AkzoNobel Publishes Fourth-Quarter and Full-Year 2008 Results
March 2, 2009
AMSTERDAM, the Netherlands - Akzo Nobel N.V. has announced its results for the fourth quarter and for the full-year 2008. The company reported 2008 revenue in constant currencies of EUR 16.2 billion, 6 percent ahead of last year (reported: 1 percent).
However, while the figures for the full year reveal that the company achieved revenue growth during 2008, the severity of the deteriorating global economy became apparent towards the end of the fourth quarter. I
n the company’s Decorative Paints business, 2008 revenue increased in constant currencies by 2 percent, with pressure on margins being mitigated by pricing management across all regions, which compensated for increased raw material costs. Higher-than-expected synergy benefits offset cost inflation, while double-digit constant currency growth was booked in Asia.
It was a mixed year for the Performance Coatings business, which had to contend with volatile raw material pricing and currencies. The Marine & Protective Coatings business had a very good 2008, while the impact of the economic downturn took full effect on the Industrial Activities in the fourth quarter. Volumes in 2008 were stable, but revenue was 1 percent lower than 2007, with margins remaining almost flat.
Specialty Chemicals delivered a solid 2008 performance and a respectable fourth quarter, despite weakening demand and volatile feedstock costs. Revenue was up 5 percent compared with 2007, while autonomous growth was 9 percent. Market weakness intensified as Specialty Chemicals approached year-end, which fueled customer de-stocking momentum and resulted in an 11 percent decline in volume in the business in the fourth quarter. However, the volume decline was more than offset by effective margin management, producing revenue growth of 3 percent.
Net income from continuing operations before incidentals declined by 14 percent to EUR 742 million. The effect on earnings per share was mitigated to a decline of 4 percent due to the share buyback programs in 2007 and 2008.
CEO Hans Wijers commented, “We are acutely aware that global market conditions and lack of visibility do not allow for any certainty. The harsh trading conditions experienced towards the end of the fourth quarter have continued into 2009 and, as a result, we expect this year to be very challenging. Nevertheless, we remain focused on achieving our medium-term target of an EBITDA margin of 14 percent by the end of 2011, on continuing to deliver the EUR 340 million ICI synergies, on driving margin management programs across the company and on rigorous cost management.”
The company also announced will not complete its share buyback program in view of the unprecedented uncertainties across the world.