Decorative Paints

  • Selling prices up 4% overall and in all regions
  • Revenue decreased 8% mainly due to adverse currencies (1% lower, excluding currency impact)
  • Volumes were 1% lower despite growth in Europe; higher selling prices were offset by mix
  • Adjusted operating income at €56 million (2017: €77 million) was impacted by foreign currencies and higher raw material costs
  • ROS at 6.6% (2017: 8.4%); ROI at 11.7% (2017: 13.8%)
Dulux Promise Interior Plastic Emulsion can (Photo)

Dulux Promise
Consumers in Pakistan now have access to Dulux Promise, the first time AkzoNobel has launched a decorative paints product onto the country’s mass market segment. It’s the latest launch in the Asia region, following the introduction of a series of innovative paint products with smart functionality.

Revenue was 8% lower, mainly due to adverse currencies. Price realization is gaining momentum and selling prices were up 4% overall. Additional measures are being implemented.

Volumes were up in EMEA, while volumes were lower in Latin America and Asia, compared to an exceptionally strong first quarter last year.

Adjusted operating income was lower, mainly due to currency effects and higher raw material costs, offset by continuous improvement and cost control.

Operating income was impacted by €8 million identified items relating to the transformation of the organization.

Revenue

First quarter

 

 

 

 

in € millions

2017

2018

∆%

∆% CC *

*

Change excluding currency impact

Decorative Paints Europe, Middle East and Africa

507

491

(3)

(1)

Decorative Paints Latin America

119

105

(12)

11

Decorative Paints Asia

297

251

(15)

(7)

Other/intragroup eliminations

(1)

(1)

 

 

Total

922

846

(8)

(1)

Revenue development Q1 2018

Decorative Paints – Revenue development Q1 2018 (bar chart)Decorative Paints – Revenue development Q1 2018 (bar chart)
Key financial figures

First quarter

 

 

 

in € millions

2017

2018

∆%

Adjusted operating income

77

56

(27)

Operating income

77

48

(38)

ROS%

8.4

6.6

 

 

 

 

 

Average invested capital

2,775

2,816

 

ROI%

13.8

11.7

 

Europe, Middle East and Africa

Volumes grew. Price increases are taking effect, but overall revenue excluding currency impact was 1% lower due to negative mix effects. Overall growth was stronger in Eastern Europe and Africa. Adverse currency impacts were driven by the pound sterling. Demand trends differed by country and uncertainty continued in some markets. Cost control measures and productivity programs remain a focus in the region.

Latin America

Volumes were lower. Revenue was down 12% (excluding currency impact up 11%). Currency impact was driven by the Brazilian real and the significant devaluation of the Argentinian peso. Higher selling prices offset increased raw material costs. Cost control remains strong.

Asia

Volumes in China were slightly lower versus an exceptionally strong quarter last year, while growth continued in India, Malaysia and Vietnam. Revenue was impacted by adverse currency effects from the majority of the Asian currencies. Revenue was 7% lower excluding the impact of currencies. Price increases have been introduced in all major markets in the region.