media release

AkzoNobel Publishes Q1 2009 Results

Akzo Nobel N.V. (AkzoNobel) today announced its results for the first quarter of 2009. All businesses experienced extremely tough trading conditions and, as a result, the company reported a revenue decline of 13 percent to €3,272 million, while EBITDA was 33 percent lower at €296 million.

  • Revenue declined 13 percent to €3,272 million
  • Volume decline evident in all three business areas, in all geographies
  • Some stabilization seen in trading conditions in March
  • EBITDA margin at 9.0 percent, EBITDA 33 percent lower at €296 million
  • Net loss of €7 million
  • Refinancing completed – €750 million bond issue in March and £250 million in April – robust balance sheet
  • Ongoing management action with focus on customers, cost, and cash
  • Restructuring and synergy realization programs on track

Financial highlights

€ millionQ1 2009Q1 2008% change
EBITDA margin (in %)9.011.7 
EBIT margin (in%)*4.37.6 
Net income**28179 
Net income total operations(7)105 
Moving average ROI (in %)*7.8- 

* Continuing operations before incidentals
** Net income from continuing operations before incidentals and fair value adjustments

Akzo Nobel N.V. (AkzoNobel) today announced its results for the first quarter of 2009. All businesses experienced extremely tough trading conditions and, as a result, the company reported a revenue decline of 13 percent to €3,272 million, while EBITDA was 33 percent lower at €296 million.

The severity of the global downturn, which AkzoNobel experienced towards the end of Q4 2008, continued to have an impact during the first quarter of 2009.

“Our first quarter results across all areas of our business reflect the depth of the global economic slowdown,” said AkzoNobel CEO Hans Wijers. “We still have limited forward visibility, but there were some early indications in March that conditions in a number of our markets may be stabilizing. We are constantly monitoring activity levels and are preparing the company for various economic scenarios. However, I believe that because of our strong fundamentals and the actions we have already taken, and continue to take, AkzoNobel is well placed to weather the current economic storm.”

AkzoNobel’s CFO Keith Nichols added: “Management focus for 2009 is on continuing to service customers, manage the cost base, generate cash and capture the synergies and benefits of the ICI acquisition.”

Revenue for Q1 2009 developed as follows:

In % vs Q1 2008VolumePrices


Exchange Rates


Decorative Paints






Performance Coatings






Specialty Chemicals













strong financial profile

With maturing debt refinanced, the company has a robust balance sheet. Having issued a €750 million bond in March and a £250 million bond in April, the company has completed its refinancing and lengthened the duration of its debt book.

Initiatives are in place to conserve cash and improve working capital utilization. As a result, the company remains well positioned to continue to improve its market positions and to achieve its medium-term objectives.

Management action

Nichols also outlined some of the management initiatives implemented during the first quarter: “In addition to the capturing of the ICI synergies, our Decorative Paints business in Europe is engaged in a major restructuring of the supply chain which involves the concentration of production sites and the closure of warehouses. They are focused on strict cost control without jeopardizing innovation and promotional activities. Meanwhile, the focus on operating costs in Performance Coatings delivered an EBITDA margin of 10.7 percent, and the integration of LII Europe in Specialty Chemicals contributed to the top and bottom line for the quarter.

Restructuring and synergy realization programs on track

2008 and Q1 2009ICI IntegrationAdditional Restructuring


Reductions in workforce




Costs (€ million)




Annualized savings
(€ million)




Our workforce at March 31, 2009 decreased to 59,650 employees (year end 2008 60,040). Acquisitions brought in 710 employees, while 1,150 left our company, mainly due to continued restructuring and realized synergies.

Decorative Paints – actively managing the downturn

  • Global economic downturn continued to impact decorative paint market
  • Volumes were down by 16 percent, partly compensated by margin management
  • ICI integration savings continue ahead of plan
  • European volumes were down substantially
  • UK retail market showed resilience
  • US housing market and decorative paint market remain weak
  • Asia – some stabilization seen in China

The global economic downturn continued to impact the decorative paint market as the negative trends we experienced during the second half of the previous year continued. Volumes were down 16 percent, partly offset by margin management (7 percent) and the acquisition of a distributor in Germany (1 percent). All regions reported a reduction in operational costs as a result of the ICI synergies and saving initiatives.

Performance Coatings – cost savings starting to bear fruit

  • Revenue decreased by 14 percent
  • EBITDA margin was 10.7 percent
  • Marine & Protective Coatings continued to show solid performance
  • The Industrial Activities experienced the full effect of the economic downturn
  • Margin management partly compensated for volume decline
  • Cost saving initiatives delivered value in Q1
  • Strong focus on managing working capital and capital expenditure

Revenue declined by 14 percent, with price increases of 6 percent partly offsetting a 20 percent volume decline. EBITDA amounted to €104 million, 21 percent lower than in 2008. EBITDA margin was 10.7 percent. There were some signs of stabilization in March over the earlier months of the quarter.

Specialty Chemicalsfocused portfolio pays off in downturn

  • Revenue decreased 11 percent, with volumes down 16 percent
  • Volume declines across all businesses, but most prominent in Surface Chemistry and Polymer Chemicals
  • Acquisitions contributed 4 percent to revenue
  • EBITDA margin was 12.2 percent
  • National Starch results were under pressure due to weak demand and high net corn costs
  • Improved results in Chemicals Pakistan

Revenue was 11 percent lower compared with 2008. The volume decline of 16 percent was partly compensated by a positive acquisition impact of 4 percent. EBITDA amounted to €158 million, 35 percent below last year. Despite the continued challenges created by weakening demand and volatile feedstock costs, an EBITDA margin of 12.2 percent was realized.

Outlook and medium-term targets

AkzoNobel has strong market positions in a number of highly attractive sectors with a wide geographical spread. Continual focus is being given to margin management and cost reduction actions so that the company is well positioned to meet the current challenges and, as a result, will be in good shape to take advantage of the recovery when it comes. Forward visibility remains limited which makes it difficult to predict with any certainty. AkzoNobel continues to expect that 2009 will be a challenging year. Nevertheless, the company remains focused on achieving its medium-term target of an EBITDA margin of 14 percent by the end of 2011; on continuing to deliver the €340 million ICI synergies; on driving margin management programs across the company; and on rigorous cost management.

The Report for the 1st Quarter of 2009 can be read on


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