Sales up, with productivity and pricing improvements driving profitability growth

15 November 2017

“We’re pleased with our third quarter net sales, which increased 7.6%, driven by solid performance in Europe and North America,” says Jens Birgersson, ROCKWOOL Group CEO. “The strong sales reflect favourable market conditions and a continued healthy demand for the top-quality stone wool products we offer. EBIT margin for the quarter is up 0.6% to a solid 12.4%, as productivity and particularly pricing improvements continue to gain momentum, and will remain in focus for us moving forward”.

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Highlights

  • In the first nine months of 2017 net sales increased by 5.9% in local currencies compared to the same period last year, driven primarily by good volume growth. Third quarter net sales grew by 7.6% in local currencies (Q3 2016: 1.6%).
  • Year-to-date increase in input costs remained at a high level and impacted contribution margin. During Q3, the significant increase in input costs began to level out, while sales prices started to increase. This, together with high operations productivity, improved the profitability in Q3.
  • In the first nine months of 2017 EBIT increased by 8% to EUR 185 million (2016: EUR 172 million) equal to a 10.7% EBIT margin (same margin level as last year). This year´s Q3 EBIT was EUR 76 million against EUR 67 million last year, up 13%, with the EBIT margin reaching 12.4% (Q3 2016: 11.8%).
  • Net profit for the first nine months 2017 reached EUR 134 million an improvement of EUR 12 million compared to the same period last year (2016: EUR 122 million).
  • Free cash flow was at level with last year amounting to EUR 141 million (2016: EUR 140 million).
  • In the first nine months of 2017 investment expenditure reached EUR 93 million (2016: EUR 91 million).
  • Annualised return on invested capital reached 17.0% compared to 15.1% for the same period last year, driven by higher operational earnings and lower invested capital.

Full year Outlook 2017 updated

  • Expectation for net sales growth remain unchanged of 5-7% in local currencies.
  • Updated expectation for EBIT margin from slightly above 10% to close to 11%.
  • Updated forecast for investment expenditure from EUR 150 million to around EUR 135 million excluding acquisitions.

About the ROCKWOOL Group

At the ROCKWOOL Group, we are committed to enriching the lives of everyone who experiences our product solutions. Our expertise is perfectly suited to tackle many of today’s biggest sustainability and development challenges, from energy consumption and noise pollution to fire resilience, water scarcity and flooding. Our product range reflects the diversity of the world’s needs, while supporting our stakeholders in reducing their own carbon footprint.

Stone wool is a versatile material and forms the basis of all our businesses. With approx. 10,500 passionate colleagues in 38 countries, we are the world leader in stone wool solutions, from building insulation to acoustic ceilings, external cladding systems to horticultural solutions, engineered fibres for industrial use to insulation for the process industry and marine & offshore.

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