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AkzoNobel has released its 2017 financial results.
Akzo Nobel CEO, Thierry Vanlancker, pictured, commented: "In 2017 we delivered another year of increased EBIT with revenue growth for all Business Areas, driven by a combination of higher volumes and bolt-on acquisitions.
"We are taking various measures amongst which cost control to deal with industry-wide headwinds, including higher raw material costs and challenges for the Marine and Protective Coatings business.
"We strengthened our leading global position in performance coatings through the acquisitions of V.Powdertech business for Powder Coatings, Flexcrete Technologies Ltd. for Protective Coatings and Disa Technology (Disatech) for Specialty Coatings.
"In 2017, we opened the world’s most advanced and sustainable paint plant in Ashington, UK.
"This will be the production centre for our leading global brand, Dulux.
"Other examples of our focus on strengthening the business include a €13M investment in a new innovation hub in the UK, and the opening of a new Performance Coatings facility in Chonburi, Thailand.
"In September, we were ranked number one on the Dow Jones Sustainability Index.
"During the year, we put particular emphasis on increasing our energy efficiency, reducing material waste and continuing to deliver more eco-premium solutions for our customers.
"We are on track to create two focused, high performing businesses.
"The internal separation of the Specialty Chemicals business is complete and a full separation remains on track for April 2018.
"The transformation of AkzoNobel into a focused Paints and Coatings company is progressing well, with phase one on track to achieve €110M savings in 2018, contributing directly towards delivering the 2020 financial guidance."
Outlook AkzoNobel Paints and Coatings:
Headwinds experienced during 2017, including higher raw material costs and adverse effects from foreign currency, are projected to continue in 2018, especially during the start of the year.
The company anticipates ongoing positive developments for Decorative Paints in all regions, particularly Asia.
Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings.
AkzoNobel continues to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline.
Paints and Coatings performance in 2017
Decorative Paints revenue was up 2% (up 4% excluding currency impact) driven by strong volume growth, partly offset by adverse currencies and price/mix effects.
Volumes were up 7% overall, with growth in all regions.
Performance Coatings revenue was up 2% (up 4% excluding currency impact), mainly due to the acquired Industrial Coatings business, partly offset by adverse currencies.
Volumes 1% lower due to adverse conditions in the marine, and oil and gas industries offsetting growth in most segments and regions.
Growing the business
AkzoNobel opened a new facility in Ashington, UK, which is the world’s most advanced and sustainable paint factory.
The high tech plant is the new centre of production for Dulux, the world’s leading decorative paint brand.
In Dongguan, China, the company opened a Specialty Coatings facility dedicated to producing aerospace coatings for the North and South Asian aviation market.
This new facility will offer improved and faster service to existing, as well as new customers, in this rapidly growing market.
Acquisitions and divestments
In 2017, the company acquired the V.Powdertech business, the leading Thai manufacturer of powder coatings, which supplies a range of products for domestic appliances, furniture and general industrial applications.
The company also completed the acquisitions of Flexcrete Technologies Ltd and Disa Technology (Disatech) to further strengthen the portfolio of its Protective and Specialty Coatings business.
The full report can be viewed here.