Akzo Nobel has issued a profit warning and announced a revamp that will include the chief financial officer stepping aside. As Francis Maguire reports, the Dutch paint maker blamed cost inflation and currency headwinds for not achieving the 100 million euro ($121 million) improvement in 2017 operating profit it promised when rejecting a recent takeover.
Regrets? Akzo Nobel may have a few. The Dutch paint maker posting a profit warning on Friday... And announcing its Chief Financial Officer is temporarily stepping aside due to health reasons. This just months after the company rejected a $22 billion takeover by U.S. rival PPG.. An offer which some shareholders wanted to accept. In turning down that bid Akzo Nobel promised a 100 million euro jump in operating profit this year, A figure now proving optimistic. The firm blaming cost inflation and currency headwinds for the shortfall. SOUNDBITE (English) JEREMY STRETCH, HEAD OF STRATEGY, CIBC "I guess the question is Is the company going to be able to withstand the difficulties in the sector and in terms of the pressures that are being put upon it in terms of the rapid appreciation for the euro for example. Has it necessarily hedged its translation risk effectively. So it is going to be a very rocky and bumpy ride still for investors and access. And I guess the question is will the will the takeover be resurrected once a standstill period is comes to a conclusion." The company's new leadership is now raising prices and cutting costs. They say they're still on target to meet financial targets for 2020.... Though Friday's profit warning might just leave sceptical analysts even more unconvinced.