Insulation industry news from Global Insulation

UK: Energy efficiency products group entu UK has reported a fall in its interim pre-tax profit amid weakness in insulation and solar power products, but said that it is on target to meet full year expectations, according to Dow Jones. Pre-tax profit for the six months fell to Euro5.42m from Euro7.99m in the same period of 2014, as revenues fell to Euro75.5m from Euro80m.

Bulgaria: Insulation materials producer Hydroizomat plans to pay no dividend for 2014 as it ended the year at a loss. The proposal will be voted at a general shareholders' meeting on 6 July 2015. Hydroizomat posted a preliminary net loss of Euro48,100 in 2014.

Luxembourg: Armacell, which produces flexible insulation foams and engineered foams for the equipment insulation market, has successfully continued its international growth strategy in 2014.

Armacell increased its net sales by 8.8% year-on-year to Euro452m in its 2014 financial year. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 9.6% year-on-year to Euro71.2m in 2014. Adjusted earnings before interest, taxes and amortisation (EBITA) improved by 8.7% to Euro56.1m. Due to continued efforts to improve cost performance, Armacell maintained an EBITA ratio relative to net sales of 12.4%.

Important drivers of Armacell's positive development were the ongoing growth in the construction/HVAC (heating, ventilation and air conditioning) business as well as the growing demand for the substitution of existing insulation with high-performance materials. A number of other growth drivers, such as continuing urbanisation, greater energy-efficiency and a renewed focus on noise protection, are also driving demand for the company's technical solutions and products.

"2014 was a successful year for Armacell. Our profitable growth in both our business segments and across all of our regions underlines the significance of our consistent international growth strategy," said Patrick Mathieu, CEO of Armacell International SA.

In 2014, Armacell recorded net sales growth in both of its business segments and across all three regions. In the Advanced Insulation business, net sales were up by 8.9% to Euro356m. This division accounted for 79% of net sales in 2014. Advanced Insulation encompasses all company activities relating to the development of flexible insulation foam products for the insulation of equipment. These include markets in which energy distribution is required, such as in commercial and residential construction, industrial applications, or the oil and gas industry.

In the Engineered Foams business segment, net sales increased by 8.9% to Euro94.6m, accounting for 21% of net sales in 2014. In this division, Armacell develops light foams for use in a wide range of end markets in which both product weight and robustness are essential, such as the automotive and wind energy industry.

A core component of Armacell's international growth strategy is its presence in emerging markets, which Armacell was able to further reinforce in 2014. In June 2014, it purchased the remaining shares in Armacell Zamil Middle East Company (AZMEC) in Saudi Arabia, from its previous joint venture partner Zamil Industrial Investment Co. Armacell also purchased Armatech Co Ltd in Korea, a long-time distribution partner and leading provider of engineered foams for the heating, sanitation and air conditioning industry.

Armacell consistently pursued its international growth strategy in the first quarter of 2015. It acquired Turkish insulation materials manufacturer Das Yalitim Sanayi ve Ticaret Anonim Sirketi (OneFlex). Armacell also acquired Industrial Thermo Polymers Limited (ITP) in Canada.

In 2015, Armacell will continue to focus on expanding its strong market position, globally marketing its technologies and delivering on its international growth strategy.

US: Installed Building Products Inc (IBP), which produces and installs insulation and complementary building products, has announced its results for the first quarter of 2015, which ended on 31 March 2015.

For the first quarter of 2015, net revenue grew by 22.7% year-on-year to US$130m. On a same branch basis, net revenue improved by 14% from the prior year quarter, with approximately half of the growth attributable to an increase in the number of completed jobs and the remainder through price gains and a more favourable customer and product mix. Gross profit improved by 29.2% to US$34.1m and gross margin expanded to 26.3% from 24.9% in the same period of 2014. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 78.9% year-on-year to US$7.6m, largely due to higher gross profit. Operating income improved to US$3m from US$0.9m in the prior year quarter. Adjusted net income from continuing operations was US$1.4m compared to US$0.1m in the same period of 2014. Selling, general and administrative expenses as a percentage of net revenue was stable at 23.4% compared to the same period of 2014, primarily due to higher net revenues that partially offset additional costs associated with being a public company and personnel costs to support growth.

"We continue to effectively execute our growth strategy, producing solid increases in net revenue, same branch sales and profitability," said Jeff Edwards, chairman and CEO. "In the first quarter 2015, our branches continued to exhibit growth trends above the rate of improvement in US residential construction and we further benefitted from our local leadership across our national network of locations. We remained focused on actively managing our costs to achieve another quarter of improved profitability while we further expanded our operations. Since the beginning of 2015, we have significantly expanded our geographic reach with the addition of market-leading insulation installers. We are especially pleased with the addition of BDI, which further strengthens our presence in the western US. As we move forward in 2015, we expect our branches to continue to perform well in their local markets and we are firmly positioned to capitalise on improving residential end markets. Additionally, we remain focused on pursuing select accretive acquisitions and leveraging our cost base to further enhance our margins and cash flow."

Ireland: Kingspan has reported a near 30% increase in group sales for the first four months of 2015, driven by favourable currency movements and strong performances in its core markets of the UK and North America. The building materials and insulation products provider said that sales in the first four months reached Euro719m, 28% ahead of the same period of 2014.

Kingspan said that underlying profitability has been strong, "Complemented further by favourable translation, reflecting Euro/Sterling and Euro/Dollar exchange rates, which are significantly better than the average rates of the last 10 years." Management said that current trading patterns coupled with a strong order backlog point to a strong first half for the group, despite flat conditions in mainland Europe and 'impending weakness' in both Canada and Australia.

"The combination of recent development activity, growing conversion, a strong innovation pipeline and the increasing emphasis worldwide on energy-efficiency leave us confident about Kingspan's longer term future," said management.

Earlier in 2015, Kingspan closed its Euro315m takeover of Belgian Joris Ide. While the deal helped push the group's net debt levels up by Euro273m to almost Euro400m, Kingspan still has a 'robust' funding position, with Euro425m of lending facilities still undrawn.

Sales in Kingspan's core insulated panels division increased by 28% year-on-year in the first four months of 2015, aided by a 3% boost from acquisitions. Insulation board sales revenues were up by 40% and access floors saw a 19% revenue rise. The environmental division saw a 9% sales rise.

The group said recently that it was eyeing up Latin America as a likely next step in its ongoing geographical expansion, with some kind of presence likely to be taken in Brazil and Mexico in the next few years.

US: Owens Corning's consolidated net sales for the first quarter of 2015 have fallen to US$1.21bn year-on-year from US$1.28bn in the same period in 2014. Adjusted earnings fell by US$13 to US$22m for the same period. The results was attributed to a weak roofing business.

"Owens Corning had a good start to 2015. Insulation continues to benefit from growth in US housing starts. Results in Composites reflect strong execution and operational performance. In Roofing, first quarter revenues and margins were weak. However, the Roofing business did not experience the discounting and inventory build in the channel that we saw in the same quarter last year, positioning the business to deliver higher volumes for the remainder of the year," said chairman and chief executive officer Mike Thaman.

To support growth in the North American mineral wool insulation business, the company's board of directors has approved a US$90m investment in a new mineral wool plant, to be operational in late 2016.

For its outlook the US based insulation, roofing and composites manufacturer said that it continues to expect to benefit in 2015 from sustained improvement in the US housing market and moderate global growth. Insulation should continue to benefit from growth in US residential new construction, improved pricing and operating leverage. Composites and roofing businesses are also expected to improve or remain stable respectively.

South Korea: LG Hausys plans to increase sales of its phenolic foam (PF) insulation six-fold by 2018, which it produces from its plant in North Chungcheong Province.

"We will see a change in the construction market in Korea," said Kim Myoung-deuk, head of decorative material department. "Many people prefer remodelling their houses and eco-friendly materials will become more popular." LG Hausys's PF insulation has a thermal conductivity of 0.018W/mK, which is about twice as efficient as polystyrene insulator at 0.034W/mK.

LG Hausys began producing PF insulation in October 2013. It aims to post US$12.6m in sales in 2015, up fromUS$7.21m in 2014. Sales are expected to top US$45m by 2018. It is a challenging goal, considering the stagnating construction industry in the country.

"Until now, around 80% of the insulation market has mostly been polystyrene or polyurethane, but a move to materials with higher insulation performance and better fireproofing has been forecast," said the vice president of LG Hausys. "We will be able to achieve this challenging goal." Researchers have estimated that the market share of the high-performance insulator in the global insulation market will increase from 10% in 2015 to >30% by 2018.

LG Hausys plans to focus its business capacity on developing insulation products for fire doors and sandwich panels and expanding to China. The Chinese government is preparing to enforce an energy-saving policy that tightens the insulation level in buildings, especially in the north. Because of this, it is estimated that the Chinese high-performance insulation market will grow more than 50%/yr. "We expect the high-performance insulator market to grow continuously, on policies for fire safety and energy saving and because of growing consumer interest in reducing the cost of heating and cooling," said Myoung-deuk.

US: Installed Building Products has reported strong results for both the fourth quarter of 2014 and the entire 2014 year.

"The positive momentum in our business continued through the fourth quarter of 2014, resulting in solid growth in our net revenue and profitability for the full year of 2014," stated Jeff Edwards, chairman and CEO. "In the fourth quarter, we were especially pleased with our 21.7% increase in net revenue which resulted in another quarter of significant operating leverage. Into 2015, we expect housing completions to continue improving at a steady pace and we are energised by our prospects to continue scaling our business in a disciplined manner to further expand our national network of attractively positioned branch locations."

Installed Building Products' fourth quarter 2014 net revenue increased by 21.7% year-on-year to US$145m. Its branch sales increased by 16.2% year-on-year due to higher volume, price gains and a more favourable customer and product mix. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 65.3% year-on-year to US$15.2m. Its operating income rose by 105% year-on-year to US$9.3m.

In the entirety of 2014, Installed Building Products' revenue increased by 19.9% year-on-year to US$518m. Branch sales increased by 16.4%, with approximately 75% of the increase due to growth in the number of completed jobs and the remainder achieved through price gains and a more favourable customer and product mix. Adjusted EBITDA improved by 73.6% to US$44m.

Hungary/Ukraine: Hungarian building materials manufacturer Masterplast has seen its earnings fall in 2014 after the worsening Ukraine crisis forced it to write off investment plans for a new expanded polystyrene (EPS) insulation plant in the country.

Masterplast has reported that its annual net income dropped by 38% year-on-year to Euro749,000 in 2014. Without the enforced Ukraine write-off, the company had expected its post-tax profit to reach Euro1.6m. Masterplast, which has a growing string of plants in eastern Europe, has reported that its 2014 revenue was flat at Euro81.6m, while its annual operating profit fell by 1% year-on-year to Euro2.7m.

Masterplast had planned to invest Euro1.4m to set up a new EPS insulation plant at Lviv in the far west of Ukraine, where it had bought and converted existing industrial premises. It expected to become Ukraine's third-largest player in the thermal insulation segment within three years. However, early in 2014 Masterplast suspended its national investment and project for the EPS and adhesives plant. With the situation deteriorating further since then, it has decided not to restart its expansion scheme until Ukraine's political and economic position has stabilised.

Denmark: Rockwool has said that its results for 2014 were negatively affected by the devaluation of the Russian Rouble and that Russia will continue to impact its results for some time to come. Its turnover, however, increased by 9% year-on-year to Euro2.18bn, whereas earnings before interest and taxes (EBIT) fell by 4% to Euro161m. Post-tax profit decreased to Euro112m from Euro116m in 2013. Rockwool expects its net sales growth in 2015 to be slightly positive and EBIT to reach around Euro150m.