AkzoNobel Releases Q2 2024 Financial Increases
THURSDAY, JULY 25, 2024
Global coatings company AkzoNobel released its 2024 second-quarter financial report on Tuesday (July 23), revealing a 2% increase in both revenue and organic sales.
Operating income came in at 270 million euros ($292.9 million) compared to last year’s 279 million euros, which the company attributes to operating cost inflation, particularly in wages. This, however, was reportedly offset by raw material cost benefits and volume growth.
“For the third consecutive quarter, we demonstrated our ability to deliver growth in mixed markets, while expanding gross margin by 160 basis points,” commented AkzoNobel CEO Greg Poux-Guillaume.
“Although our operational costs are up, efforts to mitigate this inflationary cost pressure are accelerating and measures are already underway, above and beyond our industrial efficiency program. This will allow us to deliver on our 2024 ambitions, towards the lower end of our guidance and in line with current consensus.”
By Segment
In the Decorative Paints segment, revenue was reported to be down 1% at 1.139 billion euros compared to last year’s 1.147 billion euros. For the half year, the segment’s revenue remained essentially flat at 2.19 billion euros.
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Global coatings company AkzoNobel released its 2023 second-quarter financial report on Tuesday (July 23), revealing a 2% increase in both revenue and organic sales. |
Acquisitions added 1% due to the acquisition of Huarun in China, completed in August 2023, while adverse currencies negatively impacted revenue by 1%.
Operating income at 121 million euros versus last year’s 151 million euros, mainly attributed to operating cost inflation and identified items. Operating income also reportedly includes identified items of negative 20 million euros, mainly due to restructuring related costs.
In the Performance Coatings segment, revenue was 3% higher, mainly driven by double digit volume growth in China and solid growth in the rest of Asia and North America, with a flat market in Europe. Adverse currencies negatively impacted revenue by 1%, the company says, resulting in 3% revenue growth.
Operating income also increased to 182 million euros compared to 168 million euros in 2023, mainly due to higher volumes and gross margin expansion, partly offset by operating cost inflation. Operating income includes identified items of negative 11 million euros as part of restructuring related costs.
Mid-Year Figures, 2024 Outlook
For the first half of 2024, AkzoNobel reported that organic sales up 2% due to volume growth and higher price/mix, revenue flat. Volumes were up 2% in Coatings, while Paints was flat.
Additionally, volume growth in Coatings was driven by higher volumes in most businesses, including mid-single digit growth in Powder Coatings and double digit growth for most Coatings businesses in China. Volumes in Paints were flat, with higher volumes in SESA offset by weaker demand in China and LATAM. Deco EMEA was flat. Adverse currencies impacted revenue by 2%.
The company notes that operating income increased to 531 million euros over last year’s 461 million euros, mainly due to gross margin expansion and higher volumes, more than compensating for operating cost inflation.
For the rest of the year, based on current market conditions and constant currencies, AkzoNobel expects to deliver 2024 adjusted EBITDA towards the lower end of its full-year guidance range of 1.5 to 1.65 billion euro.
The full report from AkzoNobel can be read here.
Tagged categories: AkzoNobel; Business conditions; Business management; Business matters; Business operations; Coating Business; Consumer Reports; Earnings reports; Finance
