Akzo Nobel India held a conference call on 05 August 2023 to discuss the results for the quarter ended June 2023 and way forward. Mr. Rajiv Rajgopal - Managing Director, Mr. Krishna R- Chief Financial Officer and Whole time Director of the company addressed the call.

Highlights of the Concall

• Revenue increased 7% in Q1FY24 driven by B2B businesses

• The company had very high double-digit growth in premium and projects. As a result product mix is a little better and has improved, and it has seen a strong finish to the quarter with premium leading the category growth after a few quarters.

• The company continue to see healthy demand from real estate sector supporting projects business

• The company saw margin expansion led by raw material softening with mix improvement

• The company saw double-digit growth continuing for most businesses in Coatings.

• Healthy demand in auto industry resulted in double-digit growth across auto and speciality coatings.

• Powder coatings saw double-digit growth across segments led by good uptick in the automotive, real estate and consumer durables.

• Marine segment is driven by healthy orders from Coastal & Navy and new builds while infrastructure, oil & gas and power driving protective segment.

• The one business, which was challenged a bit was Industrial Coatings. while coil business grew on the back of healthy steel production but packaging was impacted as last year in the base, there was a huge consumption, onetime consumption by one of its customers. The company expect packaging to start after a couple of months again.

• The company has launched four strategic priorities for 2023- margin management (hold onto pricing gains to expand margins), Operating expense in terms of adjusting costs to the market reality, reduce working capital to enhance cash flow and integrated supply chain to be more responsive to the business

• The company aims to grow faster than industry while growing profitability too.

• The company expects tailwinds such as favourable demographic dividend, strong domestic consumption, Government & private investment in infrastructure and manufacturing, increasing digitalization and Rapid urbanization n the medium term would continue to drive the Indian economy and inter alia the prospects of the paint and coatings industry.

• The company expects paint industry to grow from Rs 62,000 crore today to Rs 100,000 crore within the next five years

• The company has three key 2030 sustainability ambitions -reducing its carbon emissions by 50%, utilizing 100% renewable energy, and moving towards zero waste. It continues to act on these ambitions. For example, nearly 75% of the energy requirements at its Bengaluru site are met by renewable energy. Likewise, nearly 60% of raw materials purchased during FY23 were sustainably sourced.

• The company continues to offer its customers solutions that enable them to reduce their own emissions and material use. Currently, nearly 30% of its revenue is coming from sustainable solutions.