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AMSTERDAM, The Netherlands — While revenue was up 5% in constant currencies, report revenue for AkzoNobel’s third quarter was down 4.2%, while operating income and net income were up sharply for the period.
The company noted that revenue growth in constant currencies was mainly driven by pricing; volumes were flat, with higher volumes in Marine and Protective Coatings, Powder Coatings and Decorative Paints Asia and offset by soft demand in Industrial Coatings.
EBITDA for the third quarter ended Sept. 30 was €443 million, up 46% from €283 million in the same period last year.
Operating income increased nearly 111% over the year-ago period, which the company attributed to property divestments, partly offset by restructuring and acquisition-related costs for the Chinese Decorative Paints acquisition from Sherwin-Williams.
As of Sept. 30, the company’s net debt was €4.103 million vs. €4.089 million at the end of 2022. The net debt/EBITDA leverage ratio at the end of the quarter was 3.2, compared with 3.8 as of Dec. 31, 2022. Free cash flow was up significantly year-over-year to €243 million as compared with €54 million in the 2022 period.
In its outlook for the full year, AkzoNobel expects the economic conditions to continue to impact volume growth. It says cost reduction programs are expected to partly mitigate higher-than-expected inflationary pressure on operating expenses.
Based on current market conditions, the company projects around €1.45 billion adjusted EBITDA for the year.
For the full earnings report, click here.
