MOSCOW (MRC) -- Coatings company Hempel (Lyngby, Denmark) has announced a new strategy that targets a doubling of the company’s sales by 2025. Hempel says it intends to achieve the target through refocused geographical priorities, focused segment leadership positions, and M&A, as well as an acceleration of sustainability, innovation, and digitalization activities, said Chemweek.
Hempel generated revenue of EUR1.5 billion (USD1.8 billion) in 2019, an increase of 14%. "When the world closed down in 2020 and global operations including ours were challenged, we sped up our strategy process,” says Hempel president and CEO Lars Petersson. “Now we have laid the foundation for not only doubling our revenue but also for significantly increasing our positive impact for our customers, partners, and employees. We will build leadership positions and invest in our core segments and put sustainability at the heart of how we do business."
Hempel expects 50% of the intended revenue growth to come from M&A but says the strategy also has a clear-cut emphasis on organic growth through building market leadership positions in specific areas of its four segments: decorative, marine, infrastructure, and energy. Hempel says that 2.5 percentage points of its 14% revenue growth in 2019 was organic.
"By 2025, we expect more than 50% of our revenue to come from sub-segments and geographies where we have a leading position, compared to less than 10% today," the company says.
Hempel needs to refocus geographically, because "we have been spread too thin and too shallow and therefore we focus our business by exiting some geographies by own operation and strengthening others," according to Petersson. “Alongside that we know that our customers need suppliers with end-to-end solutions and a deep knowledge and impact on the market,” he says. The company has started a transformation of how it sells and develops by building stronger partnerships with a number of customers "to truly understand their needs, future challenges, and to co-create differentiated solutions," Petersson says.
The new strategy’s sustainability goals include being carbon neutral in Hempel’s own operations by 2025 and also reducing the carbon footprint of its customers. The company has committed to science-based targets and will launch a sustainability framework in February 2021.
"Putting sustainability at the heart of how we do business will drive change both within Hempel and across our value chain through our products and services. We see sustainability as a key enabler for growth, by helping our customers reach their sustainability targets. Our target to double in size in the next five years makes our commitment to sustainability even more important, and we are ready to make some bold decisions as we accelerate," says Petersson.
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