Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on AKZO NOBEL. We currently have 6 research reports from 1 professional analysts.
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Weak pricing power (cont’d)
19 Oct 16
Akzo reported 4% lower sales, down to €3,600m, facing a lower price/mix (-2%), whereas the gross profit margin improved 1pp to 42.7% in Q3. EBITDA came in pretty much unchanged at €594m (€590m) and net income attributable to shareholders stood unchanged at €285m. Operating CF moved slightly up to €600m (€583m), helped by a stronger NWC inflow and more positive other changes, but partly eaten up more negative changes in provisions. Investing CF (€-114m after €-143m) benefited from lower capex (-21% to €-128m). Despite higher dividend payments (€-22m after €-10m), financing CF moved from €-277m to €-106m lifted by lower net gross debt repayments (€-78m after €-267m). Management continued to give no detailed guidance but sees itself in a position to confirm the group’s financial guidance 2016-18 (ROS: 9-11%; ROI: 13-16.5%).
Covering Paints and Coatings
19 Jul 16
Akzo’s sales weakened by 6% (v: +1%; p: -2%; FX: -5%) to €3,711m in Q2, but the gross profit margin strongly improved from 41.4% to 43.6%. EBITDA was up +5% to €642m, whereas net profit attributable to shareholders declined 6% to €312m. Operating CF was up (+11% to €453m) primarily helped by lower changes in provisions. Investing CF strongly rose from €-37m to €-110m, suffering from higher capex and lower divestment results. Despite higher dividend payments (€-226m after €-184m), financing CF came in at €-192m after €-361m fuelled by a swing in borrowings from net repayments to net proceeds. Management continued to give guidance, but it expects some uncertainties in the company’s markets triggered by challenging conditions in several countries and segments.
Not a good start to 2016, but profitability is resilient
19 Apr 16
Continued operations’ sales declined by 4% (organic: 0%) to €3,430m, but gross profit margin improved from 40.2% to 41.5% in Q1. EBITDA increased +5% to €487m and net profit attributable to shareholders jumped +50% to €240m. Operating CF moved from €-622m to €-336m, strongly benefiting from a lower NWC outflow and lower provisions. Capex stood unchanged at €-124m and investing CF came in at €-120m (€-131m). Financing CF swung from €-35m to €256m, driven by a net gross debt inflow after an outflow. Management failed to give guidance, but expects some uncertainties in the company’s markets triggered by challenging conditions in several countries and segments.
Non-business measures propelled profitability
10 Feb 16
Akzo Nobel lifted FY sales by +4% to €14,859m, primarily driven by favourable FX tailwinds (+6%) and the gross profit margin improved from 39.3% to 40.9%. EBITDA strongly climbed 24% to €2,088m with respective margin seen at 14.1% (11.8%). Net income attributable to shareholders jumped +79% to €979m. Operating CF strongly rose +40% to €1,136m, reflecting the higher operating performance and the swing in other changes despite the higher outflow for provisions. Investing CF saw a small change (€-508m after €-529m) primarily due to lower capex. Financing CF (€-972m after €-635m) was hit by higher net gross debt repayments (€-689m after €-367m). 2015 targets (ROS: 9%; ROI: of 14%; net debt/EBITDA ratio: <2.0x) have been reached (ROS: 10.6%; ROI: 15.0%; net debt/EBITDA: 0.6x) based on the company’s calculation. Management proposes a 2015 final dividend of €1.20 bringing the total 2015 dividend up to €1.55 (€1.45). For 2016, management failed to give clear guidance, but expects a challenging year with difficult market conditions in Brazil, China and Russia. Europe is expected to stay at current levels. The anuual report will be published within the next few weeks.
Performance Coatings' strong profitability push
22 Oct 15
Sales were up +2% to €3,760m and the gross profit margin improved from 40.0% to 41.9% in Q3. EBITDA strongly rose +21% to €590m and net profit attributable to shareholders jumped +39% to €285m. Q3’s operating CF was up +19% to €583m, benefiting from the better operating performance and additionally helped by a higher NWC inflow. Due to higher capex (€163m after €-137m), investing CF came in at €-143m (€-129m). Helped by lower net gross debt repayments (-€267m after €-277m) and lower dividends, financing CF moved from €-296m to €-277m. Management again confirmed delivery of 2015 targets. As a reminder, AkzoNobel aims for a ROS of 9%, a ROI of 14% and a net debt/EBITDA ratio below 2.0x.
Humble organic performance, but increasing profitability
21 Jul 15
Q2 sales were clearly fuelled by favourable FX developments (+9%), bringing sales up +6% to €3,949m. The gross profit margin jumped from 40.0% to 46.5% and EBITDA strongly rose by +32% to €610m. Net profit attributable to shareholders soared up from €205m to €331m. Q2 operating CF moved up just tiny blip (+€14m to €407m,) dampened by higher NWC outflow, higher provisions (ICI pension funds) and lower other changes. Investing CF came in at €-37m (€-147m) clearly helped by €114m in net proceeds from the Paper Chemicals divestment. Financing CF saw higher net gross debt repayments (€-175m after €-22m) bringing outflow from €-197m to €-361m. Management confirmed delivering its 2015 targets. As a reminder, AkzoNobel aims for a ROS of 9%, ROI of 14% and a net debt/EBITDA ratio below 2.0x.
Innovate, specialise, integrate, globalise
01 Dec 16
Carclo has refocused investment in its established businesses (Technical Plastics and LED Technologies), where a differentiated offer and long-term relationships with customers provide good earnings visibility and more certainty of a return. This strategy delivered strong revenue and profits growth during H117. This growth appears set to continue, underpinned by long-term relationships with blue-chip customers. We leave our estimates and indicative valuation broadly unchanged and introduce our estimates for FY19.
30 Nov 16
Results have yet again beaten our forecasts and the management has now delivered the fourth consecutive year of earnings above expectations. The share price is up 41% over the last three months, and Treatt is steadily moving from commoditised sales to more value-added products. Its strategy of deep customer relationships is paying off, giving it a real competitive advantage and improving margins. The year finished strongly and momentum is due to continue in the traditionally seasonally weaker Q117. Our P&L forecasts are broadly maintained, but our fair value moves to 272p (from 240p) as a result of stronger cash flow.
Small Cap Breakfast
29 Nov 16
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.
N+1 Singer - Morning Song 06-12-2016
06 Dec 16
With FY16 volume and revenue already disclosed in the pre-close, the focus in today’s prelims is on PBT (£100.3m versus our £101m) and EPS (96.8p versus our 95.4p). No special dividend triggered this year (none forecast) and DPS is held at 46.8p (N1SE: 48.0p). On end markets, recent commentary is reiterated – the core business is growing, whilst consumer electronics will be subdued in the current year (competitive capacity from Solvay). On currency, there will be a material benefit in the current year (a little more than the £14m to £15m previously indicated), and a further tailwind next year if current rates are maintained (quantum TBC). There is also an investment of £10m today in a minority interest in Magma Global, Victrex’ oil and gas mega programme partner. Although the share price is now close to our TP of 1730p, we feel that there is enough in today’s announcement to retain a positive stance on medium term opportunities with strong cashflow and a special dividend potentially to look forward to in the current year.