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2016-10-19

AkzoNobel Q3 2016 Results: Profitability increased in an environment of mixed volume growth

October 19, 2016

AkzoNobel publishes Q3 2016 results

Profitability increased in an environment of mixed volume growth

Interim dividend increased. Currency headwinds continue

Akzo Nobel N.V. (AKZA.AS; AKZOY)

* Volume growth in Decorative Paints and Specialty Chemicals, while volumes
were flat overall
* Revenue down 4 percent to €3.6 billion, due to adverse currency and
price/mix effects
* EBIT* up 1 percent at €442 million (2015: €436 million), reflecting
continuous improvement initiatives and lower costs, partly offset by
adverse currency effects
* Operating income up 4 percent at €454 million (2015: €436 million)
positively impacted by incidental items
* Return on sales** was up at 12.3 percent (2015: 11.6 percent) andreturn on
investment** improved to 15.2 percent (2015: 13.0 percent). ROS and ROI
improved in all three Business Areas
* Net income attributable to shareholders was €285 million (2015: €285
million)
* Adjusted earnings per share (EPS) was €1.20 (2015: €1.24)
* Net cash inflow from operating activities up at €600 million (2015: €583
million)
* Interim dividend up 6 percent to €0.37 per share (2015: €0.35)
* Further de-risking of pension liabilities
* Outlook unchanged: The market environment remains uncertain with
challenging conditions in several countries and segments. Deflationary
pressures and currency headwinds are expected to continue. We maintain our
financial guidance for 2016-2018

AkzoNobel today reported volume growth in Decorative Paints and Specialty
Chemicals with further overall profitability growth in the third quarter,
despite challenging conditions in several countries and segments. EBIT
increased 1 percent to €442 million and return on sales improved to 12.3
percent (2015: 11.6 percent). Overall volumes were flat, and revenue was down
4 percent to €3.6 billion, due to adverse currency and price/mix effects.
Return on investment was 15.2 percent (2015: 13.0 percent).

CFO Maëlys Castella:

"We achieved further growth in profitability in the third quarter, with
returns up for all Business Areas and positive volume developments in
Decorative Paints and Specialty Chemicals. We are delivering on our
improvement programs and maintaining a strong cash discipline. We decided to
increase the interim dividend by 6 percent to €0.37 per share.

"Our focus remains on driving continuous improvement and organic growth. We
broke ground on a powder coatings plant in Mumbai that will bring us closer
to our customers in the north and west of India. We also introduced
innovative products that bring major sustainability benefits to our
customers, including our Berol DR-B1 direct release surfactant and Aquasilk
waterborne wood coating. Denim Drift was launched as our Color of the Year
for 2017."

*Operating income excluding incidental items.
** ROS% is EBIT divided by revenue.
Moving average ROI% is 12 months EBIT divided by 12 months average invested
capital.

Q3 2016 in € million

------------------------------------------------------------------------
| Q3 2015 Q3 2016 delta % |
| Revenue 3,760 3,600 (4) |
| Operating income 436 454 4 |
| EBIT (operating income excl. incidentals) 436 442 1 |
| Return on sales (ROS) %** 11.6 12.3 |
| Net income attributable to shareholders 285 285 - |
| |
------------------------------------------------------------------------
Year-to-date January - September 2016 in € million

--------------------------------------------------------------------------
| YTD 2015 YTD 2016 delta % |
| Revenue 11,300 10,741 (5) |
| Operating income 1,228 1,302 6 |
| EBIT (operating income excl. incidentals) 1,194 1,267 6 |
| Return on sales (ROS) %** 10.6 11.8 |
| Net income attributable to shareholders 776 837 8 |
--------------------------------------------------------------------------
Decorative Paints:
Volumes increased 3 percent due to positive developments in Asia and EMEA,
while volumes continued to be lower in Latin America. Revenue was down 3
percent mainly due to unfavorable currency effects. We launched our 2017
Color of the Year, Denim Drift, part of our ongoing efforts to inspire
customers to make confident color choices and drive growth for our business.

Performance Coatings:
Volumes were down by 2 percent affected by adverse conditions in the marine
and oil and gas industries, partly offset by positive developments in other
segments, including automotive and specialty coatings. Revenue was down 6
percent due to unfavorable currencies, lower volumes and adverse price/mix
effects. The intended acquisition of BASF's Industrial Coatings business is
expected to be completed towards the end of 2016. We broke ground on a €9
million powder coatings plant in Mumbai which will bring us closer to our
customers in the north and west of India and will also provide several
innovative lines new to the Indian market.

Specialty Chemicals:
Volumes were up 1 percent with positive developments, especially in Industrial
Chemicals, partly offset by lower demand in the oil-related segments. Revenue
was down 3 percent mainly due to price deflation in several markets. We
launched Berol DR-B1, an essential ingredient for outdoor cleaning products
which successfully meets stringent US Environmental Protection Agency (EPA)
standards, without compromising on performance.

Sustainability, Human Cities and Innovation:
We achieved several milestones in the quarter, including: The launch of
Aquasilk, a waterborne wood coating that helps Chinese customers meet strict
local environmental standards; an addition to our award-winning Intersleek
marine foul release coating range which incorporates a bio-renewable raw
material; and the signing of a flagship Human Cities project to help renovate
four historic sites in the Jing'an district of Shanghai.

Business Area highlights
in € million

------------------------------------------------------------------------------------------------------
| Decorative Paints |
| Q3 2015 Q3 2016 delta% YTD 2015 YTD 2016 delta% |
| 1,052 1,021 (3) Revenue 3,076 2,937 (5) |
| 121 132 9 Operating income 299 315 5 |
| 121 123 2 EBIT (operating income excl. incidentals) 299 306 2 |
| 11.5 12.0 ROS %** 9.7 10.4 |
| Performance Coatings |
| Q3 2015 Q3 2016 delta% YTD 2015 YTD 2016 delta% |
| 1,493 1,406 (6) Revenue 4,473 4,267 (5) |
| 210 192 (9) Operating income 600 600 - |
| 210 199 (5) EBIT (operating income excl. incidentals) 600 607 1 |
| 14.1 14.2 ROS %** 13.4 14.2 |
| Specialty Chemicals |
| Q3 2015 Q3 2016 delta% YTD 2015 YTD 2016 delta% |
| 1,235 1,202 (3) Revenue 3,821 3,614 (5) |
| 163 168 3 Operating income 518* 511 (1) |
| 163 168 3 EBIT (operating income excl. incidentals) 488 511 5 |
| 13.2 14.0 ROS %** 12.8 14.1 |
------------------------------------------------------------------------------------------------------
The Q3 2016 report can be viewed and
downloaded
at
www.akzonobel.com/quarterlyresults.

* Includes a book profit net of related costs of
€30 million in Q2 2015 related to the divestment of the Paper Chemicals
business.
** ROS% is EBIT divided by revenue.
Moving average ROI% is 12 months EBIT divided by 12 months average invested
capital.

- - -

AkzoNobel creates everyday essentials to make people's lives more liveable and
inspiring. As a leading global paints and coatings company and a major
producer of specialty chemicals, we supply essential ingredients, essential
protection and essential color to industries and consumers worldwide. Backed
by a pioneering heritage, our innovative products and sustainable
technologies are designed to meet the growing demands of our fast-changing
planet, while making life easier. Headquartered in Amsterdam, the
Netherlands, we have approximately 45,000 people in around 80 countries,
while our portfolio includes well-known brands such as Dulux, Sikkens,
International, Interpon and Eka. Consistently ranked as a leader in
sustainability, we are dedicated to energizing cities and communities while
creating a protected, colorful world where life is improved by what we do.

Not for publication - for more information

-----------------------------------------------------------
| Corporate Media Relations Corporate Investor Relations |
| T +31 (0)88 - 969 7833 T +31 (0)88 - 969 7590 |
| Contact: Andrew Wood Contact: Lloyd Midwinter |
-----------------------------------------------------------

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statements should be carefully considered, and it should be understood that
many factors could cause forecasted and actual results to differ from these
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