AkzoNobel announces Q3 results
(Thomson Reuters ONE) - * Revenue declined 10 percent to ?3,639 million* EBITDA* of ?549 million, EBITDA margin at 15.1 percent* Restructuring continues* Net income: ?197 million (2008: ?152 million)* Operating working capital reduced to 14.5 percent of revenue (2008: 17.4 percent)* Interim dividend of ?0.30 per share announced* Recovery remains fragileFinancial highlights+-------------------------------------------------------------------+| Q3 '09 | Q3 '08 | % | In ? millions | Jan-Sep | Jan-Sep | % || | | | | '09 | '08 | ||-------------------------------------------------------------------|| ||-------------------------------------------------------------------|| 3,639 | 4,049 | (10) | Revenue | 10,579 | 11,854 | (11) ||--------+--------+------+---------------+---------+---------+------|| 549 | 527 | 4 | EBITDA* | 1,372 | 1,546 | (11) ||--------+--------+------+---------------+---------+---------+------|| 15.1 | 13.0 | | EBITDA margin | 13.0 | 13.0 | || | | | (in %)* | | | ||--------+--------+------+---------------+---------+---------+------|| 391 | 375 | 4 | EBIT* | 903 | 1,083 | (17) ||--------+--------+------+---------------+---------+---------+------|| 10.7 | 9.3 | | EBIT margin | 8.5 | 9.1 | || | | | (in %)* | | | ||--------+--------+------+---------------+---------+---------+------|| 197 | 152 | 30 | Net income | 345 | 436 | (21) || | | | total | | | || | | | operations** | | | |+-------------------------------------------------------------------+* Continuing operations before incidentals** After incidentalsAkzo Nobel N.V (AkzoNobel) has today announced its results for thethird quarter of 2009, which demonstrate that trading remains toughacross all businesses, and that markets are stabilizing at lowerlevels of demand."We have seen some signs of an improvement in emerging markets, butoverall we don't foresee a quick recovery," said AkzoNobel CEO HansWijers. "The business environment continues to be tough, so it'spleasing to see that our focus on customers, costs and cash isproving to be effective. We remain committed to implementing ourrestructuring and integration programs and we are on track to deliveron our previously stated EBITDA margin target of 14 percent by theend of 2011."Revenue growth for Q3, 2009 developed as follows:+-----------------------------------------------------------------------+|Q3 2009 | Volume| Prices| Acquisitions/| Exchange | Total||in % vs.Q3 | | | divestments| rates| ||2008 | | | | | ||-------------+--------+------------------------+---------------+-------||Decorative | (9)| 4 | 1 | (2)| (6)||Paints | | | | | ||-------------+--------+--------------+---------+---------------+-------||Performance | (11)| 1 | (1)| (1)| (12)||Coatings | | | | | ||-------------+--------+--------------+---------+---------------+-------||Specialty | (6)| (5)| 3 | - | (8)||Chemicals | | | | | ||-------------+--------+--------------+---------+---------------+-------||Total | (8)| (1)| - | (1)| (10)|+-----------------------------------------------------------------------+Management focusEBITDA from continuing operations before incidentals was 4 percenthigher at ?549 million, due to continued margin management and costreduction programs. Decorative Paints is undertaking a majorrestructuring of the European supply chain, while all businesses inPerformance Coatings benefited from margin management and costreduction programs leading to an EBITDA of ?166 million, 12 percenthigher than 2008. Focus on cost and cash reduced the SpecialtyChemicals cost base and partially offset the volume shortfall.Balance sheet and dividendThe balance sheet remains robust with a reduction of net debt to ?2.0billion and reduced operating working capital to 14.5 percent ofrevenue, down from 16.3 percent in Q2.The company's dividend policy is based on an annual pay-out ratio ofat least 45 percent of net income before incidentals and fair valueadjustments for the ICI acquisition. The interim dividend has beenset at ?0.30 per share (2008: ?0.40 per share). The final dividendwill be proposed to the Annual General Meeting of Shareholders onApril 28, 2010.Restructuring costsMajor restructuring projects in Decorative Paints were related tofurther supply chain and integration projects in Continental Europeand to rightsizing capacity and store closures in the US. InPerformance Coatings, the company incurred costs for headcountreduction programs in Industrial Activities and Car Refinishes. InSpecialty Chemicals, the closure of the Skoghall site in Sweden wasannounced and ?49 million was recognized as restructuring costs. Theprocess for an intended 20 percent reduction of staff working at theAmsterdam head office and Arnhem shared service center in theNetherlands is on track.Decorative Paints* Revenue down 6 percent (Q2, 2009: 5 percent)* Volume decline of 9 percent (Q2, 2009: 10 percent)* EBITDA at ?198 million (2008: ?207 million)* EBITDA margin at 15.2 percent (2008: 15.0 percent)* Trade market remains weak* Margins positively impacted by continued restructuring, mix improvements and new product launches* US market still depressed* Strong performance in Europe on the back of mix and restructuring initiativesRevenue was 6 percent down. The EBITDA margin was 15.2 percent (2008:15.0 percent). In Europe, volumes were down compared with last year,but price increases mitigated the revenue decline. EBITDA marginimproved on 2008 despite the weakness of the pound sterling. The USmarket was still depressed and US stores had a challenging quarter asthe commercial market remained soft. Restructuring activities arecontinuing with the closure of 48 stores in the quarter. The relaunchof Glidden is gaining momentum. China experienced growth fueled byadvertising and new product launches.Performance Coatings* Revenue decreased by 12 percent* Volumes down 11 percent (Q2, 2009: 19 percent down)* EBITDA up 12 percent at ?166 million (2008: ?148 million); EBITDA margin at 16.1 percent* Cost levels decreased as restructuring programs continue* Improving performance in Industrial ActivitiesRevenue in Performance Coatings declined 12 percent as a result oflower demand across all businesses. Volume decreased 11 percent (Q2,2009: 19 percent down).Volumes are still below prior year level. Withthe exception of the late cycle Marine and Protective Coatingsbusiness, some recovery in volume is visible.The emerging markets showed the most visible signs of recovery. Allbusinesses clearly benefited from margin management and costreduction programs, leading to an EBITDA of ?166 million, 12 percenthigher than in 2008. The EBITDA margin was 16.1 percent, 3.4 percentahead of the previous year. There is an ongoing focus on capitalexpenditure and the increased focus on operating working capital isdelivering results.Specialty Chemicals* Revenue decreased by 8 percent* Volumes down 6 percent (Q2, 2009: 18 percent)* Cost and cash saving initiatives gathered momentum, with programs in all businesses* EBITDA at ?220 million (2008: ?242 million) with margin at 16.7 percent (2008: 16.8 percent)* Resilient performance at Functional Chemicals, Surface Chemistry and Pulp and Paper Chemicals* Industrial Chemicals results under pressureSpecialty Chemicals experienced lower demand across most businesses.Market conditions remained challenging as overall demand has leveledoff below 2008 and the pressure on margins has intensifiedaccordingly.Demand strengthened in the quarter, largely in the markets that wereseverely impacted early in the cycle. As a result, volumes in thequarter were 6 percent below last year. The prolonged volumeshortfall has resulted in pressure on prices (5 percent), this waspartially offset by acquisitions (3 percent), resulting in a revenuedecline of 8 percent. The focus on cost and cash favorably impactedour cost base and partially compensated for the volume shortfall.EBITDA margin was just below 17 percent, in spite of the challengescreated by weak demand and uncertain markets. EBITDA amounted to ?220million, 9 percent below 2008.Outlook and medium-term targets reiteratedFocus continues to be given to customers, 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. However, the economicrecovery remains fragile and it continues to be difficult to predictcustomer demand.The company remains committed to improving operational efficiencythrough further restructuring and cost control and to achieving itsmedium-term target of an EBITDA margin of 14 percent by the end of2011.The report for the 3rd quarter can be read onwww.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 58,000 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 7833 CorporateInvestor Relations, tel. +31 20 502 7854Contact: Tim van derZanden Contacts: HuibWurfbain and Ivar Smitshttp://hugin.info/130660/R/1350211/325667.pdfhttp://hugin.info/130660/R/1350211/325668.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 27.10.2009 - 07:00 Uhr
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