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Income, Sales Up for AkzoNobel Q3

Friday, October 23, 2015

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Amsterdam coatings giant AkzoNobel has reported income and sales gains for its third quarter amid “challenging market conditions.”

Operating income for the quarter was up 30 percent to €436 million ($487 million) and net income attributable to shareholders increased 39 percent from €205 million ($229 million) seen in the same period a year ago, the company reported Thursday (Oct. 22).

Photos: AkzoNobel

Headquartered in Amsterdam, the paint and coatings company can trace its origin back to 1646. It employs 47,000 people in 80 countries.

The company attributes the income growth to “positive effects of process optimization, lower costs, reducing restructuring expenses and favorable currency developments.”

Earnings before interest and tax, depreciation and amortization (EBITDA) jumped 21 percent to €590 million ($659 million).


Revenue reached €3.8 billion ($4.2 billion), up 2 percent compared to the same period last year, due to favorable currency effects, offset by divestments and slightly lower volumes, AkzoNobel reported.

Reorganization at Work

“We continue to see the benefits of our ongoing business transformation, including our new organizational structure and focus on operational excellence,” Maëlys Castella, CFO, said in a statement.

“During Q3 we saw increased profitability across all three of our Business Areas, despite the challenging market conditions.”


Maëlys Castella, AkzoNobel CFO

Europe, the company’s largest market, remains a difficult marketplace, as well as Russia, Brazil and China, AkzoNobel noted. The company expects the positive impact of foreign currencies to level in the fourth quarter.

The company remains on track to deliver its 2015 targets, she said.

The following business area results were reported.

Decorative Paints

This area saw a 7 percent jump in operating income for the quarter, to €121 million ($135 million), due to the new operating model, lower costs and currency developments.

Revenue, however, was flat at €1.05 billion ($1.17 billion), with favorable currency effects being offset by adverse price/mix.

Volumes for the unit were up in Asia, while volumes were down for Latin America and Europe.

Performance Coatings

This area was the star performer for the third quarter, posting a 56 percent gain in operating income, to reach €210 million ($235 million).


Marine and Protective Coatings revenue jumped 11 percent in the third quarter.

Growth in this unit was driven by costs reductions from performance initiatives, lower costs, favorable product mix, lower restructuring charges and favorable currency developments, the company said.

Revenue was up 5 percent, to €1.49 billion ($1.67 billion), due to favorable currencies and continued strong demand for premium products. Specifically, Marine and Protective Coatings revenue jumped 11 percent in the third quarter.

Volumes dipped in the quarter due to ongoing capital spending declines in the global oil and gas industry, and further weakening in some markets, namely Brazil and China.

Specialty Chemicals

This business’ operating income increased 4 percent, to €163 million ($182 million), supported by benefits from further production at its new Frankfurt plant, lower costs and operational efficiencies throughout the business.


Revenue for the third quarter was flat due to favorable currency effects, offsetting the impacts of the divested Paper Chemicals business and adverse price/mix in several segments.

Volumes were flat, the coatings manufacturer reported. Growth in some segments compensated for lower demand in oil drilling segments, which mainly affected Surface Chemistry and Functional Chemicals.


Tagged categories: AkzoNobel; Business matters; Coating Business; Coatings manufacturers; Earnings reports; Economy; Finance; Market forecasts

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