Decorative Paints

  • ROS up at 12.1% (2017: 9.4%) with 5% positive price/mix driven by pricing initiatives
  • Acquisition of Xylazel in Spain; acquisition of Fabryo in Romania completed on October 1, 2018

Q3 2018:

  • Revenue 6% lower, and flat in constant currencies; price/mix was 5% positive, driven by higher selling prices
  • Adjusted operating income increased to €115 million (2017: €95 million) with higher prices and cost savings more than compensating for raw material costs, currency effects and lower volumes
  • Adverse currency effects were driven by various currencies including the Argentinian peso, Brazilian real and Turkish lira
  • ROS higher at 12.1% (2017: 9.4%); ROI at 12.6% (2017: 12.4%)
Entire Chinese theme park coated by AkzoNobel (photo)

Entire Chinese theme park coated by AkzoNobel
Colorful Yunnan Happy World, the first theme park in southwest China, opened to the public in Kunming, Yunnan province, after collaborating with AkzoNobel’s Dulux Pro brand to paint around 180,000 square meters of attractions and facilities in approximately 80 different colors.

Q3 2018:

Revenue was 6% lower and flat in constant currencies. Price realization is gaining momentum and selling prices were up overall. Volumes were lower in all segments, mainly due to continued focus on pricing initiatives.

Adjusted operating income was higher due to improved pricing and cost savings more than offsetting higher raw material costs, currency effects and lower volumes, resulting in ROS up at 12.1% (2017: 9.4%).

Operating income was adversely impacted by €3 million identified items relating to the transformation of the organization.

Revenue

Third quarter

 

January-September

2017

2018

∆%

∆% CC 1

in € millions

2017

2018

∆%

∆% CC 1

1

Change in constant currencies

2

Including 9% positive impact of hyperinflation accounting as per IAS 29 for our Argentian operations

561

546

(3%)

0%

Decorative Paints Europe, Middle East and Africa

1,652

1,628

(1%)

1%

129

117

(9%) 2

8%

Decorative Paints Latin America

366

329

(10%)

12%

318

288

(9%)

(7%)

Decorative Paints Asia

961

849

(12%)

(7%)

(1)

 

 

Other/intragroup eliminations

(4)

(3)

 

 

1,007

951

(6%)

0%

Total

2,975

2,803

(6%)

0%

Revenue development Q3 2018

Decorative Paints – Revenue development Q3 2018 (bar chart)Decorative Paints – Revenue development Q3 2018 (bar chart)
Key financial figures

Third quarter

 

January-September

2017

2018

∆%

in € millions

2017

2018

∆%

95

115

21%

Adjusted operating income

293

294

95

112

18%

Operating income

293

271

(8%)

9.4

12.1

 

ROS%

9.8

10.5

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

2,771

2,790

 

 

 

 

ROI%

12.4

12.6

 

Europe, Middle East and Africa

Revenue in Q3 was 3% lower, and flat in constant currencies. Price increases are taking effect, while volumes were lower.

Adverse currency impacts were mainly driven by the Turkish lira.

The acquisition of Xylazel in Spain and Doves Decorating Supplies in the UK were announced and completed in September 2018. The acquisition of Fabryo Corporation S.R.L., announced in June 2018, was completed on October 1, 2018.

Latin America

Revenue in Q3 was 9% lower (including positive impact of hyperinflation accounting), although up 8% in constant currencies, mainly driven by positive price/mix effects. Higher selling prices and cost control offset increased raw material costs. Adverse currency effects were driven by the Argentinian peso and Brazilian real.

Asia

Revenue in Q3 was 9% lower and 7% lower in constant currencies. Selling prices increased as a result of continued focus on pricing initiatives. Volumes were lower in China, also due to focus on value over volume, while growth continued in India and Vietnam.