Citation
(2006), "Akzo Nobel reports substantially higher Q1 revenues and operational earnings, led by Coatings", Pigment & Resin Technology, Vol. 35 No. 5. https://doi.org/10.1108/prt.2006.12935eab.011
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited
Akzo Nobel reports substantially higher Q1 revenues and operational earnings, led by Coatings
Akzo Nobel reports substantially higher Q1 revenues and operational earnings, led by Coatings
Highlights:
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Revenues up 12 percent, operating income excluding incidentals up 21 percent.
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Organon – continued strong growth, increasing pipeline and marketing expenditures.
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Intervet – record quarterly sales, steady profitable growth.
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Coatings – excellent growth, sharp EBIT margin increase.
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Chemicals – strong start to the year, progress on divestments.
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Strong financial position.
Arnhem, The Netherlands, April 20, 2006 – Akzo Nobel (Euronext Amsterdam: AKZ; Nasdaq: AKZOY) reported substantially higher revenues and operational earnings for the first quarter of 2006, driven by a strong start to the year in all businesses, particularly Coatings.
Net income was down 13 percent to 249 million compared with the same period last year due to incidentals. Excluding incidentals, net income rose 39 percent from 155 million to 215 million.
Commenting on the company's performance, CFO Rob Frohn said: “Our first quarter performance was very strong as we continued to deliver on growth. All units contributed to the 12 percent increase in revenues, with continued top line growth at Organon, record sales at Intervet, excellent Coatings volumes and a strong start to the year at Chemicals.”
He added that operational earnings excluding incidentals grew 21 percent, driven by strong margin recovery at Coatings and a robust profit performance at Intervet and Chemicals. Organon's operating income, excluding incidentals, was slightly lower due to significantly increased pipeline and marketing expenditures to support future growth.
“Coatings performed particularly well during the quarter with the industrial activities achieving substantial earnings growth and considerably improved margins,” continued Frohn. “In April, we announced an offer for Sico Inc., Canada's leading coatings company, to further strengthen our global leadership in Coatings.”
“Chemicals earnings improved in spite of increasing energy prices. Coupled with Intervet's record quarterly performance and continued strong growth at Organon, it's been a great start to the year. Assuming current economic conditions continue, I expect this positive trend will be maintained.”
First quarter revenues for 2006 increased 12 percent to 3.4 billion, on autonomous growth of 8 and 4 percent favorable currency effects. Operating income excluding incidentals increased Akzo Nobel nv Velperweg 76 P.O. Box 9300 6800 SB Arnhem, The Netherlands, Tel: +31 26 366 43 43; Fax: +31 26 366 49 40, 21 percent to e332 million, representing a 9.8 percent margin compared with 9.0 percent in the same period last year. Both operating income (375 million, down 11 percent) and net income (249 million, down 13 percent) including incidentals were below the first quarter last year, as net incidentals gains were lower. These incidentals – restructuring and impairment charges (42 million), costs relating to environmental and antitrust cases (43 million), and divestment gains (128 million) – resulted in a net gain of e43 million in this quarter. This figure compares with a e145 million net gain in Q1 2005, resulting mainly from the special benefit for the termination of the Risperdal® co-promotion. Earnings per share were e0.87 compared with e1.00 in the prior period.