Revenue in Decorative Paints declined 5 percent, mainly due to lower volumes in Europe, price/mix effects and currencies. Operating income at €43 million was higher than in 2012, reflecting lower restructuring charges and lower costs in mature markets.
Revenue in Performance Coatings declined 3 percent compared with the previous year. The slowdown in Europe impacted all businesses. Operating income was up 2 percent and margins improved due to a combination of margin management activities and ongoing cost control.
Revenue in Specialty Chemicals was 11 percent lower due to divestments and lower volumes, mainly in construction related products and the pulp bleaching and plastics industries. The cold weather affected seasonal segments such as agriculture and the exit from the merchant fatty acids business in China also contributed to the volume decline. Profitability was impacted by the lower volumes and productions stops.
In December 2012, AkzoNobel completed the divestment of Chemicals Pakistan, which accounts for the divestment impact in revenue.
The divestment of Decorative Paints North America was completed on April 2013 and is reported in discontinued operations. The cash inflows and the deal result will be reported in Q2.
CFO Keith Nichols
"The economic environment remains challenging and we do not expect an early improvement in the trends that we see in our businesses. The acceleration of our performance improvement program and the strategic priorities announced in February are the right focus to have in these markets."