By Joshua Kirby

Akzo Nobel is eyeing glossier profit margins in the coming years despite a drop in revenue and earnings in 2025, as it prepares a $19 billion merger with rival Axalta that could be sewn up by the end of the year.

The Amsterdam-based paint maker, which owns consumer brands like Dulux and Interpon, said Tuesday that adjusted earnings before interest, taxes, depreciation and amortization amounted to 1.44 billion euros ($1.70 billion) last year, down 2% on year and missing company guidance for a result of around 1.48 billion euros.

Revenue in the last three months of the year came to 2.37 billion euros, a fall of 9% from the same period a year earlier, and lower than the 2.43 billion euros analysts had estimated, according to a consensus provided by Visible Alpha. That drop was largely down to currency effects, the company said. The euro gained strongly against the dollar over the course of last year as trade and monetary concerns hit the greenback, a headwind for European companies that sell to customers across the Atlantic.

"We expect slight share-price pressure on the result," analysts at Jefferies wrote following the update.

Despite the sliding top and bottom lines, Akzo Nobel's operating margin widened by 0.4 percentage points to 14.2% for the year.

"In a year when markets went largely backwards, we continued to improve our profitability," Chief Executive Greg Poux-Guillaume said. He pointed to reductions in staff numbers and other cost-cutting measures.

The company said it expects adjusted Ebitda of at least 1.47 billion euros this year, and in the medium term to expand its profit margin above 16%. Akzo Nobel said it would propose a final dividend of 1.54 euros a share for the year, unchanged from a year earlier.

The upbeat outlook comes as Akzo Nobel prepares an all-share merger with Philadelphia-based Axalta. The deal is set to create a global paint giant with a combined market value of around $19 billion, based on current exchange rates, and capitalizations that have expanded since the merger--first floated but abandoned in 2017--was revived in November. Axalta is the former DuPont paint division that was sold to investor Carlyle in 2013 before going public a year later.

Akzo Nobel in December said its finance chief Maarten de Vries would stay on, delaying his planned retirement in order to oversee the tie-up. The merged entity would have annual revenue of around $17 billion, placing it among the world's largest paint and coatings players. The deal should be sealed by the end of the year, or shortly afterward, Akzo Nobel said.

Still, the company doesn't expect an immediate improvement in its target markets, Poux-Guillaume said.

"We expect a weak first half, with the second half helped by easier comparisons," he said. "Against this backdrop, our efficiency measures will continue to support our performance as we push towards our midterm targets."

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

February 03, 2026 02:28 ET (07:28 GMT)

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