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Akzo Nobel said it expects core earnings to be €100m higher in 2017, as the Dutch paints and chemicals group posted record profitability in the first quarter of the year.

The owner of the Dulux brand, which is attempting to fend off a €22.4bn takeover assault by US rival PPG Industries, posted a 13 per cent increase in earnings before interest and tax – excluding one-off items – to €376m in the three months ending 31 March.

It put this down to “volume growth, continuous improvement and cost discipline”. The company added that this measure of earnings should be €100m greater than the €1.5bn delivered in 2016, barring any “substantial changes” in market conditions, which would represent a 6.7 per cent increase.

The company said on an investor call this would put them on the “high side” of their earnings before interest and tax guidance.

Akzo Nobel will be hoping that the update sets a positive tone before it unveils a new strategy to investors this morning. Management must convince shareholders that its future lies as an independent company rather than in a combination with PPG.

A number of shareholders – led by the activist hedge fund Elliott – have called for Akzo Nobel to enter talks with its suitor, though the Amsterdam-based group has so far resisted.

During the first quarter, Akzo Nobel’s revenue rose 7 per cent to €3.6bn, due to higher volumes and acquisitions. Return on sales hit 10.3 per cent. Sales and earnings were up in each of its divisions – decorative paints, performance coatings and speciality chemicals.

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