AkzoNobel has outperformed market expectations in the first quarter of 2026, delivering stronger profitability even as revenue declined amid currency pressures and divestments.

 

The Dutch paints and coatings giant reported revenue of €2.39 billion, down 9% year-on-year, with organic sales slipping 1%. The drop was largely driven by foreign exchange impacts and the divestment of its India business.

 

But beneath the headline decline, profitability told a different story. Operating income rose on a comparable basis, while adjusted EBITDA climbed 7% to €345 million, pushing margins up to 14.5%—an 80 basis point increase and the fourth consecutive quarter of expansion.

 

CEO Greg Poux-Guillaume struck an upbeat tone, emphasizing execution in a volatile environment: “We delivered a strong quarter of execution in a turbulent market, with adjusted EBITDA up 7% and margin up 80 bps, the fourth consecutive quarter of margin expansion. 

 

"This was achieved through positive pricing and cost efficiency, both of which will continue to support our performance for the rest of the year. Good working capital management underpinned our solid cash delivery.”

 

Cash flow also improved, with net cash outflow narrowing to €86 million, a €26 million improvement from the previous year.

 

The company acknowledged mounting geopolitical pressures, particularly from the Middle East, but maintained confidence in its pricing strategy: “While the conflict in the Middle East is impacting our cost of supply, we’re maintaining our guidance for the year. Our already announced price increases are expected to fully compensate anticipated cost impacts based on current assumptions.”

 

Strategically, AkzoNobel continues to reshape its portfolio. It has signed an agreement to sell its Pakistan business to Packages Group, with completion expected in the second half of the year.

 

At the same time, progress continues on its planned merger with Axalta, a deal that could reshape the global coatings industry.

“In parallel, we continue to make good progress towards our planned merger with Axalta, hitting all our filings milestones. We remain on target for a mid-year EGM, when shareholders will vote on the proposed merger.”

 

Looking ahead, AkzoNobel reaffirmed its full-year outlook, targeting at least €1.47 billion in adjusted EBITDA and a €100 million improvement in constant currencies. The company also reiterated its mid-term ambition to push margins above 16%, supported by organic growth and operational efficiencies.