AMSTERDAM • Akzo Nobel issued a profit warning yesterday and announced a revamp that will include the chief financial officer stepping aside and a shake-up to its paints and industrial coatings businesses.
The Dutch company, citing cost inflation and currency headwinds, said it would not achieve the €100 million (S$161.3 million) in operating profit this year that it promised when rejecting a recent takeover.
In May, the company rejected a €26.3 billion takeover by United States rival PPG Industries, an offer worth €95 per share. Akzo shares were down 2.9 per cent at €76.4 in early trade yesterday.
Akzo said CFO Maelys Castella would take a leave of absence due to health reasons and return "in a senior management position" when she is better. Chief executive officer Ton Buechner in July also quit for health reasons.
"It is extraordinary that these cases follow each other so rapidly, but it is purely coincidental. They are for entirely different reasons, and are in no way related," chairman Antony Burgmans told reporters.
New CEO Thierry Vanlancker will meet shareholders to defend the company's strategy, following a court order to repair relations damaged under Mr Buechner and Mr Burgmans. Shareholders, led by Elliott Advisors, sued Akzo for the right to hold a shareholders meeting to vote on expelling Mr Burgmans for mismanagement.
In rejecting the PPG takeover, Akzo Nobel pledged to pursue its own sale of its specialty chemicals division, which represents a third of the company's sales and profit.
Under a reorganisation announced yesterday, the firm said it will realign management along four geographical lines for paints, and there will be four "integrated coatings business units" presumably by product line, although the company did not elaborate.
Mr Vanlancker said headwinds, such as higher raw material costs, were having "a wider and greater impact as the year continues" and the company was raising prices and cutting costs in response.
Akzo remains on course to meet 2020 financial targets announced in April, he said, including reaching a 15 per cent return on sales, though analysts have been sceptical about these targets.