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Hempel earnings slip on COVID-19 disruption

March 03/2021

MOSCOW (MRC) -- Hempel (Lyngby, Denmark) reports 2020 net profit of EUR43 million (USD52 million), down from EUR50 million in the previous year, on revenue of EUR1.54 billion, up slightly from EUR1.53 billion, according to Chemweek.

The company says it achieved organic sales growth of 3.2% last year, building on momentum from 2019, despite an overall declining worldwide market for coatings.

Hempel says it faced uncertainty and disruption across regions and markets due to the COVID-19 pandemic, but was able to achieve an EBITDA margin of 10.1%, or 9.8% in reported numbers, in 2020. The companys full-year EBITDA was EUR151 million, down from EUR157 million in the previous year. The margin figure excludes restructuring costs related to exiting certain countries. The company says it made extraordinary high investments in our supply chain in China, during 2020. Hempel, wholly owned by the Hempel Foundation, has not released fourth-quarter figures.

Hempel was able to deliver a strong performance during unprecedented times, says Lars Petersson, president and CEO of Hempel. We have now seen organic growth for six quarters in a row and been able to reduce our debt further. This puts us in a strong position for the coming years.

Last year was strong for Hempels marine coatings segment, especially in APAC, with many vessels coming into dry dockings for scheduled maintenance, the company says. Growth in Hempels decorative paints segment exceeded expectations, primarily driven by strong demand in the do-it-yourself markets in the UK and Germany, it says.

The company announced a new strategy recently, including plans to double its sales by 2025. The acquisition of  Wattyl, expected to close in the first quarter, is the first step in the transformation strategy and will have a major, positive impact on our footprint in South and East Asia and underlines our growth ambitions for our decorative and protective segments, Hempel says. We are going for leadership positions in selected segments and geographies, all while making sustainability the foundation of our business, it says.

Hempel also presented its new sustainability framework in February as part of the strategy.

As MRC reported earlier, in January 2021, Hempel announced a new strategy that targets a doubling of the companys 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.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1%  year on year.
Author:Margaret Volkova
Tags:propylene, ethylene, coatings, petrochemistry, paints and coatings, Hempel, sustainable development, Denmark, Russia.
Category:General News
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