Dulux maker AkzoNobel says it plans to slash its costs quicker

City A.M. Reporter
THE NEW chief executive of Dutch paints and chemicals group AkzoNobel said yesterday it plans to speed up cost-cutting and focus on improving returns and cash generation over the next three years.

The firm, best known for its Dulux brand, is aiming for a return on sales of nine per cent, return on investment of 14 per cent by the end of 2015, and to trim its debt to earnings ratio.

The firm yesterday reported fourth-quarter Ebitda of €363m (£316.9m), slightly up from a year ago, and a quarterly net loss of €59m, on revenue of €3.67bn.

AkzoNobel’s results over recent quarters have been hit by fragile consumer demand and weak housing markets in the United States and Europe, as well as high costs for raw materials such as titanium dioxide, a pigment used in paint.

In the last six months, it has taken a huge writedown on its purchase of Dulux paint maker ICI and sold its struggling North American decorative paints arm to US rival PPG Industries for $1.1bn to focus on its larger European and faster-growing businesses.

Ton Buechner, who took over from Hans Wijers as chief executive in April 2012, had originally planned to outline his strategy alongside the third-quarter results last year, but had to postpone the announcement when he went on medical leave.

“AkzoNobel’s new financial targets are designed to drive operational excellence, cash generation and accountability and demonstrate a clear focus on creating value for shareholders,” the company said in a statement.