AkzoNobel says its financial results for the second quarter of 2023 deliver on expectations, showing resilient volumes, increased profits, and strong free cash flow.
Net cash from operating activities was €305 million compared to negative €52 million in Q2 2022. Revenue was €2.741 billion – four per cent down on unfavourable exchange rates but three per cent up in constant currencies. Pricing increased five per cent and volumes fell one per cent.
Operating income grew 36 per cent to €279 million, adjusted operating income rose 25 per cent to €311 million, and return on sales (ROS) was 11.3 per cent compared to 8.7 per cent in Q2 2022.
“Our Q2 results are in line with expectations, despite volatile markets, and complete a solid first half of 2023, said Greg Poux-Guillaume, CEO of AkzoNobel. 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.”
Looking ahead, 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 normalisation, and de-leveraging.
Cost reduction programmes are expected to partly mitigate higher than expected inflationary pressure on operating expenses for 2023, with the company expecting declining raw material costs to have a favourable impact on profitability. Based on current market conditions, the company aims to deliver €1.40 billion to €1.55 billion adjusted EBITDA.