AkzoNobel continues to improve performance
- Operating income up 38 percent at €486 million (2014: €353 million)
- Revenue up 6 percent to €3.9 billion, mainly driven by favorable currency effects
- Improved performance with return on sales at 12.3 percent (2014: 9.5 percent); and return on investments at 11.7 percent (2014: 10.1 percent)
- Net income attributable to shareholders up 61 percent at €331 million (2014: €205 million)
- Adjusted earnings per share (EPS) up 37 percent at €1.30 (2014: €0.95)
- Net cash inflow from operating activities at €407 million (2014: €393 million)
- Divestment of Paper Chemical business completed
- Triennial review ICI Pension Fund (UK) completed in July, 2015
- On track to deliver 2015 targets
Akzo Nobel N.V. (AKZA.AS; AKZOY) today reported a second quarter with positive developments in profitability of all three Business Areas despite a challenging market environment.
Second quarter operating income increased 38 percent to €486 million, reflecting the positive effects of efficiency programs, lower costs, reduced restructuring expenses, divestment results and favorable currency rates. Revenue of €3,949 million was up 6 percent compared with the same period last year due to favorable currency rates, offset by divestments and lower volumes in some areas. The divestment of Paper Chemicals was completed in line with the strategy of pruning the portfolio. The triennial review with the trustees of the ICI Pension Fund (UK) was completed in July, 2015. Market trends in North America continued to be positive with Europe not improving. Conditions remained challenging in many countries, including in Russia, Brazil and China. Return on sales improved to 12.3 percent and return on investments was up at 11.7 percent. AkzoNobel remains on track to deliver its 2015 targets.
CEO Ton Büchner:
second quarter continued to show the positive impact of our focus on profitability and leadership in sustainability.
The global economy remains challenging and shows a very mixed picture with different dynamics per region and customer segments. We remain on track to deliver our 2015 targets."
Performance Coatings benefited from cost reductions created through performance improvement initiatives, margin management activities, manufacturing productivity and favorable currencies which resulted in an increase of operating income of 24 percent. Revenue was up 8 percent across all reporting units, benefiting from favorable currencies and a higher demand for premium products. Volumes declined mainly due to lower capital and maintenance spending in the global oil and gas industry. Russia, Brazil and China remain challenging.
Specialty Chemicals operating income increased by 55 percent (31 percent excluding incidental items related to the divestment of Paper Chemicals business). The results were supported by the increase of production at the new Frankfurt plant, operational efficiencies throughout the business and favorable currency developments. Revenue was up 5 percent due to continued favorable currency effects, partly offset by the impact of the divested Paper Chemicals business. Volumes overall were flat. Growth in some segments compensated for lower demand in oil drilling segments. North America continued to show a positive trend while growth in Asia was subdued and demand remained weak in Europe and South America.
rate movements, positive market trends in North America and no improvement for Europe overall, as well as lower growth rates in many countries, including Russia, Brazil and China, are determining the dynamics of 2015. Our significant actions taken in recent years form a sound basis for further improved performance. We are on track to deliver our targets for 2015*.