AkzoNobel swings to net loss of €60 in Q4 from year-ago period's profit of €179M on revenues of €3.78B, up 4%; results reflect rapid price increases for most raw materials, ongoing economic headwinds in many major markets
February 16, 2012
– 2011 revenue up 7 percent to €15.7 billion, driven mainly by pricing actions
Weaker end markets and cost inflation impacted results
2011 EBITDA 9 percent lower at €1.8 billion
Net income from continuing operations €469 million (2010: €664 million)
Adjusted EPS €2.91 (2010: €3.71)
Total dividend for 2011: increase to €1.45 proposed (2010: €1.40)
Performance improvement program on track
Economic environment and certain raw materials remain key sensitivities in 2012
Outlook for 2012 and medium-term ambitions
AkzoNobel aspires to be the world's leading coatings and specialty chemicals company. The medium-term ambitions are to grow to €20 billion in revenue, increase EBITDA each year while maintaining a 13 to 15 percent margin, reduce OWC percent of revenue year-on-year by 0.5 percent towards a 12 percent level, and pay a stable to rising dividend.
The sustainability ambitions are to remain a top three leader in our industry, to be top quartile in our peer group in terms of safety performance, diversity, employee engagement and development, and eco-efficiency improvement rates.
During 2011 the business faced many challenges, most notably the rapid price increases that affected most of our raw materials and the continuing economic headwinds in many of our major markets.
For the year ahead, the company expects to see the full-year benefit of the price rises that have been achieved so far, and which have now offset most of the raw material price increases. Currently, AkzoNobel is experiencing greater price stability in most raw materials, with the exception of TiO2, which is to continue to rise in price, and for which plans are in place to pass through further price rises in the future. In addition, the company is implementing its performance improvement program, which should bring significant benefits in 2012 and beyond, underpinning margins. As a result, close to 800 employees have been made redundant.
The major uncertainty remains the economic environment. The concerns are focused on the risk of recession in Europe, delayed recovery of the US property market and the potential for a slowdown in China. Each of these can have a significant impact on customers in these regions that would in turn impact AkzoNobel's sales volumes. These, together with certain raw materials, remain the key sensitivities in 2012.
AkzoNobel has a strong portfolio of complementary businesses, with many leading market positions and exposure to high growth markets. This, combined with ongoing management actions, means that the company is confident of delivering medium-term growth in line with its strategic ambitions.