Akzo Nobel positioned for new growth

16-Nov-2004

Akzo Nobel is set for a return to growth over the coming years, benefiting from the Company's successful restructurings, investments in innovative products and growth markets, and its strengthened financial position.

Speaking at Akzo Nobel's annual Fall Analyst Meeting in London, CEO Hans Wijers, said: "Akzo Nobel has reached a turning point for renewed growth. Our efforts to fix Pharma and increase the cash generation and growth potential of our businesses have put the Company in a strong position for the future.

"Our medium-term human pharmaceuticals pipeline is promising and the growth of Coatings will accelerate as we expand our global leadership organically and through acquisitions, while continuing to improve financial returns. Also, following the completion of the recent divestment program and the wide-ranging restructuring efforts, Chemicals is now showing a satisfying performance.

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"Developments at Pharma will be one of the central elements to Akzo Nobel's growth. The sales decline triggered by the loss of the Remeron patent is expected to bottom out in 2005. In the short-term, we will be helped by rising sales of new products such as innovative contraceptives NuvaRing - which has already captured market shares of 2-5% in some countries where it has been launched - and Implanon, which is expected to be launched in the United States in 2005. The next product to be launched from our pipeline may be Livial, which could be on the U.S. market by the end of 2006.

"In the medium-term, we have five drugs already at, or close to, phase III development, which are scheduled to be submitted as from 2006. These include asenapine, the promising psychosis drug - patent protected until 2020 - in co-development and co-promotion with Pfizer. In our muscle relaxant franchise, we have a revolutionary new class of reversal agent; in fertility, a long-acting weekly injection ovulation inducer; in menopausal treatments, a non-hormonal alternative to HT aimed at reducing hot flushes/night sweats; and in CNS, a non-addictive treatment for chronic sleep disorders aimed at the growing insomnia market, which is set to double in the next ten years." Wijers added: "The Company is stepping up its investments in development and pre-marketing to support all these late stage pipeline opportunities."

Looking further ahead, Wijers said that the Company is actively expanding its biotechnology activities, with a new research center due to open in the United States next year. Biotech already represents nearly 20% of revenues at Akzo Nobel's human Pharma business. It will result in higher efficiency and also create a platform for further expansion of this attractive market in the longer term.

Wijers also took the opportunity to discuss plans for accelerating the growth of Coatings, expanding on Akzo Nobel's global number one position. "Growth in mature markets will be powered by technological innovation, delivering superior new products to our customers, and by in-fill and bolt-on acquisitions where we see an opportunity to add value to our portfolio," he said. "In emerging markets, we will aggressively expand our position, mainly by greenfield investments. China is our fastest growing market, with sales set to double in the next five years."

With regards to Chemicals, Wijers stated: "While enjoying the benefits of the ongoing restructuring efforts, under new leadership we are now having a detailed look at various chemicals activities, focusing on strong leadership positions and improved financial performance."

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