The turmoil at AkzoNobel shows no signs of subsiding. The worst seemed over as the Dutch coatings producer temporarily ended a feud with activist investor Elliott Advisors in August, but hours ahead of its scheduled extraordinary general meeting (egm) on Sept. 8, the company issued a profit warning and announced plans to restructure the coatings business.

Earnings-pressuring issues with which Vanlacker said the company is “dealing head on” were said to include unfavorable foreign exchange rates, problems in the marine and protective coatings industry and temporary disruption to manufacturing and supply chains during the third quarter, as well as a greater than expected inflation in raw material costs.

Simultaneously, Akzo announced that its chief financial officer, Maëlys Castella, is taking a leave of absence for health reasons, but is expected to return to the company in a senior management role, “following an anticipated recovery.” Group Controller Hans De Vriese will act as interim CFO, as the company initiates “a full internal and external search for a permanent replacement.”

During the pushback against PPG, management had forecast an earnings increase of €100m for 2017. However, on the egm, CEO Thierry Vanlancker – appointed to the position to replace Ton Büchner, who resigned for health reasons in July – said current challenges in the paints and coatings market “are having a wider and greater impact as the year continues.”

At the same time, the CEO stressed that Akzo would achieve the targets for 2020, which include a 15% return on sales and more than 25% return on investment in the paints and coatings division, while acknowledging that its earnings are lagging those of competitors by “one or two points.”

To meet the targets of its remaining coatings business after the spin-off of the specialty chemicals arm – scheduled to take place in April 2018 –   the company has launched a restructuring scheme calling for the creation of four regional paints units and four integrated coatings units  that  Vanlacker said would have “full profit and loss responsibility.” 

The new, fully integrated management structure is designed to enhance customer focus, drive further operational excellence, and build greater momentum and speed across the business, Vanlacker said. However, several analysts expressed skepticism that the targets were achievable, especially in view of the profit warning for this year.

At the egm, Akzo’s management and its supervisory board chairman, Antony Burgmans, are said to have faced intense questioning from shareholders about the company’s response to PPG’s bid.  Elliott’s London-based European arm had sought the meeting, but later defused a potentially volatile session by striking a comprise that sees Burgmans stepping down in April 2018 and Akzo management appointing three new directors to the supervisory board.