International. The financial performance of global coatings company Hempel was satisfactory in 2017 with organic growth of -0.7 percent, the company said. This was in line with the global coatings market and the segments in which Hempel operates, which maintained a stable EBITDA margin (12.4 percent) in 2017, just below the 2016 level (13.2 percent).
In addition, Hempel saw great results for its focus on improving net working capital and reducing net debt. Net working capital days decreased from 89 days in 2016 to 59 days in 2017: the strategic ambition for 2020 reached three years earlier. Consequently, Hempel saw strong cash flows again in 2017, reaching EUR 155 million for operating activities.
Hempel was therefore able to reduce its net interest debt from €119 million in 2016 to just €21 million in 2017, equivalent to a ratio of 0.1 to EBITDA (0.6 in 2016). This makes Hempel a virtually debt-free company and leaves the company in a strong position to take a leading part in industry consolidation.
Hempel Group President and CEO Henrik Andersen comments: "We made great strides on our transformation path and made many important investments in building the foundation we need to accelerate growth. We are now ready to welcome startups to join the Hempel family and look forward to acquisitions happening in 2018. We want to play a leading role globally in consolidating the industry and actively driving the industry forward through innovative new customer-centric products, support and services. We are also very proud to have managed to focus on the transformation of this large company despite serious compliance issues in some operating units in Asia Pacific."
Expectations for 2018
Hempel expects the global marine coatings market to continue to be a challenge in 2018, especially the new construction segment where global overcapacity adds to the already negative trends in the industry. Despite this, Hempel anticipates positive underlying organic growth in most segments and geographies. Hempel's EBITDA margin is expected to remain at a solid level, in line with 2017.
