AkzoNobel (Paints and Coatings):
- Successfully completed the dual-track process for the separation of Specialty Chemicals; AkzoNobel to sell Specialty Chemicals to The Carlyle Group and GIC for €10.1 billion
- On track implementing our "Winning together: 15 by 20" strategy
- Transformation gaining momentum: program office up and running
- Robust pricing initiatives ramping up: price increase successful in Q1 2018; second wave of price increases to come in 2018
- Selling prices up 3% overall and for all businesses
- Revenue down 8%, mainly due to adverse foreign currencies (1% lower excluding currency impact) at €2,176 million
- Volumes 3% lower, mainly due to continued adverse market conditions in the marine, and oil and gas industries
- Savings from continuous improvement were €30 million and creating a fit-for-purpose organization delivered €10 million
- Adjusted operating income1 at €149 million (2017: €208 million) due to adverse foreign currencies, higher raw material costs and lower volumes not yet fully offset by increased selling prices and cost discipline
- ROS2 at 6.8% (2017: 8.8%); ROI3 at 13.2% (2017: 14.8%)4
- Adjusted EPS5 from continuing operations at €0.35 (2017: €0.50)
- Net income from total operations up 5% to €253 million (2017: €240 million), including discontinued operations at €134 million (2017: €114 million)
Akzo Nobel N.V. CEO, Thierry Vanlancker, commented:
“We delivered a key milestone in creating two focused, high performing businesses with the agreement to sell Specialty Chemicals to the Carlyle Group and GIC for €10.1 billion.
“Headwinds continue for Marine and Protective Coatings, as well as currencies and higher raw material costs. Results were lower compared to an exceptionally strong quarter last year.
“We are ramping up our pricing initiatives and have implemented various cost discipline measures to deal with higher raw material prices. Initial savings from creating a fit-for-purpose organization are also being realized. The transformation is gaining momentum and we are on track for delivering 15% return on sales by 2020.”
Outlook AkzoNobel Paints and Coatings:
Higher raw material costs and adverse effects from foreign currencies are projected to continue in 2018, especially during the start of the year. We anticipate ongoing positive developments for Decorative Paints in all regions, particularly Asia. Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings. We continue to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline. Our "Winning together: 15 by 20" strategy will create a focused Paints and Coatings company and deliver our 2020 guidance.
Q1 2018 in € millions
Paints and Coatings