Revenue and volumes up despite strong headwinds;
Transformation plan to deliver €110 million savings in 2018
Akzo Nobel N.V. (AKZA.AS; AKZOY)
- Volumes 2% higher driven by Decorative Paints and Performance Coatings
- Revenue up 1%, mainly due to volume growth and acquisitions, partly offset by unfavorable currencies
- EBIT1 at €383 million (2016: €442 million), impacted by unfavorable currencies, temporary disruption to the manufacturing and supply chain, continued headwinds for Marine and Protective Coatings and margin pressure from raw material cost inflation
- Direct impact of around €25 million on EBIT related to Hurricane Harvey and other events
- Adjusted EPS at €1.07 (2016: €1.20)
- Initiating phase one of transformation plan to create a fit for purpose Paints and Coatings organization to deliver €110 million savings in 2018 contributing towards the 2020 financial guidance
- Extraordinary General Meeting (EGM) to be held on November 30, 2017
- Creating two focused high-performing businesses:
Separation of Specialty Chemicals is on track to be completed by April 2018
€1 billion special cash dividend as advance proceeds to be paid on December 7, 2017, following shareholder approval for the separation
- Capacity expansions in the UK (Decorative Paints), China (Performance Coatings) and Sweden (Specialty Chemicals)
- Number one in the Chemicals Industry Group on the Dow Jones Sustainability Index, for the fifth time in six years
CEO Thierry Vanlancker commented:
“We have continued to grow our business with higher volumes and increased revenues despite challenging market conditions in selected areas of our business, especially in Marine and Protective Coatings.
“We have also initiated phase one of our transformation plan to create a fit for purpose Paints and Coatings organization which will deliver €110 million annual savings in 2018 contributing towards our 2020 financial guidance.
“EBIT for 2017 is now expected to be in line with 2016, due to adverse foreign exchange, ongoing industry specific headwinds and supply chain disruptions, including the adverse impact of Hurricane Harvey in the US.
“There continues to be significant interest in our Specialty Chemicals business and we look forward to the separation process officially kicking off in the coming weeks. We have announced several capacity expansions to accelerate growth for the business, including a €20 million investment to increase production at Sundsvall, Sweden for our Expancel expandable microspheres.”
We anticipate positive developments for EMEA (excluding the UK), North America and Asia, while Latin America is expected to stabilize.
Industry specific headwinds continue, including higher raw material prices and challenges for marine and protective coatings.
We are implementing various measures to mitigate current market challenges, including increased selling prices and additional cost control.
EBIT for 2017 is now expected to be in line with 2016, due to ongoing industry specific headwinds and supply chain disruptions.