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AkzoNobel Releases Q4, 2020 Numbers

Thursday, February 18, 2021

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Global coatings manufacturer AkzoNobel (Amsterdam) released its fourth-quarter and end-of-year financial reports Wednesday (Feb. 17), indicating a 1% decrease in revenue for Q4, and a 8% decrease in revenue for the full year.

Additionally, while constant currencies were up 6% in Q4, the full year revealed a 4% drop.

Financial Overview

On April 1, 2020, AkzoNobel completed the acquisition of Mauvilac Industries. Later that year, AkzoNobel also acquired Stahl’s performance powder coatings activities in September, Titan Paints (Spain) in October, and New Nautical Coatings in the last quarter of 2020.

For the company’s fourth quarter, revenue was down 1% and up 6% in constant currencies, with the positive price/mix also up 1%. Volumes were also 6% higher, mainly due to strong performance in Decorative Paints.

In the fourth quarter, adjusted operating income was up 32%, totaling 294 million euros up from 2019’s fourth quarter at 223 million euros, driven by strong margin management and cost-saving programs. Operating income, up from 2019’s 173 million euros, totaled 243 million euros. However, this increase also included negative identified items totaling 51 million euros, mainly related to transportation costs.

Delivering on the company’s 15 by 20 promise, ROS reached 15%, excluding unallocated cost.

AkzoNobel

Global coatings manufacturer AkzoNobel (Amsterdam) released its fourth-quarter and end-of-year financial reports Wednesday (Feb. 17), indicating a 1% decrease in revenue for Q4, and a 8% decrease in revenue for the full year.

On the COVID-19 pandemic, AkzoNobel said, “The pandemic situation is being closely monitored and appropriate measures are being taken to continue serving customers and save costs, while at the same time keeping the organization intact and able to respond quickly to changes in end market demand.

“Although demand trends differ per region and segment, the overall impact on AkzoNobel for the full-year 2020 was limited. An overall positive impact was noted for the Decorative Paints segment, whereas there was an overall adverse impact in the Performance Coatings segment. The pandemic has not impacted our going concern assumption.”

The company also noted that in its 2020 figures, all COVID-19 related impacts were treated as normal operations and not included in identified items.

Decorative Paints

The ROS for the company’s Decorative Paints segment for the fourth quarter totaled 14%, up from 2019’s 10%. There was also an 2% positive price/mix, partly offset by adverse currency impact of 10%, mainly related to South America.

For this segment, revenue was 4% higher, and up 14% in constant currencies. There was also significant volume growth of 12%. Adjusted operating income increased to 126 million euros, up from 2019’s 87 million euros, driven by higher volumes, positive price/mix, margin management and cost savings.

Operating income also increased from 2019’s 75 million euros to 122 million euros.

Performance Coatings

The ROS for the Performance Coatings’ fourth quarter was up at 16.2%, with a price/mix of 1% and 1% higher volumes, driven by continued recovery from the impact of COVID-19 on end market demand, specifically in Powder Coatings and Industrial Coatings.

In the Marine and Protective Coatings, revenue saw a 19% drop and was 14% lower in constant currencies. This was attributed to the negative impacts on marine and oil and gas related projects.

The segment’s revenue was down 4%.

Adjusted operating income saw a 53-million-euro increase at 212 million euros, over 2019’s 159 million euros, which was mainly driven by volume growth, margin management and cost savings.

End-of-Year Numbers

For AkzoNobel’s 2020 overview, revenue was 8% lower, 4% lower in constant currencies, while price/mix was up 1% overall. Volumes were 4% lower, mainly due to the impact of COVID-19 on end market demand.

Adjusted operating income totaled 1,099 million euros, up from 2019’s 991 million euros, which was driven by margin management and cost-saving programs. Operating income was up 15%, totaling 963 million euros. The increase was attributed to margin management and cost-saving programs. Operating income also included negative identified items of 136 million euros, mainly related to transformation costs.

End-of-year numbers for the Decorative Paints segment saw revenue take a 3% dip, with a 3% increase in constant currencies. Adjusted operating income, totaling 573 million euros, up from last year’s 418 million euros. Operating income increased to 551 million euros and was negatively impacted by 22 million euros identified items related to transformation costs.

As for Performance Coatings, revenue was 11% lower, with constant currencies also showing an 8% decrease. Adjusted operating income clocked in at 700 million euros, up from last year’s 688 million euros. Price/mix was 1% positive, while volumes were 9% lower, mainly due to the impact of COVID-19 on end market demand, in particular for the automotive and aerospace industries, as well as for marine and oil and gas related projects.

“Our 2020 results demonstrate structural performance improvement from the first phase of our transformation. Despite COVID-19 headwinds, we rose to the challenge and delivered our 15 by 20 promise, achieving 15% return on sales and more than 20% return on investment,” said AkzoNobel CEO, Thierry Vanlancker.

“We continued to look after our customers and everyone at AkzoNobel deserves enormous credit for their passion and commitment, especially in such a challenging year. We’ve now achieved organic growth for two quarters in a row and announced acquisitions including Titan Paints in Spain and New Nautical Coatings in the US. We transformed our systems and processes and expanded our industry-leading Paint the Future innovation ecosystem. We’ve also accelerated our People. Planet. Paint. approach to sustainability and been recognized by key benchmarks as the leader in the paints and coatings industry.

“What’s really exciting is that we’re literally only half-way through our transformation to reclaim our position as the reference in the industry. Our new Grow & Deliver strategy represents the second stage of our journey – which began in 2017 – to double the profit of AkzoNobel.”

   

Tagged categories: AkzoNobel; Annual report; Asia Pacific; Business matters; Business operations; Consumer Reports; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Latin America; North America; Program/Project Management; Z-Continents

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