Dutch coatings supplier AkzoNobel (AMS: AKZA; OTCMKTS: AKZOY) reported first-quarter 2026 results April 22, posting adjusted EBITDA of €345 million ($404 million) on revenue of €2.39 billion ($2.79 billion).
Adjusted EBITDA was down 3% as reported but up 7% on a comparable basis, marking the fourth consecutive quarter of year-over-year margin expansion. Adjusted EBITDA margin reached 14.5%, up 80 basis points from a year earlier. Reported revenue declined 9%, with currency translation and the December 2025 divestment of AkzoNobel's India operations accounting for most of the drop. Organic sales declined 1%.
Operating income totaled €177 million ($207 million), down from €192 million ($225 million) on a reported basis but up 9% on a comparable basis.
U.S. refinish demand still soft
On the company's earnings call, CEO Greg Poux-Guillaume addressed U.S. refinish demand in response to an analyst question. "Refinish in the U.S., as you know, was impacted by that sort of tension between higher insurance premiums and lower disposable income, and that stabilized at a trough, but it hasn't picked up yet," he said. He added that European refinish was less impacted but was also not rebounding, while the company's refinish business in Asia performed well in the quarter.
The commentary echoes refinish softness reported by PPG Industries in Q3 2025, where automotive refinish organic sales declined by a double-digit percentage versus the prior year on lower U.S. volumes.
Axalta merger on track
In prepared remarks, Poux-Guillaume said AkzoNobel was "hitting all our filings milestones" on its planned merger with Axalta Coating Systems. The company said it remains on target for a mid-year shareholder vote on the proposed merger.
The all-stock merger, announced in November 2025, would combine two of the largest refinish suppliers serving collision repair shops globally and is valued at approximately $25 billion. The merged company would have projected revenues around $17 billion and operate 173 manufacturing sites across more than 160 countries. Closing remains expected in late 2026 or early 2027, subject to shareholder and regulatory approvals.
Company representatives addressed the merger in further detail this past February.
Guidance reaffirmed
AkzoNobel reaffirmed its full-year 2026 outlook, with adjusted EBITDA expected to be at or above €1.47 billion ($1.72 billion). The company said it expects to deliver €100 million ($117 million) of adjusted EBITDA improvement in constant currencies.
In the mid-term, AkzoNobel said it aims to expand its adjusted EBITDA margin above 16% and deliver a return on investment between 16% and 19%. The company expects net debt-to-adjusted-EBITDA leverage to be around two times by year-end 2026.
The company also signed an agreement during the quarter to sell its Pakistan operations to Packages Group, with the transaction expected to close in the second half of 2026.
