Performance Coatings

  • Volumes up 2 percent with positive developments in all reporting units
  • Revenue down 5 percent, due to adverse currencies
  • EBIT and operating income up 1 percent, due to higher volumes, continuous improvement initiatives and lower costs offset by unfavorable currencies
  • ROS increased to 15.1 percent (2015: 14.2 percent); ROI increased to 31.0 percent (2015: 23.9 percent)

Volumes were up 2 percent with positive developments in all reporting units. Demand trends differed per region. Revenue was down 5 percent due to adverse currencies.

EBIT and operating income were up 1 percent due to higher volumes, continuous improvement initiatives and lower costs.

Revenue

Second quarter

 

January-June

2015

2016

∆%

in € millions

2015

2016

∆%

*

ROS% = EBIT/Revenue. Moving average ROI (in %) = 12 months EBIT/12 months average invested capital

418

392

(6)

Marine and Protective Coatings

771

752

(2)

389

385

(1)

Automotive and Specialty Coatings

777

758

(2)

750

705

(6)

Industrial and Powder Coatings

1,445

1,370

(5)

(7)

(9)

 

Other/intragroup eliminations

(13)

(19)

 

1,550

1,473

(5)

Total

2,980

2,861

(4)

 

 

 

 

 

 

 

220

222

1

Operating income

390

408

5

220

222

1

EBIT

390

408

5

14.2

15.1

 

ROS% *

13.1

14.3

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

2,643

2,612

 

 

 

 

Moving average ROI (in %) *

23.9

31.0

 

 

 

 

 

 

 

 

35

40

 

Capital expenditures

64

71

 

 

 

 

Number of employees

19,700

19,300

 

Revenue development Q2 2016

Performance Coatings – Revenue development Q2 2016 (bar chart)Performance Coatings – Revenue development Q2 2016 (bar chart)

Marine and Protective Coatings

Protective Coatings volumes were up due to strong demand in Asia. Volumes in Marine Coatings were impacted by the slowdown of new build activity in Asia, as well as maintenance and dry docking. Revenue was down 6 percent with improved volumes more than offset by adverse price/mix and currencies.

Automotive and Specialty Coatings

Volumes in Automotive Coatings were up, particularly in Europe. New business in Asia helped to offset a general slowdown in Specialty Coatings. Revenue was down 1 percent with increased volumes and favorable price/mix more than offset by adverse currencies.

Industrial and Powder Coatings

Volumes for Powder Coatings were positive, especially in Europe, while demand was subdued for Wood Coatings. Coil and Packaging Coatings grew in Asia. Revenue was down 6 percent due to higher volumes more than offset by adverse currencies and price/mix.

Intended acquisition of BASF’s Industrial Coatings business

In Q1 2016, the intended acquisition of BASF’s Industrial Coatings business was announced. The business generated revenue of about €300 million in 2015 and supplies products for a number of end uses, including coil, furniture foil and panel coatings, wind energy and general industry, and commercial transport. The planned transaction is expected to be completed in the later part of the second half of 2016.

We inaugurated a new €6.5 million technology center in Songjiang, Shanghai. The company's largest research facility in China, it will support customers in all our end-use sectors. Equipped with a full array of state-of-the-art material analysis and performance testing facilities, the center currently employs 150 scientists, which is expected to rise to 200 by 2020. The majority of the products supported by the new facility will be waterborne and powder-based, in line with our ambitions to develop more eco-premium solutions. (Photo)

We inaugurated a new €6.5 million technology center in Songjiang, Shanghai. The company's largest research facility in China, it will support customers in all our end-use sectors. Equipped with a full array of state-of-the-art material analysis and performance testing facilities, the center currently employs 150 scientists, which is expected to rise to 200 by 2020. The majority of the products supported by the new facility will be waterborne and powder-based, in line with our ambitions to develop more eco-premium solutions.