AkzoNobel rebound continues in the third quarter with solid profit growth and robust cash generation

Highlights Q3 2023 (compared with Q3 2022) 

• Revenue in constant currencies up 5% on pricing, despite flat volumes; reported revenue 4% down on unfavorable exchange rates  
• Operating income improved to €354 million (2022: €168 million) 
• Adjusted operating income at €324 million (2022: €184 million); ROS 11.8% (2022: 6.4%) 
• Net cash from operating activities positive €297 million (2022: €126 million) 
• Net debt to EBITDA leverage ratio improved sequentially to 3.2x  

AkzoNobel CEO, Greg Poux-Guillaume, commented: “Our third quarter results show a solid rebound in profit and continued improvement of our margins, despite an adverse currency impact. While volumes were flat, we are increasingly benefitting from the easing of raw material costs. Higher profits and improving working capital management both contributed to a leverage ratio of 3.2, which keeps us on track to meet our year-end guidance.” 

2023 Outlook

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 around €1.45 billion adjusted EBITDA.  

Leverage guidance remains unchanged at less than 3 times net debt/EBITDA by the end of 2023, excluding the Kansai Paint Africa acquisition which is not expected to close before year end.