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AkzoNobel today announces preliminary, unaudited, financial results for full-year 2017.
The internal separation of the Specialty Chemicals business is complete. A full separation of Specialty Chemicals, either via a private sale or a legal demerger, remains on track for April 2018. As a result, the Specialty Chemicals business will be reported as discontinued operations.
- Revenue, including discontinued operations, for full-year 2017 expected to be up 3% (up 4% excluding currency impact) at around €14,575 million (2016: €14,197 million)
- EBIT, including discontinued operations, for full-year 2017 expected to be around €1,525 million (2016: €1,502 million). EBIT excludes identified items totaling around €130 million mainly related to the transformation of AkzoNobel into a focused Paints and Coatings company, including the separation of Specialty Chemicals
Positive developments continued for Decorative Paints, particularly in Asia, while challenging conditions in the marine and oil and gas industries impacted Performance Coatings. Some industry specific headwinds persisted, including higher raw material costs, and adverse effects from foreign currency increased further. Continuous improvement and cost discipline contributed positively to achieving the results.
Specialty Chemicals delivered a strong performance throughout 2017, including during the fourth quarter.
AkzoNobel also confirms financial guidance for 2020*: Paints and Coatings 15% ROS, ROI >25%; Specialty Chemicals 16% ROS, ROI >20%, reflecting continued growth in profitability.
The transformation of AkzoNobel into a focused Paints and Coatings company, including the separation of Specialty Chemicals, is progressing well and the associated one-off costs are within expectations. Phase one of creating a fit for purpose Paints and Coatings organization, announced in October 2017, is on track to achieve €110 million savings in 2018, contributing directly towards delivering the 2020 financial guidance. Various measures to mitigate current market challenges, including increased selling prices and cost discipline, also continue to be implemented.
As previously announced, AkzoNobel will publish a report for the full-year and the fourth quarter 2017 on Thursday, March 8, 2018. This is later than previous years due to the financial reporting process relating to the separation of Specialty Chemicals.
EBIT = operating income excluding identified items
* Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption