Half-year revenue up 4%; strong progress on strategy to accelerate growth and value creation
(Thomson Reuters ONE) -
July 25, 2017
AkzoNobel publishes half-year and Q2 2017 results
Akzo Nobel N.V. (AKZA.AS; AKZOY)
Progressing strategy to accelerate growth and value creation
* Capacity expansions in Brazil, Mexico, Sweden and Thailand
* Two acquisitions announced to strengthen Performance Coatings business
* Decorative Paint product launches including Levis in China and EasyCare in
Brazil
* Specialty Chemicals separation process remains on track
* Shareholder engagement plans announced including Extraordinary General
Meeting (EGM) on September 8, 2017
* New set-up for Executive Committee
Half year:
* Volumes up 2%, driven by Decorative Paints and Specialty Chemicals
* Revenue up in all Business Areas and 4% overall, mainly due to volume growth
and acquisitions
* EBIT(1 )up 1% at ?837 million (2016: ?825 million), mainly due to volume
growth and continuous improvement, partly offset by higher raw material
costs and continued weak demand in Marine and Protective Coatings
Q2:
* Volumes increased for Decorative Paints and Specialty Chemicals, and flat
overall
* Revenue up 2% driven by Performance Coatings and Specialty Chemicals
* EBIT at ?461 million (2016: ?491 million), impacted by continued weak demand
in Marine and Protective Coatings, higher raw material costs and planned
maintenance turnarounds in Industrial Chemicals
* Adjusted EPS up 2% at ?1.35 (2016: ?1.32)
* ?160 million share repurchase program completed
Outlook: AkzoNobel continues to anticipate positive developments for EMEA
(excluding the UK), North America and Asia, improving during the year, while
Latin America is expected to stabilize. Market trends will remain challenging
for the marine and oil and gas industries.
The company has improved its ability to respond to developments in its markets
and continues taking appropriate measures, including structure to drive
operational excellence and additional cost control, to deal with higher raw
material prices in an inflationary environment.
The company continues to expect EBIT for 2017 to be around ?100 million higher
than 2016, as a result of growth momentum and continuous improvement, assuming
no further material changes in market and economic dynamics, including foreign
currencies.
CEO Thierry Vanlancker, commented:
"It is a privilege to lead AkzoNobel, a company full of great people focused on
delivering for our customers every day.
"I was involved in developing our strategy to accelerate sustainable growth and
value creation for all our stakeholders. We will continue to deliver on the
plans for the creation of two focused, high-performing businesses - Paints and
Coatings and Specialty Chemicals. The separation process remains on track.
"During the first half of the year, we invested to significantly increase our
production capacity around the world and launched two of our premium Decorative
Paints brands in key markets. We also announced two acquisitions to strengthen
our Performance Coatings business.
"We are putting in place a new Executive Committee structure designed to build
momentum across the business and maintain our focus on operational excellence.
"Following a record performance for AkzoNobel in the first quarter, we continued
to see growth across all our business areas with the exception of challenging
market conditions in the marine and oil and gas industries, and inflationary
pressures which impact part of our business. Mitigation plans are in place and
we will see the benefit of these later in the year.
"As part of our ongoing program to strengthen the relationship with our
shareholders, we are announcing a range of new activities including an EGM,
which will be held on September 8.
"We remain focused on executing our new strategy and continue to expect EBIT for
2017 to be around ?100 million higher than 2016, as a result of growth momentum
and continuous improvement. This assumes no further material changes in market
and economic dynamics, including foreign currencies."
H1 2017 in ? million
H1 2016 H1 2017 Delta %
Revenue 7,141 7,446 4
EBIT(1) 825 837 1
Return on sales (ROS) %(2) 11.6 11.2
Return on investment (ROI) %(3) 15.1 14.8
Net income attributable to shareholders 552 541 (2)
Q2 2017 in ? million
Q2 2016 Q2 2017 Delta %
Revenue 3,711 3,785 2
EBIT(1) 491 461 (6)
Return on sales (ROS) %(2) 13.2 12.2
Return on investment (ROI) %(3) 15.1 14.8
Net income attributable to shareholders 312 301 (4)
Decorative Paints:
Half-year revenue was up driven by strong volume growth. Positive volume
developments were partly offset by adverse price/mix. Volumes were up 6% with
volume growth in Asia and Latin America. The favorable impact from the Brazilian
real was offset by the weakening of the pound sterling. EBIT increased 8% mainly
as a result of improved volumes and cost control.
The company has made a series of product launches in key markets including the
Levis premium coating brand in the professional market segment in China and its
EasyCare brand in Brazil.
Performance Coatings:
Half-year revenue was up 4%, driven by the acquired Industrial Coatings
business. Positive volume developments for Industrial and Powder Coatings were
more than offset by continued weak demand in Marine and Protective Coatings.
Excluding Marine and Protective Coatings, volumes were higher. EBIT was down due
to ongoing weakness in the marine and oil and gas industries. Excluding Marine
and Protective Coatings EBIT was up. Return on sales and return on investment
were affected by Marine and Protective Coatings and the acquired Industrial
Coatings business.
Customers will benefit from the startup of a ?31 million state-of-the-art
production facility in Chonburi, Thailand as well as the expansion of an
existing facility in in Santo André, Brazil. The company also announced two
acquisitions recently to strengthen its Performance Coatings business:
Flexcrete Technologies Ltd., a UK manufacturer of products used for the
protection and repair of concrete substrates; and Disa Technology, a French
supplier of adhesive films used in the aerospace, transportation and industrial
equipment sectors.
Specialty Chemicals:
Half-year revenue was up 6%, with growth in all business units and regions.
Several of the businesses benefitted from improved market conditions in the oil
drilling, agrochemicals and building and construction segments. Strong growth in
China was driven by the new organic peroxides plant in Ningbo and plant closures
at competitors driven by an increased focus on implementation of health, safety
and environmental standards. EBIT increased by 3% as a result of higher volumes
which were partly offset by raw material price increases not yet fully being
recaptured through increased selling prices and the impact of planned
maintenance turnaround in Industrial Chemicals. Return on sales would have been
higher than 2016 excluding the impact of planned maintenance turnaround in
Industrial Chemicals, which impacted Q2 EBIT by around ?13 million.
A ?10 million investment in Sweden will boost supplies of chelated
micronutrients for agricultural markets, while an expansion in Los Reyos, Mexico
cements the company's leading position in organic peroxides used in the polymer
industry.
Innovation: Ten start-ups will see their innovative ideas for more sustainable
chemistry move a step closer to reality after being named winners of the Imagine
Chemistry challenge, launched earlier this year. AkzoNobel also completed a ?2.6
million expansion of its R&D facilities in Houston, Texas to support its
Performance Coatings businesses. Architects, designers and specifiers can now
research and create a full coatings specification from a mobile device following
the launch of a new digital app by the Powder Coatings business.
Sustainability: A contract with energy company Vattenfall will enable AkzoNobel
to ramp up the supply of renewable electricity to its facilities in Sweden and
Finland. The company joined forces with The Ocean Cleanup, providing advanced,
biocide-free coatings technology for the equipment used in the cleanup
operations. AkzoNobel will be an official sustainability partner of the
2017/2018 Volvo Ocean Race, which also focuses on protecting the oceans.
Human Cities: AkzoNobel launched the Human Cities Coalition, a public-private
partnership bringing together more than 150 stakeholders and 20 partners to
focus on improving life in mega cities. Argentine and Belgian muralists used
paint donated by AkzoNobel's Alba brand to transform grey facades into a
colorful open-air gallery in Saldías, a slums area of Buenos Aires. Malaysian
artists showcased their creativity to create murals at Starbucks stores in
Malaysia using AkzoNobel's Dulux brand.
Business Area highlights in ? million
Decorative Paints
H1 2016 H1 2017 Delta% Q2 2016 Q2 2017 Delta%
1,916 1,968 3 Revenue 1,055 1,046 (1)
183 198 8 EBIT(1) 131 121 (8)
9.6 10.1 ROS %(2) 12.4 11.6
Performance Coatings
H1 2016 H1 2017 Delta% Q2 2016 Q2 2017 Delta%
2,861 2,975 4 Revenue 1,473 1,504 2
408 389 (5) EBIT(1) 222 202 (9)
14.3 13.1 ROS %(2) 15.1 13.4
Specialty Chemicals
H1 2016 H1 2017 Delta% Q2 2016 Q2 2017 Delta%
2,412 2,548 6 Revenue 1,206 1,259 4
343 355 3 EBIT(1) 179 179 -
14.2 13.9 ROS %(2) 14.8 14.2
1. Operating income excluding identified items.
2. ROS% is EBIT divided by revenue.
3. Moving average ROI% is 12 months EBIT divided by 12 months average invested
capital
For more information on our new strategy can be found here and the full Half-
Year and Q2 report can be viewed and downloaded at
www.akzonobel.com/quarterlyresults
- - -
AkzoNobel creates everyday essentials to make people's lives more liveable and
inspiring. As a leading global paints and coatings company and a major producer
of specialty chemicals, we supply essential ingredients, essential protection
and essential color to industries and consumers worldwide. Backed by a
pioneering heritage, our innovative products and sustainable technologies are
designed to meet the growing demands of our fast-changing planet, while making
life easier. Headquartered in Amsterdam, the Netherlands, we have approximately
46,000 people in around 80 countries, while our portfolio includes well-known
brands such as Dulux, Sikkens, International, Interpon and Eka. Consistently
ranked as a leader in sustainability, we are dedicated to energizing cities and
communities while creating a protected, colorful world where life is improved by
what we do.
Not for publication - for more information
Corporate Media Relations Corporate Investor Relations
T +31 (0)88 - 969 7833 T +31 (0)88 - 969 7856
Contact: Andrew Wood Contact: Lloyd Midwinter
Safe Harbor Statement
This press release contains statements which address such key issues such as
AkzoNobel's growth strategy, future financial results, market positions, product
development, products in the pipeline and product approvals. Such statements
should be carefully considered, and it should be understood that many factors
could cause forecasted and actual results to differ from these statements. These
factors include, but are not limited to, price fluctuations, currency
fluctuations, developments in raw material and personnel costs, pensions,
physical and environmental risks, legal issues, and legislative, fiscal, and
other regulatory measures. Stated competitive positions are based on management
estimates supported by information provided by specialized external agencies.
For a more comprehensive discussion of the risk factors affecting our business
please see our latest annual report, a copy of which can be found on our
website: www.akzonobel.com.
Media Release H1 and Q2 2017 Results:
http://hugin.info/130660/R/2122684/809466.pdf
Photo Thierry Vanlancker:
http://hugin.info/130660/R/2122684/809442.jpg
H1 Results Infographic:
http://hugin.info/130660/R/2122684/809441.pdf
Q2 Report:
http://hugin.info/130660/R/2122684/809440.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: AkzoNobel NV via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 25.07.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 553662
Anzahl Zeichen: 15308
contact information:
Town:
Amsterdam
Kategorie:
Business News
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"Half-year revenue up 4%; strong progress on strategy to accelerate growth and value creation"
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