The Rockwool Group
As a supplement to a variety of already existing
activities related to the construction industry, stone
wool production was started in 1937.
From the early sixties the Rockwool Group was
started in its present form and the decision made to
focus on development, production and bringing to
market of stone wool products only.
The Rockwool Group is today the worlds biggest
producer of stone wool products and systems and
number 2 in mineral wool in Europe.
The Rockwool Group
This position has been obtained through
prioritisation of:
Process technology, engineering and R & D.
Market share increase.
The Rockwool Group
The Rockwool Group was listed on the Copenhagen
Stock Exchange in 1996 and is presently member of
the Midcap+ section.
Since the beginning of 2003 the value of its
B-shares has increased from approx. DKK 95 per DKK
10 share to 791 at the end of august 2006.
5 years Share Price Development
75 175 275 375 475 575 675 775Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06
P ri ce i n D K K
The Rockwool Group
The Rockwool Foundation holds 23% of the share
capital. The Foundation stimulates neutral research
into social, political and economical circumstances
in Denmark and abroad.
There exists – as far as management is aware – no
shareholder agreement between shareholders.
Net sales 1994-2006
682 715 767 839 902 970 1022 1065 1067 1104 1229 1344 603 711 0 200 400 600 800 1000 1200 1400 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2EBITDA 1994-2006
115 101 119 130 145 153 133 141 131 147 177 201 84 120 0 25 50 75 100 125 150 175 200 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Changes in EBITDA
EBITDA 2004
177
EBITDA 2005
201
Increased sales prices
46
Increased volumes / changes in product mix
23
Increased prices on purchases
-51
Improved efficiency and other items
6
EBIT 1994-2006
56 42 49 58 66 60 29 50 40 66 89 119 43 62 0 20 40 60 80 100 120 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Profit after Minority Interests 1994-2006
38 34 45 46 48 39 19 27 18 34 54 77 101 27 41 0 10 20 30 40 50 60 70 80 90 100 110 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 est 2005 Q2 2006 Q2Cash Flow from Operations 1994 - 2004
101 107 122 119 120 100 83 124 115 104 152 148 21 72 0 20 40 60 80 100 120 140 160 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Stocks, Debtors & Creditors 1994-2006
-50 -58 -61 -66 -66 -94 -111 -120 -123 -151 -159 -163 -226 -206 -250 -225 -200 -175 -150 -125 -100 -75 -50 -25 0 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Investments & Acquisitions 1994-2006
56 88 100 89 141 160 202 120 105 85 95 127 60 55 0 50 100 150 200 250 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Free Cash-Flow 1994-2006
49 20 25 31 -21 -59 -118 4 10 19 57 21 -39 16 -120 -100 -80 -60 -40 -20 0 20 40 60 mE U R 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 Q2 2006 Q2Financial goals
Target
Actual 2005
6% sales growth
9.6%
Profit ratio at 9%
8.8%
Return on invested capital at 14%
18.3%
Free cash flow at 2% of turnover
1.6%
Expectations for 2006
Sales growth at 12%
ÆNet sales from EUR 1,344 million to approx. EUR 1,505 million.
Net result after minority interests
ÆFrom EUR 77 million to approx. EUR 101 million.
Investment and capital expenditure
Key points
1. Market development
European building insulation market
Other markets
2. Main changes in the competitive landscape
3. The capacity situation
4. Legislative opportunities
EPBD
Expected growth in
European
construction
markets
in 2006
Sources: Euroconstruct June 2006 et al.
> 5 % 3-5 % 1-3 % 0-1 % < 0 %
European (EU) building insulation market
No lasting negative effect on the increasing building
industry activity from rising inflation (incl. energy
prices), interest rates and regional shortage of certain building materials
Increased focus on energy efficiency in buildings – in
particular from the legislator. The insulation market will outgrow the building market – 4 to 6% by 2009
compared to today
The residential market will remain stable at the rather
high levels of previous years
The non-residential market will grow in line with the
European (EU) building insulation market
The refurbishment market is growing, fuelled by high
energy prices and new financial incentives:
In Germany EUR 1.4 bn/year for increased energy efficiency in existing dwellings. The interest has been overwhelming
Incentive programmes being introduced in many other countries e.g. France, Spain and the UK.
EU’s structural funds now to target building projects in the new member states :
EUR 6 bn (2% of total amount) for multi-family housing projects 2007-2013
Other markets
The building insulation markets in North America, Russia and the Ukraine remain buoyant – however – with a slow down in the US residential segment
The technical insulation market is growing fast due to a general under capacity in the petrochemical and power generation industries
The horticultural greenhouse industry continues to suffer from high energy prices. Despite this, our Grodan
European competitive landscape
Finnish stone wool and sandwich panel producer Paroc acquired by capital fund Arcapita
Knauf indicates further glass wool capacity increase in Eastern Europe
Grand Forks Milton Melaka (Malaysia) Wern Tarw Roermond Caparroso Moss Doense Hedehusene Gladbeck Neuburg St. Eloy- Les-Mines Vamdrup Trondheim Iglesias Flechtingen Cigacice Malkinia Bohumin Gógánfa Tapolca Vyborg Moskva Istria (under construction)
Geographic expansion
Capacity situation
The Rockwool Group is presently establishing new
capacity – both greenfield as well as at existing facilities – in order to match the expected market growth in the coming years
Management has at this point in time a number of additional capacity increase projects on the drawing board
Legislative opportunities
The Energy Performance of Buildings Directive (EPBD) enforces:
Building regulations must be based on total energy performance calculations
Energy certification (incl. advise on energy efficiency
improvement measures) of buildings which are constructed, sold or rented
National building regulations to be revised (= tightened) concerning energy efficiency every 5 years
Buildings > 1,000 m2 must be upgraded to follow energy efficiency requirements when undergoing major renovation
Legislative opportunities
No member states managed to fulfil all requirements
concerning implementation by the target date 4 January 2006 but Germany and Denmark were close
In a number of countries, energy requirements for new constructions are now strengthened as a consequence of the implementation
Such strengthened requirements will usually impact the market with a 12 months delay due to the building cycle Implementation of the EPBD is still ongoing:
Changes in energy requirements of new
buildings
Legislative opportunities
The Rockwool Group wishes to play a major role in the market for energy efficiency in buildings and has therefore established the BuildDesk Division
BuildDesk is unbiased and offers software tools, services and consultancy
BuildDesk is active in Germany, Holland, the UK and
Legislative opportunities
Major BuildDesk achievements since March 2006
Launch of energy performance software for new
domestic buildings and supporting seminars in the UK
Energy certification and consultancy software and training launched in Denmark
Strategic “energy certificate” partnership established in Germany with DENA (Deutsche Energie Agentur), the Federal Ministry of transport, building and urban affairs, the energy company E.ON and EID (Energiepass
Initiative Deutschland)
BuildDesk Online established; initially with a U value calculator
Legislative opportunities
Directive on energy end-use efficiency and energy services (ESD)
Adopted in December 2005
Enters into force in 2008
Goal: To improve end-use energy efficiency in each
member state with minimum 9% over a period of 9 years either through national initiatives and/or through
obligations on energy providers to help end users improve energy efficiency
We expect the ESD will have a market impact comparable to the EPBD
