Financial Information

ANNUAL REPORT AND FINANCIAL STATEMENTS

Crown Berger Annual Report and Financial Statements [2010]
(*Click on the report to view as a flipping book*)
Crown Berger Annual Report and Financial Statements [2009]
(*Click on the report to view as a flipping book*)

Managing Director's Statement

2010 - Was an excellent year for our Crown Results are what matters, so it is with pride and pleasure that I present the headline; “Our turnover increased by 21% that is over four times the growth of the national economy”.

We have therefore shown our ability to manage a changing business environment, as well as contributing to a reduced carbon footprint as we continue to becoming an environmental friendly organisation.

Our strategy is to use the best management practices. After two years of implementation and consolidation, the rewards of adopting Kaizen, Balanced Scorecard, combined with our financial investment in SAP have created a motivated workforce. The end result is an achievement in all business facets; Sales, Finance, Production, Purchasing, HR, and IT. The system was not only implemented at the head office, but also at Westlands, Kisumu and Mombasa.

The increase in turnover allowed Crown Berger to cross the Ksh. 3 billion mark. This was against a backdrop of higher raw material prices and world oil price volatility which was evident in the last quarter, we improved our gross margin by 3% compared to 2009.

Excellent finance planning and improved working capital management helped create a positive cash flow. This has made our company strong and healthy.

Today, we are experiencing a turbulent environment in various parts of the world which will result to a challenging 2011. Already raw material prices have escalated by more than 30%, the Kenya shilling has depreciated, oil prices have increased, which adds to the uncertainty.

However, I believe the demand for paints will remain, as the construction sector has great potential in this country. We will have to innovate, diversify horizontally and grow our business to
ensure shareholder return on their investment.

Sales and Marketing

Crown won the coveted Marketing Society of Kenya (MSK) award for the Best TV advertising Campaign of 2010, which featured our transformation theme and supported the Crown brand, thus assisting our dealers’ business growth. The upside of this transformation campaign was a growth factor in the premium market sales which justified the investment.

Combined with excellent increase in automotive and economy segments, it was all about breaking records with sales policies and marketing support to provide a sustainable base for future growth.
Innovation is the key word in our Mission statement, as we are listening to our customers and stakeholders.

During the year we promoted loyalty schemes to our distributors (large and small), and engaged a wider franchise with balanced percentage increase in all regions of the country. Training of painters and auto spray applications was a key target that was met by sessions in some 20 different locations and reached to over 2,000 painters.

The Crown website was duly born as a selling and marketing tool, it was expanded in content and entertainment value and will be our key communicator going forward. We have also launched a
supporting page on facebook for greater digital media coverage.

Rakesh Rao
20 April 2011