Double-digit revenue growth was achieved in all three business areas, driven by the company’s continued strength in high growth markets and demand recovery in mature economies.
Raw material price inflation has been significant. Pricing and cost reduction actions are on-going to mitigate the impact of this and AkzoNobel remains confident that it will be able to compensate for these increases.
During the quarter, EBITDA improved by 10 percent to €437 million, although overall EBITDA margins declined slightly compared with Q1 2010, reflecting the lag effect of pricing and margin management actions to compensate raw material price increases. Sequentially, from Q4 2010, the EBITDA margin increased from 10.4 percent to 11.6 percent as mitigating actions took effect. The company has a seasonal pattern in that revenue and profitability are lowest in the fourth and first quarters of the year.
“These results demonstrate further progress in working towards our medium-term strategic goals and in managing the current inflationary headwinds,” said Hans Wijers, AkzoNobel chairman and chief executive. “I am particularly pleased with the strong volume and pricing behind our 16 percent revenue growth, which gives me confidence that we have been able to maintain or improve market share across the portfolio.
“There continue to be considerable differences in the strength of demand across our geographies and end markets, but we have continued to grow revenue in both high growth and mature markets,” Wijers said. “Our revenue growth in high growth markets continued to be impressive.
“Raw material prices have continued to rise, as we indicated last quarter,” he continued. “Pricing and cost reduction actions are on-going to mitigate the impact of these higher prices and we remain confident that we will be able to compensate for these increases.
“Specialty Chemicals continues to experience strong demand and both revenue and EBITDA grew strongly. Performance Coatings achieved considerable growth in high growth markets and benefitted from the acquisitions made last year,” said Wijers. “The successful roll-out of our Decorative Paints products to 3,500 Walmart stores in the US, together with continued strong growth in Asia and Latin America, underpinned the Decorative Paints performance.