DIY slump dampens Dulux maker income

A RETURN to the office and the revival of foreign holidays dampened sales at Dulux maker Akzonobel, as the end of Covid restrictions prompted a fall in DIY projects.

Akzonobel said it sold 9pc fewer pots of paint and coatings in the three months to the end of June compared with last year. The company said the results were “clearly impacted by two months of lockdowns in China” as well as European DIY stores not needing to order more products due to backlogs.

The company posted operating income of €205m (£175m) for the period, a 47pc drop on last year.

Thierry Vanlancker, the chief executive, pointed to “significant headwinds” in the quarter, including an “enormously big drop in footfall for consumers coming to DIY outlets” in Europe this spring.

“Consumers simply were not showing up,” he said. “Probably … people were travelling or had other stuff to do than hanging around the house for once after the Covid period.”

DIY stores had bought lots of stock in March, meaning they did not need to buy in April and May. By June, this had worked its way through the system. Mr Vanlancker said: “It was a pretty brutal reset of the inventory.”

Revenues at Akzonobel rose 14pc in the quarter, as it increased its prices 16pc to cope with steeper costs of materials such as latex, which is used in paint.

Mr Vanlancker dismissed suggestions that price rises were behind the drop in sales. The cycle of having to raise prices, he said, was starting to end.

“You see the raw materials increasingly becoming better available, it’s not back to normal yet, but there’s more availability. And also the increases [in the costs] of many products are starting to taper off.”

Raw material costs are expected to peak in the third quarter.

The company said it is on course to hit its earnings target of €2bn for 2023.