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AkzoNobel recently announced that it would intensify its asset-sale programme after revising down its adjusted core EBITDA forecast for 2025 to around EUR 1.48 billion. The paints and coatings major attributed the revision to persistent macroeconomic uncertainty, inflationary pressures, and currency fluctuations. The company also recorded a EUR 300 million provision related to a legal case in Australia and incurred a EUR 30 million foreign-exchange loss in the recent quarter. Its divestment of the Indian decorative-paints business, valued at USD 1.6 billion, is expected to close by December, signalling its continued focus on portfolio optimisation.
AkzoNobel, the Amsterdam-based global paints and coatings manufacturer, has indicated that it will proceed with additional asset disposals as part of a broader restructuring plan aimed at strengthening profitability and operational focus. The company revised its full-year 2025 adjusted EBITDA outlook to approximately EUR 1.48 billion, compared with earlier expectations of surpassing that figure. Executives cited unfavourable exchange-rate movements and subdued demand across key markets as the main contributors to the revision. Advertisement
The company's management noted that market conditions remained challenging across Europe and parts of Asia, leading to slower-than-expected recovery in construction and industrial demand. The euro's appreciation during the recent quarter resulted in a EUR 30 million translation loss, while a EUR 300 million provision was created in connection with an ongoing Australian court case related to a project between 2013 and 2015. The company reiterated that it denied any wrongdoing and intended to defend its position vigorously.
In line with its strategic priorities, AkzoNobel reaffirmed its plan to divest operations where it does not hold a clear leadership position. The company highlighted that the sale of its Indian decorative-paints business to JSW Paints for USD 1.6 billion, announced in June, remained on course to conclude by the end of this year. It expects to generate around EUR 500 million in net proceeds from the sale, which will be used primarily for debt reduction and cost-efficiency initiatives.
Meanwhile, activist investor Cevian Capital has steadily increased its holding in AkzoNobel to about 5 % by August, with expectations that it could reach 10 % by the end of the year. The firm's share price declined roughly 4 % following the revised guidance announcement, as investors responded cautiously to the lower earnings outlook and ongoing legal uncertainties. Despite these challenges, AkzoNobel's leadership reaffirmed its commitment to long-term value creation, cost discipline, and capital reallocation to higher-growth segments within its global operations.
The company's revised earnings outlook underscores the influence of currency volatility, legal provisions, and muted demand in its key markets. While short-term performance may remain constrained, management's focus on debt reduction, cost control, and reinvestment into core businesses could enhance long-term resilience. The planned completion of the Indian business sale later this year will be a significant milestone in AkzoNobel's efforts to strengthen its balance sheet and refocus on markets where it maintains competitive leadership.
Source: Reuters
5th Jun, 2025
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