Dulux parent reports that sales to date meet expectations but that results in Q2 are likely to be adversely impacted by challenging trading conditions and the rising costs of raw materials.
The paint firm issued a trading update ahead of its full results, revealing that its recent performance has continued to be impacted by further raw material price inflation in Q2 and, as a result, margins are expected to be flat, compared with Q1. Akzo estimates that raw material prices are around 20% higher year-on-year.

What the firm describes as "continued softness of demand" in its mature markets, including the UK, also played a part, with a Q2 EBITDA of around €550m now expected.

Akzo predicts full-year 2011 EBITDA to be at least in line with the prior year, assuming there is no further deterioration in the economic climate.

Akzo ceo Hans Wijers said: "We are on track in terms of our medium-term growth ambitions. Our revenues in the first half will illustrate this as they are expected to be ahead of our full-year guidance, driven by positive price and volume development."

He added: "Ongoing actions to mitigate raw material price inflation, company-wide cost containment actions, our continuing successful progress in turning around the performance of US Decorative Paints and continued encouraging growth in high growth markets, will all help mitigate the weaker-than-expected market conditions."