Our results at a glance

Q1 2019 results show progress towards Winning together: 15 by 20 strategy

  • Adjusted operating income 9% higher at €163 million
    • Raw material inflation continued; variable costs €77 million higher
    • Ongoing pricing initiatives resulted in price/mix up 6%
    • Cost-saving programs delivered €38 million
    • Volumes lower due to value over volume strategy
  • ROS, excluding unallocated costs, increased to 9.1% (2018: 8.7%)
    • Decorative Paints continued good momentum in seasonally lower quarter
    • Automotive and Specialty coatings impacted by order pattern
  • On track returning a total of €6.5 billion to shareholders
  • €639 million cash payments to the main UK pension plans

Q1 2019:

  • Revenue was flat in a seasonally low quarter; up 1% in constant currencies, with positive price/mix offset by 7% lower volumes; acquisitions contributed 1%
  • Adjusted operating income up 9% at €163 million (2018: €149 million, which included gains on disposals) driven by ongoing pricing initiatives and cost-saving programs; ROS at 7.5% (2018: 6.8%)
  • Operating income at €113 million includes €50 million adverse impact from identified items, mainly related to transformation costs and non-cash impairments (2018: operating income of €108 million was negatively impacted by €41 million identified items)
  • Decorative Paints ROS up at 7.1% (2018: 6.6%) supported by 6% positive price/mix, driven by ongoing pricing initiatives
  • Performance Coatings ROS up at 10.3% (2018: 10.0%); continued pricing initiatives contributed to price/mix of 7%
  • Adjusted EPS from continuing operations, up 30% at €0.46 (2018: €0.35); net income from total operations at €65 million (2018: €253 million, including €134 million results from discontinued operations)

AkzoNobel around the world
Revenue by destination

AkzoNobel around the world – Revenue by destination (bar chart)

Outlook:

We are delivering towards our Winning together: 15 by 20 strategy and continue creating a fit-for-purpose organization for a focused paints and coatings company, contributing to the achievement of our 2020 guidance. Demand trends differ per region and segment in an uncertain macro-economic environment. Raw material inflation is expected to continue during the first half of 2019, although at a lower rate than 2018. Robust pricing initiatives and cost-saving programs are in place to address the current challenges. We continue executing our transformation to deliver the next €200 million cost savings by 2020, incurring one-off costs in 2019 and 2020. We target a leverage ratio of between 1.0-2.0 times net debt/ EBITDA by the end of 2020 and commit to retain a strong investment grade credit rating.
2020 guidance (ROS 15%, ROI >25%) (graphic)

* Excluding unallocated corporate center costs and invested capital; assumes no significant market disruption

(XLS:) Download XLS

Summary of financial outcomes

First quarter

 

 

 

in € millions

2018

2019

∆%

1

The statement of income, statement of cash flows and the balance sheet for Q1 2019 include the impact from adoption of IFRS 16 “Leases” (as per January 1, 2019). The 2018 comparative figures have not been restated. Further details and a quantification of the impact are provided on Financial highlights and Notes to the condensed financial statements.

Revenue

2,176

2,185

–%

Adjusted EBITDA 1

209

248

19%

EBITDA 1

168

198

18%

Adjusted operating income 1

149

163

9%

Operating income 1

108

113

5%

ROS% 1

6.8

7.5

 

OPI margin 1

5.0

5.2

 

 

 

 

 

Average invested capital 1

6,401

6,494

 

ROI% 1

13.2

12.5

 

 

 

 

 

ROS% excl. unallocated costs 1

8.7

9.1

 

ROI% excl. unallocated costs 1

16.6

16.2

 

 

 

 

 

Capital expenditures

37

37

 

Net debt

2,596

(1,259)

 

Number of employees

35,400

34,400

(3%)

 

 

 

 

Net cash from operating activities – continuing

(456)

(724)

 

 

 

 

 

Net income from continuing operations

119

65

(45%)

Net income from discontinued operations

134

–

 

Net income attributable to shareholders

253

65

 

Earnings per share from total operations (in €)

1.00

0.28

 

Earnings per share from continuing operations (in €)

0.47

0.28

40%

Adjusted earnings per share from continuing operations (in €)

0.35

0.46

30%