Strategic direction

The vision for our Performance Coatings business is to be the leading coatings company from a performance perspective. By 2015, our expected outcomes are to achieve a return on sales level of 12 percent and a return on investment of 25 percent. The actions that we are taking to deliver on these targets are:

  • Drive overarching performance improvement initiatives
  • Pursue differentiated growth strategies
  • Deliver business-specific plans

Drive overarching performance improvement initiatives

We have defined improvement actions that apply to all parts of our business. These initiatives are instrumental to both revenue and cost improvement. The actions include:

  • Continuously reducing external spend. Procured raw materials make up a significant percentage of our Performance Coatings cost base, so it is fundamental to our success that we appropriately manage our external spend. We will take measures to ensure continuous year-on-year savings by leveraging our scale and simplifying our product designs across the full Business Area to maximize and capture opportunities created by similarities in terms of raw materials and suppliers
  • Continuously improving our operations. We will continue to adapt our operational footprint to the geographic shifts in demand and drive benefits through concentrating production from several business units on to larger sites. We will further improve our performance through productivity improvement techniques and reduction of inventory and logistics costs
  • Drive commercial excellence to increase sales effectiveness. We are focusing on improving sales force effectiveness based on best-in-class processes in key account management, specification selling and customer relationship management, as well as a harmonized approach to training

Pursue differentiated growth strategies

To continue growing our business while improving performance levels, we will focus and prioritize our activities on market sectors and geographies where we have the best opportunities.

We have defined two strategic priorities for our businesses:

  • Outgrow the market organically. For parts of our business that are in attractive markets and where our competitive position is strong, we will be focusing on profitable growth
  • Improve performance by driving operational excellence. In parts of our business where the growth opportunities are less favorable, our focus will be on improving profitability by driving operational excellence

Deliver business-specific plans

Each individual business will continue to develop key capability areas that will support the delivery of leading performance and eco-premium solutions in the market.

  • In Automotive and Aerospace Coatings, our color and design expertise is fundamental to our success. We are a global leader in this area based on digitized color matching tools which allow us to effectively and efficiently work with customers to provide the perfect color. Our state-of-the-art digitized color system was instrumental in the rapid and cost-effective roll-out of Autowave upgrades. Autowave is a technology upgrade for vehicle refinishes coatings improving our customers’ environmental footprint through less waste and the increased use of water-borne technology
  • In Marine and Protective Coatings, our leading anti-corrosion, fouling control and fire protection technologies drive our success. We will continue to lead innovation in these areas, building on recent product introductions such as Intersleek 1100SR foul release, which provides industry-leading anti-slime performance, while at the same time delivering the same level of environmental benefits as our existing Intersleek range. Another good example of this is the introduction of our Intercept antifouling range, which offers predictable linear polishing performance, enabling operators to plan and budget effectively throughout the docking cycle
  • In Powder Coatings, our global scale and deep understanding of the end-user segments are key to our success. As the largest powder coatings supplier in the world, Interpon offers the widest product line in the industry. Our leading technologies and innovations include highly durable and stylish coatings for architects; clear coats to protect aluminum wheels from corrosion for automakers; and Resicoat, a tailored product specified for use by pipeline operators. We will continue leveraging our global presence and our strong innovation pipeline to offer our customers the best choice and technologies
  • In Industrial Coatings, high durability coatings, superior color and styling capabilities, as well as the introduction of eco-friendly solutions, are key to our success. We work with customers who are large industrial OEM manufacturers where we are a key part of their supply chain – providing them with products and solutions to make their production processes more efficient and their customers’ products better. We continue to invest in innovation to provide improved coatings solutions, such as chromate-free coil coatings, BPA-free packaging coatings and low-formaldehyde wood finishes and adhesives

Performance Coatings expected 2015 financial outcomes:

  • Return on sales: 12%
  • Return on investment: 25%