Welcome and thank you for standing by. We will now get started with this meeting. Just a reminder, this call is being recorded. If you have any objections, you may disconnect at this time. This call will be listen only and there will be questions at the end. If you would like to queue for a question, please press star one at the end of the call. Now I'd like to introduce you to your host, Kenny Chae. You may begin. Thank you. Hello, and welcome to AkzoNobel's investor update for the fourth quarter and full year 2021. I'm Kenny Chae, Head of the Investor Relations team. Today, our CEO, Thierry Vanlancker, and CFO, Maarten de Vries, will guide you through our results. We'll refer to the presentation, which you can follow on screen and download from our website at akzonobel.com. A replay of this webcast will also be available. There will be an opportunity to ask questions after the presentation. For additional information, please contact our investor relations team. Before we start, I would like to remind you about the disclaimer at the back of this presentation. Please note this also applies to the conference call and answers to your questions. I will now hand over to Thierry, who will start on slide four of the presentation. Thank you very much, Kenny. Hello, good morning, and a very warm welcome to everyone on the call. Our fourth quarter results demonstrate our continued strong pricing momentum with pricing up on average 12.5% overall for the quarter. We exited December with a 14% pricing run rate on track to offset the significant raw material inflation on a run rate basis near the end of the first quarter. Revenue was up 9% and up 12% versus Q4 2019 in constant currencies, with revenue up for both Paints and Coatings. Adjusted operating income was down 29% to EUR 209 million as a result of significant raw material cost inflation and continued supply constraints. Despite a total raw material cost headwind of EUR 769 million for 2021, adjusted operating income for the year was EUR 1.092 billion, which is roughly flat as compared with an excellent 2020 result, a true statement to the agility of our organization. We also completed in January our EUR 1 billion share buyback program we announced last year. We also announced a final dividend of EUR 1.54 per share, which leads to a total dividend of EUR 1.98 per share. Hereby we deliver on our capital allocation priority of a stable and rising dividend. Let's turn to slide five. During the fourth quarter, we delivered further top line growth and continued progress in line with our Grow & Deliver strategy. Our strong pricing actions and good performance in key growth markets underpins our confidence in our strategy as we deliver growth for the sixth consecutive quarter, with prices up 12.5% for the quarter and 14% in December. Growth was particularly strong in Industrial Coatings and Paints South Asia, and we continue to see sequential recovery for Marine and Protective Coatings. What makes me personally really proud is that despite exceptional supply chain volatility, our businesses delivered on our internal quarterly forecasts. That is a strong testimonial for the maturity of our integrated business planning process that we introduced about three years ago. We kept our focus on creating an efficient high-performing company with now 94% of our revenue on one of our four main SAP systems. During the quarter, we also got to see tangible recognition for our efforts in the field of sustainability, both external with the recognition of the Terra Carta Seal at COP26, as well as internal with an all-time high organizational health score of 72 for the full year of 2021. That's coupled with a record participation rate of 86% for the whole organization worldwide. Let's now turn to slide six, which summarizes how we view current demand trends in the markets where we operate. As mentioned, we see strong sequential recovery in our Paints business in South Asia due to easing of COVID restrictions, with demand especially strong in India and markets like Vietnam opening up in December. We still have a material backlog in North America from continued supply constraints as well as labor shortages. Supply constraints continue to impact EMEA, but we saw some signs of easing during the quarter already. Overall, this resulted in a total backlog of around EUR 100 million, slightly higher sequentially versus the third quarter. The underlying demand for paints is now strong in all regions. For Paints EMEA, demand from the do it yourself segment has normalized at a higher level than 2019 as expected, while professional demand has returned to pre-pandemic levels. Demand for Industrial Coatings remains strong, especially the packaging and the wood segments. Underlying growth trends for Powder Coatings are also strong and driven by both demand and market share growth. Although supply constraints continue to impact this business significantly for the most of the fourth quarter. Within the Automotive and Specialty Coatings segment, both vehicle refinish and aerospace coatings show further signs of sequential recovery, while demand for consumer electronics continues to normalize. The demand for Marine and Protective Coatings continues its sequential recovery, while demand for Yacht Coatings remains strong. Let's turn to slide number seven. Before we zoom in on two of our business units as usual, given the size of our Paints EMEA business and the significant market dynamics we experienced over the past two years, especially in Europe, it is probably good to look at how we are doing and our view for 2022. We are clearly outperforming the Paints Europe market, both in volume and in revenue, as shown on the left, with 2021 volumes strongly outperforming the market, mainly driven by market share gains through our strong portfolio and pricing. Please note that this chart excludes Middle East and Africa. The right side chart on this slide shows AkzoNobel's U.K. deco volumes for do it yourself and trade indexed versus 2019. Both do it yourself and trade volumes are now above 2019 levels, with trade volumes having recovered and do it yourself volumes having normalized from pandemic levels. We actually see similar trends like the one in the U.K. across other countries in Western Europe, for example, France, the Netherlands, and Spain. As such, we are very confident in our Paints EMEA business as we move into 2022. For Europe, we expect similar volumes this year as in 2021, but at significantly higher prices. Let's now zoom in on two of our business units in a bit more detail as of slide eight. We will be zooming in on our Decorative Paints Southeast Asia business and our Marine and Protective Coatings business. On slide eight, we look at our Decorative Paints business in Southeast Asia, which has leading positions and strong brands. In the region, AkzoNobel has top market positions in Vietnam, Malaysia, Indonesia, and Thailand, and a strong number four position in India, where we have a significant opportunity for growth, which we're going for right now. South Asia is a fast-growing market with strong growth outlook. However, as we communicated throughout 2021, COVID-19 restrictions had a significant negative impact on the second and third quarter of both 2020 and 2021. I am pleased to share that by the end of 2021, the market has shown recovery, and almost all stores are back to operations with Q4 2021 revenue even higher than the same quarter in 2019. Despite the external challenges in the past years, our employees managed to stay customer-focused, leading to market share gains in seven out of the nine markets we're operating in India, Indonesia, Vietnam, Malaysia, Pakistan, and Singapore. As we expanded our reach by adding 6,700 stores across the region. We also had strong Dulux brand launches like EasyClean Anti-Viral, and we see solid growth in the fast-growing waterproofing and wood care categories we operate in. Having focused and built discipline over the past years on profitability, our efforts were rewarded with a significant improvement in profitability versus 2019, with adjusted operating income up 29%. Turning to slide nine, we will zoom in to our Marine and Protective Coatings business. Marine and Protective Coatings is a EUR 1.2 billion business for us, with leading positions in three global segments, Marine, Protective, and Yacht Coatings. The Marine and Protective segments were significantly impacted during the pandemic when economic activity abruptly slowed down. However, throughout 2021, we have seen a gradual sequential recovery in both segments due to economic recovery in both shipping and energy. For Marine, the new build demand for the Marine segment is recovering, and for Protective, demand in the energy sector is recovering. While we had success, particularly in offshore wind in Europe and China. In the second half of 2021, sales were up 15% versus prior year, and we expect the segment to continue this recovery trend into 2022. For the yacht segment, we are the clear market leader with leading brands and products. Market demand has been strong in the past years, with increased demand driven in part by GDP and consumer lifestyle changes. Considering that yachts need regular maintenance, we believe that robust demand for both new yachts and maintenance will continue. We also acquired New Nautical Coatings with the iconic Sea Hawk Yacht Coatings brand strengthening us in the U.S. I will now hand over to Maarten, who will share more around the financial results from slide 11 onwards. Maarten? Yeah, thank you, Thierry. Hello, everybody on the call. During the fourth quarter, reported revenue was up 9% versus prior year. Versus the fourth quarter of 2019, revenue was up 12% in constant currencies. In response to significant raw material headwinds, we delivered strong pricing of 12.5% in the quarter and 14% in December. The volumes were 6% lower, mainly due to supply constraints and the normalized DIY demand for paints in Deco EMEA, although volumes were flat versus the fourth quarter of 2019. Adjusted operating income decreased 29% to EUR 209 million as a result of the significant raw material inflation and continued supply constraints, not yet fully offset by significant pricing efforts. This resulted in a return on sales of 8.7% versus 13.3% in the fourth quarter last year. Adjusted operating income excludes the impact of identified items, which had a net negative impact of EUR 4 million for the fourth quarter, mainly related to transformation initiatives. Adjusted EBITDA was 21% lower at EUR 301 million. Moving over to slide 12, which shows the development of adjusted operating income during the fourth quarter. We delivered significant pricing in Q4, although not fully compensating for the impact of raw material cost inflation and lower volumes. Lower volumes represented a EUR 64 million headwind, mainly due to supply constraints and normalized end market demand in Paints EMEA, while significant pricing delivered a EUR 276 million benefit. Mix was virtually flat at -EUR 2 million. Currency had a minor effect of + EUR 2 million. With raw material and other variable cost inflation, including inbound freight costs, resulted in a net negative impact of EUR 325 million compared with the fourth quarter of 2020. Operating expenses and other one-offs were EUR 28 million lower versus Q4 2020. Underlying OpEx was in line with Q4 last year. The positive delta is explained by negative one-offs in Q4 2020, combined with some positive one-offs for Q4 2021. Moving to slide 13. As expected, we are seeing significant raw material headwinds continue. For the full year 2021, we saw approximately 20% raw material cost inflation versus 2020, resulting in a total headwind of EUR 769 million. For Q4, raw material cost inflation was already higher than 30%, resulting in a EUR 325 million headwind. For the first quarter, we expect an adverse impact from raw material cost between EUR 360 million-EUR 390 million versus the first quarter of 2021. As indicated in our outlook statement, we expect raw material cost inflation and supply constraints to gradually ease by mid this year. At the same time, we continue to deliver significant price increases to catch up with the raw material inflation, with Q4 pricing at 12.5% and December at 14%. As a reminder, Q3 pricing was 9%, with September at a 10% run rate. We expect the first quarter pricing to land between 14%-16% when comparing to the first quarter of 2021. Turning now to slide 14 for the Q4 results of Decorative Paints. Reported revenue for paints was 5% higher versus the Q4 last year. Revenue was 17% higher versus Q4 2019 in constant currencies. The volume for paints was 8% lower, mainly due to the normalization of DIY in EMEA, along with seasonality. However, volume was up 4% compared to the same quarter in 2019. Pricing was up 10%, driven by strong and disciplined pricing initiatives while mix was flat. For Deco EMEA, revenue in Q4 was flat. In constant currencies, revenue was 3% lower, although up 12% versus Q4 2019. Pricing initiatives were offset by lower volumes as a result of normalizing market demand in the DIY segment. Versus Q4 2019, the volumes were flat. For the full year, revenue was 8% higher and 16% higher versus 2019, with revenue growth supported by organic volume growth, pricing and the consolidation of Titan Paints in Spain. Revenue for South America was up 18% in constant currencies driven by pricing initiatives, although volumes were impacted by supply constraints, especially in Brazil. Southeast Asia showed strong sequential growth, while both India and Indonesia showed strong growth in the retail segment. Revenue for China was up, supported by volume growth in retail, offset by lower volumes for the project segment. At the end of the quarter, pricing for paints had caught up with raw material cost inflation on a run rate basis. Despite the strong revenue performance and underlying demand being robust, the combination of supply constraints, lockdowns, and raw material costs resulted in adjusted operating income 14% lower at EUR 108 million and a return on sales of 11.4% versus 14% for the same period last year. Moving now to the fourth quarter results for Performance Coatings. Reported revenue for coatings was up 11% year-on-year. Revenue was up 10% versus Q4 2019 in constant currencies. Volume for coatings was 5% lower, mainly due to supply constraints with varying degree across all businesses. Revenue growth was driven by pricing initiatives of 14%, while mix was flat. Revenue growth in Powder Coatings was driven by pricing initiatives, especially in the industrial and consumer segments. As indicated earlier, Powder Coatings showed strong underlying demand, but was impacted by supply constraints, especially in North America. Marine and Protective Coatings continued to see sequential recovery with revenue up 16% versus prior year. Revenue for Automotive and Specialty Coatings was 4% higher, mainly due to pricing initiatives despite slightly lower volumes. Aerospace is showing strong recovery while automotive is still impacted by supply constraints. Growth in Industrial Coatings was driven by pricing initiatives with revenue growth in all segments, especially in packaging and wood, even though Industrial Coatings was also impacted by supply constraints during the quarter. The significant raw material inflation combined with ongoing supply constraints resulted in adjusted operating income 35% lower at EUR 137 million and a return on sales at 9.4%. Now turning to slide 16. Working capital for the fourth quarter reflects higher raw material costs and supply constraints. Physical inventories went up due to supply constraints and raw material cost inflation. At the same time, we improved receivables in terms of overdues. This resulted in operating working capital as a percentage of revenue at 13% versus 9.9% for the same period last year. Normalized for raw material cost inflation, working capital would have been 2% lower, around 11% of revenue. Free cash flow was EUR 80 million for the quarter and EUR 305 million for the full year. That's excluding pension pre-funding and top-up payments due to increase in working capital along with other changes in provisions and lower EBITDA for the quarter. Capital expenditures for the quarter were EUR 99 million, leading to a total of EUR 288 million for the full year 2021. We are investing in growth, the optimization of our asset footprint, and ongoing integration of our ERP systems. Going forward, we expect CapEx at approximately 3% of revenue. The net debt/EBITDA leverage ratio was 1.6 x at the end of the fourth quarter 2021, in line with our target leverage ratio of net debt/EBITDA of one to two times. We remain committed to retain a strong investment grade credit rating. Moving now to slide 17. Over the full year 2021, adjusted EPS is up 5% to EUR 4.07 per share. Although adjusted EBITDA was 21% lower for the fourth quarter due to significant raw material cost inflation. Adjusted EBITDA for the full year was roughly flat at EUR 1.4 billion, which is an extraordinary achievement considering more than EUR 760 million raw material cost inflation during the year. Delivering on our capital allocation priorities, we've completed our EUR 1 billion share buyback in January this year and increased our final dividend to EUR 1.54 per share. Now turning to slide 18. We are reiterating our capital allocation priorities with profitable organic growth supported by CapEx of around 3% of revenue. As indicated, we are delivering on our stable to rising dividend policy. We also maintain our focus on strategically aligned and value creating bolt-on acquisitions. We also remain focused on moderate share buybacks. We completed our EUR 1 billion share buyback program in January this year and announced a further EUR 500 million program this morning. I will now hand over to Thierry for concluding remarks. Thank you, Maarten. To summarize, we delivered strong pricing of 12.5% and 9% higher revenues in the fourth quarter while delivering on our capital allocation priorities. Trends differ per region and segment, while raw material inflation and supply constraints are expected to gradually ease by mid-2022. As mentioned, with our Grow & Deliver strategy, we target to grow at or above our relevant markets and continue to build on our strong foundation. We are confident in our EUR 2 billion adjusted EBITDA target for 2023 and the average annual 50 basis points increase in return on sales over the period from 2021 to 2023, in line with our announced Grow & Deliver strategy. We hope that we can give you all of the details in our virtual session on the 17th, where we'll provide an update on our Grow and Deliver strategy. With that, I'm handing it over to Kenny for information about upcoming events and the Q&A session on slide 21. Thank you, Thierry. Before we start the Q&A session, I would like to draw your attention to some of the upcoming events shown on slide 21. As just mentioned by Thierry, we hope to see you virtually during our investor update on Grow & Deliver on February 17th, 2022. On March 2nd, we will publish our annual reports, and we will publish our first quarter report on April 21st, followed by the annual general meeting of shareholders on April 22nd. The ex-dividend date of our 2021 final dividend is on April 26th, and the record date is April 27th, followed by the payment on May 4th. This concludes the formal presentation, and we would be happy to address your questions. Please state your name and company when asking a question and limit the number of questions to two per person so others can participate. Operator, please start the Q&A session. Okay, we will now start the Q&A session. In order to ask a question, please press star one and clearly state your name. Once again, in order to ask a question, please press star one. Our first question is from Laurent from BNP. Laurent, your line is now open. Thank you very much. Good morning, all. Thierry, my first question is on pricing. You seem to have been much more aggressive than peers in the second half, and your guidance for Q1 is again more aggressive than peers. I'm just wondering, are you not seeing signs of market share losses in particular in Performance Coatings? I know you've mentioned market share gains in deco, but I'm wondering what's happening in Performance Coatings. The second question is on the 2023 target, including the target on percentage margin improvement. You've got inflation of about EUR 1.5 billion higher than I guess what you had assumed when you announced the plan. I'm just wondering, why do you think you can still do the percentage margin improvement, the average 50 basis points? Have you identified new levers in terms of costs, for instance, that can help you get there? Okay, thank you. Thank you, Laurent, for your question. Let me tackle the first one, and then maybe, Maarten, you can handle the second one. On market share loss or potential market share losses in coatings, we are not aware of any customer where we lost any volume because of pricing. If you look at our volumes, and by the way, you go back to 2019, which is kind of the reference for it, we are basically in line with that. If you then take into consideration the hundred million Euro backlog in orders, which by the way, the vast majority of that is in coatings, because there I think the supply constraints are still higher. We haven't seen any sign of share losses at all, and I think our teams have been, yes, they have been extremely assertive on pricing, but I think the way it has been done has been assuring that we weren't getting into any issues. The only area volume-wise where I would say that we, and I think we talked about it in the previous quarters, is on Powder Coatings in China at the lower end of the market, where we decided that given the viscosity of trying to get the prices up combined with the high run-up of raw material costs, the view wasn't worth the climb. That's not a big issue because that's a pretty opportunistic segment in the market where you can step in, step out, depending on how much energy you have for pricing and how much capacity is available. I'm really not aware, Laurent, of any coatings fiascos because of pricing at all. Now, Maarten- Yeah. On the second question. Yeah, Laurent. First of all, we remain confident in our in the realization of our EUR 2 billion adjusted EBITDA target for 2023. We've also commented earlier that this is clearly not a linear line. We are now in a kind of a phase on catching up in terms of pricing versus raw material. We believe that we will be there by the end of the first quarter. In fact, I commented earlier that for paints, by the end of the Q4 on a win rate basis, we are there already, but the impact in coatings is typically very much higher. It is about, and we've commented on it in the second half, it's about margin expansion and raw material starts to ease and therefore managing our pricing. It is about growth, and we've indicated that we want to grow in line or above the markets. It is about all the programs we are running in terms of further optimizing our asset network, product management, et cetera. The plans are there. The plans are underpinned, but again, we've commented it's not a linear line. By the way, Laurent, I think that's a teaser for having you all eager and interested during the 17 review where we will bore you out of your mind with all the gory details on how we're gonna get there. That's it. Maybe before then, can you tell us what you think is your weighted average market growth rate for this year? Not asking for guidance for what you can achieve, but more your view on the market. Well, we will have to get back to you because I'm not sure we necessarily talk in weighted averages, but we'll get back to you on that question. Kenny, can you then... Yes. Okay, thank you. All right. Our next question is from Jaideep Pandya. Your line is now open. Thanks. First question really is on your raw material guidance and more so actually looking at it more fundamentally rather than just, you know, on a quarterly numbers basis. You know, if I look at all the key raw materials in the last sort of five years, there was a lot of capacity added, whether it's acrylic or epoxy or TIO2 or what have you, especially driven by China. You know, looking at the next three years, a lot of these raw materials actually don't have much capacity coming online. What actually, you know, in an oil environment, which is relatively inflationary these days, what gives you the confidence that actually we will see a sharp normalization and reversal of the raw material costs, especially if oil prices sort of remain, you know, above $75 and the supply chain disruptions out of China continue to remain? That's my first question. Then the second question really is around, you know, mine and your favorite topic, Thierry, which is M&A. You know, considering that your cash balance is pretty good these days, and the fact that your industry has gone through a tough time in terms of profitability and passing on raws, you know, do you think that there are enough assets which you were looking at previously which were not available, which could be available now, given the fact that, you know, everybody like yourselves or, you know, your big peers have struggled to find important raw materials. I'm assuming that your smaller competitors found it even more difficult to find raw materials. Any thoughts on that? And also, you know, your favorite company in the U.S., which you never wanted to buy. Thanks a lot. The last point is cheeky, actually, so you don't have to answer that. Yes. All right. Thanks, Jaideep. On your first question, why do we think that the raw material inflation will be easing? By the way, it is not a question of believing that it's gonna happen. We do see forward-looking in our context that there is an easing. I'm not sure we said it about a sharp drop. I think we said it is easing at that moment of time. In that sense, I would say, Jaideep, the mental picture you have to have is that, with our price increases, if this was a surfing game, we've been trying to catch the wave, and we try to get there sooner than the others, and I think we do. Now the first quarter is us scrambling to stand up on our boards, and that's so the first quarter will be a bit of a continuation of what we've seen. It's clearly that there is a structural easing with all the nuances that you have to put around it. If you go around capacity and volumes for the building blocks that go into our industry, I just wanna point out that the paints and coatings industry is not in volume a growth industry. We commented that in the past. It's not like if the businesses do better that we sell humongous amounts more volume than any of our competitors need, by the way. Just wanna point that out. On capacity utilization, that's kind of a different translation you have to make there, from where we see the industry going. Secondly, capacity utilization, specifically in China, was actually pretty low for the units, so there was sufficient capacity available. To be honest, Jaideep, if we go around the world, we do see, I would say a normalization easing, whatever word you wanna use in Asia on raw materials. Because some key user markets like the construction project markets are down, so that, and that doesn't really impact us very much. You see an availability. There has been an issue, in fact, to get the Asian material to get over to other parts of the world because of logistics. The arbitrage that typically comes out of China wasn't happening. We actually see signs of that recurring. A number of those Asian suppliers are building up gradually stocks, for example, in Europe. It is actually starting to happen as we speak. In that sense, believe me, we do the deep dives with our procurement team. We see those signs happening. For us, we think Q1 will be stabilizing ourselves on the surfboard, but we are pretty confident that as of second quarter and beyond, there is a margin expansion opportunity for us that we will definitely try to capture on. That's basically on the raws and our expectation for the rest of the year. If we go to the M&A, I think no news, in fact, on our side, in the sense that we remain very focused on our M&A as a tool to improve our businesses and not exactly go for size. Are there companies that smaller companies, as you refer to, that make themselves available? The answer is yes. We are looking at all of them. We're analyzing them. Frankly, it's not a question of can you afford to buy them? The answer would be yes. The question is, what do they do to our network? Do they strengthen our network? Do they actually help us to have a stronger performing business? If that answer is a bit questionable, then we actually just let it go. There are indeed all sorts of assets bubbling up. Multiples that are in the CR highs, so I think you have to really take the fiduciary responsibility to do the best thing for the shareholders than just adding on volume, without necessarily having too much to show for later on. There's not really any news in our capital allocation. We will talk about it also on the 17th, but there is no new news on that area. Does that answer your question, Jaideep? Yeah. Thanks a lot. Well done. Thank you. Thank you. Our next question is from Charlie Webb. Your line is now open. Morning, all. Thank you very much for taking the time to take some questions. Maybe first up, kind of following on a little bit from last question around volumes. Obviously you've had two quarters now of roughly -6% volumes, Q3 and Q4, although obviously the shape of that differed a little bit by division. How do you see that into Q1? Are those headwinds that you saw in Q4 continuing, getting better, getting worse? That's kind of the first part of it. Obviously looking into the rest of the year, you know, how do you see that on a full year basis? Maybe just a quick run around the two divisions in the end markets would be helpful. That's the first one on volumes. The second question just on raw materials. Thank you very much for the very useful price and raw material expectations for Q1. Very clear. Given the visibility you have on that raw material basket, how do you see raw material headwinds or in maybe just in percentage terms or that basket in percentage terms, how do you see that year-on-year 2022 versus 2021? Yeah. All right. Thank you, Charlie. Let me handle the first one, and then Maarten, you have time to think about the second one. I mean, that's how we do things around here. On the volume headwinds, you really have to look at the differences between Deco and then on Coatings, I would say. For decorative paints, the reason why we keep mentioning 2019 is that actually comparisons with the quarters, the fourth quarter or the first quarter for that matter in 2020 is a bit meaningless, specifically on volume, because there you had to do it yourself. We commented on that do it yourself tends to be bigger volumes than trade. As these things normalize, you basically always have a negative number. We're comparing it in 2020 with the in fact also the first quarter of 2021 are actually the wrong comparisons. For Decorative what you will see is in Europe, Middle East, Africa, the normalization, as we indicated, continuing. That means do it yourself being at a higher level than in 2019, and that has now been very consistent since March, April of 2021. Then basically having the rest of the globe for us then South America China and Southeast Asia doing pretty well and actually recovering in certain cases. I do want to point out that in China we have focused since about three, four years on the retail market. That is growing very nicely. I think we're getting there close to double digits, if you compare it to 2019. We also stayed away from projects that had the negative that we couldn't boast fantastic percentages over the last years. It was based on our assumption that that market was gonna collapse sooner or later, and that the exposure to bad debt was very high. In fact, that's exactly what's panning out right now. For Deco, Charlie, you really have to look at what is normal. There I think it will be more on if you take all the pluses and minuses, it may be small negative percentages still. I think once you get into the second half of the year, the comparisons start normalizing again, because we're still specifically in the first quarter, we'll be comparing with very artificial Q1 situations in 2021. For Performance Coatings, if you look at the volumes, there are two elements I wanna point out. Underlying demand is actually pretty good. So again, the bulk of the not being able or the backlog of EUR 100 million I mentioned, the vast majority of that sits in Performance Coatings. Underlying demand is very good. If you look at volume impacts, two I've already indicated. One is Powder Coatings stepping away for, I think, right price volume decisions of the low end of the market in China, but that's typically relatively high volume because, I would say, the supply constraints on the raw materials into that business are especially needing our attention. That's something we can step in whenever we feel that there is money to be made and that it would be again worthwhile to do so. So that has an impact on volume. The second element is if you look around the globe, there is an impact on supply or a more pronounced impact on raw material supply in North America. I mean, that is actually, as you've seen in our chart, that is more what we call the red area. Specifically, we think for the first half of the year, whereas the rest of the globe is gradually, I would say not getting easier, but easing to having more robust supply chains. Those are the impacts in volume, and then in fact all the trends, again, we'll talk about it also on the 17th, are actually in the green, but then you have all these constraints you have to put around it. Charlie, does that answer your questions on the volumes? No, that's very helpful. Just about to push you, the minus six, I guess we've seen in Q3, Q4, I mean, is that the kind of continuation you'd expect in Q1? Or if I can understand a little bit your comment, perhaps is a little bit better sequentially in terms of recovery in certain markets or either comp? I'm just trying to gauge which direction we're moving. Probably still negative, but just to what degree. Yeah, I think Q1 again. I think the analogy of standing up on our surfboards in the first quarter is correct, and you don't typically get too much beat while you're trying to stand up on the surfboard. Q1 on volume, I wouldn't have too many recoveries on that. We do assume that in fact, once the supply of raw materials indeed starts somewhat normalizing, I would say. I mean, it's not like we're here totally enthusiastic about what's coming, that actually that would be allowing us to recover on the percentage volumes on that. Again, I know that for the analyst community, there is high focus on percentage volume. Frankly, if you look at coatings, there is an underlying, mega trend to sell less volume, and have more, thinner layers, higher opacity, less overspray, et cetera. But then on the contrary, recover that with pricing and with technology. It's not one that we track here every day, but I think you would probably see that percentage, starting to flatten out, or let's say, getting less negative, let me put it this way, as we progress in the year. That's very helpful. Does that answer the question, Charlie? Yes, that's great. Thank you. Thanks. Maarten, on the second Charlie, on your raw material question, I think what I do like to comment, and I mentioned it earlier as well, that in Q4 our raw material was just above the 30% versus the level in 2020. Now, if you look at the numbers for the first quarter, it will be well above the 30%. We've indicated at the end of Q1, early Q2, we do expect it will be at peak level. That's also the moment with our pricing actions that we offset the raw material, that we kind of from an amount perspective offset it and have caught up. For the full year, I don't wanna make any predictions here, apart from what we have said earlier, that we will then from that plateau onwards, we'll see a gradual easing. Maybe if I just- That's not surprisingly where our management focus has been on as soon as possible catching up with the raw material inflation. We have started to have the first sessions with our businesses around how do you manage the margin expansion on the other side of the cycle. We all have good hopes that we will have to implement that management focus somewhere near the half of 2022. Just on the raws. I mean, obviously, it wasn't that long ago, a quarter ago, that we were expecting Q4 to be the point at which we were kind of run rate by the end of Q4 in line with raw materials on a pricing basis. What's changed in that quarter that's led us, you know, to kind of push that out one quarter forward, given, I guess, procurement is normally one quarter, two quarters ahead of time. So just what's changed there in that last quarter that led that to go push down? Yeah, Charlie, I think there is this chart that Maarten showed on how the price runs up, and I think it's very telling. You see this little thingy coming up in the first quarter. It's mostly driven, by the way, with energy costs that came in. Secondly, I think we commented in the previous quarter that the long-term contract things are a bit of a thing of the past at this moment. We do see the first suppliers coming back for a long-term contract, which is a telling sign, but that means it's a bit more of a spot opportunistic buy. I would say if you really have to look then, regionally, it's actually more in North America, where there continue to be supply chain, inbound logistics, all sorts of items where there is a bit of a surcharge that comes in. We do, I mean, okay, we are halfway the first quarter, so I mean, it's not like we are predicting the future here. We do see indeed that little thingy that you see in the first quarter, indeed also panning out in reality. It's more the ongoing reaction that has to happen, but that is obviously starting to flatten out right now in the Apart from energy costs, which we mentioned before, also inbound freight, inflation plays a role as well. Yeah. Okay. Thank you very much. Our next question is from, Peter. Peter, your line is now open. Yeah, I think that's me, is it? Peter Clark? Yeah, yeah. I think I just heard Peter, so I didn't know who it was, but I presume it's me. Yeah, no, just following on what Charlie was saying because I was actually quite surprised you ended up in the middle of the range with your raw material basket and input costs. I thought you'd be at the upper end of that. Obviously when we look at Q1, you're obviously a bit more challenging than I thought, especially considering some of the peers are talking about no worse in Q1 against Q4. Regionally as well, I'm surprised given what you said, North America was a bit of a problem because I thought maybe it's something with the European weighting. There's something that just caught you out because again, looking at the working capital outflow, I don't think I've ever seen that in Q4 as well. I'm just wondering if something just changed towards the end of the quarter that was making it a little bit different on the outlook there for the raw material basket, accepting that you can catch it up. The second question is on the U.K. chart. I see you're still forecasting volumes up in 2022 on 2021, led by trade understandably. DIY is down slightly on that chart. I'm just wondering if your thinking on that has got more cautious over the last six months or so, given what is unquestionably an inflation bomb coming through for the consumer here. Those are the two questions. Thank you. Two things there, Peter. One, has anything changed? The answer is no. I think if you really go to what might be different with competitors, but I do believe that what we have been predicting three to four months ago actually miraculously, given all the changes, has panned out almost exactly in our business. That's what the reference to our integrated business planning. I think what could be, but we haven't necessarily analyzed it in detail, is either regional differences. Yes, some of the raw materials in specifics of our businesses, for example, in Marine and Protective and in Powder Coatings, those went sequentially up more. That might be a difference. That's also where we pricing more, by the way, to offset it. That might be the difference. I'm not sure if we have done a complete forensic on what might be different, but there is no, Maarten, as far as I know, there is no underlying difference. What happened, it's more stuff that came in really at the last, I would say the last two months or the last 1.5 months in the fourth quarter around energy transport, et cetera, all the things we mentioned in the answer to Charlie. That's actually the first thing. On the U.K. chart, we actually see a business that will be very similar in 2022 versus 2021. In fact, that we have in common with also our value chain partners that we operate in. Not sure if that chart leads you to believe that we are expecting a boom. It actually is relatively flat versus 2021, but however, at better pricing. Now, if you talk about the inflation and for consumers, that is correct, but we haven't seen any sign of that. We don't expect that to happen. In fact, that chart was specifically for the U.K. because many of you are sitting in the U.K., and it is of course very important. For the rest of Europe, we start seeing actually some very nice elements coming in from the Green Deal. There is the element in Italy, which actually is already very visible. Although the Green Deal does not necessarily focus specifically on paints is always the end of a project that you do around the house and around the building. The effect on the Italian situation has been an extremely nice evolution. Unfortunately, given the raw material constraints, we could only half enjoy that. I'm not sure, Peter. I don't think there's anything in that chart that gives the impression that we are buoyant about the market. What we wanted to indicate is that we see all signs for a very stable market on volume versus 2021. Got it. Very clear. I haven't forgot my name, by the way. You know? I'm not yet Tony Jones. Thank you. Our next question is from Rob Hales. Your line is now open. Hi, good morning. Thanks for taking my questions. Thanks for doing the little deep dives each quarter. Very helpful. I just was focused on the Decorative Paints South Asia slide and calling out India as the max opportunity, but you're number four there. I think before you've talked about, you know, in-country market share as the key success factor. I was wondering if you could just tell us a little bit about the market structure and kind of how far you are from, you know, number one or the top three. Then on, you know, the supply constraints, you know, North America is still the worst, and you mentioned labor shortages. I'm just kind of wondering how much of that is due to labor shortages now for the supply constraints there. Yeah. All right. On Southeast Asia and specifically around India, we are number four. You have Asian Paints, obviously the big player, and then with Berger Paints as the number two. I think once you have Kansai Nerolac and ourselves, we're a bit closer, but we are the number four in that market. Also because we have been keeping a pretty good view on the profitability of that market. With the Grow & Deliver, by the way, a little bit off the radar screen, we did have our Indian team going for a bit similar as in China to geographic expansion because we were very much around four or five real mega cities in India and not so much in the smaller cities inside of India. They've been executing on that. In fact, they've shown a pretty nice growth this year, but very disciplined. At the same time, though, they have been very much focusing on maintaining their margins. As the results show come in because they're all listed companies, so you can very much see those numbers in detail of AkzoNobel India, as it is a listed company. What we are very encouraged about is that our growth is actually very good compared to the others. Again, we focus much more on paint, and we haven't gone into all sorts of adjacencies as the others have done. Our growth has been good, but our profitability, which is high in India, has actually been totally capped in quality, whereas as the results from those listed companies come in, all the three others have actually taken a significant nosedive in profitability. For us, that is obviously an ongoing growth story in India, where we want to keep the middle path between growing but growing in a very healthy way. There's a lot of actually investment. It's actually in capital investment for tinting machines, et cetera, as we add new stores in new geographies. That's for the first question. On labor issues in North America, yes, there are labor supply constraints. Labor also, there is a higher percentage of absenteeism in the U.S. because of COVID. We have that around the world, but for example, in Europe, I would say if I look at the numbers, it's a 1-2% higher absenteeism and people are back after a week or whatever. With some overtime et cetera, we're able to manage it. In the U.S., it's difficult. To be honest, however, it has had more an impact on the growth plans that we have in some of our businesses. In some of them, we had significant plans to go to 24/7 because the demand to sweat the assets more, and that has been a little bit on the back burner because we are having to put all hands on deck to having the existing shift system operating. I think there's all sorts of questions around, is it the Great Resignation? Is it people going to other industries? Is it the effect of COVID on people being ill at home? But the U.S. has been labor constrained for us quite significantly. As I think it has been for many companies in the U.S., by the way. Does that answer the question, sir Rob? Yeah. That's great. Thank you. Good. Up next is Sebastian. Your line is open. Hello, good morning, and thank you for taking my questions. I would have two, please. The first is on how pricing is set more broadly. It was mentioned earlier that the sales team is being quite assertive in setting these prices. I'm just wondering, is there any difference in the contracts that are being negotiated now versus, let's say, a year or two ago with regards to how automatic pass-through of raw materials is? What I'm getting at is the way in which AkzoNobel has responded to higher raw materials partly a product of introducing greater levels of indexation in its contracts, or is it just a series of difficult conversations that happen to have gone well? My second question is on Marine. Mm-hmm. How do the margins in this sub-segment compare to those of Performance Coatings more generally? To what extent do you have visibility on a two or three-year view in a recovery in this segment? When exactly do you know you get the business for large container ships and so on? Thank you. Yeah. Okay. Two questions. Pricing set, I would say contracts with an automatic price indexation are in fact a minority of our contracts that we have. It is in fact in businesses like Industrial Coatings, typically big users who buy big volumes. There you have these clauses in there, which is typically end of quarter, you can do an adjustment, et cetera, which of course, if you have this explosive increase of raw material, you're always running three months behind. Then on the downside, when the raw material starts deflating, you obviously have a gain that you recover it. It's actually a relatively small part of our portfolio. The rest is actually, I would say, as you say, a series of difficult conversations where I think our sales organization has got lots of training this year. They've done that. Now, what has helped is, in fact, the setup we had to really have an analysis by business on what was happening in the raw material basket so that our sales organization had data that actually was consistent and was actually also for customers acceptable or understandable. I think that has helped. In that sense, I think it's the automatic indexation is a smaller part of what we do. I don't think necessarily that that will structurally become a bigger part of our portfolio given the industries we operate in. On Marine and Protective, I would have to answer the question on margin on twofold. If you go to the intrinsic, what I would call variable margin or contribution margin per kilogram, it is actually one of our leading businesses. The issue is, of course, it is a high service business, both for Protective and for Marine, where we have lots of technical support, on-site support, et cetera. It's one of those businesses where although the margins per liter or per kilogram are pretty healthy, once you drop in volume, you get into an infrastructure that actually gets too heavy and it starts impacting the bottom line of the business. For us, at one point, you can't scale back anymore because if you wanna hold on to your customers, you have to have X amount of people on-site to actually do the research, do the technical inspection, et cetera. In that sense, I think the way out here is more volume, so having more volume passing through the system. Hence, we thought we're really worth flagging the sequential increase because that actually just raises the whole quality of the business as we go through that. Last but not least, the visibility for new ships. That's about an 18- to two year cycle. Again, contracts are being made. The ship is being built and the paint job comes at the end. For bigger Protective Coatings projects, oil and gas, et cetera, that's typically the case too. You also have a number of, I would say, 25%-30% of that business, which is more the maintenance, which is more an in-year, I would say within the 12 months that you have a view that would be a dry docking for ships, or it would be maintenance overhauls of existing infrastructure. Does that answer your question, Sebastian? Yes, indeed. Thank you for taking the time to go through them. Thank you very much. Up next, we have Geoff Haire. Your line is open. Hi. Most of my questions have been asked and answered very well. Just one question I want to clarify on. Thierry, you mentioned, I think in one of the earlier questions that you expect margins to improve from the second quarter of 2022. Could you just clarify whether that's on a sequential basis or an annual basis? In fact, it's sequential. Again, this whole margin squeeze that we have because the raw materials go up, and even if we in absolute terms will be offsetting raw material costs, I mean, on percentages, of course, that gives a squeeze. We look at it indeed sequentially as we go forward. Okay. Thanks for clarifying that. Yeah. Thank you. Up next, we have Matthew. Your line is open. Hi there. It's Matthew Yates from Bank of America. Just a couple of questions, please. Firstly on the working capital, Maarten de Vries, obviously in an inflationary environment, we would expect you to consume some cash here, but you were highlighting the impact of supply chain constraints that it's had on inventory. Is that in terms of you've got an excess of finished goods sitting there, or you're waiting for other additives, et cetera, to actually finish products? I'm just wondering to what extent there's scope for releasing some working capital as that backlog unwinds. The second question, I'd like to ask about the wording around the EUR 2 billion target for 2023. In the Q3 results, you said you were confident, but you dropped the use of that word in this statement, although both Thierry and Maarten, you both said you've been confident on this call. I'm just curious, in terms of the change in the language, was the intention here to stress that there is a specific set of measures that you have to back up this target? Yeah. All right, let me then handle the second question first. Just for the record, we are very confident. I've actually added the word very, if you listen carefully, very confident around the 2 billion EBITDA, and that's the whole exercise on the 17th to have you walk out of that session even more confident than we are. If we haven't been necessarily wordsmithing it to that point, we are confident. Otherwise, we wouldn't be talking about it, to be honest, if we didn't see a clear pathway to get to 2 billion EBITDA. Just to ease your mind on that topic. Maarten on the first- Yeah, Matthew, on the working capital. A few points. First of all, we ended at 13%, and if you really normalize for the raw material cost inflation, we would sit at 11%. I've mentioned that. Which is still up versus the 9.9%, where we ended up in 2020. By the way, at that time, we commented that was artificially low given a high payable position we had at the end of 2020. Now, on your question on the inventory level, in fact, if you look at the finished goods, they are really very much stable. The imbalance sits apart from the raw material price increase, sits in the raw material where we indeed, as you mentioned yourself, have raw materials in our inventories waiting to be completed with raw materials which are constrained to be able to manufacture and bring it to finished goods and deliver to our customers. The challenging supply situation creates some imbalances in our raw material stocks and some of our semi-finished goods. Thank you both. Up next, we have Mubasher from Citi. Your line is open. On M&A, is it fair to assume that you're very much focused on the organic side of things at the moment and the M&A is on the back burner as you kind of embark on this EUR 2 billion by 2023? Whether that's gonna be an organic basis. I just wanted to confirm that as well, that the EUR 2 billion is still on an organic basis. Thank you. Yeah. The answer is yes. It is actually on an organic basis, correct. When you look at the M&A side of things, I think you were a little bit more bullish going into, I think 2021 and back into 2020 saying that there's an opportunity to do deals. I think we've done a couple of smaller deals, but is that I think from an earlier point where your focus is very much on smaller side of things. Is that still the case, given that about you? Yes. Yeah. Yes. Well, I think where the confidence was that there were a number of deals we were looking at and that there were a number of deals coming up, and that is actually still the same situation. Having said that, in our industry, you very quickly get to multiples of 14, 15, 16% + multiples for what you buy. You have to be certain that it makes sense. Call us old-fashioned, but I think the way that we do the analysis is, okay, so what do we buy? What does it bring? What are the synergies and what does it do for our business? In that sense, I think that has made a number of assets drop out once you really start looking at it. Again, we come back to the point that we feel the company is on a very good trajectory, even given the last two years of roller coaster we went into with COVID, that we kept the ship very much straight. The last thing we wanna do is actually have energy evaporate in just trying to inflate the top line while we have still lots of opportunities to do stuff internally. Even given all the things that are happening in our markets, we feel confident. That's why we do the share buyback. There's one company we know very well, that we know what the performance is and that we know the multiples are actually too low, and that is AkzoNobel. That is actually where, in any doubt, we put our money in. In that sense, I think, Grupo Orbis has been one which is pretty sizable and actually resets it. Again, I will repeat, we are looking at quite some other assets, but it's the same, I would say, the same asset test around does that really fit, does it bring anything or not? We're very active. Our M&A group is very active, but we actually come to a lot of conclusions around, that is not the asset we wanna go after. Sometimes these assets then show up at somebody else, and that's totally fine with us. Understood. Thank you. I think we're running a bit over time now, so maybe two more questions before we wrap it up. Yep. Okay. Up next we have Georgina Fraser for Goldman Sachs. Your line is open. Hi. Morning, everyone. Thanks so much for sneaking me in at the end here. Could I ask you Thierry, could you maybe go into a bit of detail about the operating environment that you're seeing in China? It's something that I think we're all struggling to understand, the balance of supply and demand side drivers for the Chinese economy at the moment. Your, you know, your view of the paints industry over there would be really helpful, especially since you mentioned that long-term raw material contracts are starting to come back. Do Chinese suppliers have a better line of sight of availability? Are volumes maintaining the levels that we saw in the fourth quarter so far this year? Thanks, Georgina, and we would always have you at the end, but even at the beginning, if you would insist on these meetings. On China, I would say the raw material issues are in fact much less than anywhere else in the world. Now I have to put it in the context of what's happening in the broader paints and coatings industry, and specifically what happens in the bigger volume market, which is by definition the paints industry there. As you know, we've been focusing now on the retail part of the business because with Dulux we have a strong brand name. We can go to these tier two, tier three, tier four cities, and that's actually been very successful for the team at good margins. We have been staying away from the project market. Project is a very small part of our business. That one has actually really taken a big hit with the real estate issues that are there. I think that explains some of the announcements you've seen from other listed companies in China in our market space that are focusing very much on the project space. Now, the project space is big volume, so if that goes down, that actually eases even further the raw material supply into the remaining part of the paints and coatings industry. That explains why there has been more and increasingly so requests or I would say willingness from Chinese raw material suppliers to discuss longer term contracts that actually are pretty I would say normal contracts versus what they were before. I think you have to see it, Georgina, in the context of a significant reset that has happened in that market. The markets are holding up pretty well. Again, I'm looking for the coatings businesses here, but then also the deco is more a consumer sentiment business. For retail, it is holding up pretty well. In fact, we see nice traction in the, as I said, the tier three, tier four cities, etc. These small villages with 1-2 million people that are doing very well. I don't know if that answers your questions, Georgina. Very insightful for us. Thank you very much for sharing. Yep, thank you. For the final question? Our final participant is Chetan from JP Morgan. Your line is open. Yeah. Hi. Morning. Two questions, hopefully easy ones. First on 2021 and also on Q1 maybe. Can you shed some light on how should we think about the, sort of the other OpEx line in the EBIT bridge, just given there is clearly some increase that we see on the labor cost inflation, in general. How should we think? Is it gonna be positive, negative? Any color there would be useful. The other question I had was, I'm just looking at slide number six and seven, which shows, you know, the, you know, clearly the demand trends remain strong. At least that's the message. Why is that not visible in the Q4 numbers when it seems like in Q4, EMEIA, Decorative Paints volumes are now back to 2019 levels, so which suggests that clearly the DIY moderation and the increase in, you know, professional business is not yet a net positive. I'm just trying to reconcile those two messages. Thank you. All right, Chetan, thank you very much. Maarten, do you wanna answer the OpEx question? Yeah, I think on OpEx, I think it's good to look at it from a sequential perspective. In fact, I like to highlight that we have shown very strong cost discipline throughout 2021, quarter by quarter. Also in the fourth quarter, we were more or less flat from an OpEx perspective despite the inflation, because we see, of course, labor inflation, which we offset with all our productivity actions. I want to highlight also the freight inflation and the outbound inflation, which in 2021 was roughly 7%. Despite all that, we have managed to keep our OpEx more or less flat. What you saw specifically in the fourth quarter is the effect of the comparison with Q4 the year before in terms of the negatives there and some positives in Q4 2021. Going forward, and that's probably your question, it's better to look at from a sequential perspective than to try to compare with the previous year. Chetan, on your question of the volume, I think chart number seven that you refer to, of course, talks about AkzoNobel paints in Europe, whereas, of course, the volumes we talk is for the whole world in that. If you, there's a number of pluses and minuses in that, but if you look at the Southeast Asia, for example, yes, that perked up quite significantly near the end of the third quarter, but I mean, that is actually, that doesn't make the quarter necessarily to bring to its full justice. It's maybe something we have to take offline because I think we get too micro a reading of what we talk about here. For our markets today and specifically in Europe, they normalize for DIY versus 2019. We also get to a normal seasonality. I think I wanna stress that. In fact, we look at it more sequentially versus what was still an unbelievably abnormal quarter in Q4 2020, where people typically, that's our lowest quarter. If you go back, that was actually an exorbitantly high quarter for the season, given people sitting at home. You really have to look at it versus where we were at that specific quarter and what we would consider a normal seasonality, as we've been saying over the last two quarters, that we went to a normal seasonality, but healthier than it was in 2019. I hope that. We can actually take it offline because it's probably good to ease your mind on that. It's for us, the big problem is to explain the complete abnormality we had in 2020 in certain segments, and then explaining in single-digit percentages where it's coming from. No, that's clear. Thank you. Bye. Thank you. All right. Thank you everyone for participating in today's results call. For any additional questions, please contact us at Investor Relations at AkzoNobel, and we wish you a pleasant day. Thank you. Thank you for participating. You may now disconnect.