RECTICEL
Cost rises pressure earnings in 2010 / Automotive top performer / Restructuring in flexible foam
Earnings of polyurethane foam specialist Recticel (Brussels / Belgium; www.recticel.com) came under pressure in 2010 as the group was unable to pass on its EUR 52m higher starting materials costs in full. Despite a 5.6% increase in sales to EUR 1.35 bn, EBITDA shrank by 18% to EUR 83.5m, EBIT plunged by 40% to EUR 27.6m and the net result declined by 30% to EUR 14.4m. Top performer was Automotive, which swung into profit after a loss in 2009. The company pared its debt burden from EUR 192m to EUR 159m.
In Recticel’s largest business segment, Flexible Foam, EBITDA fell by 51% to EUR 22.2m, despite higher volumes. Sales revenue declined by nearly 35% to EUR 603m, due mainly to problems in Spain, where a building market plagued by overcapacity prevented higher costs being passed on. After incurring losses of EUR 1.6m in the Spanish market, the group has decided to “downsize its industrial footprint” there – see Plasteurope.com of 17.02.2011. Restructuring efforts in Spain reduced earnings by EUR 7.9m, and legal fees in connection with an EU anti-trust investigation took a EUR 1.9m bite.
In the Automotive segment, EBITDA rebounded to EUR 26.9m after a loss of EUR 6.9m a year earlier, as sales rose 12% to EUR 325m. Recticel said the profitability of the Interiors unit improved significantly, due to higher volumes and successful restructuring, and sales increased by 22% to EUR 170.2m. Revenues of the Seating unit improved by 4.5% to EUR 136.6m, but the expiration of state stimulus packages ate into growth. The Exteriors unit, which mainly carries out toll compounding for BASF – see Plasteurope.com of 04.11.2008 – saw sales recede by 7.4% to EUR 18.1m.
EBITDA of the Bedding segment deteriorated by 58% to EUR 17.3m and sales by 6.2% to EUR 293m in 2010, reflecting Recticel’s sale of its 50% interest in Cofel to its joint venture partner Pikolin (Zaragoza / Spain) in 2009 – see Plasteurope.com of 18.06.2009. Adjusted for the divestment, the earnings decline was held to 3.7% and sales increased by 5.8%.
Hard hit by higher costs that could not be passed on, EBITDA of the Insulation segment declined by 12% to EUR 35.5m, as sales gained 12.6% to EUR 187.4m. As structural demand in this segment is expected to improve, thanks especially to stricter insulation standards and higher energy costs, the Belgian group is building a new plant for thermal insulation panels in France, which is due on stream in early 2013.
Pointing to a “positive orientation” of its main markets, Recticel is forecasting a “further increase” in overall sales for 2011. Here it is banking on being able to pass on higher raw materials prices faster as well as improving cost efficiency through restructuring.
e-Service:
Detailed press release on Recticel 2010 annual results as a PDF document
In Recticel’s largest business segment, Flexible Foam, EBITDA fell by 51% to EUR 22.2m, despite higher volumes. Sales revenue declined by nearly 35% to EUR 603m, due mainly to problems in Spain, where a building market plagued by overcapacity prevented higher costs being passed on. After incurring losses of EUR 1.6m in the Spanish market, the group has decided to “downsize its industrial footprint” there – see Plasteurope.com of 17.02.2011. Restructuring efforts in Spain reduced earnings by EUR 7.9m, and legal fees in connection with an EU anti-trust investigation took a EUR 1.9m bite.
In the Automotive segment, EBITDA rebounded to EUR 26.9m after a loss of EUR 6.9m a year earlier, as sales rose 12% to EUR 325m. Recticel said the profitability of the Interiors unit improved significantly, due to higher volumes and successful restructuring, and sales increased by 22% to EUR 170.2m. Revenues of the Seating unit improved by 4.5% to EUR 136.6m, but the expiration of state stimulus packages ate into growth. The Exteriors unit, which mainly carries out toll compounding for BASF – see Plasteurope.com of 04.11.2008 – saw sales recede by 7.4% to EUR 18.1m.
EBITDA of the Bedding segment deteriorated by 58% to EUR 17.3m and sales by 6.2% to EUR 293m in 2010, reflecting Recticel’s sale of its 50% interest in Cofel to its joint venture partner Pikolin (Zaragoza / Spain) in 2009 – see Plasteurope.com of 18.06.2009. Adjusted for the divestment, the earnings decline was held to 3.7% and sales increased by 5.8%.
Hard hit by higher costs that could not be passed on, EBITDA of the Insulation segment declined by 12% to EUR 35.5m, as sales gained 12.6% to EUR 187.4m. As structural demand in this segment is expected to improve, thanks especially to stricter insulation standards and higher energy costs, the Belgian group is building a new plant for thermal insulation panels in France, which is due on stream in early 2013.
Pointing to a “positive orientation” of its main markets, Recticel is forecasting a “further increase” in overall sales for 2011. Here it is banking on being able to pass on higher raw materials prices faster as well as improving cost efficiency through restructuring.
e-Service:
Detailed press release on Recticel 2010 annual results as a PDF document
11.03.2011 Plasteurope.com [218824-0]
Published on 11.03.2011
German version of this article...