(Adds details of strategy, quotes)
AMSTERDAM Feb 20 The new chief executive of
AkzoNobel NV said on Wednesday the Dutch paints and
chemicals group would speed up cost-cutting and focus on
improving returns and cash generation over the next three years.
It will aim for a return on sales of 9 percent, return on
investment of 14 percent by the end of 2015, and a ratio of net
debt to EBITDA - earnings before interest, tax and depreciation
- of less than 2.0 times, all by the end of 2015.
AkzoNobel's results over recent quarters have been hit by
fragile consumer demand and weak housing markets in the United
States and Europe, as well as high costs for raw materials such
as titanium dioxide, a pigment used in paint.
In the last six months, it has taken a huge writedown on its
purchase of Dulux paint maker ICI and sold its struggling North
American decorative paints arm to U.S. rival PPG Industries
for $1.1 billion to focus on its larger European and
Ton Buechner, who took over from Hans Wijers as chief
executive in April 2012, had originally planned to outline his
strategy alongside the third-quarter results last year, but had
to postpone the announcement when he went on medical leave.
"AkzoNobel's new financial targets are designed to drive
operational excellence, cash generation and accountability and
demonstrate a clear focus on creating value for shareholders,"
the company said in a statement.
AkzoNobel shares trade at a discount to those of its U.S.
rivals PPG Industries and Sherwin-Williams, based on
Starmine's SmartEstimates for the price-earnings (P/E) ratio and
for the ratio of enterprise value (EV) to EBITDA.
AkzoNobel said it would complete its EBITDA improvement plan
in 2013, a year early, delivering 500 million euros in EBITDA
gains at a cost of 205 million euros.
It said it has delivered structural EBITDA gains of 250
million euros so far since the launch of the program in late
2011, while one-off costs amounted to 292 million euros.
AkzoNobel, which also makes coatings for cars, aircraft and
ships, and specialty chemicals such as those used in the pulp
and paper industry, reported fourth-quarter EBITDA of 363
million euros, slightly up from a year ago, and a quarterly net
loss of 59 million euros, on revenue of 3.67 billion euros.
Analysts in a poll commissioned by Reuters had expected
EBITDA before one-off items of 355 million euros, net profit of
44.5 million euros, and revenue of 3.89 billion euros.
(Reporting by Sara Webb; Editing by Mark Potter)