JOTUN GROUP
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Jotun Group has bond funding of NOK 1 555 million. One of
the long-term bond agreements entered into in 2014, with a
carrying amount of NOK 400 million, is based on a fixed interest
rate of 3.85 per cent. In addition, Jotun Group has a bilateral
loan with Nordic Investment Bank (NIB) of USD 101.6 million
with floating interest rate.
Sensitivity interest rates
Jotun Group has long-term interest-bearing debt of NOK 2 253
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 1 853 million.
Gain/loss from a 3 percentage point change in
interest rates
Funding and liquidity risk
The Group monitors its risk by using cash flow forecasts. The
main elements of the funding strategy are the establishment of
long-term loans and credit facilities with a minimum average
of two years to maturity and maintaining a strategic financing
reserve equivalent to five per cent of the Group’s operating
revenue. See note 16 for further details on the Group’s funding.
Cash flow from operations has seasonal cycles, especially due
to the sales of exterior decorative paints in Scandinavia, and
protective coatings in Eastern Europe and Central Asia. Through
the first months of the year, the Group has substantial build-up
of working capital in preparation for sales during spring and
summer season. This is an expected cyclical movement and is
taken into account when planning the Group’s financing. Other
drivers of the liquidity development are investments in new
factories and changes in the working capital in the individual
companies. The parent, Jotun A/S, repatriates cash through
both ordinary dividends and interim dividends based on target
equity ratios for subsidiaries.
Investments are financed mostly from Jotun A/S and the
cash flows are predictable as the financing for each project is
planned well in advance.
(NOK MILLION) Effect on
cost of debt
2018 67.6
2017 49.3