Coatings World - April 2011

H.B. Fuller reports first quarter 2011 results

H.B. Fuller Company reported financial results for the first quarter that ended February 26, 2011. Net income for the first quarter of 2011 was $14.4 million, or $0.29 per diluted share, versus $19.0 million, or $0.38 per diluted share, in last year’s first quarter.

Net revenue for the first quarter of 2011 was $339.5 million, up 9. 7 percent versus the first quarter of 2010. Higher average selling prices, higher volume and acquisitions positively impacted net revenue growth by 6. 8, 2.2 and 1.7 percentage points, respectively. Foreign currency translation reduced net revenue growth by one percentage point. Organic revenue grew by nine percent year-over-year. On a sequential basis, net revenue decreased approximately six percent relative to the fourth quarter of 2010, in-line with typical seasonal patterns, the company said.

Gross profit margin was down approximately 300 basis points versus the first quarter of 2010, primarily due to the cumulative effect of escalating raw material costs over the past year. Gross profit margin improved by 20 basis points versus the previous quarter as a combination of product reformulation and pricing actions offset ongoing raw material cost increases. Relative to the prior year, Selling, General and Administrative expense was higher by 5. 9 percent, but down 80 basis points as a percentage of net revenue.

At the end of the first quarter of 2011, the company had cash totaling $122 million and total debt of $239 million. This compares to fourth quarter levels of $133 million and $251 million, respectively. Sequentially, net debt was essentially unchanged. Cash flow from operations was $1.5 million in the first quarter, slightly better than last year, driven by better net working capital management, offset by lower net income.

“We are pleased with the results of the first quarter,” said Jim Owens, H. B. Fuller president and chief executive. “We continued our growth momentum with organic revenue up nine percent from last year. While raw material costs continued to rise in the quarter, our gross margin improved sequentially due to a combination of pricing actions, reformulation and product substitution that were executed efficiently by the entire organization. We have bumped up our full-year revenue guidance to between 10 percent and 12 percent above last year primarily to reflect additional price increases required to recover material costs. We met our expectations for profitability in the first quarter and, as a result, we are reaffirming the full-year earnings per share guidance that we provided at the beginning of the fiscal year.”

BASF achieves a capital gain of €900 M from K+S
Aktiengesellschaft shares sale

BASF SE has successfully placed approximately 19.7 million
shares of K+S Aktiengesellschaft (representing 10. 3 percent of
the company’s share capital) with institutional investors at a
price of € 50.00 per share. It was achieved through an acceler-
ated bookbuilding transaction. The total proceeds of the trans-
action amount to approximately €1 billion. BASF achieved a
capital gain before taxes of about €900 million from the sale.

Jotun reports strong quarter results

Jotun’s operating revenues and profits reached record ldevels in 2010, as a result of volume increases in all of its segments and strong performances in high-growth markets. The company reported operating revenues of NOK 12.0 billion in 2010, up from NOK 11.2 billion the previous year, while operating profit rose to NOK 1.34 billion in 2010, from NOK 1.16 billion in 2009.

Jotun sold 10 percent more paint in 2010 than in the previous year. Jotun’s strategy of operating across a range of market segments and geographical regions continues to deliver positive results, as strong sales in parts of Asia and the Middle East offset slower sales in Europe and the US. Rising cost of major raw materials such as epoxies, titanium dioxide, acrylics and metals, affected Jotun’s margins. Jotun supplied coatings to iconic buildings including Burj Khalifa in Dubai, the world’s tallest building, and Canton Tower in China. CW

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