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AkzoNobel’s 2010: ‘New Strategy’ Yields 12% Growth

Thursday, February 17, 2011

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Akzo Nobel N.V. (AkzoNobel) reported strong gains in sales and earnings for 2010, with revenue advancing 12% from 2009, to €14.6 billion ($19.85 billion). Net income was €754 million ($1.025 billion), up sharply from €285 million in 2009.

For the fourth quarter, the company reported revenue of €3.6 billion ($4.9 billion), a 17% increase from the fourth quarter of 2009. Net income for the quarter was €162 million ($220 million), a swing from a net loss of €60 million for the prior-year period.

Key developments for the company’s architectural-coatings segment included a supply-contract deal with Walmart in the U.S. that will make Akzo Nobel the primary paint supplier to more than 3,500 Walmart stores. That agreement, combined with a “successful relaunch” of the Glidden brand, helped to boost the brand’s market share in 2010, the company said.

Akzo Nobel: Full-year 2010 in € million

AkzoNobel

Hans Wijers, chairman and CEO, said the company’s financial performance for 2010 “marks the first year of delivery of our new strategy. All business areas have reported strong revenue growth, increased profitability, improved sustainability performance, and higher returns on invested capital.

Hans Wijers

“AkzoNobel’s revenue in high growth markets, currently representing around 40% of our total, grew more than 20%, outperforming the market in 2010. In our mature markets, revenue increased close to 10%, further evidence that our medium-term growth plans are on track.”

For 2011, Wijers said the company “expects to make further progress on its medium-term strategic ambitions. The company is aiming for more than 5% revenue and EBITDA growth in 2011.”

Asia Sets Pace for Decorative Paints

For the company’s Decorative Paints business, revenue for the year was €4.97 billion, a 9% increase from €4.57 billion in 2009. Earnings before interest, taxes, depreciation and amortization (EBITDA) was €548 million, up 13% from €487 million in 2009.

Regionally, the strongest Decorative Paints sales increase for 2010 was reported for Asia, where revenue rose 33%, to €841 billion. Decorative Paints revenue in Europe rose 2%, to €2.6 billion; in North America, revenue was up 9%, to €1.5 billion.

For the fourth quarter, Decorative Paints revenue was €1.14 billion, an 11% increase from €1.02 billion for the fourth quarter of 2009. Decorative Paints EBITDA for the quarter declined 10%, to €63 million from €70 million in 2009.

In comments on the performance of the Decorative Paints results, the company said demand in high-growth markets “showed a robust recovery in 2010 after a challenging 2009. Our growth strategy of investing in brands, distribution and people, and expanding into mid-tier markets in high-growth regions is progressing well.”

Decorative Paints demand declined in most “mature” markets during the year, except for the UK ”where we continued to strengthen the Dulux market position and gained share in the trade segment,” the company said.

The U.S. Decorative Paints business “marked a key milestone in our turnaround strategy by securing a supply contract with Walmart,” the company said, adding that the deal makes it “the primary paint supplier to more than 3,500 Walmart stores.” As a result of the agreement, the company said it will develop and manufacture a portfolio of interior and exterior paints under the Glidden and Walmart Colorplace brands.

The company added that a “successful relaunch of our Glidden brand also resulted in a higher Glidden market share in 2010.”

Performance Coatings: Revenue up 16%

For the company’s Performance Coatings business, revenue for the year was €4.8 billion, up 16% from €4.1 billion in 2009. EBITDA for the year rose 9%, to €647 million from €594 million in 2009. Turning in the strongest revenue increases were powder coatings (+40%) and industrial coatings (+22%), followed by car refinishes (+14%), wood finishes and adhesives (+13%), and marine and protective coatings (+7%).

   

Tagged categories: AkzoNobel; Coatings manufacturers; Earnings reports; Economy; Finance

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