Jotun's revenues rose by 9% in 2011
Thursday, 23 February 2012 | 00:00
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.
The company reported operating revenues of NOK 10.7 billion in 2011, up from NOK 9.8 billion the previous year. Meanwhile operating profit was NOK 956 million in 2011, compared with NOK 1,240 million in 2010, due mainly to higher raw materials prices.
Key operational highlights
. Jotun sold more paint in volume and value terms in 2011 than in 2010
. Jotun's 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.
. Sales rose in China, Russia, Korea, Turkey, Oman, Abu Dhabi, India and offset slower sales in Europe
. Operations in the Middle East were affected by the Arab Spring
Commenting on the results Morten Fon, Jotun's President and CEO, said: "Jotun's business model has proven to be remarkably resilient and the group has had a satisfactory performance in an otherwise challenging year. Indeed, we managed to grow our sales in a number of important markets, despite a number of unexpected events in the global economy. For our
results, high raw materials prices remain a challenge for us and the industry as a whole."
Long-term perspective and investments
Jotun made considerable investments in 2011, and major projects during the year included:
. New production structure and construction of a new factory in Sandefjord
. New factory in Malaysia
. Ongoing construction of new factories and buildings in China and USA
. Factory expansion in UK
. Purchase of land in Russia and Indonesia
. World-wide implementation of new business support information
Solid financial position
Jotun's equity ratio was 55 per cent at the end of the year. The company had sufficient liquidity and low interest bearing debt. The company's cash and cash equivalents stood at NOK 618 million at year-end, and the company had undrawn credit facilities totalling NOK 1.425 billion.
"Jotun is in a good position to continue its long term growth trend, in spite of challenges in the global economy. The group has a solid business model with a differentiated regional and segment approach, and sound financial foundation which enables further investment in line with its proven organic growth strategy," said Morten Fon, Jotun's President & CEO.
Transition to IFRS
With effect from the 2011 accounts including comparable figures from 2010, Jotun has transitioned to International Financial Reporting Standards (IFRS) from Norwegian Accounting Standards (NGAAP).
The purpose of the transition is to make financial information from Jotun more understandable for a wider international group of readers.
The transition has some effects on the accounts, including less room to include Jotun's share of revenues from companies which the group owns together with other partners. Jotun has several such partnerships in the Middle East and Asia.
Thus, operating revenues are lower than what has been previously reported. For the results, however, the transition to IFRS is nearly neutral.