Jotun reported an operating profit of NOK 1.1 billion in 2009 as compared with NOK 0.9 billion for the previous year. Operating income increased from NOK 10.4 to NOK 11.2 billion. In litres and kilos, Jotun sold two per cent more paint than it did in 2008. There were large variations between the markets and geographically. Key markets such as China, South Korea and the Middle East reported strong figures. Europe performed poorly, and the Norwegian market, for example, was weaker than in many years. The group’s results were the best ever.
“We are satisfied with the results, which have exceeded our expectations. Jotun has positioned itself in many growth markets, and we have captured market shares in key areas. The results provide a good foundation for our future long-term priorities,” said President & CEO Morten Fon.
He points out that Jotun has also maintained a relatively high investment level in a challenging period for the global economy. Last year, for example, a decision was made to invest in a new factory in Sandefjord valued at more than NOK 500 million. This is Jotun’s largest investment ever. There are plans to establish factories in Libya and Russia. The construction of a new factory in China, Malaysia and the USA is underway. New factories were opened in Saudi-Arabia and South-Korea in 2009.
Vulnerable to raw materials and exchange rates
Following a positive trend for raw material prices for most of 2009, the trend turned around towards the end of the year. Income and assets are converted to Norwegian kroner from foreign currencies. Over eighty percent of the group’s revenue comes from outside Norway. The company is prepared for possible negative exchange rate effects moving forward.
Solid financial position
The company’s equity ratio is slightly more than 55 per cent.
Weaker in 2010
“We are prepared for weaker results in 2010. Jotun operates to some extent in late-cyclical markets, which means that we notice the effects of an economic decline later. Several areas are expected to show a somewhat weaker performance, but again, there will be a great deal of variation. There are, for example, grounds to expect weaker performance in areas such as deliveries to shipbuilding and in terms of property projects," said Morten Fon.
KEY FIGURES (NOK million)
2009 2008 % change
Operating income 11,219 10,442 7.4
Operating profit 1,157 919 25.9
Profit before tax 1,096 877 25.0