Sales were down 4% compared to last year, but up 3% in constant currencies. Company increases financial guidance for full year.
Akzo Nobel N.V. (AKZA; AKZOY) reported revenue of €2.741 billion ($3.023 billion) in the second quarter, down 4% on unfavorable exchange rates but up 3% in constant currencies compared to the second quarter of 2022. According to the company, pricing was up 5%, but volumes were 1% lower during the quarter.
Operating income for the quarter was up 36% at €279 million ($307.75 million) compared to €205 million) in 2022. The company reported adjusted earnings before interest, taxes, depreciation and amortization of €702 million in the first half of 2023.
AkzoNobel CEO, Greg Poux-Guillaume, said, “Our Q2 results are in line with expectations despite volatile markets and complete a solid first half of 2023. In Q2, we achieved year-on-year profit growth driven by resilient volumes, robust pricing and the first effects of raw material deflation. This helped us offset headwinds from continuing softness in some markets and from adverse currency impact and persistent inflation. Our results provide a solid foundation and allow us to increase our full-year guidance. We’re on the right path – in markets that will continue to be impacted by macro-economic uncertainties.”
The company updated its financial guidance for the full year. AkzoNobel expects the ongoing macro-economic uncertainties to continue and weigh on organic volume growth. The company will focus on margin management, cost reduction, working capital normalization and de-leveraging.
Cost reduction programs are expected to partly mitigate higher than expected inflationary pressure on operating expenses for 2023. AkzoNobel expects declining raw material costs to have a favorable impact on profitability. Based on current market conditions, AkzoNobel targets to deliver €1.40 to €1.55 billion adjusted EBITDA.
The company noted in its financial release that it received approval during the quarter to supply the full water-based Sikkens range of refinish products to Porsche China, playing an important role in helping Porsche China to meet the country’s strict VOC regulation.