Akzo Nobel publishes results for the first quarter 2018
Akzo Nobel announced an adjusted operating income at €149 million (2017: €208 million) for the first quarter 2018 due to adverse foreign currencies, higher raw material costs and lower volumes not yet fully offset by increased selling prices and cost discipline. Net income from total operations is up 5% to €253 million (2017: €240 million), including discontinued operations at €134 million (2017: €114 million).
Paints and Coatings performance in Q1 2018
Decorative Paints revenue decreased 8% mainly due to foreign currencies (down 1% excluding currency impact). Higher selling prices were offset by adverse mix effects. Volumes were 1% lower, despite growth in Europe. Volumes were lower in China compared to an exceptionally strong first quarter last year.
Performance Coatings revenue was 9% lower, mainly due to adverse currencies (down 1% excluding currencies). Pricing initiatives have continued to gain traction, with 2% price increases in the first quarter and further increases expected in the following quarters. Volumes were 5% lower, mainly due to adverse conditions in the marine, and oil and gas industries. Volumes increased for Powder Coatings, as well as Automotive and Specialty Coatings.
Specialty Chemicals performance in Q1 2018
Revenue was 3% lower (up 4% excluding currency impact) with positive pricing impact being more than offset by adverse currencies and lower volumes. Industrial Chemicals benefited from strong pricing. Volumes were down 1%, with lower volumes in some segments, partly offset by volume growth in Pulp and Performance Chemicals.
Outlook Akzo Nobel Paints and Coatings
Higher raw material costs and adverse effects from foreign currencies are projected to continue in 2018, especially during the start of the year. The company anticipates ongoing positive developments for Decorative Paints in all regions, particularly Asia. Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings. Akzo Nobel continues to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline. The “Winning together: 15 by 20” strategy will create a focused Paints and Coatings company and deliver Akzo Nobel's 2020 guidance.
The Q1 2018 report can be viewed and downloaded at the website of Akzo Nobel.