Annual Report 2014 for ROCKWOOL International

1 modul = 14,14 x 13,13 mm Annual Report 2014 CONTENTS CONTENTS | PROFILE | EDITORIAL | KEY EVENTS | ROCKWOOL STORY | PERFORMANCE | CSR | RISK MANAGEMENT | CORPORATE GOVERNANCE | SHARES | FINANCIAL STATEMENTS Contents 1 modul = 14,14 x 13,13 mm Management review Financial statements The ROCKWOOL Group ...............................................3 Income statements and Statement of comprehensive income .............48 Taking the ROCKWOOL Group to the next level. 4 Balance sheet - Assets ..............................................49 Key events .........................................................5 Balance sheet - Equity and liabilities ..................................50 Five-year-summary .................................................6 Cash flow statement ................................................51 A strong platform for profitable growth .................................7 Statement of changes in equity .......................................52 Sales, markets and performance .....................................11 Notes contents ....................................................54 1 modul = 14,14 x 13,13 mm Highlights ....................................................11 Notes ............................................................55 Business area Insulation segment ...............................13 Definition of key figures and ratios ....................................82 Business area Systems segment ................................16 Group companies ..................................................83 Annual Report 2014 Financial performance .........................................18 Expectations ..................................................19 Other information Sustainability - an inherent part of our daily activities. .21 Quarterly follow-up (part of Management Review). 84 Environment ..................................................22 The ROCKWOOL® trademark. 86 Supply chain management and human rights. .24 Cover photo People drive business ...............................................27 Acoustic ceilings from the ROCKWOOL Group create a nice interior and protect The ROCKWOOL Foundation .........................................32 people from unpleasant noise. Ceiling systems are an increasingly important Risk management ..................................................34 business area, now accounting for almost 15% of sales. The integration of the Corporate governance ..............................................37 newly acquired ceiling grid company Chicago Metallic was one of the main events during 2014. Board ............................................................41 Group Management ................................................42 The ROCKWOOL shares .............................................43 Management’s report ...............................................45 Independent auditors’ reports ........................................46 2 ROCKWOOL International A/S I Annual Report 2014 PROFILE CONTENTS | PROFILE | EDITORIAL | KEY EVENTS | ROCKWOOL STORY | PERFORMANCE | CSR | RISK MANAGEMENT | CORPORATE GOVERNANCE | SHARES | FINANCIAL STATEMENTS 1 modul = 14,14 x 13,13 mm The ROCKWOOL Group The ROCKWOOL Group is the world’s leading supplier of The ROCKWOOL Group was founded in 1909 and insulation innovative products and systems based on stone wool. We production started in 1937. The Group’s head office is create sustainable solutions to protect life, assets, and the located close to Copenhagen. In 2014, the Group generated environment today and tomorrow. net sales of EUR 2,180.4 million. The company is listed on the NASDAQ Copenhagen stock exchange. Stone wool is a versatile material based on one of nature’s most abundant resources. It forms the basis of the following The Group’s operations have a large presence in Europe and ROCKWOOL Group businesses: we also have facilities in Russia, North America, India and East Asia. Our more than 11,000 employees in more than 35 Building insulation countries cater for customers in a large part of the world. Industrial & technical insulation for process industry, marine and offshore Acoustic ceiling systems Exterior cladding Horticultural substrate solutions Engineered fibres Noise and vibration control 3 ROCKWOOL International A/S I Annual Report 2014 EDITORIAL CONTENTS | PROFILE | EDITORIAL | KEY EVENTS | ROCKWOOL STORY | PERFORMANCE | CSR | RISK MANAGEMENT | CORPORATE GOVERNANCE | SHARES | FINANCIAL STATEMENTS Taking the ROCKWOOL Group 1 modul = 14,14 x 13,13 mm to the next level Despite much turmoil in the world economy, the European markets have been disappointing in 2014 and the ROCKWOOL Group sales grew by a solid 8.9% in 2014 and anticipated recovery has not yet materialised. However, the delivered EUR 205.5 million cash from our operations. Board remains convinced about the solid potential of these Helped by two major acquisitions and strong performances markets where we are making important investments as in North America, Eastern Europe and Russia, the year was part of our programme to re-engineer European another testimony to the growth potential of our stone wool production. The North American market, which is growing businesses. fast thanks to our successful roll-out of stone wool insulation and acoustic ceilings, will be a key priority for Strong growth needs to go hand in hand with healthy future investment. For the moment, however, focus is on profitability and steady cash flow to finance the growth. For getting the newly opened factory in Mississippi up to the Board, it has been paramount to ensure that the optimal performance in order to satisfy our many new Group’s successful expansion over the last decade customers. continues with even more focus on leveraging the potential of its many different business units across the globe. This One of the pillars of the current strategy has been the was behind the decision to bring on board a new CEO with continued development of more integrated building solid management experience gained at one of the world’s solutions as witnessed by two major acquisitions. These largest industrial companies. One of the key priorities in established the Group as a serious player in the German the coming period will be to review our global business facade systems market and the North American and strategy in order to secure a solid future foundation from European ceiling systems market. We will continue on this which we can take the ROCKWOOL Group to the next level. road which holds great potential for growth. Our Systems “Even in relatively weak business posted impressive figures in 2014, both in terms construction markets, there are At the same time we need to focus on operational of sales growth and profitability. It shows that, even in always opportunities to develop, challenges, not least the consequences of the current relatively weak construction markets, there are always economic instability and strong currency fluctuations. We opportunities to develop, particularly where we can particularly where we can position intend to maintain our strong position in the important position and leverage the unique properties of stone wool. and leverage the unique Russian market which has experienced dramatic ups and We will continue to exploit these promising pockets of downs. We believe we can eventually emerge stronger from growth. properties of stone wool." this crisis while our short term focus is on securing smooth operations and managing risks in the best possible Finally, a thank you to management and employees, it’s Bjørn Høi Jensen manner. been a turbulent year but thanks to your dedicated efforts Chairman of the Board of the ROCKWOOL Group we are well on our way to the next level. 4 ROCKWOOL International A/S I Annual Report 2014 KEY EVENTS CONTENTS | PROFILE | EDITORIAL | KEY EVENTS | ROCKWOOL STORY | PERFORMANCE | CSR | RISK MANAGEMENT | CORPORATE GOVERNANCE | SHARES | FINANCIAL STATEMENTS 1 modul = Key events 14,14 x 13,13 mm APRIL JUNE SEPTEMBER General meeting elects Launch in Europe and North Inauguration of the first Bjørn Høi Jensen as new America of new combined US factory close to Chairman of the Board ceiling systems based on Memphis ROCKFON ceiling tiles and Chicago Metallic grid systems JANUARY JULY Newly acquired HECK Wall Opening of a new pan- Systems is officially part of the MAY European production centre in OCTOBER ROCKWOOL Group The ROCKWOOL Group the Czech Republic. A new step Jens Birgersson announced as decides to change approach in in the international growth new ROCKWOOL Group CEO China, discontinuing the strategy of the Industrial & factory project in Tianjin Technical insulation business 5 ROCKWOOL International A/S I Annual Report 2014 FIVE-YEAR SUMMERY CONTENTS | PROFILE | EDITORIAL | KEY EVENTS | ROCKWOOL STORY | PERFORMANCE | CSR | RISK MANAGEMENT | CORPORATE GOVERNANCE | SHARES | FINANCIAL STATEMENTS Five-year summary 1 modul = 14,14 x 13,13 mm EUR million 2010 2011 2012 2013 2014 2014 2010 2011 2012 2013 2014 2014 DKK DKK million Number of employees Income statement items Number of employees Net sales 1,575.2 1,845.3 1,969.4 2,002.8 2,180.4 16,255 (year-end) 8,808 9,368 9,778 10,562 11,031 11,031 EBITDA 240.5 243.9 302.7 313.2 311.7 2,324 Depreciation, amortisation Ratios and write-downs 134.0 122.6 149.0 144.3 150.3 1,121 EBIT ratio 6.8% 6.6% 7.8% 8.4% 7.4% 7.4% EBIT 106.5 121.3 153.0 168.9 161.4 1,203 Earnings per share of DKK 10 (EUR 1.3) 3.4 4.0 4.8 5.4 5.20 38.77 Financial items -2.3 -6.3 -7.4 -6.2 -5.6 -42 Dividend per share of Profit before tax

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