Our results at a glance

  • Decorative Paints ROS up at 12.1% (2017: 9.4%) with 5% positive price/mix driven by pricing initiatives
  • Performance Coatings ROS up at 12.2% (2017: 10.3%) with higher selling prices contributing to price/mix up 7%
  • Volumes were lower, partly driven by moving away from lower margins given our value over volume strategy
  • Continued focus on transformation delivered €35 million cost savings in Q3
  • Taking next step in our transformation to deliver next €200 million cost savings by 2020
  • Completed sale of Specialty Chemicals on October 1, 2018; returning a total of €6.5 billion to shareholders
  • Acquisition of Xylazel in Spain; acquisition of Fabryo in Romania completed on October 1, 2018

Q3 2018:

  • Revenue 4% lower, and flat in constant currencies, with positive price/mix offset by lower volumes
  • Adjusted operating income was up €18 million at €243 million (2017: €225 million) driven by pricing initiatives and cost saving programs despite €10 million adverse impact from foreign currencies
  • Operating income was up €22 million at €237 million (2017: €215 million) and includes a €6 million adverse impact from identified items, mainly related to the transformation
  • ROS improved to 10.4% (2017: 9.3%); ROI at 12.6% (2017: 13.4%)
  • Net income from total operations at €301 million (2017: €216 million), including discontinued operations at €152 million (2017: €95 million)
  • Interim dividend of €0.37 per share, rebased for AkzoNobel as a focused paints and coatings company

Outlook:

We are delivering towards our „Winning together: 15 by 20“ strategy and continue creating a fit-for-purpose organization for a focused paints and coatings company, contributing to the achievement of our 2020 guidance. 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 address the current challenges. We are taking the next step in our transformation to deliver the next €200 million cost savings by 2020, incurring total one-off costs of €350 million between 2018 and 2020.

Summary of financial outcomes

Third quarter

 

January-September

2017 1

2018

∆%

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

2,419

2,326

(4%)

Revenue

7,329

6,948

(5%)

294

303

3%

Adjusted EBITDA

941

797

(15%)

225

243

8%

Adjusted operating income

727

617

(15%)

215

237

10%

Operating income

686

537

(22%)

9.3

10.4

 

ROS%

9.9

8.9

 

8.9

10.2

 

OPI margin

9.4

7.7

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

6,559

6,322

(4%)

 

 

 

ROI%

13.4

12.6

 

 

 

 

 

 

 

 

59

36

(39%)

Capital expenditures

165

106

(36%)

 

 

 

Net debt

1,910

2,700

 

 

 

 

Number of employees

36,200

34,300

(5%)

 

 

 

 

 

 

 

157

284

81%

Net cash from operating activities – continuing

(24)

(157)

 

259

179

(31%)

Net cash from operating activities – discontinued

464

427

(8%)

 

 

 

 

 

 

 

121

149

23%

Net income from continuing operations

415

375

(10%)

95

152

60%

Net income from discontinued operations

342

450

32%

216

301

39%

Net income from total operations

757

825

9%

0.86

1.18

37%

Earnings per share from total operations (in €)

3.02

3.24

7%

0.53

0.60

13%

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

1.81

1.48

(18%)

0.99

1.24

25%

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

3.20

3.37

5%