AkzoNobel’s financial results for Q1 2023 show the company increased revenue by five per cent (eight per cent in constant currencies). Pricing rose seven per cent, more than offsetting increased raw material and freight costs although volumes dropped three per cent, with Europe showing resilience and China rebounding.
Operating income was €182 million (2022: €232 million), adjusted operating income was €218 million (2022: €230 million) and return on sales was 8.2 per cent (2022: 9.1 per cent). Net cash from operating activities was negative €50 million (2022: negative €102 million).
“In the first quarter of 2023, our key markets proved to be resilient despite unfavourable macroeconomic conditions,” said Greg Poux-Guillaume, CEO of AkzoNobel. “We delivered higher volumes than expected with healthy pricing dynamics, leading to further margin expansion.
“We were able to achieve a strong sequential improvement in profitability based on solid margin management, better than anticipated volumes in Europe, and rebound in China, benefiting both Paints and Coatings.”
AkzoNobel said it 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 anticipated to mitigate ongoing pressure from inflation in operating expenses for 2023. AkzoNobel expects declining raw material costs to have a favourable impact on profitability. Based on current market conditions, the company targets to deliver €1.2 billion to €1.5 billion adjusted EBITDA.