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(Reuters) -Dutch paints and coatings maker Akzo Nobel (OTC:AKZOY) has set out a plan to save costs and improve supply chain efficiency, after forecasting yearly core earnings towards the lower end of its previous forecast due to lower than expected volumes.
Shares in the maker of Dulux and Flexa paints were down 4% at 61.58 euros by 0850 GMT, after touching their lowest in 11 months.
The company said it would make a 150 million euros ($159 million) investment through 2024-2026 for its cost saving “industrial transformation” plan, aiming for a 250 millions euros benefit by 2027.
Akzo has been recovering from a post-COVID slowdown last year, marked by rising raw material costs and destocking activity in its decorative do-it-yourself segment in Europe.
The Amsterdam-based company said it now targeted around 1.45 billion euros in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2023, at the lower end of its previous guidance between 1.4 and 1.55 billion.
It said it expects continued economic uncertainties to weigh on its sales volumes.
Asked on a press call about the guidance update, CEO Grégoire Poux-Guillaume said the company had seen flat volumes, but had achieved a better performance than its peers. “It’s a reflection of what we see in our competitors,” he said.
The new guidance is slightly below the 1.47 billion euros expected by analysts in a company-provided consensus.
“Overall, in line adj EBIT print/adj EPS miss and somewhat weaker 4Q guide than consensus will likely limit the enthusiasm on the stock,” J.P. Morgan analysts said in a note.
Akzo Nobel reported a 46% rise in adjusted EBITDA to 414 million euros ($439 million) in the quarter, above the 412 million seen in consensus.
($1 = 0.9430 euros)
