Annual Report 2015
The electronic version of the Annual Report 2015
was released on 26 February 2016.
We are as usual issuing two publications:
- Annual Report 2015
The complete annual report, including the accounts.
Available as PDF only and in English only
as of 26 February 2016
- Pamphlet 'The ROCKWOOL Group 2015'
Extract of the annual report and without the complete accounts.
Available as PDF in English and Danish as of 14 March 2016.
Available as hard copy in English and Danish as of 29 March 2016
Unlocking our full potential
The ROCKWOOL Group is transforming. We ended 2015 stronger and leaner.
Profitability improved throughout the quarters and, despite the turbulence in the world economy, we met our commitments and exceeded the operational EBIT expectation. This is a noteworthy achievement, given the challenges of a sluggish European economy, the strong headwinds in the Russian market and an Asian region impacted by the Chinese deceleration. As predicted, the US steamed ahead, underlining the promising potential of the North American market.
Sustainability - an excellent platform for our long-term growth
The global Climate Conference COP21 highlighted the need for international agreements addressing the global issues that affect our planet, although the individual countries’ pledges to reduce emissions are in reality non-binding. This could be a turning point and add new momentum, not least with a stronger role played by the business sector, major cities and other private actors.
In the long-term, we are confident that the global ambition to tackle climate change will enable us to continue to lead the way in our industry thanks to the unique properties of our stone wool products and systems. In the short-term, we acknowledge the need for a rapid political alignment for legislation to counter the over-consumption of energy in the global building stock and we will continue to drive this agenda forward. The benefits that superior insulation has to offer in this field are multiple: reduced greenhouse gas emissions, increased energy efficiency, increased energy independency with a reduced need to import energy, and local job creation.
Raising the bar on performance
In 2015 we launched our Business Transformation Programme. The performance improvements were focused on three key drivers:
- Organisational agility
- Cost efficiency
- Customer centricity
Following a thorough analytical phase during the spring and summer, we noted the significant potential for improving scale benefits and efficiencies. The resulting initiatives comprise a more global set-up for our procurement activities, a new approach for how we price our products in the market place, a strengthened focus on streamlining our product portfolio as well as a flatter organisation with clearer responsibilities.
We are confident that the Business Transformation Programme will unlock considerable benefits and we aim to raise our profitability by EUR 50 million by 2017. We have already started to see the first effects in the fourth quarter of 2015.
Looking ahead into 2016, the turmoil in the world economy which characterised the latter part of last year is still a current reality. The ROCKWOOL Group continuously monitors the potential impact that these issues have on our different regional businesses; we must remain flexible in a new dynamic reality.
As part of the Business Transformation Programme we rebalanced our geographical priorities to reflect our investment strategy for profitable expansion. Confirmation of this approach is reflected in our prioritisation for expansion in North America. In November we announced the intention to build a ceiling tiles plant in connection with our US factory in Mississippi to support our successful ROCKFON ceiling business. We also see opportunities in the insulation business which is expanding rapidly and we will continue to drive double digit growth. This will compensate for the more modest short-term growth outlook we have for the European construction markets and the challenges we currently face in Russia, as well as the focused approach on profitable segments we apply in Asia.
In the current macro-economic environment we have therefore taken a cautious approach projecting 2%-4% organic growth in the coming 2-3 years, while keeping true to our core value of Entrepreneurship for pursuing new opportunities if positive market developments arise. The Business Transformation Programme will enable us to be even more ready for this.
The ROCKWOOL team
2015 has been a year of challenges and our employees have proven their willingness and capability to embrace change and adapt to the market demands. The ROCKWOOL team shares the same passion for a more profitable and sustainable future. This is what drives our continuous effort to develop innovative products and sustainable solutions for our customers, the building sector, our shareholders and the environment.
|Bjørn Høi Jensen|
Chairman of the Board of Directors
President and Chief Executive Officer