Insulation industry news from Global Insulation

Luxembourg: Armacell recorded consolidated net sales of Euro591m in 2020, down by 8% year-on-year from Euro644m in 2019. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 10% to Euro120m from Euro134m. During the year, the company completed a polyethylene terephthalate (PET) foaming line expansion in Suzhou, China, built an elastometric foams plant in Cheonan, South Korea and consolidated its Italian insulation activities at a new facility in Turin. It also made strategic investments in diversified areas.

President and chief executive officer Patrick Mathieu said, “In a complex and challenging environment our business model again proved resilient. With our global reach and multi-segment activity, we ended the year in relatively good shape. We took the appropriate measures to navigate changing circumstances and ensure we come out of the pandemic stronger than before. Our utmost priority was always to safeguard the health of our employees, maintain operations and continuously support our customers.” He added, “After the successful closure of our capital market refinancing in February 2020, our shareholders PAI Partners and KIRKBI expressed their commitment to our on-going growth strategy. In 2021, we look forward to partnering with our customers in adding value to their businesses.”

Belgium: Recticel’s consolidated net sales fell by 6% year-on-year in 2020 to Euro829m from Euro879m in 2019. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 15% to Euro51.6m from Euro60.7m. Sales from its insulation business rose slightly to Euro249m driven by a strong second half of 2020 and higher prices due to higher raw input costs. The group made divestments to businesses held by its flexible foams and automotive divisions on 30 June 2020 significantly improving its sales and earnings in the reporting year.

Chief executive officer Olivier Chapelle said, “After an 18% sales decline in the first half of 2020 caused by the Covid-19 lockdown, the second half of 2020 was marked by significant sales fluctuations varying from one business segment or country to another, influenced by the subsequent waves of the Covid-19 outbreaks and the related precautionary measures taken by national governments. In this difficult context, we managed to generate a robust 7% sales growth in the second half of 2020 and a 10% increase in adjusted EBITDA.”

“Numerous ‘force majeure’ events at the premises of our chemical raw material suppliers have created and continue to create supply shortages of polyols and isocyanates. Our suppliers have used this situation to implement price increases at an historically high pace, leading to new all-time highs. In response to this, we were compelled to mitigate these cost increases through corresponding sale price increases. The situation is expected to normalise as of the third quarter of 2021.”

US: Installed Building Products’ consolidated net sales were US$1.65bn in 2020, up by 9% year-on-year from US$1.51bn in 2019. Its earnings before interest, depreciation, taxation and amortisation (EBITDA) rose by 26% to US$231m from US$184m. In the fourth quarter of 2020, the insulation supplier recorded a higher proportion of insulation sales to production builders, leading to a drop in insulation selling prices. In November 2020, the group acquired WeatherSeal Insulation and in October 2020 it acquired Insulation Contractors/Magellan Insulation.

Chair and chief executive officer Jeff Edwards said, “We believe most of our markets will remain strong in 2021 and we expect 2021 will be another good year of growth and profitability for Installed Building Products, despite the continued effects of the Covid-19 pandemic. Reflecting our confidence in executing on our acquisition strategy and our commitment to create long-term value for shareholders, I am pleased with the board’s decision to initiate a quarterly cash dividend programme, and increase and extend our share repurchase programme. The financial and operating accomplishments we achieved in 2020 is encouraging and I remain excited by the continued opportunities to grow IBP and create even greater value for our shareholders.”

Ireland: Kingspan recorded full-year consolidated sales of Euro4.58bn in 2020, down by 2% year-on-year from Euro4.66bn in 2019. Profit for the year from continuing operations was Euro385m, up by 2% from Euro378bn. Earnings before finance costs, income taxes, depreciation, amortisation (EBITDA) increased by 3% to Euro597m from Euro580m. Insulation boards sales fell by 10% to Euro787m from Euro877m. Kingspan’s trading profit from insulation boards fell by 6% to Euro117m from Euro110m.

The group said, “2020 was a tumultuous year for Kingspan, as it was for many. After a relatively strong start, April and May saw a deep reduction in activity in many markets, followed by a rebound towards mid-year and ultimately a strong finish in the fourth quarter.” It added, “Globally, governments reacted in varying ways to the crisis which resulted in an economic experience which was equally variable. All markets suffered interruption to some degree, although in our case it was particularly acute in the UK, Spain, Canada and Ireland. Most other markets recovered to, and in some cases exceeded, the performance of 2019.”

In late 2020, the company made changes following the Grenfell Tower fire inquiry’s ‘highlighting’ of ‘historical behaviours’ affecting the company’s role as indirect supplier of some of the building’s insulation. Chief Executive Officer Gene Murtagh said, “The unacceptable conduct and historical process shortcomings, involving a small number of employees in our UK insulation boards business, do not reflect the high standards of integrity and safety that are core Kingspan values, deeply held by our people. We have already implemented several important changes that demonstrate our commitment to product compliance and good governance. Our aims are clear: to reassure that safety takes precedence over all other considerations and to ensure this can never happen again.” The changes include the launch of a new code of conduct, new testing protocols and the publication of all test reports.

US: Owens Corning’s full-year consolidated net sales were US$7.06bn, down by 1% year-on-year from US$7.16bn in 2019. Its loss before interest and taxes was US$124m, compared to earnings before interest and taxes (EBIT) of US$753m in 2019. Earnings were negatively affected by a non-cash pre-tax impairment charges of US$987m related to its insulation division, recorded in the first quarter of 2020 and driven by the economic uncertainties associated with the Covid-19 pandemic. Insulation sales fell by 2% to US$2.61bn from US$2.67bn, while insulation EBIT rose by 10% to US$250m from US$230m. Sales from its composites division also fell but rose for roofing.

Chair and chief executive officer Brian Chambers said, “Our global team demonstrated great flexibility and resolve to deliver strong financial results in an unprecedented year. These results showed the strength of our businesses and the earnings power of our company. In 2021, we will continue to focus on the health and safety of our teams, serving the needs of our customers, and positioning the company for long-term success.”

Denmark: Rockwool recorded net sales of Euro2.60bn, down by 4% year-on-year in local currency terms. Profit for the year fell by 12% to Euro251m. Sales were supported in regions where construction was able to remain active throughout the coronavirus lockdowns. The company noted a strong recovery in the fourth quarter of 2020.

Chief executive officer Jens Birgersson said, “Looking back on a turbulent year, we are proud of how well our colleagues handled the many challenges. Our teams ensured employees were safe while quickly adjusting operations, sales and service to match the changing needs of our customers.”

The company plans to make Euro370m of investments, excluding acquisitions in 2021. Planned investments include a new plant in the US and a plant relocation in China, in addition to capacity expansions for its Rockfon and Grodan stone wool businesses.

The group said, “The underlying medium to long-term structural growth drivers for stone wool products are even stronger today than at the start of 2020. On top of fundamental trends like urbanisation and increasingly tighter building regulations, we expect that several other trends will continue driving growth in our business. For example, the growing focus on energy efficiency, fire safety and circularity continues to influence the decisions of consumers, the building industry and policymakers, with the pandemic accelerating these trends in multiple ways.”

UK: SIG recorded full-year sales of Euro2.1bn in 2020, down by 13% year-on-year on a like-for-like basis. In the fourth quarter of 2020, sales rose by 5% in the EU, by 2% in the UK and by 4% overall. The group said that this reflects the initial impact of its Return to Growth strategy. The strategy has delivered increased organic sales, supported by ‘robust demand’ in the Repair, Maintenance and Improvement segment. The company noted France and the UK as robust markets within the segment. It said that profitability improved throughout the second half of 2020, with ‘solid’ performance in the EU. Estimated full-year costs were Euro25m.

The group said “Whilst the evolving Covid-19 backdrop will continue to create uncertainty in the short term, the fundamentals of the group’s markets remain sound and the strong recovery in demand across territories and sectors through the second half was encouraging. Providing there is no material disruption to either our business or end markets as a result of the pandemic, the board expects the near-term benefits of the actions taken in 2020 to deliver organic revenue growth in 2021, including market share gains. The benefits of this will become increasingly evident as the year progresses and should enable us to return to underlying operating profitability during the second half.”

Ireland: Kingspan has reported a sales fall of 5% year-on-year in its 2020 nine-month trading update, to Euro3.27bn from Euro3.44bn in the first nine months of 2019. Its sales of insulation boards fell by 14% and by 5% year-on-year in the third quarter of 2020.

The group said that insulation board sales “performed well” in Ireland, the UK and parts of Continental Europe in the third quarter of 2020, while volumes “improved, with raw material-related price deflation in the earlier part of the period partially offsetting this” in total sales. The Asia Pacific region “consolidated the progress seen in the first half,” while activity in the US was “positive through the third quarter.” Only the Middle East proved “a more challenging environment.”

The company said, “Overall, our end markets are in reasonable shape bearing in mind the uncertain and evolving backdrop. In this environment it is difficult to see too far ahead and trading patterns can evolve quickly. Our raw material costs are on the rise at present and, with the customary lag anticipated, a challenging recovery effort is underway. Trading in the fourth quarter to date has been strong, helped to an extent by accelerated demand in the expectation of inflation-led price increases in the coming months. Whilst conscious that much of the seasonally variable fourth quarter is still at play, in what is an untypical year, we expect to deliver a full year trading profit marginally ahead of 2019.”

US: Huntsman’s net income in the first nine months of 2020 was US$691m, more than doubled from US$259m in the corresponding period of 2019. This was in spite of a fall in sales of 15% to US$4.35bn from US$5.14bn. Its polyurethanes (PU) segment recorded sales of US$2.55bn, down by 13% from US$2.93bn, and earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$271m, down by 36% from US$426m. The company attributed the sector’s sales fall in the third quarter of 2020 to “lower methylene diphenyl diisocyanate (MDI) average selling prices,” which “decreased across most major markets in relation to the global economic slowdown resulting from the Covid-19 pandemic.” It added, “Overall polyurethanes sales volumes were roughly flat when including sales volumes in connection with the Icynene-Lapolla Acquisition. The increase in segment adjusted EBITDA was primarily due to lower raw material costs and lower fixed costs, as well as additional sales volumes in connection with the Icynene-Lapolla Acquisition, partially offset by lower MDI pricing.”

President, chair and chief executive officer (CEO) Peter Huntsman said, “The third quarter proved to be better than we had anticipated with improving conditions in almost all of our businesses. Although the global community continues to face significant challenges around Covid-19, we see positive momentum entering the fourth quarter. We remain fully on track in integrating our two downstream acquisitions completed earlier this year and in delivering in excess of US$100m of annualised synergies and savings from our previously announced cost optimization initiative by the end of 2021.”

France: Saint-Gobain’s third quarter results for 2020 for its High Performance Solutions division were supported by external thermal insulation products (ETICS). The group said that, “activities serving the construction Industry held up well in the nine-month period, and in the third quarter when sales were virtually stable thanks notably to ETICS.” Despite this sales decreased for the division in both the third quarter and the first nine months of 2020.

The building materials producer’s overall like-for-like sales fell by 7.2% year-on-year to Euro27.9bn in the first nine months of 2020 from Euro32.4bn in the same period in 2019. However, overall sales improved by 3.2% year-on-year to Euro10.1bn in the third quarter of 2020.