Akzo Nobel NV had its biggest two-day decline for more than four years in Amsterdam after Chief Executive Officer Ton Buechner’s long-awaited management blueprint for the chemical and paint company failed to impress.
The owner of the Dulux paint brand dropped as much as 6.2 percent, adding to yesterday’s 5.3 percent slide and making the shares’ two-day performance their worst since November 2008.
Buechner’s day of presentations in London yesterday failed to convince investors, who had been waiting 10 months for the CEO to sketch out his vision. His strategy centers on streamlining Akzo Nobel and bringing forward a deadline for an existing 500 million-euro ($659 million) efficiency program by a year. Other new targets include a 9 percent operating margin and a 14 percent return on investment by 2015.
“Buechner highlighted the very large profit improvement opportunity in Akzo Nobel, but we think his realistic 2015 targets seemed too realistic,” Jeremy Redenius, an analyst at Sanford C. Bernstein, said in a note.
The 9 percent margin goal seems “especially conservative,” Redenius said, adding he’d banked on 12 percent being ’’very easy to get.’’
Buechner pledged to eliminate complexity at the chemical-and paint-maker as the focus now is on improving performance, particularly at the struggling decorative paints unit in Europe. Approaching his first anniversary as CEO, he abandoned a goal to lift sales to 20 billion euros by 2015.
Akzo Nobel traded 5.1 percent lower at 46.82 euros as of 12:36 p.m., reducing the company’s market value to 11.2 billion euros.