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Sales slip by 10% at Akzo Nobel

Published: 19 February 2010
Dulux's parent company Akzo Nobel has reported a 10% decline in both sales volume and revenue for 2009.
Sales slip by 10% at Akzo Nobel
Revenue for the calendar year 2009 was €13.9bn down from €15.4bn in 2008.

Major restructuring and integration activity in took place in decorative paints in 2009 as a result of the widely publicised merger with paint giant ICI in 2008. This included the divestment of the Crown Paints brand.

Speaking specifically about the decorative paints sector, the company report said: "It proved to be a challenging year. While merging the former ICI with our own decorative paints business and building the fundamentals of the integrated organisation, we were faced with a sharp decline in demand due to the economic crisis. For the full year, volumes were down 9%, while revenue dropped 7%."

In the UK, trade sales saw double-digit declines, whereas the retail business fared slightly better driven by "high promotional activity".

However, interestingly, despite the promotional activity, both volume and revenue declined by the same amount - 10% - across the group. This is explained in part by an increase in margin from 12.5% to 12.7%.

The report claimed the recovery in the UK remained "fragile" but said that demand in Western Europe continued to improve.

This is borne out by the fact that, while revenue was down for decorative paints (Europe) by 7% from last year, a 3% revenue increase in Q4 suggests things may be on the up.

The report concluded: "The economic recovery remains uncertain, particularly in mature markets. However, Akzo Nobel remains on track to achieve its medium-term target of an EBITDA margin of 14% by the end of 2011."

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