When Danish coatings group Hempel announced Michael Hansen would be taking over as CEO some 2 1/2 years ago, the message was one of continuity. But then came a slew of changes, including a global reorganization and a private equity firm taking a stake alongside the longstanding philanthropic majority owner, the Hempel Foundation.
There have been a few changes on the P&L too.
Although Hempel had to extend an ambitious five-year Double Impact plan to double revenue, in what would have been the final year, Hansen has ticked off many financial boxes in 2025: the maker of Crown Paints and marine antifouling treatments just reported record EBITDA and margins, in what was a scrappy 12 months for the coatings industry in general. Cost management helped drive free cash flow to EU139 million from EU29 million.
“One of the statements I made back then was that we need to improve our profitability relative to peers. That we have been laser-focused on,” Hansen said in an interview with chemicalESG.
For this year, the CEO is budgeting for mid-single-digit organic sales growth and margins of more than 17%.
Hempel, which competes with the likes of AkzoNobel, PPG and Sherwin-Williams, says it is winning customers from peers, including in the cutthroat market of decorative paint.
“In difficult markets, stagnating markets, we’re growing and we’re clearly taking share,” the CEO said. “It’s really been about maximizing that channel and reaching more customers through our existing stores rather than pricing.”
Hempel is also making additional inroads on the industrial side, including coatings and treatments for marine and infrastructure.
There’s still work to do, he said. A lot of effort is going into harmonizing operations across the globe to create a more “scalable” company for added efficiencies in areas like automation.
Hansen feels success in coatings will be defined by groundbreaking technology and innovation that can lift performance and drive sustainability, especially on the industrial side. PPG’s actions highlight that sentiment. In its home US market, PPG exited the deco market, pivoting toward pretreatments and liquid and powder coatings for manufacturers of everything from cars to electronics, metal coils and aircraft.
“When we talk about innovation and technology development, it’s primarily, but not solely, within energy infrastructure and marine,” Hansen said in the interview.
But he doesn’t buy into the theory that industrial coatings are the more noble pursuit.
“Before we write deco off, I want to warn against that narrative,” he said.
In a nod to Sherwin-Williams, he added: “Keep in mind one of the most successful companies in our industry is primarily focused on deco in North America. It’s a space where you evolve around your brand.”
Last year, the company created a new technology hub and appointed its first chief technology officer, Emilie Barriau, who first joined Hempel 15 years ago from Ecolab.
There is another big piece of the puzzle for Hansen to fill: Hempel’s 5-year strategy announced out at the beginning of 2021 also set out to double revenue (sales stood at EU2.19 billion last year, up from EU1.54 billion in 2020). In the 2023 annual report*, the company extended the horizon of that goal beyond 2025.
At a time when assets are coming up for sale in the coatings industry, that’s something that Hempel’s new private equity partner, CVC Capital Partners, will be on hand to help with.
(This version of the story clarifies the year the strategic plan was extended.)