Akzo Nobel improves profitability to record levels
Akzo Nobel has reported record profitability in the first quarter of 2017. Up across all business areas the company achieved higher revenues and volumes.
Akzo Nobel continues to anticipate positive developments for EMEA, North America and Asia, improving during the year, while Latin America is expected to stabilize. Market trends experienced in the second part of 2016, including for the marine and oil and gas industries, are expected to continue during the first half of 2017.
Higher EBIT for 2017 expected
The company has structurally improved its ability to respond to developments in its markets and continues taking appropriate measures to deal with higher raw material prices in an inflationary environment. EBIT for 2017 is expected to be around EUR100 million higher than 2016, as a result of growth momentum and continuous improvement, assuming no material change in market and economic dynamics.
Decorative Paints
Revenue was up 7%, mainly driven by strong volume growth. Volumes were up 9%, with positive developments in all regions. Volume developments were positive for the sixth consecutive quarter. EBIT increased by 48%, mainly as a result of higher revenue and continued focus on cost measures, while recognising that Q1 is a seasonally smaller quarter.
Performance Coatings
Revenue was up 6%, driven by positive volume development across a number of segments and the acquisition of BASF’s Industrial Coatings business. EBIT was up 1%, with positive development in segments including Industrial and Powder Coatings and Automotive and Specialty Coatings offsetting continued weak demand in the marine and oil and gas industries and integration costs. More than 100 scientists will be brought together in a new EUR12.6 million research and innovation hub in Felling, UK. The facility will focus on developing protective coatings for the energy, mining, infrastructure and oil and gas industries.
Specialty Chemicals
Revenue was up 7%, due to positive volume developments in all business units and regions and favorable currency effects. Volumes were up 5%, with several businesses benefiting from improved market conditions in the oil drilling, mining, agrochemical and building and construction segments. EBIT increased by 7%, mainly due to improved volumes and operational efficiencies, partly offset by price increases which were not yet fully recaptured through increased selling prices.
CFO Maëlys Castella
“Our record performance continued this quarter, showing the substantial growth momentum we have across the business. Significant progress continues across all our Business Areas, reflecting both our strong customer focus and great portfolio of brands. We remain focused on increasing returns to shareholders, including a EUR150 million share repurchase program that began in the quarter. Our strong financial and operational foundation has enabled us to embark on the next phase of our strategy, with a review of options for the separation of the Specialty Chemicals business to further unlock value for shareholders. We look forward to updating the market on our new strategy.”
