Akzo Nobel announced that it intends to concentrate its Dutch-based management personnel in a new office building in Amsterdam, which is currently being built and which will be ready within about 2.5 years.
Currently, head office and the Dutch-based business unit’s management is spread over four office locations. The company will no longer have offices in Amersfoort and Hoofddorp following the relocation.
Akzo claims that the new building, in which about 700 people will work, should bring some (unidentified) cost savings and is also intended to promote cross-company collaboration.
Our View:
We would expect the savings to be relatively small when compared to the profit improvement initiatives that are currently undertaken (and which are intended to save € 250m in 2013 alone, after already having delivered € 250m in 2012). Despite a clear share price trigger and a weak underlying building market in Europe, we continue to believe valuation is attractive enough to warrant an Accumulate rating and our € 53 target price.