AKZO NOBEL: Close to compensate for rawmat inflation, situation to ease by mid-22 AKZA NA
Despite a slight adjusted operating profit miss in 4Q, management is confident to catch up the raw materials inflation on a run rate basis by the end of 1Q22 and expects inflation and supply constraints to ease by mid 2022. We welcome the pricing discipline Akzo is increasingly demonstrating (+12.5% y/y in 4Q21). We also appreciate Akzo for its leadership positions in the attractive global paints & coatings industry, which is characterized by a fairly low capital intensity and consolidation potential. In the absence of further M&A, we see scope for returning c. € 3.3bn in the form of dividends and buybacks over the 2022-2024 period alone. We maintain our Accumulate rating and € 110 TP.Akzo Nobel N.V. is a holding company. Through its subsidiaries, Co. is engaged in the production and marketing of paints, coatings and specialty chemicals. Co. has three segments: Decorative Paints, which supplies products for the professional and do-it-yourself markets, including paints, lacquers and varnishes, as well as products for surface preparation; Performance Coatings, which is divided into the following businesses: Automotive and Aerospace Coatings, Industrial Coatings, Marine and Protective Coatings, and Powder Coatings; and Specialty Chemicals, which are used in products such as ice cream, soups, disinfectants, plastics, soaps, detergents, cosmetics, paper and asphalt.
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