Last of the Big Spenders

Elsewhere, trouble in the financial markets has led the company to put some corporate-finance plans on hold. The board has deferred the final €1.6 billion of a share buyback programme until after it refinances €1.8 billion of bonds that mature by May 2009. "We could never have predicted how this banking crisis has evolved and how paralysed the financial markets would become in late summer," Nichols says. "You would have thought for a strong investment-grade company this [refinancing] should have just been a routine event." Instead, with debt markets largely closed, AkzoNobel wants the safety of its own cash to fall back on, although Nichols adds that he is "encouraged" by recent developments in the bond market and is "not too concerned" about the impending maturity.

Muddy Waters
Not all investors share Nichols' confidence. By late November, AkzoNobel's share price was at its lowest in more than five years. To what extent the company's new structure has affected its stockmarket performance is questionable, although Nichols thinks the upheaval of the restructuring and reliance on pro-forma revenues have made it a difficult business to value. "We've undergone huge change that has made it complicated for analysts to keep up with and understand," he says. The CFO hoped a September investor day was "a big step" in giving the market a clearer picture of AkzoNobel. But in an October research note, Credit Suisse said that accounting effects from the acquisition, disposals and restructuring would make "the waters somewhat muddy" and that "market commentators may need some time to analyse [AkzoNobel's] numbers properly."

While ICI is integrated and the investment community gets its collective head around the new AkzoNobel, Nichols faces the same uncertain outlook as his fellow CFOs across myriad industries amid the downturn. "The real unknown here is how this is going to develop, so we have to be even better prepared than usual to react and adapt quickly," he says. "We have experienced people across the three business areas, and their knowledge and understanding, together with our leading positions, strong brands and customer relationships, give us at least a headstart in managing our way through here." Nichols seems to have convinced himself — now he needs to make sure investors are on board too.

Tim Burke is senior editor at CFO Europe.

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