AkzoNobel confirms revenue development year-to-date met expectations, but Q2 results will be hit by challenging trading conditions, raw material price inflation
June 27, 2011
– As part of its ongoing communications with its key stakeholders, Akzo Nobel N.V. (“AkzoNobel”) today provides a trading update.
AkzoNobel confirms that revenue development year-to-date has met the company’s expectations, but that results for the second quarter will be adversely impacted by ongoing challenging trading conditions and one-off factors.
Recent performance has continued to be impacted by further raw material price inflation in Q2 and, as a result, sequential second quarter contribution margins are expected to be flat compared with Q1. Year-on-year raw material prices are estimated to be around 20 percent higher.
In addition, continued softness of demand in our mature markets and prolonged maintenance stops within Specialty Chemicals will also impact results in the second quarter. These factors lead to an expected second quarter EBITDA of around €550 million.
AkzoNobel expects full-year 2011 EBITDA to be at least in line with the prior year, assuming no further deterioration in economic conditions.
CEO Hans Wijers commented: “We are on track in terms of our medium-term growth ambitions. Our revenues for the first half will illustrate this as they are expected to be ahead of full-year guidance, driven by positive price and volume development.
“Ongoing actions to mitigate raw material price inflation, company-wide cost containment actions, our continuing successful progress in turning around the performance of US Decorative Paints and continued encouraging growth in high growth markets, will all help mitigate the weaker-than-expected market conditions.”