Financial Results 1 Forward-looking statement The statements on - PowerPoint PPT Presentation

Q3/9M 2019 Financial Results 1

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 exchange rate developments, the raw material situation, production and distribution-related issues, breach of contract or unexpected termination of contract, price reductions due to market-driven price reductions, market acceptance of new products, launches of competitive products and other unforeseen factors. In no event shall ROCKWOOL International A/S be liable for any direct, indirect or consequential damages or any other damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other action, arising out of or in connection with the use of information in this presentation. 2

Highlights Q3 YTD Sales of Sales increase in local currencies EUR 2,042 million 3.2% up 4.1% in reported figures EBIT of EBIT margin of EUR 278 million 13.6% up 7.8% over last year up 0.4 percentage points Free cash flow of Net profit EUR 1 million EUR 213 million down from EUR 138 million last year improvement of EUR 14 million 3

Highlights Q3 Sales of Sales increase in local currencies EUR 706 million 0.9% up 2.1% in reported figures EBIT of EBIT margin of EUR 100 million 14.1% up 2.8% over last year up 0.1 percentage points Free cash flow of Net profit EUR 73 million EUR 77 million down from EUR 110 million last year improvement of EUR 1 million 4

Q3 YTD sales growth of 3.2% NET SALES EURm Sales grew 3.2% in local currencies, and reached +3.2% EUR 2,042 million. + 4.1 % Sales increased 4.1% in reported figures with a positive currency effect of 0.9 percentage points. Reported figures 2,042 1,962 Local currencies Q3 2018 YTD Q3 2019 YTD NET SALES PER BUSINESS SEGMENTS Insulation up 0.8% in local currencies, and 1.6% in EURm reported figures. +0.8% +1.6% Systems segment sales grew 11.6% in local 2018 YTD currencies and 13.2% in reported figures. 2019 YTD Local currencies 1,536 1,560 2019 YTD Reported figures +11.6% +13.2% 482 426 Insulation Systems 5

Q3 sales growth of 0.9% NET SALES EURm Sales grew 0.9% in local currencies, and reached +0.9% EUR 706 million. + 2.1 % Sales increased 2.1% in reported figures with a positive currency effect of 1.2 percentage points. Reported figures 706 692 Local currencies Q3 2018 Q3 2019 Insulation down 2.3% in local currencies, and 1.2% in reported figures. NET SALES PER BUSINESS SEGMENT EURm -1.2% Systems segment sales grew 13.1% in local -2.3% currencies and 14.6% in reported figures. 2018 2019 Local currencies 548 541 2019 Reported figures +13.1%+14.6% 144 165 Insulation Systems 6

Regional sales development Q3 Growth in local currencies Key developments Share of sales* Western Europe ▪ Especially France and UK performing well ▪ Germany had a difficult quarter +3.8% 59% +3.7% incl. FX effect ▪ General decline in region CEE incl. Russia ▪ Growth in Russia -9.9% ▪ Positive currency effect of 2.4 percentage points 19% -7.5% incl. FX effect ▪ Positive sales development in North America while China has North America, Asia stabilised and others ▪ South East Asia decreased 22% ▪ Positive currency effect of 3.7 percentage points +3.9% +7.6% incl. FX effect * Q3 2018 share of sales 58%, 21%, 21% respectively 7

Profitability Q3 + 3.5 % +2.8% EBITDA up 3.5% to EUR 142 million EBITDA & EBIT EURm 144 142 ▪ 137 EBITDA margin of 20.1% compared to 19.8% in 132 125 the same quarter last year. 120 119 112 109 102 100 97 91 EBITDA ▪ 83 Adjusted for the IFRS 16 reclassification, EBITDA 77 76 73 70 margin decreased by 0.4 percentage points; EBIT underlying margin in line with last year. Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 EBIT up 2.8% , reaching EUR 100 million EBITDA / EBIT MARGIN (%) ▪ Corresponding to a 14.1% EBIT margin, an 20.7% 20.1% 18.6% 19.9% 19.8% 19.4% 17.6% 18.8% increase of 0.1 percentage points. 16.9% 14.7% 14.1% 13.6% 14.0% 12.4% 11.2% 11.6% 11.7% 12.0% ▪ The IFRS 16 reclassification has no material impact EBITDA margin on EBIT. EBIT margin Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 8

Good underlying profitability in both segments in Q3 -1.9% EBIT EURm +22.5% 78 77 Insulation EBIT decreased 1.9% to EUR 77 million in Q3. Q3 2018 Q3 2019 ▪ EBIT margin decreased 0.4 percentage points to 23 12.4%. 19 ▪ Affected by start-up costs for the new factories. Insulation Systems Systems EBIT increased 22.5% to EUR 23 million in EBIT MARGIN Q3. (%) ▪ EBIT margin reached 14.0%, which is 0.9 21.2% percentage points higher than the same period in 2018, with all businesses contributing positively. 14.0% 14.0% 13.1% 13.9% 12.1% 11.4% Insulation 11.1% 10.0% 12.0% 12.4% 12.8% Systems 11.2% 11.1% 10.4% 10.0% 10.5% 10.0% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 9

Increased investment activities in Q3 Investments totaled EUR 120 million in Q3 2019 (Q3 2018: EUR 52 million). ▪ Capacity investments mainly relate to ongoing factory projects in the United States (West Virginia) and the expansion in Germany. INVESTMENTS Capacity Program EURm Maintenance CAPEX 120 94 80 78 69 52 59 48 47 53 41 37 19 30 22 14 9 20 51 33 35 31 26 27 27 21 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 10

Free cash flow – Q3 ▪ Cash flow from operations before financial items and tax was EUR 217 million in Q3 2019, which is EUR 38 million higher than same period FREE CASH FLOW last year. EURm Q3: EUR -37m 128 ▪ NWC decreased to 9.4% (LY: 9.6%) of net sales, 110 increasing from EUR 250 million end of Q3 2018 to EUR 258 million end of Q3 2019 primarily due to 73 62 higher inventories. 58 26 ▪ 16 Free cash flow in Q3 2019 decreased by EUR 37 million and reached EUR 73 million compared to last year, mainly due to higher investment level. Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 -34 ▪ ROCKWOOL is net debt free with a net cash position end of third quarter of EUR 288 million, a decrease of EUR 29 million compared to Q3 2018. Q3 YTD 2018: Q3 YTD 2019: -88 EUR 138m EUR 1m EUR -137m 11

Outlook for 2019 12

Outlook for full year 2019 Net sales is expected to be at the 1. Sales lower end of the guidance of growth of 2-5% in local currencies. The EBIT margin is still expected 2. EBIT at around the same level as last year (12.8%).* 3. Investment Investment expenditure excluding acquisitions is still expected around EUR 390 million . * Including the one-off positive EBIT impact (EUR 10 million) from the Rockfon North America legal case settlement. 13

Key figures for the Group YTD YTD EURm Q3 2019 Q3 2018 YoY (%) Q3 2019 Q3 2018 YoY (%) FY 2018 Income statement Net sales 706 692 2.1% 2,042 1,962 4.1% 2,671 EBITDA 142 137 3.5% 406 382 6.4% 507 EBIT 100 97 2.8% 278 258 7.8% 341 Profit before tax 98 95 3.4% 270 250 8.3% 335 Profit for the period 77 76 2.7% 213 199 7.6% 265 Balance sheet Total assets 2,635 2,347 12.3% 2,431 Equity 2,057 1,821 13.0% 1,877 Equity ratio 77.9% 77.4% 0.5pp 77.2% 14

Questions? 15

ROCKWOOL International A/S Hovedgaden 584 DK-2640 Hedehusene Denmark CVR No. 54879415 Tel: +45 46 56 03 00 www.rockwoolgroup.com 16