Akzo Nobel N.V. published results for Q1 2023.

Revenue was €2,657 million, up 5% and up 8% in constant currencies. Pricing is up 7%, more than offsetting increase of raw material and freight costs. Meanwhile, volumes are 3% lower. Europe is showing resilience, and China is rebounding.

Operating income was €182 million (2022: €232 million), with adjusted operating income at €218 million (2022: €230 million). Net cash from operating activities were a negative €50 million (2022: negative €102 million).

“In the first quarter of 2023, our key markets proved to be resilient despite unfavorable macroeconomic conditions,” said AkzoNobel CEO Greg Poux-Guillaume. “We delivered higher volumes than expected with healthy pricing dynamics, leading to further margin expansion.

“We were able to achieve a strong sequential improvement in profitability based on solid margin management, better than anticipated volumes in Europe and rebound in China, benefiting both paints and coatings,” added Poux-Guillaume. “We also announced our intention to acquire a small but complementary decorative paints business in China, which will further strengthen our number two retail position in this important and profitable market.”

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. Based on current market conditions, AkzoNobel targets to deliver €1.2 to €1.5 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.