AkzoNobel Reports Third-Quarter 2023 Financial Results
Akzo Nobel N.V. has published financial results for third-quarter 2023. According to the report, the company’s revenue across currencies was up 5% on pricing, despite flat volumes, while reported revenue was 4% down on unfavorable exchange rates. Operating income was reported at €354 million (2022: €168 million), and adjusted operating income was reported at €324 million (2022: €184 million); ROS 11.8% (2022: 6.4%). The company reported a net cash from operating activities positive at €297 million (2022: €126 million), and a net debt to EBITDA leverage ratio improved by 3.2x.
AkzoNobel CEO, Greg Poux-Guillaume, said, “Our third-quarter results show a solid rebound in profit and continued improvement of our margins, despite an adverse currency impact. While volumes were flat, we are increasingly benefitting from the easing of raw material costs. Higher profits and improving working capital management both contributed to a leverage ratio of 3.2, which keeps us on track to meet our year-end guidance.”
Decorative Paints
AkzoNobel reported revenue in constant currencies was 5% higher, reported revenue was 3% lower. Revenue growth in constant currencies was reportedly mainly driven by pricing. Volumes were flat, with lower volumes in Latin America offset by higher volumes in Asia. The acquisition of the Chinese decorative paints business of Sherwin-Williams added 1%. Other, which mainly relates to the impact of hyperinflation accounting, increased revenue by 1%. Operating income reportedly increased to €156 million (2022: €102 million), mainly due to a rebound in gross margins. The company reported an operating income including identified items of -€3 million (2022: -€3 million). Adjusted operating income reportedly increased to €159 million (2022: €105 million), and ROS improved to 14.2% (2022: 9%).
Performance Coatings
AkzoNobel reported revenue was 5% higher in constant currencies, while reported revenue was 5% lower. Revenue growth in constant currencies was reportedly driven mainly by pricing. The company said volumes were flat, with growth in powder coatings and marine and protective coatings offset by continued soft demand in industrial coatings. Other, which mainly relates to the impact of hyperinflation accounting, was reportedly increased revenue by 1%. The company said operating income increased to €245 million (2022: €98 million), mainly due to a rebound in gross margins. Operating income includes identified items of positive €43 million, mainly resulting from a property divestment (2022: -€7 million identified items). Adjusted operating income increased to €202 million (2022: €105 million), while ROS improved to 12.5% (2022: 6.2%).
AkzoNobel expects the ongoing macro-economic uncertainties to continue and weigh on organic volume growth. The company will focus on margin management, cost reduction, working capital normalization and de-leveraging. Cost reduction programs are expected to partly mitigate higher than expected inflationary pressure on operating expenses for 2023. AkzoNobel expects declining raw material costs to have a favorable impact on profitability. Based on current market conditions, AkzoNobel targets to deliver around €1.45 billion adjusted EBITDA.
The full report can be accessed here.
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!
