Strategic initiatives deliver strong growth and basis for new platform Organon Biosciences

7 February 2006

Boxmeer, the Netherlands, February 7, 2006 – Akzo Nobel NV has announced today that it intends to separate its pharmaceutical activities from its chemicals and coatings businesses. The aim is to create two independent companies that are each a platform for growth in their own segments.  ‘The separation of the human and animal healthcare businesses of our company – Organon, Intervet and Nobilon - will put us into a strong position building on our expertise in both fields’, emphasized Ruurd Stolp, President of Intervet International bv. The strategic initiatives pursued by Intervet in recent years began to pay dividends in 2005, contributing to a strong set of results, and create an excellent basis for the intended new pharma business. Intervet sales increased by 7% to EUR 1,094 million*, with volume growth the main contributor to higher revenues. Intervet delivered an EBIT of EUR  238 million – up by 29%, and equivalent to an operating income margin of 21.8%. The definitive decision on the separation into the two companies is subject to approval by an (extraordinary) meeting of shareholders and consultation with relevant employee representative bodies.
 
Intervet continues to sharpen the strategic focus on major food and companion animal species markets, and expects to deliver similarly positive results beyond 2005, when the fruits of the extensive research and development programs will enhance the company’s existing portfolio. 

Stronger growth was delivered in spite of recent divestments in non-core areas. During 2005, Intervet completed the sale of larger parts of the feed additive business and Vetstream, a provider of clinical information services in the veterinary market; activities which no longer fit with the core business operations. 

During the year, Intervet benefited from efficiency improvements in manufacturing with a major investment program at the multifunctional sites in the Netherlands, UK, India and Australia.

Intervet further expanded the strong market position in Europe, due to improved supplies and strong growth of Cobactan®, the innovative range of anti-infective formulations, based on the proprietary molecule cefquinome. Intervet generates more than 50% of its sales in Europe. In 2005, the company’s development in North America was characterized by growth in key segments. The region contributes with 16% to Intervet sales. Sales in North America grew substantially, driven by new product introductions in the companion animal segment, including Vetsulin® (the first insulin to treat diabetes in dogs) and Continuum® (combination vaccine with long-lasting immunity), and in the cattle segment, where the recently introduced cattle bio line Vista® received very positive response. Intervet’s vaccine segment covers around 50% of total sales, which underlines the company’s leading position. Sales in Latin America were boosted by substantial growth in Brazil in various product segments and Chile mainly by increased sales of fish vaccines.  The region contributes with 13% to the company’s sales. Although large parts of Asia are still severely affected by avian influenza outbreaks, business is improving. The acquisition of AgVax Developments Ltd. in New Zealand will further boost the strong growth in Oceania. During 2005 sales growth could be realized in all species segments. Intervet's ruminant product range covers with around 40% the largest share. The strong performance underlines the company’s leading position which Intervet is holding in various markets and species or product segments.

In September the Dutch Ministry signed a contract with Intervet about a vaccine bank for emergency vaccination with Porcilis® Pesti, Intervet's marker vaccine against Classical Swine Fever. End of 2005 marketing authorization for a range of Intervet’s Nobilis® Influenza vaccines has been granted to Intervet UK by the UK authorities. The vaccine range is for the active immunization of chickens, ducks and other avian species as an aid in the control of outbreaks of Avian Influenza type A, subtype H5 (the type causing the current outbreak), and also subtypes H7 and H9. Intervet interprets these developments as a signal within Europe making vaccination part of the preparedness plan of countries against highly infectious diseases.

* For further details see Akzo Nobel Press Release, 7 February 2006, www.akzonobel.com

Note for the editor
Intervet, a business unit of Akzo Nobel, based in Boxmeer, the Netherlands, with sales of EUR 1,094 million in 2005, is dedicated to research and development, production and marketing of innovative animal health products. Intervet's product range for use in livestock, companion animals, poultry and fish includes vaccines, antiparasitics, anti-infectives, endocrine products and other pharmaceutical specialties. Intervet operates globally with its own marketing organizations. The company currently employs around 5,000 people.

Internet: www.intervet.com

Akzo Nobel is a global 500 company and is listed on both the Euronext Amsterdam and NASDAQ stock exchanges. It is also listed on the Dow Jones Sustainability Indexes. Based in the Netherlands, we are a multicultural organization serving customers throughout the world with human and animal healthcare products, coatings and chemicals. We employ around 61,500 people and conduct our activities in four segments, human and animal health, coatings and chemicals, subdivided into 13 business units, with operating subsidiaries in more than 80 countries. Consolidated revenues for 2005 totaled EUR 13.0 billion. The financial results for the first quarter will be published on April 20, 2006.

Internet: www.akzonobel.com

Not for publication - for more information:
Sabine Schueller 
Intervet International bv  
Communications & Public Affairs 
Tel:  +31 (0)485 587085
Fax: +31 (0)485 585392
communications@intervet.com

Safe Harbor Statement*
This report contains statements which address such key issues as Akzo Nobel’s growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, progress of drug development, clinical testing and regulatory approval, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business please see our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission, a copy of which can be found on the company’s corporate website www.akzonobel.com. The 2005 Annual Report on Form 20-F will be available in the second quarter of 2006. 

* Pursuant to the U.S. Private Securities Litigation Reform Act 1995. 

This document does not constitute an offering of any securities in Organon Biosciences. 
No definitive decision has been made in respect of such offering. The terms and conditions of an offering of securities in Organon Biosciences will be contained in a prospectus, approved by the Dutch Authority for the Financial markets. Prospective investors are urged to read the prospectus, which, in the event that it becomes available, will contain important information that prospective investors should consider before making any investment decision.