OUR BUSINESS
10
Despite facing headwinds in some markets and segments, Jotun achieved overall sales growth in 2018 and
strengthened its business in anticipation of more activity in the years ahead.
Full time employees Production volume
SCA
WE
EECA
MEIA
SEAP
NEA
AM
50 100 150 200 250 300 350
SCA
WE
EECA
MEIA
SEAP
NEA
AM
1 2 3 4 5 6 7
Jotun performed well in the Decorative Paints and Protective
Coatings segments in 2018, but despite promising
developments in the second half of the year, demand for
Jotun coatings in the Marine Coatings segment fell short of
expectations. Sales in the Powder Coatings segment were flat.
Operating revenue increased by eight per cent, helping Jotun
retain its long-term growth trend. However, overall profitability
has been under pressure due to the significant rise in raw
material prices, an increasingly cost-conscious customer base
and losses due to claims reported last year.
Improving profitability
While sales volume remains an important metric of the
company’s growth, Jotun acted decisively in 2018 to improve
profitability. For example, Jotun implemented price increases
to compensate for higher raw materials costs, refocused on
the sale of premium products in all segments and worked
successfully to control growth in operating costs.
Jotun has also been successful in building for the future. In
addition to entering new markets, expanding production
capacity in existing markets and launching a number of
potentially game-changing products in all segments, Jotun
continues to migrate from a paints and coatings supplier to a
solutions provider to help meet the specific needs of customers
and end users. Internally, Jotun continues to make significant
investments to upgrade standardised IT systems that help the
global organisation become more efficient and connected.
Jotun has also increased investments in its global R&D network
to improve the quality and speed of the innovaton processes.
Continuous improvement
Looking ahead, Jotun is working to strengthen its organic
growth model by investing in tools and systems to allow the
company to enter new markets more forcefully and at less cost.
At the same time, the company is working to reduce the per
unit cost of production by improving processes at every stage of
the value chain. These and other steps the company has taken,
combined with the anticipated recovery of both the marine
newbuildings and oil and gas industries suggests Jotun will
experience improved results in 2019.
3 6 9 12 15
SCA
WE
EECA
MEIA
SEAP
NEA
AM
0
Production facilities Total sales (100 %)
Sales in billion
SCA
WE
EECA
MEIA
SEAP
NEA
AM
Corporate
0 500 1000 1500 2000 2500 3000
Litres/kilos (1 000 tonnes)
2018
2008
Management summary
Promising future