AkzoNobel today provided an update on its business in light of the COVID-19 pandemic. The company says that the steps it took to rapidly reduce costs are proving successful, while at the same time keeping the organization intact and able to respond quickly to changes in end market demand.
Revenue in the first quarter dropped by around 5% with Asia most affected throughout the first quarter. Other regions were impacted only from the second half of March.
AkzoNobel says that in more recent months, end market demand has evolved in line with company planning assumptions. Market headwinds were strongest during April and resulted in revenue almost 30% lower versus last year. Demand improved as some lockdown measures started to ease, although revenue for May remained around 20% below 2019.
Distribution channels for decorative paints have mostly reopened in China and Europe, with demand returning towards previous levels. Varying degrees of market disruption persist in the rest of Asia and South America. Demand for performance coatings has also improved, although at a much slower pace than for decorative paints, the company says. Segments related to automotive and aerospace industries continue to be more significantly affected than others. Market headwinds are expected to ease further throughout June, although continue to differ by region and segment.
Commenting on the evolving situation, AkzoNobel CEO, Thierry Vanlancker, said, “We’re weathering the COVID-19 storm, taking care of our employees while protecting our business…Although the pandemic situation forced us to pause key parts of our transformation, our teams have focused on minimizing all discretionary costs, as well as carefully managing cash and working capital. The actions we’ve taken, together with our strong balance sheet, provide a solid platform for AkzoNobel to perform as an industry frontrunner.”
By: Natasha Alpreowicz
Source: Chemical Week
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