Performance Coatings

  • Revenue growth, excluding currency impact, for all businesses except for Marine and Protective Coatings
  • Revenue decreased 9% mainly due to adverse currencies (1% lower excluding currency impact); selling prices up 2% overall and for all businesses
  • Volumes 5% lower, mainly due to adverse conditions in the marine, and oil and gas industries, despite growth in other areas
  • Adjusted operating income at €134 million (2017: €187 million) decreased due to adverse currencies, higher raw material costs and lower volumes, partly compensated by improved pricing, continuous improvement and cost control
  • ROS at 10.0% (2017: 12.7% ) ROI at 21.3% (2017: 28.6%)
A new powder coatings plant in Mumbai, India (Photo)

New powder coatings plant opened in India
Our commitment to customers in India has been strengthened following the inauguration of a new €9 million facility for the production of powder coatings. Located in Thane, Mumbai, the plant is the company’s sixth production site in India. The new facility will complement AkzoNobel’s existing plant in Bangalore, adding new product lines in bonded metallic and functional powder coatings.

Revenue was 9% lower mainly due to adverse currencies (1% lower excluding currencies). Pricing initiatives have continued to gain traction, with 2% price increases in the first quarter and further increases expected in the following quarters.

Volumes increased for Powder Coatings, as well as Automotive and Specialty Coatings. Adverse conditions persisted in the marine, and oil and gas industries.

Adjusted operating income was impacted by adverse currencies, higher raw material costs and lower volumes, partly compensated by higher selling prices, continuous improvement and cost control. Productivity and cost control measures remain a key focus.

Operating income was negatively impacted by €13 million identified items relating to the transformation of the organization.

Revenue

First quarter

 

 

 

 

in € millions

2017 1

2018

∆%

∆% CC 2

1

2017 figures have been represented for the new business unit structure

2

Change excluding currency impact

Powder Coatings

288

292

1

8

Marine and Protective Coatings

380

300

(21)

(14)

Automotive and Specialty Coatings

360

346

(4)

4

Industrial Coatings

454

423

(7)

1

Other/intragroup eliminations

(11)

(19)

 

 

Total

1,471

1,342

(9)

(1)

Revenue development Q1 2018

Performance Coatings – Revenue development Q1 2018 (bar chart)Performance Coatings – Revenue development Q1 2018 (bar chart)
Key financial figures

First quarter

 

 

 

in € millions

2017

2018

∆%

Adjusted operating income

187

134

(28)

Operating income

187

121

(35)

ROS%

12.7

10.0

 

 

 

 

 

Average invested capital

2,659

2,890

 

ROI%

28.6

21.3

 

Powder Coatings

Revenue was up 1% (up 8% excluding currency impact) due to volume growth and positive price/mix effects, offset by adverse currencies. The acquisition of the V.Powdertech business helped to fuel growth.

Marine and Protective Coatings

Revenue was 21% lower (14% lower excluding currency impact) due to lower volumes and adverse currencies. Volumes in Marine Coatings continued to be affected by the slowdown of new build activity, despite some recovery in other segments. Protective Coatings volumes decreased due to fewer oil and gas projects. We continue to implement measures focused on restructuring and right sizing.

Automotive and Specialty Coatings

Revenue was 4% lower (up 4% excluding currency impact) despite favorable price/mix, higher volumes and the acquisition of Disa Technology (Disatech).

Industrial Coatings

Revenue was 7% lower (1% higher excluding currency impact). Positive price/mix more than offset volume decline. Demand differed per region and segment.