- Sales increase, especially as a result of higher sales prices
- Earnings significantly above prior-year level, primarily because of lower special charges
- Outlook 2013: sales above level of previous year; considerable earnings improvement supported by programs to increase efficiency
Coatings – Sales by region
(Location of customer)
We increased our sales to third parties in 2012 by €161 million to €2,961 million (volumes 0%, prices 5%, currencies 1%). Weaker sales volumes in parts of Europe were offset by higher demand in Asia and North America. In particular, sales volumes for our automotive coatings grew overall. Favorable market conditions in the global automotive industry, particularly in the first half of the year, contributed substantially to sales growth. We raised sales prices in all business areas due to further increases in raw material costs.
Our business with automotive coatings was very successful thanks to growing demand in Asia and North America. However, sales volumes in Europe were slightly below the previous year’s level on account of declining demand from southern Europe. Automotive refinish coatings also saw decreased demand in Europe. However, we were able to more than offset this decline with increased volumes in Asia as well as higher sales prices in North America. In the industrial coatings business, we benefited in Europe from strong demand for coil coatings from the Russian steel industry as well as from the emerging markets for coatings for wind turbine rotor blades. In our decorative paints business, we raised sales volumes in South America in the premium segment, compensating for a volumes decline in other segments. Sales fell in Europe, however, due to a weaker market and the divestiture of our business with Relius® decorative paints.
Income from operations rose considerably. This was mostly the result of lower special charges in comparison with 2011. The expansion of our business activities in Asia as well as increased research spending were largely responsible for fixed costs above the level of the previous year. This rise in fixed costs was partly offset by programs to increase efficiency. We were not able to fully pass on higher raw materials costs to the market.
For 2013, we anticipate high demand from the automotive industry, primarily in China and North America. Demand will likely also continue to increase for decorative paints in South America. Furthermore, we particularly expect higher demand from the emerging markets and from Russia. Development will likely be weaker, however, in the market for automotive refinish coatings in Europe. Overall, we anticipate sales exceeding the level of 2012. Supported by programs to increase efficiency, we aim to considerably increase earnings. Together with our customers, we will strengthen and continue to expand our presence in the growth markets of Asia and Eastern Europe, especially in China, India and Russia.