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Decorative Paints – Overview


  • Full-year revenue increased 9 percent and EBITDA increased 13 percent
  • All three regions reported higher revenue and profit in 2010
  • Strong revenue growth and increased investment in brands and distribution in high growth markets
  • Soft demand in most mature markets, particularly in Continental Europe and Canada
  • Walmart supply contract roll-out on track

Full-year revenue growth was 9 percent (in constant currencies: up 3 percent). Demand in the high growth markets showed a robust recovery in 2010 after a challenging 2009. Our growth strategy of investing in brands, distribution and people, and expanding into mid-tier markets in high growth regions is progressing well. Growth rates achieved in China and South East Asia have significantly outpaced markets, whilde demand in most of the mature markets declined during the year. As a result, our revenue in mature markets declined, apart from the UK where we continued to strengthen the Dulux market position and gained share in the trade segment.

Q4 revenue development followed a similar regional pattern as the rest of 2010. Revenue increased 11 percent, primarily driven by Asia and Latin America and a positive foreign currency translation effect.

We continued to invest in the future of the business, with absolute A&P spending increased by 30 percent and A&P spending as a percentage of revenue increasing to 6 percent (2009: 5 percent). In addition, a large number of countries, including Canada, China, India, Germany, France, Sweden, the Netherlands and Belgium completed successful SAP roll-outs during the year.

Our US business marked a key milestone in our turnaround strategy by securing a supply contract with Walmart. We will be the primary paint supplier to more than 3,500 Walmart stores. This will involve developing and manufacturing a portfolio of interior and exterior paints under the Glidden and Walmart Colorplace brands. The successful relaunch of our Glidden brand also resulted in a higher Glidden market share in 2010.

During the year, we maintained our focus on costs, margin improvement and operating working capital efficiency. We continued the restructuring programs in our European business to counter soft market demand, while our margin management programs enabled us to maintain overall margins despite higher raw material prices. EBITDA was up 13 percent for the year and down 10 percent for Q4, where the positive currency impact was 7 percent and 10 percent respectively. The EBITDA margin improved from 10.6 percent in 2009 to 11.0 percent in 2010.

Revenue development 2010

Decorative Paints – Revenue development 2010 (bar chart)

Revenue development Q4 2010

Decorative Paints – Revenue development Q4 2010 (bar chart)
Decorative Paints – Brands (logos)
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