Industry Profitability Higher in 2011, but Sales Growth Slower

ARLINGTON, Va., Sept. 21, 2012 /PRNewswire-USNewswire/ -- Recently released results from the Association's annual Company Productivity Report (CPR) for 2011 show that member companies achieved the highest overall profitability in at least five years. In particular, the performance ratio "total return on assets" (i.e., net profit before tax & interest as a percent of total assets) for 2011 was 10.6%, 20.2%, and 10.5% for the Liquid (LIQ), Factory Pack (FPP), and Balanced Product Mix (BPM) groups respectively.  

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Not only was this the highest "overall" industry-wide profitability in recent years, but this represented one of the highest levels of overall average profitability among the nearly 100 industry segments that Industry Insights regularly tracks through CPR type studies.

"NACD's members continue to lead - through profitability, safety and supply chain advancement." said NACD President Chris Jahn.  "The results posted in the Company Productivity Report are impressive and show their dedication to supporting their manufacturers and customers alike.  Our members find solutions that meet their customer's needs and further their manufacturers reach.  We applaud them on a great year."  

However, while profitability was up, NACD member company sales growth for 2011 was generally lower than that of the prior year. When measured by actual physical throughput of pounds of chemicals moving through the warehouse (without 3rd party), sales growth was a flat 0.2% for LIQ group firms, while FPP firms grew 3.7% (down from a 16.0% growth in 2010), and BPM firms reported a 2.1% advance (down from a 13.4% growth in 2010). 

Other noteworthy highlights of 2011 industry performance include:

• "Sales per employee"  increased sharply in the aggregate among survey participants during 2011, going from $1,076,560 in 2010 to $1,314,270 in 2011, representing a 22.1% improvement in personnel productivity. Moreover, "sales per employee" for all three industry segments was among the highest of the wholesale distribution businesses tracked by Industry Insights.
• "Total payroll expense (including fringe benefits) as a % of sales" improved from 9.5% in 2010 to 8.9% in 2011, based on all NACD participants in the aggregate. This payroll cost performance tended to be much lower than other wholesale distribution industries tracked by Industry insights.

NACD and its over 400 member companies are vital to the chemical supply chain providing products to over 750,000 end users. They make a delivery every six seconds while maintaining a safety record that is more than twice as good as all manufacturing combined. NACD members are leaders in health, safety, security, and environmental performance through implementation of Responsible Distribution, established in 1991 as a condition of membership and a third-party verified management practice. For additional information on our members, their safety record or NACD, visit NACD at www.nacd.com.

Contact: Lucinda Schofer
703/527-NACD(6223)

SOURCE National Association of Chemical Distributors (NACD)