Directors’ report
1. Main activities
Jotun’s primary business activities include the
development, production, marketing and sales
of paints and coatings systems and related
products for the treatment, protection and
beautification of surfaces.
The Jotun Group is organised into seven
regions: “Scandinavia”, “West Europe”, “East
Europe and Central Asia”, “Middle East, India
and Africa”, “North East Asia”, “South East
Asia and Pacific” and “Americas”.
Jotun’s business is organised into two areas:
Decorative Paints and Performance Coatings.
Decorative Paints
Jotun develops, manufactures and distributes
interior and exterior paints to consumers and
professionals worldwide. In addition to direct
sales, Jotun sells through a global network of
about 8 500 dealers.
Performance Coatings
Marine Coatings:
Jotun is the world’s leading provider of marine
coatings to the newbuilding and maintenance
markets. Jotun also supplies coating solutions
for leisure boats and mega yachts.
Protective Coatings:
Jotun is a leading supplier of protective coatings
(steel and concrete protection), to companies
active in the offshore, energy, infrastructure, and
hydrocarbon processing industries.
Powder Coatings:
Jotun is a leading supplier of powder coatings
to companies active in the manufacture of
appliances, furniture, building components,
pipelines and general industries.
Jotun is a global company made up of 65
companies in 47 countries, including 39
production facilities. The company extends its
reach to other countries through a network
of subsidiaries, joint ventures, associated
companies, sales offices and distributors. The
parent company, Jotun A/S, has its headquarters
in Sandefjord, Norway. Of the Group’s operating
revenue, approximately 11 per cent is related
to its activities in Norway while 89 per cent is
related to the rest of the global network.
2. Review of the annual accounts
In 2019, the Group recorded total operating
revenue of NOK 19 652 million, which is an
increase of 11 per cent compared to 2018
(NOK 17 660 million). Excluding positive
currency effects, mainly due to a weaker
Norwegian krone, underlying revenue growth
was seven per cent.
Increased revenue was achieved by continued
good growth in Decorative Paints and a strong
recovery in Protective Coatings. Strong sales in
Marine Coatings were supported by a recovery
in the newbuilding market, while low activity in
key markets affected sales in Powder Coatings.
The Group achieved all-time high profit for the
year driven by solid sales growth, higher gross
margins and the company’s successful efforts
to control costs.
In accordance with section 3-3a of the
Norwegian Accounting Act, the Board confirms
that the Group fulfils the requirements
necessary to operate as a going concern, and
that the 2019 financial statements have been
prepared on the basis of this assumption.
Profits
The Group achieved an operating profit for
the year of NOK 2 320 million, compared
to NOK 1 361 million in 2018. The profit
improvement is mainly explained by solid sales
growth and higher gross margins, caused
by previously implemented price increases in
combination with slightly lower raw material
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costs. Net financial costs totalled
NOK 242 million, resulting in a profit before tax
of NOK 2 079 compared to NOK 1 115 million
in 2018. Jotun’s activities are subject to
corporate tax in the countries in which the
Group operates, and income tax amounted to
NOK 529 million in 2019. This led to a profit for
the year of NOK 1 549 million compared
to NOK 674 million in 2018.
The parent company, Jotun A/S, achieved a
total profit for the year of NOK 639 million in
2019, compared to NOK 727 million in 2018.
Allocation of profit for the year:
In 2019, Jotun A/S posted profit for the year
of NOK 639 million. The Board of Directors
proposes the following allocation:
Proposed dividend NOK 547 million
Transfer to equity NOK 92 million
Financial position, capital structure and risk
Cash generated from operating activities
improved by NOK 1 428 million to
NOK 3 173 million. Increased cash flow
from operating activities offset cash outflows
tied to investments in non-current assets of
NOK 1 464 million. At year-end, the Group had
a positive cash position of NOK 1 903 million
compared to NOK 1 012 million as of
31 December 2018.
BOARD OF DIRECTORS
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