ICI Paints Summer 2007 Performance
Please note that ICI is now part of Akzo Nobel and is no longer trading as a separate company. Therefore financial results information displayed here is historic, not current. Latest financial results and information for Akzo Nobel can be seen on their corporate website.
Full details of ICI?s second quarter and half year 2007 performance can be seen on the Group?s corporate website.
| Second Quarter | Half Year | |||||||
|---|---|---|---|---|---|---|---|---|
| 2007 £m |
2006 £m |
Reported % |
Comparable % |
2007 £m |
2006 £m |
Reported % |
Comparable % |
|
| 632 | 647 | (2) | 2 | Sales | 1,186 | 1,218 | (3) | 3 |
| 81 | 79 | 2 | 7 | Trading Profit | 127 | 121 | 5 | 10 |
| 12.8% | 12.2% | Trading Margin (%) | 10.7% | 9.9% | ||||
Paints comparable sales were 2% ahead for the quarter. Strong growth for the Decorative businesses in Asia and Latin America, and further progress in the UK & Ireland and Continental Europe offset further weak trading for Decorative North America. Gross margin percentages were ahead of the same quarter in 2006, benefiting from higher selling prices and efficiency improvements which offset regional mix effects due to high growth in Asia. With costs below gross margin only slightly higher, trading profit was 7% higher than the second quarter last year. Trading margins were 12.8% (2006: 12.2%).
For the half year, comparable sales were 3% ahead. Gross margin percentages were ahead of last year and, with costs below gross margin only slightly increased, trading profit was 10% ahead.
Sales for Decorative UK & Ireland were 3% ahead of the second quarter last year as volume growth in UK Trade and the Ireland business offset weaker volumes in UK Retail. Gross margin percentages were ahead of last year and despite increased publicity costs, trading profit was well ahead.
Decorative Continental Europe sales were 6% ahead of last year, with growth in southern Europe, the Benelux region and parts of Eastern Europe offsetting some weakness in Germany and Poland. Good weather in the early part of the quarter contributed to good growth across the region. Gross margin percentages were lower than last year, reflecting a weaker product mix. Despite costs below gross margin being higher than last year, the strong top-line performance contributed to a good improvement in trading profit.
As expected, sales for Decorative North America were lower than last year due to lower sales volumes across all channels. Overall sales were down 8% compared to a steady quarter in 2006, with sales volumes for US Retail and US Trade depressed by the continuing weakness in the US housing market. This was partially offset by favourable product mix, lower supply chain costs and price increases, contributing to improved gross margin percentages compared with the prior year. With good control of costs below gross margin and the benefits of restructuring initiatives, trading profit was ahead of the same period in 2006. Market conditions are not expected to change in the second half of the year, but good cost control and weaker prior year comparative performance should help contribute to an overall improvement in profitability.
Decorative Asia had another strong quarter, with sales growth of 19%. All countries were ahead of last year with the exception of Thailand. Sales growth in China was 28%, reflecting strong volume growth as expanded distribution continued to bring benefits. Despite lower gross margin percentages, reflecting increased sales of mid-tier products, trading profit for the quarter was ahead.
Decorative Latin America had another good quarter with sales growth of 16%. Gross margin percentages were lower than last year due to a weaker product mix in Argentina and Uruguay and lower selling prices in Brazil, but trading profit was significantly ahead.
Sales for Packaging Coatings for the quarter grew by 4%, reflecting improved selling prices and volume growth in Asia, North America and Latin America. Gross margin percentages were lower due primarily to raw material cost pressure only partially offset by price increases. However, with costs below gross margin lower than last year, trading profit was in line with the same period last year.
