Insulation industry news from Global Insulation

UK: SIG has forecast in a trading update that its sales revenue will fall by 2.3% year-on-year in 2018. It described the UK trading environment as increasingly ‘challenging’ in the second half of 2018 with commercial demand reduced by economic uncertainty, slower house price inflation and falling secondary housing market transactions. Conditions in France and Germany were also reported as slowing down in the second half.

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.

UK: SIG’s revenue has fallen in the three months to October 2018 due to a weakening construction market in the UK. Its revenue in the UK and Ireland fell by 8.7% year-on-year. It said that commercial construction demand had remained dampened by macro-economic uncertainty, house price inflation was slowing and secondary housing market transactions had continued to fall. Its sales in Europe were mixed with quarterly declines in France and Germany but strong gains in Poland, the Benelux region and in its Air Handling business.

Ireland: Kingspan’s sales rose by 18% year-on-year to Euro3.18bn in the first nine months of 2018. Insulated panel sales increased by 20% due to mainland European sales and the acquisition of Synthesia and Balex. Despite an improvement in the third quarter the market in the UK as reported as subdued for smaller and medium projects. Insulation board sales grew by 13% driven by its Kooltherm product sales. European sales were reported as mixed, although improvements in Scandinavia, Southern Europe and North America were noted.

Belgium: Recticel’s sales for its insulation business has remained stable year-on-year at Euro202m in the first nine months of 2018. The polyurethane foam producer’s insulation sector sales fell year-on-year in the third quarter of 2018 due to ‘strong’ volumes combined with falling prices and methylene diphenyl diisocyanate (MDI) input prices. Overall sales at the company have risen slightly so far in 2018.

France: Saint-Gobain’s Interior Solutions division’s net sales grew by 4.2% year-on-year to Euro5.33bn in the first nine months of 2018 from Euro5.11bn in the same period in 2017. The group said that division performance in the third quarter of 2018 was driven by pricing. Western Europe progressed slightly despite lower volumes in the UK. In North America, the acceleration in price increases in the quarter reduced sales volumes. Asia and emerging countries reported good growth. Overall, the group’s sales rose by 1.8% to Euro31.1bn from Euro30.6bn.

“Saint-Gobain continues along its growth trajectory despite a tough comparison basis in the third quarter of 2017. Our focus on increasing prices – critical in an inflationary environment – continues to pay off. The industrial issues that had weighed on our profitability in the first half of the year are largely behind us,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain.

US: Weaker market conditions have reduced Owens Corning’s expected growth in the third quarter of 2018. The building materials company’s net sales rose by 11% year-on-year to US$5.33bn in the first nine months of 2018 from US$4.78bn in the same period in 2017. Its earnings before interest and tax (EBIT) increased by 1.5% to US$596m from US$587m. For its insulation business the company said that it had reduced its expected EBIT growth for the year due to weaker market expectations across different regions and products.

“Weaker than expected market conditions across all three businesses, which impacted third-quarter results, are expected to continue during the fourth-quarter. As a result, we have lowered our 2018 outlook and now expect adjusted EBIT to be in line with last year,” said chairman and chief executive officer (CEO) Mike Thaman.

Belgium: Recticel’s sales from its insulation division have rallied following the resumption on methylene diphenyl diisocyanate (MDI) supplies after a shortage in 2017 and poor weather in the first quarter of 2018. Its sales rose by 2.7% year-on-year to Euro129m in the first half of 2018 from Euro133m in the same period in 2017. Earnings before interest, taxation, depreciation and amortisation (EBTIDA) increased by 60.6% to Euro14.2m fro Euro22.8m. It attributed the growth in profitability to price rises and efficiency gains. The company also said that the construction of a new plant in Finland, dedicated to the supply of the Scandinavian and Baltics markets, is on schedule to start up in late 2018.

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.