Jotun reported nine percent rise in revenue
in 2011 due to better market conditions in
Asia and Middle East while profits dipped
Jotun’s long-term growth trend continued
in 2011 with improved sales in most segments and divisions, due to improved
markets in Asia and parts of the Middle
East said the company, however the paint
maker’s profit took a dip.
The company reported operating revenues of NOK10.7 billion (~USD1.9 billion) in 2011, up from NOK 9. 8 billion
(~USD1.7 billion) the previous year.
Meanwhile operating profit was NOK956
million (~USD169 million) in 2011, compared with NOK 1,240 million (~USD219
million) in 2010, due mainly to higher
raw materials prices.
Jotun said it sold more paint in volume
and value terms in 2011 than in 2010.
Margins and profits were affected by high
costs of major raw materials such as epoxies, titanium dioxide, acrylics and metals.
Jotun’s strategy of operating across a
range of segments and geographies continues to yield results with higher sales in
parts of Asia and the Middle East that offset slower sales in Europe.
“Jotun’s business model has proven to
be remarkably resilient and the group has
had a satisfactory performance in an other-
wise challenging year,” said Morten Fon,
Jotun’s president and CEO. “Indeed, we
managed to grow our sales in a number of
important markets, despite a number of un-
expected events in the global economy.
High raw materials prices remain a chal-
lenge for us and the industry as a whole.”
Jotun made considerable investments in
2011, and major projects during the year in-
cluded: new production structure and con-
struction of a new factory in Sandefjord; a
new factory in Malaysia; ongoing construc-
tion of new factories and buildings in China
and the United States; factory expansion in
the UK; purchase of land in Russia and In-
donesia; world-wide implementation of new
business support information technology.
“Jotun is in a good position to continue
its long-term growth trend, in spite of chal-
lenges in the global economy,” said Fon.
“The group has a solid business model with
a differentiated regional and segment ap-
proach, and sound financial foundation
which enables further investment in line
with its proven organic growth strategy.”
The Jotun Group is one of the world’s
leading manufacturers of paints, coatings
and powder coatings. The group has 70
companies and 38 production facilities on
all continents. Including the total network
of legal companies, agents, branch offices
and distributors Jotun is represented in
more than 80 countries. Jotun’s operations
cover development, production, marketing
and sales of various paint systems and
products to protect and decorate surfaces
in the residential, shipping and industrial
markets. The Jotun Group has today 7,800
employees with its headoffice located in
Sandefjord, Norway.
AkzoNobel posts Q4 and full-year results for 2011
Akzo Nobel N.V. published Q4 and full-year results for 2011. The company reported revenue growth across all business
areas, led by price/mix developments of
five percent and a two percent volume increase the company said.
“2011 was a challenging year against
the background of weaker global economic conditions and unprecedented raw
material price inflation,” said CEO Hans
Wijers. “The absolute impact of increased
raw material prices for the year was approximately €1 billion. Despite this significant headwind, our reported pricing
actions have now offset most of this, and
for the year ahead we expect to see the
full-year benefit of these increases.
“In addition, to further reduce our cost
base and improve our competitiveness, we
recently launched a performance improvement program, which is on track,” said Wijers. “Our strong fundamentals,
geographical spread and commitment to de-
liver, in combination with the improvement
program, give us confidence in the future.”
AkzoNobel’s performance improvement
program, launched in October 2011, is designed to strengthen competitiveness, enhance the company’s ability to grow,
simplify support structures and significantly
reduce its cost base. This implies a significant change in the operating model and
business culture. The comprehensive three-year plan—designed to improve performance and deliver €500 million EBITDA in
2014—is expected to deliver €200 million
EBITDA in 2012. This implies higher restructuring costs for the coming year. Restructuring activities continue in decorative
paints in Europe and the United States.
AkzoNobel’s medium-term ambitions
are to grow to € 20 billion in revenue, increase EBITDA each year while maintaining a 13 to 15 percent margin, reduce
OWC percent of revenue year-on-year by
0.5 percent towards a 12 percent level,
and pay a stable to rising dividend.
During 2011 AkzoNobel said it faced
many challenges, most notably the rapid
price increases that affected most of its raw
materials and the continuing economic
headwinds in many of its major markets.
For the year ahead, the company expects
to see the full-year benefit of the price rises
that have been achieved so far, and which it
says have now offset most of the raw material price increases. Currently, AkzoNobel
said it is experiencing greater price stability
in most raw materials, with the exception of
TiO2, which is to continue to rise in price,
and for which plans are in place to pass
through further price rises in the future.
The major uncertainty remains the economic environment. The concerns are focused on the risk of recession in Europe,
delayed recovery of the United States
property market and the potential for a
slowdown in China. Each of these can
have a significant impact on customers in
these regions that would in turn impact
