Rockwool A/S Class A · OMXCOP:ROCK_A
Rockwool A/S Class A — Rockwool International — Basic Materials Seminar, London 2010
58 slides from Rockwool A/S Class A's conference presentation, Mar 16, 2010
Slide 1: Basic Materials Seminar, London
Basic Materials Seminar, London 16.3.2010 Jens1 Krogsgaard, Vice President, Finance Lars Wodschow, Manager, IR and Corporate Communications 1
Slide 2: Forward-looking statement
Forward-looking statement The statements on the future in this presentation, including expected sales and earnings, are associated with risks and uncertainties and may be affected by factors influencing the activities of the group, e.g. the global economic environment, including interest and exchang
Slide 3: Agenda
Agenda 1. The Rockwool Group 2. Energy and climate as growth drivers 3. Financials 4. Market situation 5. Q&A 3 3
Slide 4: The Rockwool Group
The Rockwool Group 4 4
Slide 5: The Rockwool Group
The Rockwool Group World leader in stone wool products Global no. 2 in insulation Turnover 2009 EUR 1.501 billion 7,800 employees 21 factories in 14 countries 5 5
Slide 6: Sales distributed on business area
Sales distributed on business area Insulation 82% Systems 2009 Division 18% ROCKFON ROCKPANEL ROCKDELTA LAPINUS FIBRES GRODAN 6 6
Slide 7: Sales distributed on countries
Sales distributed on countries Other countries 13% Germany Other Other 17% Scandinavian countries countries 34% 8% Germany 31% Denmark France 8% 1995 2009 15% Great Britain 8% Russia Belgium 7% France 5% 13% Denmark The Netherlands 6% Poland 10% The Netherlands 7% 19% 7 7
Slide 8: Rockwool production is capital intensive – a new plant costs €110 mill.
The Rockwool production is capital intensive – a new plant costs €110 mill. Chimney Filter Recycling Recycling of insulation waste from building sites Cupola furnace Environmental burner Cooling zone Special machinery Spinning Raw chamber material silos Raw material supply Weighing Binder Spinner Cu
Slide 9: Raw materials
Raw materials Diabase Lime Coke Recycling briquettes 9 9
Slide 10: Rockwool factories
Rockwool factOrieS “rorem x Vyborg * Moss * Grand Forks X Milton x Doense x Moscow x gemctup Volga (planned) Malkinia Flechtingen x x Cigacice x Wern Tarw Roentiond* x Gladbeck * Melaka, Malaysia * Bohumin * Neuburg xTapoica * St. Eloy-Les-Mines x. Istria * Caparroso * Dahej, India (planned) ROCKWOO
Slide 11: Product properties and market segments
Product properties and market segments FLEXIBLE PRODUCTS RIGID PRODUCTS Main applications: Main applications: Residential, refurbishment and newbuild Non-residential (flat roof, facade, foundation, sandwich panels), technical insulation, OEM Glass wool Foam plastics Key market: Key market: Flexible
Slide 12: Product properties - Insulation
Product properties - Insulation Stone wool Glass wool Foam Melting point 1000oC 600oC Burns Load bearing capacity + - + Compression ability (+) + - during transport and storage Sound absorption + + - 12 12
Slide 13: Energy and climate as growth drivers
Energy and climate as growth drivers 13 13
Slide 14: Not just a climate issue
Not just a climate issue Security of energy supply Reduce global warming Green jobs Cleaner air, better health Cut energy costs 14 14
Slide 15: The last oil
The last oil 4 countries control most of 80% of the oil producing the world’s oil reserves nations are facing, or already struggling with, declining 3 countries control most of production the world’s gas reserves EU dependence on energy Energy demand is growing, imports from 56% to 70% res
Slide 16: Who controls the oil?
Who controls the oil? Who uses the oil? (thousand of barrels per day) Ee, Saudi Arabia 264 billion barrels (bbs) @ 6,000+ @ 3,000-5,999 f @ 2,000-2,999 @ 1,000-1,999 ® 0-999 ROCKWOOL
Slide 17: Climate change – global recognition of the max. 2 degrees target
Climate change – global recognition of the max. 2 degrees target 17 17
Slide 18: Energy efficiency is key to a low-carbon future
Energy efficiency is key to a low‐carbon future While technological progress is needed to achieve some emissions reductions, efficiency gains and deployment of existing low‐carbon energy account for most of the savings. 45 550 450 Gigatonnes Policy Policy Scenario Scenario 40 9% Nuclear 14% CCS Rene
Slide 19: Energy efficiency of buildings - status
Energy efficiency of buildings - status 33% 26% 41% of all energy in EU is of all energy in EU is of all energy in EU is used for transport used by industry used by buildings 2/3 of energy consumption in 80% of energy consumption buildings is used for heating is used in small buildings and cooling <
Slide 20: The lowest hanging fruit
The lowest hanging fruit - insulation is the most profitable CO2 saving; examples from McKinsey study “saved energy is better than new sources to replace fossil energy” 20 20
Slide 21: Financials
Financials 21 21
Slide 22: Net sales 2009
Net sales 2009 - decreased by 18.5% compared to 2008 13908 13700 14000 13000 12000 11537 11168 11000 DKK million 10024 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 21% 15% 0 -1% -18% -1000 2005 2006 2007 2008 2009 Net sales Changes 22 22
Slide 23: Long term sales development 1984-2009
Long term sales development 1984-2009 14000 12000 DKK million 10000 8000 6000 4000 2000 0 2009 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009e 23 23
Slide 24: Sales trends
Sales trends The market situation remains challenging in the Group’s markets but the sales development shows a small improvement. Since August, sales prices have stabilized in most countries where the group operates. The newbuild market remains in many places at a historical low level in both
Slide 25: Construction indicators
Construction indicators Construction : global confidence per type of building for EU27 Balance of answers 20 Residential Non Residential 10 0 -10 -20 -30 -40 -50 -60 2004 2005 2006 2007 2008 2009 25 Source: European Commission 25
Slide 26: Systems Division sales
Systems Division sales Sales in the division are performing better than the market. The Rockfon Group continues to outperform the market. Benefits from public renovation programs for hospitals and educational sector. Grodan expects a reasonably good sales season after the important Dutch marke
Slide 27: EBITDA 2009
EBITDA 2009 stands at 14% of Net Sales 3500 3391 3000 DKK million 2500 2373 2122 2000 1500 1529 1500 1000 24% 18% 17% 15% 14% 500 0 2005 2006 2007 2008 2009 EBITDA EBITDA Ratio 27 27
Slide 28: EBIT ratio 2009
EBIT ratio 2009 stands at 5.2% of net sales and 6.6% after correction of restructuring and reorganization costs 2800 2705 2600 2400 DKK million 2200 2000 1800 1600 1502 1405 1400 1200 885 1000 800 576 600 400 20% 5% 200 12% 9% 11% 0 2005 2006 2007 2008 2009 EBIT EBIT Ratio 28 28
Slide 29: Long term EBIT ratio 1984-2009
Long term EBIT ratio 1984-2009 20% 18% 16% Percentage 14% 12% Goal 11% 10% 8% 6% 4% 2% 0% 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 29 29
Slide 30: Energy spot prices
Energy spot prices Indexed spotprices of oil, foundry coke, gas and electricity 2005-2009 (Q1, 2005 = 100) 350 300 250 200 150 100 50 0 05 06 07 08 09 2 3 4 2 3 4 2 3 4 2 3 4 2 3 4 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 20 20 20 20 20 1 1 1 1 1 Q Q Q Q Q 30 30
Slide 31: Investments and acquisitions
Investments and acquisitions 3000 2642 2500 DKK million 2000 1621 1689 1500 1170 944 1004 1000 1126 357 416 634 500 953 587 588 495 536 0 2005 2006 2007 2008 2009 Other CAPEX Capacity programme + acquisitions 31 31
Slide 32: Cash flow
Cash flow 2600 2400 2480 2200 2000 1800 1950 1600 1810 1507 DKK million 1400 1200 1000 859 1103 800 780 600 160 805 400 200 0 -200 -400 -600 -800 -1000 -1200 -1135 2005 2006 2007 2008 2009 Cash flow from operations Free cash flow 32 32
Slide 33: Expectations for 2010
Expectations for 2010 Net sales decrease of 5-10%. Profit after minority interests around DKK 300 million. Investment level around DKK 1,000 million including completion of our Indian project and continuation of preparation of the new Russian factory in the Volga region (excl. acquisitions). 3
Slide 34: Key elements 2010
Key elements 2010 Sales volume Negative carryover from 2009 in the new build segments Positive refurbishment trend in Western Europe Sales prices Carry over from Eastern Europe correction Opportunities in some countries/segments Input costs Risk on raw material inflation Average co
Slide 35: Highlights
Highlights COP15 substantially increased the political awareness of the priority to be given to energy efficient buildings – in all climate zones of the globe Construction activity level in Europe seems to have bottomed out – at a low level. Stimulus packages result in relative strong performanc
Slide 36: Market region Europe
Market region Europe 36 36
Slide 37: The Energy Efficiency train will not slow down
The Energy Efficiency train will not slow down Passive House level EU Action Plan (20/20 target) Standards Obligatory EPBD 1 in various countries New Climate agreement In Copenhagen? ESD Kyoto agreement EPBD 2 1997 2000 2002 2006 2007 2009 2010 2013 2020 37 37
Slide 38: Required increase in insulation volume to passive house
Required increase in insulation volume when going from current building code to passive house – some examples Roof 360mm Roof 585mm Denmark +30-80% Wall 190mm Wall 345mm Germany Roof 195mm Roof 425mm +100-300% Wall 90mm Wall 350mm 38 38
Slide 39: European insulation market 2010
European insulation market 2010 Plastic foam 40-45% Other 5% • Recticel (PUR) • Kingspan (PUR) • CRH (EPS) • DOW (XPS) • BASF (XPS) Market size • Metechno (PUR) €6.5 bill • Thyssen (PUR) Glass wool 25-30% • Saint Gobain Stone wool 25-30% • Knauf • Rockwool International • Uralita • Paroc •Knauf •Sai
Slide 40: Construction region 1: The collapsed markets in Europe
Construction region 1: The collapsed markets in Europe • In UK, construction activity is at a low level but we see small signs of recovery in residential newbuild and positive effects from government programmes. • The Spanish market continues to deteriorate. • Ukraine, Hungary and Baltics still seve
Slide 41: Construction region 2: More resilient markets in Western Europe
Construction region 2: More resilient markets in Western Europe • The main markets in France and Germany remain relatively strong supported by government stimulus packages. • Scandinavia and Benelux develop more negatively. • Sales price levels are holding up. 41 41
Slide 42: Construction region 3: Eastern Europe still down
Construction region 3: Eastern Europe still down • Region still depressed with the exception of Poland showing strength in residential new built market. • Russian market has now bottomed out and is expected to recover rather quickly. • Sales prices have gone down but are now stabilising 42 42
Slide 43: Full effect in 2010 of strong government actions
Full effect in 2010 of strong government actions in important Western European countries Germany: EUR 17 billion to support energy efficiency in buildings UK: CERT programme (Carbon Emissions Reduction Target): EUR 4 billion to support energy efficiency in buildings France: All public building
Slide 44: European legislation creates long-term growth perspectives
European legislation creates long-term growth perspectives New, tightened EPBD2 will stimulate EU insulation demand especially in existing building stock Renovation of existing buildings Energy requirements for major renovations now includes all buildings, also <1,000 m2 Stricter energy requir
Slide 45: Energy Services Directive
Energy Services Directive Partnerships with energy providers EU member states are required to improve energy efficiency by minimum 9% from 2008 to 2016. In some EU countries, major parts of the savings requirements have been transferred to energy providers. Energy providers in UK and Denmark
Slide 46: Market region Russia
Market region Russia 46 46
Slide 47: Russian insulation market 2010
Russian insulation market 2010 Plastic foam 29% Market size € 0.7 bill Glass wool 26% Stone wool 45% 47 47
Slide 48: Russian economy will improve fast
Russian economy will improve fast Market downturn has bottomed out and the Group is expecting a rather fast increase in activities, accelerating further in 2011 and 2012. New energy efficiency legislation passed by the Duma end November 2009 will be an important driver. This new legislation ta
Slide 49: Major Russian centres of population
Major Russian centres of population St.PETERSBURG ARKHANGELSK 850 km NORTHWEST MOSCOW FAR EAST CENTER N.NOVGOROD YAKUTSK 1030 km VOLGA URAL KAZAN YEKATERINBOURG SOUTH 870 km SIBERIA Chelyabinsk Rostov Ufa Samara Omsk NOVOSIBIRSK KHABAROVSK KZ IRKUTSK VLADIVOSTOK Population more than 1 mio 49 49
Slide 50: Market region North America
Market region North America 50 50
Slide 51: North American insulation market 2010
North American insulation market 2010 Glass wool 50-55% • Owens-Corning • Saint Gobain Stone wool 5% • Johns-Manville • Rockwool • Knauf Market size International A/S •Fibrex € 5.5 bill. •Thermofiber •IIG Plastic foam 25-30% Other 15-20% • Owens-Corning (EPS & XPS) • Johns-Manville (EPS & XPS) • DOW
Slide 52: North American insulation market supported by stimulus packages
North American insulation market supported by stimulus packages Construction market has reached the bottom; US newbuild residential slightly on the way up? US legislation will stimulate renovation Stimulus funds largely unspent and will be consumed in 2010; $ 11 billion for a.o. energy efficie
Slide 53: North American sales growth
North American sales growth The Rockwool Group is able to grow despite an insulation market that was down 20% on average. Still very low market share with plenty of room to grow. Growth most evident in residential DIY segment, especially in Canada. Successful start in USA DIY & flat roof seg
Slide 54: Market region Asia
Market region Asia 54 54
Slide 55: China and Southeast Asia
China and Southeast Asia Insulation market is completely unconsolidated with hundreds of producers. Other 8% Plastic foam 72% Glass wool 12% Market size € 2.5 bill. Stone wool 8% 55 55
Slide 56: China and Southeast Asia
China and Southeast Asia The Chinese market is by far the biggest in the Far East representing approx. 80% of the total market in the region. Urbanisation and industrialisation are the main drivers behind newbuild activities and will continue to fuel the growth of the insulation market. The hu
Slide 57: Indian market driven by infrastructure
Indian market driven by infrastructure Insulation market in emerging countries develops in 3 phases: 1. Establishment of infrastructure (energy supply) e.g. power plants, pipelines, etc. technical insulation market. 2. Reduction of heating/cooling costs and improved comfort in offices non reside
Slide 58: Questions
Questions 58 58
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