Report on the first nine months of 2023
for ROCKWOOL A/S
Release no. 13 – 2023
to Nasdaq Copenhagen
Earnings call
ROCKWOOL Group will host an earnings call on 23 November 2023 at 11.00 CET. The call will be transmitted live on
www.rockwool.com.
1/14
22 November 2023
Strong results in a challenging market
Highlights
Sales in the first nine months of 2023 reached 2686 MEUR, a
decrease of six percent in local currencies and nine percent in
reported figures compared to last year, driven by lower sales in
many European markets.
Sales in Q3 2023 reached 903 MEUR, a decrease of four percent in
local currencies and 11 percent in reported figures compared to last
year.
EBITDA in the first nine months of 2023 reached 577 MEUR, up 22
percent, yielding a 21.5 percent EBITDA margin. Sales prices were
maintained while energy prices eased, bringing earnings back to a
normalised level.
EBITDA in Q3 2023 reached 219 MEUR, an increase of 68 percent
compared to the unsatisfactory low result last year. The EBITDA
margin was 24.3 percent.
EBIT in the first nine months of 2023 increased 27 percent to 383
MEUR, with a 14.3 percent EBIT margin, including the 27 MEUR
donation to the Foundation for Ukrainian Reconstruction*.
EBIT in Q3 2023 increased 115 percent to 146 MEUR, with a 16.2
percent EBIT margin, up 9.4 percentage points.
Investments reached 216 MEUR for the first nine months of 2023,
mainly related to electrical melter conversion in Flumroc, Switzerland
and Systems Division capacity.
Cash flow from operations before financial items and tax amounted
to 581 MEUR for the first nine months of 2023 compared to 339
MEUR in the same period last year.
Shareholders may from 22 November 2023 until 6 December 2023
request conversion of A shares to B shares. For further information
please refer to https://www.rockwool.com/group/
about-us/investors/conversion-shares/.
*) Of which 100 MDKK was approved at the EGM on 31 August 2022 and
the remaining 100 MDKK at the AGM on 29 March 2023. Together they
constitute the 27 MEUR donation.
Outlook 2023
Sales decline of 4-5 percent in local currencies, changed from
previously up to eight percent.
EBIT margin around 14 percent, changed from previously around
13 percent.
Investment level around 325 MEUR excluding acquisitions.
“Although sales development varies across
regions, with North America and parts of
Asia performing well and most of Europe
remaining sluggish, our overall financial
results year-to-date are strong. Sales are
down, but less than expected, while
earnings recovered to more normalised
levels, helped along by stable pricing and
lower if still high energy prices. I am pleased
with the strong cash flow, which stems
primarily from operational efficiency and our
ability to adapt as market conditions require.
Looking ahead, European construction
activity, both residential and commercial, is
likely to remain low, while demand in North
America and Asia looks more positive”.
CEO Jens Birgersson
2/14
Main figures / key figures for the Group
Unaudited Audited
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
Income statement items in MEUR
Net sales 903
1 010
2 686
2 952
3 907
EBITDA 219
131
577
473
638
Amortisation, depreciation and write-downs 73
63
194
172
236
EBIT 146
68
383
301
402
Profit before tax 148
63
391
232
358
Profit for the period 109
45
289
170
273
Balance sheet items in MEUR
Non-current assets
2 326
2 321
2 301
Current assets
1 150
1 253
1 127
Total assets
3 476
3 574
3 428
Equity
2 698
2 628
2 580
Non-current liabilities
210
207
206
Current liabilities
568
739
642
Net interest-bearing cash / (debt)
122
-42
-23
Net working capital
417
461
441
Invested capital
2 605
2 647
2 596
Cash flow items in MEUR
Cash flow from operating activities
263
145
501
252
394
Cash flow from investing activities
85
86
216
241
334
Free cash flow 178
59
285
11
60
Others
Number of full-time employees (end of period)
11 918
12 399
12 197
Ratios
EBITDA margin 24.3%
13.0%
21.5%
16.0%
16.3%
EBIT margin 16.2%
6.8%
14.3%
10.2%
10.3%
ROIC (rolling 4 quarters)
18.4%
16.4%
16.4%
Return on equity (rolling 4 quarters)
14.7%
9.9%
11.0%
Equity ratio
77.6%
73.5%
75.3%
Stock market information (DKK)
Earnings per share 38
16
100
59
93
Cash flow per share
91
50
173
87
136
Book value per share
931
904
887
Share capital (million)
216
216
216
Price per A share
1 707
1 189
1 636
Price per B share
1 708
1 191
1 637
Market cap (million)
36 829
25 665
35 311
Number of own shares
50 288
52 057
47 857
For definition of key figures and ratios see page 87 in the ROCKWOOL Group Annual Report 2022 available on our website: www.rockwool.com/.
3/14
Management report for the period
1 January to 30 September 2023
General update
Low economic activity and high interest rates and building costs reduced new-
build construction activity in most European markets, in both residential and
commercial building sectors. The Nordic, Central, and Eastern European
markets were negatively impacted while UK, France, and Southern Europe
fared better. North America and Asia performed well. Overall, ROCKWOOL
experienced lower sales during the first nine months of 2023 relative to the
same period in 2022.
Lower energy prices, stable sales prices and agility in operation normalised
margins and earnings. Sales prices remained stable in most markets compared
to year-end 2022, however we are diligently monitoring this to safeguard our
market share.
Global sales development
In the first nine months of 2023, ROCKWOOL generated net sales of 2686
MEUR, a decrease of six percent in local currencies. Currency translation had a
negative impact of three percentage points, which resulted in sales decline of
nine percent in reported figures.
In Q3 2023, ROCKWOOL generated net sales of 903 MEUR. While this is a
decrease of four percent in local currencies compared to Q3 2022, sales during
Q3 were higher than the previous three quarters, also in volume. Currency
translation had a negative impact of six percentage points, which resulted in a
sales decline of 11 percent in reported figures.
Regional sales development
In the first nine months of the year, sales in Western Europe amounted to 1588
MEUR, down seven percent in local currencies, and eight percent in reported
figures. Sales in France, Spain and the United Kingdom performed well, while
most other markets declined compared to same period last year. In Q3 2023,
sales in Western Europe amounted to 519 MEUR, down nine percent in local
currencies and down 10 percent in reported figures compared to same period
last year.
In Eastern Europe, sales for the first nine months of 2023 amounted to 488
MEUR, a decrease of 15 percent in local currencies and 23 percent in reported
figures. Most main markets showed double-digit sales decreases compared to
2022. Sales in Q3 2023 amounted to 189 MEUR, down two percent in local
currencies and 20 percent in reported figures. Several main markets
experienced double-digit sales decline in the quarter.
In the rest of the world, the first nine months of sales amounted to 610 MEUR,
an increase of six percent in local currencies and two percent in reported
figures. Sales in North America and South Asia performed well. In Q3 2023,
sales amounted to 195 MEUR, up six percent in local currencies and down two
Group sales
-
6
%
Sales in Western Europe
-
7
%
Sales in Eastern Europe
-
15
%
Sales in rest of the world
+
6
%
4/14
percent in reported figures. Sales in parts of Asia regained momentum and
delivered double-digit growth.
Regional sales
MEUR
Group profitability
During the first nine months of the year, EBITDA increased 22 percent to 577
MEUR resulting in an EBITDA margin of 21.5 percent compared to 16.0 percent
for the same period last year. The increase in margin was driven by stable
sales prices, lower although still high energy prices, operational efficiency, and
a positive product mix. We have reduced the volatility in energy prices by
hedging about half of our expected electricity and natural gas consumption for
the coming winter.
In Q3 2023, EBITDA increased 68 percent to 219 MEUR resulting in an
EBITDA margin of 24.3 percent compared to 13.0 percent for the same period
last year. Earnings in Q3 last year were strongly impacted by inflation and
particularly a surge in energy prices.
EBIT for the first nine months of 2023 increased 27 percent, reaching 383
MEUR. This corresponds to an EBIT margin of 14.3 percent compared to 10.2
percent for the same period last year and 13.6 percent for the first nine months
of 2021. The result for the first nine months of 2023 includes two donations to
the Foundation for Ukrainian Reconstruction totalling 27 MEUR, of which 13.4
MEUR (100 MDKK) was approved at the EGM on 31 August 2022 and the
remaining 13.4 MEUR (100 MDKK) at the AGM on 29 March 2023. Together
they constitute the full donation approved by the general assembly. Excluding
the 27 MEUR donation to the Foundation for Ukrainian Reconstruction, EBIT
margin for the first nine months of 2023 was 15.3 percent, an increase of 5.1
percentage points compared to last year.
In Q3 2023, EBIT amounted to 146 MEUR with an EBIT margin of 16.2 percent,
an increase of 9.4 percentage points compared to the unusually low margin in
Q3 2022. The result for Q3 2023 includes higher depreciations than last year
due to write down of goodwill in Insulation segment related to Central and
Eastern Europe.
1 725
1 588
631
488
596
610
0
400
800
1 200
1 600
2 000
2 400
2 800
3 200
YTD Q3 2022 YTD Q3 2023
Western Europe Eastern Europe and Russia North America, Asia and others
EBITDA
+
22
%
EBIT margin
+
4.1
%
-
points
20%
2
1
%
59%
59%
18%
2
3
%
5/14
EBIT & EBIT margin
MEUR
Net financial items ended positive at 8 MEUR for the first nine months of 2023.
Since March 2022 the foreign currency exposure on the intercompany balance
between ROCKWOOL A/S and the subsidiary in Russia has not been hedged.
Consequently we have recorded an unrealised exchange rate gain of 20 MEUR
during the first nine months of 2023, partly recovering last year’s unrealised
exchange rate loss of 34 MEUR.
The effective tax rate was 26 percent for the first nine months of 2023, down
0.8 percentage points compared to the same period last year and up 2.3
percentage points from full year 2022. The increase compared to full year 2022
is driven by the non-deductible donations to the Foundation for Ukrainian
Reconstruction.
Net profit for the first nine months of 2023 amounted to 289 MEUR, which is
119 MEUR higher than in the same period last year.
Balance sheet
Net working capital ended the first nine months at 417 MEUR, a decrease of 24
MEUR compared to year-end 2022 and 44 MEUR compared to Q3 2022. The
decrease was derived from lower trade receivables and inventory and was
partly offset by lower trade payables due to deflation and lower production
activity. Net working capital ratio ended at 11.5 percent, a decrease of 0.7
percentage points compared to last year.
Due to higher four quarters rolling EBIT, annualised return on invested capital
ended at 18.4 percent compared to 16.4 percent for the same period last year,
despite the higher invested capital.
At the end of Q3 2023, total assets amounted to 3476 MEUR, at level with year-
end 2022 and a decrease of 98 MEUR compared to Q3 2022. The
development mainly relates to inventory and receivables being high at Q3 last
year due to sales growth and inflation-driven sales price increases.
ROIC
+
2
.
0
%
-
points
90
111
105
95
102
131
68
101
104
133
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4
2021 2022 2023
13.3%
11.2%
11.0%
10.5%
6.8%
12.0%
12.9%
13.2%
14.3%
14.5%
16.2%
146
6/14
At the end of the period, the equity ratio remained solid at 78 percent.
Cash Flow
Operations continued to generate solid cash flow. For the first nine months of
2023 cash flow from operations before financial items and tax amounted to 581
MEUR, up 242 MEUR from the same period last year. The impact from
changes in net working capital was positive even with the transfer of 38 MEUR
to the Foundation for Ukrainian Reconstruction.
Capital expenditure, excluding acquisitions/disposals of subsidiaries and grants
received in China, was 235 MEUR, compared to 240 MEUR in the same period
last year. The conversion to the electrical melter in Flumroc (Switzerland),
additional production capacity in Bohumin (Czech Republic), new Rockpanel
capacity in Roermond (Netherlands), and additional Grodan capacity in Toronto
(Canada) were the largest individual investment projects in the first nine months
of 2023. In September 2023, the Belgium-based Rockfon distribution business
Charles Wille et cia SA was divested with limited financial impact.
Free cash flow for the first nine months was 285 MEUR, compared to 11 MEUR
in the same period last year mainly from strong operational cash flow.
Cash flow from financing was -228 MEUR in the first nine months of 2023
compared to 26 MEUR same period last year, mainly due to repayment of
drawings on our credit facilities.
The Group’s financial situation remains solid with a net interest-bearing cash
position of 122 MEUR end of Q3 2023 and unused credit facilities of 600
MEUR.
Operational cash flow before
financial items and tax
+242
MEUR
Free cash flow
+
274
MEUR
7/14
Business segments
Sales per business
MEUR
Key figures Insulation segment
MEUR
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
External net sales 711
796
2 098
2 327
EBIT 118
52
307
241
EBIT margin 14.9%
5.8%
13.0%
9.2%
Insulation segment sales for the first nine months of 2023 reached 2098 MEUR,
which is a decrease of seven percent in local currencies and 10 percent in
reported figures. In Q3 2023, Insulation segment sales reached 711 MEUR,
which is a decrease of four percent in local currencies and 11 percent in
reported figures compared to same quarter last year. Insulation sales in Europe
were still subdued as a result of lower volume, especially in Central and
Eastern Europe, while sales in North America and Asia grew.
Insulation segment EBIT for the first nine months of 2023 reached 307 MEUR
with an EBIT margin of 13 percent, an increase of 3.8 percentage points
compared to the same period last year. Based on our commitment to support
Ukraine reconstruction activities, a donation of 27 MEUR to the Foundation for
Ukrainian Reconstruction was recognised in the Insulation segment – half in Q1
and half in Q2 2023. Excluding these donations, EBIT margin in the first nine
months of 2023 was 14.1 percent, up 4.9 percentage points compared to 2022.
In Q3 2023, EBIT was 118 MEUR resulting in an EBIT margin of 14.9 percent,
up from an unusually low margin of 5.8 percent in Q3 2022 driven by high
energy inflation.
498
724
664
568
807
723
604
796
711
621
707
173
200
202
210
211
194
193
214
192
221
248
0
200
400
600
800
1 000
1 200
Q1 Q2 Q3 Q4
924
Insulation sales
-
7
%
Insulation EBIT margin
+
3
.
8
%
-
points
Systems
Insulation
6
71
866
778
1
018
7
97
842
955
1 010
917
903
8/14
EBIT per business
MEUR
Key figures Systems segment
MEUR
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
External net sales 192
214
588
625
EBIT 28
16
76
60
EBIT margin 14.6%
7.7%
12.9%
9.7%
Systems segment sales for the first nine months of 2023 amounted to 588
MEUR, which is a decrease of one percent in local currencies and a decrease
of six percent in reported figures. In Q3 2023, sales amounted to 192 MEUR,
which is a decrease of five percent in local currencies and 10 percent in
reported figures compared to Q3 2022. Sales increased in Lapinus and
Rockfon in Europe and Asia, while Grodan was impacted by late ordering cycle
for the high-season.
Systems segment EBIT was 76 MEUR in the first nine months of 2023, an
increase of 25 percent and an EBIT margin of 12.9 percent, an increase of 3.2
percentage points compared to the same period last year. In Q3 2023, EBIT
amounted to 28 MEUR with an EBIT margin of 14.6 percent, up 6.9 percentage
points. The improved margin relates mainly to lower input costs and solid
performance in Grodan in North America and Rockfon in Europe and Asia.
Conversion of shares
In accordance with ROCKWOOL’s articles of association, shareholders may
from 22 November 2023 (as per this announcement) until 6 December 2023
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/.
59
79 79
69
110
110
78
52
118
69
71
31
23
25
42
21
23
27
16
28
26
30
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4
Systems sales
-
1
%
Systems EBIT margin
+
3
.
2
%
-
points
Systems
Insulation
9
0
1
0
2
10
4
111
10
5
95
101
131
68
133
14
6
9/14
Outlook for the full year 2023
Market development in key regions like North America, Asia and UK have
improved compared to our previous expectations, while fourth quarter System
Divisions sales look more positive. As a result, we now expect a sales decline
of 4-5 percent, changed from previously up to eight percent.
Additionally, we now expect EBIT margin to be around 14 percent, changed
from previously around 13 percent. The improvement mainly comes from higher
sales than forecasted, continued lower energy prices, stable sales prices in
most markets, and agility in the operation.
We expect the investments excluding acquisitions to amount to around 325
MEUR.
2023 outlook overview
8 February 2023 10 May 2023 6 July 2023 30 August 2023 22 November 2023
Net sales
in local currencies
Sales decline of
up to 10 percent
Sales decline of
up to 10 percent
Sales decline of
up to 10 percent
Sales decline of up
to eight percent
Sales decline of 4-5
percent
EBIT margin
Between
8-10 percent
Around 10 percent Around 12 percent Around 13 percent Around 14 percent
Investments excluding
acquisitions
Around 400 MEUR Around 400 MEUR Around 400 MEUR Around 325 MEUR Around 325 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 and services. We help our customers and communities tackle
many of today’s biggest sustainability and development challenges, from energy
consumption and noise pollution to fire resilience, water scarcity and flooding. Our
product range reflects the diversity of the world’s needs, while supporting our
stakeholders in reducing their own carbon footprint.
Stone wool is a natural, fully recyclable, versatile material that forms the basis of all our
businesses. With approximately 11 900 dedicated colleagues in 40 countries and sales
in more than 120, we are the world leader in stone wool products, 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
22 November 2023
Registered Directors
Board of Directors
11/14
Income statement
Unaudited Audited
MEUR
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
Net sales
Other operating income
Operating income 904
Raw material costs and production material costs
Delivery costs and indirect costs
Other external costs
Personnel costs
Operating costs 685
EBITDA 219
Amortisation, depreciation and write-downs
EBIT 146
Income from investments in associated companies
-
-
Financial items
-5
-69
-45
Profit before tax 148
Tax on profit for the period
Profit for the period 109
EUR
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
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
Profit for the period 109
Items that will not be reclassified to income statement:
Tax on other comprehensive income
-4
Items that may be subsequently reclassified to income statement:
Currency adjustment from translation of entities
-21
-72
Hedging instruments, value adjustments
Tax on other comprehensive income
-1
Other comprehensive income -21
-68
Comprehensive income for the period 88
12/14
Business segments and sales reporting
Unaudited
YTD Q3 Insulation segment Systems segment Eliminations ROCKWOOL Group
MEUR 2023
2022
2023
2022
2023
2022
2023
2022
External net sales 2 098
2 327
588
625
-
-
2 686
2 952
Internal net sales 269
306
-
-
-269
-306
-
-
EBIT 307
241
76
60
-
-
383
301
EBIT margin
13.0%
9.2%
12.9%
9.7%
14.3%
10.2%
Goods transferred at a point in time
2 098
2 327
588
625
2 686
2 952
Geographical split of net sales
Unaudited Audited
MEUR
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
Western Europe
519
575
1 588
1 725
2 290
Eastern Europe and Russia
189
236
488
631
813
North America, Asia and others
195
199
610
596
804
Total net sales
903
1 010
2 686
2 952
3 907
Balance sheet
(condensed) Unaudited Audited
MEUR Q3 2023
Q3 2022
FY 2022
Assets
Intangible assets 150
Tangible assets 2 038
Right-of-use assets 82
Other financial assets 16
Deferred tax assets 40
Non-current assets 2 326
Inventories 395
Receivables 501
Cash 254
Current assets 1 150
Total assets 3 476
Equity and liabilities
Share capital
Currency translation adjustments -189
-117
Proposed dividend -
Retained earnings 2 855
Hedging 3
-1
Total equity 2 698
Non-current liabilities 210
Current liabilities 568
Total liabilities 778
Total equity and liabilities 3 476
13/14
Cash flow statement
(condensed) Unaudited Audited
MEUR
Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
EBIT
Adjustments for amortisation, depreciation and write-downs
Adjustments of non-cash operating items
-5
-9
-1
Changes in net working capital
-133
-148
Cash flow from operations before financial items and tax 291
Cash flow from operating activities 263
Cash flow from investing activities excluding acquisitions -91
-85
-222
-240
-333
Business acquisitions/disposals, net of cash 6
-1
-1
-1
Free cash flow 178
Cash flow from financing activities -133
-106
-228
-14
Net cash flow 45
-47
Cash available – beginning of period
Exchange rate adjustments on cash available
-13
-16
-18
-8
-9
Cash available – end of period 241
Unutilised, committed credit facilities
Statement of changes in equity
Unaudited
Shareholders of ROCKWOOL A/S
MEUR
Share
capital
Currency
translation
adjustments
Proposed
dividend
Retained
earnings
Hedging
Total
equity
Equity 1 January 2023 29
-117
-1
Profit for the period
Other comprehensive income
-72
-
-68
Comprehensive income for the period -
-72
Purchase of own shares
-3
-3
Expensed value of Restricted Share Units issued
Dividend paid
-102
-101
Equity 30 September 2023 29
-189
Equity 1 January 2022 29
-134
-1
Profit for the period
Other comprehensive income
Comprehensive income for the period -
Purchase of own shares
-2
-2
Expensed value of Restricted Share Units issued
Dividend paid
-102
-101
Equity 30 September 2022 29
14/14
Main figures in DKK million
Unaudited Audited
MDKK Q3 2023
Q3 2022
YTD
Q3 2023
YTD
Q3 2022
FY 2022
Net sales 6 725
7 513
20 007
21 960
29 068
Amortisation, depreciation and write-downs 542
466
1 443
1 280
1 760
EBIT 1 092
508
2 856
2 243
2 988
Profit before tax 1 103
470
2 914
1 727
2 664
Profit for the period 816
334
2 156
1 264
2 031
Total assets 25 921
26 581
25 493
Equity 20 120
19 544
19 186
Cash flow from operating activities 1 958
1 078
3 732
1 872
2 929
Cash flow from investing activities 638
639
1 611
1 793
2 481
Exchange rate 7.45
7.44
7.45
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 2022 with no significant changes.
Significant accounting estimates and assumptions
In preparing this interim report Management has made various accounting estimates and judgements that may significantly
influence the amounts recognised in the Consolidated Financial Statement and related information at the reporting date. The
accounting estimates and judgements 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 2022 and primarily relates to impairment testing, expected
lifetime for tangible assets, deferred tax assets and uncertain tax positions.
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.
ROCKWOOL A/S
Denmark
Tel: (+45) 46 56 03 00
CVR number: 54879415
Report date: 2023-11-22