Furthermore, Hempel saw great results from its sharp 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 achieved three years early. Consequently, Hempel saw strong cash flows again in 2017, coming in at €155 million from operating activities.
Hempel was, therefore, able to reduce its net interest-bearing debt from € 119 million in 2016 to €21 million in 2017, equalling 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 the consolidation of the industry.
Ready for a leading global role
In 2017, Hempel focused successfully on optimising and investing in its functions, processes and leadership in order to continue the transformation of Hempel into a leading global coatings company and to accelerate the execution of its Journey to Excellence strategy.
“We took great strides in our transformational journey and made many important investments in building the foundation we need in order to accelerate growth. We are now ready to welcome new companies to join the Hempel family and expect acquisitions to happen in 2018,” President & CEO Henrik Andersen said.“We want to play a leading global role in the consolidation of the industry and actively drive the industry forward through new customer-focused innovative products, support and services. We are also very proud that we managed to keep our focus on transforming this great company despite the serious issues with compliance in some operating units in Asia Pacific.”
Customer relations and trust
Hempel made use of 2017 to develop its relationships with customers. Hempel’s global organisation is now much more effective and agile when working with customers, no matter where in the world they operate. Listening to customers, understanding their businesses, gaining their trust and delivering value-adding products and services that meet their needs are key to continuous success and long-term partnerships.
“Customer focus and trust are key aspects of our values and the Hempel way of doing business. They are central to our identity and are now central to our brand, too. In 2017, we launched our first company-wide tagline: Trust is earned. We look forward to living up to that ambition in the years ahead,” Andersen said
Hempel Sailing World Championships 2018
In June, Hempel announced that it would be the title sponsor of the Sailing World Championships 2018 to be held in Aarhus, Denmark in July and August. The Championships are expected to draw around 1,500 sailors from 100 nations as well as over 400,000 visitors.
Expectations for 2018
Hempel expects the global marine coatings market to continue to be challenging in 2018, especially the newbuilding segment where global overcapacity is adding to the already negative trends in the industry. Despite this, Hempel anticipates positive underlying organic growth across most segments and geographies. Hempel’s EBITDA margin is expected to remain at a strong level, in line with 2017.