Earnings Release • Aug 29, 2007
Earnings Release
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ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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29 August 2007
Today the Board of Rockwool International A/S has approved the following report on the first half of 2007.
Further information: Gilles Maria, Chief Financial Officer
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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| 2nd qtr. 2007 |
2nd qtr. 2006 |
Acc. 2nd qtr. 2007 |
Acc. 2nd qtr. 2006 |
Full year 2006 |
|
|---|---|---|---|---|---|
| Unaudited | Audited | ||||
| Income statement items in DKK million: | |||||
| Net sales | 3,442.1 | 2,827.5 | 6,697.5 | 5,303.7 | 11,536.9 |
| EBDIT | 862.8 | 512.7 | 1,647.4 | 896.1 | 2,121.9 |
| Operating profit before financial items (EBIT) | 686.9 | 245.4 | 1,301.4 | 459.0 | 1,404.5 |
| Financial items | 4.0 | -14.8 | 0.3 | -29.1 | -33.5 |
| Profit before tax | 697.6 | 235.9 | 1,314.9 | 440.3 | 1,400.8 |
| Profit for the period after minorities' interests | 477.0 | 160.0 | 904.8 | 302.9 | 950.0 |
| Cash flow (from operating activities) | 670.7 | 579.5 | 1,093.8 | 532.4 | 1,809.8 |
| Balance sheet items in DKK million: | |||||
| Fixed assets | 5,633.8 | 5,032.2 | 5,290.9 | ||
| Current assets | 4,148.5 | 3,090.7 | 3,320.0 | ||
| Total assets | 9,782.3 | 8,122.9 | 8,610.9 | ||
| Equity including minorities' interests | 6,821.2 | 5,316.9 | 6,033.2 | ||
| Provisions | 864,7 | 702.8 | 722.8 | ||
| Long-term debt | 40.7 | 224.3 | 77.9 | ||
| Short-term debt | 2,055.7 | 1,878.9 | 1,777.0 | ||
| Other items in DKK million: | |||||
| Investments and acquisitions | 659.1 | 410.9 | 1,004.4 | ||
| Depreciation | 346.0 | 437.1 | 717.4 | ||
| Number of employees: | |||||
| Number of employees | 8,406 | 7,714 | 8,017 | ||
| Ratios: | |||||
| EBIT ratio (%) | 19.4 | 8.7 | 12.2 | ||
| Profit per share of DKK 10 | 42.1 | 13.9 | 44.0 | ||
| Intrinsic value per share of DKK 10 | 316.1 | 238.7 | 274.0 | ||
| Equity ratio (%) | 69.7 | 65.4 | 70.1 | ||
| Main figures in EUR million: | |||||
| Net sales | 462.0 | 379.0 | 898.8 | 710.9 | 1,546.7 |
| Operating profit before financial items (EBIT) | 92.2 | 32.9 | 174.7 | 61.5 | 188.3 |
| Profit before tax | 93.6 | 31.6 | 176.5 | 59.0 | 187.8 |
| Profit for the period after minorities' interests | 64.0 | 21.5 | 121.4 | 40.6 | 127.4 |
| Cash flow (from operating activities) | 90.0 | 77.7 | 146.8 | 71.8 | 242.6 |
| Total assets | 1,314.4 | 1,089.0 | 1,154.9 | ||
| Equity including minorities' interests | 916.6 | 712.8 | 809.2 | ||
| Investments and acquisitions | 88.5 | 55.1 | 134.7 | ||
| Depreciation | 46.4 | 58.6 | 96.2 | ||
| Exchange rate DKK | 7.45 | 7.46 | 7.45 | 7.46 | 7.46 |
The ratios have been calculated in accordance with recommendations issued by the Danish Association of Financial Analysts (2005 edition).
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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The Rockwool Group generated sales in the first half of 2007 of DKK 6,698 million corresponding to an increase of 26% compared to the same period last year. In all markets, the very positive sales price development of the first quarter continued.
Sales in the Insulation Division including intercompany sales increased by 25% to DKK 6,326 million. The external sales increased by 28%.
Systems Division's sales increased by 14% to DKK 870 million.
EBDIT for the Group totalled DKK 1,647 million which is 84% up on the year before. EBIT ended at DKK 1,301 million – an increase of DKK 842 million which is 183 % more compared to first half 2006.
EBIT in the Insulation Division rose by 241% to DKK 1,230 million. Systems Division generated an EBIT of DKK 59 million which is an increase of 45% compared to the first half 2006.
Net financial items ended up positive at DKK 0.3 million which is DKK 29 million better than in first half 2006.
Profit after minorities interests for the first half was DKK 905 million which is DKK 602 million higher than last year, corresponding to a an increase of 200%.
Cash flow from operations for the period is DKK 1,094 million which is DKK 561 million better than last year. This increase is mainly caused by the positive development in Group profit.
The working capital has increased by DKK 363 million in first half 2007 compared to an increase of DKK 91 million in the same period last year. The reason why the working capital has increased relatively more in the first half 2007 compared to the year before is mainly due to a higher level of commercial debtors.
Investment expenditure in the first half was DKK 659 million which is an increase of DKK 248 million compared to the first half 2006.
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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As per 30 June 2007 total assets amounted to DKK 9,782 million. The equity ratio at the end of the period was 69.7%
Some signs of weaknesses in residential new building can be seen in Western Europe whereas renovation is doing well. In non-residential segments, both new building and renovation, strong development is expected to continue.
The expected sales increase for the year is adjusted upwards to 22% which will give total sales for the year of DKK 14.1 billion.
For 2007, a profit of around DKK 1,900 million after minorities' interests is now expected which is an increase of DKK 300 million compared to the expectations announced in the quarterly announcement from May 2007.
The investment level for the year is expected to be at approx. DKK 1.5 billion.
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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The Board and Group Management have today approved this interim report for the first half of 2007.
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, as approved by the EU and additional Danish requirements for financial reporting by listed companies.
We believe that the accounting policies applied – which are unchanged from those applied in the annual report for 2006 – are appropriate and that the accounting estimates made are reasonable. In our opinion this interim report presents a true and fair view of the Group's assets, liabilities and financial position on 30 June 2007 and of earnings and cash flows during the period.
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.
| Eelco van Heel | Gilles Maria | Carsten B. Winther |
|---|---|---|
| Bestyrelse | ||
| Tom Kähler | Henrik Nyegaard | Preben Damgaard |
| Connie Enghus | Lars Elmekilde Hansen | Jan W. Hillege |
| Gustav Kähler | Peter Nørgård | Jürgen Sengera |
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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| DKK million | 2nd qtr. | 2nd qtr. | Acc. 2nd qtr. |
Acc. 2nd qtr. |
Full year |
|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2006 | |
| Unaudited | Audited | ||||
| Net sales | 3,442.1 | 2,827.5 | 6,697.5 | 5,303.7 | 11,536.9 |
| Operating income | 3,489.7 | 2,896.1 | 6,777.7 | 5,411.7 | 11,704.6 |
| Operating costs | 2,803.4 | 2,650.7 | 5,476.3 | 4,952.7 | 10,300.1 |
| EBDIT | 862.8 | 512.7 | 1,647.4 | 896.1 | 2,121.9 |
| Operating profit before financial items (EBIT) | 686.9 | 245.4 | 1,301.4 | 459.0 | 1,404.5 |
| Income from associated companies | 6.7 | 5.3 | 13.2 | 10.4 | 29.8 |
| Financial items | 4.0 | -14.8 | 0.3 | -29.1 | -33.5 |
| Profit before tax | 697.6 | 235.9 | 1,314.9 | 440.3 | 1,400.8 |
| Tax on profit for the period | 195.3 | 84.3 | 368.2 | 145.6 | 431.8 |
| Minorities' interests | 25.3 | -8.4 | 41.9 | -8.2 | 19.0 |
| Profit for the period after minorities' interests | 477.0 | 160.0 | 904.8 | 302.9 | 950.0 |
| Acc. | Acc. | Full | |||
|---|---|---|---|---|---|
| DKK million | 2nd qtr. | 2nd qtr. | 2nd qtr. | 2nd qtr. | year |
| 2007 | 2006 | 2007 | 2006 | 2006 | |
| Unaudited | Audited | ||||
| Profit for the period | 502.3 | 151.6 | 946.7 | 294.7 | 969.0 |
| Adjustments | 377.8 | 256.1 | 734.7 | 524.7 | 1,170.0 |
| Change in net working capital | -118.0 | 288.5 | -363.3 | -91.3 | -4.0 |
| Cash flow from operations before financial items and tax | 762.1 | 696.2 | 1,318.1 | 728.1 | 2,135.0 |
| Cash flow from operations activity | 670.7 | 579.5 | 1,093.8 | 532.4 | 1,809.8 |
| Cash flow from investments activities | -315.2 | -200.8 | -659.1 | -410.9 | -1,004.4 |
| Cash flow from operating and | |||||
| investments activities (free cash flow) | 355.5 | 378.7 | 434.7 | 121.5 | 805.4 |
| Cash flow from finance activities | -206.4 | -160.5 | -238.6 | -68.1 | -438.5 |
| Change in cash available | 149.1 | 218.2 | 196.1 | 53.4 | 366.9 |
| Cash available – beginning of period | 732.5 | 156.4 | 689.8 | 323.2 | 323.3 |
| Adjustments to exchange rates | 1.0 | -2.1 | -3.3 | -4.1 | -0.4 |
| Cash available – end of period | 882.6 | 372.5 | 882.6 | 372.5 | 689.8 |
| Unutilised committed credit facilities | 1,450.0 | 1,515.3 | 1,450.0 |
Individual items in the statement of funds cannot be directly deduced from the consolidated balance sheet, as balance sheet items of the foreign companies at the beginning of the year have been converted at the rates of exchange on 30 June.
| DKK million | 2nd qtr. | 2nd qtr. | Acc. 2nd qtr. |
Acc. 2nd qtr. |
Full year |
|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2006 | |
| Net sales per business segment | Unaudited | Audited | |||
| Insulation | 3,250.4 | 2,698.6 | 6,325.9 | 5,046.6 | 10,851.1 |
| Systems Division | 444.7 | 381.8 | 869.7 | 760.3 | 1,793.0 |
| Group eliminations and holding companies | -253.0 | -252.9 | -498.1 | -503.2 | -1,107.2 |
| The Group | 3,442.1 | 2,827.5 | 6,697.5 | 5,303.7 | 11,536.9 |
| Operating profit before fin. items per business segment | |||||
| Insulation | 663.7 | 162.6 | 1,230.3 | 360.6 | 1,149.9 |
| Systems Division | 30.6 | 24.4 | 58.9 | 40.7 | 170.9 |
| Group eliminations and holding companies | -7.4 | 58.4 | 12.2 | 57.7 | 83.7 |
| The Group | 686.9 | 245.4 | 1,301.4 | 459.0 | 1,404.5 |
ROCKWOOL INTERNATIONAL A/S Hovedgaden 584, Entrance C DK-2640 Hedehusene Phone: +45 4656 0300 www.rockwool.com
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| Balance sheet | |||
|---|---|---|---|
| DKK million | 2nd qtr. 2007 |
2nd qtr. 2006 |
Full year 2006 |
| Unaudited | Audited | ||
| Assets | |||
| Intangible fixed assets | 165.7 | 99.9 | 109.7 |
| Tangible fixed assets | 5,128.0 | 4,513.0 | 4,849.6 |
| Financial fixed assets | 181.2 | 162.4 | 184.8 |
| Deferred tax assets | 158.9 | 256.9 | 146.8 |
| Fixed assets | 5,633.8 | 5,032.2 | 5,290.9 |
| Stocks | 960.0 | 864.2 | 769.1 |
| Receivables | 2,202.5 | 1,796.5 | 1,825.6 |
| Cash funds | 986.0 | 430.0 | 725.3 |
| Total current assets | 4,148.5 | 3,090.7 | 3,320.0 |
| Total assets | 9,782.3 | 8,122.9 | 8,610.9 |
| Liabilities and equity | |||
| Share capital | 219.7 | 219.7 | 219.7 |
| Other reserves | 6,459.7 | 5,021.2 | 5,712.9 |
| Minorities interests | 141.8 | 76.0 | 100.6 |
| Total equity | 6,821.2 | 5,316.9 | 6,033.2 |
| Total provisions | 864.7 | 702.8 | 722.8 |
| Long-term debt | 40.7 | 224.3 | 77.9 |
| Short-term debt | 2,055.7 | 1,878.9 | 1,777.0 |
| Total long-term and short-term debts | 2,096.4 | 2,103.2 | 1,854.9 |
| Total liabilities and equity | 9,782.3 | 8,122.9 | 8,610.9 |
| DKK million | 2nd qtr. | 2nd qtr. | Full year |
|---|---|---|---|
| 2007 | 2006 | 2006 | |
| Equity as of 1 January | 6,033.2 | 5,075.2 | 5,075.2 |
| Exchange rate adjustments | 26.9 | -37.2 | 15.1 |
| Tax on changes in equity | - | - | -25.6 |
| Profit for the period | 946.7 | 294.7 | 969.0 |
| Acquisition of own shares | 14.8 | 15.2 | 26.9 |
| Expensed value of options issued | 8.1 | 4.0 | 7.9 |
| Paid dividend | -208.5 | -103.8 | -103.7 |
| Minorities' interests – addition and dividend (net) | 0.0 | 68.8 | 68.4 |
| Equity as of end of period | 6,821.2 | 5,316.9 | 6,033.2 |
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