Global paints and coatings manufacturer, AkzoNobel said its EBIT revenue for the third quarter fell drastically despite volume growth and nonorganic activities.
EBIT revenue fell to EUR383 million compared to EUR442 million posted in the year before.
The company explained that result was impacted by unfavourable currencies, temporary disruption to the manufacturing and supply chain, continued headwinds for Marine and Protective Coatings and margin pressure from raw material cost inflation
The direct impact of around EUR25 million on EBIT related to Hurricane Harvey and other events.
CEO Thierry Vanlancker, commented:
“We have continued to grow our business with higher volumes and increased revenues despite challenging market conditions in selected areas of our business, especially in Marine and Protective Coatings.
“We have also initiated phase one of our transformation plan to create a fit for purpose Paints and Coatings organization which will deliver €110 million annual savings in 2018 contributing towards our 2020 financial guidance.
“EBIT for 2017 is now expected to be in line with 2016, due to adverse foreign exchange, ongoing industry specific headwinds and supply chain disruptions, including the adverse impact of Hurricane Harvey in the US.
“There continues to be significant interest in our Specialty Chemicals business and we look forward to the separation process officially kicking off in the coming weeks. We have announced several capacity expansions to accelerate growth for the business, including a €20 million investment to increase production at Sundsvall, Sweden for our Expancel expandable microspheres.”
We anticipate positive developments for EMEA (excluding the UK), North America and Asia, while Latin America is expected to stabilize.
Industry specific headwinds continue, including higher raw material prices and challenges for marine and protective coatings.
We are implementing various measures to mitigate current market challenges, including increased selling prices and additional cost control.
EBIT for 2017 is now expected to be in line with 2016, due to ongoing industry specific headwinds and supply chain disruptions.