AKZO NOBEL 2020-21 Annual Report Analysis

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AKZO NOBEL 2020-21 Annual Report Analysis
Mon, 9 Aug

AKZO NOBEL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

AKZO NOBEL Income Statement Analysis

  • Operating income during the year fell 9.0% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 9.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.0% in FY21 as against 14.0% in FY20.
  • Depreciation charges decreased by 4.4% and finance costs increased by 10.8% YoY, respectively.
  • Other income declined by 36.4% YoY.
  • Net profit for the year declined by 12.6% YoY.
  • Net profit margins during the year declined from 8.8% in FY20 to 8.5% in FY21.

AKZO NOBEL Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 26,618 24,214 -9.0%
Other income Rs m 376 239 -36.4%
Total Revenues Rs m 26,994 24,453 -9.4%
Gross profit Rs m 3,739 3,401 -9.0%
Depreciation Rs m 790 755 -4.4%
Interest Rs m 93 103 10.8%
Profit before tax Rs m 3,232 2,782 -13.9%
Tax Rs m 858 706 -17.7%
Profit after tax Rs m 2,374 2,076 -12.6%
Gross profit margin % 14.0 14.0
Effective tax rate % 26.5 25.4
Net profit margin % 8.8 8.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Check Out: Why Millions of Dollars are Getting Pumped into this Sector?

AKZO NOBEL Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 11 billion as compared to Rs 9 billion in FY20, thereby witnessing an increase of 15.2%.
  • Current assets rose 13% and stood at Rs 17 billion, while fixed assets rose 4% and stood at Rs 22 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 40 billion as against Rs 37 billion during FY20, thereby witnessing a growth of 7%.

AKZO NOBEL Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 12,380 12,883 4.1
 
Current Liabilities Rs m 9,477 10,913 15.2
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 37,206 39,947 7.4
 
Current assets Rs m 15,503 17,478 12.7
Fixed Assets Rs m 21,699 22,462 3.5
Total Assets Rs m 37,206 39,947 7.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



AKZO NOBEL Cash Flow Statement Analysis

  • AKZO NOBEL's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -1 billion from the Rs 2 billion net cash flows seen during FY20.

AKZO NOBEL Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 3,741 2,832 -24.3%
Cash Flow from Investing Activities Rs m 44 -2,249 -
Cash Flow from Financing Activities Rs m -1,573 -1,737 -
Net Cash Flow Rs m 2,212 -1,154 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for AKZO NOBEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.6, an decline from the EPS of Rs 52.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,238.1, stands at 49.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 7.5 times, while the price to sales ratio stands at 4.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 36.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 584.5 531.7
TTM Earnings per share Rs 52.1 45.6
Diluted earnings per share Rs 52.1 45.6
Price to Cash Flow x 32.2 36.0
TTM P/E ratio x 49.1 49.1
Price / Book Value ratio x 7.6 7.5
Market Cap Rs m 101,921 101,921
Dividends per share (Unadj.) Rs 14.0 50.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for AKZO NOBEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY21, from 1.6x during FY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 28.0x during FY21, from 35.8x during FY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company declined and down at 16.1% during FY21, from 19.2% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company declined and down at 22.4% during FY21, from 26.9% during FY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company declined and down at 5.5% during FY21, from 6.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.6 1.6
Debtors’ Days Days 54 62
Interest coverage x 35.8 28.0
Debt to equity ratio x 0.0 0.0
Return on assets % 6.6 5.5
Return on equity % 19.2 16.1
Return on capital employed % 26.9 22.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how AKZO NOBEL has performed over the last 5 years, please visit here.

AKZO NOBEL Share Price Performance

Over the last one year, AKZO NOBEL share price has moved up from Rs 1,918.2 to Rs 2,238.1, registering a gain of Rs 319.9 or around 16.7%.

Overall, the S&P BSE SENSEX is up 44.4% over the year.

(To know more, check out historical annual results for AKZO NOBEL and quarterly results for AKZO NOBEL)

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Related Views on News

AKZO NOBEL Announces Quarterly Results (1QFY22); Net Profit Up 474.7% (Quarterly Result Update)

Aug 16, 2021 | Updated on Aug 16, 2021

For the quarter ended June 2021, AKZO NOBEL has posted a net profit of Rs 759 m (up 474.7% YoY). Sales on the other hand came in at Rs 6 bn (up 142.3% YoY). Read on for a complete analysis of AKZO NOBEL's quarterly results.

AKZO NOBEL Announces Quarterly Results (4QFY21); Net Profit Up 37.3% (Quarterly Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

For the quarter ended March 2021, AKZO NOBEL has posted a net profit of Rs 742 m (up 37.3% YoY). Sales on the other hand came in at Rs 8 bn (up 34.4% YoY). Read on for a complete analysis of AKZO NOBEL's quarterly results.

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