AkzoNobel's adjusted margin on earnings before interest, taxes, depreciation, the adjusted EBITDA margin rose to 15.3% in the third quarter of 2026 from 15.1% a year earlier, the company's sixth straight quarter of margin expansion, according to its Oct. 21 results. Prices rose 5% and volumes fell 2%, according to the company's full quarterly report.
On its earnings call the same day, the company also confirmed it plans to sell its European vehicle refinish business as one of two remedies to win regulatory approval of its merger with Axalta Coating Systems, pending final sign-off.
Pricing carried AkzoNobel's growth as volumes declined
Revenue was €2.54 billion ($2.85 billion), essentially flat with a year earlier. Organic sales, which exclude currency effects and changes in the business portfolio, rose 2%. Adjusted EBITDA was €388 million ($436 million). The margin streak follows a fifth consecutive gain in the second quarter.
Refinish improved in Asia and Europe but not in North America
Automotive and Specialty Coatings, the business that includes vehicle refinish, grew organic sales 3% on pricing, ahead of the company's 2% overall. Lower automotive volumes partly offset strong growth in aerospace volumes, the company said.
On the call, CEO Greg Poux-Guillaume said refinish volumes grew in Asia but had not yet rebounded in the U.S. Responding to analyst questions, he said European refinish was also better in the third quarter, while North American refinish remains at a trough.
Raw material inflation is running in the high single digits
Chief Financial Officer Maarten de Vries said raw material costs rose by a high-single-digit percentage in the third quarter and that he expects a similar trend in the fourth. AkzoNobel said in its report that it has offset raw material increases tied to the Middle East conflict with price increases and intends to use price increases to offset continued inflation if needed. De Vries said the company is preparing additional price increases for the start of 2027.
AkzoNobel kept its full-year outlook of about €1.47 billion ($1.65 billion) in adjusted EBITDA and expects flat volumes in the fourth quarter.
AkzoNobel expects two divestitures to clear the merger
Alongside the European refinish sale, the companies plan to sell Axalta's North American wood coatings business. Poux-Guillaume said regulators have not asked the companies to offer remedies involving any other business, anywhere.
"We understand that these two divestitures will allow us to obtain regulatory clearance in phase I," he said.
The two businesses together bring in less than €500 million in revenue, Poux-Guillaume said, according to a transcript excerpt AkzoNobel filed with the U.S. Securities and Exchange Commission. He said that would probably be around $500 million in dollars.
The two refinish suppliers, which will operate as Axanzo after closing, still expect to complete the deal in early 2027. Poux-Guillaume said two-thirds of the required regulatory approvals are in hand, and that U.S. and EU merger reviews are among a handful still in their final stages.
Buyer outreach for the European refinish business has only begun
"We have started reaching out to potential buyers," Poux-Guillaume said. "We're in the early phases because that discussion has only recently come to fruition with the merger authorities in Europe."
He said European regulators need only a signed deal with a buyer they accept before the merger can close, not a completed sale, so a refinish sale process that is only now getting started won't necessarily hold up the merger. Asked whether a buyer would receive a manufacturing plant or a technology license, Poux-Guillaume said AkzoNobel can offer different options depending on what potential buyers want.
In his closing remarks, Poux-Guillaume returned to the merger. "We have two remedies that we have to address, and that work has started," he said.
