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The Netherlands: Transformation Process

Akzo Nobel Publishes Results for Q2

| Editor: Alexander Stark

Akzo Nobel CEO, Thierry Vanlancker, commented: "Disciplined execution on the first phase of our transformation into a focused Paints and Coatings company is creating a fit-for-purpose organization and delivering cost savings."
Akzo Nobel CEO, Thierry Vanlancker, commented: "Disciplined execution on the first phase of our transformation into a focused Paints and Coatings company is creating a fit-for-purpose organization and delivering cost savings." (Source: Akzo Nobel)

Akzo Nobel has published its results for the second quarter 2018. The company announced that it was executing on the first phase of their transformation into a focused Paints and Coatings company. Revenue increased in all Performance Coatings segments except Marine and Protective Coatings.

Amsterdam/The Netherlands — In a statement the speciality chemicals producer announced that it implemented phase one of the transformation to create a fit-for-purpose organization. Return on Sales for Decorative Paints were up at 12.2 % (2017: 11,6 %) driven by 5 % higher selling prices. The manufacturer reports an improving trend for Performance Coatings with return on sales at 11.8 % (2017: 13.4 %). Additionally, pricing initiatives were gaining traction and closing the gap.

With the acquisition of Fabryo in Romania and the opening of a new powder coatings plant in China, the company intends to position itself in attractive markets.

In the second quarter Akzo Nobel registered a decrease of 3 % in revenues for Paints and Coatings, although revenues were up 2 % in constant currencies, with positive price/mix partly offset by lower volumes. The adjusted operating income amounted to approx. $ 262 million (2017: $ 342.4 million) mainly impacted by $ 24.5 million adverse foreign currencies and $ 23.3 million non-recurring items. The operating income includes the adverse impact of identified items of $ 38.4 million, mainly related to the transformation. Return on sales was at 9.2 % (2017: 11.6 %), up for Paints and improving for Coatings. The return on investment was at 12.2 % (2017: 14.4 %).

The company reported a net income from total operations of $ 315.6 million (2017: $ 350.5 million), including discontinued operations of $ 191 million (2017: $ 156 million)

Akzo Nobel CEO, Thierry Vanlancker, commented that Decorative Paints delivered a particularly strong performance with pricing initiatives and cost savings compensating for higher raw material costs.

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Outlook

For the remainder of 2018, the company expects positive developments for Decorative Paints and Performance Coatings, excluding Marine and Protective Coatings, where market conditions were still challenging. Demand trends differed per region and segment. Raw material inflation was projected to continue for the remainder of 2018, although at a slower rate than during the start of the year. Robust pricing initiatives and cost-saving programs were in place to mitigate the current challenges, the company stated.

Akzo Nobel's Q2 2018 report can be viewed and downloaded

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