Recticel reports H1 profit growth as it completes its first year as a building sustainability specialist

PRESS RELEASE

Regulated information – Inside information      

Brussels, 30 August 2024 – 07:00 CET                 

Recticel reports H1 profit growth as it completes its first year as a building sustainability specialist

European markets have largely remained slow in the first half with adverse weather conditions causing delays in some construction sites. While the residential sector has continued to underperform, the commercial market has shown more resilience. 

We do believe that we may have reached the bottom of the cycle in most Western European markets and we start to see a return to market growth in the UK. 

After a pre-Easter price hike in A-Chemicals, prices for raw materials have dropped, with potential to drop further in the second half of 2024.

Jan Vergote, CEO Recticel : 

“Our H1 2024 results confirm the effectiveness of our market driven strategy. 

In Insulation Boards, we are lowering our cost base and increasing sales volumes. Our operational value creation is succesful. Our recent substantial expansion of the Belgian and French plants is on stream. We are building up our innovation pipeline and are launching 15 new Insulation Boards products over the next 18 months. 

At the same time, we are successfully rolling out Trimo’s premium Insulated Panels strategy throughout Western Europe. The integration of Rex panels is on track.

In the first half-year 2024, our Soundcoat Acoustic Insulation materials have been used by all major US aerospace companies including SpaceX, Blue Origin, Boeing and Rocket Lab.

We are proud to confirm that Recticel’s net-zero targets were approved by SBTi in Q1 2024.

We remain focused on significant growth of the business and are well positioned to execute M&A initiatives, which we evaluate on a permanent basis.”

OUTLOOK

We see continued volume growth in H2 2024, albeit in comparison with a strong H2 2023.  Adjusted EBITDA is expected to land around EUR 50 million.

CONSOLIDATED GROUP RESULTS – KEY FIGURES

in million EUR

A change in the scope of consolidation took place in H1 2024: the acquisition of REX Panels & Profiles SA (100%) on 10 January 2024.

Sales: from EUR 266.1 million in H1 2023 to EUR 298.6 million in H1 2024.

Q2 2024 sales increased by 14.2% from EUR 138.4 million in 2023 to EUR 158.0 million, including  0.6% currency effect.

H1 2024 sales increased by 12.2% from EUR 266.1 million to EUR 298.6 million, including 0.7% currency impact. 

Adjusted EBITDA: from EUR 18.2 million in H1 2023 to EUR 25.1 million in H1 2024. Adjusted EBITDA margin on sales increased from 6.8% to 8.4%.

Adjusted operating profit (loss): from EUR 6.7 million in H1 2023 to EUR 9.8 million in H1 2024. Adjusted operating profit (loss) margin on sales increased from 2.5% to 3.3%.

Adjustments to Operating profit (loss) on continuing operations in H1 2024 amount to  EUR -3.2 million and include:

•     EUR -2.8 million of restructuring costs;

•     EUR -0.5 million of other adjustments: mainly M&A related transaction and legal costs.

¹   As announced in the press release of 14 June 2023, the Engineered Foams activities have been fully divested and accounted for as Discontinued Operations (IFRS 5).

²   REX Panels & Profiles (Insulated Panels) is fully consolidated as of 10 January 2024.

³   Income from other associates: income from associates not considered as being part of the Group’s core business are not integrated in Operating profit (loss); i.e. TEMDA2 (Ascorium, formerly Automotive Interiors).

EBITDA: from EUR 15.9 million in H1 2023 to EUR 21.9 million in H1 2024. EBITDA margin on sales increased from 6.0% to 7.3%.

Operating profit (loss): from EUR 4.0 million in H1 2023 to EUR 6.6 million in H1 2024. Operating profit (loss) margin on sales increased from 1.5% to 2.2%.

Financial result: from EUR -6.2 million in H1 2023 to EUR 2.2 million in H1 2024.

Interest charges decreased from EUR -6.7 million in H1 2023 to EUR -1.3 million in H1 2024 following  the proceeds from the divestment of Engineered Foams to Carpenter Co.  Consequently the interest income has increased due to the cash position from EUR +0.6 million in H1 2023 to EUR 3.1 million in H1 2024.

Income and impairment from other associates: from EUR -5.6 million in H1 2023 to EUR 0 million in H1 2024 relates primarily to the partial impairment of the TEMDA2 investment value (at 49%).  

Income and deferred taxes: from EUR -3.1 million in H1 2023 to EUR -4.3 million in H1 2024.

•     Current income tax: from EUR -2.3 million in H1 2023 to EUR -3.3 million in H1 2024; current tax charges increase in line with the higher results.

•     Deferred tax: from EUR -0.7 million in H1 2023 to EUR -1.0 million in H1 2024; 

Result of the period of continuing operations: from EUR -10.9 million in H1 2023 to EUR +4.5 million in H1 2024.

Result from discontinued operations: from EUR 13.0 million in H1 2023 to EUR 2.0 million in H1 2024.

The result from discontinued operations in H1 2024 mainly represents the net capital gain as a result of the final agreement and settlement of the Completion Accounts on 5 July 2024 on the disposal of the Engineered Foams activities sold to Carpenter Co. amounting to EUR +2.0 million and composed of the following items:

•     gain on the divestment of Engineered Foams: EUR +2.3 million; 

•     direct attributable transaction costs: EUR -0.3 million.

The total result (restated) of discontinued operations in H1 2023 was composed of:

•     the result until 12 June 2023 of the Engineered Foams activities sold to Carpenter Co.  (EUR -0.5 million);

•     the net capital gain on the disposal of the Engineered Foams activities sold to Carpenter Co. amounting to EUR +10.7 million;

•     the result of the Aquinos closing account settlement (including the release of the closing accounts provision and the interest on the Aquinos receivable (EUR +2.0 million).

Consolidated result of the period (share of the Group): from EUR 2.2 million in H1 2023 to EUR 6.6 million in H1 2024.

FINANCIAL POSITION

in million EUR

APPENDICES

All figures and tables contained in these annexes have been compiled in accordance with the IFRS accounting and valuation principles, as adopted within the European Union. The applied valuation principles, as published in the latest annual report at 31 December 2023, were applied for the figures included in this press release.

The analysis of the risk management is described in the annual report and the IAS 34 Interim report per 30 June 2024, both which are available fromwww.recticel.com.

CONSOLIDATED INCOME STATEMENT

in thousand EUR  

³

³

¹

¹   As announced in the press release of 14 June 2023, the Engineered Foams activities have been fully divested and accounted for as Discontinued Operations (IFRS 5).

²   REX Panels & Profiles SA is fully consolidated as of 10 January 2024.

³   Income from other associates: income from associates not considered as being part of the Group’s core business are not integrated in Operating profit (loss); i.e. TEMDA2 (Ascorium, formerly Automotive Interiors).

EARNINGS PER SHARE

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOW

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR YEAR ENDING 30 JUNE 2024

in thousand EUR

RECONCILIATION WITH ALTERNATIVE PERFORMANCE MEASURES

in thousand EUR

GLOSSARY

IFRS MEASURES

Consolidated (data): financial data following the application of IFRS 11, whereby joint ventures and associates are integrated on the basis of the equity method.

ALTERNATIVE PERFORMANCE MEASURES

In addition, the Group uses alternative performance measures (Alternative Performance Measures or "APM") to express its underlying performance and to help the reader to better understand the results. APM are not defined performance indicators by IFRS. The Group does not present APM as an alternative to financial measures determined in accordance with IFRS and does not give more emphasis to APM than the defined IFRS financial measures.

Adjusted EBITDA: EBITDA before Adjustments (to Operating Profit).

Adjusted operating profit (loss): Operating profit (loss) + adjustments to operating profit (loss).                      

Adjustments to Operating profit (loss) include operating revenues, expenses and provisions that pertain to restructuring programmes (redundancy payments, closure & clean-up costs, relocation costs,...), reorganisation charges and onerous contracts, impairments on assets ((in)tangible assets and goodwill), revaluation gains or losses on investment property, gains or losses on divestments of non-operational investment property, and on the liquidation of investments in affiliated companies, revenues or charges due to important (inter)national legal issues and costs of advisory fees incurred in relation to acquisitions or business combination projects, costs of advisory fees incurred in relation to acquisitions, divestments or business combination projects, including fees incurred in connection with their financing and reversals of inventory step up values resulting from purchase price allocations under IFRS 3 Business Combinations.

Current ratio: Current assets / Current liabilities.

EBITDA: Operating profit (loss) + depreciation, amortisation and impairment on assets; all of continued activities.

Gearing: Net financial debt / Total equity.

Income from associates: Income considered as being part of the Group’s core business are integrated in Operating profit (loss).

Income from other associates: Income from associates not considered as being part of the Group’s core business are not integrated in Operating profit (loss).

Leverage: Net financial debt / EBITDA (last 12 months).

Margin: EBITDA margin, Adjusted EBITDA margin, Operating Profit (loss) margin and Adjusted operating profit (loss) margin are expressed as a % on Sales 

Net free cash-flow: Sum of the (i) Net cash flow after tax from operating activities, (ii) the Net cash flow from investing activities, (iii) the Interest paid on financial liabilities and (iv) reimbursement of lease liabilities; as shown in the consolidated cash flow statement.

Net financial debt: Interest bearing financial liabilities and lease liabilities at more than one year + interest bearing financial liabilities and lease liabilities within maximum one year + accrued interests – cash and cash equivalents + Net marked-to-market value position of hedging derivative instruments. The interest-bearing borrowings do not include the drawn amounts under non-recourse factoring/forfeiting programs.

Net working capital: Inventories and contracts in progress + Trade receivables + Other receivables + Income tax receivables – Trade payables – Income tax payables – Other amounts payable

Operating profit (loss): Profit before income from other associates, fair value adjustments of option structures, earnings of discontinued activities, interests and taxes. Operating profit (loss) comprises income from associates of continued activities.

Total net financial debt: Net financial debt + the drawn amounts under off-balance sheet non-recourse factoring programs.

Uncertainty risks concerning the forecasts made

This press report contains forecasts which entail risks and uncertainties, including with regard to statements concerning plans, objectives, expectations and/or intentions of the Recticel Group and its subsidiaries. Readers are informed that such forecasts entail known and unknown risks and/or may be subject to considerable business, macroeconomic and competition uncertainties and unforeseen circumstances which largely lie outside the control of the Recticel Group. Should one or more of these risks, uncertainties or unforeseen or unexpected circumstances arise or if the underlying assumptions were to prove to be incorrect, the final financial results of the Group may possibly differ significantly from the assumed, expected, estimated or extrapolated results. Consequently, neither Recticel nor any other person assumes any responsibility for the accuracy of these forecasts.

About Recticel Group

Recticel Group is a Belgian insulation company with a strong presence in Europe and the USA. It offers smart insulation solutions that advance a carbon-free economy and a better quality of life.  

Recticel Group delivers upon a portfolio of Insulation Boards, Insulated Panels and Acoustic Solutions.

Recticel Insulation designs polyurethane thermal and thermo-acoustic boards for optimal building comfort and energy efficiency. This includes vacuum insulation panels (VIP) by Turvac.

Trimo enables the highest aesthetic standards and extends architectural capabilities with its mineral wool insulated panels and modular space solution, primarily in non-residential applications. With the recent acquisition of REX Panels & Profiles, the portfolio now includes PIR insulated panels.

Soundcoat provides acoustic solutions used in some of the world’s leading technological innovations.

At the end of 2023, Recticel employed 1,255 people and had achieved sales of EUR 529.4 million. Its operations are spread over seven countries.

The Science Based Targets initiative (SBTi) approved Recticel’s near-term targets for the reduction of  scope 1, 2 & 3 greenhouse gas emissions by 2030 (from base year 2021) and net-zero targets for 2050.

Recticel is listed on Euronext in Brussels (Euronext: RECT - Reuters: RECT.BR - Bloomberg: RECT:BB).

Financial calendar 

Recticel NV/SA

Bourgetlaan 42 avenue du Bourget

1130 Brussels

Belgium

This press release is available in English and Dutch on www.recticel.com.