AKZO NOBEL 2022-23 Annual Report Analysis

Wed, 12 Jul

AKZO NOBEL has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

AKZO NOBEL Income Statement Analysis

• Operating income during the year rose 20.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 21.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.8% in FY23 as against 13.7% in FY22.
• Depreciation charges increased by 8.7% and finance costs decreased by 2.8% YoY, respectively.
• Other income grew by 10.5% YoY.
• Net profit for the year grew by 15.5% YoY.
• Net profit margins during the year declined from 9.2% in FY22 to 8.8% in FY23.

AKZO NOBEL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	31,486	38,021	20.8%
Other income	Rs m	248	274	10.5%
Total Revenues	Rs m	31,734	38,295	20.7%
Gross profit	Rs m	4,324	5,251	21.4%
Depreciation	Rs m	759	825	8.7%
Interest	Rs m	145	141	-2.8%
Profit before tax	Rs m	3,668	4,559	24.3%
Tax	Rs m	767	1,208	57.5%
Profit after tax	Rs m	2,901	3,351	15.5%
Gross profit margin	%	13.7	13.8
Effective tax rate	%	20.9	26.5
Net profit margin	%	9.2	8.8

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AKZO NOBEL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 13 billion as compared to Rs 12 billion in FY22, thereby witnessing an increase of 6.8%.
• Current assets rose 6% and stood at Rs 19 billion, while fixed assets rose 7% and stood at Rs 25 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 44 billion as against Rs 41 billion during FY22, thereby witnessing a growth of 7%.

AKZO NOBEL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	12,595	13,163	4.5
Current Liabilities	Rs m	11,838	12,639	6.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	41,331	44,023	6.5
Current assets	Rs m	17,604	18,682	6.1
Fixed Assets	Rs m	23,718	25,332	6.8
Total Assets	Rs m	41,331	44,023	6.5

AKZO NOBEL Cash Flow Statement Analysis

• AKZO NOBEL's cash flow from operating activities (CFO) during FY23 stood at Rs 5 billion, an improvement of 300.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -151 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -3 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 billion from the Rs 59 million net cash flows seen during FY22.

AKZO NOBEL Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	1,214	4,862	300.5%
Cash Flow from Investing Activities	Rs m	2,304	-151	-
Cash Flow from Financing Activities	Rs m	-3,459	-3,017	-
Net Cash Flow	Rs m	59	1,697	2,776.3%

Current Valuations for AKZO NOBEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 73.6, an improvement from the EPS of Rs 63.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,724.5, stands at 37.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 22.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	691.4	834.9
TTM Earnings per share	Rs	63.7	73.6
Diluted earnings per share	Rs	63.7	73.6
Price to Cash Flow	x	23.8	22.3
TTM P/E ratio	x	30.0	37.0
Price / Book Value ratio	x	7.7	7.1
Market Cap	Rs m	97,594	93,015
Dividends per share (Unadj.)	Rs	75.0	65.0

Ratio Analysis for AKZO NOBEL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY23, from 1.5x during FY22. 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 improved and stood at 33.3x during FY23, from 26.3x during FY22. 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 improved and stood at 25.5% during FY23, from 23.0% during FY23. 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 improved and stood at 35.7% during FY23, from 30.3% during FY22. 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 improved and stood at 7.9% during FY23, from 7.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.5	1.5
Debtors’ Days	Days	57	53
Interest coverage	x	26.3	33.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.4	7.9
Return on equity	%	23.0	25.5
Return on capital employed	%	30.3	35.7

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 1,880.0 to Rs 2,724.5, registering a gain of Rs 844.5 or around 44.9%.

Overall, the S&P BSE SENSEX is up 20.2% over the year.

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