Akzo Nobel (AKZA) Q4 2024 earnings summary

Executive summary

• Q4 2024 organic sales grew 1% year-over-year, with flat volumes and a 1% increase in price/mix; adjusted EBITDA rose 3% to €321 million (12.3% margin), and full-year adjusted EBITDA reached €1.5 billion (14.1% margin).

• Full-year organic sales increased 2%, supported by a 1% volume increase and a 130 bps expansion in adjusted gross margin.

• Profit growth in Q4 was driven by Coatings, especially Marine & Protective, while Decorative Paints remained flat.

• Net debt to EBITDA increased to 3x due to lower payables and accelerated restructuring, with a target to reduce leverage below 2.5x midterm.

• Efficiency and transformation programs are delivering cost savings, with €170 million gross savings expected in 2025 and a total €300 million annual benefit targeted by 2027.

Financial highlights

• Q4 2024 revenue was €2,619 million (up from €2,529 million in Q4 2023); adjusted EBITDA: €321 million (12.3% margin).

• FY 2024 adjusted EBITDA: €1,506 million (14.1% margin); post-hyperinflation accounting: €1,478 million.

• Q4 free cash flow was €284 million, impacted by timing of inventory and payables; FY 2024 free cash flow: €367 million.

• Adjusted EPS for Q4 2024: €0.56 (up from €0.42); FY 2024: €3.88 (up from €3.07).

• Return on investment improved to 13.3% in 2024.

Outlook and guidance

• 2025 adjusted EBITDA targeted above €1.55 billion, driven by €170 million in self-help savings and flat to low single-digit growth.

• Leverage targeted below 2.5x net debt/adjusted EBITDA by end of 2025 and around 2x mid-term.

• Midterm ambitions: adjusted EBITDA margin over 16% and ROI between 16%-19%.

• No significant market rebound expected in 2025; growth to be led by Marine, Powder, and emerging Deco markets.

• Guidance assumes constant currencies, organic volumes, and no major market disruptions.