PaintSquare.com
Follow us on Twitter Follow us on LinkedIn Like us on Facebook Follow us on Instagram Visit the TPC Store
Search the site

 

Advertisement

Safway Services


Coatings Industry News

Main News Page


AkzoNobel Reports Revenue Dip in Q2

Thursday, July 19, 2018

Comment | More

Global coatings firm AkzoNobel released its second-quarter financial report yesterday, with revenue 3 percent lower than originally forecast, owing largely to difficulties in the Marine and Protective segment.

In March, AkzoNobel announced the 10.1 billion-euro ($12.5 billion) sale of its Specialty Chemicals business to The Carlyle Group and Singapore’s sovereign wealth fund GIC. Specialty Chemicals was marked as discontinued operations in the Q2 report, and the company noted the implementation of the first phase of a fit-for-purpose organization for a focused paints and coatings company.

Financial Overview

In addition to the dip in revenues on the quarter, volumes also decreased by 3 percent, primarily due to the Marine and Protective Coatings segment, though selling prices were up 4 percent. The Performance Coatings segment as whole, which includes Marine and Protective, Powder Coatings, Automotive and Specialty, and Industrial Coatings, experienced a downturn at 11.8 percent ROS, compared to 2017’s Q2 ROS standing at 13.4 percent.

Images: AkzoNobel

In March, AkzoNobel announced the 10.1 billion-euro ($12.5 billion) sale of its Specialty Chemicals business to The Carlyle Group and Singapore’s sovereign wealth fund GIC. Specialty Chemicals was marked as discontinued operations in the Q2 report.

The second quarter saw an adjusted operating income of 225 million euros, which includes the adverse impact of items related to the company transformation. Net income from total operations rang in at 271 million euros (in comparison with 2017's 301 million euros), including discontinued operations at 164 million euros (2017, 164 million euros).

As for the half-year mark, revenue is 6 percent lower, although it up 1 percent in constant currencies with the positive price and mix offset by lower volumes. Adjusted operating income is down from 2017’s 502 million euros to 374 million euros.

Decorative Paints

Return-on-sales for Decorative Paints was up for the quarter at 12.2 percent, indicating that pricing initiatives and cost savings are compensating for the higher cost of raw materials. This year, AkzoNobel also acquired Romania-based decorative paint and plaster manufacturer Fabryo, as well as two companies--Whites Trade Paints and Cambrian Decorators Supplies Limited—to further enhance the network of Dulux Decorator Centres in the UK.

Selling prices were 5 percent higher overall, and up in all regions. Revenue was 4 percent lower than prior-year numbers, but up 2 percent in constant currencies. Adjusted operating income for the segment increased to 123 million euros, up from 2017’s 121 million, thanks to higher selling prices and cost savings offsetting foreign currencies, among other factors.

Performance Coatings

Revenue in constant currencies for the Performance Coatings segment was up 5 percent, excluding Marine and Protective Coatings. The upward trend continues into a 3 percent increase in selling prices, but revenue for the segment is down 3 percent.

Global coatings firm AkzoNobel released its second-quarter financial report yesterday, with revenue 3 percent lower than originally forecasted, return-on-sales for Decorative Paints up at 12.2 percent and the implementation of the first phase of a fit-for-purpose organization for a focused paints and coatings company.

Adjusted operating income also took a hit, falling from 2017’s 202 million euros to today’s 172 million euros; this was impacted by foreign currencies, higher raw material costs and lower volumes.

Discontinued Operations

Revenue for Specialty Chemicals, reported as Discontinued Operations, was up 1 percent, and up 7 percent inconstant currencies thanks to positive price/mix. Adjusted operating income increased 5 percent from 2017’s 166 million euros to 175 million euros. Improvements made to both pricing and productivity were partially offset by adverse currencies and one-off environmental and restructuring costs.

Moving Forward

To restructure the company, AkzoNobel has kicked off the first phase of the “Winning together: 15 by 20” strategy, which brought in 25 million euros in Q2.

AkzoNobel’s outlook for the future remains positive, as the forecast indicates positive developments for Decorative Paints and Performance Coatings. This excludes Marine and Protective Coatings, for which market conditions remain difficult.

Raw material inflation is expected to continue throughout the course of this year, but moving more slowly than it did at the beginning of 2018. Both pricing initiatives and cost-saving tactics are being used to mitigate current difficulties.

   

Tagged categories: AkzoNobel; Earnings reports; Finance

Comment Join the Conversation:

Sign in to our community to add your comments.

Advertisements
 
SAFE Systems, Inc.
 
Portable Dust Collectors for Tough Environments
 
Trailer and skid-mounted models in numerous sizes, powered by electric and/or diesel. Sloped roofs, multiple dust inlets, high static, dampered fans. Lockable power & drive compartments.
 

 
SABRE Autonomous Solutions
 
Introducing the ALPHA1 Blasting Robot
 
Once installed and commissioned – simply
SCAN PLAN BLAST.
 

 
HoldTight Solutions Inc.
 
Clean surfaces simply don't rust, and no other product cleans like HoldTight®
 
HoldTight® is a wet blasting additive that decreases the water’s surface tension, allowing it to get into the pores of the surface and remove ALL contamination, including salts, acids, abrasives, light oils, and greases. HoldTight® leaves behind zero unwanted residue, and evaporates with the water, providing a surface that is thoroughly clean and ready for a tightly adhered coating bond for up to 72 hours.
 

 
Tarps manufacturing, Inc.
 
QUALITY MADE IN AMERICA —Available near you!
 
CLICK to get a behind-the-scenes look at how Tarps Manufacturing makes the highest-quality tarps right here in the USA — available nationwide.
 

 
RCG America
 
www.glassOx.com
 
Recycled crushed glass factory direct. Pallet to truckloads. Experience quality. Demand savings. Serving PA, MD, DE, NJ, NY, CT, RI, MA, MI, OH, IN, WV, KY.
 

 
Blastox/The TDJ Group, Inc.
 
Blastox® - One Step Lead Abatement
 
Sandblast additive delivered to jobsite pre-blended to eliminate hazardous abrasive wastes. Why mix, meter or apply at the job-site? Blast with ease and
Let your painters paint!
1(800)-252-7869
 

 
Carboline Company
 
New product: Carbozinc® 608 HB
 
Introducing a new high build zinc-rich primer that can save you time and money by eliminating the epoxy intermediate coat!
 

 
KTA-Tator, Inc. - Corporate Office
 
KTA-Tator EH&S Services
 
• Ambient & Worker Exposure Air Monitoring
• Safety & Health Program Development
• Lead Paint Assessments
& Specifications
• Health Hazard & Jobsite Safety Assessments
Call 1-800-532-3633
 

 
Graco Inc.
 
Graco EcoQuip 2: Experience the Difference
 
While others claim their equipment is the same, none of them compare to Graco’s EcoQuip 2™ Vapor Abrasive® blasting line. Visit graco.com/ecoquip to learn more.
 

 
ARC / A.W. Chesterton Company
 
Erosion Resistant Coating
 
It’s high gloss low drag, abrasion resistant surface extends equipment life, improves material flow, enhances equipment efficiency, and reduces downtime.
 

 
 
 

Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@paintsquare.com


The Technology Publishing Network

Durability + Design PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy Policy   |   Terms & Conditions   |   Support   |   Site Map   |   Search   |   Contact Us