First quarter report of 2022
for ROCKWOOL A/S
Release no. 05 – 2022
to Nasdaq Copenhagen
Earnings call
ROCKWOOL Group will host an earnings call on 19 May 2022 at 11.00 CEST. The call will be transmitted live on
www.rockwool.com/group/.
1/13
18 May 2022
Strong sales performance in high inflationary environment
Highlights
▪ Sales in Q1 2022 reached 924 MEUR, an increase of 36
percent in local currencies and 38 percent in reported
figures compared to last year, driven by high volume
demand and necessary sales price increases.
▪ EBITDA in Q1 2022 reached 155 MEUR, an increase of
16 MEUR or 12 percent compared to Q1 2021. The
EBITDA margin was 16.8 percent, down 3.9 percentage
points from last year. As expected, high cost increases
on production materials and energy were not fully
compensated by sales price increases and cost actions
in the quarter.
▪ EBIT increased 14 percent to 102 MEUR in Q1 2022,
with an 11.0 percent EBIT margin, down 2.3 percentage
points from Q1 2021.
▪ Investments excluding acquisitions reached 70 MEUR in
the first quarter 2022, a decrease of 12 MEUR compared
to Q1 2021.
▪ Annualised return on invested capital reached 18 percent
from 17 percent in Q1 2021.
▪ As a consequence of the terrible war in Ukraine, all
investments in Russia have been cancelled.
ROCKWOOL in Russia is a stand-alone operation and
continues conducting business to avoid nationalisation of
our assets and loss of unique intellectual property.
Outlook 2022
▪ Growth in net sales of 20-25 percent in local currencies.
▪ EBIT margin around 13 percent.
▪ Investment level around 425 MEUR excluding
acquisitions.
“High demand and sales price increases drove double-digit
revenue growth across almost all business units. While not
materially affecting sales performance at this point, the
terrible war in Ukraine and the challenging geopolitical
situation are contributing to an already stressed global
economy. Even with the price increases, the soaring
energy, material, and logistics costs diluted margins in the
first quarter. This will necessitate further price increases
across the businesses. We expect to restore margins in the
coming quarters”.
CEO Jens Birgersson
2/13
Main figures / key figures for the Group
Unaudited
Audited
Q1 2022
Q1 2021
FY 2021
Income statement items in MEUR
Net sales
924
671
3 088
EBITDA
155
139
602
Amortisation, depreciation and write-downs
53
49
201
EBIT
102
90
401
Profit before tax
83
88
393
Profit for the period
63
68
303
Balance sheet items in MEUR
Non-current assets
2 156
1 994
2 129
Current assets
1 184
872
951
Total assets
3 340
2 866
3 080
Equity
2 455
2 185
2 394
Non-current liabilities
184
172
163
Current liabilities
701
509
523
Net interest-bearing cash / (debt)
-1
26
76
Net working capital
415
319
306
Invested capital
2 435
2 129
2 294
Cash flow items in MEUR
Cash flow from operating activities
2
29
426
Cash flow from investing activities
70
83
310
Free cash flow
-68
-54
116
Others
Number of full-time employees (end of period)
12 246
11 470
11 968
Ratios
EBITDA margin
16.8%
20.7%
19.5%
EBIT margin
11.0%
13.3%
13.0%
ROIC (rolling 4 quarters)
18.1%
16.9%
18.8%
Return on equity (rolling 4 quarters)
12.8%
12.1%
13.5%
Equity ratio
73.5%
76.1%
77.7%
Stock market information (DKK)
Earnings per share
22
23
104
Cash flow per share
1
10
147
Book value per share
845
738
823
Share capital (million)
216
220
216
Price per A share
2 246
2 385
2 379
Price per B share
2 260
2 685
2 859
Market cap (million)
48 565
54 519
56 295
Number of own shares
61 228
422 542
56 228
For definition of key figures and ratios see pg. 97 in the ROCKWOOL Group Annual Report 2021 available on our website:
www.rockwool.com/group/.
3/13
Management report for the period
1 January to 31 March 2022
Global sales development
Sales in Q1 2022 showed strong growth driven by high demand for non-
combustible insulation products and our other stone wool products. Both
volume and sales price increases contributed to the growth. Almost all business
units continued to see solid demand and combined with necessary sales price
increases all delivered double-digit growth. The war in Ukraine has so far not
materially impacted the Group’s sales performance, but it has placed an
additional strain on the economy overall with supply chain disruptions and
inflationary pressure on production materials, energy prices and logistics.
In Q1 2022, ROCKWOOL Group generated net sales of 924 MEUR, an
increase of 36 percent in local currencies compared to Q1 2021. Currency
translation had a positive impact of two percent, which resulted in a sales
growth of 38 percent in reported figures. Sales growth was driven by both
volume and needed price increases in the first quarter of the year.
The aggregated price increase during Q1 was 17 percent over same period last
year. In the same period, we have seen a high inflation of more than 60 percent
on input and logistics costs. This amounted to more than 140 MEUR negative
impact versus first quarter last year, with majority of inflation impacting us
during Q4 2021 and Q1 this year. As sales price increases did not fully offset
the soaring inflation on input costs, in particular energy related costs, additional
price increases are necessary and have been initiated for Q2 2022.
Regional sales development
In the first quarter of 2022, sales in Western Europe amounted to 557 MEUR,
up 32 percent in local currencies and up 33 percent in reported figures
compared to the same period last year. All markets experienced double-digit
growth, with especially Germany, the United Kingdom, Italy, France, and the
Netherlands contributing to the sales growth.
In Eastern Europe, sales for the first quarter of 2022 amounted to 178 MEUR,
an increase of 76 percent in local currencies and 70 percent in reported figures.
Most countries experienced double-digit sales growth in the quarter, with
especially Poland performing well.
In the rest of the world, first quarter sales amounted to 189 MEUR, an increase
of 20 percent in local currencies and 27 percent in reported figures. North
America experienced particularly good growth while China was still affected by
severe COVID-19 restrictions and lockdowns.
Group sales
+36%
Sales in Western Europe
+32%
Sales in Eastern Europe
+76%
Sales in rest of the world
+20%
4/13
Group profitability
In Q1 2022, EBITDA reached 155 MEUR an increase of 12 percent compared
to Q1 2021. The EBITDA margin was 16.8 percent in Q1 2022 compared to
20.7 percent in the same period last year. The EBITDA margin was highly
impacted by accelerating inflation on production materials, energy and logistics,
which sales price increases, productivity gains, and cost actions did not fully
offset.
EBIT for the first quarter of 2022 increased 14 percent, reaching 102 MEUR,
corresponding to an EBIT margin of 11.0 percent. EBIT was impacted by higher
depreciation primarily from the new production capacity in the United States.
EBIT & EBIT margin
MEUR
During March, an intercompany balance between ROCKWOOL A/S and our
subsidiary in Russia became unhedged and we consequently recorded an
unrealised exchange loss of 20 MEUR.
The effective tax rate was 24 percent in Q1 2022, up 1.2 percentage points
from the same period last year and up one percentage point from full year
2021.
417
557
105
178
149
189
0
100
200
300
400
500
600
700
800
900
1 000
Q1 2021 Q1 2022
Western Europe Eastern Europe and Russia North America, Asia and others
EBITDA margin
-3.9%-points
EBIT margin
-2.3%-points
80
58
100 100
90
111
105
95
102
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4
2020 2021 2022
Regional sales
MEUR
12.3%
10.0%
14.9%
14.3%
13.3%
14.3%
11.2%
22%
16%
62%
60%
19%
21%
11.0%
13.2%
5/13
Net profit for the first quarter of 2022 amounted to 63 MEUR, which is 5 MEUR
lower than in the same period last year.
Balance sheet
Net working capital ended the first quarter of 2022 at 415 MEUR, an increase of
109 MEUR compared to year-end 2021 and 96 MEUR compared to Q1 2021,
mainly reflecting the higher inventory values due to higher costs, and higher
increased sales prices in trade receivables. The net working capital ratio ended
at 12.4 percent, at level with last year.
Despite the higher invested capital, annualised return on invested capital
improved to 18.1 percent compared to 16.9 percent for the same period last
year.
At the end of Q1 2022, total assets amounted to 3340 MEUR, an increase of
260 MEUR compared to year-end 2021 and 474 MEUR compared to Q1 2021.
The increase is mainly related to ongoing investments combined with increased
inventories and trade receivables due to sales growth.
As a consequence of the terrible war in Ukraine, all investments in Russia have
been cancelled. ROCKWOOL in Russia is a stand-alone operation and
continues conducting business to avoid nationalisation of our assets and loss of
unique intellectual property. We have established procedures and controls to
ensure that we comply with all international sanctions.
As announced on 5
th
May 2022, the Company will call for an extraordinary
general meeting in August 2022 to seek shareholder approval for a proposal to
utilise between 100-200 MDKK (13-26 MEUR) prior to the 2023 Annual General
Meeting to support the reconstruction of Ukraine.
At the end of the period, the equity ratio was still solid at 74 percent.
Cash Flow
Cash flow from operations before financial items and tax amounted to 38
MEUR in Q1 2022, down 5 MEUR from the same period last year.
The change in net working capital had further negative cash flow impact of 17
MEUR compared to same quarter last year, primarily due to higher inventory
values and higher trade receivables from the increase in sales.
In Q1 2022, capital expenditure excluding acquisitions was 70 MEUR compared
to 82 MEUR in the same period last year. The relocation of the factory in China,
the new Rockfon line in Poland, the additional Grodan capacity in Toronto, and
the conversion to electrical melter in Flumroc (Switzerland), were the largest
individual projects.
Free cash flow was -68 MEUR in Q1 2022 compared to -54 MEUR in the same
period last year.
ROIC
+1.2%-points
Operational cash flow before
financial items and tax
38 MEUR
Free cash flow
-68 MEUR
6/13
Cash flow from financing was 136 MEUR, an increase of 134 MEUR compared
to Q1 2021 mainly due to drawings on our credit facilities.
The Group’s financial situation remains solid with net interest-bearing debt of 1
MEUR at the end of Q1 2022 and unused credit facilities of 470 MEUR.
Business segments
Key figures Insulation segment
MEUR
Q1 2022
Q1 2021
External net sales
724
498
EBIT
79
59
EBIT margin
9.5%
10.3%
In Q1 2022, Insulation segment sales reached 724 MEUR, which is an increase
of 44 percent in local currencies and 45 percent in reported figures compared to
first quarter last year. The growth was driven by volume and sales price
increases in all main markets.
EBIT in the Insulation segment increased by 20 MEUR to 79 MEUR in Q1
2022. The EBIT margin ended at 9.5 percent, below last year as sales price
increases did not fully offset the extremely high inflation on energy, production
materials, and logistics costs.
483
498
724
438
568
0
502
604
0
491
621
0
166
173
200
145
210
0
168
193
0
209
221
0
0
100
200
300
400
500
600
700
800
900
1 000
2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021
Q1 Q2 Q3 Q4
Insulation sales
+44%
Insulation EBIT margin
-0.8%-points
Sales per business
MEUR
Systems
Insulation
649
671
924
583
778
670
797
700
842
7/13
Key figures Systems segment
MEUR
Q1 2022
Q1 2021
External net sales
200
173
EBIT
23
31
EBIT margin
11.6%
17.6%
Systems segment sales amounted to 200 MEUR in Q1 2022, which is an
increase of 14 percent in local currencies and 16 percent in reported figures
compared to Q1 2021. Especially Rockfon and Rockpanel performed well and
contributed with double-digit growth. Grodan sales were negatively impacted by
an overstocked supply chain in North America, which we expect will normalise
in the second half of the year.
The Systems segment generated an EBIT of 23 MEUR, which is 8 MEUR
below last year. The EBIT margin was 11.6 percent compared to the unusually
high margin of 17.6 percent in Q1 2021. The lower margin relates to impact
from rapidly increasing material and logistics costs and a negative product mix.
56
59
79
40
69
76
78
64
69
24
31
23
18
42
24
27
36 26
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4
Systems sales
+14%
Systems EBIT margin
-6%-points
EBIT per business
MEUR
Systems
Insulation
80
90
102
90
58
111
100
105
100
95
8/13
Outlook for the full year 2022
Demand for our products is strong and we expect that construction activity
levels will remain high throughout 2022 despite the tragic war in Ukraine and
the risks of even higher inflation and interest rates. We assume that gas
supplies will remain uninterrupted to our factories in Europe.
The soaring input costs will necessitate additional sales price increases, which
is reflected in the updated forecast for the full year. We now expect that sales
growth in local currencies will be between 20-25 percent compared to
previously 15-20 percent.
Margin recovery is important to continue a high level of investments in needed
capacity expansion and conversions of our manufacturing technology to
greener energy to fulfil our sustainability commitments. We expect that we can
restore margins in the coming quarters, and we retain the full year EBIT margin
outlook of around 13 percent. This includes costs from the expected
contribution to the reconstruction in Ukraine, as announced.
The higher than expected demand results in high capacity utilisation for our
factories, which limits possibilities to execute some planned investments. As
previously communicated, we have cancelled all investments in Russia. We
expect that the full year capital expenditure will be around 425 MEUR
compared to previous estimate of around 500 MEUR.
2022 outlook overview
9 February 2022
18 May 2022
Net sales
in local currencies
Sales growth of
15-20 percent
Sales growth of
20-25 percent
EBIT margin
Around 13 percent
Around 13 percent
Investments excluding
acquisitions
Around 500 MEUR
Around 425 MEUR
Further information:
Kim Junge Andersen, Chief Financial Officer
ROCKWOOL A/S
+45 46 56 03 00
At ROCKWOOL Group, we are committed to enriching the lives of everyone who
experiences our products. Our expertise is perfectly suited to tackle many of today’s
biggest sustainability and development challenges, from energy consumption to noise
pollution and water scarcity to flooding. Our range of products reflects the diversity of the
world’s needs, supporting our stakeholders in reducing their own carbon footprint along
the way.
Stone wool is a versatile material and forms the basis of all our businesses. With more
than 12 200 passionate colleagues in 40 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.
9/13
Management statement
18 May 2022
Registered Directors
Jens Birgersson
CEO
Kim Junge Andersen
CFO
Board of Directors
Thomas Kähler
Chairman
Carsten Bjerg
Deputy Chairman
Rebekka Glasser Herlofsen
Carsten Kähler
Ilse Irene Henne
Jørgen Tang-Jensen
Connie Enghus Theisen
Christian Westerberg
Berit Anette Kjerulf
10/13
Income statement
Unaudited
Audited
MEUR
Q1 2022
Q1 2021
FY 2021
Net sales
Other operating income
Operating income
Raw material costs and production material costs
Delivery costs and indirect costs
Other external costs
Personnel costs
Operating costs
EBITDA
Amortisation, depreciation and write-downs
EBIT
Income from investments in associated companies
Financial items
-19
-2
-9
Profit before tax
Tax on profit for the period
Profit for the period
Profit for the period attributable to:
Non-controlling interests
Shareholders of ROCKWOOL A/S
Earnings per share of 10 DKK (1.3 EUR)
Diluted earnings per share of 10 DKK (1.3 EUR)
Statement of comprehensive income
Unaudited
Audited
MEUR
Q1 2022
Q1 2021
FY 2021
Profit for the period
Items that will not be reclassified to income statement:
Actuarial gains and losses of pension obligations
Tax on other comprehensive income
-2
Items that may be subsequently reclassified to income statement:
Currency adjustment from translation of entities
Other comprehensive income
Comprehensive income for the period
Comprehensive income for the period attributable to:
Non-controlling interests
Shareholders of ROCKWOOL A/S
11/13
Business segments and sales reporting
Unaudited
Q1
Insulation segment
Systems segment
Eliminations
ROCKWOOL Group
MEUR
2022
2021
2022
2021
2022
2021
2022
2021
External net sales
724
498
200
173
-
-
924
671
Internal net sales
101
74
-
-
-101
-74
-
-
EBIT
79
59
23
31
-
-
102
90
EBIT margin
9.5%
10.3%
11.6%
17.6%
11.0%
13.3%
Goods transferred at a point in time
724
498
200
173
924
671
Geographical split of net sales
Unaudited
Audited
MEUR
Q1 2022
Q1 2021
FY 2021
Western Europe
557
417
1 834
Eastern Europe and Russia
178
105
562
North America, Asia and others
189
149
692
Total net sales
924
671
3 088
Balance sheet
(condensed)
Unaudited
Audited
MEUR
Q1 2022
Q1 2021
FY 2021
Assets
Intangible assets
Tangible assets
Right-of-use assets
Other financial assets
Deferred tax assets
Non-current assets
Inventories
Receivables
Cash
Current assets
Total assets
Equity and liabilities
Share capital
Currency translation adjustments
-134
-180
-134
Proposed dividend
Retained earnings
Hedging
-1
-1
-1
Non-controlling interests
Total equity
Non-current liabilities
Current liabilities
Total liabilities
Total equity and liabilities
12/13
Cash flow statement
(condensed)
Unaudited
Audited
MEUR
Q1 2022
Q1 2021
FY 2021
EBIT
Adjustments for amortisation, depreciation and write-downs
Adjustments of non-cash operating items
-3
-5
Changes in net working capital
-114
-97
-82
Cash flow from operations before financial items and tax
Cash flow from operating activities
Cash flow from investing activities
-70
-82
-302
Business acquisitions, net of cash
-1
-8
Free cash flow
-68
-54
Cash flow from financing activities
-194
Net cash flow
-52
-78
Cash available – beginning of period
Exchange rate adjustments on cash available
-5
-2
Cash available – end of period
Unutilised, committed credit facilities
Statement of changes in the equity
Unaudited
Shareholders of ROCKWOOL A/S
MEUR
Share
capital
Currency
translation
adjustments
Proposed
dividend
Retained
earnings
Hedging
Total
Non-
controlling
interests
Total
equity
Equity 1 January 2022
-134
-1
Profit for the period
Other comprehensive income
Comprehensive income for the period
Purchase of own shares
-2
-2
-2
Equity 31 March 2022
-134
-1
Equity 1 January 2021
-212
-1
Profit for the period
Other comprehensive income
Comprehensive income for the period
Share buy-back programme
-3
-3
-3
Purchase of own shares
-4
-4
-4
Equity 31 March 2021
-180
-1
13/13
Main figures in DKK million
Unaudited
Audited
MDKK
Q1 2022
Q1 2021
FY 2021
Net sales
6 873
4 988
22 966
Amortisation, depreciation and write-downs
398
366
1 493
EBIT
757
666
2 979
Profit before tax
613
654
2 923
Profit for the period
466
505
2 251
Total assets
24 841
21 310
22 902
Equity
18 261
16 248
17 803
Cash flow from operating activities
18
216
3 166
Cash flow from investing activities
523
616
2 306
Exchange rate
7.44
7.44
7.44
Accounting policies
This unaudited interim report has been prepared in accordance with IAS 34 and additional Danish regulations for the
presentation of quarterly interim reports by listed companies. The interim report has been prepared in accordance with the
accounting policies set out in the Annual Report for 2021 with no significant changes.
Significant accounting estimates and assumptions
In preparing this interim report Management has made various accounting estimates and assumptions that may significantly
influence the amounts recognised in the Consolidated Financial Statement and related information at the reporting date. The
accounting estimates and assumptions which Management considers to be material for the preparation and understanding
of the interim report are stated in Note 1.1 in the Annual Report 2021 and primarily relates to impairment testing, expected
lifetime for tangible assets, deferred tax assets and uncertain tax positions and pension obligations.
Disclaimer
The statements on the future in this report, 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.