Our results at a glance: A focused Paints and Coatings company

Full-year Paints and Coatings:

  • Revenue up 2% (up 4% excluding currency impact) and in both Business Areas, mainly due to volume growth and acquisitions, partly offset by unfavorable currencies and price/mix
  • Volumes 2% higher; up 7% for Decorative Paints with growth in all regions, while down 1% for Performance Coatings due to adverse conditions in the marine, and oil and gas industries
  • EBIT at €905 million (2016: €928 million), resulting from higher raw material costs, partly offset by increased selling prices, continuous improvement and cost control
  • Operating income at €825 million (2016: €923 million), includes the adverse impact of identified items of €80 million, mainly related to the transformation of the Paints and Coatings organization and legal items
  • ROS at 9.4% (2016: 9.8%); ROI at 13.9% (2016: 14.4%)
  • Adjusted EPS from continuing operations at €2.56 (2016: €2.38)

Q4 Paints and Coatings:

  • Revenue flat (up 5% excluding currency impact), mainly due to volume growth and acquisitions, offset by unfavorable currencies and price/mix
  • Volumes up 3%, driven by Decorative Paints, with growth in all regions
  • EBIT at €178 million (2016: €149 million) with increased selling prices, continuous improvement and cost control, partly offset by higher raw material costs
  • Operating income at €139 million (2016: €132 million), includes the adverse impact of identified items of €39 million
  • Adjusted EPS from continuing operations at €0.57 (2016: €0.48)

Investing in UK production (Photo)

Investing in UK production
We opened the world’s most sustainable paint factory in Ashington, UK. It will be the production center for Dulux, the world’s leading paint brand.

Outlook:

Headwinds experienced during 2017, including higher raw material costs and adverse effects from foreign currencies, are projected to continue in 2018, especially during the start of the year.

We anticipate ongoing positive developments for Decorative Paints in all regions, particularly Asia. Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings.

We continue to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline. Our “Winning together – 15 by 20” strategy will create a focused Paints and Coatings company and deliver our 2020 guidance.

Summary of financial outcomes

Fourth quarter

 

January-December

2016 1

2017

∆%

in € millions

2016 1

2017

∆%

1

Represented to present the Specialty Chemicals business as discontinued operations

2

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

2,291

2,283

Revenue

9,434

9,612

2

149

178

19

EBIT

928

905

(2)

132

139

5

Operating income

923

825

(11)

6.5

7.8

 

ROS% 2

9.8

9.4

 

5.8

6.1

 

OPI margin%

9.8

8.6

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

6,422

6,494

 

 

 

 

ROI (in %) 2

14.4

13.9

 

 

 

 

 

 

 

 

104

84

 

Capital expenditures

278

250

 

 

 

 

Net debt

1,252

1,951

 

 

 

 

Number of employees

36,300

35,700

 

 

 

 

 

 

 

 

82

29

(65)

Net income from continuing operations

538

443

(18)

51

46

 

Net income from discontinued operations

432

389

 

133

75

(44)

Net income attributable to shareholders

970

832

(14)

0.53

0.29

 

Earnings per share from total operations (in €)

3.87

3.31

 

0.48

0.57

 

Adjusted earnings per share from continuing operations (in €)

2.38

2.56

 

0.66

0.92

 

Adjusted earnings per share from total operations (in €)

4.15

4.40

 

578

529

 

Net cash from operating activities

1,291

969