AkzoNobel’s Q4 and full-year 2019 results show transformation on track

AkzoNobel has released its Q4 and full year results for 2019.

Highlights Q4 2019:

• Adjusted operating income up 23% at €223M (2018: €181M), despite softer end market demand;
• ROS, excluding unallocated costs, increased to 11.0% (2018: 9.0%);
• Operating income at €173M (2018: €68M); OPI margin improved to 7.7% (2018: 2.9%);
• Progress towards delivering cost savings; delivered €10M cost savings in this quarter;
• Revenue 3% lower and 4% lower in constant currencies, with positive price/mix of 1% more than offset by 4% lower volumes;
• Adjusted operating income up 23% at €223M (2018: €181M) driven by ongoing pricing initiatives, margin management and cost-saving programmes; ROS increased to 9.9% (2018: 7.8%);
• Operating income at €173M includes €50M negative impact from identified items, related to transformation costs and non-cash impairments (2018: €68M including €113M negative identified items); OPI margin improved to 7.7% (2018: 2.9%).

Full-year 2019:

• Revenue was flat, with positive price/mix of 4% and acquisitions contributing 1%, offset by 5% lower volumes due to our value over volume strategy;
• Adjusted operating income up 24% at €991M (2018: €798M) driven by pricing initiatives and cost savings; ROS up at 10.7% (2018: 8.6%); ROS excluding unallocated costs up at 12.0% (2018:10.6%);
• Operating income up 39% at €841M, including €150M negative impact from identified items, mainly related to transformation costs and non-cash impairments, partly offset by a gain on disposal following asset network optimisation (2018: €605M including €193M negative impact from identified items, mainly related to €130M transformation costs and €57M one-off non-cash pension costs); OPI margin improved at 9.1% (2018: 6.5%);
• Net income from total operations at €539M, including €22M discontinued operations (2018: €6,674M, including €6,264M from discontinued operations);
• Final dividend proposed of €1.49 per share.

AkzoNobel CEO, Thierry Vanlancker, commented:

"Our 2019 results show we are on track with our transformation.

"We made good progress, despite higher raw material costs and softer end market demand.

"Our performance improvement accelerated during the second half of 2019, resulting in business return on sales up by almost 200 basis points to 12.5%.

"We delivered on our commitment and returned €6.5bn to shareholders, following the sale of Specialty Chemicals.

"At the same time, we continued to invest in our future.

"We kickstarted a €50M investment in our US wood coatings business, completed the acquisition of Mapaero to strengthen our global position in aerospace coatings and expanded our Paint the Future innovation ecosystem.

"The real driving force behind AkzoNobel’s achievements has been our dedicated and diverse colleagues around the world.

"Together, we remain fully focused on delivering our Winning together: 15 by 20 strategy during the year ahead.”