On March 13, the annual CEO Forum of coatings world was held as scheduled. Eight CEOs from PPG, Haihong old man, RI Tu holdings, Akzo Nobel, ACE, Becks, Berger paints and HMG paints attended the forum.
The following contents are mainly discussed:
How is the market performance of paint giants in 2019?
Which markets offer the biggest growth opportunities?
Business strategy for 2020 and beyond?
What is the future direction of R & D?
We translated and sorted out the main contents according to the original English version for the reference of boss of Tu enterprise! It is hoped that the stone from other mountains can be used for reference by Chinese coating enterprises.
Michael McGarry: Chairman and CEO of PPG
Lars Petersson: President and CEO of Hempel
Masaaki Tanaka: Chairman and CEO of Nippon Paint
Thierry vanlancer: CEO of Akzo Nobel
Robert Bryant: CEO of axalta
Boris gorella: CEO of Beckers
Abhijit Roy：Berger Paints CEO
John Falder：HMG Paints CEO
Question 1: what is the performance of the paint and coating market in 2019?
Robert Bryant, CEO of axalta: the market is mixed in 2019. The global demand for touch up paint is stable. The demand comes from the strong global automobile market, with 89 million new cars coming offline, an increase of more than 3% over the previous year. The industrial end market experienced some pressure in 2019, and the transportation market also encountered some resistance because of the decline of global light vehicle demand.
John falder, CEO of HMG payments: the UK market is very interesting in 2019. The political uncertainty of brexit and numerous delays cause the company to limit or delay its spending.
Boris gorella, CEO of Beckers: 2019 is an exciting year, reaching the highest sales volume in our 154 year history.
Michael McGarry, chairman and CEO of PPG: in 2019, our aviation coatings business achieved strong sales growth, surpassing the overall industry performance in the United States and Asia. Driven by continued strong growth in Asia, our protection and marine coatings business grew in the fourth quarter of 2019.
Lars Petersson, President and CEO of Hempel: the global ocean market also began to pick up in 2019. Despite the uncertainty of future regulations and how to achieve future emission reduction, the marine newbuilding market is still at a low level, but shows signs of recovery. Due to the increase of docks, fleet age and net fleet, the marine inventory market has grown, and the maintenance and repair market is quite strong. As expected, the decoration market in Europe, Middle East and Africa is full of challenges, and the demand is flat or even down.
Abhijit Roy, CEO of Berger paints: India's economy is facing some strong resistance in 2019, and its overall growth is much slower than that in the past decade. In addition to the automotive business, we are able to achieve double-digit sales and value growth in most segments.
Masaaki Tanaka, chairman and CEO of Nippon Paint: in our major Asian markets, demand for paints and coatings increased slightly in 2018 compared to 2019. In particular, the demand for housing construction in China has increased by 9.2% compared with 2018. China's car production fell 6% to 26.09 million.
In the Japanese market, the number of housing construction projects is 4% less than in 2018. The production of construction machinery decreased by 3.7% to 390000, but the production of automobile industry was 9.22 million. In 2018, the total production of paint in Japan was 164 million tons, equivalent to the level in 2018.
Thierry vanlancer, CEO of Akzo Nobel: our performance improvement accelerated in the second half of 2019, resulting in a nearly 200 basis points increase in return on business sales to 12.5%.
After the sale of special chemicals, we returned 6.5 billion euros to shareholders.
We launched a 50 million euro investment in the US wood coatings business and completed the acquisition of mapaero to consolidate our global position in aerospace coatings and expand the paint the future innovation ecosystem.
Question 2: what is the revenue of the enterprise in 2019?
Robert Bryant, CEO of axalta: axalta's net sales in 2019 are about $4.5 billion. Last year, thanks to the stable demand for touch up paint, the global net sales of touch up paint increased by 3.3%.
In 2019, adjusted earnings before interest and tax increased by 5% to US $706 million, adjusted earnings per share increased by 6% to US $1.80, and free cash flow increased by 31% to US $475 million compared with 2018.
John falder, CEO of HMG payments: 2019 is a year of considerable growth, and we have achieved a record turnover. We are honored to be recognized by the Manchester evening news business of the year award, the British Coatings Federation, and the corporate social responsibility campaign of the year award.
Boris gorella, CEO of Beckers: we have achieved double-digit growth in the global coil coating business, and we have seen some steady development in the ace field.
Michael McGarry, chairman and CEO of PPG: in 2019, net sales of continuing operations increased by about 1% to US $15.1 billion, excluding unfavorable foreign currency translation.
Four acquisitions completed in 2019 strengthen our business portfolio:
Whitford worldwide company is a global manufacturer specializing in low friction and non stick coatings for industrial applications and consumer products;
Hemmelrath, a global coatings manufacturer of automotive original equipment manufacturers (OEMs);
Dexmet Corporation, a manufacturer of surface specific materials for aerospace, automotive and industrial applications;
Texstar, LLC is a manufacturer of high-performance transparencies, wingtip lenses and plastic components for aerospace and defense vehicles, and a leader in advanced transparent coatings.
Lars Petersson, President and CEO of Hempel: for Hempel, 2019 is a good year. Our revenue increased by 2.5% from 1.346 billion euros in 2018 to 1.534 billion euros.
The continuing uncertainty of brexit has affected our decoration business in the UK and Ireland; the geopolitical uncertainty and economic slowdown in the Middle East have affected our business in Europe, the Middle East and Africa (EMEA); and the trade friction between China and the United States has increased the uncertainty in our Americas and Asia Pacific region.
Abhijit Roy, CEO of Berger paints: on November 1, 2019, Shalimar tar products (STP) was acquired. This acquisition will help us take the lead in the fast-growing waterproof field.
Masaaki Tanaka, chairman and CEO of Nippon Paint: net sales rose 3% year on year in fy2019, excluding M & A and other temporary factors. Operating profit increased by 4.8% year on year, and our business performed well.
In addition to the strong performance of Chinese decorative coatings with high market share, the strong performance of Japanese and American decorative coatings also contributed to our operating profit. Last year's acquisition of Dulux group in Australia and betek Boya, a Turkish decoration manufacturer, boosted revenue by 10.3%.
Thierry vanlancer, CEO of Akzo Nobel: the revenue is the same as that of previous years, with 4% of positive price / mixed revenue and 1% of acquisition, but the sales volume is down 5%.
Question 3: which areas of the coatings and coatings market have brought the greatest growth opportunities to your company?
Robert Bryant, CEO of axalta: we are the market leader in touch up paint, especially in North America. In 2019, new "value centered" transparent coating and primer products will be launched, and the global automobile market will grow by about 3%, which will promote the overall touch up paint market and growth of Ashtar.
In the industrial sector, we see an excellent opportunity for the growth of wood coatings business and will continue to bring new coating innovations and products to market, with a focus on water-based solutions. Energy solutions also have huge global growth opportunities in motor coatings and new opportunities in the general industrial liquid and powder coatings market as well as in the agricultural, construction and earth (ACE) markets.
In the field of transportation, in China, we believe that light vehicles will have long-term growth opportunities. Also in China, commercial vehicles are expected to grow, producing more than 1 million vehicles a year. Globally, we see growth opportunities in the rail and trailer sectors, as well as emerging opportunities in specialty OEMs and other commercial vehicle categories.
John falder, CEO of HMG paints: with the advent of our innovative acrythane 4G finish and graphene containing acrythane ultra commercial vehicle finish, the development of waterborne and decorative coatings in the commercial vehicle market has brought exciting potential opportunities for HMG.
Boris gorella, CEO of Beckers: we have further expanded our Asian network, built a second plant in Vietnam and a new plant in Bangladesh. Business in North America has been well established with plants in the United States (Chicago, Illinois and Fontana, California) and Mexico (Monterey).
Michael McGarry, chairman and CEO of PPG: the automotive and industrial market supporting the development of electric vehicles will be the main driving force. Electric vehicles usually need two to three times more paint than traditional vehicles, because the batteries and boxes of electric vehicles need coating, adhesives and sealants, and protective coating to meet all their functional requirements.
PPG recognizes that it is imperative to provide a digital platform that can improve the customer experience. One example is our PPG service platform, which enables us users to directly connect with PPG professionals, manage and arrange routine paint maintenance projects.
Lars Petersson, President and CEO of Hempel: we want to see growth in specific segments. For example, passive fire retardant coating. These coatings require more and more building specifications. Our investment in establishing a new R & D center in Spain (focusing on PFP coatings) has led us to launch many products.
Abhijit Roy, CEO of Berger paints: decoration business accounts for more than 70% of our business, which is our growth opportunity. In this market segment, we are particularly interested in high-quality interior and exterior wall coatings.
Masaaki Tanaka, chairman and CEO of Nippon Paint: we believe that Asia (especially China) is one of the most important regions, accounting for about 40% of the group's net sales, and is growing continuously.
In China, the growth rate of paint market in 2015-2020 is 6.9%, and it is expected that the demand for decorative paint will continue to grow in the medium and long term.
Thierry vanlancer, CEO of Akzo Nobel: in many regions and countries, the decorative paint market is still very fragmented. Industry consolidation is still a theme, and in recent years, we have participated in it through several acquisitions.
On the demand side, the Asian market will continue to surpass the developed countries.
The investment in oil and gas industry (including LNG) provides a more optimistic prospect for the development of marine and protective coatings.
Powder coatings are by far the fastest growing segment driven by many factors, including a strong demand for more sustainable solutions.
Question 4: what are the business strategies for growth in 2020 and beyond?
Robert Bryant, CEO of axalta: looking forward, axalta has the ability to drive profit growth in high-performance and traffic coatings.
In 2020, we will continue to launch durable, sustainable and beautiful innovation