Insulation industry news from Global Insulation

Denmark: Rockwool’s insulation sales declined by 0.6% year-on-year to Euro483m in the first quarter of 2020 from Euro486m due to slowdowns in Asia, in technical insulation sales and in its sandwich panel business. Despite this its earnings before interest and taxation (EBIT) rose slightly to Euro56m. Overall the group’s net sales and EBIT rose slightly to Euro649m and Euro80m respectively.

“Despite turbulence from the COVID-19 pandemic whose impact we began to feel late in the quarter, we achieved solid first quarter results. Climate change isn’t going away, however. Energy renovation is a high-impact economic recovery measure that creates local jobs, a more resilient and healthy society while at the same time contributing to reaching long-term global climate ambitions,” said chief executive (CEO) officer Jens Birgersson.

The group reported that, due to coronavirus, its sales were affected in Asia and started to decrease during the last weeks of March 2020 in southern Europe. In China, production lines were temporarily closed early in the quarter and re-opened four weeks later. Factories in Malaysia, India, France and Spain were closed at different times in March 2020. It said that all these factories had now partly resumed production. The company is planning to adjust operations based on reduced demand and a decline in construction spending in future quarters. It also intends to seek, “market opportunities resulting from political and fiscal responses to drive economic recovery.”

Denmark: Rockwool International has appointed Jessica Jonasson as Senior Vice President for Group Human Resources and a member of group management. She succeeds Camilla Grönholm, who after eight years with Rockwool, has decided to return to Finland, spend more time with family and to pursue non-executive work.

Jonasson, a Swedish national, currently holding the position of Vice President for Human Resources at ASSA ABLOY Entrance Systems, based in Sweden. She is expected to start her new position at Rockwool in August 2020 after a transitional period following Grönholm’s departure at the end of May 2020.

Denmark/Canada: Rockwool has announced the retirement of long-standing North America regional president Trent Ogilvie and thanked him ‘for the successes he helped create in the North American business’ over his 25 years in the post. The company employed 60 people at a single facility in the region in Toronto, Canada, when Ogilvie took over as president in 1995. Its four facilities in Canada and the US now employ 1000 people and make sales of hundreds and millions of US Dollars.

Rockwool’s fifth stone wool production line, located in West Virginia, is due to open in early 2021.

Denmark: Rockwool’s post-tax profit for 2019 was Euro285m, up by 7.5% from Euro265m in 2018. Sales rose by 3.2% to Euro2.8bn from Euro2.7bn. The company’s insulation section saw ‘mixed market conditions’ but ‘showed modest growth’ over the period, thanks in particular to state-supported energy efficiency improvement in construction practices generating increased demand in the South-West Europe region.

Rockwool said that it invested in long-term growth, having opened a plant in Romania in late-2019, with a capacity expansion to a German plant due to come online in mid-2020 and a further plant in the US to follow in early 2021. Rockwool Group chairman Henrik Brandt and CEO Jens Birgersson said, “For the fifth year in a row, our customer satisfaction scores increased.” Satisfaction rose by 14% year-on-year.

Denmark: Rockwool’s sales for the nine months to 30 September 2019 were Euro2.0bn, up by 3.2% from Euro1.9bn in the corresponding period of 2018. Its earnings before interest and taxes over the period were up by 7.8% year-on-year at Euro278m in the first nine months of 2019 from Euro258m. The company forecast annual sales growth of 2% - 5% and no change in EBIT margin from 12.8% in 2018. Rockwool vice president Michael Zarin noted positively Rockwool’s stonewool insulation’s versality in tackling many of today’s biggest sustainability and development challenges.

Denmark: Rockwool has recorded second-quarter net profits of Euro79m in 2019, up by 14.5% year-on-year from Euro69m for the same period in 2018. The group’s first-half sales were Euro1.34bn, improving 4.4% year-on-year from Euro1.28bn in 2018, with a corresponding growth in Earnings Before Interest and Tax (EBIT) of 11.0% to Euro178m from Euro160m. Chief Executive Officer (CEO) Jens Birgersson has expressed praise at the growth of both the insulation and systems segments.

Germany: Covestro has signed an agreement with HIG Capital, a private equity company, for the sale of its European Systems Houses business. HIG Capital aims to position the business towards mid-sized customers. Covestro will retain its polyurethane markets in Asia where it will continue to serve its customers. The sale is part of Covestro’s ongoing portfolio optimization process that includes the sale of Covestro’s North American spray polyurethane foam systems home business in 2017.

The systems houses businesses are part of the Covestro’s Polyurethanes segment and sell tailor-made polyurethanes systems. The European Systems Houses business comprises facilities in the Netherlands, Denmark, Spain, Germany and further businesses in Italy. Operations will continue at the current facilities while Covestro will continue to have strong ties with the systems houses business as a key polyurethanes supplier.

The closing of the transaction is expected for the second half of 2019 after the required antitrust clearance. No value for the sale has been disclosed.

Denmark: Rockwool’s external net sales for its insulation business rose by 16% year-on-year to Euro2.07bn in 2018 from Euro1.78bn in 2017. Its earnings before interest and taxation (EBIT) grew by 45% to Euro266m from Euro184m. It attributed the sale increase to the insulation market in Europe and North America. Overall the group’s sales, including its systems business, grew by 12.5% to Euro2.67bn from Euro2.337bn.

“We achieved a great deal in 2018. Our company is financially solid, expanding operations to meet customer demand, and benefiting from strong brand awareness and reputation. Sales growth and profitability were strong, with the EBIT margin the second highest in the group’s recent history, notwithstanding being affected by increasing input costs. For 2019, we expect good profitability, though with a lower top-line growth than 2018,” said Group chief executive officer (CEO) Jens Birgersson.

Denmark: Rockwool plans to use Intershop’s commerce-as-a-service (CaaS) product for its online business-to-business (B2B) sales platform. The change is part of the company’s general digitisation strategy. The new system allows connectivity between a customer-relationship manager (CRM), product information management (PIM) and quotation system with the storefront.

“With our business running worldwide, being successful in B2B means multi-country, multi-currency, multi-brand management with complex sales channels that need to go hand in hand. We were looking for a commerce solution that allows us to target different channels individually, while being able to scale without effort. Intershop CaaS proved most suited for this purpose," said Mirella Vitale, Senior Vice President Marketing, Communication & Public Affairs at Rockwool Group.

A pilot of the new system is expected in mid-2019. Expansion across different channels will then follow.

Denmark: Rockwool has reported that its trend of ‘solid’ performance continued in the third quarter of 2018, with high sales growth and increased profitability so far over the course of the year.
Sales in the first nine months reached Euro1.96bn, an increase of 16.1% in local currency terms, including acquisitions, which contributed three percentage points. The negative currency impact was three percentage points. In the third quarter of 2018, sales increased by 14.6% in local currency terms to hit Euro692m.

Earnings before interest and tax (EBIT) over the first nine months of 2018 ended at Euro258m, an increase of 39%. In the third quarter of 2018, EBIT was Euro97m, an increase of 28% year-on-year.

Rockwool’s growth in net sales is now expected to be 14-15% for the whole of 2018 in local currency terms, including around 2-3% from the acquisition of Flumroc.

Commenting on the group’s performance, CEO Jens Birgersson said,
“We are pleased with our sales and profitability performance, as we achieved good top line growth in all major regions and good profitability across the board. The higher input costs we’re experiencing are being offset by strong factory performance and high productivity.”

“It’s also gratifying that our sustainability efforts are being recognised, with the Standard & Poor’s Trucost analysis confirming that 100% of Rockwool’s products contribute to meeting UN Sustainable Development Goals,” concluded Birgersson.