AkzoNobel plans additional asset sales after lowering its financial guidance for 2025

AkzoNobel, the maker of Dulux paints, slightly reduced its 2025 outlook on Wednesday amid ongoing market uncertainty and announced plans for additional asset disposals following the sale of its Indian unit.

The Dutch paints and coatings manufacturer now expects adjusted core earnings (EBITDA) of around €1.48 billion ($1.73 billion) for 2025, compared with earlier guidance projecting higher profits. The revised outlook also reflects the stronger euro, which has affected results this year.

In terms of business momentum and exchange rates, the fourth quarter is expected to look like the third one, when AkzoNobel took a 30-million-euro hit from converting foreign currencies to euros, CEO Greg Poux-Guillaume told analysts.

Additionally, the company recorded a €300 million provision related to a court case involving an Australian project from 2013–2015, while reaffirming that it does not consider itself liable and intends to defend the claims.

"Likely, the provision related to the Ichthys court case will be in focus today, with potential damages sought of 2.7 billion euros, far exceeding AkzoNobel's insurance coverage of 500 million euros," analysts from ING said in a research note.

REPAINTING ASIA

In its latest portfolio development, Pakistan’s IGI Investments announced on Wednesday that it is in discussions to acquire up to 100% of AkzoNobel Pakistan

"Wherever we don't have a leadership position and we think the business would be more valuable to somebody else, we'd rather exit and recycle the capital towards our businesses where we have a winning hand," Poux-Guillaume told Reuters, adding the company had begun to focus on its decorative paints businesses in Asia.

He also said the sale of AkzoNobel's India decorative paints unit to JSW Paints for $1.6 billion, announced in June, was on track to close by December. It plans to use 500 million euros of the proceeds to reduce its debt in a push to cut costs.

In August, activist investor Cevian Capital took an around 3% stake in AkzoNobel, citing confidence in the group's strategy of improving operating performance and sharpening its portfolio.

It has since raised the stake to 5% and is on track to reach 10% by Christmas if the average pace of investments remains unchanged, Poux-Guillaume said in the interview.

Source: Reuters