Corporate Responsibility Report 2012 - Hempel

Corporate Responsibility Report
1

Contents
Introduction 4
About Hempel 6
ethical behaviour 8
Health and safety 10
environment 14
environment: reducing vOC emissions 18
Procurement 24
Our people 26
Community engagement 28
Corporate volunteering 36
Financial results 38
3

Introduction to the Hempel Corporate
Responsibility Report 2012
“Being a good corporate citizen is about more than just how we work – we also have a
responsibility to help those less fortunate than ourselves.”
At Hempel, we have long been aware of our responsibilities to the communities in which we operate.
Our customers, suppliers and employees recognise our efforts within corporate responsibility. I am proud of
our work in this area and I would like to thank all our employees for their commitment. This report highlights
some of our most important achievements and developments in corporate responsibility during 2012.
I am pleased to include Crown Paints in this report. Following its integration, Crown Paints is now our
Decorative organisation in the UK, which confirms that Crown is now aligned with our principles, values
and ways of working.
In 2012, we began many supplementary initiatives to ensure that our employees continue to follow the
same Hempel values wherever they work. This included conducting comprehensive training programmes
in our Code of Conduct for our managers and office employees. Our Code of Conduct plays an important
role in ensuring we conduct our business ethically and professionally – and the training will ensure that
we continue to work with the same high standards everywhere on the globe.
We believe that our company can and should contribute to a better environment – and we continuously
focus on reducing waste, emissions and consumption. Our newest factory in Pilar, Argentina, is
an example of how the latest technology can optimise production,
improve the working environment and reduce waste and emissions.
And while we know that our coatings contribute to a better world
by extending product lifetimes and increasing fuel efficiency, we also
acknowledge that our work involves chemicals. Therefore, we have
made reducing the environmental impact of the chemicals we use
a key focus area in recent years. In 2012, we introduced many new
low-solvent solutions and low-solvent versions of existing products.
We are now documenting our efforts in this area and will continue to
measure the results.
Being a good corporate citizen is about more than just how we work – we
also have a responsibility to help those less fortunate than ourselves. That is why the Hempel Foundation,
the owner of Hempel A/S, supports schools and education programmes in poor areas around the world.
We now support 18 different projects, working with others to give more than 30,000 children the opportunity
to get a good education and the chance to build a better future for themselves and their families.
I hope you find this review of our current and future corporate responsibility initiatives interesting.
Pierre-Yves Jullien
Group President and CEO
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InTRODUCTIOn
ABOUT HemPel
eTHICAl BeHAvIOUR
HeAlTH & SAFeTY
envIROnmenT
envIROnmenT: ReDUCInG vOC emISSIOnS
PROCURemenT
OUR PeOPle
COmmUnITY enGAGemenT
FInAnCIAl ReSUlTS
8 Hempel’s Commitment to Corporate Social Responsibility
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6 Hempel’s Commitment to Corporate Social Responsibility
5

About Hempel
A world-leading coatings supplier working in the decorative, protective, marine, container
and yacht markets, Hempel is committed to conducting business in a socially responsible
manner and with respect for the environment.
Hempel coatings help protect man-made structures – from wind turbines and bridges to ships and homes
– from the corrosive forces of nature. With a strong focus on R&D, advanced production techniques and
professional coating advice, we work around the globe to help keep man-made structures safe, attractive
and corrosion-free for longer.
Our coatings enable structures to remain in active service for longer by extending their product lifecycles.
This helps reduce the overall environmental impact of each structure during its lifetime. However, we also
believe that as a company we must continually focus on improving our environmental performance, and
must help our customers meet their environmental targets.
We produce advanced products for the shipping industry that maintain a ship’s hydrodynamic performance
and so reduce fuel consumption and associated CO 2
emissions. We invest in developing low-solvent
and waterborne products that reduce the amount of volatile organic compounds and other chemicals
released into the environment. And we continually work to reduce the energy we consume and waste we
produce.
Our 5,000 employees live and work in more than 80 countries, and we have 24 factories, 48 sales offices
and more than 150 stock points located strategically around the globe. But wherever we work, we foster
a close dialogue with our stakeholders, customers, suppliers and employees, and conduct business to
the same high ethical standards.
6

The Hempel Foundation
Hempel’s founder, J.C. Hempel,
transferred the ownership of
Hempel A/S to the Hempel
Foundation in 1948. Today,
the Foundation remains
the sole shareholder of the
Hempel Group. Its main
purposes are to ensure the
Group maintains a sound
economic basis for its
continued existence and
development worldwide and,
in line with J.C. Hempel’s
wishes, to support charitable
causes of a cultural, humanitarian
and scientific nature.
introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
To make this contribution
as effective as possible,
the Foundation focuses on
two key issues: the education
of children in need and
research into environmentally
sustainable solutions for
the coatings industry.
You can read about the
Hempel Foundation’s
projects in the Community
engagement section of
this report.

Ethical behaviour
At Hempel, we believe that only a reliable and respected company, both in terms of ethical
behaviour and the quality of its products and services, can be successful in the long-term.
As a company, we comply with all relevant laws and regulations in the countries where we operate.
However, we do not stop at compliance. We have policies in place covering business ethics, management,
communication, and health, safety and environment (HSE) – and run training programmes to ensure that
our employees follow our standards and business ethics in all areas of our business.
A high level of business ethics around the globe
Our Code of Conduct and Business Ethics policy are both essential to our responsible business model.
Together, they provide guidelines for our employees about how to act when dealing with our customers, our
suppliers, each other, and any other business partner.
Our Code of Conduct and Business Ethics policy have been in place for many years and are continuously
updated according to best practice. A new initiative is a more comprehensive training programme and
test to ensure these guidelines are fully adopted and understood by all employees. In 2012, we ran
the programme with our office staff and managers around the globe, achieving an almost 100 per cent
completion rate.
The warehouse staff, factory operators and employees at our Decorative sites in the UK will follow the
programme in 2013, helping ensure that all Hempel employees, wherever they work, conduct business
with the same high ethical standards.
Our Anti-bribery policy is included in both our Code of Conduct and Business Ethics policy. We are
determined to avoid any form of corruption or bribery. The payment or acceptance of bribes is prohibited
by Hempel and any employees breaking this rule face disciplinary action, including dismissal.
Focus on competition law
As part of our efforts to ensure competition law compliance, we conduct competition law training with
relevant staff. The training consists of online seminars and follow-up tests and takes into consideration
the status of current sales, sales development and Hempel’s position in the various markets.
In 2012, a large proportion of our sales and marketing representatives from our Americas and Asia-Pacific
regions underwent the training. Our work to educate our staff on competition law and new and coming
regulations is continuing.
Ensuring compliance throughout the organisation
Internal audits play an important role in our dedication to ensuring compliance with our policies and
procedures. Each year we carry out an extensive audit programme covering legal compliance, HSE
management, financial and internal controls and our own standard procedures. The findings from these
internal audits are reviewed by our Executive Group Management Team and a corrective action plan is
8

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
established if needed. We carried out a total of 25 audits in 2012. In addition, competition law compliance
audits are selectively carried out by an external legal counsel.
Incident management and the ombudsman system
Despite our best efforts, there may still be instances when we as a company, or individuals within our
company, fail to follow the principles laid out in our Code of Conduct and Business Ethics policy. In such
cases, we encourage our employees to report any concerns they have to a manager.
In addition, we established a formal ombudsman system in 2012. As a growing international company, we
want our values and the way we work to be transparent. The ombudsman system enables any employee
to raise concerns about mistreatment or a breach of values with a regional ombudsman.
We also established an Incident Management Function to enable employees to communicate confidentially
any serious breach of the values stated in our Code of Conduct. Launched in December 2012, it
gives employees the opportunity to bring their concerns directly to the Executive Management and Board
of Directors.
140 sales staff
underwent competition
law training
25 internal financial
and compliance audits
were carried out
9

Health and safety
At Hempel, we believe that the safety of our employees and customers is paramount.
Our on-going focus on safety and training helps ensure our company remains a good and safe place to
work. We have a Group Health, Safety and Environmental (HSE) policy to help improve working conditions
for our employees and reduce the risk of accidents. We also provide training and comprehensive safety
information to employees and our customers.
Improving safety training for employees
Following the success of the Accident Prevention and Fire Prevention training programmes introduced
in 2011, we introduced a new training programme in 2012. The Chemical Risk training programme is
designed for employees who handle chemicals, including HSE coordinators and factory operators, and
covers information on legislation as well as operational best practice.
Employees in half of our factories followed the Chemical Risk training programme in 2012 and employees
at our other factories will be trained in 2013.
Worldwide
‘Safety First’ campaigns
Our Safety First campaign in
Singapore was a great success
in 2011, and we decided to run
campaigns in all our regions in
2012. Designed to increase
focus on safety among employees,
the campaigns are based
on best practice as well as the
experiences gained from Singapore.
All our production units in the Middle
East ran Safety First campaigns in
2012. One product of the campaign,
new safety rules signs can be found in
all factories in the region.
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introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
181 people were
trained in accident
prevention
134 people were
trained in fire
prevention
247 people were
trained in chemical
risks

Special award for
zero accidents
Introducing Crown Care
Crown Care is an integrated electronic reporting and management
tool used by our Decorative sites in the UK for reporting all health,
safety and environmental incidents. As well as powerful reporting
capabilities, it includes preventive features, such as hazard spotting
and training, and corrective measures, such as accident investigation
and audit follow up.
The system runs in real-time, so relevant employees can be notified
of any issues immediately. It also reduces the use of paper in the
offi ce and associated waste. Based on our experiences in the UK,
we are looking into implementing the system in other offi ces and
facilities.
Hempel Singapore has
an outstanding safety
record: no accidents in
2009, 2010, 2011 or
2012. In recognition of
this, Hempel Singapore
received a special Hempel
Group award in 2012.
“As a safety professional,
you need to have the right
attitude and passion to
understand what safety is
all about. It requires 100
per cent commitment and
effort. It is not just another
job that you want to finish
within a specific timeframe
and forget about. It’s an
undying love affair.”
Noorman Buang, HSE
Coordinator for Singapore
A dedication to reducing accidents
We believe that one accident is one too many and pay great attention
to reducing the risk of accidents on Hempel sites, as well as
external sites where our employees work. When accidents do occur,
we take immediate preventive actions to avoid any re-occurrences.
We keep detailed records of all accidents that occur in our factories,
investigate the cause and implement preventive measures. Over recent
years, these dedicated efforts to improve awareness and training
have led to significant improvements – and this continued in 2012.
Number of accidents
per 1 million factory working hours
The number of accidents per 1 million factory working hours in
the Hempel Group is relatively low for the coatings industry.
19.1 10.7 12.0 11.0 9.9 13.7 10.2 8.5 10.6 9.2 4.0
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
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InTRODUCTIOn
ABOUT HemPel
eTHICAl BeHAvIOUR
HeAlTH & SAFeTY
envIROnmenT
envIROnmenT: ReDUCInG vOC emISSIOnS
PROCURemenT
OUR PeOPle
COmmUnITY enGAGemenT
FInAnCIAl ReSUlTS
A total of 13 accidents (defi ned as an on-the-job injury that results in at least one day’s absence) were
reported across the Group in 2012, a signifi cant decrease from 2011. When comparing the number
of accidents to the total number of factory working hours, the number is relatively low for the coatings
industry.
In 2011, three of our factories accounted for 70 per cent of all accidents at Hempel. We worked closely
with these factories and they all reduced the number of accidents in 2012. Our factory in France,
for example, reduced the number of accidents by more than 50 per cent.
Improving safety communication for customers with GHS
The safety communication for Hempel’s products is gradually changing to the new Globally Harmonised
System for labelling and Classifi cation of Chemicals (GHS). As a worldwide standard, GHS will be more
widely adopted around the world than previous systems and gives a higher level of detail.
Since implementing GHS in China in 2011, we have continued implementation around the world.
Our aim is to implement GHS in all our regions by the end of 2013 (excluding the US and Canada, whose
governments do not allow for the implementation of GHS before 2014).
Improving safety performance in the US
In the USA, each Hempel production and logistics department
is safety audited eight times a year. The score, calculated as a
percentage, indicates how well a department meets our safety
requirements. If a department gets a score below 75 per cent,
it is re-audited within one week. This approach saw an improvement
in results from 2011 to 2012.
USA HSE Audits 2011 vs. 2012
80% 83% 82% 91% 86% 85%
91% 93%
2011
2012
1 2
3
4
Yearly quarters
13

environment
At Hempel, we believe that the coatings industry can and should contribute to a better environment.
We invest in advanced products and innovative ideas that help our customers cut
fuel consumption and reduce emissions. We also invest in research into environmentally
sustainable solutions and continually strive to improve our own environmental performance.
Our Health, Safety and environmental (HSe) management system monitors our environmental performance,
and we are dedicated to reducing our environmental impact by reusing and recycling resources, and reducing
our energy and resource consumption.
A significant drop in waste production
Waste is an element of paint production that is impossible to avoid, and must be managed carefully.
We divide waste into two categories. ‘Hazardous waste’ can be defi ned as waste that requires special
disposal treatment. ‘Other waste’ consists of materials that can for the most part be recycled, such as
metal, plastic and wood.
Our focus and investments in solvent recovery units and wastewater treatment in 2012 led to a signifi cant
drop in both types of waste.
Total waste
kg per ton paint produced
Over recent years, we have steadily reduced the amount of waste we produce. In 2012, waste produced per ton
of coating manufactured dropped by 4 per cent. (This graph does not include figures from Decorative in the UK.)
Hazardous waste
Other waste
26.3
22.2
20.0 17.2
17.5
17.0 17.2
16.4
8.4
8.1
7.7
17.3 17.0 16.4 16.6 15.7 13.7 13.7 15.7 14.1 16.7 13.6
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
14

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
Global HSE
competition
We hold an annual HSE
competition in all our
factories to help focus
employees on health, safety
and environmental issues.
As part of the competition,
each factory submits one or
more examples of how they
have reduced the risk of
accidents, improved energy
efficiency, reduced waste or
saved costs. The winners in
2012 were:
1. Guangzhou, China. By
completely mapping electricity
use, the factory was
able to significantly reduce
energy consumption in
utilities as well as air and
water treatment systems.
2. Kuwait. The factory
introduced new plastic bag
packaging for putty products
that helps limit waste.
3. Poland. The installation
of a regenerative
thermal oxidiser plant
ensures minimal emissions
to the atmosphere. The
oxidiser is also integrated
into the factory heating
system to help reduce gas
consumption.

Continued focus on energy consumption
Hempel significantly reduced energy consumption per ton of product manufactured from 2002 to 2007,
mainly due to energy saving efforts and increased production. Since 2008, we have managed to keep
our energy consumption stable, despite opening more automated factories, which reduce the risk of
accidents and waste (high priorities for us), but also use relatively more energy.
Total energy in kWh per ton product manufactured
In 2012, energy consumption remained around level with previous years, despite the opening of more automated factories.
(This graph does not include fi gures from Decorative in the UK.)
187 183 161 160 145 127 131 143 139 148 141
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
HSE audits and management systems
We carry out HSe audits in each of our factories and warehouses, typically every third year, as part of our
HSe management system. These audits are an important part of our risk management efforts, and help
ensure the safety of our employees and the uninterrupted supply of products to our customers.
In 2012, we conducted HSe audits in seven of our factories, as well as HSe inspections of our warehouses,
external warehouses, Hempel offi ces and customer sites where our coating advisers work. The audits
help ensure we comply with local legal requirements and our own high standards.
ISO and OHSAS certifications
We have global ISO 9001, ISO 14001 and OHSAS 18001 certifi cates, illustrating our commitment to
quality and HSe. In 2012:
• Our sites in Bahrain and Guangzhou achieved certifi cation according to the
ISO 14001 standard. As a result, 28 Hempel sites are now ISO 14001 certifi ed.
• Our Guangzhou factory obtained OHSAS 18001 certifi cation, bringing
the number of OHSAS-certifi ed Hempel sites to seven.
• Our factories in India and Argentina achieved ISO 9001 certifi cation, bringing
the number of ISO 9001 certifi ed sites to 47.
16

New factory better for
the environment
Opened in February 2012,
our factory in Pilar in
Argentina is designed to
produce more than 10
million litres of coatings
each year. The factory
uses the latest technology
to ensure good working
conditions for staff and
minimum impact on the
environment. This includes
new dissolvers that employ
an advanced vibration
technique to ensure the
powder is dispensed with
the minimum of dust
released into the air.
introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results

environment:
Reducing vOC emissions
At Hempel, we give careful consideration to vOC emissions during product development to
ensure that the concentrations used in our products do not lead to unnecessary emissions.
Our coatings protect man-made structures from corrosion. This extends the structure’s product lifecycle,
helping reduce the structure’s overall environmental impact. However, coatings use chemicals that can
be damaging to the environment. Our Health, Safety and environmental policy requires that we focus on
sustainable technologies when developing new products, so both we and our customers can continue to
improve environmental performance.
Working actively to reduce VOC emissions
vOCs (volatile Organic Compounds) make up the liquid part of solvent-borne paints. After application,
the liquid evaporates to leave a dry painted surface. However, during this evaporation process, vOCs are
released into the atmosphere. In large concentrations, some vOCs are harmful to human health and
damaging to the environment and, as a result, many countries limit the maximum concentration of vOC
in different products.
We focus on developing coating solutions that reduce the amount of vOC used. In 2012, we gave
particular focus to reducing the level of vOC in our products for the marine segment. As a result of this
work, we managed to bring down the average amount of vOC in our marine coatings from 451 grams per
litre sold in 2011 to 420 grams per litre sold in 2012, a reduction of 7 per cent.
This work will continue to have an impact in 2013 and beyond. In total, we introduced 11 new marine
products during 2012, with an average vOC content of 188 grams per litre. These products will have an
impact on the amount of vOC per litre sold in the next 1-3 years, when they have been established on the
market and constitute a greater volume of the coatings we sell each year.
Average contents of VOC (g/l)
The diagram shows the average amount of vOC in our products by segment (Decorative is not included here as the vast majority
of decorative coatings are waterborne). Yacht, like marine, saw a decrease in vOC per litre sold in 2012, and this should continue
in 2013 as new products become established on the market. The vOC per litre sold remained level in our Protective range in 2012.
However, we introduced a number of new Protective products during the year, with an average vOC content of 271 grams per litre,
and we expect these products will have a signifi cant impact as they become established on the market in the coming years.
* In Container, we introduced a fully waterborne coating system in 2010 called EcoBoxcoat. However, the container industry has
been shrinking over the last couple of years and the market has remained reluctant to switch to a new technology in an uncertain
economic climate.
442 442 271 451 420 188 542 542 434 412 308
VOC per litre sold 2011
VOC per litre sold 2012
Average VOC content
of products introduced
in 2012
Protective
Marine Container* Yacht
18

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
Reducing VOC emissions through product development
The case stories here are just two examples of how product development can have a direct impact on
reducing harmful VOC emissions.
Case story: advanced solution increases production without increasing emissions
Ultra-High Solids and Speed (UHSS) is a unique protective system for steel surfaces that reduces the
number of coatings required from three to two, and significantly cuts VOC emissions compared to similar
systems.
Using two coatings with low VOC content, UHSS produces just 399 kilograms of VOC per 10,000m²
compared to around 1,375 kilograms for a standard three-coat system. In addition, it requires less
waiting time between coats – as well as fewer cans, thinners and cleaners – which enables manufacturers
to increase production without increasing emissions.
We originally developed UHSS for a wind tower manufacturer in Sweden, however it can be used in a large
number of industries. The system was granted a patent by the European Patent Office in September 2012.
21

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
Case story: new versions of existing products help lower VOC emissions
We released new high-solids versions of some of our existing antifouling products in 2012 to help customers
reduce VOC emissions from their operations. The products – Hempel GLOBIC, OCEANIC and OLYMPIC – are
all anti-fouling coatings that stop fouling organisms attaching to a ship’s hull.
A major concern for ocean-going vessels, fouling organisms, such as barnacles and biological slime,
cause extra drag in the water. As a result, the vessel requires more power to move – which consumes
more fuel and leads to higher emissions. GLOBIC, Hempel’s top antifouling coating, uses nano-capsule
technology to give the hull a smooth finish that fouling organisms cannot attach to.
As well as cutting emissions by reducing the amount of fuel a vessel uses, the new high-solids products
release less VOC into the atmosphere than their predecessors. Hempel GLOBIC 9000 for example,
contains 15 per cent less VOC than the previous product, GLOBIC NCT.
23

Procurement
Our products are made from raw materials sourced from around the globe. Irrespective of
their country of origin, we strive to achieve a solid relationship with our suppliers, built on
the highest business ethics.
We expect our suppliers to develop and produce high quality products under safe conditions and with
respect for their employees and the environment. We have a Supplier policy in place to help ensure
all suppliers know what is expected of them and, when signing a Supply Agreement with Hempel, our
suppliers agree to conduct their business in a way that does not compromise our Code of Conduct.
Benchmarking supplier performance
In order to ensure that our suppliers adhere to our Supplier policy, we entered into an agreement with
an external partner to perform compliance audits of a number of our suppliers in 2012. The evaluations
enable us to benchmark each supplier’s performance in regards to quality management, HSE management
and business ethics.
Transparency through the entire supply chain
Our Decorative sites in the UK use an electronic supplier management system called VINE (Vendor
Information Network Exchange), which enables us and our suppliers to work together within the supply
chain process.
VINE gives both parties full transparency across the supply process, from reporting and information
submissions to inventory vendor management and invoicing. This helps simplify and accelerate the
supply process, allowing for greater efficiency and transparency.
We have a Supplier policy
in place to make sure all
our suppliers know what
is expected of them when
they work with us.
24

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results

Our people
An innovative and enthusiastic workforce is essential for our success and the future
existence of our company. That’s why we strive to give our 5,000 employees a great
place to work and continuing opportunities for professional and personal growth.
With 5,000 employees spread across 80 countries, we are present in most parts of the world, and have
employees with a wide range of cultural backgrounds and experiences. We welcome this diversity, because
we believe that innovation comes from people thinking differently. We believe that ensuring equal rights and
promoting diversity will help us to attract the best people and so better serve our customers.
Equal rights for all employees
We are committed to eliminating any form of negative discrimination. This includes discrimination based
on age, disability, gender, pregnancy, maternity, race, religion, political beliefs, family responsibilities and
sexual orientation.
It is our policy to ensure that all decisions on employment and career
development are based on merit and support business goals. This
is achieved through the continuous review of workplace policies,
practices, procedures and behaviours to ensure that they enable all
employees to achieve their full potential.
We have implemented a diversity strategy for hiring into leadership
positions that requires executive search companies to present a
diverse list of external candidates.
Building for the future with the Hempel Academy
The success of our company depends on retaining an innovative and
skilled workforce – and we are committed to helping our employees
build their skills by offering a broad range of courses and development
programmes.
Taking care of our people
J.C. Hempel established
the Employee Foundation
in 1954 to provide financial
support for Hempel
employees or their relatives
who are in special
need of assistance, such
as those suffering due to
long-term illness, natural
disaster or other tragic
circumstances.
A global academy for training and development, with centres in Copenhagen and Shanghai, the Hempel
Academy develops and delivers training programmes for both employees and customers, ranging from
industry-specific paint technology courses to courses in leadership and finance. In 2012, Hempel Academy
conducted training for more than 1,000 people, including 120 customers following industry-specific
technology courses. In addition, close to 3,000 people followed e-learning courses run by the Academy,
with the majority taking the Hempel Code of Conduct course.
In March 2012, we opened a new Learning & Development Centre at our production site in Darwen in
the UK. The Centre hosted more than 3,000 people in its first nine months, including employees, local
school classes and special needs groups. Activities range from one-to-one training with key customers to
networking events for local businesses.
26

2,926 people
followed training
courses at the
Hempel Academy
introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
120 customers
completed our technical
training courses
Explorer – Next Generation
We launched the Explorer – Next Generation programme in 2010.
Employees from around the globe who have been identified as potential
future leaders within Hempel join the programme to develop
general leadership skills and improve specific business skills and
expertise. Since its inception, 62 employees have completed the
programme. 29 per cent of these employees have since been promoted,
of which 16 per cent have been promoted twice within a
two-year period.
An opportunity for global trainees
Our trainee programmes give young people the opportunity to
kick-start their career and develop their skills with Hempel. The
programme in China, for example, admits up to 16 young graduates
each year, offering them the chance to pursue a career in sales,
technical service or supply chain management. The programme provides
structured training over 18-24 months, and valuable on-the-job
experience.
Distribution of employees
14%
5%
30%
51%
Europe & Africa
Asia-Pacific
Middle East
Americas

Community engagement
28

introduction
about hempel
Ethical behaviour
HEALTH & SAFETY
Environment
Environment: Reducing VOC emissions
Procurement
our people
Community engagement
Financial results
29

Community engagement
At Hempel, we believe that a company has a responsibility that stretches beyond business.
That’s why we contribute to positive development in the communities where we live
and work.
Ending poverty and hunger by providing universal education are part of the eight Millennium Development
Goals conceived by the United Nations in 2000, and the Hempel Foundation has joined with others to
try to make these goals a reality. The Hempel Foundation has made education of children in need the
main focus for its donations, and concentrates on supporting projects that help give some children the
opportunity to get a better education.
In 2012, the Hempel Foundation more than doubled the number of education projects it supports from
8 to 18. Spanning 12 countries, these projects are seen as a way for our company to make a small
difference to communities around the world. To increase the impact of its results, the Hempel Foundation
works with strategic partners, both locally and internationally, and more than half of its projects are run
in cooperation with Save the Children or IBIS, a Danish non-government organisation.
A focus on education
There are many reasons why children in certain areas do not have access to education. We work with projects
that are designed specifically to address the challenges of the region and people where the project
takes place, because we believe this will have the most sustainable long-term impact.
The educational projects supported by the Hempel Foundation can
be divided into four main categories: Helping child labourers into
education, building new schools, improving local schools, and after
school education and clubs.
You can read about some of the projects we support here, and see a
full overview of all 18 projects at www.hempelfoundation.com
30

The Hempel Foundation helped
fund the construction of a
new school in Battambang in
Cambodia in 2009. Today, the
Foundation co-funds the daily
running of the school, enabling
children from poor areas to
get a good primary education
at no cost to their family.
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Helping child labourers into education
As a part of our ethical standards, Hempel is committed to not using any kind of child labour, either
directly or through our suppliers. We also believe that children should have access to a good education
and so help fund projects that focus on giving children the opportunity to leave work and attend school.
One such project helps child labourers in the brick kilns of West Bengal in India leave work and start education.
The Hempel Foundation is working with Save the Children to build two education centres, where
children get an effective pre-education (as well as food and healthcare) instead of working. The aim is to
equip the children with the skills they need to enter the educational system.
Building new schools
In some cases, children are not able to attend school because there is simply no school for them to go
to or the school is too far away for them to make the journey each day. We support projects in different
areas of the world to build new schools and hire and train teachers.
In Saboda in northern Ghana, for example, many children must walk up to 15 kilometres just to get to
school. Working with the Danish non-government organisation IBIS, the Hempel Foundation is funding the
construction of eight satellite schools, giving 800 children a chance to attend school.
Improving local schools
One of the main reasons that children drop out of school, especially in poor areas of the world, is because
the quality of the school they attend is very low. The majority of the Hempel Foundation’s education projects,
therefore, focus on upgrading schools to a level that enables the children to attain the education
they need to build a better life for themselves and their families.
Migrant schools in China are one example. Due to recent economic growth, millions of workers and their
families have moved to the big cities, and private schools have been set-up to cope with the influx of
children. However, many of these schools are short of funds. Working with Save the Children, the Hempel
Foundation supports five private migrant schools in Shanghai by helping train teachers and school managers,
developing teaching materials and running workshops with parents.
After school education and clubs
Many developed countries still have segments of the population who live in poverty. Often, children in
these areas go to school, but struggle to reach their full potential as their family situation and life in the
neighbourhood is not conducive to study. In these cases, after school projects give children a chance to
improve their grades and get away from the difficulties of their everyday lives.
In Rio de Janeiro, for example, the Hempel Foundation works with the non-profit organisation Gol De Letra
to improve education and cultural development of young people in the poorest areas of the city. Started
by two Brazilian soccer players, the organisation runs classes for children to improve their academic performance
and encourages them to help with cultural activities in the district.
32

Research into environmentally
sustainable solutions
The Hempel Foundation also supports
research into environmentally
friendly technologies, particularly
in the area of surface protection.
This is done through a long-term
partnership with the Department
of Chemical and Biochemical Engineering
at the Technical University
of Denmark, where we help drive
fundamental research and raise
awareness of sustainable technologies.
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The partnership supports a number
of programmes. The Elite Master’s
Programme, for example, offers
grants for living expenses and
tuition to international students
working on a master’s degree in
chemical and biochemical engineering.
Hempel employees act
as mentors, guiding the students
as they learn to work globally with
sustainable technologies.

The Hempel Foundation’s
projects around the world
Education of
child workers in
Guatemala
Building new
schools in Ghana
Education for
unemployed youth
in Rio De Janeiro,
Brazil
Bilingual education
for indigenous
children in Bolivia
After school
education for
underprivileged
children in
Rio De Janeiro,
Brazil
Improving reading
and writing skills in
San Juan, Argentina
An after school
social centre in
Lujan, Argentina
34

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Training children
in life skills in
Xinjiang, China
A children’s
village in
Chengdu, China
Supporting migrant
schools in
Shanghai, China
Supporting girls
schools in
Banswara, India
Providing education
for child workers in
West Bengal, India
Building and running
a new school
in Cambodia
Improving reading
and writing skills
in Uganda
Upgrading local
schools in
Mozambique
Upgrading local
schools in Pune,
India
Upgrading local
schools in
Indonesia
High quality
education for
underprivileged
children in
South Africa
You can read more
about these projects at
www.hempelfoundation.com
35

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Corporate volunteering
At Hempel, being a responsible corporate citizen goes beyond policies and projects. We
would like to make corporate responsibility part of our employees’ everyday lives, and
encourage our employees to donate their time to causes that mean a lot to them.
We give our employees the chance to take part in global volunteering events, and encourage them to
volunteer at events in their local community. We believe these experiences are an important part of
actively taking responsibility for the world and the communities in which we live and work.
Global volunteering
Hempel began its global volunteering programme for employees in 2010. Each year, one employee from
each Hempel region is given the opportunity to visit one of the education projects supported by the
Hempel Foundation. During the trip, the employee volunteers educate the children about their home
country and introduce them to games and culture from their country. This is an extremely exciting time
for the children, who may have never been outside their local village or met anyone from another culture.
In 2012, the employee volunteers visited a project in the Altiplano in Bolivia focused on providing bilingual
and inclusive education to indigenous children. Seven employee volunteers joined the trip, experiencing
life at 4,000 metres above sea level and working with the teachers and children at the schools.
Bartlomiej Hoffman,
Laboratory
Technician,
Hempel Poland
Ursula Cubillo,
Technical
Assistant R&D,
Hempel Spain
Rachel Demain,
Sustainability
Technology Officer,
Crown Paints
Chen Zhang,
Marketing Segment
Manager, OEM,
Hempel China
Erika Solis,
Technical Service
Administrator,
Hempel USA
Agustin Blasco,
Engineering
Department Manager,
Hempel Argentina
Priscilla Henry,
Sales Executive,
Hempel
Malaysia
Local volunteering
We also encourage
employees to take part in
local volunteering events.
In 2012, for example,
the employees in Hempel
China participated in the
volunteering event Caring
Dedication at the Silver
Star Primary School in
Shanghai, supported by
the Hempel Foundation.
The event aimed at educating
children in healthy
living through storytelling,
drawing and other engaging
activities.
37

Financial highlights of the Group
Key fi gures in EUR million
group
2008 2009 2010 2011 2012
Income statement
Revenue 598.6 714.2 889.1 1,077.3 1,242.3
eBITDA 60.8 93.0 118.3 105.1 126.2
Depreciation 10.8 19.7 26.7 33.6 42.8
Operating profi t (eBIT) 50.0 73.3 91.6 71.5 83.4
Profi t before tax 51.2 65.8 86.8 60.9 65.2
net profi t for the year 36.1 44.4 52.9 34.8 34.6
Balance sheet
Total assets 421.6 599.6 763.4 1,063.5 1,066.7
equity 210.3 265.1 316.3 326.9 355.7
Employess
Average number of employees 2,168 2,867 3,638 4,468 4,977
External sales (EUR million)
Employees
599 714 889 1,077 1,242
2,168 2,867 3,638 4,468 4,977
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
38

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Financial results
Profit and loss account
In EUR thousands
group
2011 2012
Revenue 1,077,324 1,242,254
Production costs 707,959 780,498
Gross profit 369,365 461,756
Selling and distribution expenses 212,526 259,802
Administrative expenses 85,338 118,519
Operating profit 71,501 83,435
Share of net profits of associates 2,314 2,581
Profit before financial income and expenses 73,815 86,016
Net financials 12,951 20,756
Profit before tax 60,864 65,260
Corporation tax 18,031 18,800
Profit after tax 42,833 46,460
Minority interests 7,987 11,873
Net profit for the year 34,846 34,587
39

Balance sheet
In EUR thousands
group
2011 2012
Intangible assets 176,513 166,343
Property, plant and equipment 183,911 193,209
Fixed asset investments 29,212 46,901
Fixed assets 389,636 406,453
Inventories 184,388 165,365
Receivables 383,182 367,873
Cash and cash equivalents 106,288 127,010
Current assets 673,858 660,248
Assets 1,063,494 1,066,701
Total equity 326,853 355,734
Minority interests 37,005 43,149
Provisions 73,260 80,371
Long-term debt 231,771 210,268
Short-term debt 136,534 120,122
Trade and other payables 258,071 257,057
Debt 626,376 587,447
Equity and liabilities 1,063,494 1,066,701
40

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Financial results
Cash flow statement
In EUR thousands
group
2011 2012
Operating Profit 71,501 83,435
Adjustment for non-cash operating items 37,765 43,022
Change in working capital -13,466 23,986
Corporation tax paid -32,834 -22,310
Total cash flow from operating activities 62,967 128,133
Business acquisitions, net -160,683 -9,153
Purchase and sale of property, plant and equipment -27,600 -25,499
Purchase and sale of intangible assets -4,517 -2,881
Dividend received from associates 1,243 1,174
Total cash flows from investing activities -191,557 -36,359
Total cash flows from financing activities 126,576 -62,563
Change in cash and cash equivalents -2,014 29,211
41

HEMPEL A/S
Lundtoftegårdsvej 91
DK-2800 Kgs. Lyngby
Denmark
Tel: +45 4593 3800
Fax: +45 4588 5518
www.hempel.com