ICI Looks to Boost Performance, Downplays Talk of Divestitures
Separately, ICI announced that David Hamill, a member of the Group Management Committee of Royal Philips Electronics, will join the company as ICI Paints chairman and chief executive and will become a member of the ICI board as an executive director. Hamill will assume the leadership of ICI Paints on Dec. 8.
The company, in a "strategic update" that followed an announcement on third-quarter financial results, said it will direct growth initiatives at core businesses that include architectural paints, industrial adhesives, modified starches, fragrances and flavors. Geographically, the company said it will pursue an aggressive growth strategy in Asia.
In the latest in a series of disappointing earnings reports, ICI said third-quarter net profit declined 16.3%, to £67 million ($113.5 million), while sales for the quarter fell 4.3%, to £1.507 billion ($2.533 billion). But the company's Paints segment posted a 13% gain in third-quarter operating profit, to £69 million. Paints-segment sales for the quarter rose 2.6%, to £601 million.
ICI Chairman and CEO John McAdam said the company will seek to be "more focused and directive" in pursuing growth strategies for key strategic business units, with aggressive growth programs to be pursued in Asia in all businesses and selective growth initiatives planned for Paints in Europe and Latin America. The company said its approach for Paints in North America will be to "aggressively maintain" its market position.
The company said divestitures will be considered for some businesses, but said it will focus more on cost containment and "capital effectiveness" in cases where divestiture is "either not practical or not value-adding."
ICI also said Chairman Alex Trotman will retire at the end of the year and will be succeeded by Deputy Chairman Peter Ellwood, in line with succession plans announced in June. Ellwood is formerly Group chief executive of Lloyds TSB Group plc.