AkzoNobel reports strong quarter despite Middle East conflict driving up costs

Paint manufacturer AkzoNobel says the conflict in the Middle East has pushed up its procurement costs. The company, known for brands including Flexa, Dulux, and Sikkens, shared the update in its first-quarter results. Despite geopolitical tensions linked to the Iran war and volatile markets, AkzoNobel reported a strong performance over the period.

AkzoNobel said it benefited from price adjustments and cost reductions, which improved profitability. The company reported an adjusted operating profit of 345 million euros and nearly 2.4 billion euros in revenue.

AkzoNobel chief executive Greg Poux-Guillaume said he expects price increases announced earlier to fully compensate for rising energy and raw material costs over the course of the year. The company is sticking to its outlook for 2026.

In additional comments, Poux-Guillaume said the war is also having a limited effect on AkzoNobel’s marine coatings business. Due to the blockade of the Strait of Hormuz, many vessels are trapped in the Persian Gulf and cannot reach dry docks for maintenance and repainting.

Despite ongoing global uncertainty, he said he is pleased with the company’s recent performance, adding: “We have shown that we can handle uncertainty well.”

Last year, AkzoNobel announced plans to merge with US-based rival Axalta. The transaction is expected to be finalized either by the end of this year or in early 2027.

AkzoNobel says the planned merger is progressing well, with shareholders set to vote on the deal at an extraordinary general meeting around mid-year. If approved, the new company will be listed in New York, while AkzoNobel will be delisted from the Amsterdam stock exchange. Poux-Guillaume is expected to lead the combined group as CEO.

As part of its cost-cutting measures, the company eliminated 1,800 jobs last year and shut down several production sites, including facilities in the Netherlands.