For 2005, Sico reported record sales of $312.1 million, which represents a 2.9% increase over the previous year, despite higher manufacturing and distribution costs largely attributable to soaring oil prices.
Commenting on Sico’s 2005 performance, Pierre Dufresne, president and CEO, said that the company continued to stand out in the Canadian architectural paint industry although its fincancial growth was impeded due to a more challenging business environment than in previous years.
“Drawing on our ability to adapt to less favorable economic conditions, we initiated a number of changes to improve our performance and competitiveness in the coming years, particularly in the industrial sector,” Dufresne said.
The architectural sector’s sales grew by 5.2% to $277.1 million. While this growth is partly attributable to selling price increases introduced during the year, in order to counter the rising costs of raw materials, and to the acquisition of Mills Paint Sales in western Canada, it also reflects organic growth in the volume of paint sold by Sico.
“This is particularly satisfactory as the overall Canadian demand for architectural paint declined in 2005. Sico thereby surpassed the industry’s average performance, which resulted in an increase in our share of the Canadian market,” Dufresne said.
Faced with a difficult competitive environment and an unfavorable exchange rate, Sico’s industrial sector sustained a 12.5% decrease in its revenues, which ammounted to $35 million in 2005.
“This sector’s operating profitability, although stable, did not meet our expectations,” said Dufresne. “A number of initiatives were taken during the second half of 2005 and at the beginning of 2006 to maintain its customer base despite increased competition from U.S. manufacturers, to recruit new customers and, above all, to rapidly improve this business unti’s profitability and return on capital invested.