Toronto, Ontario -- The second quarter of 2025 delivered uneven results for three of the world's largest automotive coating suppliers, Sherwin-Williams, Akzo-Nobel and BASF.
While Sherwin-Williams struggled with consumer weakness, AkzoNobel managed to expand margins through efficiency measures and BASF's anticipated guidance cut was well-received by investors.
The mixed results across all three companies reflect broader challenges facing the automotive coatings sector, including currency volatility, uneven demand patterns and ongoing market uncertainty.
Sherwin-Williams' growth slows
Sherwin-Williams posted modest growth in the quarter, with net sales rising to US$6.31 billion ($8.29 billion), up 0.7 per cent over Q2 2024. However, the company's bottom line took a hit as adjusted earnings per share (the company's profit divided by the number of shares outstanding, adjusted for one-time items) fell to US$3.00 ($4.00), down 8.6 per cent and missing analyst expectations.
Net income (the company's total profit after all expenses and taxes) dropped to US$754.7 million ($991 million) from US$889.9 million a year earlier. The company blamed weakness in its do-it-yourself consumer brands and soft demand for professional products used by body shops and other commercial customers.
Investors weren't impressed. Sherwin-Williams shares declined about 1.9 per cent after the release of its most recent quarterly report.
AkzoNobel: Margins expand as revenues fall
Netherlands-based AkzoNobel faced significant currency challenges in Q2, with revenue falling six per cent to €2.626 billion ($3.64 billion) compared to Q2 2024. The decline came despite flat organic sales (sales growth excluding currency effects and acquisitions), as adverse currency effects weighed on the top line.
Despite this, the company managed to improve its profitability through cost-cutting measures. Adjusted earnings before interest, taxes, depreciation, amortization, and one-time items rose to €393 million ($545 million), lifting the company's profit margin to 15.0 percent from 14.4 percent a year earlier.
AkzoNobel generated €234 million ($324 million) in operating cash flow (the cash generated from day-to-day business operations), up from €151 million in the prior year. The company also announced progress on planned asset sales, including a binding agreement to sell its Indian operations to the JSW Group, expected to close in the fourth quarter.
BASF: Revenue declines as dry powder rises
According to preliminary figures released earlier this month, German chemical giant BASF saw its Q2 sales drop 2.1 percent to €15.77 billion ($21.9 billion), weighed down by negative currency shifts and softer pricing across its product lines. The company's EBITDA before special items stood at €1.77 billion ($2.46 billion), meeting analyst expectations but falling short of last year's €1.96 billion.
The bottom line took a more significant hit, with net income plunging to just €0.08 billion ($111 million) from €0.43 billion in the prior year. However, BASF's cash generation improved, with free cash flow (the cash left over after capital expenditures and operating expenses) rising to €0.53 billion ($736 million) from €0.47 billion previously.
Management acknowledged the challenging environment by lowering its full-year EBITDA forecast to €7.3–7.7 billion ($10.1–10.7 billion). Despite the downward revision, BASF shares gained more than three percent in Frankfurt trading the Monday following the release of the preliminary Q2 figures.
