Akzo Nobel N.V. published results for second quarter 2022

Highlights Grow & Deliver (compared with Q2 2021):
• Revenue was up 14% to €2,853 million, and 10% higher in constant currencies, pricing up 16%.
• ROS2 at 8.7% (2021: 13.3%), resulting from lower volumes and continued raw material and freight costs inflation.
• Adjusted EBITDA at €337 million (2021: €419 million).
• Acquisition of Grupo Orbis completed in April 2022. Intended acquisition of Kansai Paint’s business in Africa announced in June 2022. Intended acquisition of the liquid wheel coatings business of Germany-based Lankwitzer Lackfabrik GmbH announced in July 2022.

Highlights Q2 2022 (compared with Q2 2021):
• Pricing up 16%; offsetting the increase of raw material and other variable costs. Volumes 9% lower.
• Operating income at €205 million (2021: €384 million), includes €44 million negative impact from Identified items (2021: €49 million net positive impact). OPI margin 7.2% (2021: 15.3%).
• Adjusted operating income3 at €249 million (2021: €335 million).
• Net cash from operating activities decreased to negative €52 million (2021: positive €168 million).
• Net income attributable to shareholders at €106 million (2021: €261 million).
•EPS from total operations at €0.60 (2021: €1.40); adjusted EPS from continuing operations at €0.84 (2021: €1.20).

“Our Q2 results were clearly impacted by two months of lockdowns in China and destocking in decorative paint do-it-yourself channels in Europe,” said AkzoNobel CEO Thierry Vanlancker. “Demand from our customers got back on track in June. Despite the significant Q2 headwinds we were able to match the volumes from pre-COVID Q2 2019.

“I’m extremely proud of how the organization stays focused and has the agility to push ahead with our Grow & Deliver ambitions of €2 billion EBITDA in 2023 – while mitigating increasing macro-economic and geo-political uncertainty with further cost reduction and margin management initiatives.”

AkzoNobel targets to grow at or above its relevant markets, in line with the company’s Grow & Deliver strategy. Trends differ per region and segment, with raw material and other variable cost inflation (including freight) expected to gradually ease towards the end of 2022.

AkzoNobel aims to continue to offset raw material and other variable cost inflation (including freight) through pricing initiatives. Macroeconomic uncertainties have increased due to geopolitical tension, the resurgence of COVID-19 and inflation.
Assuming there are no further significant market disruptions, AkzoNobel aims to deliver the €2 billion adjusted EBITDA target for 2023, and an average annual 50 basis points increase in return on sales over the period 2021-2023.

AkzoNobel targets a leverage ratio of one to two times net debt/EBITDA and is committed to retaining a strong investment grade credit rating.