- Implemented phase one of transformation to create a fit-for-purpose organization delivering €25 million in Q2;
- Decorative Paints return on sales up at 12.2 percent (2017: 11.6 percent) driven by five percent higher selling prices;
- Improving trend for Performance Coatings with return on sales at 11.8 percent (2017: 13.4 percent); pricing initiatives gaining traction and closing the gap;
- Investing in attractive markets: acquisition of Fabryo in Romania and the opening of new powder coatings plant in China
Q2 AkzoNobel (Paints and Coatings):
- Revenue three percent lower, although up two percent in constant currencies, with positive price/mix partly offset by lower volumes;
- Adjusted operating income at €225 million (2017: €294 million) mainly impacted by €21 million adverse foreign currencies and €20 million non-recurring items;
- Operating income includes the adverse impact of identified items of €33 million, mainly related to the transformation;
- Return on sales at 9.2 percent (2017: 11.6 percent), up for Paints and improving for Coatings; return on investment at 12.2 percent (2017: 14.4 percent);
- Net income from total operations at €271 million (2017: €301 million), including discontinued operations at €164 million (2017: €134 million)
"We continued investing in our market-leading positions, including the acquisition of the Fabryo decorative paints business in Romania and the opening of a new powder coatings plant in Changzhou, China,” the CEO concluded.
The company said it is delivering towards its "Winning together: 15 by 20" strategy by creating a fit-for-purpose organization for a focused paints and coatings company, contributing to the achievement of our 2020 guidance. For the remainder of 2018, AkzoNobel expects positive developments for Decorative Paints and Performance Coatings, excluding Marine and Protective Coatings, where market conditions are still challenging. Demand trends differ per region and segment. Raw material inflation is projected to continue for the remainder of 2018, although at a slower rate than during the start of the year. Robust pricing initiatives and cost-saving programs are in place to mitigate the current challenges.
Discontinued operations (including Specialty Chemicals)
- Revenue up one percent;
- Adjusted operating income up 50 percent at €252 million (2017: €168 million), caused by held for sale effects (Q2 impact: €74 million) and stronger underlying performance in Specialty Chemicals;
- In Specialty Chemicals, adjusted operating income was higher, mainly due to stronger price/mix effects and productivity improvements, partly offset by adverse currencies, restructuring costs related to manufacturing network optimization projects and other one-off costs