Akzo Nobel NV (AKZA), the world’s largest decorative paints maker, reported a little changed first-quarter operating profit as restructuring costs and adverse currency effects held back earnings.
Operating profit reached 216 million euros ($299 million) after 217 million euros a year earlier, the Amsterdam-based company said today in a statement. Sales dropped 2.4 percent to 3.4 billion euros. The company said it is still on track to reach its 2015 targets.
The paint maker is trying to bring profitability in line with peers including PPG Industries Inc. (PPG:US) by focusing on fewer and more profitable businesses. Akzo Nobel is seeking a buyer for assets in its paper-chemical operations, people familiar with the matter told Bloomberg in February and the company earlier this year reported an impairment charge of 139 million euros on a “business held for sale” within the specialty chemicals division.
“We are on track to deliver the 2015 targets despite the expected continued fragile economic environment and continued volatile currencies in 2014,” Akzo said in the statement today. Chief Executive Officer Ton Buechner has set targets for an operating margin of 9 percent and a 14 percent return on investment in 2015.
The company in January said it will spend an extra 50 million euros on its reorganization this year, bringing total revamp costs to 250 million euros. In the first quarter, the company had restructuring costs of 44 million euros.
Akzo Nobel shares have risen 19 percent in the last six months. They gained 3.7 percent to 56.86 euros yesterday in Amsterdam trading.
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