Performance Coatings

  • Volumes down 2 percent affected by adverse conditions in the marine and oil and gas industries, partly offset by positive developments in other segments
  • Revenue down 6 percent, due to adverse currencies, lower volumes and adverse price/mix effects
  • EBIT was down 5 percent with continuous improvement initiatives and lower costs more than offset by adverse currencies and lower volumes
  • Profitability continued to improve. ROS was up at 14.2 percent (2015: 14.1 percent); ROI increased to 30.9 percent (2015: 26.5 percent)

Volumes were down 2 percent affected by adverse conditions in the marine and oil and gas industries. Demand trends differed per segment and region. Revenue was down 6 percent due to unfavorable currencies, lower volumes and adverse price/mix effects.

EBIT was down 5 percent with continuous improvement initiatives and lower costs more than offset by adverse currencies and lower volumes. Operating income was negatively impacted by incidental items.

Revenue

Third quarter

 

January-September

2015

2016

∆%

in € millions

2015

2016

∆%

*

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

399

364

(9)

Marine and Protective Coatings

1,170

1,116

(5)

378

369

(2)

Automotive and Specialty Coatings

1,155

1,127

(2)

724

683

(6)

Industrial and Powder Coatings

2,169

2,053

(5)

(8)

(10)

 

Other/intragroup eliminations

(21)

(29)

 

1,493

1,406

(6)

Total

4,473

4,267

(5)

 

 

 

 

 

 

 

210

192

(9)

Operating income

600

600

210

199

(5)

EBIT

600

607

1

14.1

14.2

 

ROS% *

13.4

14.2

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

2,672

2,586

 

 

 

 

Moving average ROI (in %) *

26.5

30.9

 

 

 

 

 

 

 

 

36

35

 

Capital expenditures

100

106

 

 

 

 

Number of employees

19,500

19,400

 

Revenue development Q3 2016

Performance Coatings – Revenue development Q3 2016 (bar chart)Performance Coatings – Revenue development Q3 2016 (bar chart)

Marine and Protective Coatings

Volumes in Marine Coatings were impacted by the slowdown of new build activity in Asia, as well as maintenance and dry docking. Protective Coatings volumes remained robust despite some headwinds in the oil and gas industry. Revenue was down 9 percent.

Automotive and Specialty Coatings

Volumes were up due to strong Automotive and Consumer Electronics demand in Asia offsetting weaker demand in Automotive in North America. Revenue was down 2 percent despite higher volumes.

Industrial and Powder Coatings

Volume developments were mixed per region for both Wood and Metal Coatings. Volumes were up for Powder Coatings. Revenue was down 6 percent overall.

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 towards the end of 2016.

We recently broke ground on a €9 million powder coatings plant in Mumbai that will bring us closer to our customers in the north and west of India and will also provide several innovative lines new to the Indian market, including bonded metallic products for the pipe and rebar markets. (Photo)

We recently broke ground on a €9 million powder coatings plant in Mumbai that will bring us closer to our customers in the north and west of India and will also provide several innovative lines new to the Indian market, including bonded metallic products for the pipe and rebar markets.