Due to the COVID-19 pandemic and the consequential significant market disruption, AkzoNobel has decided to pause key parts of the company's transformation and suspend its 2020 financial ambition.
AkzoNobel has adopted maximum precautions to ensure the safety and well-being of its employees, who are working remotely in their jobs allow, while also taking all reasonable steps to sustain business operations and continue serving its customers.
"It's clear COVID-19 is having a huge impact - for you, for us at AkzoNobel, and for the whole world. Our priority right now is the health and safety of our employees, their families, and our partners. At the same time, we're taking all reasonable steps to continue serving our customers, some of whom are relying on us to provide products across a whole range of critical industries" said Thierry Vanlancker, AkzoNobel CEO.
"Headwinds related to COVID-19, including unpredictable and lower end market demand as well as various measures impacting our business operations, are increasing for most parts of the world and will have a significant impact during Q2. In China, activity is gradually returning to normal after being significantly impacted in Q1" continued Vanlancker.
"The supply and demand balance and regulatory situation are complex, constantly evolving, and differs per region and segment. There is currently little reliable visibility on the second quarter, however we expect end market demand to be significantly below any of our previous expectations" stated AkzoNobel CEO.
"We're closely monitoring the pandemic situation and taking all necessary measures, including steps to rapidly reduce costs and carefully manage cash flows in the short-term. The significant market disruption forces us to pause key parts of our transformation and hence to suspend our 2020 financial ambition. Once markets normalize, we remain eager and passionate to resume our Winning together: 15 by 20 momentum to drive AkzoNobel's performance in line with industry frontrunners" concluded Vanlancker.
The balance sheet and cash position of AkzoNobel are strong and solid. Indeed, net cash and cash equivalents were €1.2 billion and financial leverage was 0.7x net debt/EBITDA at December 31, 2019. The company has a €1.3 billion unutilized revolving credit facility with a maturity of 2025. The next bond maturity is €750 million in July 2022. Retaining a strong investment is what AkzoNobel is committed to.
On April 2020 the company will announce the financial results for the first quarter 2020. On April 23, 2020 the company will hold its Annual General Meeting of shareholders. Due to the circumstances, AkzoNobel strongly encourages its shareholders to exercise their voting rights via proxy or to attend and vote virtually.