AkzoNobel has delivered its sixth consecutive quarter of margin expansion, backed by pricing gains and cost savings, while signing binding agreements to sell its Decorative Paints business in Southeast Asia for $1.35 billion in a major portfolio-value realisation move.
The Dutch paints and coatings maker reported 2% organic sales growth in the third quarter of 2026, although revenue remained broadly flat at €2.538 billion against €2.547 billion a year earlier. Adjusted EBITDA rose 1% to €388 million, while the adjusted EBITDA margin improved to 15.3% from 15.1% in the corresponding quarter last year.
Operating income, however, came under pressure, falling to a loss of €73 million from a loss of €29 million a year earlier. The company attributed the impact to the deconsolidation of its Russian operations and the divestment of its business in Pakistan.
AkzoNobel also reported an organic adjusted EBITDA increase of €15 million, highlighting the contribution of pricing actions and its cost-saving programme despite challenging market conditions.
The proposed sale of its Decorative Paints business in Southeast Asia for $1.35 billion represents a significant step in AkzoNobel’s strategy to unlock value from its portfolio. The transaction values the business at 21 times its financial-year 2025 EBITDA, according to the company.
The move also concludes the strategic review of AkzoNobel’s Paints portfolio in Asia, following the earlier sale of its liquid coatings businesses in India.
AkzoNobel CEO Greg Poux-Guillaume said the company’s latest performance reflected sustained progress on sales and profitability.
“AkzoNobel delivered another strong quarter, with organic sales and adjusted EBITDA both increasing. Our sixth consecutive quarter of margin expansion confirms our ability to realize pricing in challenging markets and to deliver on our ambitious cost savings plan.
“We also announced the divestment of our Decorative Paints business in South East Asia, which successfully concludes the strategic review of our Paints portfolio in Asia. At an enterprise value of 21x FY25 EBITDA – more than twice our current trading multiple – it unlocks significant value, as did the previous sale of our liquid coatings businesses in India for 25x EBITDA. Meanwhile, our merger with Axalta is firmly on track, with regulatory approvals advancing and closing expected in early 2027.”
AkzoNobel expects adjusted EBITDA to reach around €1.47 billion for the full year 2026, based on year-end 2025 exchange rates and adjusted for the divestment of its liquid coatings businesses in Asia. The company is targeting an improvement of around €100 million in adjusted EBITDA in constant currencies.
The outlook remains subject to market uncertainties, geopolitical developments and prevailing trading conditions.
Operating cash flow also weakened during the quarter. Net cash from operating activities stood at €187 million, compared with €331 million in the third quarter of 2025.
Alongside its portfolio reshaping, AkzoNobel continues to advance its proposed merger with Axalta, with regulatory approvals progressing and completion expected in early 2027, subject to the necessary clearances.
Over the medium term, the company is targeting an adjusted EBITDA margin of more than 16% and an adjusted return on average invested capital of 16% to 19%, supported by organic growth and operational improvements.
AkzoNobel expects leverage to reach around two times net debt to adjusted EBITDA by the end of 2026. Its medium-term objective is to maintain leverage at around that level while preserving an investment-grade credit rating.
The latest results point to continued progress on profitability and portfolio optimisation, even as flat reported revenue, weaker operating income and lower operating cash flow underscore the challenges facing the group.
