AkzoNobel responds to market disruption caused by Covid-19
AkzoNobel has paused key parts of the company’s transformation and is suspending its 2020 financial ambition in response to significant market disruption resulting from the Covid-19 pandemic. Once markets normalise, AkzoNobel intends to resume its momentum and drive performance in line with industry frontrunners.
AkzoNobel has reported that it is taking maximum precautions to ensure the safety and well-being of its employees, while also taking all reasonable steps to sustain business operations and continue serving its customers. In affected countries and regions, AkzoNobel employees are working remotely if their job roles allow.
As the situation continues to evolve, the company is constantly adapting its actions.
AkzoNobel’s CEO, Thierry Vanlancker, commented: “Headwinds related to Covid-19, including unpredictable and lower end market demand as well as various measures impacting our business operations, are increasing for most parts of the world and will have a significant impact during Q2. In China, activity is gradually returning to normal after being significantly impacted in Q1.
“The supply and demand balance and regulatory situation are complex, constantly evolving, and differs per region and segment. There is currently little reliable visibility on the second quarter, however we expect end market demand to be significantly below any of our previous expectations.
“We’re closely monitoring the pandemic situation and taking all necessary measures, including steps to rapidly reduce costs and carefully manage cash flows in the short-term. The significant market disruption forces us to pause key parts of our transformation and hence to suspend our 2020 financial ambition. Once markets normalise, we remain eager and passionate to resume our Winning together: 15 by 20 momentum to drive AkzoNobel’s performance in line with industry frontrunners.”
At December 31, 2019, AkzoNobel’s net cash and cash equivalents were EU€1.2 billion ($1.3bn) (and financial leverage was 0.7x net debt/EBITDA. The company has a €1.3bn ($1.4bn) unutilised revolving credit facility with a maturity of 2025. The next bond maturity is €750 million ($821m) in July 2022.
Financial results for the first quarter 2020 will be announced on 22 April 2020. AkzoNobel will hold its Annual General Meeting of shareholders on April 23, 2020. Given the circumstances, AkzoNobel has strongly encouraged its shareholders to exercise their voting rights via proxy or to attend and vote virtually.
