AMSTERDAM, the Netherlands – AkzoNobel has reported an increase in total revenue for the third-quarter of 2011 but a decrease in net income compared to the third quarter of 2010.
The company reported total revenue of EUR 4.051 billion, a five-percent increase from EUR 3.867 for the third quarter of 2010. Net income from continuing operations was EUR 148 million, a 32-percent decline from EUR 217 million in the same period in 2010. In response, the company has announced a performance improvement program to strengthen its competiveness, enhance its ability to grow, simplify its support structures and reduce its cost base.
In commenting on the results, CEO Hans Wijers said, "Although our top-line revenue growth throughout the quarter was relatively strong, we have seen the macroeconomic situation worsen, which has impacted our third-quarter results. We have also not yet fully offset the unprecedented raw material cost increases; but this quarter illustrates that we are making good progress, as evidenced by the six-percent overall price increase, led by Specialty Chemicals. "We do not expect the macroeconomic situation to improve quickly. So, as in 2008, we are taking action and have launched a major performance improvement program to deliver EUR 500 million EBITDA in 2014. This program will ensure that our growth ambitions are delivered at or above the mid-point of our 13-15 percent EBITDA margin guidance. Our strong fundamentals, commitment to deliver and this program give us confidence in the future."
The performance improvement program will restructure underperforming parts of the portfolio, transfer best practices, and standardize and simplify key processes.
An Executive Committee, which was established on January 1, 2011, has defined a comprehensive three-year plan to improve the company's performance. Twenty master plans with over 100 detailed initiatives have been developed in the areas of supply chain and sourcing, research and development, shared services for finance, information management, and human resources.
The program also includes business restructuring in areas of the company such as Decorative Paints Europe and North America and in Performance Coatings' Wood Finishes and Adhesives business. Company-wide programs to further improve margin management capabilities - as well as employee recruitment and training, particularly in high-growth markets - are also being rolled out.
Approximately 40 percent of the anticipated benefits will come from the supply chain and sourcing programs, and a further 50 percent from margin management, R&D initiatives, and business restructuring programs.
With Weak Third Quarter, AkzoNobel Announces Improvement Plan
October 23, 2011