Insulation industry news from Global Insulation

Denmark: Rockwool International has released its first half financial results for 2012, which show a generally improving picture. The group generated sales in the first half of 2012 of Euro919.9m, corresponding to an increase of 9% compared to same period of 2011. External sales in the group's insulation segment increased by 9% to Euro758.1m. Part of Rockwool's improved financial picture is due to an increase in the number of plants it operates. In the first six months of 2011 it opened a production facility in Russia and increased activity in India, North America and elsewhere.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the group reached US$126.7m and earnings before interest and tax (EBIT) came to Euro57.7m, an increase of Euro18.2m (EBIT) compared to the same period of 2011. In the first half of 2012, the insulation segment EBIT came to Euro40.0m, an increase of 87% year-on-year.

In the western European insulation market, Rockwool reported that the good trading conditions observed in France and Germany since 2011 had continued for the group during the second quarter of 2012, offsetting the negative trends seen in countries like Spain, the UK and the Netherlands, in which it is experiencing increasingly difficult market conditions. In eastern Europe, Poland has continued its strong recovery, whereas Russia is seen by Rockwool to be levelling out, albeit with a small increase in sales compared to the first half of 2011.

Sales in North America continued to develop well. In Asia, and particularly in China, demand for non-combustible insulation material is increasing and is likely to be even stronger when new Chinese regulations regarding fire safety in buildings come into force.

Sales prices have continued to increase during the second quarter of 2012, however at a lower level than during the first quarter and with large differences between markets. The inflation on most raw materials was still high for this period although Rockwool started to benefit from lower foundry coke prices deriving from more reasonable coking coal prices.

Looking ahead to the remainder of 2012, Rockwool expects the general slowdown of the western European economy and the Euro crisis to have further negative effects on the new-built insulation markets, although refurbishment is expected to be resilient. In eastern Europe including Russia, Rockwool expects insulation markets to show robust double-digit growth. The very positive sales development in North America is expected to continue, well supported by better market conditions. In Asia, its sales development will be limited by the as-yet unsolved logistical challenges of importing products from Europe. Overall, the group expects its net sales at current exchange rates to increase by at least 5% for the full year 2012.

Despite the slowdown of the world economy Rockwool says that it expects a continuation of inflationary pressures in 2012 and it will maintain its focus on increasing sales prices and cost-control. It forecasts a net profit for the whole of 2012 in the region of Euro87.3-93.8m.

Demnark/The Netherlands: Rockwool's board of directors has approved a plan to invest Euro23m in a major expansion of its Rockpanel cladding board business. The investment will be allocated to establishing a new state-of-the-art press line at the group's plant in Roermond in the Netherlands.

Rockpanel cladding boards are used as decorative and weather-protecting building elements on facades, dormers and rooflines. The main sales are in north-western Europe with Benelux, Germany, Denmark and UK accounting for the majority of the business. Sales of Rockpanel boards have seen strong double-digit growth in recent years and this is expected to continue both in the existing geographies as well as in new European markets.

Commenting on the expansion plan, CEO Eelco van Heel said, "The aesthetic and technical benefits as well as the strong sustainability profile have made the Rockpanel boards increasingly popular amongst architects and installers. We are confident that we can turn this business into a strong European player which can contribute significantly to the future of the Rockwool Group."

Denmark: The Board of Rockwool International A/S has approved the company's annual report for 2011. The report shows that the group's sales increased by 17.2% to Euro1.85bn. Rockwool's profit after minority interests increased by 25% and came to Euro86m, with investments at Euro161m. In 2012 sales are expected to increase by 5% with profit after minority interests of more than Euro80m. Investments excluding acquisitions is expected to be around Euro188m.

"Despite the turbulent state of the world economy in 2011, the year produced many positive developments in the Rockwool Group," wrote Rockwool's CEO Eelco van Heel in the report. "We managed to grow sales by 17% and, even though there was strong pressure on raw material prices, we also maintained our profitability at more or less the same level as the previous year."

Van Heel added that Rockwool had been less adversely affected than other areas of the construction industry because European countries such as France and Germany are looking to increase efficiency during times of economic hardship. He also noted that Rockwool had been expanding its activities outside of Europe and had grown its 'Systems' business.

Rockwool's insulation business, representing 82% of its net sales showed a solid growth trend throughout 2011. Sales grew by 20% although customers resisted price increases at the start of the year. The increase was predominantly driven by the renovation market, especially in Europe and North America. Sales in Russia were up by 45% year-on-year. Rockwool met this demand with imports from its Polish facilities.

In the US, Rockwool completed an important agreement with the home-improvement chain Lowe's. This has given access to more than 200 stores in north-eastern US, helping Rockwool make the most of this challenging market.

Denmark: The major Danish insulation producer Rockwool has announced better-than-expected results for the fourth quarter of 2011. Based on the registered level of sales in 2011, Rockwool expects its sales to have increased by 17% over those of 2010. It expects that its profit after tax and minority interests will come in above Euro80m. In its third quarter report, the Rockwool Group had expected a sales increase of 15% for the full year 2011 compared to 2010 and a profit after tax and minority interests of approximately Euro74m.

The healthy sales trend in Rockwool products continued in the final quarter of 2011, which it says was due to the mild winter weather in Europe combined with strong underlying demand in core markets. Despite the challenging macro-economic environment (especially in Europe) and the rather low visibility, the Rockwool Group expects continued growth in 2012. The Group expects sales to increase by approximately 5% in 2012. It expects its profit after tax and minority interests to be kept at the 2011 level, above Euro80m.

Denmark/Poland: Rockwool International announced on 28 November 2011 that it had received the necessary approvals to acquire Polish insulation systems manufacturer Fast s.p. zoo and had closed the transaction.

The agreement was first announced in June 2011. Closing was originally expected to take place by the end of October 2011. The value of the deal was not disclosed.

Fast, also known as Etics, is one of the leading players in the Polish market for external facade insulation systems. Through this acquisition the Danish company will gain expertise in coating and plaster production, as well as colouring techniques.

Denmark: Rockwool has reported a 40% increase in third-quarter net profit, helped by a recovery in demand in key European markets, higher sales prices and lower input prices. The group confirmed its nine-month report for 2011 that it still expects sales to increase by 15% for the full year with a net profit of around Euro74m.

For the third quarter of 2011 net sales rose year-on-year by 20% to Euro488m from Euro406m in 2010. This was helped by the inclusion of a recent acquisition and recovery of demand in some of its European key insulation materials markets. Profit rose by 40% year-on-year to Euro26m in 2011 from Euro18m in 2010. For the year to date there was a similar rise in sales of 17% compared to 2010 but a smaller increase in profit at only 10%.

The company said it expects the positive sales development observed during the first nine months of 2011 to continue in the coming quarters and that a downwards curve in raw material prices will continue and start to positively impact margins in the fourth quarter.

Denmark: Rockwool International A/S saw its net profit decline slightly to Euro16.5m in the three months to 30 June 2011 from Euro17.2m in the corresponding period of 2010.

Recovery in the company's main European insulation markets, driven by Germany and France, continued and considerable growth was marked in Poland and Russia as well.

Net sales went up to Euro845m from Euro452m. Operating costs expanded by 18% to Euro434m, which led to a reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to Euro57.9m from Euro64.8m in the quarter.

Rockwool foresees that further sales growth will come in the coming quarters. Rockwool anticipates that its net profit after minority interests will be Euro73.8m for 2011.

Denmark/Poland: Rockwool International has signed an agreement to acquire FAST s.p. z o.o., a Polish system holder for external facade insulation. In 2010, FAST generated a turnover of USD 16.73m and employed 90 persons. The transaction is expected to close by the end of October 2011.

The acquisition of FAST allows Rockwool to gain access to capabilities within coating and plaster production as well as colouring techniques. In addition, the acquisition will enable Rockwool to expand the use of stone wool solutions and penetrate into the building insulation market.

India/Denmark: Rockwool International, the world's largest producer of rockwool-based insulation products has opened a new plant in Gujarat province in India. The facility's main task is to supply the India's rapidly growing industrial sector as well as some of India's neighbours with high-tech insulation products for technical installations such as heating pipes, boilers and tanks. The second priority, building insulation, is still at an early stage but the company wants to help India reduce the amount of energy it consumes via air conditioning units.