AkzoNobel Reports Lower Revenue for 2009
February 22, 2010
AMSTERDAM, The Netherlands - Akzo Nobel N.V. (AkzoNobel) has announced its 2009 fourth-quarter and full-year results. The company reported 2009 revenue of EUR 13,893 million, 10 percent below the previous year.
Commenting on the results, CEO Hans Wijers said, "The fact that we can report an EBITDA margin close to 13 percent in such challenging markets is a good indication of both the underlying strength of our company and the successful implementation of the ongoing restructuring and cost-reduction programs. Our ability to adapt early and quickly to the new economic reality was crucial, and we are now well placed to take advantage of the upturn when it comes.
"Our volume development per quarter confirms that the stabilization we reported at the end of the third quarter has continued. However, we believe the recovery is fragile and will be slow. We continue to focus on customers, cost reduction and cash generation, but investments to capture growth will remain a priority, particularly in high-growth markets. The management actions we have taken, and continue to implement, underpin our confidence that AkzoNobel will achieve its 2011 target of an EBITDA margin of 14 percent."
In Decorative Paints, volumes were down nine percent for the full year, while revenue dropped seven percent. Volumes stabilized in Europe during the fourth quarter, whereas the high-growth markets outperformed the relatively weak final quarter of 2008. Commercial markets continued to be weak, particularly in the mature markets.
A multi-year restructuring program to eliminate or reduce complexity and duplication is underway. The program is geared towards leveraging regional scale through increased standardization and investments in people and brands. There has been significant investment in the restructuring of the U.S. business and in the re-launch of the Glidden brand in the United States.
Although 2009 revenue for Performance Coatings decreased by 12 percent, all businesses benefited from cost-reduction and margin-management programs, with Industrial Activities closing six sites during the year. This resulted in an EBITDA margin of 14.5 percent, 2.1 percent ahead of 2008. EBITDA was up four percent from 2008 at EUR 587 million.
After a difficult first quarter, which saw a large reduction in volume for most businesses, there was some recovery in the second half of the year. Marine and Protective Coatings and Packaging Coatings had a good year. Industrial Activities achieved a strong fourth quarter, with demand levels surpassing the previous year. However, activity remains below pre-recessionary levels.
In Specialty Chemicals, revenue for the full year was down eight percent, driven by weak demand across all businesses, with volumes down nine percent. Lower volumes led to EBITDA being down 10 percent, although the performance of Functional Chemicals and Pulp and Paper Chemicals improved over 2008. Management action to address the impact of the economic downturn included the closure of four production sites.