Revenue and volumes up despite strong headwinds; Transformation plan to deliver €110 million savings in 2018
CEO Thierry Vanlancker, commented:
"We have continued to grow our business with higher volumes and increased revenues despite challenging market conditions in selected areas of our business, especially in Marine and Protective Coatings.
"We have also initiated phase one of our transformation plan to create a fit for purpose Paints and Coatings organization which will deliver €110 million annual savings in 2018 contributing towards our 2020 financial guidance.
"EBIT for 2017 is now expected to be in line with 2016, due to adverse foreign exchange, ongoing industry specific headwinds and supply chain disruptions, including the adverse impact of Hurricane Harvey in the US.
"There continues to be significant interest in our Specialty Chemicals business and we look forward to the separation process officially kicking off in the coming weeks. We have announced several capacity expansions to accelerate growth for the business, including a €20 million investment to increase production at Sundsvall, Sweden for our Expancel expandable microspheres."
Outlook:
We anticipate positive developments for EMEA (excluding the UK), North America and Asia, while Latin America is expected to stabilize.
Performance Coatings
Volumes were up by 1% in the third quarter, with growth for Industrial and Powder Coatings, partly offset by adverse conditions in the marine and oil and gas industries. Revenue was up 2%, due to volume growth and the acquired Industrial Coatings business, partly offset by currency effects. EBIT was adversely impacted by ongoing weakness in the marine and oil and gas industries, as well as increased costs of raw materials in the paints and coatings industry and adverse currency effects. Measures being implemented to mitigate current industry specific headwinds include increased selling prices and additional cost control.
The company opened a facility in Dongguan, China, dedicated to producing aerospace coatings for the North and South Asian aviation market. This new facility will offer improved and faster service to existing, as well as new, customers in this rapidly-growing market.
Supervisory Board & EGM
AkzoNobel announces today the nomination of a new Supervisory Board member; Mr. Michiel Jaski, following an extensive search process. This follows the nomination of Mrs. Sue Clark and Mr. Patrick Thomas for appointment to the Supervisory Board as announced on August 16, 2017.
A request from AkzoNobel shareholder Universities Superannuation Scheme Limited ("USS") was received on July 24 to nominate Mr. Eric Meurice for appointment to the Supervisory Board. The Supervisory Board has accordingly placed this proposal on the agenda of the EGM of November 30, 2017.
Antony Burgmans, Chairman of the Supervisory Board, commented: