Akzo Nobel missed Q2 Ebitda estimates as decorative paint volumes slid 4% in Europe. The paintmaker held full-year guidance near €1.5-1.6 billion despite margin compression from higher raw material costs.
Alpha Score of 35 reflects weak overall profile with weak momentum, poor value, moderate quality, moderate sentiment.
Akzo Nobel's second-quarter profit missed expectations, the company said Tuesday, as weak demand in its decorative paints business and higher raw material costs squeezed margins.
The Dutch paintmaker reported adjusted earnings before interest, taxes, depreciation and amortization of €348 million for the three months through June, below the €362 million consensus estimate compiled by the company. Revenue fell 1% to €2.69 billion, dragged lower by a 4% drop in decorative paints volumes in Europe, the Middle East and Africa.
"The market environment remained challenging, particularly in our decorative paints segment in Europe," Chief Executive Gregoire Poux-Guillaume said on the call. He pointed to cautious consumer spending and destocking by retailers as headwinds.
The company's industrial activities division, which supplies coatings for cars and packaging, also faced pressure. Volumes there fell 2% from a year earlier as auto production slowed across key markets.
Akzo Nobel maintained its full-year guidance for adjusted Ebitda of roughly €1.5 billion to €1.6 billion, a target the company first set in February. Operating margins came in at 9.8% for the quarter, down from 10.7% a year ago, as input costs for titanium dioxide and other pigments rose.
Shares in Amsterdam-listed Akzo Nobel fell 4.2% in morning trading following the release. The stock has lost roughly a fifth of its value over the past 12 months as higher interest rates weighed on construction activity and renovation demand across Europe.
The company said its cost-saving programme, which targets €250 million in annual savings by the end of 2027, remains on track. Poux-Guillaume declined to give a more specific timeline for a recovery in decorative paint volumes, saying only that the company expects a "gradual improvement" in the second half as destocking cycles end.
Akzo Nobel's powder coatings division was a relative bright spot, with volumes up 3%, driven by demand from the data-center and renewable-energy sectors. The segment now accounts for about 15% of group revenue, the company said.
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