Insulation industry news from Global Insulation

Denmark: Rockwool’s earnings before interest and taxation (EBIT) have risen by 78% year-on-year to Euro64m in the first half of 2016 from Euro36m in the same period of 2015. Its sales revenue fell by 2% to Euro784m from Euro799m due to currency variations. In local currencies its revenue rose by 2.1% due to the Building insulation segment, whereas the Industrial & Technical insulation area continued to be challenged by low investment levels in the oil and gas related industries.

“I am very satisfied with the continued improvement in our performance, especially within the Insulation business. This is a result of the acceleration of our Business Transformation Program, improved market conditions in Germany and the successful expansion in the US. We are confident that we will deliver a strong result for 2016,” said chief executive officer Jens Birgersson.

Regionally, markets in Asia and North America performed well. Markets in Western Europe showed continued improvement but sales in Russia continued to fall.

UK: Kingspan’s sales revenue has risen by 19% year-on-year to Euro1.47bn in the first half of 2016 from Euro1.24bn in the same period in 2015. Its net profit rose by 83% to Euro126m from Euro82.4m. The insulation and building products manufacturer attributed the result to increased market penetration and growth though new acquisitions.

“These results reflect our strongest ever six month performance, underpinned by solid organic growth and a robust contribution from the Joris Ide and Vicwest businesses acquired last year. The expansion in profit margin has helped deliver a 50% increase in trading profit and, with good order intake momentum in the second quarter continuing into the current trading period, we expect a solid performance in the second half,” said Gene Murtagh, Chief Executive of Kingspan.

The company’s sales revenue from insulated panels rose by 26% to Euro950m from Euro753m, supported by sales in mainland Europe. Sales revenue from insulated boards rose by 9% to Euro947m from Euro319m driven by the UK

UK: SIG’s revenue has risen by 11% year-on-year to Euro1.61bn for the first half of 2016 from Euro1.45bn in the same period in 2015. Its operating profit rose by 37% to Euro53.8m from Euro39.3m. The insulation producer attributed the increase in sales revenue on acquisitions and foreign exchange effects.

“The group delivered a solid first half performance with good progress on its Strategic Initiatives offsetting the twin pressures of variable trading conditions, particularly in Mainland Europe, and a competitive market environment,” said Stuart Mitchell, Chief Executive. He added that the company had observed a slowing of UK construction market activity following the country’s decision to leave the European Union. However, SIG’s risk to Brexit should be minimised as its mainly buys and sells its products within each country.

US: Installed Building Products’ (IBP) net revenue has risen by 40% year-on-year to US$404m in the first half of 2016 from US$290m in the same period of 2015. Its net income more than doubled to US$15.8m from US$7.7m. The insulation installation company attributed the strong result to growth in the residential building market.

"Our results continue to benefit from strength throughout the homebuilding industry, growth at our existing branch locations and the contribution of our recently acquired businesses,” said Jeff Edwards, chairman and chief executive officer of IBP.

France: Saint-Gobain’s sales revenue has fallen by 1.6% year-on-year to Euro19.6bn in the first half of 2016 from Euro19.9bn in the same period of 2015. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 3.8% to Euro1.89bn from Euro1.96bn. The group blamed the loss in sales revenue on negative currency changes, especially in Latin American, and to a lesser extent, in the UK following its decision to leave the European Union. Saint-Gobain’s Interior Solutions division, which includes gypsum wallboard and insulation production, reported a 3.1% rise in sales revenue to Euro3.3bn from Euro3.2bn.

“Saint-Gobain’s sales for first-half 2016 confirm our February forecasts, with France stabilising and all regions making strong contribution to growth. Our strategy of investing in emerging markets provides us with a diversified platform for profitable growth. Our first-half results also benefited from efforts to optimise our operations, particularly in Western Europe, and from upbeat trading in the US. The results are in line with our objectives and we expect alike-for-like improvement in operating income for second-half 2016 versus second-half 2015. While the 23 June 2016 Brexit vote in the UK has created a climate of uncertainty, it does not affect our objectives,” said Pierre-André de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain.

US: Owens Corning’s sales revenue has risen by 7% year-on-year to US$2.78bn in the first half of 2016 from US$2.61bn in the same period in 2016. Its net earnings rose by 78% to US$198m from US$111m. However, sales revenue for its insulation business fell by 4% to US$799m from US$830m. No reason for the decline in insulation revenue was given, but the company expects slightly negative revenue growth and relatively flat margins to continue for the full year.

Lithuania: Paroc has announced that it does not expect its revenue from its operations in Lithuania to grow in 2016. The mineral wool manufacturer saw its profit in the country fall by 28.3% year-on-year to Euro4.24m in 2015 from Euro5.92m in 2014. Its revenue fell by 7.1% to Euro42.9m, according to BNS News.

"The income from sales within the country increased year-on-year, while exports to Russia, Belarus and Latvia shrank considerably. The decline was in part compensated by the sharp growth of supplies to Poland," Paroc said in its annual report. According to the statement, the company's 2016 income and profit are not expected to rise.

Denmark: Rockwool’s profit has risen by 56% year-on-year to Euro28m for the first quarter of 2016 from Euro18m for the same period in 2015. Its net sales fell slightly to Euro494m from Euro499m. it reported sales of Euro368m in its insulation business, a slight fall from Euro375m in the first quarter of 2015. The company stated that sales growth had continued from 2015 into early 2016 in most markets with the exception of Russia where exchange rate variations contributed to a slight decline in net sales in the quarter.

“We continue to improve the overall health of the business. I am especially pleased to see that our business transformation programme is contributing so significantly to the strong Q1 result. The growth in North America continues and in Europe we see good developments in both Northern and Southern Europe, a trend we would like to see spreading to the core markets of Germany and France. Russia is the main challenge at the moment, but even with this important market at a low level we made solid progress in group profitability,” said company chief executive officer Jens Birgersson.

Ireland: Kingspan has reported that its group sales rose by 25% year-on-year to Euro903m for the first four months of 2016. It also noted in an interim management statement that order placement in the non-residential segments in the UK had eased ahead of the referendum on European Union (EU) membership scheduled for late June 2016. Insulated panel sales rose by 37% in the period. Insulated board sales rose by 11% driven by strong UK sales and supported by Europe and the US.

Chief executive Gene Murtagh also said at the company’s annual general meeting on 5 May 2016 that the insulation producer had made an investment in a facility selling duct insulation in Iran. The unit is expected to be in production later in 2016 supported by the company‘s UAE business, according to the Irish Independent.

China: China National Building Material Company's (CNBM) net profit has fallen by 83% year-on-year to US$157m in 2015. Its revenue fell by 17.8% to US$15.4bn. China's largest cement producer has blamed the loss of profits on a steep drop in cement sales due to a national slowdown in fixed-asset investments, infrastructure construction and real estate investments.

The state-owned building materials company also produces gypsum wallboard, insulation materials and ceiling systems. Revenue from the sale of lightweight building materials fell by 7.6% to US$1.09bn as the price of gypsum wallboard fell. However, revenue from mineral wool insulation sales and composite materials rose by 25.3% to US$501m due to increased sales of pipes, tanks and rotor blades.