Coatings - AkzoNobel

COATINGS
Ove H. Mattsson
31%
11%
Millions of guilders 1998
pro forma*
1998 1997
Net sales 10,500 9,065 8,382
Operating income** 883 778 751
Depreciation and
amortization 294 277 241
Gross cash flow 1,177 1,055 992
Expenditures
for PP&E 428 368 287
R&D expenditures 276 224 209
Invested capital
at year end 4,989 3,819 3,393
Key ratios
Operating income**
as percentage of:
– net sales 8.4 8.6 9.0
– invested capital 21.1 21.6 23.1
Net sales/
invested capital 2.51 2.51 2.57
Expenditures for
PP&E/depreciation 1.5 1.4 1.2
Number of
employees at
year end 32,100 25,100 23,100
20%
* The pro forma figures exclude all effects of the Courtaulds acquisition.
** Before nonrecurring items.
4%
7%
Annualized* 1998 business
unit sales (NLG 11.9 billion)
Decorative Coatings
Industrial Coatings
Car Refinishes
Industrial Products
Printing Inks
Resins
Former Courtaulds:
Marine & Protective Coatings
Industrial
Aerospace Coatings and Sealants
11%
8%
6%
6%
5% 3%
19% 19%
* Including sales of the former Courtaulds activities on a full-year basis.
32
9%
8%
9%
8%
SALES AND INCOME
9%
Annualized* Annualiz 1998 net sales
by country of by origin count
The Netherlands The Neth
Germany Germany
Sweden Sweden
United KingdomUnited
Ki
France France
Other European Other countries Eu
USA and Canada USA and
Asia
Asia
Other regions
Other reg
8%
11% 8%
9%
9%
Coatings’ sales were NLG 10.5 billion in 1998, up
25 percent. The former Courtaulds activities
accounted for 17 percent of this increase and other
acquisitions for 6 percent. Volumes and average
selling prices each were 1 percent higher. Currency
translations had virtually no impact. Operating
income before nonrecurring items was NLG 883
million, an increase of 18 percent. Of this gain,
14 percent was attributable to the contribution of
former Courtaulds.
Car Refinishes, Industrial Products, and Resins again
had a strong year and achieved higher operating
income figures. Results of Aerospace Coatings and
Sealants were up due to solid volume growth.
Decorative Coatings’ results were flat, in part due to
poor weather conditions in Europe. As a
consequence of the crisis in Russia, Industrial
Coatings and Printing Inks were unable to match the
performance of the previous year. Protective
Coatings’ activities were negatively affected by the
crisis in Asia. Earnings of Coil Coatings operations in
the United States were lower due to strong price
pressure.
Return on sales was 8.4 percent—down from
9.0 percent in 1997—against the 10-percent longterm
target. Return on invested capital was
21.1 percent in 1998, compared to the target of
25 percent.
▼
21%
11%
For definitions of certain
financial ratios and concepts
see back cover foldout.