AkzoNobel Reports First Quarter Financial Results

Akzo Nobel NV has published its results for the first quarter of 2022

Grow & Deliver Highlights (compared to Q1 2021)
• Revenue up 12% and 10% at constant currencies1, driven by strong pricing (up 17%)
• ROS2 at 9.1% (2021: 13.6%), resulting from continued raw material and freight cost inflation and supply constraints
• Adjusted EBITDA at €317 million (2021: €391 million)

Highlights Q1 2022 (compared to Q1 2021)
• Pricing initiatives more than offset the increase in raw materials and other variable costs (including freight), which together increased by €334 million compared to Q1 2021. Volumes down 7%
• Operating profit of €232 million (2021: €303 million), including a net positive impact of €2 million from identified items (2021: €4 million net negative impact) . OPI margin 9.2% (2021: 13.4%)
• Adjusted operating income3 at €230 million (2021: €307 million)
• Net cash from operating activities decreased to negative €102 million (2021: negative €31 million)
• Net income attributable to shareholders of €154 million (2021: €217 million)
• EPS from total transactions at €0.87 (2021: €1.15); Adjusted EPS from continuing operations at €0.86 (2021: €1.18)

“We continued to make good progress, with strong revenue growth in both paints and coatings in the first quarter. Thanks to our strong pricing initiatives, we are in line with the unprecedented variable cost inflation that has affected our industry during the quarter.

“I am very proud of our organization, and our first quarter results are proof of the continued hard work and commitment of all of our employees.

“While uncertainties remain regarding, among other things, sanctions against Russia, the resurgence of COVID-19 in China and continued supply constraints – particularly in North America – we remain confident in delivering on our Grow strategy. & Deliver.”

Cetol products used in an eye-catching museum
Sustainable technology and responsible architecture come together in this visually stunning museum, which recently opened in Uruguay. Inspired by the shape of an arch and constructed of wood, the futuristic Atchugarry Museum of Contemporary Art (MACA) is surrounded by 40 acres of greenery. Our Cetol Woodcare brand has supplied over 1,000 liters of interior and exterior products, which help to protect the impressive structure. The eye-catching museum is considered a great example of how wood can be used for architectural purposes and not just for decorative applications.

Sustainability ratings reflect people. Planet. Painting. commitment
We are extremely proud to have been awarded Platinum status by EcoVadis, one of the leading providers of corporate sustainability ratings. This is the eighth consecutive year that we have received their highest rating. A key contributing factor was our ambitious science-based sustainability goal of halving our carbon footprint across the value chain by 2030. This follows Sustainalytics which awarded us our highest rating, with our sustainable portfolio, our carbon program and the reduction of waste and the use of hazardous substances among the strengths highlighted. These two ratings reflect our commitment to ensuring that everything we do starts with people. Planet. Painting.

Paint the Future winners sign letters of intent
Three startups have signed letters of intent to continue working together on sustainable business opportunities with AkzoNobel following our latest Paint the Future Global Startup Challenge. SolCold from Israel, Aerones from Latvia and SprayVision from the Czech Republic received their awards after an intense three-day training camp at our headquarters in Amsterdam, the Netherlands.

In-house resin production being scaled up
We are investing in expanding in-house resin manufacturing as part of the company’s Grow & Deliver strategy. The scale-up program, which is already underway, will help build resilience to supply disruptions while making a significant contribution to achieving our Scope 3 financial and carbon reduction ambitions (upstream ).

Take a quantum leap to accelerate innovation
We partnered with Microsoft to explore how quantum computing could help accelerate the development of more sustainable paints and coatings. Scientists from both parties will use Microsoft’s powerful Azure Quantum ecosystem to co-develop what will effectively be a virtual lab. The goal is to conduct experiments using quantum chemistry, which is capable of performing multiple complex processes with lightning speed and efficiency.

AkzoNobel aims to grow at or above its relevant markets, in line with the company’s Grow & Deliver strategy. Trends differ by region and segment, with inflation of raw materials and other costs (including freight) expected to gradually ease in the second half of 2022. AkzoNobel aims to continue to offset inflation of raw materials and other variable costs (including freight) through pricing initiatives. Market uncertainties have increased due to the sanctions against Russia and the resurgence of COVID-19 in China, among others. Assuming no further significant market disruptions, AkzoNobel aims to achieve the adjusted EBITDA target of €2 billion for 2023 and an average annual increase of 50 basis points in return on sales over the 2021-2023 period. AkzoNobel targets a leverage ratio of 1 to 2 times net debt/EBITDA and is committed to maintaining a strong investment grade credit rating.

The first quarter report can be viewed and downloaded https://akzo.no/results-q12022