Performance Coatings

  • Revenue in constant currencies was up 5% excluding Marine and Protective Coatings
  • Marine and Protective Coatings headwinds reducing and restructuring positively contributing

Q2 2018:

  • Selling prices up 3%
  • Revenue 3% lower, although up 2% in constant currencies driven by positive price/mix
  • Adjusted operating income at €172 million (2017: €202 million) was still impacted by foreign currencies, higher raw material costs and lower volumes
  • ROS at 11.8% (2017: 13.4% ); ROI at 19.9% (2017: 27.2%)

Half-year 2018:

  • Revenue was 6% lower, while up 1% in constant currencies, mainly due to positive price/mix
  • Adjusted operating income at €306 million (2017: €389 million) due to adverse currencies, higher raw material costs and lower volumes, partly compensated by price increases, continuous improvement and cost savings
  • ROS at 10.9% (2017: 13.1%)
Poder coatings in the automotive sector (Photo)

AkzoNobel’s largest powder coatings plant opens in China
Production has started at AkzoNobel’s largest powder coatings plant in Changzhou, China. The facility will help to further strengthen the company’s global leadership position in the powder coatings market.

The result of nearly €40 million of investment, the Changzhou plant will supply an extensive range of Interpon and Resicoat products to meet growing demand for more sustainable coatings solutions. Key markets include the automotive, architectural and general industrial sectors.

Q2 2018:

Revenue was 3% lower, although up 2% in constant currencies driven by all businesses except for Marine and Protective Coatings. Pricing initiatives continued to gain traction, with 3% price increases in Q2 and further increases planned.

Adjusted operating income continued to be impacted by adverse currencies, higher raw material costs and lower volumes. Price increases and cost control measures remain a key focus.

Operating income was negatively impacted by €10 million identified items relating to the transformation of the organization.

Half-year 2018:

Revenue was 6% lower, although up 1% in constant currencies. Volumes increased for Powder Coatings, as well as Automotive and Specialty Coatings, but were lower for Marine and Protective Coatings.

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.

Operating income was negatively impacted by €23 million identified items relating to the transformation of the organization.

Revenue

Second quarter

 

January-June

2017 1

2018

∆%

∆% CC 2

in € millions

2017 1

2018

∆%

∆% CC 2

1

2017 figures have been represented for the new business unit structure

2

Change in constant currencies

303

317

5

10

Powder Coatings

591

609

3

9

377

340

(10)

(5)

Marine and Protective Coatings

757

640

(15)

(9)

362

359

(1)

4

Automotive and Specialty Coatings

722

705

(2)

4

475

456

(4)

3

Industrial Coatings

929

879

(5)

2

(13)

(18)

 

 

Other/intragroup eliminations

(24)

(37)

 

 

1,504

1,454

(3)

2

Total

2,975

2,796

(6)

1

Revenue development Q2 2018

Performance Coatings – Revenue development Q2 2018 (bar chart)Performance Coatings – Revenue development Q2 2018 (bar chart)

Revenue development half-year 2018

Performance Coatings – Revenue development half-year 2018 (bar chart)Performance Coatings – Revenue development half-year 2018 (bar chart)
Key financial figures

Second quarter

 

January-June

2017

2018

∆%

in € millions

2017

2018

∆%

202

172

(15)

Adjusted operating income

389

306

(21)

202

162

(20)

Operating income

389

283

(27)

13.4

11.8

 

ROS%

13.1

10.9

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

2,725

2,949

 

 

 

 

ROI%

27.2

19.9

 

Powder Coatings

Revenue in Q2 was 10% higher in constant currencies and up in all regions. Growth was supported by new applications and selling price increases.

Revenue in the first half-year was up 3%, and up 9% in constant currencies, due to volume growth and positive price/mix effects.

The acquisition of the V. Powdertech business in Thailand helped to fuel growth and strengthen leading powder coatings business in South East Asia.

Marine and Protective Coatings

Revenue in Q2 was 5% lower in constant currencies, with a continued focus on selling price increases and cost savings.

Revenue in the first half-year was 15% lower, and 9% lower in constant currencies, due to lower volumes.

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 in Q2 was up 4% in constant currencies due to higher volumes and positive price/mix.

Revenue in the first half-year was 2% lower, although up 4% in constant currencies, due to favorable price/mix, higher volumes and the acquisition of Disa Technology (Disatech).

Industrial Coatings

Revenue in Q2 was up 3% in constant currencies as a result of continued focus on pricing initiatives. Price increases were partly offset by lower volumes.

Revenue in the first half-year was 5% lower, although up 2% in constant currencies. Positive price/mix more than offset lower volumes. Demand differed per region and segment.