By Anna Peverieri and Dimitri Rhodes
(Reuters) -Dulux paints maker AkzoNobel missed expectations for third-quarter sales and earnings on Wednesday, hit by weak consumer demand and lower pricing in China.
Shares in the Dutch paints-and-coatings maker fell 5.3% by 0708 GMT, the worst performer on Amsterdam’s blue chip index. They have fallen more than 19% so far this year after a string of consensus misses in recent quarters.
“Our business in China is doing really well on the industrial side and it is doing pretty badly on the consumer side,” finance chief Maarten de Vries said during a press call.
The company, which sells decorative paints to consumers and professionals and specialised coatings used by many industries, said its quarterly organic sales fell 11% in Asia largely due to competitive pricing in China.
AkzoNobel has been focused on cutting costs as the wider industry faces a patchy recovery from a post-pandemic slowdown when raw material costs rose and the decorative do-it-yourself market sought to reduce inventory.
Costs came down sequentially in the in the third quarter, after wage inflation affected them in the first six months of the year, de Vries said.
Akzo’s operating income still fell 27% compared to last year due to higher operating and restructuring related costs, it said.
Third-quarter revenue fell 3% to 2.67 billion euros ($2.88 billion), below the 2.76 billion euros expected by analysts.
Organic sales in the decorative paints business rose 1%, helped by higher pricing outside of China, but weighed down by weak China demand and flat sales in Europe and the Middle East.
Sales in the coatings division rose 2% organically, driven by growth in its Marine, Protective and Powder Coatings units.
U.S.-based rival PPG Industries last week also missed profit expectations, citing weaker demand for industrial coatings.
AkzoNobel said it expected its adjusted core profit (EBITDA) to reach 1.5 billion euros this year, at the bottom of its earlier forecast range and in line with analysts’ expectations.
Third-quarter adjusted EBITDA fell 4.8% to 394 million euros, missing consensus of 404 million.
($1 = 0.9256 euros)
(Reporting by Anna Peverieri and Dimitri Rhodes in Gdansk; editing by Milla Nissi)
