(Adds more detail, CEO quote)
AMSTERDAM, Feb 17 (Reuters) - Dutch paints and coatings maker Akzo Nobel posted a 32% jump in fourth-quarter core earnings on Wednesday, beating analysts’ expectations, and said it would buy back 1 billion euros ($1.21 billion) worth of its shares in the coming year.
The share buyback follows Akzo’s decision earlier this month to drop efforts to buy Finnish rival Tikkurila, days after U.S. group PPG Industries topped its bid.
But Akzo would remain on the lookout for interesting takeover targets, Chief Executive Officer Thierry Vanlancker said.
“We still have plenty of gun powder left to do the acquisitions we target,” he told reporters.
Adjusted operating income jumped to 294 million euros in the October-December period, the maker of the Dulux and Flexa brand of paints said, as demand recovered from the deep fall fuelled by the coronavirus crisis earlier in the year.
Analysts polled by the company had expected adjusted operating income to increase to 262 million euros, compared with 223 million euros a year earlier.
Total revenue increased 6% to 2.21 billion euros, stripped from currency fluctuations, marking a significant improve from the first half of last year when Akzo lost about a quarter of its sales due to economic lockdowns enforced across the globe. .
“Despite COVID-19 headwinds, we rose to the challenge and delivered our promise,” Vanlancker said.
This included meeting the goals set in 2017 to increase return on sales to 15% and return on investments to 20% by the end of 2020.
Akzo expects return on sales to improve by 50 basis points in 2021, with sales growth “at least in line with relevant markets,” Vanlancker said.
$1 = 0.8274 euros Reporting by Bart Meijer; Editing by Tom Hogue and Subhranshu Sahu