Q2 2025 Akzo Nobel NV Earnings Call Transcript
Key Points
- Akzo Nobel NV (AKZOF) achieved a 60 basis point increase in EBITDA margin to 15%, reflecting pricing discipline and structural benefits from SG&A and industrial programs.
- The company generated EUR162 million of free cash flow in the quarter despite EUR49 million of cash-out related to restructuring.
- Akzo Nobel NV (AKZOF) successfully sold most of its Indian businesses at 25 times 2025 EBITDA for EUR1.4 billion, while maintaining a royalty stream for Coatings.
- The SG&A program announced last year is fully implemented, delivering over EUR150 million of recurring savings, with potential for further efficiency improvements.
- The company is on track to reduce leverage to around 2.3 times by year-end, reflecting current ForEx rates and expected deleveraging proceeds from India.
- Volumes declined by 1% year-on-year, primarily due to continued softness in the North American Coatings markets.
- Foreign exchange rates posed a significant headwind, with a 5% negative impact on revenue, resulting in a total revenue decline of 6%.
- The Turkish deco market has slowed down significantly, with volumes down double digits, impacting the company's performance in the region.
- North American refinish demand remains soft, with consumers delaying car repairs due to increased insurance premiums and reduced disposable income.
- The automotive market remains complicated, with ongoing challenges in the Powder Coatings segment due to tariff uncertainties.
Hello, everyone, and welcome to today's AkzoNobel Q2 results call. My name is Harry, and I will be your operator today. (Operator Instructions) I would now like to hand the call over to Kenny Chae, Head of Investor Relations, to begin. Please go ahead.
Thank you, Harry. Good morning, and welcome to AkzoNobel's investor update for the second quarter of 2025. I'm Kenny Chae, Head of Investor Relations. Today, our CEO, Greg Poux-Guillaume; and CFO, Maarten de Vries, will take you through our results. We'll refer to the presentation, which can be followed by webcast or download from our website at akzonobel.com.
A replay of the webcast will also be made available following the event. There will be a Q&A session after the presentation. For more information, please contact our Investor Relations team. Before we start, a reminder of our forward-looking statements disclaimer on slide 2. Please note, this also applies to the conference call and answers to your questions.
I will now hand over to Greg,
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