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Akzo Nobel's sales hit by weak pound

Published 19/10/2016, 07:27
© Reuters.  Akzo Nobel's sales hit by weak pound

AMSTERDAM (Reuters) - Akzo Nobel, the Dutch coatings and paints maker, reported a 4 percent slide in quarterly sales on Wednesday, in line with market expectations, citing pricing pressures and the drop in the value of sterling.

Akzo, which bought British rival ICI eight years ago, said its earnings before interest and taxation (EBIT) rose 1 percent to 442 million euros (395.76 million pounds), while sales fell 4 percent to 3.6 billion euros.

Ten analysts polled for Reuters had expected an average (EBIT) of 435 million euros and sales of 3.6 billion euros.

"We expect to see continued currency headwinds in the last quarter," Chief Financial Officer Maëlys Castella told journalists, citing the fall of the pound since the vote to leave the European Union.

Castella said it was too early to identify a clear trend on wider business developments in the UK since the referendum, with mixed economic indicators highlighting short term volatility.

Despite the currency setback, Akzo maintained its outlook for 2016-2018. The company has said it aims to meet a return on sales of 9-11 percent and a return on income of 13-16.5 percent.

Akzo generates slightly more than a third of its revenue in mature European markets. In the UK, it had sales of more than 1 billion euros and 3,500 employees at the end of 2015.

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