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Media release
AkzoNobel’s second quarter results deliver on expectations with resilient volumes, profits up and a strong free cash flow; guidance increased
July 25, 2023
Akzo Nobel N.V. (AKZA; AKZOY) publishes results for Q2 2023
Highlights Q2 2023 (compared with Q2 2022)
- Revenue 4% down on unfavorable exchange rates, 3% up in constant currencies1
- Pricing up 5%, volumes 1% lower
- Operating income up 36% at €279 million (2022: €205 million)
- Adjusted operating income2 up 25% at €311 million; ROS3 11.3% (2022: €249 million)
- Net cash from operating activities positive €305 million (2022: negative €52 million)
AkzoNobel CEO, Greg Poux-Guillaume, commented:
“Our Q2 results are in line with expectations despite volatile markets and complete a solid first half of 2023. In Q2, we achieved year-on-year profit growth driven by resilient volumes, robust pricing and the first effects of raw material deflation. This helped us offset headwinds from continuing softness in some markets and from adverse currency impact and persistent inflation. Our results provide a solid foundation and allow us to increase our full-year guidance. We’re on the right path – in markets that will continue to be impacted by macro-economic uncertainties.”
Q2 2022
2,853
Q2 2023
2,741
△%
(4%)
Δ% CC¹
3%
Q2 2022
205
Q2 2023
279
△%
36%
Δ% CC¹
Q2 2022
249
Q2 2023
311
△%
25%
Δ% CC¹
Q2 2022
8.7%
Q2 2023
11.3%
△%
Δ% CC¹
H1 2022
5,378
H1 2023
5,398
△%
-%
Δ% CC¹
5%
H1 2022
437
H1 2023
461
△%
5%
Δ% CC¹
H1 2022
479
H1 2023
529
△%
10%
Δ% CC¹
H1 2022
8.9%
H1 2023
9.8%
△%
Δ% CC¹
Recent highlights
Mural pays tribute to traditional artform
The Abasto neighborhood in Buenos Aires, Argentina received a makeover recently using products supplied by the Alba brand. Five vibrant wall paintings and a 600-meter long floor mural were created to bring color to the local area. The designs pay tribute to a traditional pictorial artform known as “filete porteño” – which has received official UNESCO recognition.
Supply agreement with Porsche China
The company received approval to supply the full water-based Sikkens range of refinish products to Porsche China. Our products will play an important role in helping Porsche China to meet the country’s strict VOC regulation.
New product marks turning point for packaging industry
The packaging business continued to drive innovation with the launch of Accelshield 700, an internal coating for beverage can-tops that does not use BPA or bisphenol-based epoxies as part of its manufacturing process. This new product will help customers to meet the surge in demand for safer and more sustainable coatings, supporting our leading market position.
2023 Outlook*
AkzoNobel expects the ongoing macro-economic uncertainties to continue and weigh on organic volume growth. The company will focus on margin management, cost reduction, working capital normalization and de-leveraging.
Cost reduction programs are expected to partly mitigate higher than expected inflationary pressure on operating expenses for 2023. AkzoNobel expects declining raw material costs to have a favorable impact on profitability.
Based on current market conditions, AkzoNobel targets to deliver €1.40 to €1.55 billion adjusted EBITDA.
The company aims to lower its leverage ratio to less than 3.4 times net debt/EBITDA, including the impact of the Kansai Paint Africa acquisition, by the end of 2023 and return to around 2 times post-2023.
*Outlook is based on organic volumes and constant currencies, and assumes no significant market disruptions.
The report for the second quarter can be viewed and downloaded: https://akzo.no/Q2-2023-results
1 Constant currencies calculations exclude the impact of changes in foreign exchange rates by retranslating the prior year local currency amounts into euro at the current year’s foreign exchange rates
2 Adjusted operating income = operating income excluding identified items
3 Return on sales (ROS) is adjusted operating income as percentage of revenue
This media release covers the highlights for the quarter. We recommend reading the media release in combination with the full quarterly report. The quarterly report provides additional information, including the IAS34 condensed consolidated financial statements. ROS, adjusted OPI, adjusted EPS, EBITDA and Adjusted EBITDA are Alternative Performance Measures (APM’s). AkzoNobel uses APM adjustments to the IFRS measures to provide supplementary information on the reporting of the underlying developments of the business. A reconciliation of the alternative performance measures to the most directly comparable IFRS measures can be found in the AkzoNobel quarterly report.
All figures in the media release and in the AkzoNobel quarterly report are unaudited. The interim condensed consolidated financial statements were discussed and approved by the Board of Management and the Supervisory Board. These condensed financial statements have been authorized for issue.
This is a public announcement by Akzo Nobel N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014).
About AkzoNobel
We supply the sustainable and innovative paints and coatings that our customers, communities – and the environment – are increasingly relying on. Our world class portfolio of brands – including Dulux, International, Sikkens and Interpon – is trusted by customers around the globe. We’re active in more than 150 countries and have set our sights on becoming the global industry leader. It’s what you’d expect from a pioneering paints company that’s committed to science-based targets and is taking genuine action to address globally relevant challenges and protect future generations.
