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Jotun Reports Record Year Results

Sunday, March 6, 2011

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Norway-based coatings giant Jotun reported record operating revenues and profits in 2010, notching volume increases in every segment and strong performances in high-growth markets.

Photos: Jotun Group Jotun coating advisors verify specifications, surface preparation practices and application procedures, and perform quality control testing.

The Jotun Group is one of the world's largest manufacturers of protective and marine coatings, paints and powder coatings, with more than 70 companies, 38 production facilities and 7,800 employees globally.

Overall Results

The company said it sold 10% more paint in 2010 than in 2009—although, like every coatings manufacturer, rising raw materials costs bit into profit margins.

The company reported a 7% increase in operating income, to NOK (Norwegian Kroner) 12.0 billion in 2010 (about $2.1 billion USD), up from NOK 11.2 billion the previous year; operating profit rose by 16% to NOK 1.34 billion in 2010 (about $240 million USD), from NOK 1.16 billion in 2009.

Strong sales in parts of Asia and the Middle East offset slower sales in Europe and the United States, Jotun reported. The company drew 60% of its 2010 revenue from Asia and the Middle East and more than half of its revenues from its Coatings segment.

Exceeding Expectations

“We are pleased with Jotun’s performance in 2010, which exceeded our initial expectations,” said Morten Fon, Jotun’s President and CEO.

The year’s earnings exceeded expectations, said Jotun President and CEO Morten Fon.

“During the year, we took the steps necessary to actively manage changes and align our growth strategy more closely with local economic conditions. This approach, coupled with the dedication and hard work of Jotun employees, proved to be successful.”

Projects and Investments

Jotun supplied coatings in 2010 to several iconic buildings worldwide, including Burj Khalifa in Dubai (the world’s tallest building) and Canton Tower in China.

Jotun’s total investments reached NOK 600 million (about $107 million USD) in 2010. The year’s major projects included:

• A new production facility in Norway;

• Continuing construction of production facilities and distribution centers in Malaysia and Singapore;

• A new coatings facility in Qingdao, China, and a new powder coatings factory in Zhangjiagang, China;

• Expansion of Jotun Powder in the UAE;

• Finalization of investment for a new waterborne factory in Saudi Arabia;

• New companies established in the Middle East; and

• Implementation of new business support information technology worldwide.

“Jotun is in a unique position to continue its long-term growth trend,” said Fon. “While we will continue to pursue an organic growth strategy, we have taken steps to accelerate our business development and streamline the process for identifying and establishing operations in promising new markets and segments."

Key Financial highlights (NOK million)