AkzoNobel has published its financial results for first quarter 2022, revealing revenue growth of 12 per cent to €2.53 billion, driven by strong pricing which rose 17 per cent. Volumes were seven per cent lower while acquisitions added one per cent.
Return on Sales was 9.1 per cent (Q1 2021: 13.6 per cent), resulting from continued raw material and freight costs inflation, along with supply constraints. Adjusted EBITDA was €317 million, down from the Q1 2021 figure of €391 million.
The company said pricing initiatives more than offset the increase of raw material and other variable costs including freight which, combined, increased €334 million over Q1 2021.
Operating income declined 23 per cent to €232 million, while adjusted operating income was €230 million, a 25 per cent reduction compared to Q1 2021. Net cash from operating activities decreased from negative €31 million in Q1 2021 to negative €102 million in Q1 2022.
AkzoNobel CEO Thierry Vanlancker said the company continued to make good progress, with strong revenue growth in both paints and coatings in the first quarter. “Through our vigorous pricing initiatives, we are in line with the unprecedented variable cost inflation that impacted our industry during the quarter.
“I’m very proud of our organisation, and our first quarter results are proof of the ongoing hard work and commitment of all our employees.
“Although uncertainties remain with regard to, amongst others, the sanctions on Russia, the COVID-19 resurgence in China, and continued supply constraints – especially in North America – we remain confident in realising our Grow & Deliver strategy.”
AkzoNobel said it targets to grow at or above its relevant markets. Trends differ per region and segment, with raw material and other cost inflation (including freight) expected to gradually ease during the second half of 2022. The company aims to continue to offset raw material and other variable cost inflation, including freight, through pricing initiatives.
“Market uncertainties have increased due to the sanctions on Russia and the resurgence of COVID-19 in China, among others,” the company said. “Assuming there are no further significant market disruptions, AkzoNobel aims to deliver the €2 billion adjusted EBITDA target for 2023, and an average annual 50 basis points increase in return on sales over the period 2021-2023. AkzoNobel targets a leverage ratio of 1-2 times net debt / EBITDA and is committed to retaining a strong investment grade credit rating.”