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AkzoNobel Releases Q3 Financial Report

Thursday, October 22, 2020

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Global coatings company AkzoNobel released its 2020 third-quarter financial report Wednesday (Oct. 21) and reported volume and adjusted operating income increases year over year.

The company reports that adjusted operating income was up 18% at 353 million euros ($418.7 million)—up from 300 million euros in 2019. ROS increased from 12.5% to 15.5%.

The company noted that while revenue was 5% lower, volume was up 3%, showing a strong demand for Decorative Paints, though that was offset by lower volumes in Performance Coatings.

“We delivered an excellent performance for the third quarter, with revenue growth in constant currencies, and business return on sales up at 17.7% driven by strong discipline on margins and cost savings,” said AkzoNobel CEO Thierry Vanlancker. “These results were made possible by the continued commitment of all AkzoNobel colleagues around the world, adapting to the challenges presented by COVID-19.”

Overview

Overall, revenue landed at 2.27 billion euros, up from 2.38 billion during the third quarter of 2019. In terms of COVID-19, the company noted that, “Although demand trends differ per region and segment, the overall impact in Q3 was less than in Q2.”

AkzoNobel

Global coatings company AkzoNobel released its 2020 third-quarter financial report Wednesday (Oct. 21) and reported volume and adjusted operating income increases year over year.

In the Decorative Paints segment, revenue was up 4% at 1 billion euros, up from 968 million euros this time last year. Adjusted operating income increased to 208 million euros (2019: 135 million), mainly driven by higher volumes and cost savings, the company noted.

Meanwhile, operating income increased to 202 million euros (2019: 130 million). Revenue was up by 10% in the EMEA, but dropped by 3% and 5% in South America and Asia, respectively.

In the Performance Coatings segment, however, revenue came in at 10% lower than last year, dropping from 1.41 billion euros in 2019 to 1.27 billion.

Adjusted operating income was 195 million euros, nearly flat form 2019’s 194 million. AkzoNobel said that the margin management and cost savings more than offset lower volumes and unfavorable currency impact. Operating income was 179 million euros, up from 2019’s 156 million).

The biggest drop was seen in the Marine and Protective Coatings subsegment, which saw a 22% drop in revenue, followed by Automotive and Specialty Coatings (12% drop), Industrial Coatings (4%) and Powder Coatings (4%).

Looking Ahead

That company says that it has suspended its 2020 financial ambition in response to the significant market disruption resulting from the pandemic.

Headwinds related to COVID-19 continue to ease, although demand trends differ per region and segment in an uncertain macro-economic environment, the company notes, adding that raw material costs are expected to have a favorable impact for the fourth quarter of 2020.

“Although the macro-economic environment remains uncertain, we’re continuing to build on our solid position as a frontrunner in our industry, committed to serving our customers with more innovative and sustainable solutions,” Vanlancker said.

   

Tagged categories: AkzoNobel; Asia Pacific; Business matters; COVID-19; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Good Technical Practice; Latin America; North America; Z-Continents

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