AkzoNobel Shares Q1 2024 Financial Results

WEDNESDAY, APRIL 24, 2024


Global coatings company AkzoNobel released its 2024 first quarter earnings report Tuesday (April 23), showing a 1% decrease in revenue and a return on investment of 13.8%.

According to AkzoNobel, operating income rose to 261 million euro ($278 million), compared to 182 million euro in 2023, mainly due to a continued rebound in gross margins, higher volumes and lower identified items.

The company added that the adjusted EBITDA increased to 363 million euro this year from 305 million euro in 2023, while the adjusted EBITDA margin improved to 13.8% from 11.5%.

Financing income and expenses reportedly amounted to negative 16 million euro from last year’s negative 38 million euro. The 22 million euro decrease in expenses, according to Akzo, is mainly due to hyperinflation accounting and the release of the interest related part of a provision for an uncertain tax position.

“Our performance for the first quarter combined volume growth in both Paints and Coatings with margin expansion, as it did in the previous quarter,” said AkzoNobel CEO, Greg Poux-Guillaume.

“After growing volumes 2% in Q1, we're preparing for further growth in areas where we see market opportunities such as in Powder, where we're adding new production lines. Our momentum and the progress of our efficiency measures bode well for a strong 2024 performance in markets which remain mixed.”

Report by Segment

In the Performance Coatings segment, organic sales were up by 2% while revenue was down by 2% to 1.58 million euro from last year’s 1.61 million euro. Organic sales growth was reportedly driven by higher volumes in most businesses, including mid-single digit growth in Powder and double digit volume growth in most businesses in China.

The company attributed the reduction in revenue to adverse currencies negatively impacting revenue by 4%, resulting in the 2% decrease.

In the Performance Coatings subsegments, powder coatings revenue dropped by 1% from 344 million euro to 341 million euro. Marine and protective coatings revenue dropped 2% from 366 million euro to 359 million euro, with industrial coatings decreasing 5%, as last year’s 538 million euro dropped to 512 million euro.

However, revenue automotive and specialty coatings saw a 2% increase, with 372 million euro this year compared to 2023’s 363 million euro.

In the Decorative Paints segment, the company reported that revenue saw a 1% increase with 1.05 million euro compared to last year’s 1.04 million euro, while organic sales were up by 3% due to positive price/mix and higher volumes.

Additionally, acquisitions saw a 1% increase from the acquisition of Huarun in China, while adverse currencies negatively impacted revenue by 3%, resulting in the 1% revenue growth.

Operating income increased to 116 million euro from last year’s 94 million euro, mainly due to a continued rebound in gross margins and higher volumes, Akzo states.

Looking forward, AkzoNobel states that it expects to deliver between 1.5 and 1.65 billion euro adjusted EBITDA in 2024. For the mid-term, AkzoNobel plans to expand profitability for an adjusted EBITDA margin of above 16% and a return on investment between 16% and 19%, underpinned by organic growth and industrial excellence.

The company also reportedly plans to lower its leverage to about 2.3 times net debt/EBITDA by the end of 2024 and around two times in the mid-term, while remaining committed to retaining a strong investment grade credit rating.

   

Tagged categories: AkzoNobel; Asia Pacific; Business conditions; Business management; Business matters; Business operations; Coating Business; Coatings; Consumer Reports; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Industry News; Latin America; Market; North America; Program/Project Management; Z-Continents

Join the Conversation:

Sign in to our community to add your comments.