Akzo Nobel N : AkzoNobel updates Q2 outlook based on impact of China lockdowns and slower start to the EMEA DIY season

Akzo Nobel N.V.

Media release

June 14, 2022

AkzoNobel updates Q2 outlook based on impact of China lockdowns and slower start to the EMEA DIY season

(AKZA; AKZOY)

AkzoNobel has updated its Q2 outlook based on the impact of the evolving business environment, including the effect of China lockdowns and the slower start to the EMEA DIY season.

Overall demand signs for paints and coatings remain robust, with North America still constrained in raw material availability and logistics, but sequentially improving. In Europe in particular, macroeconomic uncertainty related to consumer confidence has increased.

Consumer demand in the Deco DIY channels in Europe - which represent 40% of total Deco EMEA revenue - got off to a slow start in Q2, subsequently impacted by inventory reductions in the DIY channel. In June, Deco DIY channel demand improved back to 2019 levels. Despite share gains and our Deco Professional business performing as anticipated, the total Q2 operating income for our Decorative Paints segment is expected to be down by approximately €50 million versus expectations entering the second quarter.

COVID-19 lockdowns in China during Q2 impact both paints and coatings. This impact was mainly on our coatings business, while paints was able to almost offset by progressing with its geographical expansion initiatives. The re-opening in June is showing a positive rebound, but not enough to catch up on all the missed revenue in the quarter, resulting in a negative operating income impact of approximately €40 million for the quarter, versus expectations entering Q2.

"The current business environment is complex and constantly evolving," explains AkzoNobel CEO, Thierry Vanlancker. "Given the macro-economic uncertainties, we're accelerating adjustments in our cost base for H2, as well as our working capital optimization, while continuing to make progress on our Grow initiatives.

"Business trends in June are largely in line with earlier views, while pricing actions remain ahead of raw material and logistics inflation. We continue to focus on realizing our Grow & Deliver ambition."

AkzoNobel continues to focus on achieving its €2 billion adjusted EBITDA target for 2023, despite the volatile market environment having a material impact on the company's Q2 2022 financials.

Financial results for Q2 of 2022 will be announced on July 20.

This is a public announcement by Akzo Nobel N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014).

About AkzoNobel

We supply the sustainable and innovative paints and coatings that our customers, communities - and the environment - are increasingly relying on. That's why everything we do starts with People. Planet. Paint. Our world class portfolio of brands - including Dulux, International, Sikkens and Interpon - is trusted by customers around the globe. We're active in more than 150 countries and have set our sights on becoming the global industry leader. It's what you'd expect from a pioneering paints company that's committed to science-based targets and is taking genuine action to address globally relevant challenges and protect future generations.

Christian Neefestraat 2	T [phone]
1077 WW Amsterdam	E [e-mail]
P.O. Box 75730	www.akzonobel.com
1070 AS Amsterdam
Netherlands

Not for publication - for more information

AkzoNobel Media Relations

T +31 (0)88 - 969 7833

Contact: Diana Abrahams

[e-mail]

AkzoNobel Investor Relations

T +31 (0)88 - 969 0139

Contact: Kenny Chae

[e-mail]

Safe Harbor Statement

This press release contains statements which address such key issues such as AkzoNobel's growth strategy, future financial results, market positions, product development, products in the pipeline and product approvals. Such statements should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business please see our latest annual report, a copy of which can be found on our website: www.akzonobel.com

2