By Dimitri Rhodes
(Reuters) – Dulux paint maker Akzo Nobel said on Wednesday it sees a manageable cost impact from the tariff war between the U.S. and China and reported a first-quarter profit beat, citing cost reductions and higher pricing.
Akzo Nobel’s shares were up 8% as of 0729 GMT, on track for their best day since March 2022, with analysts at J.P. Morgan saying the “1Q beat should reassure.”
“Our local-for-local and procurement derisking strategic principles continue to largely shield us from direct impacts on our cost base or our ability to deliver,” CEO Greg Poux-Guillaume said in statement.
The Dutch paints and coatings maker said it sees a manageable annualized EBITDA cost from the tariff war, with U.S. exports impacted by 25 million euros ($28.44 million) and U.S. imports impacted by 10 million euros, given the current tariffs.
At present, around 98% of products sold in the U.S. and China are locally produced. Were the tariffs to increase further, the company would be able to replace the remaining flows, Poux-Guillaume told Reuters.
“While our products don’t travel much, our customers do,” the CEO said on a call with investors.
Akzo sells decorative paints and specialised coatings, with each unit relying on consumer confidence and GDP, and the former waning in both the Euro zone and the U.S.
“If people don’t feel confident about the economy or if companies start holding back on investments, then that will impact us indirectly,” Poux-Guillaume said.
“And consumer confidence has kind of leveled off. People are a little bit worried about what’s happening to the world and their economy. But it hasn’t collapsed. So the market is okay, but not great,” he added.
The Amsterdam-listed company posted a 1.7% drop in adjusted EBITDA to 357 million euros as higher prices and strong cost reductions compensated for lower volumes and inflation.
This came above the 345 million euros expected by analysts in a Vara consensus provided by the company.
($1 = 0.8790 euros)
(Reporting by Dimitri Rhodes; Editing by Mrigank Dhaniwala and Sonia Cheema)
