Our results at a glance

Progress on transformation into a focused Paints and Coatings company:

  • Successfully completed the dual-track process for the separation of Specialty Chemicals; AkzoNobel to sell Specialty Chemicals to the Carlyle Group and GIC for €10.1 billion
  • On track implementing our “Winning together: 15 by 20” strategy
  • Transformation process gaining momentum: program office up and running
  • Robust pricing initiatives ramping up: price increase successful in Q1 2018; second wave of increases to come in 2018

Q1 2018 Paints and Coatings:

  • Selling prices up 3% overall and for all businesses
  • Revenue down 8% mainly due to adverse foreign currencies (1% lower excluding currency impact) with positive price/mix offset by lower volumes
  • Volumes 3% lower, mainly due to continued adverse market conditions in the marine, and oil and gas industries
  • Savings from continuous improvement were €30 million and creating a fit-for-purpose organization delivered €10 million
  • Adjusted operating income at €149 million (2017: €208 million) due to adverse foreign currencies, higher raw material costs and lower volumes not yet fully offset by increased selling prices and cost discipline
  • Operating income at €108 million (2017: €208 million), includes the adverse impact of identified items of €41 million, mainly related to the transformation of the organization
  • ROS at 6.8% (2017: 8.8%); ROI at 13.2% (2017: 14.8%)
  • Adjusted EPS from continuing operations at €0.35 (2017: €0.50)
  • Net cash outflow from operating activities at €456 million (2017: €379 million)
  • Net income from total operations up 5% to €253 million (2017: €240 million), including discontinued operations at €134 million (2017: €114 million)

Outlook:

Higher raw material costs and adverse effects from foreign currencies are projected to continue in 2018, especially during the start of the year. We anticipate ongoing positive developments for Decorative Paints in all regions, particularly Asia. Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings. We continue to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline. Our “Winning together: 15 by 20” strategy will create a focused Paints and Coatings company and deliver our 2020 guidance.

Terminology change

Adjusted operating income equals operating income excluding identified items, which was previously called “EBIT”. Calculations of ROS and ROI remain unchanged. Adjusted earnings per share now only excludes identified items, while adjustments for post-tax amortization are not made anymore.

Summary of financial outcomes

First quarter

 

 

 

in € millions

2017 1

2018

∆%

1

Represented to present the Specialty Chemicals business as discontinued operations

2

Represented for the new adjusted earnings per share definition, which no longer excludes post-tax amortization charges

Revenue

2,377

2,176

(8)

Adjusted EBITDA

281

209

(26)

Adjusted operating income

208

149

(28)

Operating income

208

108

(48)

ROS%

8.8

6.8

 

OPI margin%

8.8

5.0

 

 

 

 

 

Average invested capital

6,500

6,401

 

ROI%

14.8

13.2

 

 

 

 

 

Capital expenditures

45

34

 

Net debt

1,801

2,596

 

Number of employees

36,200

35,400

 

 

 

 

 

Net cash from operating activities – continuing

(379)

(456)

 

Net cash from operating activities – discontinued

92

82

 

 

 

 

 

Net income from continuing operations

126

119

(6)

Net income from discontinued operations

114

134

 

Net income attributable to shareholders

240

253

5

Earnings per share from total operations (in €)

0.96

1.00

 

Adjusted earnings per share from continuing operations (in €) 2

0.50

0.35

 

Adjusted earnings per share from total operations (in €) 2

0.96

0.93