Coatings World - JULY 2013

The Valspar Corporation
Minneapolis, Minnesota/USA
www.valsparglobal.com

PUBLIC COMPANY
YEAR ESTABLISHED: 1806
Revenue: $4.03 billion s (2011: 3.704 bn)

MARKETS SERVED

• Architectural coatings • General industrial • Coil coatings • Wood coatings • Automotive refinish

KEY EXECUTIVES

Gary Hendrickson, president and CEO; Rolf Engh, executive VP, general counsel and secretary; Steven Erdahl, executive VP; Anthony Blaine, senior VP; Howard Heckes, senior VP; James Muehlbauer, CFO; Brian Falline, group VP; Bernard Ouimette, senior VP; Roeland Polet, senior VP.

Valspar’s sales for fiscal year 2012 totaled $4.03 bn, a two per- cent increase from fiscal year 2011. Revenues in the compa- ny’s Coatings segment increased four percent. This segment gained new business in every product line, and saw double-digit sales growth in general industrial and coil product lines. The Coatings segment includes a broad range of decorative and protective coatings for metal, wood and plastic, primarily for sale to OEM customers. Products within the Coatings segment include primers, topcoats, varnishes, inks, sprays, stains, fillers and other coatings used by customers in a wide range of manufacturing industries, including building products, appliances, furniture, transportations, agricultural and construction equipment, metal packaging and metal fabrication.

Paint segment revenues were flat for the year, reflecting weakness in China and Australia and slow economic recovery in the U.S. Despite these challenges, Valspar achieved double-digit volume growth in China with the successful introduction of a new product line for the affordable housing market. In Australia, the partnership with Masters, a regional joint venture with Lowe’s, continues to gain traction. All Masters stores feature Valspar’s Wattyl paint as the flagship paint brand and its 150-store growth plan is on target. The Valspar paint brand’s introduction of the “Love Your Color Guarantee” in the U.S. and Australia was well-received by consumers and generated positive paint sales and volumes. Through its Paints segment, Valspar offers a wide variety of products such as paints, primers, topcoats and aerosol spray paints sold primarily through retailers and distribution networks. The company sells branded and other products in the paints segment, including Valspar, Cabot, Huarun, DeBeer and House of Kolor. This segment includes architectural and automotive refinish lines.

Valspar continued to invest in fast-growing markets outside of the U.S. Sales in markets outside of the U.S. accounted for 46 percent of total company revenues. Latin America business delivered a double-digit revenue increase reflecting strength in industrial and packaging product lines and last year’s acquisition of Isocoat, a Bra-zilian-based manufacturer of powder coatings. Valspar’s progress in China continued with aggressive efforts to expand the Huarun and Valspar brands and the introduction of new products for the affordable housing market. The consumer paint business in China generated mid-single-digit revenue growth and high single-digit volume growth in the second half of the year.

Valspar also initiated a new partnership with B&Q, the larg-
est home improvement retailer in the United Kingdom and Ireland.
Valspar will become the flagship paint brand in all 350 B&Q retail
stores in 2013. This positions Valspar for strong future growth in
the European paint market.

Valspar to Acquire Inver

Valspar recently signed a definitive agreement to acquire Inver Holding S.r.l. (ranked number 60 in last year’s report), a leading industrial coatings manufacturer in Europe. The transaction is expected to close in the fiscal fourth quarter, subject to regulatory approval and customary closing conditions. Financial terms were not disclosed.

Inver Group is headquartered in Bologna, Italy and generated sales in 2012 of approximately $200 million. Founded in 1934, the company specializes in liquid and powder coatings products as well as resins that are used in a variety of industrial applications including off-road equipment, auto and off-road parts, architectural aluminum windows, railways and trams. Owned by the Domenichini family for three generations, the company serves customers primarily in Italy, the United Kingdom, France, Germany and Poland.