Hempel Releases Annual Report 2012

Hempel Group reported that its revenues grew by 15% in 2012, despite facing a challenging world market, and the Group is still on track to achieve its long-term goals.

The Hempel Group delivered an all-time high revenue of EUR 1,242 million in 2012. EBITDA reached a record high of EUR 126 million, an increase of 21 million compared to 2011. Net profit remained level with2011 at EUR 35 million.

Pierre-Yves Jullien, Group President and CEO of Hempel A/S, commented, “Our performance over the last few years means we have a solid financial foundation for growth in the future, which is essential for our One Hempel – One Ambition strategy. We have the financial capability to look at new investments and acquire new businesses should the right opportunity appear, and we will continue to expand production capacity and develop new products in 2013.”

Hempel’s 2012 results:

• Group revenues rose from EUR 1,077 million in 2011 to EUR 1,242 million in 2012
• EBITDA of EUR 126 million with an EBITDA margin above 10%
• Operating profit of EUR 83 million, up from EUR 72 million in 2011
• Net profit of EUR 35 million, level with 2011

The Hempel Group's revenues grew by 15% in 2012 thanks largely to a solid performance in the Industry segment – which was bolstered by growth in new markets, including Eastern Europe – and the inclusion of Crown Paints for the full year.

“As expected, 2012 was a challenging year," said Pierre-Yves Jullien. "However, we were able to adjust our Group quickly, evolve our approach to traditional markets and seize new opportunities. This gave us satisfactory growth and our long-term goals remain the same. We will reach them by continuing to provide value for our customers through our products and services.”

Hempel’s cash generation was satisfactory in 2012. However, Hempel’s EBITDA margin was only slightly above 10%, despite a stabilization of raw material prices and an improved gross margin.

“Our EBITDA margin was not on par with our objectives,” Pierre-Yves Jullien comments. “However, we have implemented a number of initiatives to ensure that the Group reaches more satisfactory earning levels and we expect to see results already in 2013. At the same time, we will ensure that we deliver a return on all the initiatives we have started since 2010 to ensure they contribute to strong growth in the years ahead.”

In 2011, Hempel acquired Crown Paints, one of the strongest decorative brands in the U.K. and Ireland. The first full year with Crown Paints as a member of the Hempel Group was a success, with Crown Paints managing to strengthen its market position, despite tough market conditions.

Continuing its growth strategy, Hempel acquired Blome International Inc. in 2012. A U.S.-based protective coatings manufacturer, Blome International Inc. offers a range of specialist protective coatings and the acquisition will support the fast growth of Hempel America.

“We can already see that Hempel and Blome International Inc. are an unbeatable match,” Pierre-Yves Jullien comments. “The two companies complement each other well and we believe the partnership will be a success already in 2013.”

Hempel performed strongly in new markets in 2012 – including Brazil, India and South Africa – and the
Group will look to build on these successes in 2013.

The company also released a number of new products, including the first coatings in its new passive fire protection range and a new range of low-solvent antifouling products that enable shipowners to reduce fuel bills and meet increasingly tough environmental legislation.

“We will keep going with our investments in 2013,” says Pierre-Yves Jullien. “We will expand capacity in India, Saudi Arabia and Russia, extend our sales channels in Asia, increase production efficiency in the U.K. and invest further in Latin America and Africa. And, of course, we will continue our commitment to develop new products that add value to our customers.”

Hempel’s Annual Report will be available as a PDF file on 04 April 2013 on www.hempel.com.