and defended by the company, often assisted by outside counsel and/or experts.
Impact OECD Pillar Two framework
AkzoNobel is within the scope of the OECD Pillar Two rules. Pillar Two legislation was enacted in the
Netherlands, and is effective for AkzoNobel as of January 1, 2024. The 2024 current tax expense related to
Pillar Two is approximately €1 million, which is attributable to earnings in a limited number of countries.
Income tax recognized in equity
The following table shows income tax items recognized in equity by category.
Income tax recognized in equity
in € millions
2023
2024
Currency exchange differences on intercompany loans of a permanent nature
(1)
—
Share-based compensation
(1)
—
Post-retirement benefits
38
31
Total
36
31
Current tax
(1)
1
Deferred tax
37
30
Total
36
31
Strategy | Sustainability |
Leadership and governance
|
Financial statements
154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 9: Earnings per share
Accounting policies
Basic earnings per share is calculated by dividing the profit for the period attributable to
shareholders of the company by the weighted average number of common shares outstanding
during the year, adjusted for any repurchased shares.
Diluted earnings per share is calculated by adjusting the weighted average number of common
shares outstanding during the year for the diluting effect of the shares of the performance-related
share plan, the restricted share plan and the share-matching plan.
Adjusted earnings per share represents the basic earnings per share from continuing operations
excluding identified items, after taxes.
General
Profit for the period attributable to the shareholders of the company was €542 million (2023: €442 million).
Profit for the period
in € millions
2023
2024
Profit before tax from continuing operations
784
838
Income tax
(296)
(246)
Profit from continuing operations
488
592
Profit for the period attributable to non-controlling interests
(41)
(50)
Profit for the period from continuing operations attributable to shareholders of the
company
447
542
Profit for the period from discontinued operations attributable to shareholders of the company
(5)
—
Profit for the period attributable to shareholders of the company
442
542
Weighted average number of common shares
Number of shares
2023
2024
Issued common shares at January 1
170,428,331 170,600,675
Effect of issued common shares during the year
145,224
128,195
Shares for basic earnings per share for the year
170,573,555 170,728,870
Effect of dilutive shares
For performance-related and restricted shares
761,918
871,692
For share-matching plan
3,283
12,313
Shares for diluted earnings per share
171,338,756 171,612,875
Earnings per share
in €
2023
2024
Continuing operations
Basic
2.62
3.17
Diluted
2.61
3.16
Discontinued operations
Basic
(0.03)
0.00
Diluted
(0.03)
0.00
Total operations
Basic
2.59
3.17
Diluted
2.58
3.16
Strategy | Sustainability |
Leadership and governance
|
Financial statements
155
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Adjusted earnings per share
Adjusted earnings per share is an Alternative Performance Measure used to provide additional insight into
the underlying profitability of the company. It helps comparing performance over time, as well as to industry
benchmarks and peers. For more details on Alternative Performance Measures refer to Note 3, section
Alternative Performance Measures.
Adjusted earnings per share*
in € millions
2023
2024
Profit for the period attributable to shareholders of the company from continuing operations
488
592
APM adjustments to operating income
45
196
APM adjustments to interest
44
(21)
APM adjustments to income tax
(13)
(54)
Non-controlling interests
(41)
(50)
Adjusted profit from continuing operations attributable to shareholders of the company*
523
663
Weighted average number of shares (in millions)
170.6
170.7
Adjusted earnings per share from continuing operations (in €)
3.07
3.88
* Refer to the glossary for definitions of the APMs.
Adjustments to operating income
For details on the adjustments to operating income, refer to Note 3, section Alternative Performance
Measures.
Adjustments to interest
Adjustments to interest include the interest impact of identified items, amongst others the impact of
discounting of provisions related to identified items, and hyperinflation accounting impact.
In 2024, these adjustments mainly related the hyperinflation accounting impact of inventory positions that
exceed normal operational levels.
Adjustments to interest in 2023 mainly related to the wind down of the cash flow hedges related to the
previously anticipated acquisition of Kansai Paints Africa. Refer to Note 26 Financial risk management for
more details.
Adjustments to income tax
Adjustments to income tax include the tax impact of identified items as well as certain specific income tax
identified items, for example the ACT case. The UK ACT case is a group litigation case the company
participates in (“Franked Investment Income litigation/case”; filed in 2003) in order to seek recovery of
Advance Corporation Tax.
In 2024, adjustments to income tax mainly related to the tax impact on the identified items included in
interest and operating income. Further, €14 million related to the ACT case.
In 2023, adjustments to income tax amounted to a net tax charge of €13 million, which mainly related to
the tax impact on the identified items included in interest and operating income.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 10: Intangible assets
Intangible assets
in € millions
Goodwill
Brands
Customer lists
Other intangibles
Total
Balance at January 1, 2023
Cost of acquisition
1,405
2,288
1,127
179
4,999
Cost of internally developed intangibles
—
—
—
268
268
Accumulated amortization/impairment
(28)
(223)
(654)
(290)
(1,195)
Carrying value at January 1, 2023
1,377
2,065
473
157
4,072
Movements in 2023
Acquisitions through business combinations
34
16
26
(4)
72
Investments - including internally developed intangibles
—
—
—
21
21
Amortization
—
(17)
(31)
(32)
(80)
Impairments, including reversals thereof
—
—
—
(1)
(1)
Hyperinflation adjustment
10
17
—
—
27
Changes in exchange rates
9
(64)
23
2
(30)
Total movements
53
(48)
18
(14)
9
Balance at December 31, 2023
Cost of acquisition
1,458
2,255
1,151
180
5,044
Cost of internally developed intangibles
—
—
—
273
273
Accumulated amortization/impairment
(28)
(238)
(660)
(310)
(1,236)
Carrying value at December 31, 2023
1,430
2,017
491
143
4,081
Movements in 2024
Acquisitions through business combinations
3
—
(1)
—
2
Investments - including internally developed intangibles
—
—
—
24
24
Amortization
—
(17)
(32)
(29)
(78)
Hyperinflation adjustment
5
10
—
—
15
Changes in exchange rates
5
11
(8)
(3)
5
Total movements
13
4
(41)
(8)
(32)
Balance at December 31, 2024
Cost of acquisition
1,472
2,274
1,136
190
5,072
Cost of internally developed intangibles
—
—
—
287
287
Accumulated amortization/impairment
(29)
(253)
(686)
(342)
(1,310)
Carrying value at December 31, 2024
1,443
2,021
450
135
4,049
Strategy | Sustainability |
Leadership and governance
|
Financial statements
157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Accounting policies
Intangible assets are valued at cost less accumulated amortization and impairment charges.
Intangible assets with an indefinite useful life, such as goodwill and certain brands, are not
amortized, but tested for impairment annually.
Intangible assets with a finite useful life, such as licenses, know-how, certain brands, customer
relationships, intellectual property rights, software expenditures (in as far as AkzoNobel controls the
software configured or customized) and capitalized development costs, are capitalized at historical
cost and amortized on a straight-line basis over the estimated useful life of the assets, which
generally ranges from 5 to 40 years for brands with finite useful lives, 5 to 25 years for customer
relationships, and 3 to 15 years for other intangibles. Amortization methods, useful lives and residual
values are reassessed annually.
Research expenditures are expensed as incurred.
Impairment
We assess the carrying value of intangible assets, property, plant and equipment and right-of-use
assets whenever events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable as a result of e.g. changes in cash flow forecasts, damages, market
developments or environmental and climate change risks. In addition, for goodwill and other
intangible assets with an indefinite useful life, the carrying value is reviewed at least annually or when
circumstances indicate the carrying amount may be impaired. If the carrying value of an asset or its
cash-generating unit exceeds its estimated recoverable amount, an impairment loss is recognized in
the statement of income on the functional level of the asset impaired.
Except for goodwill, we reverse impairment losses in the statement of income if and to the extent we
have identified a change in estimates used to determine the recoverable amount.
Accounting estimates and judgments
The cash flow projections used in the value in use calculations for the annual impairment test for
goodwill and other intangibles assets with indefinite life, require significant judgment. The various
judgments and estimations are described in the Annual impairment testing section in this Note.
The assessment for impairment is performed at the lowest level of assets generating largely
independent cash inflows. For goodwill and other intangible assets with an indefinite life, we have
determined this to be at business unit level (one level below operating segment).
For intangible assets excluding goodwill and other intangible assets with indefinite useful life,
estimates are required to determine the (remaining) useful lives.
General
Brands include both brands with indefinite useful lives and brands with finite useful lives. Brands with
indefinite useful lives are almost fully related to Dulux, which is the major brand, due to its global presence,
high recognition and strategic nature. Other intangibles include licenses, know-how, intellectual property
rights, software and development cost.
Both at year-end 2024 and 2023, there were no material purchase commitments for individual intangible
assets. No intangible assets were registered as security for bank loans.
Acquisitions through business combinations
No material additions from acquisitions were recorded in 2024. The additions from acquisitions in 2023
primarily relate to the acquisition of the Huarun business, China. Refer to Note 2 Scope of consolidation for
disclosures on acquisitions.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Annual impairment testing
Goodwill and other intangibles with indefinite useful lives are tested for impairment at business unit level
(one level below segment level) annually or whenever an impairment trigger exists, applying the value-in-
use method.
The impairment test is based on the five-year plan, which contains euro-denominated cash flow projections
for each of the business units. After the five-year plan period the terminal growth rate is applied, unless a
different approach would be more appropriate. Elements considered to determine if a different approach
would be more appropriate include high growth/emerging economies, geographic expansion opportunities,
introduction of new product ranges and opportunities from market consolidation. In 2024, no exception
was applied. In 2023, this exception was applied for Decorative Paints China and North Asia and for
Decorative Paints South East and South Asia.
Macro-economic developments and other relevant variables (e.g. inflation, geopolitical uncertainties,
climate risks) are closely monitored to ensure that the impact on the estimated future cash flows is
reflected in the models which are used to assess the value of AkzoNobel's asset base. The impact of
climate change did not have a significant effect on the estimated future cash flows.
Goodwill and other intangibles per business unit
in € millions
Goodwill
Brands with indefinite useful lives
Other intangibles with finite useful lives
Total intangibles
2023
2024
2023
2024
2023
2024
2023
2024
Decorative Paints Europe, Middle East and Africa
106
110
836
836
126
116
1,068
1,062
Decorative Paints Latin America
179
169
90
90
193
164
462
423
Decorative Paints China and North Asia
32
32
643
663
35
32
710
727
Decorative Paints South East and South Asia
7
7
208
217
10
9
225
233
Powder Coatings
155
149
—
—
34
35
189
184
Marine and Protective Coatings
210
213
—
—
96
91
306
304
Automotive and Specialty Coatings
301
304
—
—
150
144
451
448
Industrial Coatings
440
459
—
—
125
119
565
578
Corporate and other
—
—
—
—
105
90
105
90
Total
1,430
1,443
1,777
1,806
874
800
4,081
4,049
Strategy | Sustainability |
Leadership and governance
|
Financial statements
159
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
The key assumptions used in the projections for annual impairment testing are:
• Revenue growth per year: based on actual experience, analysis of markets and GDP growth, and
expected market share developments based on management's long-term projections
• Margin development per year: based on actual experience and management’s long-term projections
• Weighted average cost of capital per year: the pre-tax discount rate determined per business unit,
reflecting current market assessments of the time value of money and the risks specifically associated
with the business unit
Key assumptions 2024
in % per year
Average revenue
growth 2025-2029
Pre-tax weighted
average cost of
capital 2025-2029
Decorative Paints
2.3% - 4.9%
9.8% - 13.4%
Performance Coatings
2.9% - 4.4%
9.7% -10.1%
Key assumptions 2023
in % per year
Average revenue
growth 2024-2028
Pre-tax weighted
average cost of
capital 2024-2028
Decorative Paints
2.4%-5.8%
10.8%-15.3%
Performance Coatings
2.0%-3.6%
10.7%-11.2%
For all business units, a terminal value was calculated based on long-term inflation expectations of 2%
(2023: 2%). The estimated pre-tax cash flows have been discounted to their present value using a pre-tax
weighted average cost of capital. Discount rates have been determined for each business unit and range
from 9.7% to 13.4% (2023: 10.7% to 15.3%), with a weighted average of 10.4% (2023: 11.5%). Both the
long-term inflation expectations and the discount rates are reflective of the inflation expectation in the
eurozone.
In 2024 and 2023, no impairment charges were recognized in relation to the annual impairment test.
In addition to the annual impairment test, sensitivity tests were performed to assess the impact of changes
in the key assumptions revenue growth (50% lower), margin development (1 percentage point lower) and
weighted average cost of capital (1 percentage point higher).
As in the previous two years, given the continued uncertainty in the macro-economic environment,
additional sensitivity tests have been performed in order to assess the impact of more severe adverse
changes in key assumptions.
Both the regular sensitivity tests and the additional sensitivity tests show that the changes in key
assumptions would not cause carrying amounts to exceed recoverable amounts for any of the business
units, except for Decorative Paints China and North Asia.
Impairment of specific intangible assets
Periodical evaluations are performed in order to ensure timely detection of triggers that might indicate
impairment of specific assets. Whenever such triggers are noted, the related assets are assessed for
impairment as appropriate. In 2024 and 2023, no significant impairment charges were recorded in relation
to specific assets.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 11: Property, plant and equipment
Property, plant and equipment
in € millions
Land and buildings
Plant equipment and
machinery
Other equipment
Construction in
progress and
prepayments on
projects
Assets not used
Total
Balance at January 1, 2023
Cost of acquisition
1,658
2,208
923
373
11
5,173
Accumulated depreciation/impairment
(826)
(1,585)
(784)
(3)
(7)
(3,205)
Carrying value at January 1, 2023
832
623
139
370
4
1,968
Movements in 2023
Acquisitions
5
1
—
—
—
6
Divestments
(14)
(3)
(3)
(1)
(1)
(22)
Investments
2
8
2
253
—
265
Transfer between categories
70
145
40
(255)
—
—
Depreciation
(44)
(101)
(32)
—
(1)
(178)
Impairments, including reversals thereof
(1)
(2)
—
—
—
(3)
Hyperinflation adjustment
29
13
1
8
—
51
Changes in exchange rates
(40)
(21)
(9)
(23)
—
(93)
Total movements
7
40
(1)
(18)
(2)
26
Balance at December 31, 2023
Cost of acquisition
1,656
2,310
904
354
10
5,234
Accumulated depreciation/impairment
(817)
(1,647)
(766)
(2)
(8)
(3,240)
Carrying value at December 31, 2023
839
663
138
352
2
1,994
Movements in 2024
Divestments
(5)
(2)
(2)
—
—
(9)
Investments
2
8
3
269
—
282
Additions to asset retirement obligations
2
—
—
—
—
2
Transfer between categories
54
163
50
(267)
—
—
Depreciation
(43)
(116)
(33)
—
(1)
(193)
Hyperinflation adjustment
18
8
2
5
—
33
Changes in exchange rates
2
3
3
5
—
13
Total movements
30
64
23
12
(1)
128
Balance at December 31, 2024
Cost of acquisition
1,737
2,438
932
365
10
5,482
Accumulated depreciation/impairment
(868)
(1,711)
(771)
(1)
(9)
(3,360)
Carrying value at December 31, 2024
869
727
161
364
1
2,122
Strategy | Sustainability |
Leadership and governance
|
Financial statements
161
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Accounting policies
Property, plant and equipment are valued at cost less accumulated depreciation and impairment
charges. Costs include expenditures that are directly attributable to the acquisition of the asset,
including borrowing cost of capital investment projects under construction.
Depreciation is calculated using the straight-line method, based on the estimated useful life of the
asset components. The useful life of plant equipment and machinery generally ranges from 10 to 25
years, and for buildings ranges from 20 to 50 years. Land is not depreciated. Other equipment
contains assets with a useful life ranging from 3 to 20 years. In the majority of cases, residual value
is assumed to be not material. Depreciation methods, useful lives and residual values are
reassessed annually.
Costs of major maintenance activities are capitalized and depreciated over the estimated useful life.
Maintenance costs which cannot be separately defined as a component of property, plant and
equipment are expensed in the period in which they occur. Asset retirement obligations are
recognized in the periods in which sufficient information becomes available to reasonably estimate
the cash outflow.
Refer to Note 10 Intangible assets, for a description of the accounting policies for asset impairment,
which equally apply to property, plant and equipment.
Acquisitions through business combinations
No material additions from acquisitions were recorded in 2024. The additions from acquisitions in 2023
primarily relate to the acquisition of the Huarun business, China. Refer to Note 2 Scope of consolidation for
disclosures on acquisitions.
Investments in property, plant and equipment
In both 2024 and 2023 we invested in multiple large projects. In 2024, this included investments in a new
Industrial Coatings plant in Barcelona, Spain, and continued investments in our Wood Coatings site in High
Point, US. In 2023, investments included the upgrade of a Powder Coatings plant in Gwalior, India, and a
new plant in Hanoi, Vietnam.
Impairment of specific property, plant and equipment assets
Periodical evaluations are performed in order to ensure timely detection of triggers that might indicate
impairment of specific assets. Whenever such triggers are noted, the related assets are assessed for
impairment as appropriate. In 2024 and 2023, no significant impairment charges were recognized.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
162
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 12: Leases
Accounting policies
As a lessee, we assess whether a contract is, or contains, a lease at inception. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for a consideration. Right-of-use assets are measured at costs less
accumulated depreciation and impairment losses, adjusted for any remeasurements.
For contracts that contain a lease component, we allocate consideration based on relative stand-
alone price, with the exception of lease cars where non-lease components are not separated.
Short-term leases and low value leases are expensed on a straight-line basis over the lease term.
Refer to Note 10 Intangible assets, for a description of the accounting policies for asset impairment,
which equally apply to right-of-use assets.
General
AkzoNobel mainly leases land, office spaces, stores and cars. Some leases provide for additional rent
payments that are based on changes in local price indices.
Some property leases contain extension options exercisable by AkzoNobel up to one year before the end
of the non-cancellable contract period. We have estimated that the lease liability would increase by less
than 20%, if we would exercise the extension options which are currently not included in the valuation of
the lease liability. This excludes so-called “evergreens” or perpetual leases.
Total net cash outflow from financing activities related to leases recognized on the balance sheet was
€114 million (2023: €107 million). Net cash outflow for leases not recognized on the balance sheet was
€21 million (2023: €21 million).
Refer to Note 26 Financial risk management for the maturities of lease liabilities.
Right-of-use assets
in € millions
Land
Buildings
Other
Total
Balance at January 1, 2023
Cost of acquisition
64
393
117
574
Accumulated depreciation/impairment
(22)
(204)
(57)
(283)
Carrying value at January 1, 2023
42
189
60
291
Movements in 2023
Acquisitions
15
—
—
15
Additions/modifications
2
61
46
109
Disposals
(1)
(5)
(6)
(12)
Depreciation
(2)
(63)
(34)
(99)
Changes in exchange rates
(2)
2
(2)
(2)
Total movements
12
(5)
4
11
Cost of acquisition
77
399
123
599
Accumulated depreciation/impairment
(23)
(215)
(59)
(297)
Carrying value at December 31, 2023
54
184
64
302
Movements in 2024
Additions/modifications
1
71
49
121
Disposals
—
(5)
(4)
(9)
Depreciation
(2)
(64)
(34)
(100)
Changes in exchange rates
1
3
—
4
Total movements
—
5
11
16
Cost of acquisition
77
424
130
631
Accumulated depreciation/impairment
(23)
(235)
(55)
(313)
Carrying value at December 31, 2024
54
189
75
318
The table below shows the total impact from leases on our profit and loss account.
Income/(expenses) recognized in profit and loss
in € millions
2023
2024
Depreciation right-of-use assets
(99)
(100)
Impairments for right-of-use assets
—
—
Interest expense on lease liabilities
(7)
(9)
Short-term lease expenses
(14)
(13)
Expenses relating to low-value assets
(5)
(6)
Variable lease expenses
(2)
(2)
Total expenses
(127)
(130)
Strategy | Sustainability |
Leadership and governance
|
Financial statements
163
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Impairments of specific right-of-use assets
Periodical evaluations are performed in order to ensure timely detection of triggers that might indicate
impairment of specific assets. Whenever such triggers are noted, the related assets are assessed for
impairment as appropriate.
In 2024 and 2023, no significant impairment charges were recognized.
Note 13: Investments in associates
Accounting policies
Associates are accounted for using the equity method and are initially recognized at cost. The
Consolidated financial statements include our share of the income and expenses of the associates,
whereby the result is determined using our accounting principles. When the share of losses exceeds
the interest in the investee, the carrying amount is reduced to nil and recognition of further losses is
discontinued, unless we have further legal or constructive obligations.
The total value of investments in associates at December 31, 2024, amounted to €228 million (2023: €216
million) and consisted of our equity share of €227 million (2023: €214 million) and loans granted of €1
million (2023: €2 million).
Balance sheet information of our share in associates
Associates
in € millions, at December 31
2023
2024
Condensed balance sheet
Non-current assets
108
115
Current assets
163
159
Total assets
271
274
Shareholders’equity
214
227
Non-current liabilities
8
5
Current liabilities
49
42
Total liabilities and equity
271
274
Profit and loss of our share in associates
Associates
in € millions
2023
2024
Condensed statement of income
Revenue
209
222
Profit before tax
38
33
Profit for the period
27
23
In 2024, the results from associates amounted to a profit of €23 million (2023: €27 million). No significant
contingent liabilities exist related to associates. The largest associate of AkzoNobel is Metlac S.p.A,
incorporated in Italy. None of the associates are considered individually material to the group.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 14: Financial non-current assets
Accounting policies
Pension assets are accounted for in accordance with IAS 19; for more details on the accounting
policies refer to Note 18 Post-retirement benefits.
Loans and receivables are initially measured at fair value plus transaction costs. Subsequent
measurement is at amortized cost, using the effective interest method, less any impairment losses.
Other financial non-current assets contain different types of financial instruments, for which
treatment is dependent on the specific facts and circumstances of these assets. For more details on
the accounting policy with regards to classification, measurement and impairment of financial
assets, refer to Note 26 Financial risk management.
Financial non-current assets
in € millions, at December 31
2023
2024
Pension assets
1,017
929
Loans and receivables
180
158
Other financial non-current assets
212
187
Total
1,409
1,274
Financial non-current assets can be broken down as per the table above. Pension assets (€929 million)
relate to pension plans in an asset position (2023: €1,017 million). Excluding pension assets, financial non-
current assets amounted to €345 million (2023: €392 million).
Loans and receivables include the subordinated loan granted to the Pension Fund APF in the Netherlands
valued at €91 million (2023: €90 million).
Loans and receivables are considered to have low credit risk; the impairment provision recognized during
the period was limited to 12 months expected losses, which was less than €1 million in both 2024 and
2023.
Note 15: Inventories
Accounting policies
Inventories are measured at the lower of cost and net realizable value. Costs of inventories comprise
all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to the
present location and condition. The costs of inventories are determined using weighted average
cost.
Inventories
in € millions, at December 31
2023
2024
Raw materials and supplies
579
601
Work in progress
91
101
Finished products and goods for resale
979
1,019
Total
1,649
1,721
Inventories can be broken down as per the table above. Of the total carrying value of inventories at year-
end 2024, €14 million was measured at net realizable value (2023: €10 million). In 2024, €64 million was
recognized in the statement of income for the write-down of inventories (2023: €86 million), while
€19 million of write-downs were reversed (2023: €20 million). There are no inventories subject to retention
of title clauses.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
165
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 16: Trade and other receivables
Accounting policies
Trade receivables are initially measured at fair value plus transaction costs. Subsequent
measurement is at amortized cost, using the effective interest method, less any impairment losses.
Positions are netted if there is an intention to set off and when netting is legally enforceable.
FX contracts are measured at fair value through profit and loss, unless hedge accounting is applied.
Other receivables contain various types of (financial) assets, for which treatment is dependent on the
specific facts and circumstances of these assets.
For more details on the accounting policy with regards to classification, measurement and
impairment of financial assets, refer to Note 26 Financial risk management.
General
Trade and other receivables can be broken down as per the table below.
Trade and other receivables
in € millions, at December 31
2023
2024
Trade receivables
2,187
2,144
Prepaid expenses
39
42
Tax receivables other than income tax
154
167
FX contracts
14
16
Other receivables
89
129
Total
2,483
2,498
Ageing and impairment of trade receivables
Ageing of trade receivables
in € millions, at December 31
2023
2024
Performing trade receivables
2,040
2,003
Past due trade receivables
< 3 months
118
113
> 3 months
68
62
Allowance for impairment
(39)
(34)
Total trade receivables
2,187
2,144
Trade receivables are presented net of an allowance for impairment of €34 million (2023: €39 million). In
2024, €15 million of impairment losses were recognized in the statement of income (2023: €14 million) and
€9 million was reversed (2023: €8 million). Since the total amount of impairment losses under IFRS 9 is not
significant, no separate disclosure was made in the statement of income.
Allowance for impairment of trade receivables
in € millions
2023
2024
Balance at January 1
42
39
Additions charged to income
14
15
Release of unused amounts
(8)
(9)
Utilization
(8)
(11)
Currency exchange differences
(1)
—
Balance at December 31
39
34
Strategy | Sustainability |
Leadership and governance
|
Financial statements
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 17: Group equity
Accounting policies
Shares are classified as equity and recorded at the value of the proceeds received. Own equity
instruments that are bought back (treasury shares) are deducted from equity. Incremental costs that
are directly attributable to issuing or buying back own equity instruments are recognized directly in
equity, net of the related tax.
Dividends are recognized as liability when they are declared.
Composition of share capital at year-end 2024
in €
Authorized share
capital
Subscribed share
capital
Priority shares (48 with nominal value of €400)
19,200
19,200
Cumulative preferred shares (200 million with nominal value of €0.50)
100,000,000
—
Common shares (500 million with nominal value of €0.50)
250,000,000
85,392,319
Total
350,019,200
85,411,519
Composition of share capital at year-end 2023
in €
Authorized share
capital
Subscribed share
capital
Priority shares (48 with nominal value of €400)
19,200
19,200
Cumulative preferred shares (200 million with nominal value of €0.50)
100,000,000
—
Common shares (500 million with nominal value of €0.50)
250,000,000
85,300,338
Total
350,019,200
85,319,538
Outstanding common shares
Number of shares
2023
2024
Outstanding at January 1
174,375,227
170,600,675
Issued in connection to performance-related share plan, restricted share plan
and share-matching plan
172,344
183,963
Shares cancelled related to share buyback from previous year
(3,946,896)
—
Outstanding at December 31
170,600,675
170,784,638
Weighted average number of common shares
Number of shares
2023
2024
Weighted average number of common shares
170,573,555
170,728,870
Subscribed share capital
For further details on subscribed share capital, refer to Note F Shareholders' equity in the Company
financial statements.
Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value
of hedging instruments used in cash flow hedges, pending subsequent recognition in the statement of
income or in the initial cost or other carrying amount of a non-financial asset or non-financial liability.
Cumulative translation reserve
The cumulative translation reserve comprises all foreign exchange differences arising from the translation of
the financial statements of foreign operations, as well as from the translation of intercompany loans with a
permanent nature and liabilities and derivatives that hedge the net investments in a foreign subsidiary.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Equity-settled transactions
Equity-settled transactions relate to the performance-related and restricted share plans and the share-
matching plan, whereby shares are granted to the Board of Management, Executive Committee, other
executives and certain non-executive employee categories. For details on share-based compensation,
refer to Note 6 Employee benefits.
Dividend
Our dividend policy is to pay a stable to rising dividend. In 2024, an interim dividend of €0.44 (2023: €0.44)
per common share was paid. We propose a 2024 final dividend of €1.54 (2023: €1.54) per common share,
which would equal a total 2024 dividend of €1.98 (2023: €1.98).
Share buybacks
In 2023, 3.9 million shares were cancelled which were repurchased in 2022. In both 2024 and 2023 no
shares were repurchased.
For further details on weighted average number of shares, refer to Note 9 Earnings per share
Non-controlling interests
None of the non-controlling interests are considered individually material to the group. The effects of share
transactions with non-controlling interest shareholders are recorded in equity insofar these do not lead to
changes in control.
Non-controlling interests
2023
2024
Group entity
Partner at year-end 2024
%
Equity stake
in € millions
%
Equity stake
in € millions
Akzo Nobel India Limited, Kolkata, India
Publicly held, India
25.24
55
25.24
50
PT ICI Paints Indonesia, Jakarta, Indonesia
PT DWI Satrya Utama, Indonesia
45.00
32
45.00
30
Akzo Nobel Kemipol Kimya Sanayi ve Ticaret A.Ş., Izmir, Türkiye
Altan, Eyyüp and other family members
49.00
24
49.00
30
International Paints of Shanghai Co. Ltd, Shanghai, China
Shanghai Huayi Fine Chemical Co. Ltd and China National Shipbuilding Equipment & Materials Corp.
49.00
21
49.00
22
Akzo Nobel Saudi Arabia Ltd, Dammam, Saudi Arabia
Yousuf Bin Ahmed Kanoo Co. Ltd, Saudi Arabia
40.00
16
40.00
20
Akzo Nobel Paints (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia
Permodalan Nasional Berhad, Malaysia
40.05
17
40.05
19
Akzo Nobel UAE Paints L.L.C., United Arab Emirates
Kanoo Group, United Arab Emirates
40.00
11
40.00
17
Akzo Nobel Oman SAOC, Muscat, Oman
Omar Zawawi Establishment LLC, Oman
50.00
12
50.00
12
Société Tunisienne de Peintures Astral S.A., Megrine, Tunisia
Several people
40.00
10
40.00
11
International Paint (Korea) Ltd, Busan, South-Korea
Noroo Holdings, South Korea
40.00
6
40.00
8
Akzo Nobel Coatings S.A., Casablanca, Morocco
Société Industrielle de Peinture and several people
40.00
5
40.00
5
Others
15
18
Total
224
242
Strategy | Sustainability |
Leadership and governance
|
Financial statements
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 18: Post-retirement benefit provisions
Accounting policies
Defined contribution plans
Contributions to defined contribution plans are recognized in the statement of income as incurred.
Defined benefit plans
Most of our defined benefit pension plans are funded with plan assets that have been segregated in
a trust or foundation. We also provide post-retirement benefits other than pensions, including
healthcare and welfare plans, to certain employees, which are generally not funded.
Valuations of both funded and unfunded plans are carried out by independent actuaries, based on
the projected unit credit method. Post-retirement costs primarily represent the increase in the
actuarial present value of the obligation for projected benefits, based on employee service during the
year and interest on the net defined benefit liability/asset.
When the calculation results in a benefit to AkzoNobel, the recognized asset is limited to the present
value of economic benefits available in the form of any future refunds from the plan or reductions in
future contributions to the plan. An economic benefit is available if it is realizable during the life of the
plan, or on the settlement of the plan liabilities. The effect of these so-called asset ceiling restrictions
and any changes therein are recognized in Other comprehensive income.
Remeasurement gains and losses, which arise in calculating our obligations, are recognized in Other
comprehensive income. When the benefits of a plan improve, the portion of the increased benefits
related to past service by employees is recognized as an expense in the statement of income
immediately. We recognize gains and losses on the curtailment or settlement of a defined benefit
plan when the curtailment or settlement occurs.
Interest on the net defined benefit liability/asset is included in financing expenses related to post-
retirement benefits. Other charges and benefits recognized are reported in operating income, unless
recorded in other comprehensive income.
Accounting estimates and judgments
In order to perform the necessary actuarial calculations for assessing defined benefit obligations,
certain assumptions must be made regarding interest rates, projected pension increases, life
expectancy and healthcare cost inflation. These calculations are conducted by external actuaries
using market information such as corporate bond returns and yield curves, to determine appropriate
discount rates, as well as mortality tables and inflation rates to establish assumptions for future salary
and pension growth.
Introduction
Post-retirement benefit provisions relate to defined benefit pension and other post-retirement benefit plans,
including healthcare or welfare plans. The largest defined benefit pension plans are the ICI Pension Fund
(ICIPF) and the Akzo Nobel (CPS) Pension Scheme (CPS) in the UK which together account for 85% of
defined benefit obligations (DBO) and 90% of plan assets. Other pension plans include among others the
largely unfunded plans in Germany, the plans in the US and certain other smaller plans in the UK. The
benefits of these pension plans are based primarily on years of service and employees’ compensation. The
funding policy for the plans is consistent with local requirements in the countries of establishment. We also
provide certain healthcare and life insurance benefits to retired employees, mainly in the US and the
Netherlands.
Governance
Governance of the benefit plans is the responsibility of the Executive Pensions Committee. This committee
provides oversight of the costs and risks of the plans including oversight of the impact of the plans on the
company in terms of cash flow, pension expenses and the balance sheet. The committee develops and
maintains policies on benefit design, funding, asset allocation and assumption setting.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
169
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Pension plan de-risking
Almost all of the defined benefit plans have been closed to new members since the early to mid-2000s,
although in many plans long-serving employees continue to accrue benefits. For plans in the US, benefit
accrual is frozen and employees participate in defined contribution plans for future service. In countries
where plans are closed, new employees are eligible to join a defined contribution arrangement. In countries
in high growth markets, pension schemes currently are not material. Unless mandated by law, it is our
policy that any new plans are established as defined contribution plans.
The most significant risks that we run in relation to defined benefit plans are investment returns falling short
of expectations, low discount rates, inflation exceeding expectations, retirees living longer than expected
and legislation changes. The assets and liabilities of each of the funded plans are held outside of the
company in a trust or a foundation, which is governed by a board of fiduciaries or trustees, depending on
the legal arrangements in the country concerned. The primary objective with regards to the investment of
pension plan assets is to ensure that each individual plan has sufficient funds available to satisfy future
benefit obligations in accordance with local legal and legislative requirements. For this purpose, we work
closely with plan trustees or fiduciaries to develop investment strategies. Studies are carried out
periodically to analyze and understand the trade-off between expected investment returns, volatility of
outcomes and the impact on cash contributions. We aim to strike a cautious balance between these
factors in order to agree affordable contribution schedules with plan fiduciaries.
Plan assets principally consist of insurance (annuity) policies, long-term interest-earning investments and
investment funds with holdings primarily in quoted equity securities. Our largest plans use derivatives (such
as index futures, currency forward contracts and swaps) to reduce volatility of underlying variables, for
efficient portfolio management and to improve the liability matching characteristics of the assets. Limits
have been set on the use of derivatives which are periodically subject to review for compliance with the
pension fund’s investment strategy.
In line with our proactive pension risk management strategy, we seek to reduce risk in our pension plans
over time. We evaluate potential de-risking opportunities on an ongoing basis. Future de-risking
transactions may have both cash flow and balance sheet impacts which may be substantial, as had some
of the de-risking actions already taken. The cost of fully removing risk would exceed estimated funding
deficits.
Between 2014 and 2023, ICIPF and a smaller UK plan, the ICI Specialty Chemicals Pension Fund (ISCPF),
have invested in annuity buy-in contracts that aim to hedge all key risks related to their pensioner
populations. In November 2022, CPS also invested in an annuity buy-in contract that aims to hedge all key
risks related to 39% of their pensioner liabilities.
In April 2023, the Trustee of the ISCPF entered into a further annuity buy-in agreement with Pension
Insurance Corporation plc. It covers, in aggregate, €168 million of pensioner liabilities (insurer valuation).
The buy-in involved the purchase of a bulk annuity policy under which the insurer will pay to ISCPF
amounts equivalent to the benefits payable to all remaining pensioner and deferred members. The pension
liabilities remain with, and the matching annuity policies are held within, ISCPF. The accounting impact of
the transaction is a lower valuation of the plan assets giving a reduction in other comprehensive income of
€51 million.
By purchasing bulk annuities, the ICIPF, CPS and ISCPF Trustees have taken significant steps in actively
de-risking liabilities and reducing the risk that AkzoNobel will be required to contribute additional cash in
the future.
CPS also has an insurance contract to hedge longevity risk in respect of a portion of its pensioners not
impacted by the recent buy-in transaction.
Regulatory developments
On November 25, 2020, correspondence between the Chancellor of the Exchequer and the UK Statistics
Authority (UKSA) was published regarding the future of the Retail Price Index (RPI) measurement of
inflation. With effect from February 2030 onwards, increases in the RPI will be aligned with those under the
Consumer Prices Index (CPI) with owner occupiers’ housing costs (CPIH). Broadly this is expected to result
in RPI inflation being 1% lower in the longer term than under the existing methodology. The inflation
assumption continues to be calculated using a market breakeven inflation rate and the CPI inflation
assumption, on which the benefits of some plans are based, is set with reference to RPI. Until 2030, the
CPI inflation assumption is calculated as 1% below RPI and from 2030 onwards as 0.1% below RPI.
The Virgin Media Ltd versus NTL Pension Trustees decision, handed down by the UK High Court on June
16, 2023, has implications for the validity of trust deeds of amendment between 1997 and 2016. In July
2024, the Court of Appeal upheld the original June 2023 High Court decision and further court cases are
scheduled to clarify the scope of the judgments. High-level reviews have been carried out by the UK
defined benefit scheme trustees, assessing whether relevant deeds were validly executed. The conclusions
of the reviews which have been shared with AkzoNobel show only very limited potential effects on member
benefits if the judgment is upheld. For this reason, and because of the uncertain application of the
judgment, no changes have been made to the defined benefit obligation.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Defined contribution plans
The remaining pension plans primarily represent plans accounted for as defined contribution plans. This
includes, among others, the Pension Fund APF in the Netherlands and the 401k Plan in the US.
The ITP2 plan in Sweden is financed through insurance with the Alecta insurance company and is
classified as a multi-employer defined benefit plan. As AkzoNobel does not have access to sufficient
information from Alecta to enable defined benefit accounting treatment, it is accounted for as a defined
contribution plan. Contributions in 2024 were nil (2023: €1 million). Alecta’s funding ratio is normally
allowed to vary between 125% and 175%. The most recently quoted ratio at September 2024 stood at
163%.
The expenses of all plans accounted for as defined contribution plans in AkzoNobel totaled €101 million in
2024 (2023: €90 million).
Other post-retirement benefit plans
AkzoNobel provides certain healthcare and life insurance benefits to retired employees, mainly in the US
and the Netherlands. The risks to which the US healthcare plans expose AkzoNobel include the risk of
future increases in the cost of healthcare which would increase the cost of maintaining the plans. The
benefit payments to retirees under the Dutch plan are frozen. Both plans expose AkzoNobel to the risk of a
decline in discount rates, which increases the plan obligations, and longevity risk as the plans generally pay
lifetime benefits.
DBO at funded and unfunded pension plans
Of the €8,956 million of defined benefit obligations, €8,863 million relates to pension plans, with the table
below specifying the funded and unfunded amounts.
DBO at funded and unfunded pension plans*
in € millions, at December 31
2023
2024
Wholly or partly funded plans
9,137
8,620
Unfunded plans
270
243
Total
9,407
8,863
* Excludes other post-retirement benefit plans.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
171
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Reconciliation to the balance sheet
The 2024 closing net balance sheet position of €505 million net asset (2023: €549 million net asset)
includes the pension plans (€598 million net asset; 2023: €652 million net asset) and other post-retirement
plans (€93 million liability; 2023: €103 million liability).
Reconciliation to the balance sheet
2023
2024
in € millions
DBO
Plan assets
Total
DBO
Plan assets
Total
Balance at the beginning of the period
(9,582)
10,193
611
(9,510)
10,066
556
Statement of income
Current service cost
(22)
—
(22)
(30)
—
(30)
Past service cost
(1)
—
(1)
(1)
—
(1)
Settlements
13
(13)
—
2
(2)
—
Net interest (charge)/income on net defined benefit (liability)/asset
(455)
488
33
(427)
454
27
Cost recognized in statement of income
(465)
475
10
(456)
452
(4)
Remeasurements recognized in Other comprehensive income
Actuarial (loss)/gain due to liability experience
(131)
—
(131)
(14)
—
(14)
Actuarial (loss)/gain due to liability financial assumption changes
(233)
—
(233)
618
—
618
Actuarial (loss)/gain due to liability demographic assumption changes
256
—
256
16
—
16
Actuarial (loss)/gain due to buy-ins
—
(51)
(51)
—
—
—
Return on plan assets (less than)/greater than discount rate
—
10
10
—
(742)
(742)
Remeasurement effects recognized in Other comprehensive income
(108)
(41)
(149)
620
(742)
(122)
Cash flow
Employer contributions
—
63
63
—
48
48
Employee contributions
(2)
2
—
(2)
2
—
Benefits and administration costs paid from plan assets
793
(793)
—
799
(799)
—
Net cash flow
791
(728)
63
797
(749)
48
Other
Acquisitions/divestments/transfers
1
(1)
—
—
—
—
Changes in exchange rates
(147)
168
21
(407)
452
45
Total other
(146)
167
21
(407)
452
45
Balance at the end of the period
(9,510)
10,066
556
(8,956)
9,479
523
Asset restriction
(7)
(18)
Net balance sheet position
549
505
Presentation of Net balance sheet position
Financial non-current assets
1,017
929
Post-retirement benefit provisions
(423)
(381)
Current portion of provisions
(45)
(43)
Net balance sheet position
549
505
Strategy | Sustainability |
Leadership and governance
|
Financial statements
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Administrative expenses
Where pension plans bear their own administrative expenses using plan assets, those costs are reflected
within the current service cost line. Administrative expenses borne by funds of €13 million are included in
2024 current service cost (2023: €3 million). In addition to the expenses borne by the funds themselves,
some expenses are borne directly by AkzoNobel. Administrative expenses, borne directly by AkzoNobel,
of €13 million are included in 2024 operating income (2023: €25 million). In addition, we directly incurred
asset management expenses of €2 million (2023: €2 million), which have been included in Other
comprehensive income.
Interest costs
Interest costs on the DBO for both pensions and other post-retirement benefits, together with the interest
income on plan assets, comprise the financing income related to post-retirement benefits of €27 million
(2023: €33 million), refer to Note 7 Financing income and expenses.
Pension plans in asset position
Pension balances recorded under Financial non-current assets totaled €929 million (2023: €1,017 million).
The €88 million decrease in 2024 is due to €168 million of net actuarial losses, partly offset by €4 million of
employer contributions, net income of €28 million and exchange rate translation gains of €48 million.
Plan assets have been recognized in the company's balance sheet under IFRIC 14 to the extent future
economic benefits are available to AkzoNobel in the form of future refunds from the plan or reductions in
future contributions to the plan, either during the life of the plan or on the (final) settlement of the plan
liabilities.
Plan assets
The equities and government bond debt assets have quoted prices in active markets, although most are
held through funds comprised of such instruments which are not actively traded themselves. The UK buy-
in annuity policies have a value that is equal to the DBO of the pensioners covered by the policies.
The total value of plan assets not quoted in active markets is €6,174 million (2023: €6,603 million),
including the UK buy-in annuity policies totaling €5,735 million (2023: €6,123 million), investments in real
estate totaling €245 million (2023: €258 million) and other investments in infrastructure and insurance
policies.
Plan assets did not directly include any of AkzoNobel’s own transferable financial instruments, nor any
property occupied by or assets used by the company.
Plan assets
2023
2024
in € millions, at December 31
Total
% of total
Total
% of total
Equities
192
2
189
2
Debt - fixed interest government bonds
562
6
396
4
Debt - index-linked government bonds
1,177
12
1,140
12
Debt - corporate and other bonds
1,503
15
1,531
16
UK buy-in annuity policies
6,123
61
5,735
61
Cash and cash equivalents
126
1
143
2
Other
383
3
345
3
Total
10,066
100
9,479
100
Cash flows
In 2025, we expect to contribute €40 million (2024: €38 million) to our defined benefit pension plans. We
expect to pay a further €10 million (2024: €10 million) to our other post-retirement benefit plans. No
allowance is made for any special one-off contributions that may arise in relation to new de-risking
opportunities.
Cash flows
Pensions
Other post-
retirement benefits
in € millions
2024
2025
2024
2025
Regular contributions
37
36
10
10
Top-ups
1
4
—
—
Total
38
40
10
10
Strategy | Sustainability |
Leadership and governance
|
Financial statements
173
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Sensitivity of DBO
The actuarially calculated sensitivity effects on DBO shown in the table allow for an alternative value for
each assumption while the other actuarial assumptions remain unchanged. This table illustrates the overall
impact on DBO for the changes shown, which management assessed could be reasonably possible over a
longer term from a sensitivity test perspective. It should be noted, however, that this analysis does not
indicate any probability of such changes occurring, nor does it preclude larger changes in any given period
or longer term.
In addition, the significance of the impact and the range of reasonably possible alternative assumptions
may differ between the different plans that comprise the total DBO. In particular, the plans differ in benefit
design, currency and average term, meaning that different assumptions have different levels of significance
for each plan.
The sensitivity analysis is intended to illustrate the inherent uncertainty in the valuation of the DBO under
market conditions at the measurement date. Its results, in principle, cannot be extrapolated due to
increasing non-linear effects that changes in the key actuarial assumptions, when deviating further from the
assumptions presented, may have on the total DBO. Any management actions that may be taken to
mitigate the inherent risks in the post-retirement defined benefit plans are not reflected in this analysis, as
they would normally be reflected in plan asset changes rather than DBO changes.
The sensitivities in the table only apply to the DBO and not to the net amounts recognized in the balance
sheet. Movements in the fair value of plan assets (which include the de-risking instruments) would, to a
significant extent, be expected to offset movements in the DBO resulting from changes in the given
assumptions.
At ICIPF, the annuity buy-in contracts cover 97% of pensioner liabilities (2023: 99%) and 88% of total
liabilities (2023: 88%). At CPS, the annuity buy-in contract covers 39% of pensioner liabilities (2023: 39%)
and 28% of total liabilities (2023: 28%). Also at CPS, the longevity hedge contract covers 45% of pensioner
liabilities (2023: 45%) and 32% of total liabilities (2023: 33%).
Sensitivity of DBO to change in assumptions
in € millions
ICIPF
UK
CPS
UK
Other
pension
plans
Other post-
retirement
benefits
Total
Discount rate: 0.5% decrease
251
120
67
4
442
Price inflation: 0.5% increase*
126
73
36
—
235
Life expectancy: one year increase from age 60
350
86
41
4
481
Maturity information
Weighted average duration of DBO (years)
8.1
10.8
10.9
8.1
9.2
* The sensitivity to price inflation assumption includes corresponding changes to all inflation-related compensation increases, pensions in payment and
pensions in deferment.
Future benefit payments
The figures in the table below are the estimated future benefit payments to be paid from the plans to
beneficiaries over the next ten years.
Future benefit payments
in € millions
Pensions
Other post-
retirement
benefits
2025
806
10
2026
810
10
2027
819
9
2028
823
9
2029
832
8
2030-2034
4,270
37
Strategy | Sustainability |
Leadership and governance
|
Financial statements
174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Key figures and assumptions by plan
2023
2024
in € millions or %
ICIPF
UK
CPS
UK
Other
pension
plans
Other post-
retirement
benefits
Total
ICIPF
UK
CPS
UK
Other
pension
plans
Other post-
retirement
benefits
Total
Percentage of total DBO
61%
25%
13%
1%
100 %
60%
25%
14%
1%
100%
Defined Benefit Obligation at year-end
(5,762)
(2,373)
(1,272)
(103)
(9,510)
(5,395)
(2,243)
(1,225)
(93)
(8,956)
Fair value of plan assets at year-end
6,176
2,931
959
—
10,066
5,721
2,814
944
—
9,479
Plan funded status
414
558
(313)
(103)
556
326
571
(281)
(93)
523
Restriction on asset recognition
—
—
(7)
—
(7)
—
—
(18)
—
(18)
Amounts recognized on the balance sheet
414
558
(320)
(103)
549
326
571
(299)
(93)
505
Percentage of total current service cost
5%
23%
72%
—
100%
3%
33%
64%
—
100%
Current service cost
(1)
(5)
(16)
—
(22)
(1)
(10)
(19)
—
(30)
Employer contributions
1
7
45
10
63
—
1
37
10
48
Discount rate
4.6%
4.6%
4.3%
6.1%
4.6%
5.4%
5.5%
4.7%
6.1%
5.3%
Rate of compensation increase
1.4%
1.4%
2.2%
—
1.5%
1.5%
1.4%
2.2%
—
1.5%
Inflation
3.1%
3.1%
2.4%
—
3.0%
3.3%
3.2%
2.3%
—
3.1%
Pension increases
2.9%
2.6%
2.2%
—
2.8%
3.0%
2.7%
2.2%
—
2.8%
Life expectancy (in years)
Currently aged 60
Males
25.7
25.5
26.0
25.7
25.7
25.7
25.5
26.0
25.9
25.7
Females
27.3
28.5
28.6
27.8
27.8
27.4
28.6
28.7
27.8
27.9
Currently aged 45, from age 60
Males
26.8
26.6
27.4
26.6
26.8
26.8
26.6
27.4
26.8
26.8
Females
28.5
29.6
29.8
28.7
28.9
28.5
29.7
29.9
28.8
29.0
Strategy | Sustainability |
Leadership and governance
|
Financial statements
175
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Key plan details for the two largest pension plans1
ICI Pension Fund, UK
Akzo Nobel (CPS) Pension Scheme, UK
Type of plan
Defined benefit, based upon years of service and final salary
Defined benefit, based upon years of service and final salary
Benefits
Retirement pension for employee
Dependants’ pensions on death of employee/pensioner
Options for ill health early retirement
Retirement pension for employee
Dependants’ pensions on death of employee/pensioner
Options for ill health early retirement
Pension increases (main benefit section)
Annually linked to UK RPI with a maximum of 5%
Annually linked to UK CPI with a maximum of 5%
Plan structure
Plans are set up under a trust and are tax approved
Plans are set up under a trust and are tax approved
Governance
Trustee directors:
Three member-nominated
Three appointed with the agreement of Law Debenture
One independent (Law Debenture)
Trustee directors:
Three member-nominated
Two company-nominated
One independent (Law Debenture)
Regulatory framework
The plans are tax approved and assets are held in trust for the benefit of participants. The trustees have a legal duty to manage the trust in the best interests of
participants. Investment strategy is controlled by the trustees in consultation with the company.
Funding basis
A plan specific funding basis must be agreed with each trustee board in accordance with UK regulations. This basis is not the same as the IFRS calculation as it uses more
prudent assumptions about life expectancy and the discount rates reflect prudent estimates of the expected return on assets actually held, thus the trustees’ investment
strategies will impact the discounted value of liabilities.
Frequency of funding reviews
Normally every three years
Normally every three years
Latest completed valuation
March 31, 2023
March 31, 2023
Funding surplus/deficit at latest completed valuation1,2
€59 million surplus
€229 million surplus
Recovery plan
As there were sufficient assets to cover the Fund's technical provisions, a recovery
plan is not required.
As there were sufficient assets to cover the Fund's technical provisions, a recovery
plan is not required.
Next funding review
March 31, 2026 (due to be completed before June 30, 2027)
March 31, 2026 (due to be completed before June 30, 2027)
Asset allocation at March 31, 2024
Matching:
Return seeking:
100%
0%
Buy-in annuity contracts cover 97% of pensioner liabilities and 88% of total liabilities.
87%
13%
Buy-in annuity contract covers 39% of pensioner liabilities and 28% of total liabilities.
The longevity hedge contract covers 45% of pensioner liabilities and 32% of total
liabilities.
Membership at March 31, 2024
Active members
61
215
Deferred members
4,476
4,668
Pensioners, spouses and dependants
32,134
15,742
Total
36,671
20,625
1 Amounts in euro are a convenience translation using the December 31, 2024, exchange rate.
2 Based on local valuation regulations.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 19: Other provisions and contingent liabilities
Accounting policies
We recognize provisions when a present legal or constructive obligation as a result of a past event
exists, it is probable that an outflow of economic benefits is required to settle the obligation and the
amount can be reliably estimated. Provisions are measured at net present value. The increase of
provisions as a result of the passage of time is recognized in the statement of income under
financing income and expenses.
Provisions for restructuring of activities are recognized when a detailed and formal restructuring plan
has been approved, and the restructuring has either commenced or has been announced publicly.
We do not provide for future operating costs.
Provisions for liabilities to (former) employees are measured at present value, using actuarial
assumptions and other methods. Any actuarial gains and losses are recognized in the statement of
income in the period in which they arise.
Leased sites, offices or stores may have to be restored to their original condition or sometimes
decontaminated before being handed back at the end of the contractual period. If such legal
obligations exist, and a reliable estimate of future expenses can be made, a provision is formed.
Accounting estimates and judgments
Determining the likelihood, timing and amount of cash outflow requires estimates and significant
judgment. The main estimates and judgments per class of provisions are described below.
Provisions for environmental liabilities
Estimating the impact of environmental liabilities is complex and requires the assessment of many
(often interconnected) elements, which contain varying levels of uncertainty. Environmental liabilities
can change substantially, among others due to the emergence of additional information on the
nature or extent of the contamination, the geological circumstances, changes in (the interpretation
and/or enforcement of) environmental regulations, new and evolving analytical and remediation
techniques, success or lack of success of currently anticipated clean-up methods, actions by
governmental agencies or private parties, success or lack of success in allocating liability to other
potentially responsible parties, the financial viability of other potentially responsible parties and third-
party indemnitors, and/or other factors.
Liabilities to (former) employees
Liabilities to (former) employees consist of employer liability plans, jubilee plans and other long-term
compensation plans. In order to perform the necessary actuarial calculations for assessing the
provision, certain assumptions must be made regarding interest rates, life expectancy, the
development of costs related to employer liability plans, and employee turnover rates. These
calculations are conducted by external actuaries using market information such as corporate bond
returns and yield curves to determine appropriate discount rates, as well as claim patterns, cost
levels, mortality tables and inflation rates to establish assumptions for future expected outflow.
Sundry provisions
Sundry provisions relate to a variety of provisions, including provisions for (customer) claims, sales
returns, guarantees and other operational provisions. (Customer) claims provisions reflect the best
estimate of the expected outflow, if applicable supported by case law and internal or external legal
counsel opinions.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
177
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Movements in other provisions
in € millions
Restructuring of
activities
Environmental costs
Liabilities to (former)
employees
Sundry
Total
Balance at January 1, 2024
36
42
117
85
280
Additions made during the year
99
7
21
30
157
Additions to asset retirement obligations
—
—
—
2
2
Utilization
(58)
(16)
(20)
(27)
(121)
Amounts reversed during the year
(7)
(1)
(2)
(10)
(20)
Unwind of discount
—
4
(2)
—
2
Acquisitions
—
—
—
1
1
Divestments
—
—
(11)
—
(11)
Changes in exchange rates
—
1
—
(1)
—
Balance at December 31, 2024
70
37
103
80
290
Non-current portion of provisions
1
24
91
44
160
Current portion of provisions
69
13
12
36
130
Balance at December 31, 2024
70
37
103
80
290
Provisions for restructuring of activities
Provisions for restructuring of activities comprise of accruals for certain employee benefits and for costs
which are directly associated with plans to exit or cease specific activities, organizational optimization
programs and closing down of facilities. For all restructuring provisions, a detailed formal plan exists and
the implementation of the plan has started or the plan has been announced before the balance sheet date.
Most restructuring plans are expected to be completed within one year from the balance sheet date.
Environmental liabilities
We are confronted with costs arising out of environmental laws and regulations, which include obligations
to eliminate or limit the effects on the environment of the disposal or release of certain wastes or
substances at various sites. Proceedings involving environmental matters, such as the alleged discharge of
chemicals or waste materials into the air, water, or soil, are pending against us in various countries. In
some cases, this concerns sites divested in prior years or derelict sites belonging to companies acquired in
the past. The majority of the cash outflows relating to the environmental liabilities is expected to be within
one to five years, whilst some one-third is projected to be spent after ten years. The provision has been
discounted using an average pre-tax discount rate of 4.3% (2023: 3.7%).
For some sites for which we are faced with relatively new legislation, which are in the early stages of
discussions with regulators, and/or where there is limited information available from earlier experience,
there may be considerable variability between the clean-up activities that are currently being undertaken or
planned and the ultimate actions that could be required. For such sites, the costs for the earlier years might
be rather reliably estimable, while for later years it is much more difficult, if possible at all, to estimate the
cost of environmental compliance and remediation. If the level of uncertainty is such that no reliable
estimate can be made for the longer-term costs, no provision for such costs is recorded. While it is not
feasible to predict the outcome of all pending environmental exposures, it is reasonably possible that there
will be a need for future (changes to) provisions for environmental costs which, in management’s opinion,
based on information currently available, would not have a material effect on the company’s financial
position but could be material to the company’s results of operations in any one accounting period.
Liabilities to (former) employees
The majority of the cash outflows related to liabilities to (former) employees is expected to be after five
years. In calculating the liabilities to (former) employees, a pre-tax discount rate of on average 4.4% (2023:
4.3%) has been used.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Sundry provisions
Due to possible future developments, such as potential additional lawsuits, possible future settlements and
rulings or judgments in pending lawsuits, certain cases may result in additional liabilities and related costs.
At this point in time, we cannot estimate any additional amount of loss or range of loss in excess of the
recorded amounts with sufficient certainty to allow such amount or range of amounts to be meaningful.
While the outcome of said cases, claims and disputes cannot be predicted with certainty, we believe,
based upon legal advice and information received, that the final outcome will not materially affect our
consolidated financial position but could be material to our results of operations or cash flows in any one
accounting period.
The majority of the cash outflows related to sundry provisions is expected to be within one to five years. In
calculating the sundry provisions, a pre-tax discount rate of on average 3.8% (2023: 3.7%) has been used.
Current portion of provisions
The current portion of post-retirement benefit provisions (€43 million) and the current portion of other
provisions (€130 million) add up to €173 million (2023: €164 million), as reflected in the balance sheet.
Discount rates
The discount rates used in calculating the provisions recognized at December 31, 2024, are mentioned in
the paragraphs on provisions for environmental costs, liabilities to (former) employees and sundry
provisions. Changes in discount rates will affect our consolidated financial position. A sensitivity test
showed that a one percentage point increase or decrease of discount rates will have an impact down or up
of €5 million and €6 million, respectively, on the provisions recognized at December 31, 2024.
Contingent liabilities
A number of claims against AkzoNobel are pending, many of which are contested. This includes those
where AkzoNobel is defending claims brought by INPEX Operations Australia and JKC Australia LNG
relating to the specification and use of an AkzoNobel product which was applied to part of the pipework at
the Ichthys Onshore Project in Darwin, Australia, a large LNG project. The claims allege that AkzoNobel is
liable for significant damages (degradation of the coating on extensive parts of the pipework) and
associated remediation costs are sought under the Australian Consumer Law. AkzoNobel denies liability
and also contests the quantum of alleged damages. The vast majority of the damages claimed for
remediation costs have not yet been incurred, rather they relate to (modelled) future inspection and
remediation costs that are subject to a high degree of uncertainty and debate in the proceedings. As a
result, it is not possible for AkzoNobel to reliably estimate any potential financial impact at this stage of the
proceedings. The case has gone to trial in the Federal Court of Australia, having commenced on June 17,
2024 and the proceedings are still ongoing with a final hearing scheduled in May 2025 with further
submissions being made. The timing of the Federal Court of Australia's judgment is uncertain, although is
not expected before the end of 2025.
We are also involved in legal disputes and disputes with tax authorities in several jurisdictions. Those
disputes include situations in which AkzoNobel has provided various indemnities and guarantees in respect
of past divestments to the relevant purchasers and their permitted assigns (if applicable), which in general
are capped in time and/or amount (in proportion to the value received). The provided guarantees and
indemnities have varying maturity periods. AkzoNobel has received various claims under such indemnities
and guarantees. In some instances, AkzoNobel has been named as a direct defendant despite the
divestments.
Akzo Nobel N.V. withdrew its declarations of joint and several liability under Article 403 of Book 2 of the
Dutch Civil Code for certain Dutch former Specialty Chemicals subsidiaries divested as per October 1,
2018, and since then has followed the procedures to terminate its residual liability under those declarations
under Article 404 of Book 2 of the Dutch Civil Code. The last objection against the termination of residual
liability has been resolved on February 20, 2025.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 20: Net debt
Accounting policies
Cash and cash equivalents and short-term investments are measured at fair value through profit and loss. Cash and cash equivalents include all cash balances and other investments that are directly convertible into
known amounts of cash. Changes in fair values are included in financing income and expenses. For more details on the accounting policy with regards to classification, valuation and impairment of financial assets,
refer to Note 26 Financial risk management.
Long-term and short-term borrowings are initially measured at fair value net of directly attributable transaction costs. Subsequent measurement is at amortized cost, using the effective interest rate method. The
interest expense on borrowings is included in financing income and expenses.
The fair value of borrowings, used for disclosure purposes, is determined based on listed market prices, if available. If a listed market price is not available, the fair value is calculated based on the present value of
principal and interest cash flows, discounted at the interest rate at the reporting date, considering AkzoNobel’s credit risk.
Net debt
in € millions
Long-term
borrowings
Short-term
borrowings
Short-term
investments
Cash and
cash
equivalents
Net debt
in € millions
Long-term
borrowings
Short-term
borrowings
Short-term
investments
Cash and
cash
equivalents
Net debt
Net debt at January 1, 2023
3,332
2,543
(336)
(1,450)
4,089
Net debt at January 1, 2024
3,165
2,398
(265)
(1,513)
3,785
Net cash from operating activities
—
—
—
(1,126)
(1,126)
Net cash from operating activities
—
—
—
(673)
(673)
Acquisitions
—
—
—
114
114
Acquisitions
3
—
—
(2)
1
Investments in short-term investments
—
—
(64)
64
—
Investments in short-term investments
—
—
(320)
320
—
Repayments of short-term investments
—
—
142
(142)
—
Repayments of short-term investments
—
—
423
(423)
—
Net cash from other investing activities
—
—
—
108
108
Net cash from other investing activities
—
—
—
237
237
Buy-out of non-controlling interests
—
—
—
—
—
Buy-out of non-controlling interests
—
—
—
4
4
Net gain/loss from changes in fair value
—
—
(7)
—
(7)
Net gain/loss from changes in fair value
—
—
(3)
—
(3)
Unwind of discount and amortized cost
10
2
—
—
12
Unwind of discount and amortized cost
12
6
—
—
18
Proceeds from borrowings
499
5,337
—
(5,836)
—
Proceeds from borrowings
499
2,308
—
(2,807)
—
Borrowings repaid
—
(6,295)
—
6,295
—
Borrowings repaid
—
(3,102)
—
3,102
—
New/modification/disposal of lease contracts
96
—
—
—
96
New/modification/disposal of lease contracts
112
—
—
—
112
Transfers from long-term to short-term
(793)
793
—
—
—
Transfers from long-term to short-term
(121)
121
—
—
—
Movement bank overdrafts and short-term bank loans
—
18
—
(18)
—
Movement bank overdrafts and short-term bank loans
—
(31)
—
31
—
Dividends
—
—
—
368
368
Dividends
—
—
—
385
385
Net cash impact from discontinued operations
—
—
—
6
6
Net cash impact from discontinued operations
—
—
—
5
5
Changes in exchange rates
21
—
—
104
125
Changes in exchange rates
1
(3)
—
32
30
Net debt at December 31, 2023
3,165
2,398
(265)
(1,513)
3,785
Net debt at December 31, 2024
3,671
1,697
(165)
(1,302)
3,901
Strategy | Sustainability |
Leadership and governance
|
Financial statements
180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Analysis of net debt by category
in € millions, at December 31
2023
2024
Bonds issued
2,933
3,433
Lease liabilities
194
201
Other long-term borrowings
38
37
Long-term borrowings
3,165
3,671
Current portion of long-term borrowings
671
87
Current portion of lease liabilities
89
91
Debt to credit institutions
1,635
1,515
Other short-term borrowings
3
4
Short-term borrowings
2,398
1,697
Total borrowings
5,563
5,368
Short-term investments
(265)
(165)
Cash and cash equivalents
(1,513)
(1,302)
Net debt
3,785
3,901
AkzoNobel’s net debt is mainly denominated in euro.
Multi-currency revolving credit facility
We have a multi-currency revolving credit facility of €1.3 billion which runs until 2027. This facility does not
contain financial covenants or acceleration provisions that are based on adverse changes in ratings or
material adverse change. At year-end 2024 and 2023, this facility has not been drawn.
Long-term borrowings
At year-end 2024, bonds issued amounted to €3,433 million (2023: €2,933 million); a specification is
included in the table in this Note.
Bonds issued
in € millions, at December 31
2023
2024
1 1/8% 2016/26 (€500 million)
499
499
1 1/2% 2022/28 (€600 million)
598
598
1 5/8% 2020/30 (€750 million)
745
746
2% 2022/32 (€600 million)
595
596
4% 2023/33 (€500 million)
496
496
3 3/4% 2024/34 (€500 million)
—
498
Total
2,933
3,433
In September 2024, a bond was issued with a nominal value of €500 million and a coupon of 3.75%,
maturing in 2034.
For details on the exposure to interest rate and foreign currency risk, refer to Note 26 Financial risk
management.
The average effective interest rate of the bonds included in long-term borrowings at year-end 2024 was
2.2% (year-end 2023: 2.0%).
Aggregated maturities of long-term borrowings
in € millions
2026-2029
After 2029
Bonds issued
1,097
2,336
Lease liabilities
169
32
Other long-term borrowings
11
26
Total
1,277
2,394
The blended incremental borrowing rate applied to the lease liabilities at year-end 2024 was 3.1%
(2023: 2.4%).
At year-end 2024 and 2023, none of the borrowings was secured by collateral.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
181
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Short-term borrowings
The current portion of long-term borrowings decreased mainly due to the maturing of a €500 million bond
in November 2024.
At year-end 2024, our debt to credit institutions amounted to €1,515 million (2023: €1,635 million). Debt to
credit institutions includes our commercial paper program and short-term bank loans. We have US dollar
and euro commercial paper programs in place, which can be used to the extent that the equivalent portion
of the €1.3 billion multi-currency revolving credit facility is not used. We had €1.0 billion commercial paper
outstanding at year-end 2024 (2023: €0.8 billion) against an average interest rate of 3.4% (2023: 4.1%). At
year-end 2024, we had short-term bank loans outstanding of €0.5 billion (2023: €0.8 billion) against a
three-months Euribor plus a mark-up (2023: three-months Euribor plus a mark-up). None of these facilities
contain financial covenants.
Short-term investments
At year-end 2024, we had short-term investments for an amount of €165 million (2023: €265 million).
Short-term investments almost entirely consist of time deposits, money market funds and other marketable
securities with a life time at investment date longer than three months but shorter than 12 months. For
more information on credit risk management, refer to Note 26 Financial risk management.
Cash and cash equivalents
Cash and cash equivalents are specified in the table below.
Cash and cash equivalents
in € millions, at December 31
2023
2024
Cash on hand and in banks
957
848
Short-term investments with a life up to three months
556
454
Cash and cash equivalents in the balance sheet
1,513
1,302
Debt to credit institutions
(60)
(29)
Total per statement of cash flows
1,453
1,273
Deposits and money market funds within cash and cash equivalents almost entirely consist of time
deposits immediately convertible into known amounts of cash and with a maturity of three months or less
from the date of purchase, and marketable securities that can be redeemed immediately when called.
We face cross-border foreign exchange controls and/or other legal restrictions in a few countries that
(currently) limit the ability to make these balances available for general use by the group. Mainly as a result
of these restrictions, at December 31, 2024, an amount of €19 million in cash and cash equivalents (2023:
€57 million and €3 million short-term investments) was restricted. The vast majority of these funds are
available for use in the relevant subsidiaries’ day-to-day business.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 21: Trade and other payables
Accounting policies
Trade and other payables are measured at amortized cost, using the effective interest rate method.
Trade and other payables
in € millions, at December 31
2023
2024
Trade payables
2,312
2,220
Taxes and social security contributions
192
160
Amounts payable to employees
275
245
Interest
86
59
FX contracts
13
16
Dividends
1
2
Other liabilities
54
38
Total
2,933
2,740
Trade and other payables can be broken down as per the above table. Other liabilities consist of a large
number of individually immaterial items.
Supplier finance arrangements
AkzoNobel has entered into a limited number of supplier finance arrangements related to payables
presented within trade and other payables. These arrangements provide suppliers with the option to
receive early payment from banks before the due date, based on our terms and conditions. In line with the
nature of these arrangements, fees are typically charged by the bank to the supplier for early settlement.
At year end, the total carrying amount of trade payables for which suppliers have the option to apply early
settlements was €115 million; at reporting date, suppliers had applied this option and received payments
from banks for an amount of €69 million.
Note 22: Cash flow
Accounting policies
AkzoNobel uses the indirect cash flow model. Interest paid is classified as an operating cash flow
and interest received as an investing cash flow. Dividends received are classified as investing cash
flow and dividends paid are classified as financing cash flow. Acquisitions or divestments of
subsidiaries are presented net of cash and cash equivalents acquired or disposed of,
respectively. Cash flows from derivatives are recognized in the statement of cash flows in
the same category as those of the hedged items.
Changes in working capital
Operating activities in 2024 resulted in a cash inflow of €673 million (2023: cash inflow of €1,126 million).
This includes changes in working capital as specified in the below table.
Changes in working capital as per consolidated statement of cash flows
in € millions
2023
2024
Trade and other receivables
(111)
12
Inventories
131
(83)
Trade and other payables
234
(135)
Total
254
(206)
The amounts in the table above cannot be reconciled directly to the respective balance sheet positions.
They reflect changes in balance sheet positions only to the extent these have a cash flow impact, or they
reverse the non-cash impact as included in profit for the period. These amounts exclude non-cash
movements such as unwinding of discount, movements through Other comprehensive income,
acquisitions and divestments, and changes in exchange rates.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
183
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Free cash flow
Free cash flow is an alternative performance measure. AkzoNobel reports on free cash flow as
management believes it to be a useful measure to provide additional insight into the cash generating
capability of its operations. For more details on Alternative Performance Measures refer to Note 3, section
Alternative Performance Measures.
Free cash flow
in € millions
2023
2024
Net cash generated from/(used for) operating activities
1,126
673
Capital expenditures
(286)
(306)
Free cash flow
840
367
Note 23: Commitments
Purchase commitments for property, plant and equipment at year-end 2024 aggregated €23 million (2023:
€18 million).
Note 24: Related party transactions
We purchased and sold goods and services to various related parties in which we hold a 50% or less
equity interest (associates).
During 2024, we considered the members of the Executive Committee and the Supervisory Board to be
the key management personnel as defined in IAS 24 “Related parties”. For details on their remuneration, as
well as on shares held by members of the Supervisory Board or Board of Management, refer to Note 25
Remuneration of the Supervisory Board and the Board of Management. In the ordinary course of business,
we also have transactions with various organizations with which certain members of the Supervisory Board
or Executive Committee are associated.
For related party transactions with pension funds, refer to Note 14 Financial non-current assets and Note
18 Post-retirement benefit provisions.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 25: Remuneration of the Supervisory Board and the Board of Management
Total compensation for key management personnel expensed during the period amounted to €19.7 million
(2023: €19.2 million). An amount of €10.4 million relates to short-term employee benefits (2023: €11.6
million); €0.9 million relates to post contract benefits and other post contract compensation (2023: €1.0
million); €8.4 million relates to share-based compensation (2023: €5.4 million); and no payments relate to
termination of employment (2023: €1.2 million). In 2024, no charges were accrued which relate to taxation
on excessive pay (“Belasting heffing excessieve beloningsbestanddelen”) (2023: €nil).
This compensation includes total remuneration for the members of the Supervisory Board of €1.1 million
(2023: €0.9 million) and for the members of the Board of Management of €8.3 million (2023: €7.7 million).
For more details on the remuneration of the individual members of the Supervisory Board and the Board of
Management reference is made to the Remuneration report.
In accordance with the Articles of Association and good corporate governance practice, the remuneration
of Supervisory Board members is not dependent on the results of the company. We do not grant share-
based compensation to our Supervisory Board members.
An overview of shares held by the Supervisory Board members is provided on this page. A similar overview
is provided of the shares held by the Board of Management.
Loans
The company does not grant loans, advance payments or guarantees to members of the Supervisory
Board, members of the Executive Committee or any family members of such persons.
Shares held by the members of the Supervisory Board
Number of shares at year-end
2023
2024
Ben Noteboom
2,300
2,300
Byron Grote*
9,894
9,894
Dick Sluimers
—
—
Patrick Thomas
—
—
Ester Baiget
—
—
Hans Van Bylen
—
—
Wouter Kolk
—
—
Ute Wolf
—
—
Jaska de Bakker
—
—
* In the form of ADRs.
Shares held by the Board of Management
Number of shares at year-end
2023
2024
Greg Poux-Guillaume
1,046
7,134
Maarten de Vries
22,558
26,617
Strategy | Sustainability |
Leadership and governance
|
Financial statements
185
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note 26: Financial risk management
Accounting policies
Classification and measurement
On initial recognition, financial assets are measured at fair value (plus transaction costs, in the case
of assets not subsequently measured at fair value through profit or loss (FVTPL)).
For the purpose of subsequent measurement, financial assets are classified as measured at
amortized cost, fair value through profit or loss or fair value through other comprehensive income
(FVOCI). The classification of a financial asset is determined at initial recognition, but if certain
conditions are met, an asset may be subject to reclassification.
A financial asset is measured at amortized cost if it meets both of the following conditions:
1. It is held within a business model, the objective of which is to hold assets to collect contractual
cash flows; and
2. Its contractual terms give rise, on specified dates, to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated as FVTPL:
1. It is held within a business model, the objective of which is achieved by both collecting
contractual cash flows and selling financial assets; and
2. Its contractual terms give rise, on specified dates, to cash flows that are SPPI on the principal
amount outstanding.
All financial assets not classified as measured at amortized cost or measured at FVOCI, as
described above, (e.g. financial assets held for trading and those that are managed and whose
performance is evaluated on a fair value basis) are measured at FVTPL.
Derivatives
Derivative financial instruments are recognized at fair value on the balance sheet. Fair values are
derived from market prices and quotes from dealers and brokers, or are estimated using observable
market inputs. When determining fair values, credit risk for our counter party, as well as for
AkzoNobel, is taken into account.
Changes in fair value are recognized in the statement of income, unless cash flow hedge accounting
or net investment hedge accounting is applied. In those cases, the effective part of the fair value
changes is deferred in other comprehensive income and released to the related specific lines in the
statement of income or balance sheet at the same time as the hedged item.
Impairment
Financial assets are assessed for impairment either according to the general approach or a
simplified approach.
The calculation of impairment under the general approach uses the following stages:
• 12-months expected credit losses, taking into account possible default events within one year
• Lifetime expected credit losses in case of an increase in credit risk, through recognition of
expected credit losses over the remaining life of the exposure
• Lifetime expected credit losses, where interest is calculated on the net amount of the receivables
less impairment loss.
In all above stages, the impairment calculation used is based on external credit ratings of involved
parties or default rates published by well-known credit risk agencies.
The financial assets included in the general impairment approach are long-term loans and other
long-term receivables.
The calculation of impairment under the simplified approach requires recognition of lifetime expected
credit loss (no tracking of changes in credit risk). The financial assets included in the simplified
impairment approach are trade receivables and the remaining financial assets.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Financial Risk Management Framework
Our activities expose us to a variety of financial risks: liquidity risk, credit risk and market risk (including
foreign exchange rate risk, interest rate risk and capital risk). These risks are inherent to the way we
operate as a multinational with a large number of locally operating subsidiaries. Our overall risk
management program seeks to identify, assess, and – if necessary and possible – mitigate these financial
risks in order to minimize potential adverse effects on our financial performance.
Our risk mitigating activities include the use of derivative financial instruments to hedge certain risk
exposures. The Board of Management is ultimately responsible for risk management. We centrally identify,
evaluate and hedge financial risks, and monitor compliance with the corporate policies approved by the
Board of Management, except for commodity risks, which are subject to identification, evaluation, hedging
and monitoring in the businesses. In addition to our centralized Treasury organization in Amsterdam, we
have treasury hubs located in Brazil and China that are primarily responsible for regional cash management
and short-term financing. We do not allow extensive treasury operations directly with external parties at
subsidiary level.
Liquidity risk management
The primary objective of our liquidity risk management is to provide for sufficient cash and cash equivalents
at all times and any place in the world to enable us to meet our payment obligations. We aim for a well-
spread maturity schedule of our long-term borrowings and a strong liquidity position. At year-end 2024, we
had available €1.3 billion of cash and cash equivalents (2023: €1.5 billion) and €165 million of short-term
investments (2023: €265 million); reference is made to Note 20 Net debt.
In addition, we have a multi-currency revolving credit facility of €1.3 billion which runs until 2027. This
facility does not contain financial covenants or acceleration provisions that are based on adverse changes
in ratings or on other material adverse changes. At year-end 2024 and 2023, this facility had not been
drawn. We have US dollar and euro commercial paper programs in place, which can be used to the extent
that the equivalent portion of the €1.3 billion multi-currency revolving credit facility is not used. We had
€1.0 billion commercial paper outstanding at year end 2024 (2023: €0.8 billion) against an average interest
rate of 3.4% (2023: average interest rate of 4.1%). Further, at year-end 2024, we had €0.5 billion short-
term bank loans outstanding against three-months Euribor plus a mark-up (2023: €0.8 billion against three-
months Euribor plus a mark-up). None of these facilities contain financial covenants. The table on maturity
of liabilities and cash outflows in this Note shows the timing of cash outflows per maturity group. The
amounts disclosed in the table are the contractual, undiscounted cash flows.
Maturity of liabilities and cash outflows
in € millions
Less than
1 year
Between 1
and 5 years
Over 5
years
At December 31, 2023
Borrowings
2,309
1,112
1,859
Interest on borrowings
154
249
182
Lease liabilities
89
158
36
Trade and other payables
2,874
—
—
FX contracts (hedges)
Outflow
2,451
—
—
Inflow
(2,450)
—
—
Total
5,427
1,519
2,077
At December 31, 2024
Borrowings
1,606
1,108
2,362
Interest on borrowings
143
313
201
Lease liabilities
91
169
32
Trade and other payables
2,676
—
—
FX contracts (hedges)
Outflow
2,714
—
—
Inflow
(2,714)
—
—
Total
4,516
1,590
2,595
Credit risk management
Credit risk arises from financial assets such as cash and cash equivalents, deposits with financial
institutions, money market funds, trade receivables and derivative financial instruments with a positive fair
value. We have a credit risk management policy in place to limit credit losses due to non-performance of
financial counterparties and customers. We monitor our exposure to credit risk on an ongoing basis at
various levels. We only deal with financial counterparties that have a sufficiently high credit rating. Generally,
we do not require collateral in respect of financial assets. Investments in cash and cash equivalents, short-
term investments and transactions involving derivative financial instruments are entered into with
counterparties that have sound credit ratings and a good reputation. Derivative transactions are concluded
mostly with parties with whom we have contractual netting agreements and ISDA agreements in place. We
set limits per counterparty for the different types of financial instruments we use. We closely monitor the
acceptable financial counterparty credit ratings and credit limits and revise these where required in line with
market circumstances. We do not expect non-performance by the counterparties for these financial
Strategy | Sustainability |
Leadership and governance
|
Financial statements
187
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
instruments. Due to our geographical spread and the diversity of our customers, we were not subject to
any significant concentration of credit risks at balance sheet date.
The credit risk from trade receivables is measured and analyzed by dedicated teams in the businesses,
mainly by means of ageing analysis (refer to Note 16 Trade and other receivables). Additionally, trade
receivables and financial assets measured at amortized cost are subject to the expected credit loss
impairment model either using the general or the simplified approach. For more information on the applied
impairment approaches per financial asset type, refer to Note 1 General information.
The maximum exposure to credit risk is represented by the carrying value of financial assets in the balance
sheet, which at year-end 2024 was €4.1 billion (2023: €4.6 billion) for cash and cash equivalents, short-
term investments, loans and trade and other receivables. Our credit risk is well spread among both global
and local counterparties. Our largest counterparty risk amounted to €259 million at year-end 2024 (2023:
€332 million).
Foreign exchange risk management
Trade and financing transactions
We operate in a large number of countries, where we have clients and suppliers, many of whom are
outside of the local functional currency environment. This creates currency exposures which are partly
netted out on group level. The purpose of our foreign currency hedging activities is to protect us from the
risk that the functional currency net cash flows resulting from trade or financing transactions are adversely
affected by changes in exchange rates. Our policy is to hedge our transactional foreign exchange rate
exposures above predefined thresholds from recognized assets and liabilities. Hedge accounting is
generally not applied for foreign currency hedging activities, except for certain specific forecasted
transactions.
In 2023, a total loss of €36 million was recorded in the statement of income under financing expenses,
which related to cash flow hedging for the intended acquisition of Kansai Paint's African activities. As from
July 2022, cash flow hedge accounting was applied on a $450 million hedge for foreign currency risk
exposure related to this intended acquisition, which continued in 2023. In November 2023, the decision
was made not to proceed with the acquisition. The losses reported in 2023 included €46 million related to
the recycling of the amount accumulated in the cash flow hedge reserve through other comprehensive
income.
In general, our forward exchange contracts have a maturity of less than one year. When necessary,
forward exchange contracts are rolled over at maturity. Currency derivatives are not used for speculative
purposes.
Hedged notional amounts at year-end1
Buy
Sell
Buy
Sell
in € millions
2023
2023
2024
2024
US dollar
270
658
362
678
Pound sterling
794
—
820
46
Chinese yuan
46
58
66
128
Brazilian real
19
57
26
38
Thai Baht
12
114
16
116
Australian dollar
—
62
1
78
Singapore dollar
15
7
40
49
South African rand
—
66
6
63
Taiwan dollar
3
33
13
47
Other2
212
375
157
300
Total
1,371
1,430
1,507
1,543
1 No hedge accounting was applied on these hedged notional amounts in 2024.
2 No individually significant position is included in Other, the amounts per currency are highly disaggregated.
Investments in foreign subsidiaries and associates
During 2024 and 2023, net investment hedge accounting was applied on hedges of certain net
investments in foreign operations, which were partly hedged. The main net investments included were
related to Chinese yuan, Brazilian real, Vietnamese dong, Indian rupee, Indonesian rupiah and Taiwanese
dollar (2023: Brazilian real, Chinese yuan, Indonesian rupiah and Indian rupee), which were hedged with
forward exchange contracts for the same currencies. The spot results related to these hedges were
recognized in other comprehensive income and accumulated in the cumulative translation reserves. At
year-end 2024, no hedges of net investments were outstanding. During 2024 and 2023, the hedges of net
investments were fully effective.
Interest rate risk management
We are partly financed with debt in order to obtain more efficient leverage. Interest rate risk is the risk that
the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. Fixed rate debt results in fair value interest rate risk. Floating rate debt results in cash flow
Strategy | Sustainability |
Leadership and governance
|
Financial statements
188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
interest rate risk. At the end of 2024, 64% of our total debt consisted of fixed rate bonds (2023: 62%), 18%
consisted of commercial paper (2023: 14%) and 11% of short-term loans (2023: 15%). The fixed/floating
ratio of our outstanding bonds was 100% fixed (2023: 100% fixed). The weighted average maturity of our
outstanding bonds at year-end is 5.8 years (2023: 5.4 years). The remainder of our total debt consisted of
leases and other debt. For more information about our debt, refer to Note 20 Net debt. During 2024 and
2023, we have not used any interest rate derivatives.
Capital risk management
Our objectives when managing capital are to safeguard our ability to satisfy our capital providers and to
maintain a capital structure that optimizes our cost of capital. For this we maintain an adequate financial
strategy, with the objective to retain a strong investment grade credit rating as assigned by the rating
agencies Moody’s and Standard & Poor’s. The capital structure can be altered, among others, by
adjusting the amounts of dividends paid to shareholders, return of capital to capital providers, or issuance
of new debt or shares. In September 2024, a bond was issued with a nominal value of €500 million and a
coupon of 3.75%, maturing in 2034.
Leverage ratio
Consistent with other companies in the industry, we monitor capital headroom based on the leverage ratio
net debt/(adjusted) EBITDA for which we have set a target range of around 2 for the mid-term. Net debt/
EBITDA at December 31, 2024, was 3.0 (December 31, 2023: 2.7), while net debt/adjusted EBITDA was
2.6 (December 31, 2023: 2.6).
EBITDA
in € millions
2023
2024
Operating income
1,029
917
Depreciation and amortization
357
371
EBITDA
1,386
1,288
Adjusted EBITDA
in € millions
2023
2024
Operating income
1,029
917
Depreciation and amortization*
355
365
Identified items
45
196
Adjusted EBITDA
1,429
1,478
* Excluding identified items.
Leverage ratios
in € millions
2023
2024
Net debt*
3,785
3,901
Net debt/EBITDA
2.7
3.0
Net debt/Adjusted EBITDA
2.6
2.6
*Breakdown of net debt is available in the Note 20 Net debt.
For the calculation of net debt, refer to Note 20 Net debt. Leverage ratio is an Alternative Performance
Measure. For more details refer to Note 3, section Alternative Performance Measures.
Fair value of financial instruments and IFRS 9 categories
In the table “Fair value per financial instrument category” on the next page, insight is provided in the
recognition of the respective financial instruments per IFRS 9 category. The total carrying value is based on
the accounting principles in this Note. Financial instruments are recognized at fair value and subsequently
recognized either at fair value or at amortized cost, using the effective interest method. The financial
instruments accounted for at fair value through profit or loss are derivative financial instruments and
securities included in financial non-current assets and other current liabilities, cash and cash equivalents
and short-term investments. The remaining financial instruments are accounted for at amortized cost.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
189
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Fair value per financial instrument category
Carrying value per IFRS 9 category
in € millions
Carrying
amount
Out of scope
of IFRS7
Measured at
amortized
cost
Measured at
fair value
through profit
or loss
Total carrying
value
Fair value of items
measured at
amortized cost
December 31, 2023
Financial non-current assets1
1,409
1,136
264
9
273
271
Trade and other receivables2
2,483
193
2,276
14
2,290
2,276
Short-term investments
265
—
—
265
265
—
Cash and cash equivalents
1,513
—
—
1,513
1,513
—
Total financial assets
5,670
1,329
2,540
1,801
4,341
2,547
Long-term borrowings
3,165
—
3,165
—
3,165
3,015
Short-term borrowings
2,398
—
2,398
—
2,398
2,390
Trade and other payables3
2,933
467
2,453
13
2,466
2,453
Total financial liabilities
8,496
467
8,016
13
8,029
7,858
December 31, 2024
Financial non-current assets1
1,274
1,013
242
19
261
250
Trade and other receivables2
2,498
258
2,224
16
2,240
2,224
Short-term investments
165
—
—
165
165
—
Cash and cash equivalents
1,302
—
—
1,302
1,302
—
Total financial assets
5,239
1,271
2,466
1,502
3,968
2,474
Long-term borrowings
3,671
—
3,671
—
3,671
3,559
Short-term borrowings
1,697
—
1,697
—
1,697
1,697
Trade and other payables3
2,740
405
2,319
16
2,335
2,319
Total financial liabilities
8,108
405
7,687
16
7,703
7,575
1 €1,013 million (2023: €1,136 million) out of scope for IFRS7 mainly relates to pension assets (refer to Note 14), €242 million (2023: €264 million) measured at amortized cost relates to loans and receivables and various other financial non-current assets (refer to Note 14); €19 million (2023: €9 million) measured at FVTPL
includes €12 million (2023: nil) long-term investments (refer to Note 14) and €7 million (2023: €9 million) other financial instruments (refer to Note 14).
2 €258 million (2023: €193 million) out of scope for IFRS7 mainly relates to (non-)income taxes receivable (refer to Note 16), €2,224 million (2023: €2,276 million) relates to the remainder of trade and other receivables (refer to Note 16) and €16 million (2023: €14 million) measured at FVTPL relates to FX contracts (refer to
Note 16).
3 €405 million (2023: nil) out of scope for IFRS7 mainly relates to payables to employees and (non-)income taxes payable (refer to Note 21), €2,319 million (2023: €2,453 million) relates to the remainder of trade and other payables (refer to Note 21) and €16 million (2023: €13 million) measured at FVTPL relates to FX
contracts (refer to Note 21).
The following valuation methods for financial instruments carried at fair value through profit or loss are
distinguished:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable)
For the purpose of determining the fair value per financial instrument category, shown in the column fair
value, the following valuation methods were used:
• A Level 1 valuation method was used to estimate the fair value of the bonds issued included in our long-
term and short-term borrowings. The estimate is based on the quoted market prices for the same or
similar issues or on the current rates offered to us for debt with similar maturities.
• A Level 2 valuation method was used to determine the fair value of marketable securities included in
cash and cash equivalents and short-term investments by obtaining the market price at reporting date.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
The fair value of foreign currency contracts and swap contracts was also determined by Level 2 valuation
techniques using market observable input (such as foreign currency interest rates based on Refinitiv/
LSEG) and by obtaining quotes from dealers and brokers. Further, a level 2 valuation method was used
to determine the fair value of time deposits included in cash and cash equivalents and short-term
investments using the market interest rate. Finally, the carrying amounts of cash and banks, trade
receivables less allowance for impairment, other short-term borrowings and other current liabilities
approximate fair value due to the short maturity period of those instruments and were determined using
Level 2 fair value methods.
• A Level 3 fair valuation method (discounted cash flow using applicable market interest rates at balance
sheet date) was used for the valuation of the subordinated loan granted to the Pension Fund APF in the
Netherlands, resulting in a fair value of €99 million.
Sensitivities on financial instruments at year-end 2024
Sensitivity object
Sensitivity
Hypothetical impact
Foreign currencies:
We perform foreign currency sensitivity analysis by applying an adjustment to the spot
rates prevailing at year-end. This adjustment is based on observed changes in the
exchange rate in the past and management's expectation for reasonably possible* future
movements over a longer term from a sensitivity test perspective. We then apply the
expected possible volatility to revalue all monetary assets and liabilities (including
derivative financial instruments) in a currency other than the functional currency of the
subsidiary in the balance sheet at year-end. These effects are of a fairly linear nature.
A 10% (2023: 10%) strengthening of the euro versus US dollar
A 10% (2023: 10%) strengthening of the euro versus the pound sterling
A 10% (2023: 10%) strengthening of the euro versus Chinese yuan
Profit €21 million (2023: profit €22 million).
Profit €1 million (2023: loss €5 million)
Profit €1 million (2023: profit €1 million)
Interest rate:
We perform interest rate sensitivity analysis by applying an adjustment to the interest rate
curve prevailing at year-end. This adjustment is based on observed changes in the
interest rate in the past and management's expectation for reasonably possible* future
movements over a longer term from a sensitivity test perspective. We then apply the
expected possible volatility to revalue all interest bearing assets and liabilities. These
effects are of a fairly linear nature.
A 100 basis points (2023: 100 basis points) increase of EUR interest rates
A 100 basis points (2023: 100 basis points) increase of USD interest rates
A 100 basis points (2023: 100 basis points) increase of GBP interest rates
Loss €10 million (2023: loss €15 million)
Profit €1 million (2023: profit €1 million)
Profit €1 million (2023: profit €1 million)
* This analysis does not indicate any probability of such changes occurring; nor does it preclude larger changes in any given period or longer term.
Master netting agreements
We enter into derivative transactions under International Swaps and Derivatives Association (ISDA) master
netting agreements. In general, under such agreements the amounts owed by each counterparty on a
single day in respect of transactions outstanding in the same currency may be aggregated into a single net
amount that is payable by one party to the other. In certain circumstances – e.g. when a credit event such
as a default occurs – all outstanding transactions under the agreement may be terminated, the termination
value is assessed and a net amount is payable in settlement of the transactions. We have evaluated the
potential effect of netting agreements, including the effect of rights of set-off and concluded the impact is
immaterial. We did not offset any amounts regarding derivative transactions.
Note 27: Subsequent events
No significant subsequent events have been identified.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
191
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AkzoNobel Report 2024
Statement of income
in € millions, for the year ended December 31
Note
2023
2024
General and administrative expenses
(74)
(31)
Operating income
(74)
(31)
Financing income and expenses
B
(199)
(184)
Net income from subsidiaries
D
693
732
494
548
Profit before tax
420
517
Income tax
22
25
Net income
442
542
Balance sheet, before allocation of profit
in € millions, at December 31
Note
2023
2024
Assets
Fixed assets
Intangible assets
C
97
93
Financial fixed assets
D
10,964
10,996
Total fixed assets
11,061
11,089
Current assets
Short-term receivables
E
1,982
463
Short-term investments
G
198
162
Cash and cash equivalents
G
615
504
Total current assets
2,795
1,129
Total assets
13,856
12,218
Equity and liabilities
Equity
Subscribed share capital
85
85
Cash flow hedge reserve
—
—
Other legal reserves
312
319
Cumulative translation reserves
(711)
(579)
Actuarial gains and losses
(3,013)
(3,117)
Other reserves
7,282
7,399
Undistributed results
367
467
Shareholders’ equity
F
4,322
4,574
Provisions
2
—
Long-term liabilities
G
2,933
3,550
Current liabilities
Short-term borrowings
G
6,353
4,011
Other current liabilities
H
246
83
Total current liabilities
6,599
4,094
Total equity and liabilities
13,856
12,218
Strategy | Sustainability |
Leadership and governance
|
Financial statements
192
COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note A: General information
Akzo Nobel N.V. is a company headquartered in the Netherlands. The address of our registered office is
Christian Neefestraat 2, Amsterdam; the Chamber of Commerce number is 09007809.
The financial statements of Akzo Nobel N.V. have been prepared in accordance with Part 9 of Book 2 of
the Dutch Civil Code, making use of the option of Article 362 of the Code, meaning that the accounting
principles used are the same as for the Consolidated financial statements. These principles also include the
classification and presentation of financial instruments, being equity instruments or financial liabilities.
Foreign currency amounts have been translated, assets and liabilities have been valued, and net income
has been determined in accordance with the principles of valuation and determination of income presented
in the relevant notes of the Consolidated financial statements.
Consolidated subsidiaries are all entities (including intermediate subsidiaries) over which the company has
control. The company controls an entity when it is exposed, or has rights, to variable returns from its
involvement with the subsidiary and has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are recognized from the date on which control is transferred to the company or its
intermediate holding entities. They are de-recognized from the date that control ceases.
The company applies the acquisition method to account for acquiring subsidiaries. The consideration
transferred for the acquisition of a subsidiary equals the sum of the fair value of assets transferred by the
company, liabilities incurred to the former owners of the acquiree, and the equity interests issued by the
company. Identifiable assets acquired and liabilities and contingent liabilities assumed in an acquisition are
measured initially at their fair values at the acquisition date, and are subsumed in the net asset value of the
investment in consolidated subsidiaries. Acquisition-related costs are expensed as incurred.
Investments in consolidated subsidiaries are measured using the net asset value method, based on the
measurement of assets, provisions and liabilities and determination of profit based on the principles applied
in the consolidated financial statements. When an acquisition of an investment in a consolidated subsidiary
is achieved in stages, any previously held equity interest is remeasured to fair value on the date of
acquisition. The remeasurement against the book value is accounted for in the statement of income. When
the company ceases to have control over a subsidiary, any retained interest is remeasured to its fair value,
with the change in carrying amount to be accounted for in the statement of income.
When parts of investments in consolidated subsidiaries are bought or sold, and such transaction does not
result in the loss of control, the difference between the consideration paid or received and the carrying
amount of the net assets acquired or sold, is directly recognized in equity.
The remuneration paragraph is included in Note 25 of the Consolidated financial statements. The number
of employees having a contract with the company at year-end 2024 was six (2023: five). All employees are
based in the Netherlands.
Note B: Financing income and expenses
Financing income and expenses are specified in the table below.
Financing income and expenses
in € millions
2023
2024
Financing income - third parties
27
17
Financing income - subsidiaries
62
63
Financing expense - third parties
(145)
(142)
Financing expense - subsidiaries
(144)
(129)
Net interest on net debt
(200)
(191)
Other items
1
7
Net other financing income/(expenses)
1
7
Total financing income and expenses
(199)
(184)
Other items in 2024 and 2023 mainly include foreign currency exchange results.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
193
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note C: Intangible assets
Intangible assets mainly include (internally developed) software.
Intangible assets
in € millions
Other intangibles
Balance at January 1, 2023
Cost of (internally developed) intangibles
139
Accumulated amortization
(40)
Carrying value at January 1, 2023
99
Movements in 2023
Additions
18
Amortization
(19)
Impairments
(1)
Total movements
(2)
Cost of (internally developed) intangibles
153
Accumulated amortization
(56)
Balance at December 31, 2023
97
Movements in 2024
Additions
17
Amortization
(21)
Total movements
(4)
Cost of (internally developed) intangibles
170
Accumulated amortization
(77)
Balance at December 31, 2024
93
Note D: Financial fixed assets
Financial fixed assets
Subsidiaries
in € millions
Share in
capital
Loans
Other non-
current
assets
Total
Balance at January 1, 2023
9,870
1,636
143
11,649
Investments/acquisitions/capital contributions
40
—
—
40
Divestments/capital repayments/dividends
(287)
—
—
(287)
Net income from subsidiaries
693
—
—
693
Equity-settled transactions
14
—
—
14
Cash flow hedges
34
—
—
34
Loans granted
—
492
—
492
Loans transferred from long-term to short-term
—
(1,082)
—
(1,082)
Repayment of loans
—
(385)
—
(385)
Post-retirement benefits
(111)
—
—
(111)
Deferred tax assets
—
—
(12)
(12)
Changes in exchange rates
(55)
(26)
—
(81)
Balance at December 31, 2023
10,198
635
131
10,964
Investments/acquisitions/capital contributions
374
—
1
375
Divestments/capital repayments/dividends
(1,181)
—
—
(1,181)
Net income from subsidiaries
732
—
—
732
Equity-settled transactions
14
—
—
14
Loans granted
—
178
—
178
Loans transferred from long-term to short-term
—
(100)
—
(100)
Repayment of loans
—
(8)
—
(8)
Post-retirement benefits
(104)
—
—
(104)
Deferred tax assets
—
—
5
5
Changes in exchange rates
131
(10)
—
121
Balance at December 31, 2024
10,164
695
137
10,996
Loans to subsidiaries that will mature between two and five years amounted to €692 million (2023: €616
million). An amount of €3 million will mature after five years (2023: €19 million).
Intercompany loans and in-house bank positions, are priced at arm’s length, taking factors like the credit
quality of AkzoNobel and the counterparty, country and currency risk into consideration. The carrying
amount of the loans to subsidiaries approximates the fair value. The loans are not secured by collateral.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
194
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Other non-current assets include the subordinated loan granted to the Pension Fund APF in the
Netherlands valued at €91 million (2023: €90 million). Using a Level 3 fair valuation method (discounted
cash flow), a fair value of €99 million (2023: €98 million) was determined for this loan. For information on
valuation methods, see Note 26 Financial risk management of the Consolidated financial statements.
Other non-current assets further contain €44 million deferred tax assets (2023: €39 million). Akzo Nobel
N.V. is head of the Dutch fiscal unity for corporate income tax. Members of the fiscal unity reflect taxes in
their accounts as if they are taxable on a standalone basis and are charged or credited accordingly by the
company.
Note E: Short-term receivables
Short-term receivables
in € millions, at December 31
2023
2024
Receivables from subsidiaries
1,948
436
FX contracts
14
15
Other receivables
20
12
Total
1,982
463
Short-term receivables are expected to be settled within one year. Receivables from subsidiaries include
interest to be received on intercompany loans of €15 million (2023: €19 million) and the current portion of a
loan to a subsidiary maturing in 2025 with a value of €125 million. The carrying value of the receivables
from subsidiaries approximates the fair value. For more details on intercompany loans and in-house bank
positions, refer to Note D.
In 2023, the receivables from subsidiaries contained the current portion of a loan to a subsidiary of €1.1
billion.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
195
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Note F: Shareholders’ equity
Statement of changes in equity
Legal reserves
in € millions
Subscribed
share capital
Cash flow hedges
Other
legal reserves
Cumulative
translation reserves
Actuarial gains
and losses
Other reserves
Undistributed
results
Shareholders'
equity
Balance at January 1, 2023
87
(34)
296
(656)
(2,902)
7,265
277
4,333
Changes in exchange rates in respect of subsidiaries
—
—
—
(55)
—
—
—
(55)
Cash flow hedges
—
34
—
—
—
—
—
34
Post-retirement benefits
—
—
—
—
(111)
—
—
(111)
Net income
—
—
—
—
—
—
442
442
Comprehensive income
—
34
—
(55)
(111)
—
442
310
Dividend
—
—
—
—
—
—
(338)
(338)
Equity-settled transactions
—
—
—
—
—
17
—
17
Share buyback
(2)
—
—
—
—
2
—
—
Addition to other reserves
—
—
16
—
—
(2)
(14)
—
Balance at December 31, 2023
85
—
312
(711)
(3,013)
7,282
367
4,322
Changes in exchange rates in respect of subsidiaries
—
—
—
132
—
—
—
132
Post-retirement benefits
—
—
—
—
(104)
—
—
(104)
Net income
—
—
—
—
—
—
542
542
Comprehensive income
—
—
—
132
(104)
—
542
570
Dividend
—
—
—
—
—
—
(338)
(338)
Equity-settled transactions
—
—
—
—
—
23
—
23
Acquisition of non-controlling interests
—
—
—
—
—
(3)
—
(3)
Addition to other reserves
—
—
7
—
—
97
(104)
—
Balance at December 31, 2024
85
—
319
(579)
(3,117)
7,399
467
4,574
The holders of common shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at the Annual General Meeting of shareholders. The holders of the priority
shares are entitled to a dividend of 6% per share or the statutory interest in the Netherlands, whichever is
lower, plus any accrued and unpaid dividends. They are entitled to 800 votes per share (in accordance
with the 800 times higher nominal value per share) at the Annual General Meeting of shareholders. In
addition, the holders of priority shares have the right to draw up binding lists of nominees for appointment
to the Supervisory Board and the Board of Management; amendments to the Articles of Association are
subject to the approval of the Meeting of Holders of Priority Shares.
Priority shares may only be transferred to a transferee designated by a Meeting of Holders of Priority
Shares and against payment of the par value of the shares, plus interest at the rate of 6% per annum or the
statutory interest in the Netherlands, whichever is lower, for the period between the beginning of the year
and the date of transfer. There are no restrictions on voting rights of holders of common or priority shares.
The Articles of Association set out procedures for exercising voting rights. The Annual General Meeting of
shareholders has resolved in 2024 to authorize the Board of Management for a period of 18 months (i) to
issue shares (or grant rights to shares) in the capital of the company up to a maximum of 10% of the total
number of shares outstanding (and to restrict or exclude the pre-emptive rights to those shares) and (ii) to
acquire shares in the capital of the company, provided that the shares that will at any time be held will not
exceed 10% of the issued share capital. The issue or repurchase of shares requires the approval of the
Supervisory Board.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
196
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Unrestricted reserves at year-end
in € millions
2023
2024
Shareholders' equity at year-end
4,322
4,574
Subscribed share capital
(85)
(85)
Subsidiaries' restrictions to transfer funds
(213)
(225)
Reserve for development costs
(99)
(94)
Unrestricted reserves
3,925
4,170
Of the shareholders’ equity of €4.6 billion (2023: €4.3 billion), €4.2 billion (2023: €3.9 billion) was
unrestricted and available for distribution, subject to the relevant provisions of our Articles of Association
and Dutch law.
Legal reserves include the €225 million reserve relating to earnings retained by subsidiaries after the year
1983, to the extent that there are limitations to arrange profit distributions, and the €94 million reserve for
capitalized development costs.
Dividend
Our dividend policy is to pay a stable to rising dividend.
In 2024, an interim dividend of €0.44 (2023: €0.44) per common share was paid. We propose a 2024 final
dividend of €1.54 (2023: €1.54) per common share, which would equal a total 2024 dividend of €1.98
(2023: €1.98).
Note G: Net debt
Analysis of net debt by category
in € millions, at December 31
2023
2024
Bonds issued
2,933
3,433
Debt to subsidiaries
—
117
Long-term borrowings
2,933
3,550
Current portion of long-term borrowings
500
—
Debt to credit institutions
1,574
1,486
Debt to subsidiaries
4,276
2,521
Other
3
4
Short-term borrowings
6,353
4,011
Total borrowings
9,286
7,561
Short-term investments
(198)
(162)
Cash and cash equivalents
(615)
(504)
Net debt
8,473
6,895
Multi-currency revolving credit facility
We have a multi-currency revolving credit facility of €1.3 billion which runs until 2027. This facility does not
contain financial covenants or acceleration provisions that are based on adverse changes in ratings or
material adverse change. At year-end 2024 and 2023, this facility had not been drawn.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
197
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Long-term borrowings
At year-end 2024, bonds issued amounted to €3,433 million (2023: €2,933 million); a specification is
included in the table below.
Bonds issued
in € millions, at December 31
2023
2024
1 1/8% 2016/26 (€500 million)
499
499
1 1/2% 2022/28 (€600 million)
598
598
1 5/8% 2020/30 (€750 million)
745
746
2% 2022/32 (€600 million)
595
596
4% 2023/33 (€500 million)
496
496
3 3/4% 2024/34 (€500 million)
—
498
Total
2,933
3,433
For the fair value of the bonds issued, refer to Note 26 Financial risk management in the Consolidated
financial statements. We estimated the fair value of the bonds issued based on the quoted market prices
(Level 1) for the same or similar issues or on the current rates offered to us for debt with similar maturities.
At year-end 2024, the fair value of the bonds included in long-term and short-term borrowings was €3,321
million (2023: €3,275 million).
In September 2024, a bond was issued with a nominal value of €500 million and a coupon of 3.75%,
maturing in 2034.
The average effective interest rate of the bonds included in long-term borrowings outstanding at year-end
2024 was 2.2% (year-end 2023: 2.0%).
At year-end 2024 and 2023, none of the borrowings was secured by collateral.
An amount of €1,097 million (2023: €1,097 million) of bonds issued will mature between two and five years.
An amount of €2,336 million (2023: €1,838 million) will mature after five years.
An amount of €116 million (2023: nil) of debt to subsidiaries will mature between two and five years. An
amount of €1 million (2023: nil) will mature after five years.
Short-term borrowings
The current portion of long-term borrowings decreased due to the maturing of a €500 million bond in
November 2024.
At year-end 2024, our debt to credit institutions amounted to €1,486 million (2023: €1,574 million). For the
fair value of the debt to credit institutions, refer to Note 26 Financial risk management in the Consolidated
financial statements. Debt to credit institutions includes our commercial paper program. We have US dollar
and euro commercial paper programs in place, which can be used to the extent that the equivalent portion
of the €1.3 billion multi-currency revolving credit facility is not used. We had €1.0 billion commercial paper
outstanding at year-end 2024 (2023: €0.8 billion) against an average interest rate of 3.4% (2023: 4.1%). At
year-end 2024, we had short-term bank loans outstanding of €0.5 billion (2023: €0.8 billion) against a 3-
month Euribor plus a mark-up rate (2023: three-month Euribor plus a mark-up rate). None of these facilities
contain financial covenants.
Debt to subsidiaries consists of the current portion of intercompany loans and in-house bank positions
which are expected to be settled within one year or have no fixed repayment schedule. The debt is not
secured by collateral. For more details on intercompany loans and in-house bank positions, refer to note D.
The carrying amounts of short-term borrowings and other current liabilities approximate fair value due to
the short maturity period of those instruments.
Short-term investments
At year-end 2024, we had short-term investments outstanding for an amount of €162 million (2023: €198
million). Short-term investments almost entirely consist of time deposits, money market funds and
marketable securities with a lifetime at investment date longer than three months but shorter than twelve
months.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
198
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Cash and cash equivalents
Cash and cash equivalents are specified in the table below.
Cash and cash equivalents
in € millions, at December 31
2023
2024
Cash on hand and in banks
334
291
Deposits and money markets funds with a maturity less than three months
281
213
Included under cash and cash equivalents in the balance sheet
615
504
Deposits and money market funds within cash and cash equivalents almost entirely consist of time
deposits immediately convertible into known amounts of cash and with a maturity of three months or less
from the date of purchase, and marketable securities that can be redeemed immediately when called.
Note H: Other current liabilities
Other current liabilities
in € millions, at December 31
2023
2024
Suppliers
12
—
Payables to subsidiaries
167
18
FX contracts
12
14
Interest payable
46
48
Other liabilities
9
3
Total
246
83
The carrying amount of payables to subsidiaries approximates the fair value.
Other current liabilities are expected to fall due in less than one year.
Note I: Financial instruments
At year-end 2024, Akzo Nobel N.V. had foreign exchange contracts outstanding to buy currencies for a
total of €1.4 billion (year-end 2023: €1.3 billion), while contracts to sell currencies totaled €1.4 billion (year-
end 2023: €1.3 billion). The contracts mainly relate to US dollars, pound sterling, Chinese yuan, Thai baht,
Brazilian real, Australian dollars, Singapore dollars, South African rand and Taiwanese dollars and all have
maturities within one year. These contracts were partly offset by the foreign exchange contracts concluded
with subsidiaries; fair value changes are recognized in the statement of income, or recognized in other
comprehensive income in case hedge accounting is applied. For information on risk exposure and risk
management, see Note 26 Financial risk management in the Consolidated financial statements.
Note J: Contingent liabilities
Akzo Nobel N.V. is parent of the group’s fiscal unity in the Netherlands, and is therefore liable for the
liabilities of said fiscal unity as a whole.
Akzo Nobel N.V. has declared in writing that it accepts joint and several liability for contractual debts of
certain Dutch and Irish consolidated companies (Article 403 of Book 2 of the Dutch Civil Code and section
357(1) of the Irish Companies Act 2014, respectively). These debts at year-end 2024 aggregate to €0.5
billion (2023: €0.6 billion), and are included in the consolidated balance sheet.
Akzo Nobel N.V. withdrew its declarations of joint and several liability under Article 403 of Book 2 of the
Dutch Civil Code for certain Dutch former Specialty Chemicals subsidiaries divested as per October 1,
2018, and since then has followed the procedures to terminate its residual liability under those declarations
under Article 404 of Book 2 of the Dutch Civil Code. The last objection against the termination of residual
liability has been resolved on February 20, 2025.
Additionally, at year-end 2024, guarantees were issued on behalf of consolidated companies for an
amount of €0.2 billion (2023: €0.4 billion). The debts and liabilities of the consolidated companies
underlying these guarantees are included in the consolidated balance sheet.
A number of claims against Akzo Nobel N.V. are pending, which are contested. This includes those where
Akzo Nobel N.V. and two of its subsidiaries are defending claims brought by INPEX Operations Australia
and JKC Australia LNG relating to the specification and use of an AkzoNobel product which was applied to
Strategy | Sustainability |
Leadership and governance
|
Financial statements
199
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
part of the pipework at the Ichthys Onshore Project in Darwin, Australia, a large LNG project. The claims
allege that AkzoNobel is liable for significant damages (degradation of the coating on extensive parts of the
pipework) and associated remediation costs are sought under the Australian Consumer Law. AkzoNobel
denies liability and also contests the quantum of alleged damages. The vast majority of the damages
claimed for remediation costs have not yet been incurred, rather they relate to (modelled) future inspection
and remediation costs that are subject to a high degree of uncertainty and debate in the proceedings. As a
result, it is not possible for AkzoNobel to reliably estimate any potential financial impact at this stage of the
proceedings. The case has gone to trial in the Federal Court of Australia, having commenced on June 17,
2024 and the proceedings are still ongoing with a final hearing scheduled in May 2025 with further
submissions being made. The timing of the Federal Court of Australia's judgment is uncertain, although is
not expected before the end of 2025.
Note K: Independent auditor’s fees
Our independent auditor, PricewaterhouseCoopers Accountants N.V., has rendered, for the period to
which the audit of the financial statements relates, in addition to the audit of the Consolidated financial
statements, mainly statutory audit services for controlled entities.
Fees PricewaterhouseCoopers 2024
in € millions
In the
Netherlands
Network
outside the
Netherlands
Total
Audit of the financial statements
4.9
5.2
10.1
Other audit services
0.1
0.1
0.2
Review of the Sustainability statements
0.6
—
0.6
Tax services
—
—
—
Other non-audit services
—
—
—
Total
5.6
5.3
10.9
Fees PricewaterhouseCoopers 2023
in € millions
In the
Netherlands
Network
outside the
Netherlands
Total
Audit of the financial statements
4.2
5.2
9.4
Other audit services
0.1
0.1
0.2
Review of the Sustainability statements
0.2
—
0.2
Tax services
—
—
—
Other non-audit services
—
—
—
Total
4.5
5.3
9.8
Amsterdam, February 24, 2025
The Board of Management
Greg Poux-Guillaume, Maarten de Vries
The Supervisory Board
Ben Noteboom, Ester Baiget, Jaska de Bakker, Hans Van Bylen, Byron Grote, Wouter Kolk, Dick Sluimers,
Patrick Thomas, Ute Wolf
Strategy | Sustainability |
Leadership and governance
|
Financial statements
200
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AkzoNobel Report 2024
Strategy | Sustainability |
Leadership and governance
|
Financial statements
201
AkzoNobel Report 2024
OTHER INFORMATION
Proposal for profit allocation
202
Profit allocation and distributions
202
Special rights to holders of priority shares
202
Independent auditor’s report
203
ESG assurance report
213
Financial summary
216
Glossary
220
List of affiliated legal entities and corporations
222
Proposal for profit allocation
With due observance of Dutch law and the Articles of Association, it is proposed that net income of €204
million is carried to the other reserves. Furthermore, with due observance of article 43, paragraph 7, it is
proposed that dividend on priority shares of €1,152 and on common shares of €338 million (to be
increased by dividend on shares issued in 2025 before the ex-dividend date) will be distributed. Following
the acceptance of this proposal, the holders of common shares will receive a total dividend of €1.98 per
share, of which €0.44 was paid earlier as an interim dividend. The final dividend of €1.54 per share will be
made available from May 7, 2025.
Profit allocation and distributions
The following articles of our Articles of Association govern profit allocation and distribution:
Article 43
43.6
The Board of Management shall be authorized to determine, with the approval of the Supervisory Board,
what share of profit remaining after application of the provisions of the foregoing paragraphs shall be
carried to reserves. The remaining profit shall be placed at the disposal of the Annual General Meeting of
shareholders, with due observance of the provisions of paragraph 7, it being provided that no further
dividends shall be paid on the preferred shares.
43.7
From the remaining profit, the following distributions shall, to the extent possible, be made as follows:
a.To the holders of priority shares: 6% per share or the statutory interest referred to in paragraph 1 of
article 13, whichever is lower, plus any accrued and unpaid dividends
b.To the holders of common shares: a dividend of such an amount per share as the remaining profit, less
the aforesaid dividends and less such amounts as the Annual General Meeting of shareholders may
decide to carry to reserves, shall permit
43.8
Without prejudice to the provisions of paragraph 4 of this article and of paragraph 4 of article 20, the
holders of common shares shall, to the exclusion of everyone else, be entitled to distributions made from
reserves accrued by virtue of the provision of paragraph 7b of this article.
43.9
Without prejudice to the provisions of article 42 and paragraph 8 of this article, the Annual General Meeting
of shareholders may decide on the utilization of reserves only on the proposal of the Board of Management
approved by the Supervisory Board.
Article 44
44.7
Cash dividends by virtue of paragraph 4 of article 20, article 42, or article 43 that have not been collected
within five years of the commencement of the second day on which they became due and payable shall
revert to the company.
Special rights to holders of priority shares
The priority shares are held by Stichting Akzo Nobel (Foundation Akzo Nobel), whose board is composed
of the members of the Supervisory Board who are not members of the Audit Committee. They each have
one vote on the board of the Foundation.
The Meeting of Holders of Priority Shares has the right to draw up binding lists of nominees for
appointment to the Supervisory Board and the Board of Management. Amendments to the Articles of
Association are subject to the approval of this meeting.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
202
OTHER INFORMATION
AkzoNobel Report 2024
Independent auditor’s report
To: The Annual General Meeting and the Supervisory Board of Akzo
Nobel N.V.
Report on the audit of the financial statements
2024
Our opinion
In our opinion:
• The Consolidated financial statements of Akzo Nobel N.V. together
with its subsidiaries (“the Group”) give a true and fair view of the
financial position of the Group as at December 31, 2024, and of its
result and cash flows for the year then ended in accordance with
IFRS Accounting Standards as adopted by the European Union
(“EU”) and with Part 9 of Book 2 of the Dutch Civil Code
• The Company financial statements of Akzo Nobel N.V. (“the
Company”) give a true and fair view of the financial position of the
Company as at December 31, 2024, and of its result for the year
then ended in accordance with Part 9 of Book 2 of the Dutch Civil
Code
What we have audited
We have audited the accompanying financial statements 2024 of
Akzo Nobel N.V., Amsterdam, the Netherlands. The financial
statements comprise the Consolidated financial statements of the
Group and the Company financial statements.
The Consolidated financial statements comprise:
• The Consolidated balance sheet as at December 31, 2024
• The following statements for 2024: the Consolidated statements of
income, of comprehensive income, of cash flows and of changes
in equity
• The Notes to the Consolidated financial statements, including
material accounting policies and other explanatory information
The Company financial statements comprise:
• The Company Balance sheet as at December 31, 2024
• The Company Statement of income for 2024
• The Notes, comprising a summary of the accounting policies
applied and other explanatory information
The financial reporting framework applied in the preparation of the
financial statements is IFRS Accounting Standards, as adopted by
the EU and the relevant provisions of Part 9 of Book 2 of the Dutch
Civil Code for the consolidated financial statements, and Part 9 of
Book 2 of the Dutch Civil Code for the Company financial
statements.
The basis for our opinion
We conducted our audit in accordance with Dutch law, including the
Dutch Standards on Auditing. We have further described our
responsibilities under those standards in the section “Our
responsibilities for the audit of the financial statements” of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of Akzo Nobel N.V. in accordance with the
European Union Regulation on specific requirements regarding
statutory audit of public interest entities, the “Wet toezicht
accountantsorganisaties” (Wta, Audit firms supervision act), the
“Verordening inzake de onafhankelijkheid van accountants bij
assuranceopdrachten” (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence) and other
relevant independence regulations in the Netherlands.
Furthermore, we have complied with the “Verordening gedrags- en
beroepsregels accountants” (VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures with respect to the key audit
matters, fraud and going concern, and the matters resulting from
that, in the context of our audit of the financial statements as a whole
and in forming our opinion thereon. The information in support of our
opinion, such as our findings and observations related to individual
key audit matters, the audit approach fraud risk and the audit
approach going concern, was addressed in this context, and we do
not provide separate opinions or conclusions on these matters.
Overview and context
Akzo Nobel N.V. is a global paints and coatings company
headquartered in the Netherlands. The Group is comprised of
several components and therefore we considered our Group audit
scope and approach as set out in the section “The scope of our
group audit”. In our audit we paid specific attention to the areas of
focus driven by the operations of the Group, as set out below.
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we considered where the Board of
Management made important judgments, for example, in respect of
significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. In Note 1
of the Consolidated financial statements, the Company describes
the areas of judgment in applying accounting policies and the key
sources of estimation uncertainty. We considered the valuation of
defined benefit obligations and the recoverability of deferred tax
Strategy | Sustainability |
Leadership and governance
|
Financial statements
203
OTHER INFORMATION
AkzoNobel Report 2024
assets to be key audit matters as set out in the section “Key audit
matters” of this report, given the significant estimation uncertainty,
the judgmental nature, the magnitude of the balances involved and
the related higher inherent risk of material misstatement.
Akzo Nobel N.V. assessed the potential effects of climate change
and developed plans to meet the Group’s announced emissions
reduction commitments. The Group considered, among others,
physical risks, such as those associated with heat stress and water
scarcity, as well as transition risks, such as those associated with
optimizing production footprints, upgrading energy inefficient assets,
prioritizing renewable electricity production and transitioning from
fossil to renewable fuels. Management also assessed the resulting
impact on the financial position, including underlying assumptions
and estimates. As part of our audit risk assessment, we gained an
understanding of the Group’s strategy and sustainability targets,
evaluated the potential impact on the financial statements and
discussed the assessment and governance thereof with
management. Due to the nonmaterial potential effects of climate
change on the Group, as disclosed within Note 1 of the
Consolidated financial statements, we did not consider this a key
audit matter.
Other areas of focus, that were not considered as key audit matters,
were related to the impairment testing of goodwill and other
intangibles with indefinite useful lives, the assessment of the
accounting impact of claims brought by INPEX Operations Australia
and JKC Australia LNG with regards to the Ichthys Onshore Project
in Darwin, Australia, and the testing of information technology
general controls.
We ensured that the audit teams at both group and component level
included the appropriate skills and competencies which are needed
for the audit of the Group. We therefore included experts in the areas
of pensions, share-based payments, forensics and valuations and
specialists in the areas of tax, IT and treasury in our teams.
The outline of our audit approach was as follows:
Materiality
• Overall materiality: €41.9 million
Audit scope
• We conducted audit work in 49 components in 18 countries
• Site visits were conducted with seven countries – this included
visits to the components in China, India, France, Germany, Brazil,
the UK and Italy, which covered 33 components within our audit
• Audit coverage: 65% of consolidated revenue, 72% of
consolidated total assets and 82% of consolidated profit before
tax
Key audit matters
• Valuation of defined benefit obligations
• Recoverability of deferred tax assets
Materiality
The scope of our audit was influenced by the application of
materiality, which is further explained in the section “Our
responsibilities for the audit of the financial statements”.
Based on our professional judgment, we determined certain
quantitative thresholds for materiality, including the overall materiality
for the financial statements as a whole, as set out in the table below.
These, together with qualitative considerations, helped us to
determine the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures, and to
evaluate the effect of identified misstatements, both individually and
in aggregate, on the financial statements as a whole and on our
opinion.
Overall
group
materiality
€41.9 million (2023: €41.5 million)
Basis for
determining
materiality
We used our professional judgment to determine
overall materiality. As a basis for our judgment, we
used 5% of profit before tax.
Rationale
for
benchmark
applied
We used profit before tax as the primary benchmark,
a generally accepted auditing practice, based on our
analysis of the common information needs of the
users of the financial statements. On this basis, we
believe that profit before tax is the most relevant
metric for the financial performance of the Company.
Component
materiality
Based on our judgment, we allocate materiality to
each component in our audit scope that is less than
our overall group materiality. The range of materiality
allocated across components was between €8
million and €30 million.
We also take misstatements and/or possible misstatements into
account that, in our judgment, are material for qualitative reasons.
We agreed with the Supervisory Board to report to them any
misstatement identified during our audit above €2 million (2023: €2
million) as well as misstatements below that amount that, in our
view, warranted reporting for qualitative reasons. Where
misstatements have no impact on profit before tax, we agreed that
we would report those above €20.9 million.
The scope of our group audit
Akzo Nobel N.V. is the parent company of a group of entities. The
financial information of this group is included in the consolidated
financial statements of Akzo Nobel N.V.
We are responsible for the identification and assessment of the risks
of material misstatement of the financial statements of the group,
Strategy | Sustainability |
Leadership and governance
|
Financial statements
204
OTHER INFORMATION
AkzoNobel Report 2024
including those with respect to the consolidation process. Based on
our risk assessment, we tailored the scope of our audit to ensure
that we, in aggregate, performed sufficient work on the financial
statements to enable us to provide an opinion on the financial
statements as a whole.
In setting the scope of our group audit we determined what audit
work needed to be performed at group level or component level and
whether involvement of component auditors was necessary. Based
on this outcome, we used component auditors who are familiar with
the local laws and regulations to perform the audit work. We
subjected 32 components to audits of their complete financial
information. We further subjected 17 components to audit
procedures to achieve appropriate coverage on financial line items in
the consolidated financial statements, such as revenue, cost of
sales, inventories, trade and other receivables, post-retirement
benefit provisions, deferred tax positions and income tax expense,
cash and cash equivalents and short-term investments.
In total, in performing these procedures, we achieved the following
coverage on the financial line items:
Revenue
65%
Total assets
72%
Profit before tax
82%
None of the remaining components represented more than 5% of
total group revenue, total group assets or total group profit before
tax. For those remaining components we performed, among others,
analytical procedures to corroborate our assessment that there were
no significant risks of material misstatements within those
components.
Where component auditors performed the work, we determined the
nature, timing and extent of direction and supervision of the
component auditors and review of their work. We furthermore:
• Issued group audit instructions to component auditors to set
expectations for the component auditor's work and facilitate our
direction and supervision of the component auditor and review of
their work
• Participated in discussions with component auditors as part of
planning the engagement, including when we as the Group auditor
assigned tasks or procedures such as the performance of risk
assessment procedures or determining the nature, timing and
extent of audit responses to identified and assessed risks of
material misstatement to component auditors
• Communicated with component auditors throughout the course of
the Group audit, either virtually by leveraging technology solutions,
in-person meetings (e.g., as part of a site visit to the component
auditor's territory), or through a combination of these, in order to
monitor the progress of the component auditor's work. These
ongoing communications included matters affecting the execution,
completion and reporting of the group audit
• Reviewed relevant parts of the component auditor's work,
including the component auditor's communication of matters
relevant to our conclusion with regard to the Group audit. Our
review of the component auditor's work took place throughout the
engagement. This included on-site and/or virtual reviews
• Reviewed formal written communications prepared by our
component auditors
• Attended certain key client meetings (e.g. certain planning,
execution and closing meetings) between the component auditor
and component management
The Group engagement team performed the audit work on the
Group consolidation, financial statement disclosures and a number
of more complex items and processes controlled and monitored
centrally by Akzo Nobel N.V. These include impairment testing of
goodwill and other intangible assets with indefinite useful lives,
share-based payments, recoverability of deferred tax assets, Group
level provisions and contingent liabilities, treasury, IT general controls
testing and the procedures over the Company financial statements.
By performing the procedures outlined above at the components,
combined with additional procedures exercised at Group level, we
have been able to obtain sufficient and appropriate audit evidence
on the Group’s financial information, to provide a basis for our
opinion on the financial statements.
Audit approach fraud risks
We identified and assessed the risks of material misstatements of
the financial statements due to fraud. During our audit we obtained
an understanding of Akzo Nobel N.V. and its environment and the
components of the internal control system. This included
management's risk assessment process, management's process for
responding to the risks of fraud and monitoring the internal control
system and how the Supervisory Board exercised oversight, as well
as the outcomes.
We evaluated the design and relevant aspects of the internal control
system with respect to the risks of material misstatements due to
fraud and in particular the fraud risk assessment and the processes
for identifying and responding to the risk of fraud and the internal
control that management has established to mitigate these risks.
Akzo Nobel N.V. has an integrity and compliance program, which
includes a governance and organization structure that focuses on
policies and procedures around risk management, policy
management, communication, training and education, a competition
law program, privacy program, anti-bribery and anti-corruption
program, third party risk management program, export controls and
sanctions, monitoring, grievance and investigation procedures, and
reporting. We evaluated the design and the implementation of
certain internal controls designed to mitigate fraud risks.
We asked members of the Board of Management, the Executive
Committee, the Supervisory Board and others within the Group,
including the Internal Audit and Integrity and Compliance functions,
whether they are aware of any actual or suspected fraud. This did
not result in signals of actual or suspected fraud that may lead to a
material misstatement.
As part of our process of identifying fraud risks, we evaluated fraud
risk factors with respect to financial reporting fraud, misappropriation
of assets and bribery and corruption. We evaluated whether these
factors indicate that a risk of material misstatement due to fraud is
present.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
205
OTHER INFORMATION
AkzoNobel Report 2024
We identified the following fraud risks and performed the following specific procedures:
Identified fraud risks
Our audit work and observations
Risk of fraud through management
override of control
Management is in a unique position to
perpetrate fraud because of management’s
ability to manipulate accounting records and
prepare fraudulent financial statements by
overriding controls that otherwise appear to be
operating effectively. That is why, in all our
audits, we pay attention to the risk of
management override of controls:
• The appropriateness of journal entries and
other adjustments made in the preparation
of the financial statements
• Estimates
• Significant transactions, if any, outside the
normal course of business for the Group
We have evaluated the design and implementation of internal control measures in the processes of generating and processing
journal entries and forming estimates. This includes assessing access safeguards in the IT system and the possibility that these
lead to violations of the segregation of duties.
In testing journal entries, we have made a selection of journal entries on the basis of risk criteria and performed audit procedures
on them, including inspection of the source documentation to assess the validity of the business rationale, and substantiation of
corroborating evidence. In this context, we also tested the consolidation and elimination entries, evaluated transactions outside
the normal course of business and tested them where this was relevant in our audit.
We performed audit procedures related to the significant estimates and judgments by management, as listed in Note 1 to the
Consolidated financial statements. These procedures include assessing management’s ability to estimate by assessing previous
estimations with actual outcomes, performing sensitivity analyses, testing the model, methodology and inputs to supporting
evidence and challenging management’s forecasts as applicable. For each estimate, we paid attention to the inherent risk of bias
of management in estimates.
Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to management override of
control.
The risk of fraud in revenue recognition
Based on our risk assessment procedures, we
concluded that the risk of fraud in revenue
recognition is related to the occurrence of
revenue transactions, due to the Group’s
strategy to continuously grow and expand
market share.
We evaluated the design of the internal control measures that are intended to mitigate the risk of fraud in revenue recognition and
where relevant to our audit, assessed the effectiveness of those measures in the processes of recognizing revenue.
Through data analysis, we tested unexpected journal entries based on revenue recognition criteria, performed relevant testing on
revenue transactions throughout the year and the receivable balances at year end.
Our audit procedures included, on a sample basis, the inspection of source documentation to assess the validity of the business
rationale, and substantiation of corroborating evidence, testing the occurrence of the related revenue.
Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to occurrence of the revenue
reporting.
We incorporated an element of unpredictability in our audit. During the audit, we remained alert to indications of fraud. Furthermore,
we considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance
with laws and regulations.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
206
OTHER INFORMATION
AkzoNobel Report 2024
Audit approach going concern
As disclosed in Note 1 of the Consolidated financial statements, the
Board of Management prepared the financial statements on the
assumption that the Company is a going concern and that it will
continue all its operations for at least 12 months from the date of
preparation of the financial statements. Our procedures to evaluate
the Board of Management’s going concern assessment included,
among others:
• Considering whether the Board of Management’s going concern
assessment included all relevant information of which we were
aware as a result of our audit and inquiring with management
regarding management's most important assumptions underlying
its going concern assessment
• Analyzing the Company's financial position per the balance sheet
date, such as financial leverage and cash positions, in relation to
the financial position per prior year balance sheet date to assess
whether events or circumstances exist that may lead to a going
concern risk, and the liquidity risk management has disclosed in
Note 26 of the Consolidated financial statements
• Evaluating the Board of Management’s current budget including
cash flows, taking into account current developments in the
industry and all relevant information of which we were aware as a
result of our audit
• Analyzing whether the current and the required financing has been
secured to enable the continuation of the entirety of the entity’s
operations
• Performing enquiries of the Board of Management and other
management as to its knowledge of going concern risks beyond
the period of the Board of Management’s assessment
Our procedures did not result in outcomes contrary to the Board of
Management’s assumptions and judgments used in the application
of the going concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements. We have communicated the key audit matters to the
Supervisory Board. The key audit matters are not a comprehensive
reflection of all matters identified by our audit and that we discussed.
In this section, we describe the key audit matters and include a
summary of the audit procedures we performed on those matters.
In the prior year audit, we included a key audit matter with respect to
management's transformation projects of the organization, systems,
processes and controls. Over the past years, the Group executed a
wide range of transformation projects, which included centralization
of finance activities in Global Business Services hubs and
simplification of the IT environment, impacting the Group’s systems,
processes and controls relevant for financial reporting. While certain
transformation projects are still ongoing, others have stabilized and
did not significantly impact our planned and executed audit
approach for the 2024 audit. Therefore, we did not consider this a
key audit matter for 2024.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
207
OTHER INFORMATION
AkzoNobel Report 2024
Valuation of defined benefit obligations
Note 18
The post-retirement benefit provisions consist of defined benefit obligations (€9.0 billion), more than offset
by plan assets (€9.5 billion). The largest pension plans are the ICI Pension Fund and the Akzo Nobel (CPS)
Pension Scheme in the UK, which together account for 85% of the defined benefit obligation (DBO) and
90% of the plan assets.
We consider the valuation of the largest defined benefit obligations to be a key audit matter because
positions are significant to the Group and the assessment process is complex and involves significant
management judgment, which could be subject to management bias. The actuarial assumptions used
include demographic assumptions (rates of employee turnover, disability, early retirement and mortality)
and financial assumptions (discount rate, future salary development, benefit increases/indexation and
inflation). The Group’s disclosures are included in Note 18 to the Consolidated financial statements.
With the assistance of our actuarial experts, we have evaluated management’s actuarial assumptions and
the valuation methodologies applied, as well as the objectivity and competence of the Group’s external
pension experts used for the calculation of the defined benefit obligations.
We have challenged management on the demographic and financial assumptions, primarily on their
assumptions applied to which the defined benefit obligations are most sensitive (discount rate, inflation,
future salary development and mortality assumptions) by performing independent testing over the
assumptions and methodologies used and comparing these to the published actuarial tables, among
others. Furthermore, we tested the census data of participants.
We also assessed the adequacy of the Group’s disclosures on post-retirement benefit provisions and
assumptions used within Note 18.
Our procedures did not result in material findings with respect to the valuation and related disclosure of
defined benefit obligations at December 31, 2024.
Key audit matter
Our audit work and observations
Strategy | Sustainability |
Leadership and governance
|
Financial statements
208
OTHER INFORMATION
AkzoNobel Report 2024
Recoverability of deferred tax assets
Note 8
Management’s assessment of the recoverability of deferred tax assets in Germany, the Netherlands and
the UK, resulting from tax credits (€234 million) and net operating losses (€229 million) is significant to our
audit as the positions are material to the Group, calculations are complex and involve high estimation
uncertainty and judgmental assumptions, which could be subject to management bias. The key
assumptions include projected future taxable income, the impacts of tax planning strategies and the
application of local fiscal regulations and developments. The Group’s disclosures concerning income
taxes are included in Note 8 to the Consolidated financial statements.
We evaluated management’s assessment of the recoverability of the deferred tax assets by evaluating the
key data inputs, assumptions, and model applied by management. We performed procedures to validate
the mathematical accuracy of management's model and traced management's key inputs to appropriate
supporting documentation.
We challenged and corroborated management's key assumptions utilized in arriving at their estimated
future taxable income which included, among others, growth rates used to estimate future taxable profits,
the impacts of company plans/initiatives on the company's future taxable profits and the ability and intent
of management to execute tax planning strategies which could impact future taxable profits.
With the assistance of our tax specialists, we assessed the applicable local fiscal regulations and
developments, including changes in the statutory income tax rates, interest limitation rules and specific
requirements of the settlement of withholding taxes.
We assessed the adequacy of the disclosures on deferred tax assets recoverability within Note 8.
Our procedures did not result in material findings with respect to the recoverability of deferred tax assets
and related disclosures at December 31, 2024.
Key audit matter
Our audit work and observations
Strategy | Sustainability |
Leadership and governance
|
Financial statements
209
OTHER INFORMATION
AkzoNobel Report 2024
Report on the other information included in the
annual report
The annual report contains other information. This includes all
information in the annual report in addition to the financial
statements and our auditor’s report thereon.
Based on the procedures performed as set out below, we conclude
that the other information:
• Is consistent with the financial statements and does not contain
material misstatements
• Contains all the information regarding the management report and
the other information that is required by Part 9 of Book 2 and
regarding the remuneration report required by the sections 2:135b
and 2:145 subsection 2 of the Dutch Civil Code
We have read the other information. Based on our knowledge and
the understanding obtained in our audit of the financial statements or
otherwise, we have considered whether the other information
contains material misstatements.
By performing our procedures, we comply with the requirements of
Part 9 of Book 2 and section 2:135b subsection 7 of the Dutch Civil
Code and the Dutch Standard 720. The scope of such procedures
was substantially less than the scope of those procedures
performed in our audit of the financial statements.
The Board of Management is responsible for the preparation of the
other information, including the management report and the other
information in accordance with Part 9 of Book 2 of the Dutch Civil
Code. The Board of Management and the Supervisory Board are
responsible for ensuring that the remuneration report is drawn up
and published in accordance with sections 2:135b and 2:145
subsection 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
and ESEF
Our appointment
We were appointed as auditors of Akzo Nobel N.V. on April 29,
2014, by the Supervisory Board. This followed the passing of a
resolution by the shareholders at the Annual General Meeting held
on April 29, 2014. Our appointment has been renewed annually by
shareholders and now represents a total period of uninterrupted
engagement of nine years.
European Single Electronic Format (ESEF)
Akzo Nobel N.V. has prepared the annual report in ESEF. The
requirements for this are set out in the Delegated Regulation (EU)
2019/815 with regard to regulatory technical standards on the
specification of a single electronic reporting format (hereinafter: the
RTS on ESEF).
In our opinion, the annual report prepared in XHTML format,
including the marked up consolidated financial statements, as
included in the reporting package by Akzo Nobel N.V., complies in
all material respects with the RTS on ESEF.
The Board of Management is responsible for preparing the annual
report, including the financial statements in accordance with the RTS
on ESEF, whereby the Board of Management combines the various
components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion
whether the annual report in this reporting package complies with
the RTS on ESEF.
We performed our examination in accordance with Dutch law,
including Dutch Standard 3950N “Assuranceopdrachten inzake het
voldoen aan de criteria voor het opstellen van een digitaal
verantwoordingsdocument” (assurance engagements relating to
compliance with criteria for digital reporting).
Our examination included among others:
• Obtaining an understanding of the entity’s financial reporting
process, including the preparation of the reporting package
• Identifying and assessing the risks that the annual report does not
comply in all material respects with the RTS on ESEF and
designing and performing further assurance procedures
responsive to those risks to provide a basis for our opinion,
including:
– Obtaining the reporting package and performing validations to
determine whether the reporting package containing the Inline
XBRL instance document and the XBRL extension taxonomy
files have been prepared in accordance with the technical
specifications as included in the RTS on ESEF
– Examining the information related to the Consolidated financial
statements in the reporting package to determine whether all
required mark-ups have been applied and whether these are in
accordance with the RTS on ESEF
No prohibited non-audit services
To the best of our knowledge and belief, we have not provided
prohibited non-audit services as referred to in article 5(1) of the
European Regulation on specific requirements regarding statutory
audit of public interest entities.
Services rendered
The services, in addition to the audit, that we have provided to the
Company or its controlled entities, for the period to which our
Strategy | Sustainability |
Leadership and governance
|
Financial statements
210
OTHER INFORMATION
AkzoNobel Report 2024
statutory audit relates, are disclosed in Note K to the financial
statements.
Responsibilities for the financial statements and
the audit
Responsibilities of the Board of Management
and the Supervisory Board for the financial
statements
The Board of Management is responsible for:
• The preparation and fair presentation of the financial statements in
accordance with IFRS Accounting Standards as adopted by the
EU and Part 9 of Book 2 of the Dutch Civil Code
• Such internal control as the Board of Management determines is
necessary to enable the preparation of the financial statements
that are free from material misstatement, whether due to fraud or
error
In preparing the financial statements, the Board of Management is
responsible for assessing the Company’s ability to continue as a
going concern. Based on the financial reporting frameworks
mentioned, the Board of Management should prepare the financial
statements using the going concern basis of accounting unless the
Board of Management either intends to liquidate the Company or to
cease operations or has no realistic alternative but to do so. The
Board of Management should disclose in the financial statements
any event and circumstances that may cast significant doubt on the
Company’s ability to continue as a going concern.
The Supervisory Board is responsible for overseeing the Company’s
financial reporting process.
Our responsibilities for the audit of the
financial statements
Our responsibility is to plan and perform an audit engagement in a
manner that allows us to obtain sufficient and appropriate audit
evidence to provide a basis for our opinion. Our objectives are to
obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to
fraud or error and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high but not absolute level of
assurance, and is not a guarantee that an audit conducted in
accordance with the Dutch Standards on Auditing will always detect
a material misstatement when it exists. Misstatements may arise due
to fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial
statements.
Materiality affects the nature, timing and extent of our audit
procedures and the evaluation of the effect of identified
misstatements on our opinion.
A more detailed description of our responsibilities is set out in the
appendix to our report.
Amsterdam, February 24, 2025
PricewaterhouseCoopers Accountants N.V
Original has been signed by D. van Ameijden RA
Appendix to our auditor’s report on the financial
statements 2024 of Akzo Nobel N.V.
In addition to what is included in our auditor’s report, we have further
set out in this appendix our responsibilities for the audit of the
financial statements and explained what an audit involves.
The auditor’s responsibilities for the audit of
the financial statements
We have exercised professional judgment and have maintained
professional skepticism throughout the audit in accordance with
Dutch Standards on Auditing, ethical requirements and
independence requirements. Our audit consisted, among other
things, of the following:
• Identifying and assessing the risks of material misstatement of the
financial statements, whether due to fraud or error, designing and
performing audit procedures responsive to those risks, and
obtaining audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the intentional override of
internal control
• Obtaining an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control
• Evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related
disclosures made by the Board of Management
• Concluding on the appropriateness of the Board of Management’s
use of the going concern basis of accounting, and based on the
audit evidence obtained, concluding whether a material uncertainty
exists related to events and/or conditions that may cast significant
Strategy | Sustainability |
Leadership and governance
|
Financial statements
211
OTHER INFORMATION
AkzoNobel Report 2024
doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report and are
made in the context of our opinion on the financial statements as a
whole. However, future events or conditions may cause the
Company to cease to continue as a going concern
• Evaluating the overall presentation, structure and content of the
financial statements, including the disclosures, and evaluating
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation
We are responsible for planning and performing the Group audit to
obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Group as a
basis for forming an opinion on the financial statements. We are also
responsible for the direction, supervision and review of the audit
work performed for purposes of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit. In this respect, we
also issue an additional report to the audit committee in accordance
with article 11 of the EU Regulation on specific requirements
regarding statutory audit of public interest entities. The information
included in this additional report is consistent with our audit opinion
in this auditor’s report.
We provide the Supervisory Board with a statement that we have
complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and
where applicable, related actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the Supervisory Board, we
determine those matters that were of most significance in the audit
of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
212
OTHER INFORMATION
AkzoNobel Report 2024
LIMITED ASSURANCE
REPORT OF THE
INDEPENDENT AUDITOR ON
THE SUSTAINABILITY
STATEMENTS
Limited assurance report of the independent
auditor on the Sustainability statements
To: The Annual General Meeting and the Supervisory Board of Akzo
Nobel N.V.
Our limited assurance conclusion
Based on the procedures we have performed and the assurance
evidence we have obtained, nothing has come to our attention that
causes us to believe that the Sustainability statements of Akzo Nobel
N.V. (“the Company") for 2024 are not, in all material respects:
• Prepared in accordance with the European Sustainability
Reporting Standards (“ESRS”) as adopted by the European
Commission and in accordance with the process, carried out by
the Company, to identify the information to be reported pursuant
to the ESRS
• Compliant with the reporting requirements provided for in Article 8
of Regulation (EU) 2020/852 (“the Taxonomy Regulation”)
The subject matter of our limited assurance
procedures
We have conducted a limited assurance engagement on the 2024
Sustainability statements of Akzo Nobel N.V., Amsterdam, the
Netherlands, included in section Sustainability statements of the
management report including the information incorporated in the
sustainability statements by reference (hereafter: the Sustainability
statements).
In the Sustainability statements, references are made to external
sources or websites. The information on these external sources or
websites is not subject to our limited assurance procedures for the
Sustainability statements. We therefore do not provide assurance on
this information.
The basis for our conclusion
We conducted our limited assurance engagement in accordance
with Dutch law, including the Dutch Standard 3810N “Assurance-
opdrachten inzake duurzaamheidsverslaggeving” (assurance
engagements relating to sustainability reporting), which is a specific
Dutch Standard that is based on the International Standard on
Assurance Engagements (ISAE) 3000 “Assurance engagements
other than audits or reviews of historical financial information”. Our
responsibilities under this standard are further described in the
section “Our responsibilities for the limited assurance engagement
on the Sustainability statements” of our report. We believe that the
assurance evidence we have obtained is sufficient and appropriate
to provide a basis for our conclusion.
Our independence and quality management
We are independent of Akzo Nobel N.V. in accordance with the
“Verordening inzake de onafhankelijkheid van accountants bij
assuranceopdrachten” (ViO, Code of ethics for professional
accountants, a regulation with respect to independence) and other
relevant independence regulations in the Netherlands. Furthermore,
we have complied with the “Verordening gedrags- en beroepsregels
accountants” (VGBA, Dutch Code of ethics for professional
accountants).
PwC applies the applicable quality management requirements
pursuant to the “Nadere voorschriften
kwaliteitsmanagement” (NVKM, regulations for quality management)
and the International Standard on Quality Management (ISQM) 1,
and accordingly maintains a comprehensive system of quality
management, including documented policies and procedures
regarding compliance with ethical requirements, professional
standards and other relevant legal and regulatory requirements.
Emphasis of matter
Emphasis on the double materiality assessment
process
We draw attention to the paragraph “Description of the process to
identify and assess material impacts, risks and opportunities” in
section “Impact, risk and opportunity management” and the
paragraph “Statement on due diligence” in section “Governance” of
the Sustainability statements. The disclosures in these sections
explain possible future changes in the ongoing due diligence and
double materiality assessment process, including engagement with
affected stakeholders. Due diligence is an on-going practice that
responds to and may trigger changes in the Company’s strategy,
business model, activities, business relationships, operating,
sourcing and selling contexts relevant for stakeholders as a group.
The double materiality assessment process may also be impacted in
time by sector-specific standards to be adopted. The Sustainability
statements may therefore not include every impact, risk and
opportunity or additional entity-specific disclosure that each
individual stakeholder may consider important in its own
assessment. Our conclusion is not modified in respect of this matter.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
213
OTHER INFORMATION
AkzoNobel Report 2024
Corresponding information not subject to
assurance procedures
The corresponding information in the Sustainability statements and
thereto related disclosures with respect to previous years have not
been subjected to reasonable or limited assurance procedures.
Inherent limitations in preparing the
Sustainability statements
In reporting forward-looking information in accordance with the
ESRS, the Board of Management of the Company is required to
prepare the forward-looking information based on disclosed
assumptions about events that may occur in the future and possible
future actions by the Company. The actual outcome is likely to be
different since anticipated events frequently do not occur as
expected. Forward-looking information relates to events and actions
that have not yet occurred and may never occur. We do not provide
assurance on the achievability of this forward-looking information.
The comparability of sustainability information between entities and
over time may be affected by the lack of historical sustainability
information in accordance with the ESRS and by the absence of a
uniform practice on which to draw, to evaluate and measure this
information. This allows for the application of different, but
acceptable, measurement techniques, especially in the initial years.
Calculations to determine information as included in the
Sustainability statements could be based on assumptions and
sources from third parties that include information about, among
others, value chain and information collected from actors in the value
chain, when appropriate. We have not performed procedures on the
content of these assumptions and these external sources, other than
evaluating the suitability and plausibility of these assumptions and
sources from third parties used.
Responsibilities for the Sustainability
statements and for the limited assurance
procedures thereon
Responsibilities of the Board of Management
and the Supervisory Board for the Sustainability
statements
The Board of Management of Akzo Nobel N.V. is responsible for the
preparation of the Sustainability statements in accordance with
ESRS, including the development and implementation of the double
materiality process, which is a process to identify the information
reported in the Sustainability statements in accordance with the
ESRS and for disclosing this process in the Sustainability
statements.
This responsibility includes:
• Understanding the context in which Akzo Nobel N.V.’s activities
and business relationships take place and developing an
understanding of its affected stakeholders
• The identification of the actual and potential impacts (both negative
and positive) related to sustainability matters, as well as risks and
opportunities that affect, or could reasonably be expected to
affect, the Company’s financial position, financial performance,
cash flows, access to finance or cost of capital over the short,
medium, or long term
• The assessment of the materiality of the identified impacts, risks
and opportunities related to sustainability matters by selecting and
applying appropriate thresholds
• Making assumptions and estimates that are reasonable in the
circumstances
The Board of Management is also responsible for preparing the
disclosures in compliance with the reporting requirements provided
in the Taxonomy Regulation.
The Board of Management is also responsible for selecting and
applying additional entity-specific disclosures to enable users to
understand the Company’s sustainability-related impacts, risks or
opportunities and for determining that these additional entity-
specific disclosures are suitable in the circumstances and in
accordance with the ESRS.
Furthermore, the Board of Management is responsible for such
internal control as the Board of Management determines is
necessary to enable the preparation of the Sustainability statements
that is free from material misstatement, whether due to fraud or
error.
The Supervisory Board is responsible for overseeing the Company’s
sustainability reporting process including the double materiality
process carried out by the Company.
Our responsibilities for the limited assurance
engagement on the Sustainability statements
Our responsibility is to plan and perform the limited assurance
engagement in a manner that allows us to obtain sufficient
appropriate assurance evidence to provide a basis for our
conclusion.
Our objectives are to obtain a limited level of assurance, as
appropriate, about whether the Sustainability statements are free
from material misstatements, and to issue a limited assurance
conclusion in our report. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence decisions of users taken
on the basis of the Sustainability statements. The procedures vary in
nature and timing from, and are less in extent than for, a reasonable
assurance engagement. The level of assurance obtained in a limited
assurance engagement is therefore substantially less than the
assurance obtained in a reasonable assurance engagement.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
214
OTHER INFORMATION
AkzoNobel Report 2024
Our other responsibilities in respect of the limited assurance
engagement on the Sustainability statements include:
• Performing risk assessment procedures, including obtaining an
understanding of internal control relevant to the engagement, to
identify where material misstatements are likely to arise, whether
due to fraud or error
• Designing and performing procedures responsive to where
material misstatements are likely to arise in the Sustainability
statements. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control
Procedures performed
We have exercised professional judgment and have maintained
professional skepticism throughout the assurance engagement, in
accordance with the Dutch Standard 3810N, ethical requirements
and independence requirements. Our procedures included, among
others, the following:
• Performing inquiries and an analysis of the external environment
and obtaining an understanding of relevant sustainability themes
and issues, the characteristics of the Company, its activities and
the value chain and its key intangible resources to assess the
process to identify the information to be reported carried out by
the Company as the basis for the Sustainability statements and
disclosure of all material sustainability-related impacts, risks and
opportunities in accordance with ESRS
• Obtaining through inquiries a general understanding of the internal
control environment, the Company’s processes for gathering and
reporting entity-related and value chain information, the
information systems and the Company’s risk assessment process
relevant to the preparation of the Sustainability statements and for
identifying the Company’s activities, determining eligible and
aligned activities and preparing the disclosures provided for in the
Taxonomy Regulation, without testing the operating effectiveness
of controls
• Assessing the double materiality process carried out by the
Company and identifying and assessing areas of the Sustainability
statements, including the disclosures provided for in the
Taxonomy Regulation where misleading or unbalanced information
or material misstatements, whether due to fraud or error, are likely
to arise. We designed and performed further assurance
procedures aimed at determining that the Sustainability
statements are free from material misstatements responsive to this
risk analysis
• Considering whether the description of the process to identify the
information to be reported in the Sustainability statements made
by the Board of Management appears consistent with the process
carried out by the Company
• Evaluating the methods, assumptions and data for developing
estimates and forward-looking information. Assessing whether the
Company’s methods for developing estimates are appropriate and
have been consistently applied for selected disclosures. Our
procedures did not include testing the data on which the estimates
are based or separately developing our own estimates against
which to evaluate the Company’s estimates
• Analyzing, on a limited sample basis, relevant internal and external
documentation at the level of the Company (including other entities
or value chain from which the information may stem) for selected
disclosures
• Determining the nature and extent of the procedures to be
performed for the locations. For this, the nature, extent and/or risk
profile of these locations are decisive. Based thereon, we selected
locations to visit, being Newcastle upon Tyne, the UK; Gebze,
Türkiye and Umbogintwini, South Africa. Of these, one was a
physical visit and two were virtual. These visits are aimed at, on a
local level, observing parts of the Company’s Health, Safety,
Environment and Security (HSE&S) audits, validating source data
and obtaining through inquiries a general understanding of the
control environment, processes and information relevant to the
preparation of the Sustainability statements
• Reading the other information in the annual report to identify
material inconsistencies, if any, with the Sustainability statements
• Considering whether the disclosures provided to address the
reporting requirements provided for in the Taxonomy Regulation
for each of the environmental objectives: reconcile with the
underlying records of the Company; are consistent or coherent
with the Sustainability statements, appear reasonable, in particular
whether the eligible economic activities meet the cumulative
conditions to qualify as aligned and whether the technical criteria
are met; and whether the accompanying key performance
indicators disclosures have been defined and calculated in
accordance with the Taxonomy reference framework, and comply
with the reporting requirements provided for in the Taxonomy
Regulation, including the format in which the activities are
presented
• Reconciling the relevant financial information to the financial
statements
• Considering the overall presentation, structure and the balanced
content of the Sustainability statements, including the reporting
requirements provided for in the Taxonomy Regulation
• Considering, based on our limited assurance procedures and
evaluation of the assurance evidence obtained, whether the
Sustainability statements as a whole, including the sustainability
matters and disclosures, is clearly and adequately disclosed in
accordance with ESRS
We communicate with the Supervisory Board regarding, among
other matters, the planned scope and timing of the limited assurance
engagement and significant findings that we identify during our
limited assurance engagement.
Amsterdam, February 24, 2025
PricewaterhouseCoopers Accountants N.V.
Original has been signed by D. van Ameijden RA
Strategy | Sustainability |
Leadership and governance
|
Financial statements
215
OTHER INFORMATION
AkzoNobel Report 2024
Consolidated statement of income
in € millions, for the year ended December 31
2015
20163,4
2017
2018
20195
2020
2021
2022
2023
2024
Revenue
14,859
9,434
9,612
9,256
9,276
8,530
9,587
10,846
10,668
10,711
Operating income1
1,573
923
825
605
841
963
1,118
708
1,029
917
Adjusted operating income1
1,462
928
905
798
991
1,099
1,092
789
1,074
1,113
Adjusted EBITDA1
2,088
1,210
1,181
1,037
1,341
1,442
1,436
1,157
1,429
1,478
Financing income and expenses
(114)
(91)
(78)
(52)
(76)
(69)
(39)
(124)
(272)
(102)
Income tax
(416)
(234)
(253)
(118)
(230)
(241)
(246)
(214)
(296)
(246)
Results from associates
17
18
17
20
20
25
26
18
27
23
Profit/(loss) for the period from continuing operations
1,060
616
511
455
555
678
859
388
488
592
Discontinued operations
6
436
393
6,274
22
(7)
6
(10)
(5)
—
Non-controlling interests
(87)
(82)
(72)
(55)
(38)
(41)
(36)
(26)
(41)
(50)
Net income, attributable to shareholders
979
970
832
6,674
539
630
829
352
442
542
Common shares, in millions at year-end
249.0
252.2
252.6
256.2
199.6
190.6
181.6
174.4
170.6
170.8
Dividend2
222
239
1,287
390
1,423
366
365
347
338
338
Number of employees at year-end (FTE)
45,600
36,300
35,700
34,500
33,800
32,200
32,800
35,200
35,200
34,600
Average number of employees (FTE)
46,100
36,200
36,200
34,900
34,200
33,000
32,700
35,100
34,900
35,400
Employee benefits
2,728
1,794
1,935
1,976
1,875
1,850
1,773
1,960
2,008
2,163
Ratios
Adjusted EBITDA margin%1
14.1
12.8
12.3
11.2
14.4
16.9
15.0
10.7
13.4
13.8
ROI%1
14.0
14.4
13.9
12.6
14.1
16.1
16.0
9.8
13.0
13.3
Per share information
Net income
3.95
3.87
3.31
26.19
2.53
3.29
4.48
2.01
2.59
3.17
Adjusted earnings per share1
4.02
3.80
4.40
1.91
3.10
3.88
4.07
2.45
3.07
3.88
Highest share price during the year
74.81
64.74
82.64
82.70
91.86
91.60
107.80
98.50
78.82
75.24
Lowest share price during the year
55.65
50.17
59.11
68.82
69.12
48.50
83.50
56.22
61.42
52.82
Year-end share price
61.68
59.39
73.02
70.40
90.69
87.86
96.50
62.56
74.82
57.96
1 Refer to the glossary for definitions.
2 Cash dividend paid to shareholders of AkzoNobel.
3 Re-presented to present the Specialty Chemicals business as discontinued operations.
4 Re-presented to the new adjusted earnings per share definition, which no longer excludes post-tax amortization charges.
5 Includes the impact of the adoption of IFRS 16 “Leases”.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
216
FINANCIAL SUMMARY
AkzoNobel Report 2024
Consolidated balance sheet
In € millions at December 31
2015
20161
2017
2018
20192
2020
2021
2022
2023
2024
Intangible assets
4,156
4,413
3,409
3,458
3,625
3,554
3,690
4,072
4,081
4,049
Property plant and equipment
4,003
4,190
1,832
1,748
1,700
1,621
1,800
1,968
1,994
2,122
Right-of-use assets
—
—
—
—
374
324
304
291
302
318
Other non-current assets
2,125
1,736
1,894
1,965
2,541
2,614
2,736
2,166
2,137
1,924
Total non-current assets
10,284
10,339
7,135
7,171
8,240
8,113
8,530
8,497
8,514
8,413
Inventories
1,504
1,532
1,094
1,139
1,139
1,159
1,650
1,843
1,649
1,721
Trade and other receivables
2,741
2,787
1,964
2,141
2,133
1,994
2,339
2,447
2,483
2,498
Current tax assets
69
59
62
74
63
55
149
168
134
150
Short-term investments
—
—
—
5,460
138
250
58
336
265
165
Cash and cash equivalents
1,365
1,479
1,322
2,799
1,271
1,606
1,152
1,450
1,513
1,302
Assets held for sale
—
—
4,601
—
—
—
—
—
—
—
Total current assets
5,679
5,857
9,043
11,613
4,744
5,064
5,348
6,244
6,044
5,836
Shareholders’ equity
6,484
6,553
5,865
11,834
6,350
5,746
5,425
4,333
4,322
4,574
Non-controlling interests
496
481
442
204
218
204
211
215
224
242
Group equity
6,980
7,034
6,307
12,038
6,568
5,950
5,636
4,548
4,546
4,816
Provisions
1,865
1,938
964
899
981
896
812
554
584
541
Other non-current liabilities
360
367
285
368
391
467
567
561
557
491
Long-term borrowings
2,161
2,644
2,300
1,799
2,042
2,771
1,994
3,332
3,165
3,671
Total non-current liabilities
4,386
4,949
3,549
3,066
3,414
4,134
3,373
4,447
4,306
4,703
Short-term borrowings
430
87
973
599
169
119
1,556
2,543
2,398
1,697
Trade and other payables
3,473
3,475
2,794
2,645
2,406
2,580
2,948
2,801
2,933
2,740
Current tax liabilities
243
229
118
225
196
162
216
236
211
120
Current portion of provisions
451
422
241
211
231
232
149
166
164
173
Liabilities held for sale
—
—
2,196
—
—
—
—
—
—
—
Total current liabilities
4,597
4,213
6,322
3,680
3,002
3,093
4,869
5,746
5,706
4,730
Average invested capital3
10,475
6,422
6,494
6,340
7,026
6,834
6,829
8,062
8,233
8,350
Capital expenditures3,4
651
634
613
184
214
258
288
292
286
306
Depreciation
487
206
202
181
293
297
281
281
277
293
Operating working capital (Trade)3,5
1,385
1,405
927
898
1,068
878
1,247
1,760
1,524
1,645
Net debt
1,226
1,252
1,951
(5,861)
802
1,034
2,340
4,089
3,785
3,901
Ratios
Operating working capital (Trade) as % of revenue3
9.7
10.2
10.2
9.7
11.9
9.9
13.0
16.9
15.1
15.7
Net debt/EBITDA
0.6
1.0
1.8
(6.9)
0.7
0.8
1.6
3.8
2.7
3.0
Net debt/Adjusted EBITDA
0.6
1.0
1.7
(5.7)
0.6
0.7
1.6
3.5
2.6
2.6
1 2016 is re-presented to present the Specialty Chemicals business as discontinued operations.
2 Includes the impact of the adoption of IFRS 16 “Leases”.
3 Refer to glossary for definition.
4 Capital expenditures include investments in intangible assets as from 2018.
5 As from 2018 trade payables include certain other payables, which were previously classified as Other working capital. Trade payables, Operating working capital and Other working capital
items have been re-presented for this change of definition for some €240 million.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
217
FINANCIAL SUMMARY
AkzoNobel Report 2024
Segment statistics
in € millions, for the year ended December 31
2015
2016
2017
2018
20191,2
2020
20213
20224
2023
2024
Decorative Paints
Revenue
4,007
3,835
3,898
3,699
3,670
3,558
3,979
4,344
4,300
4,301
Operating income
345
366
334
308
425
551
622
388
500
405
Adjusted operating income
345
357
351
346
418
573
580
393
500
485
Adjusted EBITDA
495
491
472
438
573
714
728
548
645
635
Adjusted EBITDA margin%
12.4
12.8
12.1
11.8
15.6
20.1
18.3
12.6
15.0
14.8
Average invested capital
2,959
2,783
2,803
2,798
3,106
2,799
2,872
3,677
3,755
3,921
ROI%
11.7
12.8
12.5
12.4
13.4
20.5
20.2
10.7
13.3
12.4
Capital expenditures
158
107
112
50
62
77
108
91
99
87
Average number of employees (FTE)
15,100
14,800
14,700
14,100
12,900
12,100
12,500
13,800
14,000
14,100
Performance Coatings
Revenue
5,955
5,665
5,775
5,587
5,549
4,957
5,603
6,499
6,368
6,410
Operating income
792
735
668
577
565
665
616
448
698
679
Adjusted operating income
792
759
669
629
688
700
614
497
685
735
Adjusted EBITDA
938
899
817
767
861
854
773
668
854
913
Adjusted EBITDA margin%
15.8
15.9
14.1
13.7
15.5
17.2
13.8
10.3
13.4
14.2
Average invested capital
2,692
2,586
2,860
3,066
3,325
3,388
3,520
3,895
3,725
3,773
ROI%
29.4
29.4
23.4
20.5
20.7
20.7
17.4
12.8
18.4
19.5
Capital expenditures
147
159
129
107
113
146
147
167
165
197
Average number of employees (FTE)
19,700
19,300
19,800
19,200
18,000
17,500
17,000
18,000
17,600
17,800
1 The 2019 figures are restated to represent revenue from third parties instead of group revenue.
2 Includes the impact of the adoption of IFRS 16 “Leases”.
3 Operating income, adjusted EBITDA and adjusted operating income (and related measures) per segment for 2021 have been updated to reflect changes in the financial reporting structure related to a narrower definition of corporate activities and corporate costs in corporate and other activities.
4 Revenue, operating income, adjusted operating income, adjusted EBITDA, average invested capital (and related measures) for 2022 have been updated to reflect changes in the financial reporting structure.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
218
FINANCIAL SUMMARY
AkzoNobel Report 2024
Regional statistics
In € millions
2020
2021
2022
2023
2024
2020
2021
2022
2023
2024
2020
2021
2022
2023
2024
The Netherlands
North America
China
Revenue by destination
342
335
319
315
329
1,114
1,163
1,416
1,379
1,363
1,205
1,418
1,396
1,400
1,331
Revenue by origin
434
445
409
409
465
1,126
1,194
1,445
1,403
1,385
1,198
1,389
1,387
1,392
1,329
Capital expenditures
46
45
45
34
39
43
37
42
29
55
24
30
32
36
28
Average invested capital
1,713
1,701
2,038
2,013
2,012
689
784
899
817
892
852
876
878
887
951
Number of employees at year-end
(FTE)
2,300
2,400
2,300
2,300
2,400
3,000
3,100
3,100
3,100
3,000
4,500
4,400
4,300
4,600
4,300
UK
Latin America
Other Asian countries and Pacific
Revenue by destination
838
882
900
1,013
980
601
744
1,298
1,278
1,313
1,282
1,454
1,703
1,624
1,648
Revenue by origin
975
1,034
1,092
1,097
1,128
588
724
1,282
1,262
1,292
1,215
1,416
1,647
1,569
1,591
Capital expenditures
15
26
24
15
20
11
15
16
22
20
44
61
62
63
43
Average invested capital
623
553
503
609
589
290
315
823
1,070
980
768
684
834
778
814
Number of employees at year-end
(FTE)
3,000
3,000
3,000
3,000
2,900
2,300
2,400
5,100
5,200
4,900
6,100
6,200
6,300
6,300
6,500
Other EMEA countries
Revenue by destination
3,147
3,591
3,814
3,659
3,747
Revenue by origin
2,994
3,385
3,584
3,536
3,521
Capital expenditures
75
74
71
87
101
Average invested capital
1,899
1,916
2,087
2,059
2,112
Number of employees at year-end
(FTE)
11,000
11,300
11,100
10,700
10,600
Strategy | Sustainability |
Leadership and governance
|
Financial statements
219
FINANCIAL SUMMARY
AkzoNobel Report 2024
AGM or EGM
Annual General Meeting of shareholders; Extraordinary General
Meeting of shareholders.
Alternative Performance Measures (APMs)
Performance measures which are not defined by IFRS and which
exclude the so-called identified items. Alternative Performance
Measures include, but are not limited to, adjusted operating income,
(adjusted) EBITDA (margin), adjusted earnings per share and ROI.
Capital expenditures
Capital expenditures is the total of investments in property, plant and
equipment and investments in intangible assets.
Carbon footprint
The total amount of greenhouse gas (GHG) emissions caused during
a defined period of a product’s lifecycle. It is expressed in terms of
the amount of carbon dioxide equivalents CO2(e) emitted.
Greenhouse gases include CO2, CO, CH4, N2O and HFCs, which
have a global warming impact. We also include the impact of VOCs
in our targets.
Comprehensive income
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.
Constant currencies
Constant currencies calculations exclude the impact of changes in
foreign exchange rates by retranslating the prior year local currency
amounts into euros at the current year’s foreign exchange rates.
CSRD
Corporate Sustainability Reporting Directive.
(Adjusted) earnings per share
Earnings per share are net income attributable to shareholders
divided by the weighted average number of common shares
outstanding during the year.
Adjusted earnings per share are the basic earnings per share,
excluding identified items and taxes thereon.
(Adjusted) EBITDA
EBITDA is operating income excluding depreciation and
amortization.
Adjusted EBITDA is operating income excluding depreciation,
amortization and identified items.
EMEA
Europe, Middle East and Africa.
ESG
Environmental, social and governance.
Free cash flow
Free cash flow is net generated cash from/(used for) operating
activities, minus capital expenditures.
Huarun business
The acquired Chinese decorative paints business of Sherwin-
Williams.
HSE&S
Health, safety, environment and security.
Identified items
Identified items are special charges and benefits, results on
acquisitions and divestments, major restructuring and impairment
charges and charges related to major legal, environmental and tax
cases, and hyperinflation accounting adjustments for inventory
positions that exceed normal operational levels.
(Average) invested capital
Invested capital is total assets (excluding cash and cash equivalents,
short-term investments, investments in associates, pension assets,
assets held for sale) less current tax liabilities, deferred tax liabilities
and trade and other payables.
Average invested capital is the average of the quarter-end invested
capital balances for the last four quarters.
Latin America/LATAM
Excludes Mexico.
Leverage ratio
Leverage ratio is net debt divided by EBITDA; calculated as the total
of the last 12 months.
Net debt
Net debt is defined as long-term borrowings plus short-term
borrowings less cash, cash equivalents and short-term investments.
North America
Includes Mexico.
North Asia
Includes, among others, China, Japan and South Korea.
(Adjusted) operating income
Operating income is defined in accordance with IFRS and includes
identified items (to the extent these relate to operating income).
Adjusted operating income excludes identified items.
Operating working capital
Operating working capital is defined as the sum of inventories, trade
receivables and trade payables. When expressed as a ratio,
operating working capital is measured against four times last quarter
revenue. Management uses operating working capital to evaluate
our cash flow management, identify opportunities to improve
efficiency in generating cash, and ensure that we maintain low
balances to minimize our need for excess cash reserves.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
220
GLOSSARY
AkzoNobel Report 2024
Organic sales
Organic sales compares sales between periods, excluding the
impact of changes in consolidation, the impact of changes in foreign
exchange rates and the impact of hyperinflation accounting. Refer to
“Constant currencies” for details on the calculation of the foreign
exchange rate impact.
R&D
Research and development.
RD&I
Research, development and innovation.
Relevant markets
Segments and regions of the paints and coatings industry from
which AkzoNobel generates revenue.
ROI (return on investment)
ROI is adjusted operating income of the last 12 months as a
percentage of average invested capital.
Shareholders’ equity per share
Akzo Nobel N.V. shareholders’ equity divided by the number of
common shares outstanding at year-end.
SESA
South East and South Asia, includes the Pacific.
SSPs
Shared Socio-economic Pathways are scenarios that help model
future changes, including climate change.
TSR (total shareholder return)
Compares the performance of different companies’ stocks and
shares over time. Combines share price appreciation and dividends
paid to show the total return to shareholders. The relative TSR
position reflects the market perception of overall performance
relative to a reference group.
VOC
Volatile organic compounds.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
221
GLOSSARY
AkzoNobel Report 2024
List of affiliated legal entities and corporations
List at December 31, 2024, of affiliated legal entities and
corporations in conformity with articles 379 and 414, Book 2 of the
Dutch Civil Code belonging to Akzo Nobel N.V., Amsterdam.
List of consolidated legal entities and corporations
Ownership %1
Argentina
Akzo Nobel Argentina S.A.
Buenos Aires
99.999
Aruba
Arubaanse Verffabriek N.V.
Oranjestad
50.394
Australia
Akzo Nobel Coatings (Holdings) Pty Limited
Sunshine
100
Akzo Nobel Pty Limited
Sunshine
100
Austria
Akzo Nobel Coatings GmbH
Salzburg
100
Akzo Nobel Holding Österreich GmbH
Vienna
100
Bahrain
AkzoNobel Bahrain W.L.L.
Manama
100
Belgium
Akzo Nobel Paints Belgium NV
Vilvoorde
100
Auto Body Services CV (ABS)
Vilvoorde
84.615
Bolivia
Pinturas Coral De Bolívia Ltda
Santa Cruz de
la Sierra
100
Botswana
Dulux (Botswana) (Pty) Limited
Gaborone
100
Brazil
Akzo Nobel Ltda
São Paulo
100
Canada
Akzo Nobel Coatings Ltd
Ontario
100
Akzo Nobel Wood Coatings Ltd
Port Hope
100
Cayman Islands
ICI International Investments
George Town
100
Chile
International Paint (Akzo Nobel Chile) Ltda
Santiago
100
China
Akzo Nobel (China) Investment Co., Ltd.
Shanghai
100
Akzo Nobel Chang Cheng Coatings (Guangdong)
Co., Ltd.
Shenzhen
100
Akzo Nobel Coatings (Dongguan) Co., Ltd.
Dongguan
100
Akzo Nobel Coatings (Jiaxing) Co., Ltd.
Jiashan
100
Akzo Nobel Coatings (Tianjin) Co., Ltd.
Tianjin
100
Akzo Nobel Decorative Coatings (China) Ltd.
Guangzhou
100
Akzo Nobel Decorative Coatings (Langfang) Co.,
Ltd.
Langfang
100
Akzo Nobel International Paint (Suzhou) Co., Ltd.
Suzhou
100
Akzo Nobel Paints (Chengdu) Limited
Chengdu
100
Akzo Nobel Paints (Guangdong) Limited
Guangzhou
90
Akzo Nobel Paints (Shanghai) Limited
Shanghai
100
Akzo Nobel Performance Coatings (Changzhou)
Co., Ltd.
Changzhou
100
Akzo Nobel Performance Coatings (Shanghai) Co.,
Ltd.
Shanghai
100
Akzo Nobel Powder Coatings (Chengdu) Co., Ltd.
Chengdu
100
Akzo Nobel Powder Coatings (Langfang) Co., Ltd.
Langfang
100
Akzo Nobel Powder Coatings (Wuhan) Co., Ltd.
Wuhan
100
International Paint of Shanghai Co., Ltd.
Shanghai
51
Sikkens Coatings (Guangdong) Co., Ltd.
Foshan
100
Colombia
AkzoNobel Colombia S.A.S.
Medellin
100
Anhidridos y Derivados de Colombia S.A.S.
Medellin
100
Cacharreria Mundial S.A.S.
Medellin
100
Compania Global de Pinturas S.A.S.
Medellin
100
Interquim S.A.S.
Medellin
100
Oceanic Paints S.A.S.
Medellin
100
Costa Rica
Pintuco Costa Rica PCR, S.A.
Cartago
100
Curacao
Macomoca B.V.
Willemstad
100
Pintuco Curacao B.V.
Willemstad
100
Czech Republic
Akzo Nobel Coatings CZ, a.s.
Prague
100
Denmark
Akzo Nobel Deco A/S
Copenhagen
100
International Farvefabrik A/S
Herlev
100
Ecuador
Interquimec S.A.
Quito
100
Pinturas Ecuatorianas S.A.
Guayaquil
100
Poliquim, Polimeros y Quimicos C.A.
Guayaquil
100
Egypt
Akzo Nobel Egypt LLC
6th of October
City
100
Akzo Nobel Powder Coatings S.A.E.
Giza
100
El Salvador
Pintuco el Salvador S.A. de C.V.
San Salvador
100
Estonia
Akzo Nobel Baltics AS
Tallinn
100
Eswatini
Dulux Swaziland (Pty) Limited
Matsapha
100
Finland
Oy International Paint (Finland) Ab
Helsinki
100
France
Akzo Nobel Decorative Paints France SAS
Thiverny
99.983
Akzo Nobel Distribution SAS
Corbas
99.983
Akzo Nobel SAS
Montataire
100
Mapaero SAS
Pamiers
100
SAS BOUCHER
Pamiers
100
Germany
Akzo Nobel Coatings GmbH
Stuttgart
100
Akzo Nobel Deco GmbH
Wunstorf
100
Akzo Nobel GmbH
Cologne
100
Akzo Nobel Hilden GmbH
Hilden
100
Akzo Nobel Powder Coatings GmbH
Reutlingen
100
International Farbenwerke GmbH
Börnsen
100
Schramm Coatings GmbH
Offenbach am
Main
100
Schramm Holding GmbH
Offenbach am
Main
100
Greece
Akzo Nobel Anonymous Company of Paints and
Related Products
Athens
100
Varnishes and Paints Industry Vivechrom Dr.
Stefanos D. Pateras S.A.
Mandra Attica
79.184
Guatemala
Pintuco Guatemala S.A.
Guatemala
100
Guernsey
Impkemix Trustee Limited
St. Peter Port
100
Strategy | Sustainability |
Leadership and governance
|
Financial statements
222
LIST OF AFFILIATED LEGAL ENTITIES
AND CORPORATIONS
AkzoNobel Report 2024
Honduras
Pintuco de Honduras, S.A.
Choloma
100
Hong Kong SAR2
Akzo Nobel Chang Cheng Limited
Hong Kong
100
Akzo Nobel HK (Holdings) Limited
Hong Kong
100
Akzo Nobel Huarun Paints (HK) Holding Limited
Hong Kong
100
International Paint (East Russia) Limited
Hong Kong
51
International Paint (Hong Kong) Limited
Hong Kong
100
Hungary
Akzo Nobel Coatings Zrt
Budapest
100
India
Akzo Nobel Global Business Services LLP
Pune
100
Akzo Nobel India Limited
Kolkata
74.756
ICI India Research & Technology Centre
Mumbai
18.689
Indonesia
PT Akzo Nobel Car Refinishes Indonesia
Jakarta
100
PT Akzo Nobel Wood Finishes and Adhesives
Indonesia
Jakarta
100
PT ICI Paints Indonesia
Jakarta
55
PT International Paint Indonesia
Jakarta
100
Ireland
Akzo Nobel (CR9) Limited
Dublin
100
Akzo Nobel Car Refinishes (Ireland) Limited
Dublin
100
Dulux Paints Ireland Limited3
Cork
100
ICI Fertilisers (Ireland) Limited
Cork
100
ICI Ireland Limited
Cork
100
Italy
Akzo Nobel Coatings S.P.A.
Como
100
Japan
Akzo Nobel Coatings K.K.
Tokyo
100
Kenya
Akzo Nobel Kenya Limited
Nairobi
100
Kuwait
International Warba Coatings Paint Mfg Co. W.L.L.
Kuwait
49
Latvia
Akzo Nobel Baltics SIA
Riga
100
Lithuania
Akzo Nobel Baltics, UAB
Vilnius
100
Malaysia
Akzo Nobel Industrial Coatings Sdn Bhd
Kuala Lumpur
100
Akzo Nobel Paints (Malaysia) Sdn Bhd
Kuala Lumpur
59.949
Akzo Nobel Paints Marketing Sdn Bhd
Selangor
59.949
Colourland Paints Sdn Bhd
Selangor
59.949
International Paint Sdn Bhd
Johor Darul
Takzim
70
Mauritius
Akzo Nobel (Mauritius) Limited
Les Pailles
100
Mexico
Akzo Nobel Performance Coatings S.A. de C.V.
Mexico City
100
Morocco
Akzo Nobel Coatings S.A.
Casablanca
59.628
Akzo Nobel Performance Coatings Morocco
S.A.R.L.
Casablanca
100
Distral Maroc S.A.
Rabat
59.608
Sadvel S.A.
Casablanca
59.625
Myanmar
Akzo Nobel (M) Co. Ltd.
Yangon
100
Netherlands4
*Akzo Nobel (C.) Holdings B.V.
Woerden
100
Akzo Nobel Assurantie N.V.
Arnhem
100
*Akzo Nobel Car Refinishes B.V.
Sassenheim
100
*Akzo Nobel Coatings International B.V.
Arnhem
100
*AKZO Nobel Decorative Coatings B.V.
Sassenheim
100
*Akzo Nobel Insurance Management B.V.
Arnhem
100
*Akzo Nobel Management B.V.
Arnhem
100
*Akzo Nobel Nederland B.V.
Arnhem
100
*Akzo Nobel Sino Coatings B.V.
Sassenheim
100
*Akzo Nobel Sourcing B.V.
Arnhem
100
*B.V. Alabastine (Holland)
Ammerzoden
100
*ICI Omicron B.V.
Rotterdam
100
ICI Theta B.V.
Rotterdam
100
*International Paint (Nederland) B.V.
Rhoon
100
*Panter B.V.
Hoofddorp
100
New Zealand
Akzo Nobel Coatings Ltd
Avondale
100
Nicaragua
Industrial Pintuco Nicaragua S.A.
Managua
99.910
Norway
Akzo Nobel Coatings AS
Oslo
100
Oman
Akzo Nobel Oman SAOC
Muscat
50
Pakistan
Akzo Nobel Pakistan Limited
Karachi
98.266
Panama
Centro de Pinturas Pintuco, S.A.
Panama City
100
International Paint (Panama) Inc.
Mercantil
100
Kativo Chemical Industries, S.A.
Panama City
99.977
Kativo Holding Co., S.A.
Panama City
100
KCI Export Trading Ltd
Panma City
100
Pinturas Mundial de Panama, S.A.
Panama City
100
Papua New Guinea
Akzo Nobel Limited
Geheru
100
Peru
Akzo Nobel Peru S.A.C.
Lima
100
Poland
Akzo Nobel Car Refinishes Polska Sp. z o.o.
Warsaw
100
Akzo Nobel Decorative Paints Sp. z o.o.
Warsaw
100
Akzo Nobel Industrial Coatings Sp. z o.o.
Kostrzyn Wlkp.
100
International Paint Sp. z o.o.
Gdansk
100
Portugal
Akzo Nobel Coatings, Unipessoal Lda.
Matosinhos
100
Qatar
Akzo Nobel LLC
Doha
100
Romania
Fabryo Corporation Srl
Popesti-
Leordeni
100
Russian Federation
Akzo Nobel Dekor CJSC
Balashikha
100
OOO "Akzo Nobel Coatings"
Moscow
100
OOO "Akzo Nobel Lakokraska"
Orehovo-
Zuevo
100
Saudi Arabia
Akzo Nobel Saudi Arabia Ltd
Dammam
60
Singapore
Akzo Nobel Paints (Singapore) Pte Ltd
Singapore
100
International Paint Singapore Pte Ltd
Singapore
100
Slovenia
Akzo Nobel Adhezivi d.o.o.
Ljubljana
100
Strategy | Sustainability |
Leadership and governance
|
Financial statements
223
LIST OF AFFILIATED LEGAL ENTITIES AND CORPORATIONS
AkzoNobel Report 2024
South Africa
AkzoNobel South Africa (Pty) Ltd
Johannesburg
100
ICI Dulux (Pty) Ltd
Johannesburg
100
South Korea
Akzo Nobel Industrial Coatings Korea Ltd
Ansan
100
Akzo Nobel Powder Coatings Korea Co., Limited
Ansan
100
International Paint (Korea) Ltd
Busan
60
International Paint (Research) Ltd
Geoje City
100
Spain
Akzo Nobel Coatings, S.L.U.
Barcelona
100
Sri Lanka
Akzo Nobel Paints Lanka (Pvt) Ltd
Colombo
40
Sweden
Akzo Nobel Adhesives AB
Stockholm
100
Akzo Nobel Car Refinishes AB
Tyresoe
100
Akzo Nobel Decorative Coatings AB
Malmö
100
Akzo Nobel Industrial Coatings AB
Malmö
100
Akzo Nobel Industrial Finishes AB
Västervik
100
Akzo Nobel Sweden Finance AB
Malmö
100
International Färg AB
Göteborg
100
Switzerland
Akzo Nobel Coatings AG
Neuenkirch
100
Taiwan
Akzo Nobel Paints Taiwan Limited
Chung Li
100
International Paint (Taiwan) Limited
Kaohsiung
100
Thailand
Akzo Nobel Paints (Thailand) Limited
Amphur
Pakkred
100
Tunisia
Société Tunisienne de Peintures Astral S.A.
Megrine
60
Türkiye
Akzo Nobel Boya Sanayi ve Ticaret A.S.
Izmir
100
Akzo Nobel Kemipol Kimya Sanayi ve Ticaret A.Ş.
Izmir
51
Akzo Nobel Server Boya Sanayi ve Ticaret A.S.
Dilovası
55
International Paint Pazarlama Limited Sirketi
Istanbul
100
Marshall Boya Ve Vernik Sanayii A.S.
Dilovasi
93.609
Tekyar Teknik Yardim A.S.
Dilovasi
100
Uganda
Akzo Nobel Uganda Limited
Kampala
100
Ukraine
LLC "Akzo Nobel Holding Ukraine"
Kiev
100
United Arab Emirates
Akzo Nobel Decorative Paints L.L.C.
Dubai
49
Akzo Nobel ME Coatings FZE
Jebel Ali Free
Zone
100
Akzo Nobel UAE Paints L.L.C.
Dubai
48.979
United Kingdom
Akzo Nobel (CPS) Pension Trustee Limited
Slough
100
Akzo Nobel (NSC) Limited
Slough
99.902
Akzo Nobel Aerospace Coatings Limited
Slough
100
Akzo Nobel CIF Nominees Limited
Slough
100
Akzo Nobel Coatings (BLD) Limited
Slough
100
Akzo Nobel Coatings Limited
Slough
100
Akzo Nobel Decorative Coatings Limited
Slough
100
Akzo Nobel ICI Holdings
Slough
100
Akzo Nobel Industrial Coatings Limited
Slough
100
Akzo Nobel Limited
Slough
100
Akzo Nobel Packaging Coatings Limited
Slough
100
Akzo Nobel Powder Coatings Limited
Slough
100
Akzo Nobel UK Ltd
Slough
100
Cuprinol Limited
Slough
100
Dulux Limited
Slough
100
Ergon Investments International Limited
Slough
100
Ergon Investments UK Limited
Slough
100
Flexcrete Technologies Limited
Slough
100
Hammerite Products Limited
Slough
100
Holywell-Halkyn Mining and Tunnel Company
Limited
Slough
96.955
I C I Finance Limited
Slough
100
ICI Chemicals & Polymers Limited
Slough
100
ICI Paints (Trade Contract) Limited
Slough
100
Imperial Chemical Industries Limited
Slough
100
International Coatings Limited
Slough
100
International Paint Limited
Slough
100
International Paints (Holdings) Limited
Slough
100
Intex Yarns (Manufacturing) Limited
Slough
100
J.P. McDougall & Co. Limited
Slough
100
Mortar Investments International Limited
Slough
100
Mortar Investments UK Limited
Slough
100
Polycell Products Limited
Slough
100
Resinous Chemicals Limited
Slough
100
Sales Support Group Limited
Slough
100
Stevenston Holdings Limited
Edinburgh
100
United States of America
Akzo Nobel Coatings Inc.
Delaware
100
Akzo Nobel Inc.
Delaware
100
Akzo Nobel Services Inc.
Delaware
100
Blue Water Marine Paint LLC
Delaware
100
Expert Management Inc.
Delaware
100
ICI Americas Inc.
Delaware
100
International Paint LLC
Delaware
100
New Nautical Coatings Inc.
Florida
100
Uruguay
Pinturas Inca S.A.
Montevideo
100
Vietnam
Akzo Nobel Vietnam Limited
Binh Duong
100
Zambia
Dulux Zambia (2005) Limited
Lusaka
100
List of non-consolidated legal entities and corporations
Ownership %1
Colombia
Minerales Industriales S.A.S.
Sabaneta
40
Italy
Metlac Holding S.r.l.
Alessandria
49
Metlac S.p.A.
Alessandria
71.667
Spain
Okore Tech, S.L.
Madrid
24.981
1 The ownership percentage represents the interest Akzo Nobel N.V. or one or more of its majority
subsidiaries singly or jointly have in the issued share capital of the participation. The list does not
include entities that are of insignificant relevance in respect of the insight required by law, such as
dormant companies and companies in liquidation.
2 Hong Kong Special Administrative Region.
3 Akzo Nobel N.V. has declared in writing that it guarantees the commitments entered into by Dulux
Paints Ireland Limited, in conformity with section 357(1) of the Irish Companies Act 2014.
4 With respect to the Dutch legal entities marked *, Akzo Nobel N.V. has declared in writing that it
accepts joint and several liability for contractual debts of the relevant companies, in conformity with
article 403, Book 2, of the Dutch Civil Code.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
224
LIST OF AFFILIATED LEGAL ENTITIES AND CORPORATIONS
AkzoNobel Report 2024
Disclaimer
In this Report 2024, great care has been taken in drawing up the
properties and qualifications of the product features. No rights can
be derived from these descriptions. The reader is advised to consult
the available product specifications themselves. These are available
through the relevant business units. In this publication the terms
“AkzoNobel” and “the company” refer to Akzo Nobel N.V. and its
consolidated companies in general. The company is a holding
company registered in the Netherlands. Business activities are
conducted by operating subsidiaries throughout the world. The
terms “we”, “our” and “us” are used to describe the company; in the
individual business overviews within the Strategy and operations
section, they mainly refer to the business concerned. Throughout
this Report 2024, reference is made to documents on AkzoNobel’s
website. This linked information is not considered to be part of the
annual report.
Safe harbor statement
This Report 2024 contains statements which address such key
issues as AkzoNobel’s growth strategy, future financial results,
market positions, product development, products in the pipeline and
product approvals. Such statements should be carefully considered,
and it should be understood that many factors could cause
forecasts 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, as well as
significant market disruptions, such as the impact of pandemics.
Stated competitive positions are based on management estimates,
supported by information provided by specialized external agencies.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
225
COLOPHON
AkzoNobel Report 2024
Brands and trademarks
In this Report 2024, reference is made to brands and trademarks
owned by, or licensed to, AkzoNobel. Unauthorized use of these is
strictly prohibited.
We welcome feedback on our Report 2024. You can contact
us as follows:
Akzo Nobel N.V.
Christian Neefestraat 2
P.O. Box 75730
1070 AS Amsterdam, the Netherlands
T +31 88 969 7555
www.akzonobel.com
AkzoNobel Media Relations
T +31 88 969 7833
E media.relations@akzonobel.com
AkzoNobel Investor Relations
T +31 88 969 0139
E investor.relations@akzonobel.com
Editor
David Lichtneker
Art Director
Claire Jean Engelmann
Design and artwork
KentieDesign
Photography
Menno Noordanus
David Lichtneker
www.akzonobel.com
Since 1792, we’ve been supplying the innovative paints and
coatings that help to color people’s lives and protect what matters
most. Our world class portfolio of brands – including Dulux,
International, Sikkens and Interpon – is trusted by customers around
the globe. We’re active in more than 150 countries and use our
expertise to sustain and enhance everyday life. Because we believe
every surface is an opportunity. It’s what you’d expect from a
pioneering and long-established paints company that’s dedicated to
providing more sustainable solutions and preserving the best of what
we have today – while creating an even better tomorrow. Let’s paint
the future together.
© 2025 Akzo Nobel N.V. All rights reserved.
Strategy | Sustainability |
Leadership and governance
|
Financial statements
226
COLOPHON
AkzoNobel Report 2024