Dutch Coatings Maker Akzo Nobel Reports Q4 Earnings Surge, With EBITDA Adjustments Setting Stage for FY26 Growth

Akzo Nobel NV, the Dutch paint and coatings manufacturer, recently announced significantly higher fourth-quarter net income, though adjusted EBITDA faced headwinds amid softening revenues. Despite these near-term challenges, the company is projecting improved EBITDA performance for fiscal 2026 while maintaining shareholder distributions, signaling management confidence in operational momentum ahead.

Strong Profit Growth Masks Adjusted EBITDA Headwinds

In Q4, net income attributable to shareholders jumped dramatically to 598 million euros, compared with just 21 million euros a year earlier—a remarkable turnaround. Earnings per share climbed to 3.50 euros from 0.12 euro in the prior-year quarter. However, when examining the company’s operational efficiency metric, adjusted EBITDA declined 4 percent to 309 million euros from 321 million euros, reflecting softer demand conditions.

Operating income in the quarter surged to 787 million euros from 127 million euros, though adjusted operating income fell 4 percent to 217 million euros. The positive news came via margin expansion: adjusted EBITDA margin improved to 13.0% from 12.3% previously, driven by aggressive efficiency initiatives and cost optimization measures. This margin expansion provided some relief, demonstrating that despite revenue pressures, the company is successfully protecting profitability through operational discipline.

Full-Year EBITDA Performance and Sustained Dividend

For the complete fiscal 2025 year, operating income climbed to 1.16 billion euros. Total adjusted EBITDA declined 2 percent to 1.44 billion euros, while revenues softened 5 percent to 10.16 billion euros, reflecting broad-based volume weakness across the coatings industry. Organic sales were down 1 percent on lower volumes, indicating that price actions alone were insufficient to offset volume declines.

The company maintained its commitment to shareholders by proposing a final dividend of 1.54 euros per share, matching the previous year’s level—a stable payout that underscores management’s conviction in the business fundamentals.

Management Guides Higher FY26 EBITDA Amid Market Caution

Looking forward, Akzo Nobel expects adjusted EBITDA to reach or exceed 1.47 billion euros in fiscal 2026, representing approximately 100 million euros of improvement when measured in constant currencies. This guidance suggests the company anticipates stabilization and gradual recovery as the year progresses.

CEO Greg Poux-Guillaume cautioned that near-term visibility remains limited: “Based on current market conditions, we do not anticipate a material recovery across our end markets in 2026. We expect the first half to remain sluggish, with improvement likely coming in the second half through more favorable year-over-year comparisons. Our continuous efficiency measures will remain critical in supporting performance as we progress toward our mid-term profitability targets.”

Axalta Merger and Mid-Term Strategic Ambitions

The company reiterated that its merger with Axalta remains on track, with closing expected in late 2026 or early 2027, subject to shareholder and regulatory approvals. This strategic combination is expected to create operational synergies that could further support future EBITDA expansion.

For the medium term, Akzo Nobel aims to expand profitability substantially, targeting an adjusted EBITDA margin exceeding 16% and a return on investment between 16% and 19%—metrics that would represent significant improvement from current levels and underline management’s conviction that operational excellence and strategic M&A can drive shareholder value creation.