Executive summary of
the Financial Statement for 2020
GENERAL
The consolidated financial statement for the Jotun Group
consists of Jotun A/S and 58 subsidiaries, three joint ventures
in China and South Korea and five associates in the UAE and
Saudi Arabia. Subsidiaries are fully consolidated independent
of shareholding, while associates and joint ventures are
accounted for based on the equity method.
The Group’s consolidated financial statement has been
prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations as adopted
by the International Accounting Standards Board (IASB) and
approved by the European Union (EU).
REVENUE
In 2020, the Group recorded total operating revenue of
NOK 21 070 million, an increase of seven per cent compared to
2019 (NOK 19 652 million). Excluding positive currency effects,
mainly due to a weaker Norwegian krone, underlying revenue
growth was three per cent.
The underlying sales growth was modest, mainly due to the
coronavirus pandemic. This hampered sales growth in all
segments and especially in South East Asia and the Middle
East. Increased revenue was primarily achieved by good
growth in Decorative Paints, due to a surge in demand in
selected markets, like Scandinavia and Turkey.
OPERATING PROFIT
The Group achieved an operating profit for the year of
NOK 3 489 million, an increase of 50 per cent compared
to 2019. This yielded an operating margin of 17 per cent
(2019: 12 per cent). The improvement in operating profit
and profitability is mainly explained by stronger gross
margins due to lower raw material costs. In addition, positive
currency translation effects and low underlying cost growth
contributed positively. Jotun Group’s share of profit from
associates and joint ventures totalled NOK 746 million
compared to NOK 497 million in 2019. The increase is mainly
attributable to a significant improvement in South Korea
and China related to a recovery in the shipbuilding industry,
combined with stronger performance in Saudia Arabia.
PROFIT FOR THE YEAR
The profit for the year amounted to NOK 2 378 million, an
increase of NOK 828 million from 2019. Net financial costs
increased by NOK 89 million to NOK 331 million, mainly due
to realised currency effects related to dividend income. While
income tax expense increased to NOK 780 million from
NOK 529 million in 2019, the effective tax rate based on
reported profit before tax remained at 25 per cent.
INVESTMENTS
Total purchase of property, plant and equipment (PP&E) and
intangible assets amounted to NOK 1 407 million for 2020
(2019: NOK 1 464 million), representing seven per cent of
operating revenue (2019: 7 per cent). The largest investments
relate to new production facilities in Vietnam and Egypt,
production facility upgrades in Norway and the Czech
Republic, construction of a new regional headquarter and
R&D centre in Dubai and finalisation of the new headquarters
and R&D centre in Norway.
Financial performance
80 I Jotun Group Report 2020