Akzo Nobel, the Dutch company behind Dulux paints, reported stronger-than-expected first-quarter profits while maintaining that the ongoing tariff dispute between the United States and China will have a manageable effect on its operations. The company credited its performance to rigorous cost reduction initiatives and strategic pricing increases, which helped offset the challenges of lower volumes and ongoing inflationary pressures.
As of early morning trading, Akzo Nobel’s shares surged by 8%, marking their strongest single-day performance since March 2022. Analysts at J.P. Morgan noted that the quarterly earnings beat should provide reassurance to investors, highlighting the effectiveness of the company’s strategic adjustments. According to CEO Greg Poux-Guillaume, the firm’s “local-for-local” manufacturing approach and efforts to derisk its procurement processes have successfully limited the direct effects of tariffs on its operations and delivery capabilities.
The company estimates that the annualized EBITDA cost from the current tariffs amounts to approximately 25 million euros for U.S. exports and 10 million euros for U.S. imports. These impacts are considered manageable, especially since around 98% of products sold in the U.S. and China are already manufactured locally. Should the tariff landscape worsen, Akzo Nobel remains confident in its ability to reconfigure the remaining product flows to maintain operational resilience.
Addressing stakeholders during a call, Poux-Guillaume noted that while the company’s products don’t often cross borders, the global mobility of its customer base requires a flexible and responsive business model. He also acknowledged that both the Eurozone and U.S. markets are currently affected by subdued consumer confidence and GDP concerns. Although there is some hesitation among consumers and businesses regarding economic outlooks, he emphasized that confidence levels have not significantly deteriorated, and market conditions remain stable, albeit not robust.
For the first quarter, Akzo Nobel posted an adjusted EBITDA of 357 million euros, a slight 1.7% decline from the previous year. However, this result exceeded analysts’ expectations, who had forecasted 345 million euros according to a consensus compiled by Vara. The company’s ability to balance cost controls and pricing power in a complex economic environment has positioned it to navigate current headwinds effectively.
READ MORE: