AkzoNobel delivers strong Q3 results with 3% growth in volumes and 18% increase in adjusted operating income

October 21, 2020AkzoNobel delivers strong Q3 results with 3% growth in volumes and 18% increase in adjusted operating incomeAkzo Nobel N.V. (AKZA; AKZOY) publishes results for third quarter 2020Highlights Q3 2020ROS, excluding unallocated costs, increased to 17.7% (2019: 13.8%) due to strong margin management and cost savingsGrowth in volumes of 3%, with strong demand trends for most segments and regionsTotal cost savings delivered €49 million, of which €27 million structural savings related to transformation initiativesNet cash from operating activities improved by 46% to €457 million (2019: €312 million); maintained a strong balance sheetOn October 19, the acquisition of Titan Paints in Spain was announced, with completion expected before the end of Q1 2021€300 million share buyback announced, to be completed in the first half of 2021         
Q3 2020 (compared to Q3 2019)Revenue 5% lower, while up 1% in constant currencies. Volumes up 3%, showing strong demand for Decorative Paints, partly offset by lower volumes of Performance Coatings and unfavorable price/mix of 1%Adjusted operating income up 18% at €353 million (2019: €300 million); ROS increased to 15.5%
(2019: 12.5%) Operating income of €326 million includes €27 million negative impact from identified items, related to transformation costs (2019: €247 million operating income, including €53 million negative identified items); OPI margin up at 14.3% (2019: 10.3%)Net income attributable to shareholders increased 36% to €220 million (2019: €162 million)Adjusted EPS from continuing operations up 34% at €1.30 (2019: €0.97); EPS from total operations at €1.15 (2019: €0.79)Interim dividend of €0.43 per share (2019: €0.41)AkzoNobel CEO, Thierry Vanlancker, commented:
“We delivered an excellent performance for the third quarter, with revenue growth in constant currencies, and business return on sales up at 17.7% driven by strong discipline on margins and cost savings. These results were made possible by the continued commitment of all AkzoNobel colleagues around the world, adapting to the challenges presented by COVID-19.“Although the macro-economic environment remains uncertain, we’re continuing to build on our solid position as a frontrunner in our industry, committed to serving our customers with more innovative and sustainable solutions. That’s why we’re proud to have received a Platinum rating from EcoVadis for corporate social responsibility and sustainable procurement.”Recent highlightsChinese site makes switch to water-based products
Our Guangzhou decorative paints site in China is undergoing a major upgrade to enable it to exclusively produce water-based products. It’s the last of our four Chinese deco plants to make the switch, enabling us to meet growing demand for more eco-premium, water-based paints.Platinum rating awarded by EcoVadis
We’re proud to have been awarded Platinum by EcoVadis, a key rating agency which benchmarks sustainability performance. It means AkzoNobel is now in the top 1% of all companies and strengthens our leadership in sustainability.European business to be strengthened following acquisition of Titan in Spain
We’re targeting further growth in Europe after announcing on October 19 that we’ve agreed to acquire the decorative paints business of Spain’s Industrias Titan S.A.U., one of the country’s best-known brands. Completion is subject to regulatory approvals and expected before the end of Q1, 2021.The report for the third quarter 2020 can be viewed and downloaded at https://akzo.no/Q32020-Report1 ROS excluding unallocated cost is adjusted operating income as percentage of revenue for Decorative Paints and Performance Coatings; it excludes unallocated corporate center costs
2 Adjusted operating income = operating income excluding identified items
3 Constant Currencies calculations exclude the impact of changes in foreign exchange ratesThis is a public announcement by Akzo Nobel N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014).About AkzoNobelAkzoNobel has a passion for paint. We’re experts in the proud craft of making paints and coatings, setting the standard in color and protection since 1792. Our world class portfolio of brands – including Dulux, International, Sikkens and Interpon – is trusted by customers around the globe. Headquartered in the Netherlands, we are active in over 150 countries and employ around 32,000 talented people who are passionate about delivering the high-performance products and services our customers expect.Not for publication – for more informationSafe harbor statement
This media release contains statements which address such key issues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline and product approvals. Such statements should be carefully considered, and it should be under-stood that many factors could cause forecast and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures, as well as significant market disruptions such as the impact of pandemics. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business, please see our latest annual report. www.akzonobel.com.Attachments20201021 PDF Media release Q3 202020201021 PDF Q3 report 2020 Final20201021 PDF Investor Update Q3 2020