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

Q3/9M 2019 Financial Results

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Forward-looking statement

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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

• ther damages whatsoever resulting from loss of use, data
• r profits, whether in an action of contract, negligence or
• ther action, arising out of or in connection with the use of

information in this presentation.

Highlights Q3 YTD

Sales of

EUR 2,042 million

up 4.1% in reported figures EBIT of

EUR 278 million

up 7.8% over last year Free cash flow of

EUR 1 million

down from EUR 138 million last year Sales increase in local currencies

3.2%

EBIT margin of

13.6%

up 0.4 percentage points Net profit

EUR 213 million

improvement of EUR 14 million 3

Highlights Q3

Sales of

EUR 706 million

up 2.1% in reported figures EBIT of

EUR 100 million

up 2.8% over last year Free cash flow of

EUR 73 million

down from EUR 110 million last year Sales increase in local currencies

0.9%

EBIT margin of

14.1%

up 0.1 percentage points Net profit

EUR 77 million

improvement of EUR 1 million 4

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Q3 YTD sales growth of 3.2%

Sales grew 3.2% in local currencies, and reached EUR 2,042 million. Sales increased 4.1% in reported figures with a positive currency effect of 0.9 percentage points. Insulation up 0.8% in local currencies, and 1.6% in reported figures. Systems segment sales grew 11.6% in local currencies and 13.2% in reported figures.

Q3 2018 YTD Q3 2019 YTD

Reported figures Local currencies

+3.2%

+4.1% 1,962 2,042

Insulation Systems

2018 YTD 2019 YTD Local currencies 2019 YTD Reported figures

+1.6% +0.8% +11.6% +13.2%

1,536 1,560 426 482

NET SALES

EURm

NET SALES PER BUSINESS SEGMENTS

EURm

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Q3 sales growth of 0.9%

Sales grew 0.9% in local currencies, and reached EUR 706 million. Sales increased 2.1% in reported figures with a positive currency effect of 1.2 percentage points. Insulation down 2.3% in local currencies, and 1.2% in reported figures. Systems segment sales grew 13.1% in local currencies and 14.6% in reported figures.

Q3 2018 Q3 2019

Reported figures Local currencies

+0.9%

+2.1% 692 706

Insulation Systems

2018 2019 Local currencies 2019 Reported figures

• 1.2%
• 2.3%

+13.1%+14.6%

548 541 144 165

NET SALES

EURm

NET SALES PER BUSINESS SEGMENT

EURm

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Regional sales development Q3

Western Europe

+3.8%

+3.7% incl. FX effect

CEE incl. Russia

• 9.9%
• 7.5% incl. FX effect

North America, Asia and others

+3.9%

+7.6% incl. FX effect ▪ Especially France and UK performing well ▪ Germany had a difficult quarter

59%

Growth in local currencies Key developments

▪ General decline in region ▪ Growth in Russia ▪ Positive currency effect of 2.4 percentage points ▪ Positive sales development in North America while China has stabilised ▪ South East Asia decreased ▪ Positive currency effect of 3.7 percentage points

19% 22%

Share of sales*

* Q3 2018 share of sales 58%, 21%, 21% respectively

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Profitability Q3

EBITDA up 3.5% to EUR 142 million ▪ EBITDA margin of 20.1% compared to 19.8% in the same quarter last year. ▪ Adjusted for the IFRS 16 reclassification, EBITDA margin decreased by 0.4 percentage points; underlying margin in line with last year. EBIT up 2.8%, reaching EUR 100 million ▪ Corresponding to a 14.1% EBIT margin, an increase of 0.1 percentage points. ▪ The IFRS 16 reclassification has no material impact

• n EBIT.

119 109 112 132 137 125 120 144 142 76 73 70 91 97 83 77 102 100 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

EBITDA EBIT +3.5%

+2.8% EBITDA & EBIT EURm

19.4% 16.9% 18.6% 19.9% 19.8% 17.6% 18.8% 20.7% 20.1% 12.4% 11.2% 11.6% 13.6% 14.0% 11.7% 12.0% 14.7% 14.1% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

EBITDA margin EBIT margin

EBITDA / EBIT MARGIN

(%)

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Good underlying profitability in both segments in Q3

Insulation EBIT decreased 1.9% to EUR 77 million in Q3. ▪ EBIT margin decreased 0.4 percentage points to 12.4%. ▪ Affected by start-up costs for the new factories. Systems EBIT increased 22.5% to EUR 23 million in Q3. ▪ EBIT margin reached 14.0%, which is 0.9 percentage points higher than the same period in 2018, with all businesses contributing positively.

78 19 77 23

Insulation Systems

Q3 2018 Q3 2019

• 1.9%

+22.5%

EBIT

EURm

EBIT MARGIN

(%) 11.1% 10.0% 10.5% 13.9% 12.8% 10.4% 10.0% 11.2% 12.4% 12.1% 10.0% 11.4% 12.0% 13.1% 11.1% 14.0% 21.2% 14.0% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

Insulation Systems

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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

EURm 21 17 26 27 33 27 31 35 51 9 20 22 14 19 53 47 59 69 30 37 48 41 52 80 78 94 120 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

Capacity Program Maintenance CAPEX

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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 last year. ▪ NWC decreased to 9.4% (LY: 9.6%) of net sales, increasing from EUR 250 million end of Q3 2018 to EUR 258 million end of Q3 2019 primarily due to higher inventories. ▪ 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. ▪ 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.

128 26

• 34

62 110 58

• 88

16 73 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

Q3: EUR -37m

FREE CASH FLOW

EURm

Q3 YTD 2018: EUR 138m Q3 YTD 2019: EUR 1m EUR -137m

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Outlook for 2019

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Outlook for full year 2019

• 1. Sales
• 2. EBIT
• 3. Investment

Net sales is expected to be at the lower end of the guidance of growth

• f 2-5% in local currencies.

The EBIT margin is still expected at around the same level as last year (12.8%).* 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.

Key figures for the Group

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EURm Q3 2019 Q3 2018 YoY (%) YTD Q3 2019 YTD 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%

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Questions?

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

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