Rockwool A/S

Hello and welcome to Rockwool AS conference calls regarding the result for the first quarter of 2026. My name is Kim Jung Andersen. I am the CFO of Rockwool AS. Today I am pleased to present CEO Jes Munch Hansen. For the first part of this call all participants will be in a listening only mode. As a reminder this conference call is being recorded. First Jes will go through our presentation and give you an update of the results for the first quarter of 2026. Afterward, we will be ready to answer all your questions. Before I hand over the word to Jes, I must ask you to notice slide number two, which is the forward-looking statement. Please be aware that this presentation contains uncertainties. Now we can go to the next slide, which is slide number three. Jes, I will now hand over the word to you.

Thank you, Kim. Also welcome from my side. And as Kim said, I will start on slide number three, where we have our key numbers. The Rockwell Group delivered resilient performance in Q1, despite a challenging operating environment, with revenue growth of 2%, primarily driven by Eastern Europe, the United States, and Southern Europe. The EBIT margins, as you can see, reached 13.2%, what we believe is a satisfactory result, though 2.2 percentage points below the record high level of last year. Reconstruction market, particularly in Canada and United Kingdom, pressured the margin as did higher logistic cost and an increased cost base. Turning to page number four, let's focus on the revenue in Q1. where overall the construction market continued to be affected by the geopolitical turbulence and macroeconomic uncertainty. Additionally, the first two months of the year were impacted by adverse weather across Europe and North America. However, volume demand recovered from March and onwards. We successfully restarted the Swiss factory in Flumrock, during the quarter, but the production stop did have an impact on performance in the quarter. Additionally, the conversion to electric melting and upgrades to one of our production lines in our Vermont factory temporarily reduced output. The growth was driven by higher volumes and a minor increase in overall sales prices. Page number five. where you see the revenue by business segments. Insulation revenue grew 2% in local currency with solid growth in the United States and key markets across Eastern and Southern Europe. That growth was partly upset by decline in United Kingdom, Germany and Switzerland. In our system segment, revenue grew 4% in local currency. ROC Phone Europe Asia delivered solid growth across key markets Godin achieved growth mainly in Europe while our rock panel business had a stable quarter. Page number six, where we look at the regional revenue in the quarter. In the United States, we sustained the growth momentum while Canadian revenue declined in a very challenging market characterized by weak residential demand and ongoing trade uncertainties. In Western Europe, revenue declined 1%, as solid growth in Southern Europe was offset by market-driven declines in the UK, and the delay in construction activities due to the hard winter in January and February. Eastern Europe delivered strong 15% revenue growth, driven by solid growth in Romania and Hungary, while Poland increased slightly in the quarter. In Asia, revenue grew more than 7%, with decent growth in several of our markets there. Page number seven, where we look at the profitability in the quarter. Although the EBIT margin was down 2.2 percentage points, we consider this a good result, given the challenging market conditions and the comparison to a record high profit level last year. Margins in the quarter were impacted by several factors. First, a very weak construction market in Canada and the United Kingdom. Second, higher logistic costs and a higher cost base. Third, additional costs related to the production incidents in Switzerland and the planned production stop in the Netherlands related to the electric conversion and other upgrades of the production line there. Overall, these two challenges accounted for about one half of the decline in margin. That is equivalent to approximately one percentage point. While production is up and running in Switzerland, we do expect the run-in cost for the new melting technology and these other upgrades in Netherlands to affect the margin for the rest of the year. Last year, first quarter included donations to the Foundation for Ukraine's Reconstruction of 6 million out of the total donation of $13 million, while no donation was recognized in 2006. On the next page, we look at the probability by segments. First, the insulation segment. Looking at profitability by segment, the EBIT margin in insulation, while satisfactory, was down 1.7 percentage points compared to last year. The result was impacted by several factors, including the ones I just mentioned. In the systems division segment, the EBIT margin decreased 3.7 percentage points driven by inflation on input cost that were not sufficiently offset by sales price increases. Additional factors include increases in bad debt provisions, as well as increased scale-up costs in our new business area, which is part of the system segment. These new businesses mainly consist of our water management system and our prefab construction business. Let's look at our investments in Q1. Our biggest investment in Q1 related to the construction of new factories in the United States and India, and a new technical insulation production line in the United States, and the production expansion in Romania, as well as a large logistic automation project in Germany. The new factory in India is expected to come online during this summer. The sustainability investments are mainly related to electric conversions in the Netherlands and in France. On May 5th, we signed an agreement to acquire Ravago's Stonewall factory in northeastern Hungary with a capacity up to 40 kilo tons. The acquisition will support our long-term priority to meet regional demand. The transaction is expected to close in Q4 26 of course, subject to customary closing condition and regulatory approvals. The acquisition is not expected to materially impact our 2026 financial outlook. And then we have our cash flow for the quarter. As expected, financial positions turned into net debt of €306 million. That brings our leverage ratio at the end of Q1 at 0. 0.4, which is well within our policy of maximum ratio of one. At the end of Q1, we had an unused credit facility of 400 million euro. Cash usage for working capital during the quarter was unchanged compared to Q1 last year. The negative development in working capital ratio was mainly due to the planned stock build and a higher than usual seasonal increase in trade receivables due to the revenue uptake towards the end of the quarter. Free cash flow decreased 68 million euro compared to the same quarter last year, mainly from higher investments and less cash from operations. And last but not least, to our outlook on page 12, The revenue, as previously already announced, we are now expecting revenue growth to land between 3 and 6% in local currencies, and the growth outlook is based on the increased activity we saw in March and thereafter, as well as sales price increases in the range of 6 to 8%, which will mainly take effect from the mid-year. We continue to closely monitor, of course, the ongoing geopolitical turbulence, and macroeconomic uncertainties around us. The EBIT group margin for 2026 is still expected to be between 13 and 14%, as the announced sales price increases are expected to offset input costs and logistic inflation, whereby maintaining profit margins. And investments Our major investments in 2026 include capacity expansions as already mentioned in India, Romania, United States and France, along with acquisition of land for further manufacturing sites in several countries. Overall, our total investments are expected to reach around €700 million in 2026, excluding acquisitions. That concludes my run-through of the key data points, and I hand back over to Kim.

Yes, thank you very much, and I know the operator will invite in for questions. I just have a small request for you. Even if we limit to two questions at a time, please allow us to answer one question at a time. Thank you very much.