AkzoNobel’s Q2 results show strong focus on margin and cost savings in response to COVID-19 headwinds
July 22, 2020AkzoNobel’s Q2 results show strong focus on margin and cost savings in response to COVID-19 headwindsAkzo Nobel N.V. (AKZA; AKZOY) publishes results for second quarter 2020Highlights Q2 2020ROS, excluding unallocated costs1, increased to 14.0% (2019: 13.7%) due to strong margin management and cost savingsHeadwinds related to COVID-19 eased during the quarter, with revenue almost 30% lower in April and nearly 5% lower in JuneTotal cost savings delivered €116 million, of which €38 million structural savings related to transformation initiativesNet cash from operating activities improved to €308 million (2019: €152 million); maintained a strong balance sheetQ2 2020 (compared to Q2 2019)Revenue 19% lower and 17% lower in constant currencies, with positive price/mix of 2% and 18% lower volumes, mainly due to the impact of COVID-19Adjusted operating income2 at €238 million (2019: €305 million); ROS was 12.0% (2019: 12.4%)Operating income at €207 million includes €31 million negative impact from identified items, related to transformation costs (2019: €308 million, including €3 million positive identified items); OPI margin was 10.4% (2019: 12.6%)Net income attributable to shareholders at €129 million (2019: €231 million)Adjusted EPS from continuing operations at €0.80 (2019: €0.96); EPS from total operations at €0.68 (2019: €1.07)
AkzoNobel CEO, Thierry Vanlancker, commented:
“Despite lower end market demand, our business return on sales increased 30 basis points to 14% for the second quarter as a result of continued focus on margin management and cost-saving measures.“I’m extremely proud of our teams around the world, who have continued to focus on serving our customers and delivered this resilient performance while also helping many communities affected by the pandemic.“Our rigorous cash management and strong balance sheet put us in a sound position to deal with the ongoing uncertainty from COVID-19 as we strive to deliver powerful performance as a frontrunner in our industry.” Recent highlightsRising to the challenge
The outbreak of COVID-19 has not only seen us continue to supply our products to critical industries around the world. Our businesses and employees have also made every effort to support local projects and community initiatives in an effort to help as many people as possible.Interpon puts the emphasis on hygiene
Our Interpon powder coatings continue to make an important contribution to critical industries around the world. We recently expanded our antimicrobial offering (which already includes products for hygiene sensitive environments such as hospitals) by enhancing the functionality of our Interpon D1000 and 2000 range of architectural powder coatings. The inclusion of BioCote® antimicrobial technology means that building interiors can now be given increased protection against microbes such as bacteria and mold – which can cause issues such as bad odors, staining or material degradation.
*BioCote® technology does not protect users or others against disease-causing bacteria, germs, viruses or other harmful organisms. This technology is not a substitute for good hygiene and/or cleaning practices.The report for the second quarter 2020 can be viewed and downloaded at https://akzo.no/Q22020-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 ratesAbout 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 33,000 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. Attachments20200722 report Q2 2020Photo CEO Thierry Vanlancker20200722 PDF Media release Q2 2020
