“Our product launches during 2010 are an indication of the strong focus we have on innovation and our robust pipeline.”
The year proved to be more challenging than anticipated as the impact of the global economic downturn was felt in our traditionally late-cycle businesses. Volume and revenue was up overall, but our portfolio shifted as market dynamics changed, and pressure was felt on prices in most sectors. In this context, the business has continued to perform well, delivering another strong set of results.
Uncertain trading conditions have been prevalent in the marine market, with volatile freight rates impacting earnings for owners. This has resulted in a tight maintenance and repair market as owners look to delay and minimize their outlays. However, given the large world fleet size and increasing number of vessels entering the market, we anticipate increasing levels of demand over the coming years. In marine new construction, output has continued to grow, driven primarily by China, where additional new building capacity has come on line together with good demand from Korea. While volumes in this area are up, margins have been impacted by raw material cost increases. In protective coatings, the earlier part of the year saw a number of major projects put on hold as finance proved difficult to secure, which resulted in a slower start to 2010 than expected in many parts of the world. However, as the year progressed, there were some signs of encouragement with projects starting to be released. Our Yacht business put in a solid performance in what was essentially a flat market.
Investment in technology remains high and we broke ground on our new UK-based global fire protection center of excellence, which is expected to be fully operational by mid-2011. This will help reinforce our leading position in the fire protection market and allow us to more quickly bring to market products such as the waterborne Interchar 1120, which we launched during the year. We also officially opened our new worldwide marine testing laboratory in Singapore, which is focused on developing the next generation of marine antifouling paints. Product introductions in marine included a revitalized biocidal antifouling range, along with our Intershield 803+ cargo hold coating, specifically designed to meet the increasing demands of fast loading of cargos. An improved Interplate Zero (a zero VOC, water-based shop primer) was also launched during the year, responding to the increasing demand for environmentally aware products within the marine industry. In yacht we launched Awlcraft SE, a high performance metallic finish system, developed using both yacht and car refinish technologies. These launches are an indication of the strong focus we have on innovation and our robust pipeline.
We are continuing to invest in geographic growth in our Protective Coatings business, particularly within China and India, as well as the Middle East, Russia and Brazil. In North America, we successfully integrated the Devoe product line into our portfolio, which continues to add value, as does its extensive stores network. We demonstrated step change improvement in safety performance throughout the year, achieving record low TRR rates, and took extensive steps to launch sustainability as our core management philosophy, developing carbon mitigation plans and increasing the proportion of eco-premium products within our portfolio.
Revenue in € millions
Geo-mix revenue by destination in %