February 15, 2017
Volume growth and record
profitability in 2016
Akzo Nobel N.V. (AKZA.AS; AKZOY)
Full-year:
-
Delivering on our strategy
with volume growth and record profitability in 2016
-
Volume growth in Decorative
Paints and Specialty Chemicals; flat in Performance Coatings
-
Revenue down 4% due to
unfavorable currency and price/mix effects
-
EBIT1 up 3% at
€1,502 million (2015: €1,462 million), positively impacted by
volume growth, continuous improvement and lower costs
-
Record profitability:
Return on sales2 increased to
10.6% (2015: 9.8%) and return on investment2
improved to 15.0% (2015: 14.0%)
-
Adjusted earnings per share
up 3% at €4.15 (2015: €4.02)
-
Total dividend proposed for
2016 up 6.5% to €1.65 per share (2015: €1.55)
-
Net cash inflow from operating
activities up 14% at €1,297 million (2015: €1,136
million)
-
Acquisition of BASF's
Industrial Coatings business completed
-
Ongoing investments in new
capacity to support organic growth including in the US, UK,
China and India
-
Sustainable innovation:
Revenue from eco premium3 solutions
reached 20%
Outlook: In 2017 AkzoNobel anticipates
positive developments for EMEA, North America and Asia, improving
during the year, while Latin America is expected to stabilize. Some
economic and political uncertainty is expected to remain. Market
trends experienced in the second part of 2016, including for the
marine and oil & gas industries, are expected to continue in
the first half 2017.
AkzoNobel has structurally improved its ability to
respond to developments in its markets and is taking appropriate
measures to deal with higher raw material prices in an inflationary
environment. This stronger operational and financial foundation
means AkzoNobel is more agile and better able to seize growth
opportunities, including acquisitions. AkzoNobel maintains its
financial guidance for 2016-2018.
CEO Ton Büchner:
"We achieved record levels of profitability in
2016 and are making further steps in delivering on our strategy of
continuous improvement and growth.
"Our financial discipline also improved cash
generation and our current share buyback program reinforces our
confidence in this moving forward.
"We have structurally improved our ability to
respond to developments in our markets and are better able to seize
growth opportunities, including acquisitions. We completed the
purchase of the BASF Industrial Coatings business in December
2016.
"We continued to invest to support growth, with
new plants and research facilities in the US, UK, China and
India.
"Throughout the year we introduced more innovative
new products, advanced our digital agenda and made significant
steps in sustainability with higher levels of revenue from our eco
premium solutions. Our Human Cities program - everything we do for
and with society - positively impacted millions of people
around the world.
"We are now a stronger, more agile company, with
excellent brands, a growing global presence and a solid financial
and operational foundation. We maintain our financial guidance for
2016-2018."
Full-year 2016 in €
million
|
FY 2015 |
FY 2016 |
Delta % |
Revenue |
14,859 |
14,197 |
(4) |
EBIT1 |
1,462 |
1,502 |
3 |
Return on
sales (ROS) %2 |
9.8 |
10.6 |
|
Return on
investment (ROI) %2 |
14.0 |
15.0 |
|
Net
income attributable to shareholders |
979 |
970 |
(1) |
Q4 2016 in € million
|
Q4 2015 |
Q4 2016 |
Delta % |
Revenue |
3,559 |
3,456 |
(3) |
EBIT1 |
268 |
235 |
(12) |
Return on
sales (ROS) %2 |
7.5 |
6.8 |
|
Net
income attributable to shareholders |
203 |
133* |
(34) |
*
Mainly due to lower incidental items compared to 2015
Decorative Paints: Full-year
volumes were up 3% overall with positive developments in Asia and
EMEA, while volumes in Latin America were down. Positive volumes
were more than offset by unfavorable currency effects and adverse
price/mix. Revenue was down 4%. The company won a key award for its
wet color tester in the Netherlands; it is now being rolled out
into other markets, part of ongoing efforts to help consumers make
more confident color choices.
Performance Coatings:
Full-year volume was flat as growth in some segments was offset by
adverse conditions in the marine and oil & gas industries.
Demand trends differed per segment and region. Revenue was down 5%,
driven by adverse currencies and price/mix effects. AkzoNobel's
Vehicle Refinishes business launched Colorvation digital
technology, a unique system to increase speed and accuracy in color
matching for body shops, maximizing productivity and
profitability.
Specialty Chemicals:
Full-year volumes were up 1%, with positive developments, mainly
driven by Asia and Europe. Revenue was down 4% with positive volume
developments more than offset by price deflation in several
markets. Continuing the focus on growth markets, AkzoNobel
inaugurated two new plants in Ningbo, China, and announced a
further facility in Tianjin. The company also announced a joint
venture with Atul to set up a monochloroacetic acid plant in
India.
Continuous
improvement
AkzoNobel is on track with a multi-year program to transform its
global functions into a standard operating model to better support
the business to drive growth and innovation. In addition, 75% of
the company's manufacturing sites have now deployed the AkzoNobel
Leading Performance System (ALPS), designed to increase
productivity and performance.
Acquisition
AkzoNobel completed the acquisition of BASF's Industrial Coatings
business in the fourth quarter. This business is expected to
generate sales of around €280 million in 2017. It strengthens the
company's position as the global number one supplier in coil
coatings, and gives it a full-service offering for the protection
and maintenance of wind turbines. The deal includes manufacturing
plants in the UK and South Africa.
Sustainability, Human Cities and
Innovation
AkzoNobel led a unique partnership with Google, Philips and DSM to
jointly source power from renewable energy projects in the
Netherlands. It also introduced an essential ingredient, Dissolvine
M-40, to help detergent manufacturers meet strict environmental
regulations. The company's Human Cities initiatives helped
regenerate areas around the world, including Rotterdam, Shanghai,
China, Quito, Ecuador; and Montevideo, Uruguay, making people's
lives more liveable and inspiring.
Business Area highlights in €
million
Decorative Paints |
|
|
|
|
|
Q4 2015 |
Q4 2016 |
Delta% |
|
FY 2015 |
FY 2016 |
Delta% |
931 |
898 |
(4) |
Revenue |
4,007 |
3,835 |
(4) |
46 |
51 |
11 |
EBIT1 |
345 |
357 |
3 |
4.9 |
5.7 |
|
ROS %2 |
8.6 |
9.3 |
|
Performance Coatings |
|
Q4 2015 |
Q4 2016 |
Delta% |
|
FY 2015 |
FY 2016 |
Delta% |
1,482 |
1,398 |
(6) |
Revenue |
5,955 |
5,665 |
(5) |
192 |
152 |
(21) |
EBIT1 |
792 |
759 |
(4) |
13.0 |
10.9 |
|
ROS %2
|
13.3 |
13.4 |
|
Specialty Chemicals |
|
|
Q4 2015 |
Q4 2016 |
Delta% |
|
FY 2015 |
FY 2016 |
Delta% |
1,167 |
1,169 |
- |
Revenue |
4,988 |
4,783 |
(4) |
90 |
118 |
31 |
EBIT1 |
578 |
629 |
9 |
7.7 |
10.1 |
|
ROS %2 |
11.6 |
13.2 |
|
More information on our financial guidance can be
found on www.akzonobel.com/about-us/strategy
-
Operating income excluding
incidental items.
-
ROS% is EBIT divided by
revenue. Moving average ROI% is 12 months EBIT divided by 12
months average invested capital
-
Eco premium solutions and
services deliver environmental or social benefits for our customers
when compared with competitive products
The Q4 2016 report can be viewed
and downloaded at
www.akzonobel.com/quarterlyresults.
- - -
AkzoNobel creates everyday essentials to make
people's lives more liveable and inspiring. As a leading global
paints and coatings company and a major producer of specialty
chemicals, we supply essential ingredients, essential protection
and essential color to industries and consumers worldwide. Backed
by a pioneering heritage, our innovative products and sustainable
technologies are designed to meet the growing demands of our
fast-changing planet, while making life easier. Headquartered in
Amsterdam, the Netherlands, we have approximately 46,000 people in
around 80 countries, while our portfolio includes well-known brands
such as Dulux, Sikkens, International, Interpon and Eka.
Consistently ranked as a leader in sustainability, we are dedicated
to energizing cities and communities while creating a protected,
colorful world where life is improved by what we do.
Not for
publication - for more information
Corporate
Media Relations |
Corporate
Investor Relations |
T +31
(0)88 - 969 7833 |
T +31
(0)88 - 969 7590 |
Contact:
Andrew Wood |
Contact:
Lloyd Midwinter |
Safe Harbor
Statement
This press release contains statements which address key issues
such as AkzoNobel's growth strategy, future financial results,
market positions, product development, products in the pipeline and
product approvals. Such statements should be carefully considered,
and it should be understood that many factors could cause
forecasted and actual results to differ from these statements.
These factors include, but are not limited to, price fluctuations,
currency fluctuations, developments in raw material and personnel
costs, pensions, physical and environmental risks, legal issues,
and legislative, fiscal, and other regulatory measures. Stated
competitive positions are based on management estimates supported
by information provided by specialized external agencies. For a
more comprehensive discussion of the risk factors affecting our
business please see our latest annual report, a copy of which can
be found on our website: www.akzonobel.com.
PDF Media Release
Infographic Q4 and full year results
CEO Ton Büchner
Q Report
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information contained therein.
Source: AkzoNobel NV via Globenewswire
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