Jotun Presentation
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Jotun Today Sales 15.8 NOK billion 14% SCA 9 819 Employees EBITA 1.8 NOK billion 10% WE 9% EECA 19% NEA +100 Countries EBITA margin 11% 2% AM 24% MEIA 22% SEAP 67 Companies ROCE 21% 37 Factories
Our Business Areas 38% 25% Decorative paints Marine coatings 27% 10% Protective coatings Powder coatings
A story of growth Sales and EBIT NOK million, Yearly Net Sales EBIT 18 000 2500 16 000 14 000 2000 12 000 10 000 1500 8 000 6 000 1000 4 000 500 2 000 0 0 2016 2014 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 1978 1976 1974 1972
100% figures vs Jotun Group reported figures Companies where Jotun hold 50% or less are not represented in Group Figures Revenue bridge NOK million, actual rates and growth % -0.5% 22 407 4 681 3 215 1 087 187 15 785-3% Jotun 100% MEIA NEA Group sales to JV/AV Other income Jotun Group
Ownership structure Approx. 680 shareholders Gleditsch family holds 54 % 59 % of votes Orkla holds 42,5 % 38,2 % of votes Historically careful dividend policy Good cooperation between Orkla and the Gleditsch family
Corporate responsibility has high focus Values Compliance manual Business principles Leadership expectations Jotun decision making model Dilemma training Jotun Green Steps Audit of suppliers Project standards
Jotun Group Sales slightly down after a outstanding 2015 Operating Revenue NOK million, actual rates, Year End Sales Growth A few things to be aware of: 24% Lower intercompany sales Jotun Cosco, China 9% 6% 6% 9% Other income included in operating revenue impacted by Egypt currency loss -3% 10 659 11 351 12 034 13 171 16 282 15 785 2011 2012 2013 2014 2015 2016 10 Group Finance Financial Statements 2016
Jotun Group EBITA slightly down 2 500 EBITA & EBITA margin NOK million, actual rates Sales EBIT% 30% 2 000 25% 20% Second best result ever 1 500 1 000 500 6.5 % 9.9 % 10.4 % 10.0 % 12.7 % 11.2 % 15% 10% 5% Claims Equity ratio strong and further improved 53 % (2015: 52%) 0 690 1 126 1 257 1 314 2 064 1763 2 011 2012 2013 2014 2015 2016 0% 11 Group Finance Financial Statements 2016
Excluding currency effects: Record sales in Deco and Powder Sales per segment (100%-basis) NOK million, fixed rates Powder Deco 2 250 Average growth (CAGR) 7.3% Protective 8 697 9.9% Marine 1 194 5 362 3 722 2 108 6 097 3 037 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10.9% 8.1% Total 9.3%
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Raw material trend 2008-2016 Consolidated raw material price Indexed numbers, weighted average RM prices 170 150 130 110 90 70 Forecast Consolidated Corporate Marine Protective Decorative Decorative (SCA) Powder Note 1: The Weighted average All is based on all RMs in the scope of the report Note 2: Re-purchase prices indexed based on purchased currency converted to USD
Maintaining the investment targets Investments per year NOK million, actual rates, % of sales 1 201 1 209 1 332 Investments per region 2016 NOK million, actual rates AM; 26 985 NEA; 90 WE; 81 6.1% 6.8% 5.4% 5.9% EECA; 91 SCA; 129 MEIA; 427 CORP; 181 SEAP; 306 2013 2014 2015 2016
Maintaining the investment targets Investments year-end NOK million, actual rates, % of sales 1 201 1 209 985 1 332 Production facilities Oman Philippines Myanmar Malaysia (Powder) Thailand (Warehouse) 6.1 % 6.8 % 5.4 % 5.9 % R&D Product development Labs: UK, Korea, India, Gimle Admin buildings Vindal and Gimle in Norway Mumbai office in India 2013 2014 2015 2016
Investing for future growth New Factories: Completed 2016: Brazil Oman Under construction: Myanmar Started in 2016: Philippines and Malaysia (Powder) Prospects: Egypt And: New R&D Centre and Group headquarters in Sandefjord
New HQ and R&D centre in Sandefjord, Norway Started before summer - completed early 2019 Investment NOK 1.1 billion 34.000m2 People 2019: 250 in HQ and 300 in R&D Capacity for growth
Investments and net debt development (Jotun Group, actual rates) Equity ratio Jotun Group NOK Million at year end Invested in factories and working capital Accumulated Net debt (accumulated) 13 906 14 374 11 452 7 107 7 576 8 990 4 265 3 956 5 208 439 1 919 2 235 1 336 213 351 121 261 195-167 429 1 220 1 193 1 602 2 108 1 667-18 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Solid financial position Equity ratio Jotun Group At year end Net debt/ebitda Jotun Group At year end Covenant: > 25% Target: > 50% Covenant: Below 4.0 Target: Maintain IG rating 57% 56% 54% 51% 51% 52% 53% 1 0.6 0.6 0.8 0.6 0.7-0.1 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016
Debt and Financing Structure Long term debt is held by Jotun A/S Companies receive long term funding from Jotun A/S Companies have local short term bank lines Jotun A/S repatriates cash through dividends and royalty payments from companies Dividend to shareholders evaluated each year in light of capital needs and solidity target Jotun A/S has the last 4 years paid NOK 513 mill in yearly dividends
Dividend policy. Jotun Group. Dividend payments vs Profit NOK Million at year end Profit for the year Dividend 1416 Same equity last 5 years 795 857 946 1132 Maintain equity ratio above 50% 634 513 513 513 513 513 513 2011 2012 2013 2014 2015 2016
Debt funding - Jotun A/S Loans per September 2016 Maturity Loan type Amount (MNOK) May 2019 Bond 400 May 2021 Bond 300 Jan 2024 NIB loan* 1057 Sum 2357 *Nordic Investment Bank, USD 120 mill, USD rate 8,36
Available credit lines - Jotun A/S Long term Credit facilities per September 2016 Maturity Bank Amount (MNOK) August 2019 SEB 400 2 January 2021 DNB 400 3,5 Total 800 Years to maturity
Financing needs going forward Organic growth expected to continue Financing needed for investments and working capital Mostly financed by internal cash surplus, but moderate debt increase is expected given present dividend level New R&D facilities and offices in Sandefjord will require financing in 2017/2018 NOK 1 100 mill investment approved Norwegian bond market as primary funding source
Summary Jotun develops steady and as planned Some headwinds in Marine and Offshore markets Still a lot of opportunities in other segments Good cash flow and robust balance sheet