On Tuesday, AkzoNobel provided a third quarter update as high macro-economic uncertainty, especially in Europe and China, led to near historical low consumer confidence. The company said that in anticipation, customers and channel partners in the paints and coatings industry are proactively destocking in these regions.
According to the company, adjusted operating income is now expected to be in the range of €195 million ($190.6 million) to €215 million ($210.2 million) compared to the 2021 result of €241 million, excluding a retroactive impact from hyperinflation accounting regarding Turkey.
The company also addressed demand, inflation and material supply issues in the update stating, “Current demand trends are expected to continue in Q4, whilst benefits will come from the company’s own initiatives to reduce costs, improve working capital and ongoing pricing initiatives. While Q3 will see the highest raw material cost impact since the inflation cycle started early 2021, pricing will continue to offset raw material and freight inflation. Overall raw material supply is normalizing and raw material prices are starting to soften broadly.”
The company will report its third quarter results on October 20.