AkzoNobel Publishes Results for First Quarter
AMSTERDAM, The Netherlands - Akzo Nobel N.V. (AkzoNobel) reported a positive volume and price/mix development in all three of the company’s business areas for the first quarter of 2014. First-quarter revenues of €3,383 million were 2% lower compared with the same period last year. The decrease was mainly a consequence of a 5% impact from currency translation. Operating income was flat at €216 million after €15 million higher restructuring charges and currencies. As a consequence of de-risking our pension liabilities in the UK, other comprehensive income in shareholders' equity was adversely affected by €0.8 billion. Continuous improvement programs are ongoing, and the company is on track to achieve its 2015 targets.
CFO Keith Nichols commented, "These results are a further step towards the delivery of AkzoNobel's 2015 targets. Despite higher restructuring charges, continued adverse currency effects and ongoing weakness in Europe, our year-on-year return on sales, both before and after higher restructuring charges, improved for the third consecutive quarter. Net income attributable to shareholders and adjusted EPS have both increased significantly, benefiting from lower financing costs as a result of recent debt repayments. AkzoNobel remains on track to deliver its 2015 targets of 9% return on sales, 14% return on invested capital and a net debt/EBITDA ratio lower than 2.0."
Volume in Decorative Paints was up compared with 2013 due to development in Asia, while conditions in Europe and Latin America were challenging. Price/mix development was positive in all three regions. Revenue in Decorative Paints declined 6% due to 6% adverse currency effects, mainly in Latin America and Asia, and a 4% divestment effect from the sale of Building Adhesives. Operating income for the quarter was lower than the previous year, mainly due to higher restructuring costs in mature markets.
Volume in Performance Coatings was up 3% on 2013. Compared to the previous year, positive volume and price/mix development was more than offset due to a 6% negative impact from currencies. As a result, revenue declined 1% compared with 2013. Operating income was down 2% due to higher restructuring costs and currency translation.
Volume in Specialty Chemicals was higher compared with 2013 as a result of better market conditions in Functional Chemicals and the absence of the previous year's production issues, notably in Industrial Chemicals. Revenue declined due to adverse currency developments and divestments. Operating income was up 36% at €135 million due to cost control and operational efficiencies.
The company stated that it is on track to deliver its 2015 targets despite the expected continued fragile economic environment and continued volatile currencies in 2014.