Akzo Nobel NV (AKZA) Chief Financial Officer Keith Nichols said he decided to quit, forcing the Dutch maker of Dulux paint and chemicals to find a new finance head part-way through a reorganization.
Nichols, who in his eight years helped to integrate the $17 billion acquisition of Imperial Chemical Industries and reduce an inflated pension gap, will leave at the end of June, Akzo said in a statement today. The company started an international search for a successor to 53-year old Nichols, who became finance chief in 2008.
Nichols, whose family is based in the U.K., has played a pivotal role in the transformation of Amsterdam-based Akzo and was de facto running the company when Chief Executive Officer Ton Buechner took leave of absence for three months at the end of 2012. Buechner has assembled a new top-management team since joining in April 2012.
“The timing is always difficult but I’m entering my ninth year and it ends up being the best of bad timing,” Nichols said in an interview. “It’s going to be business as usual until the summer.”
Nichols’ career at Akzo spanned a period of global expansion under Buechner’s predecessor, Hans Wijers, followed by a deep-reaching efficiency drive to help lift Akzo’s operating margin to 9 percent of sales by 2015.
Akzo is “on track” to meet its goals for 2015, Nichols said, adding that it was his decision to leave and there is no immediate announcement on his next move.
Shares of the Amsterdam-based company gained 1.5 percent to 56.54 euros as of 11:59 a.m. local time. Of 32 analysts covering the company, 14 rate the stock buy, with nine rating it hold, and nine recommending investors sell Akzo.
Brought in to oversee an initial public offering of Akzo’s pharmaceutical business, Nichols’ efforts to prepare the business for listing after carrying out the in-depth due diligence needed were cut short after Schering-Plough Corp. preempted the IPO with a $14.5 billion bid in 2007.
“It’s been a hell of a journey,” Nichols said. “The company is very different to when I entered in 2005.”
Akzo said earlier this month that it will spend an extra 50 million euros ($68 million) reorganizing in 2014 as it extends its efficiency drive to improve profitability.
With little improvement in market conditions, Akzo is resorting to internal measures to help bring profitability in line with peers including PPG Industries Inc. (PPG) Buechner has set targets for 2015 of an operating margin at 9 percent of sales and a 14 percent return on investment.
Buechner will update investors on Akzo’s progress in March. The capital markets day, to be held in London, marks a year since he first outlined his strategy, and the CEO may need to outline additional measures to keep up with competitors, analysts have said.
Some of the measures undertaken in the current revamp hark back to Akzo’s purchase of ICI in 2008 for $17 billion and the need to create a more coherent company from diverse operations making Dulux paint and chemicals. The timing of the overhaul is coinciding with subdued demand in Europe and a resurgent U.S. chemical industry fueled by shale gas.
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