“We remain well positioned to further invest in building our business”
Our strong growth across all regions and business segments continued during the first half of 2011, but we caught some headwind as the year progressed, mainly due to raw material price impact and macro economic issues. While this slowed our momentum, we were still able to improve on our 2010 revenue and remained well positioned to focus on our customers and further invest in building our business.
We achieved good growth in the high growth markets, especially China, India and Latin America, where volume improvements ranged from mid-single digits to low teens. Volumes in Europe and North America were basically flat, however, largely due to a significant decline in miles driven, which dramatically impacts collision rates and subsequently our end vehicle refinish markets. Our Automotive Plastic Coatings business had a very good year, with much of the growth coming from Asia – particularly China – while our Commercial Vehicle activities also performed well, notably in North America and Europe. Aerospace, meanwhile, had a record year. The aircraft manufacturers were busy and their order books were extended more than they have been in recent times. As market leader, we benefited from this, with most of the growth being realized in the commercial aviation sector, driven mainly by the megatrends in the world. Market forces meant that there was some need to manage our pricing, but in general the strength of our product portfolio and strong customer focus ensured that we continued to grow.
In October we announced an investment of around €60 million to increase production capacity in China. This will involve constructing a new production facility in Changzhou, as well as related warehousing, quality control laboratories, support facilities and offices. The new facility will build on last year’s acquisition of Changzhou Prime Automotive Paint Co. Ltd and will strengthen our leadership position in the country’s automotive refinishes market. We owe it to our customers to be able to produce locally and supply them locally, so this will give us an important base of operations. Another notable transaction was the divestment of our company-owned distribution outlets in the US to LKQ Corporation. We decided that this would be in the best interests of our customers and it will help us to improve the capability of our distribution footprint in the region. We also bought out the minority interest in the vehicle refinish segment of our joint venture partner, Comex, in Mexico to boost our growth strategy. It means we now have full responsibility there for the marketing and distribution of our Sikkens, Lesonal, U-Tech and Wanda brands.
Last year’s rollout of our Wanda waterborne basecoat into the trade segment in North America really took off in 2011. The product has been a great success and we are gradually launching it across the globe, most recently in Indonesia and Australia. As a result of the strength of our Process Centered Environment solution, we won approval to supply Toyota Motors Europe, while our Aerospace business clinched an important contract with Air France and launched a new interior cabin coating. We continued to learn from our exciting partnership with Vodafone McLaren Mercedes and invested further in our commitment to getting color right first time for our customers by upgrading our vehicle refinish paint systems and introducing advanced color tools.
Revenue in € millions
Geo-mix revenue by destination in %