Report on the first half year of 2022
for ROCKWOOL A /S
Release no. 10 – 2022
to Nasdaq Copenhagen
Earnings call
ROCKWOOL Group will host an earnings call on 24 August 2022 at 14.00 CEST. The call will be transmitted live on
www.rockwool.com/group/.
1/14
Strong sales growth and profitability in H1; volatile environment
leads to lower full-year EBIT margin estimate
Highlights
Sales in H1 2022 reached 1942 MEUR, an increase of
31 percent in local currencies compared to H1 last year.
Sales in Q2 2022 amounted to 1018 MEUR, an increase
of 26 percent in local currencies compared to Q2 2021.
Volume remained stable at a high level during the quarter.
EBITDA in H1 2022 reached 342 MEUR, up 14 percent,
with a 17.6 percent EBITDA margin.
EBITDA in Q2 2022 reached 187 MEUR, an increase of
17 percent. Due to the soaring energy and material costs
EBITDA margin at 18.4 percent was down 2.2 percentage
points from last year.
EBIT in H1 2022 increased 16 percent to 233 MEUR, with
a 12.0 percent EBIT margin, down 1.9 percentage points
from H1 2021.
EBIT in Q2 2022 increased 18 percent to 131 MEUR with
a 12.9 percent EBIT margin, down 1.4 percentage points
from Q2 2021.
Investments excl. acquisitions reached 155 MEUR in H1
2022, at the level of last year.
Annualised return on invested capital reached 18 percent
compared to 19 percent in H1 2021.
Continued good progress on our sustainability goals.
Shareholders may now and until 7 September 2022
request conversion of A shares to B shares. For further
please refer to https://www.rockwool.com/group/about-
us/investors/conversion-shares/.
Outlook 2022
Growth in net sales of 20-25 percent in local currencies.
EBIT margin between 10 and 12 percent (as announced
on 18 August 2022).
Investment level around 375 MEUR (as announced on 18
August 2022).
“We saw continued strong growth in the second
quarter of the year, driven by high volume and
necessary price increases. Price increases helped
profitability to recover in the second quarter despite
rampant inflation.
Looking ahead to the remainder of the year, we see
a tougher macroeconomic environment and in
particular yet another surge in energy costs and price
volatility. We expect this will impact us negatively
with in excess of 100 MEUR in the second half of the
year, which cannot be fully priced in with such short
notice. We maintain our sales growth forecast, but
based on current energy price expectations, lower
the full-year EBIT margin estimate to 10-12 percent”.
CEO Jens Birgersson
2/14
Main figures / key figures for the Group
Unaudited Audited
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
FY 2021
Income statement items in MEUR
Net sales 1 018 778 1 942
1 449 3 088
EBITDA 187 160 342
299 602
Amortisation, depreciation and write-downs
56 49 109
98 201
EBIT
131 111 233
201 401
Profit before tax
86 109 169
197 393
Profit for the period
62 84 125
152 303
Balance sheet items in MEUR
Non-current assets 2 267
2 017 2 129
Current assets
1 305
887 951
Total assets
3 572
2 904 3 080
Equity
2 573
2 182 2 394
Non-current liabilities
195
180 163
Current liabilities
804
542 523
Net interest-bearing cash / (debt)
-78
16 76
Net working capital
505
321 306
Invested capital
2 645
2 157 2 294
Cash flow items in MEUR
Cash flow from operating activities 105 145 107
174 426
Cash flow from investing activities 85
68
155
151 310
Free cash flow
20
77
-48
23 116
Others
Number of full-time employees (end of period) 12 424
11 644 11 968
Ratios
EBITDA margin 18.4% 20.6% 17.6%
20.7% 19.5%
EBIT margin 12.9% 14.3% 12.0%
13.9% 13.0%
ROIC (rolling 4 quarters)
18.0%
19.3% 18.8%
Return on equity (rolling 4 quarters)
11.6%
14.4% 13.5%
Equity ratio
72.0%
75.0% 77.7%
Stock market information (DKK)
Earnings per share 21 29 43
52 104
Cash flow per share 36
50
37
60 147
Book value per share
885
749 823
Share capital (million)
216
216 216
Price per A share
1 579
2 647 2 379
Price per B share
1 584
3 049 2 859
Market cap (million)
34 104
61 263 56 295
Number of own shares
52 202
59 428 56 228
For definition of key figures and ratios see page 97 in the ROCKWOOL Group Annual Report 2021 available on our website:
www.rockwool.com/group/.
3/14
Management report for the period
1 January to 30 June 2022
Global sales development
Sales showed strong growth and reached a record high level, primarily driven
by necessary sales price increases. All Insulation business units continued to
experience solid demand and delivered double-digit growth. Systems segment
continued as expected to struggle due to lower sales in North America.
In the first half of 2022, ROCKWOOL Group generated net sales of 1942
MEUR, an increase of 31 percent in local currencies. Currency translation had
a positive impact of three percentage points, which resulted in sales growth of
34 percent in reported figures.
In Q2 2022, ROCKWOOL Group generated record level net sales of 1018
MEUR, an increase of 26 percent in local currencies compared to Q2 2021. The
growth was driven by necessary price increases with high volumes at the level
of last year. Currency translation had a positive impact of five percentage
points, which resulted in sales growth of 31 percent in reported figures.
Regional sales development
In the first half of the year, sales in Western Europe amounted to 1150 MEUR,
up 29 percent in local currencies, and 30 percent in reported figures. Sales in
all markets increased compared to same period last year. In Q2 2022, sales in
Western Europe amounted to 593 MEUR, up 26 percent in local currencies and
up 27 percent in reported figures compared to same period last year. All
markets experienced double-digit growth, especially Germany, the United
Kingdom, Italy, and Norway contributed to the sales growth.
In Eastern Europe, sales for the first half of 2022 amounted to 395 MEUR, an
increase of 66 percent in local currencies and 69 percent in reported figures.
Sales in Q2 2022 amounted to 217 MEUR, up 57 percent in local currencies
and 69 percent in reported figures. Most countries experienced double-digit
sales growth in the quarter, with especially strong performance in Poland,
Romania, and Hungary.
In the rest of the world, H1 sales amounted to 397 MEUR, an increase of 11
percent in local currencies and 20 percent in reported figures. In Q2 2022, sales
amounted to 208 MEUR, up four percent in local currencies and 14 percent in
reported figures. We experienced a strong quarter in Canada contrasted by a
weak one in the United States.
Group sales
+31%
Sales in Western Europe
+29%
Sales in Eastern Europe
+66%
Sales in rest of the world
+11%
4/14
Group profitability
During the first half of the year, EBITDA increased 14 percent to 342 MEUR
resulting in an EBITDA margin of 17.6 percent compared to 20.7 percent for the
same period last year. The decline in margin is driven by high input cost and
lower demand in the Systems segment in North America.
In Q2 2022, EBITDA reached 187 MEUR an increase of 17 percent compared
to Q2 2021. The aggregated price increase during Q2 was 27 percent
compared to the same period last year. In the quarter, we saw a continued high
inflation of more than 60 percent on material, energy and logistic costs. While
the sales price increases in absolute amounts fully offset the increase in input
and logistic costs, there is still a decline in EBITDA margin of 2.2 percentage
points. Further price increases have been initiated for the second half of the
year.
EBIT for the first half of 2022 increased 16 percent, reaching 233 MEUR,
corresponding to an EBIT margin of 12.0 percent compared to 13.9 percent for
the same period last year. In Q2 2022, EBIT amounted to 131 MEUR with an
EBIT margin of 12.9 percent. EBIT was, in addition to the decline in EBITDA,
impacted by higher depreciation primarily from the new production facility in the
United States.
885
1 150
234
395
330
397
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
H1 2021 H1 2022
Western Europe Eastern Europe and Russia North America, Asia and others
EBITDA
+14%
EBIT margin
-1.9%-points
Regional sales
MEUR
23%
16%
61%
59%
20%
21%
5/14
EBIT & EBIT
margin
MEUR
During March, an intercompany balance between ROCKWOOL A/S and our
subsidiary in Russia became unhedged and we have consequently recorded an
unrealised exchange loss of 58 MEUR end of Q2 2022.
The effective tax rate was 26 percent for the first half of 2022, up 3.2
percentage points from the same period last year and up three percentage
points from full year 2021. The increase is caused by the unrealised exchange
loss.
Net profit for the first half of 2022 amounted to 125 MEUR, which is 27 MEUR
lower than in the same period last year.
Balance sheet
Net working capital ended H1 2022 at 505 MEUR, an increase of 199 MEUR
compared to year-end 2021 and 184 MEUR compared to Q2 2021, mainly
reflecting the higher inventory values due to higher purchase costs and
increased trade receivables. The net working capital ratio ended at 14.1
percent, 2.7 percentage points higher than last year.
Due to higher invested capital, annualised return on invested capital ended at
18.0 percent compared to 19.3 percent for the same period last year.
At the end of H1 2022, total assets amounted to 3572 MEUR, an increase of
492 MEUR compared to year-end 2021 and 668 MEUR compared to Q2 2021.
The increase is mainly related to ongoing investments combined with increased
inventories and trade receivables due to sales growth and increased sales
prices, as well as increased exchange rates of the U.S. and Canadian dollar.
At the end of the period, the equity ratio remained solid at 72 percent after
dividend payment of 101 MEUR.
As announced on 4 August 2022, the Company has called for an Extraordinary
General Meeting on 31 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.
ROIC
-1.3%-points
80
58
100 100
90
111
105
95
102
131
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4
2020 2021 2022
12.3%
14.3%
13.3%
14.3%
11.2%
13.2%
10.0%
11.0%
14.9%
12.9%
6/14
Cash Flow
Cash flow from operations before financial items and tax in the first half of 2022
amounted to 154 MEUR, down 48 MEUR from the same period last year.
Change in net working capital had a negative impact on cash flow of 184 MEUR
compared to 99 MEUR in H1 last year, primarily due to higher inventory values
and higher trade receivables from the increase in sales.
Capital expenditure excluding acquisitions was 155 MEUR in H1 compared to
150 MEUR in the same period last year. The ongoing 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 in H1 2022.
Free cash flow in Q2 2022 was 20 MEUR reducing the negative free cash flow
in H1 to -48 MEUR compared to 23 MEUR in the same period last year.
Cash flow from financing was 132 MEUR in H1, mainly due to drawings on our
credit facilities.
The Group’s financial situation remains solid with net interest-bearing debt of 78
MEUR at the end of H1 2022 and unused credit facilities of 375 MEUR.
Business segments
483
498
724
438
568
807
502
604
1
491
621
1
166
173
200
145
210
211
168
193
1
209
221
1
0
100
200
300
400
500
600
700
800
900
1 000
1 100
Q1 Q2 Q3 Q4
Operational cash flow before
financial items and tax
-48 MEUR
Free cash flow
20 MEUR in Q2 2022
Sales per business
MEUR
Systems
Insulation
649
671
670
924
583
778
1 018
797
700
842
7/14
Key figures Insulation segment
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
External net sales 807 568 1 531 1 066
EBIT 110 69 189 128
EBIT margin 12.1% 10.6% 10.9% 10.5%
Insulation segment sales for the first half of 2022 reached 1531 MEUR, which is
an increase of 40 percent in local currencies and 44 percent in reported figures.
In Q2 2022, sales reached 807 MEUR, which is an increase of 37 percent in
local currencies and 42 percent in reported figures compared to Q2 last year.
The Q2 growth was driven by sales price increases in all main markets.
Insulation segment EBIT for the first half of 2022 reached 189 MEUR with an
EBIT margin of 10.9 percent, an increase of 0.4 percentage points compared to
the same period last year. In Q2 2022, EBIT increased by 41 MEUR to 110
MEUR. The EBIT margin ended at 12.1 percent, 1.5 percentage points above
last year due to country mix and necessary sales price increases.
Key figures Systems segment
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
External net sales 211 210
411 383
EBIT 21 42
44 73
EBIT margin 10.0%
20.1%
10.8% 19.0%
Systems segment sales for the first half of 2022 amounted to 411 MEUR, which
is an increase of four percent in local currencies and seven percent in reported
figures. In Q2 2022, sales amounted to 211 MEUR, which is a decrease of 3.5
percent in local currencies and at level in reported figures compared to Q2
2021. Rockfon and Rockpanel performed well and contributed with double-digit
growth. Grodan sales were still negatively impacted by an overstocked supply
chain in North America.
56
59
79
40
69
110
76
78
0.1
64
69
0.1
24
31
23
18
42
21
24
27
0.1
36 26
0.1
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4
Insulation sales
+40%
Insulation EBIT margin
+0.4%-points
Systems sales
+4%
EBIT per business
MEUR
Systems
Insulation
80
90
102
58
111
100
105
100
95
131
8/14
Systems segment EBIT was 44 MEUR in the first half of 2022, a decrease of 39
percent and an EBIT margin of 10.8 percent, a decrease of 8.2 percentage
points compared to the same period last year. In Q2 2022, EBIT amounted to
21 MEUR with an EBIT margin of 10.0 percent, down 10.1 percentage points.
The lower margin relates mainly to impact from a negative product mix, reduced
volume cost leverage, and continued investments in business expansions.
Sustainability
Progress on sustainability goals
Conversion of shares
In accordance with ROCKWOOL’s articles of association, shareholders may
now (as per this announcement) and until 7 September 2022 request
conversion of A shares to B shares. Further information on how to submit a
conversion request and on the terms and conditions can be found on the
company’s website:
https://www.rockwool.com/group/about-us/investors/conversion-shares/.
Systems EBIT margin
-8%-points
9/14
Outlook for the full year 2022
During the second quarter and into July, we experienced a significant increase
in energy market volatility with unprecedented surges in natural gas and
electricity prices.
Even though our energy-related input costs are extraordinarily volatile, as
planned we will continue to raise prices gradually for the remainder of the year.
We forecast sales growth in local currencies of 20 to 25 percent primarily driven
by price, while we based on current energy price expectations, forecast an
EBIT margin between 10 to 12 percent.
We expect the full year investment level to be around 375 MEUR.
2022 outlook overview
9 February 2022
18 May 2022
18 August 2022
24 August 2022
Net sales
in local currencies
Sales growth of
15
-20 percent
Sales growth of
20
-25 percent
Sales growth of
20
-25 percent
Sales growth of
20
-25 percent
EBIT margin
Around 13 percent
Around 13 percent
Between 10
-12
percent
Between 10
-12
percent
Investments excluding
acquisitions
Around 500 MEUR
Around 425 MEUR
Around 375 MEUR
Around 375 MEUR
Further information:
Kim Junge Andersen, Chief Financial Officer
+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 12 400 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.
10/14
Management statement
24 August 2022
Registered Directors
Board of Directors
11/14
Income statement
Unaudited Audited
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
FY 2021
Net sales 1 018 778
Other operating income 2 1
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 56 49
EBIT
Income from investments in associated companies - -
- -
Financial items -45 -2
-64 -4
-9
Profit before tax
Tax on profit for the period 24 25
Profit for the period 62 84
Profit for the period attributable to:
Non-controlling interests - -
- -
-
Shareholders of ROCKWOOL A/S
Earnings per share of 10 DKK (1.3 EUR) 2.9 3.9
Diluted earnings per share of 10 DKK (1.3 EUR) 2.9 3.9
Statement of comprehensive income
Unaudited Audited
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 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
Hedging instruments, value adjustments
-
Other comprehensive income
Comprehensive income for the period
Comprehensive income for the period attributable to:
Non-controlling interests - -1
- -1
-
Shareholders of ROCKWOOL A/S 218 89
12/14
Business segments and sales reporting
Unaudited
YTD Q2
Insulation segment
Systems segment
Eliminations
ROCKWOOL Group
MEUR
2022
2021 2022
2021
2022 2021
2022 2021
External net sales 1 531
1 066 411
383
- -
1 942 1 449
Internal net sales 203
158 -
-
-203 -158
- -
EBIT
189
128
44
73
-
-
233
201
EBIT margin
10.9%
10.5% 10.8%
19.0%
12.0% 13.9%
Goods transferred at a point in time
1 531
1 066
411
383
1 942
1 449
Geographical split of net sales
Unaudited
Audited
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
FY 2021
Western Europe
593
468 1 150
885 1 834
Eastern Europe and Russia
217
129 395
234 562
North America, Asia and others
208
181 397
330 692
Total net sales
1 018
778
1 942
1 449
3 088
Balance sheet
(condensed)
Unaudited
Audited
MEUR
Q2 2022
Q2 2021
FY 2021
Assets
Intangible assets 171
Tangible assets 1 974
Right-of-use assets
Other financial assets
Deferred tax assets
Non-current assets
Inventories 433
Receivables 613
Cash
Current assets
Total assets
Equity and liabilities
Share capital
Currency translation adjustments 20
-173 -134
Proposed dividend
-
- 102
Retained earnings
Hedging
-3 -1
Non-controlling interests
-
Total equity
Non-current liabilities 195
Current liabilities
Total liabilities
Total equity and liabilities
13/14
Cash flow statement
(condensed) Unaudited Audited
MEUR
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
FY 2021
EBIT
Adjustments for amortisation, depreciation and write-downs
Adjustments of non-cash operating items
-1
Changes in net working capital
-70
-2 -184
-99 -82
Cash flow from operations before financial items and tax
Cash flow from operating activities
Cash flow from investing activities
-85
-68
-155
-150
-302
Business acquisitions, net of cash
-
-
-
-1
-8
Free cash flow 20
Cash flow from financing activities -4
-97 132
-95 -194
Net cash flow
-20
-72
-78
Cash available – beginning of period
Exchange rate adjustments on cash available
Cash available – end of period
Unutilised, committed credit facilities
Statement of changes in the equity
Unaudited
Shareholders of ROCKWOOL A/S
MEUR
Share
capital
C
urrency
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 154
Comprehensive income for the period
Purchase of own shares
-2
-2
-2
Expensed value of Restricted Share Units issued
Dividend paid -102
-101
-101
Equity 30 June 2022
Equity 1 January 2021
-212
-1
Profit for the period
Other comprehensive income 39
-2
Comprehensive income for the period - 39 -
Share buy-back programme
-3
-3
-3
Purchase of own shares
-3
-3
-3
Expensed value of Restricted Share Units issued
Dividend paid -94
-93
-93
Equity 30 June 2021
-173
-3
14/14
Main figures in DKK million
Unaudited Audited
MDKK
Q2 2022
Q2 2021
YTD
Q2 2022
YTD
Q2 2021
FY 2021
Net sales 7 574 5 787
14 447
10 775 22 966
Amortisation, depreciation and write-downs 416 366
814
732 1 493
EBIT
978 828
1 735
1 494 2 979
Profit before tax
644 806
1 257
1 460 2 923
Profit for the period
464 622
930
1 127 2 251
Total assets
26 572
21 592
22 902
Equity
19 137
16 226 17 803
Cash flow from operating activities
776
1 082
794
1 298
3 166
Cash flow from investing activities 631 509
1 154
1 125 2 306
Exchange rate
7.44 7.44
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.