Dulux maker AkzoNobel misses Q3 forecasts as demand weakens in China

AkzoNobel missed expectations for third-quarter sales and core profit on Wednesday, hit by weak consumer demand and lower pricing in China, and as the Dulux paints maker continued to implement its cost-cutting plan.
 

"Our business in China is doing really well on the industrial side and it is doing pretty badly on the consumer side," finance chief Maarten de Vries said during a press call.
 

The Dutch company, which sells decorative paints to consumers and professionals and specialised coatings used by many industries, said quarterly organic sales fell 11 per cent in Asia largely due to competitive pricing in China.
 

 

AkzoNobel has been focused on cutting costs as the wider industry faces a patchy recovery from a post-pandemic slowdown when raw material costs rose and the decorative do-it-yourself market sought to reduce inventory.
 

"We've seen in the in the first and second quarter quite an impact specifically from wage inflation in our costs," de Vries said. He added the costs had come down sequentially in the in the third quarter.
 

Akzo's operating income dropped 27 per cent in the quarter, hit by higher operating and restructuring related costs, it said in a statement.
 

Its third-quarter revenue fell 3 per cent from a year earlier to 2.67 billion euros ($2.88 billion), below the 2.76 billion euros expected by analysts in a company-provided consensus.
 

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 4.8 per cent to 394 million euros, missing expectations of 404 million euros.
 

The Amsterdam-listed group said it expected its adjusted EBITDA to reach 1.5 billion euros this year, at the bottom of its earlier forecast range and in line with analysts' full-year expectations.

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