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Hempel has a Satisfying Year in 2007

Published on 2008-03-07. Author : SpecialChem

Hempel has improved its position in 2007, continuing to deliver sustained growth. For the second year, the Hempel Group increased revenues by 19 per cent, reaching EUR 927 million in net sales. Volume increased by 18 per cent and reached 289 million litres.

Operating profit increased by 57 per cent to EUR 96 million, which gave an operating margin of 10.4 per cent. At the same time, net profit was up by 89 per cent to EUR 70 million compared to EUR 37 million in 2006.

All this was achieved in spite of the continued high fluctuation of raw material prices and the effect of a weakening US dollar. More than 50 per cent of net sales in the Hempel Group are generated in US dollar-based markets and the overall currency effect on net sales was a reduction of growth of around 6 percentage points, e.g. growth in net sales in underlying currency was 25 per cent.

Hempel's Protective segment exceeded the increase in the global Protective market, delivering a healthy growth of more than 30 per cent, which was similar to the growth in 2006. Most of this growth has been driven by increased demand in Asia and Europe.

In 2007, the Marine segment increased net sales by 8 per cent. The largest growth was in Asia, while we saw slower growth in the biggest markets: the US and Europe. The significant effects of higher raw material prices, combined with the fact that many fixed contracts were mainly US dollar based, put margins in the Marine segment under pressure.

The Container segment continued its good performance with high activity levels and record volumes. The Yacht segment saw double-digit growth in a relative steady market. The Decorative segment continued to grow, mainly due to increased purchasing power in both developing and industrialised regions, especially China and the Middle East.

Hempel acquired LACOR on 1 January 2007 and much of the year was dedicated to ensuring a smooth integration of Hempel's existing business in Germany with LACOR. The acquisition accounted for 1 percentage point of the Group's growth.

Overall, 2007 was a satisfactory year for Hempel in most markets and segments. However, efficiencies in structures and production have not been fully realised and it is clear that Hempel must strive harder in 2008 to minimise costs and become better in passing along raw material price increases to customers.

Group President and CEO Pierre-Yves Jullien added, "We improved our position in 2007, improving efficiency and professionalism across the company. We managed this despite the weakening US dollar and raw material prices that remained high. However, we must still work harder to improve. We must obtain a better return for the value we create for our customers - and we must become truly efficient in every part of our organisation."

Source: Hempel


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