AkzoNobel publishes Q2 2009 Results
(Thomson Reuters ONE) - Brief overview:* Revenue declined 10 percent to ?3,668 million* Volumes down 16 percent (Q1 2009: 17 percent)* ICI integration and additional restructuring well on track* Cost reduction, margin management and innovation underpinned EBITDA margin* EBITDA before incidentals of ?527 million, margin at 14.4 percent (year-to-date: 11.9 percent)* Net income of ?155 million down 13 percent (Q1 2009 ?7 million loss)* Operating working capital reduced to 16.3 percent (Q2 2008: 17.1 percent)* Forward visibility limited due to continuing uncertain economic developmentFinancial highlights+--------------------------------------------------------+| ? million | Q2 2009 | Q2 2008 | % ||-----------------------------+---------+---------+------|| Revenue | 3,668 | 4,085 | (10) ||-----------------------------+---------+---------+------|| EBITDA* | 527 | 577 | (9) ||-----------------------------+---------+---------+------|| EBITDA margin (in %)* | 14.4 | 14.1 | ||-----------------------------+---------+---------+------|| EBIT* | 370 | 422 | (12) ||-----------------------------+---------+---------+------|| EBIT margin (in %)* | 10.1 | 10.3 | ||-----------------------------+---------+---------+------|| Net income total operations | 155 | 179 | (13) |+--------------------------------------------------------+* Continuing operations before incidentalsAkzo Nobel N.V (AkzoNobel) today announced its results for the secondquarter of 2009. Trading remained tough throughout all of thebusinesses and, as a result, the company reported a revenue declineof 10 percent to ?3,668 million, while EBITDA was ?527 million, 9percent lower.AkzoNobel's CEO Hans Wijers commented; "In March, we saw earlyindications that markets may be stabilizing and we have seen thattrend continue into the second quarter. However, this gradualstabilization is at significantly lower levels than 2008. With theexception of some emerging markets, we see little significantrecovery of growth. Due to the continuing economic uncertainty,forward visibility still remains limited. Therefore, managementactions continue to focus on customers, costs and cash. Our Q2results show that these actions are beginning to bear fruit."Revenue growth for Q2 2009 developed as follows:+--------------------------------------------------------------------------+|Q2 2009 | Volume| Prices| Acquisitions/ | Exchange | Total||in % vs Q2 | | | divestments | Rates| ||2008 | | | | | ||-------------+--------+---------------------------+---------------+-------||Decorative | (10)| 4| 1| -| (5)||Paints | | | | | ||-------------+--------+----------------+----------+---------------+-------||Performance | (19)| 5| -| -| (14)||Coatings | | | | | ||-------------+--------+----------------+----------+---------------+-------||Specialty | (18)| 5| 4| 1| (8)||Chemicals | | | | | ||-------------+--------+----------------+----------+---------------+-------||Total | (16)| 5| 1| -| (10)|+--------------------------------------------------------------------------+Decorative Paints* Revenue was down 5 percent (Q1 2009: 11 percent)* Synergy programs and restructuring ahead of plan, net workforce reduced by more than 2,100 employees (8 percent) compared with 2008* EBITDA margin at 13.1 percent (2008: 14.1 percent) remained strong due to margin management and stable raw material costs* Marketing initiatives focusing on innovation and sustainabilityIn Europe, the professional segment continued to be weak due to lowconstruction activity, while the retail business was more resilient.The US paint market continued to experience soft demand, but thecontraction in the second quarter was less severe than during thefirst quarter of 2009. Integration savings and strong cost managementinitiatives have helped to mitigate the volume shortfall. AkzoNobelgained market share in Latin America, while markets across the Asiaregion were mixed. China further stabilized in the quarter.Performance in India was positive, despite pressure on revenue andmargins. Overall, margins were positively impacted by price increasesimplemented in 2008.Performance Coatings* Revenue decreased by 14 percent* EBITDA margin improved to 15.8 percent (2008: 14.0 percent)* Margin management initiatives delivered value* Cost levels decreased as restructuring programs gathered pace* Strong performance in Marine and Protective Coatings and Packaging CoatingsPerformance Coatings benefited from margin management and costimprovement programs. In our Industrial Activities businesses, thecompany has closed or restructured 8 production sites in maturemarkets and will continue to align the cost structure with lowertrading levels. Marine Coatings again had a good quarter, despitelower new construction and maintenance demand. Car Refinishesexperienced improved demand in tough market conditions, compared withthe first quarter of 2009.Specialty Chemicals* Revenue declined by 8 percent* Cost and cash savings initiatives contributed in all businesses* EBITDA margin maintained at 16.6 percent* Surface Chemistry and Polymer Chemicals markets remain under pressure* Strong performance in Pulp and Paper and Functional ChemicalsMarket conditions remained weak, with a volume decline of 18 percentthat was partly compensated by favorable prices (5 percent),currencies (1 percent) and acquisitions (4 percent). Despite thecontinued challenges, uncertain feedstock costs and heightenedcompetitive pressure in the market, an unchanged EBITDA margin of16.6 percent was realized. Industrial Chemicals acquisitions to alarge part offset the volume decline, where sourcing actions,aggressive cost control and effective margin management resulted in aSurface Chemistry EBITDA on a par with 2008, despite a 27 percentvolume decline.Improved cash managementAkzoNobel has already outlined its initiatives to conserve cash andimprove working capital utilization. Compared with Q1 2009 operatingworking capital decreased by ?142 million due to lower sales andfocused working capital management.Debt maturities lengthenedFollowing the recent completion of refinancing activity, the weightedaverage maturity of AkzoNobel's debt has been extended from below 2years at June 2008 to in excess of 4 years at June 2009. In May 2009,a ?1 billion bond matured. In March 2009, the company refinancedthrough a 7.25 percent ?750 million bond, maturing in 2015. EarlyApril 2009, AkzoNobel also issued a 8 percent £250 million bond,maturing in 2016. At the end of June 2009, the company issued ?150million new private debt.ICI synergies and restructuringThe company remains on track to meet 2011 savings targets of at least?540 million, made up of ICI synergies (?340 million) combined withfurther significant additional restructuring (?200 million). Majorrestructuring and integration projects are ongoing in DecorativePaints particularly in relation to the supply chain andstandardization. In Performance Coatings, significant headcountreduction programs have been implemented in Industrial Activities andCar Refinishes, particularly in mature markets. In June 2009,AkzoNobel announced the intention to reduce headquarters staff by 20percent by 2010.Outlook and medium-term targets reiteratedAkzoNobel has strong market positions in a number of highlyattractive sectors with a wide geographical spread. Continuous focusis being given to margin management, cost reduction, and cashgenerating actions so that the company is well positioned to meet thecurrent challenges and, as a result, will be in good shape to takeadvantage of the recovery when it comes. The economic outlook remainsuncertain which makes it difficult to make predictions with anycertainty. AkzoNobel remains committed to achieve its medium-termtarget of an EBITDA margin of 14 percent by the end of 2011, deliverthe combined ?540 million synergies and restructuring initiatives,drive margin management programs and rigorous cost and cash controlacross the company.The Half-yearly report for 2009 and the report for the 2nd quartercan be read on www.akzonobel.com/quarterlyresults.Note to editors - not for publicationAkzoNobel is proud to be one of the world's leading industrialcompanies. Based in Amsterdam, the Netherlands, we make and supply awide range of paints, coatings and specialty chemicals - 2008 revenuetotaled ?15.4 billion. In fact, we are the largest global paints andcoatings company. As a major producer of specialty chemicals wesupply industries worldwide with quality ingredients for life'sessentials. We think about the future, but act in the present. We'repassionate about introducing new ideas and developing sustainableanswers for our customers. That's why our 59,000 employees - who arebased in more than 80 countries - are committed to excellence anddelivering Tomorrow's Answers Today(TM).Not for publication - for more informationCorporate Media Relations, tel. +31 20 502 7833Corporate Investor Relations, tel. +31 20 502 7854Contact: Tim van derZanden Contacts:Huib Wurfbain and Ivar Smitshttp://hugin.info/130660/R/1331287/314931.pdfhttp://hugin.info/130660/R/1331287/314932.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 29.07.2009 - 07:00 Uhr
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