Akzo can't hold it anymore! Over 1,300 layoffs!

Recently, Akzo Nobel (hereinafter referred to as the "Company") released its 2020 first half and second quarter performance reports on its official website. According to the report, Akzo Nobel achieved sales of 4.045 billion euros in the first half of the year due to the epidemic, a year-on-year decrease of 13%; at a constant exchange rate, it decreased by 11%, the positive price/product mix increased by 2%, and sales volume fell by 12%. ; Adjusted EBITDA was 623 million euros, down 3% year-on-year; operating profit was 394 million euros, down 6% year-on-year. Net profit from continuing operations was 244 million euros, a year-on-year decrease of 13%. Net profit attributable to shareholders was 243 million euros, a year-on-year decrease of 18%.

In the second quarter of 2020, sales reached 1.987 billion euros, a year-on-year decrease of 19%; a decrease of 17% at a fixed exchange rate, which was mainly due to the impact of the new crown pneumonia epidemic. Adjusted operating profit was 238 million euros, down 22% year-on-year; operating profit was 207 million euros, down 33% year-on-year; net profit attributable to shareholders was 129 million euros, down 44.16% year-on-year.

Akzo Nobel CEO Thierry Vanlancker said:
"Despite the continued weakness in market demand in the second quarter, under the continuous promotion of profit margin management and cost control, our return on sales rose by 30 basis points to 14%. All employees of the company continue to focus on providing customers with quality I am extremely proud of providing services, enhancing the resilience of performance, and providing help to communities affected by the epidemic. In the face of the uncertainties brought by the new coronavirus pneumonia epidemic, we have promoted a strict cash management system and strong We will strive to improve performance and give full play to the role of industry leader."

Situation in the first half of 2020

In the first half of 2020, Akzo Nobel's decorative coatings business sales revenue was 1.653 billion euros (2019: 1.833 billion euros), a year-on-year decrease of 10%; adjusted operating income increased to 239 million euros (2019: 196 million euros). An increase of 22% over the same period last year.

The sales revenue of the high-performance coatings business was 2.381 billion euros, a year-on-year decrease of 14% and a decrease of 13% at a constant exchange rate. Sales revenue was positively affected by 2% price/product mix, while sales volume fell by 15%, mainly due to the impact of the new crown pneumonia epidemic on end market demand. Operating profit of this business was 293 million euros, a year-on-year decrease of 13%.

In the first half of 2020, the sales revenue of decorative coatings in Asia for the first half of 2020 was 381 million euros, a year-on-year decrease of 27%, and a decrease of 27% at a constant exchange rate. Due to the impact of the new crown pneumonia epidemic at the beginning of the year, sales in China declined and then returned to previous levels. The market chaos caused by the epidemic affected many countries in Asia in the second quarter, especially India.

The sales revenue of powder coatings, marine and protective coatings, automotive and special coatings, and industrial coatings were 514 million euros, 547 million euros, 536 million euros, and 784 million euros, respectively, representing a year-on-year decrease of 16%, 14%, 19%, 9%.

Situation in the second quarter of 2020

Akzo Nobel’s sales revenue for the second quarter of 2020 was 1.987 billion euros, a year-on-year decrease of 19%, and a decrease of 17% at a constant exchange rate. This was mainly due to the impact of the new crown pneumonia epidemic. Adjusted operating profit was 238 million euros, down 22% year-on-year; operating profit was 207 million euros, down 33% year-on-year; net profit attributable to shareholders was 129 million euros, down 44.16% year-on-year.

The sales revenue of the decorative coatings business was 899 million euros, a year-on-year decrease of 10%, and a decrease of 6% at a constant exchange rate. This was mainly due to the impact of the new crown pneumonia epidemic: demand in Europe and China rebounded strongly and returned to the previous level. Other regions continued to be affected for most of the quarter.

In the second quarter of 2020, the sales revenue of decorative coatings in Asia was 203 million euros, a year-on-year decrease of 29% and a decrease of 27% at a constant exchange rate. South Asia is most affected by the new crown pneumonia epidemic. By the end of the second quarter, demand in China and Vietnam had almost returned to the previous level, and various degrees of blockade caused market disruption, especially in India.

1300 personnel reduction in half a year

The semi-annual report shows that the adjusted earnings per share from continuing operations was 1.51 euros, an increase of 8% year-on-year. As of June 30, 2020, net debt was 1.683 billion euros (2019: 62 million euros), mainly due to the stock repurchase program and dividends paid. In addition, as of the end of the second quarter of 2020, the group has 33,200 employees, a year-on-year decrease of 1,300 people from 34,500 at the end of the second quarter of last year.