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JOTUN GROUP
by the business units and individual credit limits are defined
accordingly. Outstanding customer receivables are regularly
monitored and credit risk assessments are undertaken.
There is no significant concentration of credit risk in respect of
single counterparts. Some groups of counterparts can be viewed
as significant: shipyards, ship owners, real estate developers and
some larger retail chains in Scandinavia. In combination with
a geographical distribution and few large single accounts, the
credit risk in the Jotun Group is viewed to be well diversified.
The need for bad debt provisions is analysed on an individual
customer basis. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of financial
assets disclosed in note 12. The Group does not hold collateral
as security. The Group evaluates the concentration of risk with
respect to trade receivables as low, as its customers are located
in several jurisdictions and industries and operate in largely
independent markets.
Jotun A/S has International Swap Dealers Association (ISDA)
agreements with its counterparts for derivative transactions, and
transactions are made only with Jotun Group’s core relationship
banks with satisfactory ratings.
SENSITIVITY ANALYSIS
Jotun has chosen to provide information about price risk and
potential exposure to hypothetical gain / loss through sensitivity
analysis disclosures. The following tables demonstrates the
sensitivity to a reasonably possible change in the foreign
exchange, interest rate and commodity markets, with all other
variables held constant.
SENSITIVITY FOREIGN EXCHANGE
The Jotun Group has approximately 88 per cent of its sales
and 100 per cent of operating profit arising from operations
in foreign currency. When all local sales and profit figures are
converted to NOK and consolidated into Group accounts, there is
a translation effect in NOK figures. In 2017, sales and operating
profit outside Norway was NOK 13 228 million and NOK 1 393
million respectively.
GAIN/LOSS FROM A 10 PER CENT CHANGE
IN PRICE OF NOK
EFFECT ON EFFECT ON
(NOK THOUSAND) REVENUE OPERATING PROFIT
2017 1 323 139
2016 1 278 186
SENSITIVITY COMMODITIES
Cost of Goods Sold (COGS) represents in large the cost of raw
materials. In 2017, the COGS was NOK 9 078 million, with the
top 3 raw materials representing approximately NOK 2 855
million of this amount.
GAIN/LOSS FROM A 10 PER CENT CHANGE
IN COMMODITY PRICES
EFFECT ON EFFECT ON
(NOK THOUSAND) TOP 3 OTHER
2017 286 622
2016 256 558
SENSITIVITY INTEREST RATES
Jotun Group has long term interest bearing debt of NOK 2 044
million, hereof NOK 400 million with a fixed interest rate. The
annual cost of debt will hence vary with net amount of floating
rate debt of NOK 1 644 million.
GAIN/LOSS FROM A 3 PERCENTAGE POINTS CHANGE
IN INTEREST RATES
EFFECT ON
(NOK THOUSAND) INTEREST COSTS
2017 49.3
2016 58.7