AkzoNobel CEO to return from medical leave at year-end
AMSTERDAM (Reuters) - AkzoNobel (AKZO.AS) said its chief executive, Ton Buechner, who has been on medical leave since early September, will return to work around the end of the year, sending shares in the world's largest paints maker up nearly 4 percent.
The firm, which also makes performance coatings for cars, aircraft and ships, as well as specialty chemicals such as those used in the pulp and paper industry, did not say when it would be able to update investors on its long-awaited strategy, originally scheduled for this month, for the next few years.
But Anthony Burgmans, a member of the supervisory board, told Reuters he expected the update to take place "some time in the first quarter".
The announcement had to be postponed indefinitely after Buechner, who only took over as chief executive in April, went on medical leave citing fatigue.
AkzoNobel, which makes Dulux paint, is expected to report third-quarter net income of 154 million euros on revenue of 4.267 billion euros when it announces results on Thursday, an analysts' poll commissioned by Reuters showed.
The company had warned in July of a tough economic environment, with a sluggish construction sector in Europe and the U.S. affecting demand for paints, and high costs for raw materials such as oil and titanium dioxide, a paint pigment.
Investors and analysts had hoped Buechner would announce plans for turning around the troubled paints business in the United States and improving profitability, for example with additional cost cuts on top of the 500 million euros that it announced a year ago.
Buechner has already said he does not plan any major mergers and acquisitions activity. But one investor, who asked not to be quoted by name, said AkzoNobel either has to make an acquisition to "bulk up" its U.S. paints business or else divest it.
AkzoNobel's supervisory board met on Wednesday to discuss Buechner's health and issued a statement afterwards saying he was responding to treatment and would return to work.
The shares, which had been trading lower, rose on the news and were up 3.7 percent at 44.32 euros.
"This is clearly positive, and it's good that some uncertainty has gone," said Micha Tiekink, analyst at Rabobank.
If Buechner returned to work in January, his strategy update could be ready between March and May 2013, Tiekink added.
"We are glad that Ton is progressing and we look forward to welcoming him back to the company later this year. In the meantime, we have appropriate governance in place," said Karel Vuursteen, chairman of the supervisory board.
Keith Nichols, chief financial officer, will remain as initial point of contact, while Burgmans will remain on hand to offer advice and support, the company said.
(Reporting by Sara Webb; Editing by Mike Nesbit and Helen Massy-Beresford)
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine forms new defense force, seeks Western help |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions