On February 13, Orkla announced Jotun's financial results for the fourth quarter and full year of 2024. Jotun's annual revenue increased by 7.36% year-over-year to NOK 34.206 billion (approximately $3.188 billion or RMB 22.707 billion), with a 9.0% increase at constant exchange rates. Sales momentum remained strong, with all business segments achieving double-digit growth. Earnings before interest, taxes, and amortization (EBITA) reached NOK 6.769 billion, up 5.3% year-over-year, driven by higher sales and improving gross margins. The overall outlook remains optimistic, and Jotun expects continued sales growth in early 2025.
Strong sales momentum continued into Q4 2024, with revenue increasing by 14.6% year-over-year to NOK 8.663 billion. After adjusting for positive exchange rate effects—mainly due to a stronger USD against NOK—underlying sales growth was 12%. Strong fundamental sales development resulted in double-digit growth across all business segments, supported primarily by increased sales volume and favorable product mix effects.
All regions contributed to sales growth. While Q4 saw signs of a sales rebound in Southeast Asia and the Pacific region, decorative paint sales in Scandinavia remained a challenge. Additionally, Europe's shipping market experienced slow growth, mainly due to favorable freight rates delaying port calls.
Supported by relatively stable raw material costs, operating profit in Q4 2024 increased by 17% to NOK 1.298 billion, driven by sales growth and improved gross margins. This helped offset rising operating costs and inflationary pressures in certain markets, such as Turkey and Egypt. After adjusting for currency effects, underlying profit growth was 14%.
Following a strong Q4 and record-breaking sales and operating profit in 2024, Jotun enters the new year with solid sales momentum and expects sales growth in 2025 to continue exceeding market expectations. Jotun also anticipates stable earnings in 2025, though its operating profit margin may fall below the historical highs of the past two years.
Raw material costs are expected to remain stable over the next three months, maintaining gross margins into early 2025. However, intensified competition for new contract bids is expected to put greater pressure on sales prices, leading to a gradual decline in gross margins throughout the year. To sustain overall profitability, Jotun will continue to focus on controlling operational cost growth.
Although Jotun's overall outlook remains positive, macroeconomic uncertainties and geopolitical tensions persist, including downward global growth forecasts and ongoing wars and conflicts causing supply chain disruptions. Nevertheless, Jotun remains well-positioned for further profit growth while maintaining its long-term strategic and investment plans.
