AkzoNobel Q2 results 2013
(Thomson Reuters ONE) -
* Revenue down 4 percent, mainly due to divestments
* Operating income at ?322 million (2012: ?388 million) driven by adverse
price/mix developments
* Net income attributable to shareholders ?429 million (2012: ?219 million)
due to recognition of a deferred tax asset and the divestment of Decorative
Paints in North America
* Adjusted EPS ?1.37 (2012: ?1.06)
* Performance improvement program on track to be completed in 2013, delivering
?500 million EBITDA benefit a year early
* Operational focus of strategy update announced in February is the right
approach for continuing challenging market conditions; 2015 targets
confirmed
* Restructuring activities being stepped up, full-year charges expected to be
in the order of ?325 million (initial estimate: ?205 million), with the
benefits of these additional ?120 million costs realized in 2014 and beyond
* Expected higher restructuring charges and continued weak markets mean that
full-year operating income is unlikely to exceed the ?908 million of 2012
Q2 2013 in ? million
Q2 2012 Q2 2013 D %
Revenue 4,044 3,865 (4)
Operating income 388 322 (17)
Return on Sales (ROS) % 9.6 8.3
EBITDA 554 474 (14)
Net income attributable to shareholders 219 429 96
H1 2013 in ? million
H1 2012 H1 2013 D%
Revenue 7,751 7,330 (5)
Operating income 624 539 (14)
Return on Sales (ROS) % 8.1 7.4
EBITDA 964 849 (12)
Net income attributable to shareholders 303 518 71
Akzo Nobel N.V. (AkzoNobel) today reported a 4 percent decrease in revenues in
the second quarter compared with the same period last year. This was due to
divestments and adverse currencies against a backdrop of continued challenging
market conditions. Operating income for Q2 was 17 percent lower at ?322 million.
Net income attributable to shareholders for the quarter rose to ?429 million,
buoyed by recognition of a deferred tax asset and profit on the divestment of
Decorative Paints North America. The acceleration of AkzoNobel's performance
improvement program is on track to achieve the full EBITDA benefit of ?500
million by the end of this year, whilst additional charges are expected in the
second half of the year as restructuring activities are stepped up.
At Decorative Paints second quarter revenue declined 1 percent, mainly due to
negative price/mix and unfavorable currency effects. The slowdown in global
markets continues to affect the top line. In general volumes stabilized, with
some markets, in particular China, making a positive contribution in the
quarter. Operating income for the second quarter totaled ?102 million, 9 percent
lower than the previous year, mainly as a result of restructuring costs in
mature markets.
Revenue in Performance Coatings declined 1 percent on largely stable overall
volumes compared with the previous year as a result of adverse currency effects.
Operating income was down
5 percent at ?163 million due to investments in growth and business excellence
initiatives, partially mitigated by margin management and structural cost
benefits.
Revenue in Specialty Chemicals was 12 percent lower as a result of the
divestment of Chemicals Pakistan and lower overall volumes. Operating income was
down 21 percent at ?121 million, mainly due to the lower volumes and the
conclusion of value chain issues from the previous quarter. During the quarter,
the Functional Chemicals Business Unit initiated a large restructuring program
as part of the performance improvement program, the implementation of which will
start as of Q3.
CEO Ton Büchner
"While I am pleased to report that our Decorative Paints and Performance
Coatings businesses have reported an improved or stable return on sales for the
first half of the year, our end markets remain challenging and this was
particularly visible at the end of this second quarter. Conditions remain tough
and, as we have previously indicated, we do not expect an early improvement in
the external trends our businesses are facing. With this pressure on our top
line, we are stepping up our restructuring activities to secure the delivery of
our 2015 targets which drive cash generation and quality of earnings. As a
consequence, full year restructuring costs are expected to be higher, with the
benefits of these additional restructuring costs visible in 2014. These expected
higher restructuring charges and continued weak markets mean that our full year
operating income is unlikely to exceed last year."
Performance improvement program
The performance improvement program announced in October 2011 is making good
progress with positive impact on both variable and fixed costs. The initiatives
have cumulatively resulted in
?381 million savings and AkzoNobel is on track to deliver the full ?500 million
in EBITDA at the end of this year, a year early. The program is structured
around business unit adaptations and operational excellence, which contribute
the majority of the benefits, while functional excellence is an important
enabler. Various actions taken in operational excellence address product
complexity reduction, sourcing optimization, manufacturing and distribution
excellence, and margin management across the entire organization.
Since the announcement of the program, the number of employees has been reduced
by over 2,500 FTE, of which around 800 in 2013. In the first half of 2013, ?69
million was spent on restructuring activities. Costs for the full year 2013 are
expected to be in the order of ?325 million, with the additional benefits
becoming visible in 2014. Examples of additional restructuring activities
include the upcoming initiatives in European Decorative Paints and Functional
Chemicals.
AkzoNobel will continue to implement new opportunities to optimize performance
as it moves to a culture of continuous improvement and embedded operational
excellence.
Raw materials
In the second quarter, AkzoNobel saw lower input prices as a result of lower
TiO2 costs and the lower oil price, which has begun to impact some raw
materials. Overall, raw materials costs for the year are expected to be down
marginally on a like for like basis compared with 2012.
Outlook
The economic environment remains challenging and AkzoNobel does not expect an
early improvement in the trends faced in its end-user market segments. AkzoNobel
expects to increase restructuring charges in the second half of 2013 by ?120
million to around ?325 million to secure the delivery of its 2015 targets. This
means that full year operating income is unlikely to exceed the ?908 million of
2012. The acceleration of the performance improvement program and the strategic
priorities announced in February are the right focus to have in these markets.
Business area highlights
Decorative Paints
Q2 2012 Q2 2013 D% H1 2012 H1 2013 D%
1,187 1,179 (1) Revenue 2,161 2,104 (3)
112 102 (9) Operating Income 137 145 6
9.4 8.7 ROS % 6.3 6.9
155 141 (9) EBITDA 223 229 3
Performance Coatings
Q2 2012 Q2 2013 D% H1 2012 H1 2013 D%
1,472 1,458 (1) Revenue 2,841 2,789 (2)
171 163 (5) Operating Income 298 292 (2)
11.6 11.2 ROS % 10.5 10.5
204 197 (3) EBITDA 363 360 (1)
Specialty Chemicals
Q2 2012 Q2 2013 D% H1 2012 H1 2013 D%
1,431 1,253 (12) Revenue 2,830 2,497 (12)
154 121 (21) Operating Income 294 220 (25)
10.8 9.7 ROS % 10.4 8.8
235 198 (16) EBITDA 470 372 (21)
The 2013 Q2 report can be downloaded via the AkzoNobel Report iPad app
http://bit.ly/obljrf or read online at www.akzonobel.com/quarterlyresults.
- - -
AkzoNobel is a leading global paints and coatings company and a major producer
of specialty chemicals. We supply industries and consumers worldwide with
innovative products and are passionate about developing sustainable answers for
our customers. Our portfolio includes well-known brands such as Dulux, Sikkens,
International and Eka. Headquartered in Amsterdam, the Netherlands, we are
consistently ranked as one of the leaders in the area of sustainability. With
operations in more than 80 countries, our 50,000 people around the world are
committed to excellence and delivering Tomorrow's Answers Today(TM).
Not for publication - for more information
Corporate Media Relations, tel. +31 20 502 7833 Corporate Investor
Relations, tel. +31 20 502 7854
Contacts: Stephen Hufton, Jeroen Pul Contacts:
Jonathan Atack, Sheryl Stokes
Press release Q2 2013 results:
http://hugin.info/130660/R/1717232/570940.pdf
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Source: Akzo Nobel NV via Thomson Reuters ONE
[HUG#1717232]
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Datum: 18.07.2013 - 07:01 Uhr
Sprache: Deutsch
News-ID 279495
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