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Investing.com -- AkzoNobel’s third-quarter 2025 earnings fell sharply on Wednesday after the global paints and coatings company booked a €300 million provision related to the ongoing Ichthys litigation, offsetting otherwise steady operating results.
Adjusted EBITDA came in at €385 million, matching both Jefferies and consensus forecasts. “We expect share price pressure,” Jefferies analysts said in a note.
Group sales totaled €2.55 billion, down 5% from a year earlier and slightly below expectations of €2.56 billion.
Volumes slipped 1%, while price and mix rose 1%. Currency movements reduced sales by 5%. Adjusted EBIT reached €297 million, 2% above Jefferies’ forecast and in line with consensus, with margins up 30 basis points year over year.
The Amsterdam-headquartered company reaffirmed full-year adjusted EBITDA guidance of about €1.48 billion at September exchange rates, compared with a previous goal of more than €1.48 billion at June rates.
The updated outlook implies a fourth-quarter adjusted EBITDA of about €345 million. “FY volumes now guided slightly down (vs flat prior),” Jefferies said.
Capital expenditure guidance was lowered to €320 million from €350 million. Leverage is now expected to be slightly above 2x adjusted EBITDA, and the company raised its gross savings goal to more than €175 million, from €150 million previously.
In Decorative Paints, adjusted EBITDA was €184 million, 4% below estimates of €191 million. Sales of €1.06 billion were in line with consensus and down 3% from a year earlier.
The division reported 2% organic sales growth, supported by 1% higher volume and 1% stronger price and mix.
Currency effects cut sales by 4%. EMEA results were flat in constant currency, with growth in Africa and Southeast Europe offsetting declines in Western Europe.
Asia was also flat, as higher volumes in China and Vietnam balanced weaker pricing and demand in Indonesia. Latin America grew 10% in constant currency, led by stronger pricing and higher volumes in Brazil.
Performance Coatings posted adjusted EBITDA of €209 million, 1% above Jefferies’ forecast but 2% below consensus. Sales reached €1.49 billion, 6% lower than last year.
Organic sales were flat, with volumes down 2% and price and mix up 1%. Currency effects reduced sales by 5%. By segment, Powder Coatings fell 2% in constant currency due to lower industrial and consumer volumes in the Americas.
Marine and Protective Coatings grew 4% on higher volumes in North America and Asia. Automotive and Specialty Coatings rose 2%, while Industrial Coatings declined 3%.
Operating cash flow increased to €331 million from €294 million a year earlier, while free cash flow improved to €265 million from €217 million.
Net debt was €4 billion, equal to 2.8 times adjusted EBITDA. The effective tax rate for 2025 is now projected at 26% to 29%, compared with 20% previously.
AkzoNobel shares closed the prior trading day at €61.16. Jefferies maintained a “hold” rating and a price target of €59, implying a 4% downside.