Our results at a glance

Q2 2019 results show continued progress towards our Winning together: 15 by 20 strategy

  • Adjusted operating income 36% higher at €305 million (2018: €225 million)
  • ROS, excluding unallocated costs, increased to 13.7% (2018: 12.1%)
  • Focus on value over volume resulted in price/mix up 5% and 6% lower volumes
  • Transformation on track and delivered €43 million cost savings
  • Acquisition of Mapaero, announced July 18, 2019, further strengthens our aerospace coatings business

Q2 2019:

  • Revenue was flat and up 1% in constant currencies, with positive price/mix of 5% and acquisitions contributing 1%, offset by 6% lower volumes
  • Adjusted operating income up 36% at €305 million (2018: €225 million, which included €20 million of one-off costs) driven by ongoing pricing initiatives and cost-saving programs; ROS at 12.4% (2018: 9.2%)
  • Operating income at €308 million includes €3 million positive impact from identified items, related to a gain on disposal following asset network optimization (€57 million) and transformation costs (€54 million); 2018 operating income at €192 million included €33 million negative identified items
  • Decorative Paints ROS up at 13.5% (2018: 12.2%); Performance Coatings ROS up at 13.6% (2018: 11.8%)
  • Adjusted EPS from continuing operations up 85% at €0.96 (2018: €0.52); EPS from total operations at €1.07 (2018: €1.06)

Half-year 2019:

  • Revenue was flat and up 1% in constant currencies, with positive price/mix of 5%, acquisitions contributing 1% and 6% lower volumes due to focus on value over volume
  • Adjusted operating income up 25% at €468 million (2018: €374 million) driven by pricing initiatives and cost savings
  • Operating income up 40% at €421 million, includes €47 million negative impact from identified items, mainly related to transformation costs and non-cash impairments partly offset by a gain on disposal following asset network optimization (2018: €300 million, including €74 million negative impact from identified items)
  • Net income from total operations at €296 million, including €16 million discontinued operations (2018: €524 million, including €298 million from discontinued operations)
  • €1.5 billion of the €2.5 billion share buyback program was completed

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 stabilize during the second half of 2019. Continued 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

Second quarter

 

January-June

2018

2019

∆%

in € millions

2018

2019

∆%

1

The statement of income, statement of cash flows and the balance sheet for 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 in Financial highlights and in Notes to the condensed consolidated financial statements.

2,446

2,451

–%

Revenue

4,622

4,636

–%

285

394

38%

Adjusted EBITDA 1

494

642

30%

252

397

58%

EBITDA 1

420

595

42%

225

305

36%

Adjusted operating income 1

374

468

25%

192

308

60%

Operating income 1

300

421

40%

9.2

12.4

 

ROS% 1

8.1

10.1

 

7.8

12.6

 

OPI margin 1

6.5

9.1

 

 

 

 

 

 

 

 

 

 

 

Average invested capital 1

6,351

6,648

 

 

 

 

ROI% 1

12.2

13.4

 

 

 

 

 

 

 

 

12.1

13.7

 

ROS% excl. unallocated costs 1

10.5

11.5

 

 

 

 

ROI% excl. unallocated costs 1

15.9

16.5

 

 

 

 

 

 

 

 

42

46

10%

Capital expenditures

79

83

5%

 

 

 

Net debt

2,887

62

 

 

 

 

Number of employees

35,000

34,500

(1%)

 

 

 

 

 

 

 

15

152

 

Net cash from operating activities – continuing

(441)

(572)

(30%)

 

 

 

 

 

 

 

107

215

101%

Net income from continuing operations

226

280

24%

164

16

 

Net income from discontinued operations

298

16

 

271

231

(15%)

Net income attributable to shareholders

524

296

(44%)

1.06

1.07

1%

Earnings per share from total operations (in €)

2.07

1.32

(36%)

0.42

1.00

138%

Earnings per share from continuing operations (in €)

0.89

1.24

39%

0.52

0.96

85%

Adjusted earnings per share from continuing operations (in €)

0.87

1.40

61%