Insulation industry news from Global Insulation

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.

Denmark: Rockwool is working with engineering company FLSmidth and the Technical University of Denmark (DTU) on a research project to develop sustainable process technologies that will increase the use of renewable fuels and raw materials and reduce CO₂ emissions. The project has received a Euro2.7m grant from Innovation Fund Denmark.

The project plans to investigate and optimise high-temperature processes throughout the entire production chain in both companies. The DTU holds experience in this field from the CHEC research centre at DTU Chemical Engineering, which has focused on combustion research and emission abatement in recent years. Rockwool intends to lower CO₂ emissions and reduce its fuel consumption to make its production become more sustainable. FLSmidth plans to explore using alternative cement formulas and production methods to enable the company to launch more efficient technologies for using renewable fuels and reducing emissions.

Denmark: Rockwool has announced its first half results for 2018. Sales for the half reached Euro1.27bn, 16.9% more in local currency terms. In the second quarter, sales were up by 17.3% to Euro667m. Earnings before interest and tax (EBIT) for the first half reached Euro161m, an increase of 47% year-on-year. EBIT in the second quarter was Euro91m, an increase of 43% year-on-year.

Investments in the first half of 2018 reached Euro89m, an increase of Euro26m compared to the first half of 2017, primarily due to ongoing capacity expansions in Poland and the United States.

The outlook for 2018 from the company is positive. It expects net sales to grow by 13-15% during 2018 in local currency terms, including around 2-3% from its acquisition of Flumroc.

Commenting on the Group’s performance, CEO Jens Birgersson said, “Our half-year results show solid improvement on both sales and profitability, underlining strengthened performance towards customers and growing market demand for our non-combustible insulation and other stone wool products. With sales up in all regions, Rockwool’s 11,000 highly dedicated and committed employees are the driving force behind these positive results.”

Denmark: Based on preliminary reporting, Rockwool Group is increasing its expected growth forecast for net sales for 2018 from 7-10% in local currencies to 13-15% in local currencies.

For the first half, the main preliminary highlights were a sales increase to Euro1.27bn, a 17% increase in local currency terms. Earnings before interest and tax (EBIT) increased by 47% to Euro161m. Rockwool Group will publish its full first half results on 24 August 2018.

Rockwool says that market conditions for the remainder of 2018 look promising across larger European stonewool markets, including Germany, Poland, France and the UK, as well as in North America.

Denmark: Rockwool’s sales have been driven by its insulation markets in Europe and North America. Its sales revenue grew by 17.3% year-on-year to Euro468m in the first quarter of 2018 from Euro399m in the same period in 2017. Earnings before interest and taxation (EBIT) for its insulation business rose by 98% to Euro55m from Euro28m. Overall sales and earnings for the company across all business lines rose at a slower rate.

“The strong first quarter performance is primarily driven by growing demand for our non-combustible insulation as well as our focus on productivity improvements and pricing. Owing to our broad-based manufacturing footprint, particularly in Europe, we are able to flexibly service growing customer demand, even if this results in somewhat increased logistics costs,” the company said in a statement.

Denmark: Rockwool has appointed Bjørn Rici Andersen as Senior Vice President for Group Operations and Technology. Andersen, currently working as Vice President, Group Operations, will join the Group Management role on 1 March 2018. Bernard Plancade, who has previously held this role in Group Management since 2015, will become Managing Director for Rockwool Core Solutions, based in Paris.

Denmark: Rockwool’s sales revenue for its insulation business has been driven by sales in Western and Eastern Europe. Its sales rose by 7.6% year-on-year to Euro1.31bn in the first nine months of 2017 from Euro1.22bn in the same period in 2016. Its earnings before interest and taxation (EBIT) rose by 18% to Euro129m from Euro109m. Earnings growth was driven by sales growth, improved pricing quality and a better utilisation of its US plant. Overall group sales and earnings also rose.