Annual 2005 Performance
ICI Paints in a nutshell: 2005
- Turnover: £2331m. ICI Paints delivered 6% comparable sales growth for the year.
- Trading profit: £253m*
- Net operating assets: £715m
- Average number of Employees: 15,160
2005 Performance in More Detail
In 2005 ICI Paints improved its Return on Capital Employed (ROCE) from 21.4% (2004) to 23%.
Paints sales during 2005 were 6% ahead of 2004 on a comparable basis with growth for all regions of the decorative paint business, particularly Asia and Latin America, and also for Packaging Coatings. Raw material costs increased substantially over the course of the year, and whilst increased selling prices recovered the absolute monetary value of the cost increases, gross margin percentages were lower.
Sales for Decorative Europe were 1% ahead of 2004 with growth for UK trade sales and sales in Ireland and Eastern Europe partly offset by lower sales in the UK retail market. With the combined impacts of higher raw material costs and increased sales in lower margin markets, gross margin percentages were lower than last year, and despite costs below gross margin being held below the 2004 level, trading profit was slightly lower.
Decorative North America sales were 4% up on last year with growth in all the principal market sectors. Raw material and energy cost increases were significant, and whilst the impact on margins was partially offset by increases to selling prices, gross margin percentages were lower than 2004. Trading profit was well down.
Decorative Asia sales were 17% up from 2004 with both volume growth and increased selling prices across the region. Growth was particularly strong in China, India, Pakistan and Vietnam. Gross margin percentages were slightly lower, but trading profit was significantly ahead of last year.
Sales for Decorative Latin America were 9% ahead compared with 2004. There was volume growth in all key countries, and selling prices were also higher resulting in improved gross margin percentages. Costs below gross margin increased in support of the higher level of trading, but notwithstanding this, trading profit was significantly higher than 2004.
Packaging Coatings also delivered a strong performance, with sales 14% up on last year, due to both volume growth and selling price increases. Raw material costs were also markedly higher and gross margin percentages were therefore slightly lower than last year, but trading profit was substantially ahead of 2004.
