Rockwool A/S

Good morning to everyone and welcome to Rockwool's conference calls regarding the result for the first quarter of 2025. My name is Kim Jung Andersen. I'm the CFO of Rockwool AS. Today, I'm pleased to present CEO Jens Munch Hansen. For the first part of this call, all participants will be in listen-only mode. As a reminder, this conference call is being recorded. First, YES will go through our presentation and give you an update on the results for the first quarter of 2025. Afterwards, we'll be ready to answer all your questions. Before I hand over the word to YES, I must ask you to notice slide number two, which is a forward-looking statement. Please be aware that this presentation contains uncertainties. Now we can go to slide three, which is Next slide, which is number three. Yes, I'll now hand over the word to you.

Thank you, Kim, and good morning. We had a solid start in Rockwell, a solid start to the year in a difficult environment. And when we look at the Q1 highlights, revenue for the first quarter reached 959 million euro. And that's an increase of 4 percent measured both in local and in reported figures compared to last year. Two percent of this increase comes from the acquisitions we made in October last year, and the other two percent come from volume growth throughout the group, where pricing had a neutral impact in Q1. In short, we are quite pleased with our growth performance in this otherwise subdued construction market. EBITS landed at 154 million euro, generating an EBIT margin of 16%. Slide number four. Looking at revenue in the insulation segment, we actually had a 5% revenue growth, which was primarily driven by our business in North America. And this was offset by a somewhat slowdown in East Europe, a particular slowdown in Russia. And here, just to repeat, this is where the acquisitions accounted for 2% of the revenue growth, meaning here in this segment. In the system segment, rock panel and our Lapinus businesses, our OEM business, grew, and our rock phone business was stable. And then we saw a revenue decline in Grodan, our horticulture business, driven by a lower sales in the legal cannabis market in North America. Slide number five. And here we are looking at our regions. And when I look at our Western European business, particularly our biggest market, Germany, actually delivered some growth. But the markets, particularly Germany, seem to be waiting for what the German government is going to do about the new investment programs that holds a lot of promise. We also had positive developments in countries like Switzerland, strong performance in countries like Spain and the UK. In another one of our main markets, France, we do experience price pressure, especially in our professional flat roof application segment. The United States continues to perform on a very high level with 15 percent growth, but like a few markets in Europe, you can notice a little bit of a wait and see mode where some of the customers, some of the market players are looking for more clarity around the macroeconomics, particularly the interest rates and mortgages, before placing orders on the projects already in the pipeline. If you look at the slide 6 about profitability, very short here, EBITDA numbers are up in absolute terms from 260 million euro to 223 million euro. And our EBIT margin continue at a high level. As you see, 16% EBIT margin, mainly supported by stable pricing and stable input cost. And we are, of course, very pleased to see that. When I look at the profitability by segments, we achieved a strong EBIT, 15.6% in the insulation segments, which also somewhat benefited from a positive country mix. In the system segment, the profitability declined this quarter compared to last year, and this was mainly driven by the revenue decrease and profitability decrease in Grodan. Unfortunately, we in the short term do not expect the situation in Grodan to improve meaningfully. Next to last, our investment activities on slide eight. As you can see, our total acquisitions volumes was 93 million euro in Q1. That is 9 million more than last year's quarter. And our main investments are relating to capacity buildups, our new factory in Romania. electrification of our two large lines in the Netherlands, and then our large factory project in the United States of America. Cash flow for the quarter, free cash flow was minus 47 million euro. However, our net cash position landed at 231 million euro. That's of course very positive, a super solid cash position for the group. So much for the quarter. A few comments to our outlook. As you have seen, we maintain the outlook for a year. We have now, of course, put away one quarter. But when we balance the satisfaction quarter one that we have had against the macroeconomic uncertainty we see, we maintain our full-year outlook for a low single-digit revenue growth on the top line. Again, also earnings levels for Q1 was solid. And we, of course, always, as always, stay very alert and monitor our activities across our organization. We adjust capacities and activities locally as needed. And based on this, we maintain our outlook of an EBIT margin around 16%. And last but not least, our investment projects are on track. We maintain the investment level for a level of €450 million for the full year. These were the initial comments to our first quarter.

And now we go to the Q&A.