ING lowers forecasts for Akzo Nobel deco sales

25 June 2008 14:53  [Source: ICIS news]

LONDON (ICIS news)--ING has lowered its 2008 growth forecast for Akzo Nobel’s decorative paints business in the US and Europe due to a slowdown in the region's housing markets, the investment bank said on Wednesday.


Turnover in Akzo Nobel’s US decorative business was expected to drop 10% in the US, revised down further from a 2% fall. Growth in Europe was forecasted to be flat in 2008, compared with the previous estimate of a 3% increase.


ING reduced its target price for Akzo Nobel shares to €69 from €70.


ING said it expected substantial improvement in decorative paints margins over the next two-to-three years driven by the integration of ICI.


“We expect it to come partly from cost savings, but also skills transfer from ICI’s highly regarded decorative paints business, which enjoyed margins twice those of the ‘old Akzo’ decorative unit,” said ING analyst Paul Satchell.


Akzo Nobel shares were up 1% at €43 from Tuesday’s close during trading in Amsterdam.


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By: Mark Watts
+44 20 8652 3214

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