AkzoNobel’s second quarter results deliver on expectations with resilient volumes, profits up and a strong free cash flow; guidance increased

25 July 2023

Highlights Q2 2023 (compared with Q2 2022)

• Revenue 4% down on unfavourable exchange rates, 3% up in constant currencies

• Pricing up 5%, volumes 1% lower

• Operating income up 36% at €279M (2022: €205M)

• Adjusted operating income2 up 25% at €311M; ROS3 11.3% (2022: €249M and 8.7%)

• Net cash from operating activities positive €305M (2022: negative €52M)

AkzoNobel CEO, Greg Poux-Guillaume (pictured), commented: “Our Q2 results are in line with expectations despite volatile markets and complete a solid first half of 2023. 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.”

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2023 Outlook*

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. AkzoNobel expects declining raw material costs to have a favorable impact on profitability.

Based on current market conditions, AkzoNobel targets to deliver €1.40 to €1.55bn adjusted EBITDA.

The company aims to lower its leverage ratio to less than 3.4 times net debt/EBITDA, including the impact of the Kansai Paint Africa acquisition, by the end of 2023 and return to around 2 times post-2023.

*Outlook is based on organic volumes and constant currencies and assumes no significant market disruptions.

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