Hempel continued its growth trajectory in 2021, ending the year with 5.9 per cent organic growth, following ten consecutive quarters of organic growth. Total growth was 15.1 per cent, despite supply chain challenges across the coatings industry. The 5.9 per cent organic growth was the highest in more than ten years, driven by strong performance in the Marine and Infrastructure segments, and stronger than expected in the face of unprecedented raw material cost increases and shortages. EBITDA was EUR 203 million, resulting in a stable EBITDA margin of 11.4 per cent, in line with outlook.

Hempel Annual Report 2021

“Our performance in 2021 was very satisfactory and demonstrates that the decisive actions taken to refocus our ambitions and deliver on our strategy are paying off,” says Lars Petersson, Group President & CEO of Hempel. “Our ambition is to double our business by 2025 and to increase our positive impact in terms of sustainability – and we remain on track.”

Hempel made two major strategic acquisitions during 2021. In April, it acquired Wattyl, one of Australia and New Zealand’s leading manufacturers of coatings for the decorative and infrastructure segments. In September, it followed with the acquisition of UK-based Farrow & Ball, the world’s leading luxury decorative paint and wallpaper company. Together, the two companies added revenue of EUR 162 million in 2021, with expectations of an annualised full year impact in 2022 of around EUR 275 million.

The 2022 outlook is mid to high single-digit organic revenue growth. Further, despite the unpredictable circumstances affecting raw materials, Hempel foresees a slightly increasing EBITDA margin between 11 and 12 per cent, leading to an EBITDA of EUR 220-240 million.

In February 2021, the company introduced Futureproof, a comprehensive framework and guide for embedding sustainability throughout the Hempel business, from its core operations to product development and investments.

Futureproof lays out measurable Environmental, Social & Governance (ESG) goals, including CO2 reduction targets. In November, Hempel submitted its CO2 reduction targets, in line with a 1.5°C pathway, to be independently verified by the Science Based Targets initiative and expects validation in 2022.

“Putting sustainability at the heart of how we do business is the right thing to do and the smart thing to do,” says Lars Petersson. “To win key customers, we must deliver solutions and develop partnerships that answer to their sustainability challenges. One such example is our new strategic partnership with GRI Renewable Industries, which will see us drive sustainability and cost improvements in wind tower production.”

The company also saw increased demand for its more sustainable products, such as its advanced hull coatings. These deliver fuel savings, and thereby CO2 reductions, by improving a vessel’s hydrodynamics. In 2021, Hempel’s hull coatings helped marine customers reduce CO2 emissions by 4.5 million tonnes, up from 3.6 million tonnes in 2020. Hempel aims to increase this to 5.5 million tonnes in 2022.

“As a company, we have a responsibility to act and make a difference. In 2021, we took great steps within our operations, commercial organisation, product development and sustainability work, laying the foundation for doubling our impact by 2025. Over the next few years, we will radically advance our environmental and social performance, while also expanding our business, so we can continue to create a brighter future with more sustainable solutions and fund the philanthropic work of our owner, the Hempel Foundation,” Lars Petersson concludes.

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