ARMACELL ANNUAL REPORT 2016

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 Read the full Armacell Annual Report 2016 here

 

 

  

WHAT WE MAKE

 

FACTS AND FIGURES

 

Headquartered in Luxembourg with regional head offices in EMEA (Münster, Germany), the AMERICAS (Chapel Hill, North Carolina) and APAC (Singapore), Armacell is a global leader in flexible foams for the equipment insulation market and a leading provider of engineered foams. Now one of the world’s best known global brands for flexible technical insulation, Armacell generated total net sales of € 558.6 million in 2016. 

 

 

Some 3,000 employees work at 25 production and administrative facilities in 16 countries on four continents. Armacell has 450 sales offices around the world, and the company's international character is underpinned by 70 employee nationalities. A total of 410 active patents in approximately 60 patent families testify to the innovative skills of Armacell. For example, Armacell's patented technology for recycling PET bottles to produce green foam is still unique in the industry.

 

410 active patents in different patent families

 

50,000 PET bottles recycled into foam for one wind turbine

 

140x more energy saved in an Armaflex lifetime than required to manufacture it

 

Armacell’s product portfolio consists of flexible insulation products and mechanical equipment for the energy distribution market (Advanced Insulation) and technical foams for use in a broad range of enduser markets (Engineered Foams). Ever since the invention of flexible closed-cell elastomeric foam insulation in 1954, Armacell has underlined its technical leadership in the insulation industry with a series of pioneering inventions. Today, with effective equipment insulation, a key factor in tackling global warming through a reduction in CO₂ emissions, Armacell can claim to be a global leader in energy efficiency. Armacell’s equipment insulation materials and mechanical equipment have a proven worldwide record as energy-efficient solutions that offer superior long-term thermal and acoustic efficiency at a lower overall installed cost. 

Armacell stands out from the competition through its reliable, high-quality thermal insulation solutions and innovative technology.
 Gu Shengqiang,
General Manager, Zuocheng New Material Co. Ltd., China

 

Find out more about Armacell’s facts and figures

 

WHERE TO FIND US

WIDE-RANGING APPLICATIONS

 

Armacell’s industry-leading position in the flexible foam insulation market is reflected in the use of its products in a wide range of iconic projects the world over – from a famous highlight like the legendary Empire State Building in New York or the eye-catching Paralympic Centre in Brazil to the mobile Halley VI Research Station in the icy waters of the Antarctic and the AIDA cruise liners that sail the Seven Seas.

We chose Armacell because of their powerful product portfolio, industry leadership and strong sales coverage.

Mike Eggers, Strategic Sourcing Director,
Distribution International, Inc., USA

 

AN EXAMPLE: RUSSIAN ORTHODOX CATHEDRAL IN PARIS, FRANCE

Armacell provided PET foam core material to produce the five spectacular gilded domes of the recently inaugurated Russian Orthodox Cathedral in Paris. Two properties of this insulation material – its weight-reducing structural core and benchmark insulation performance – played a key role in enabling the architect Jean-Michel Wilmotte to realise an iconic design combining tradition and modernity.

 

 

 

PET FOAM CORE
Lightweight Polyethylene Terephthalate (PET) foams offer superior mechanical and tensile strength, residual flexibility as well as excellent fatigue properties in combination with low thermal conductivity and sound attenuation properties.
- 100% made of recycled PET bottles and 100% recyclable

 

Find out more about Armacell’s Iconic Projects in the Annual Report, p. 14 

WHY WE ARE NEEDED

PLANET HEALTH, HUMAN WELL BEING

 

Urbanisation, the globalisation of food supplies, energy efficiency, acoustic comfort, lightweighting: five megatrends impacting on the health of our planet and its inhabitants – and all areas where Armacell’s energy-saving or noise- and vibration-reducing solutions are making a key difference. Equipment insulation is an international growth market driven by urbanisation and the need for enhanced energy efficiency.

 

> 70% of greenhouse gas emission generated in cities

 

1/3 of global energy used in buildings

 

2050 Two out of three humans live in cities

 

In emerging economies, the booming infrastructure market is driving the demand for insulation materials. In mature economies, rising energy prices, stricter legislation, technological innovation and the associated substitution of legacy products are the motors of growth. With the demand for energy expected to rise by a third by 2035, effective insulation is a key factor in tackling climate change, as it is one of the simplest, fastest and most cost-effective means of improving energy efficiency. No other investment to tackle climate change pays off so quickly. The more urbanised societies become, the more people suffer from excessive noise and vibration – a stress our acoustic solutions can alleviate. And with around a third of food produced for human consumption lost along the food chain, effectively insulated cool chains not only prevent massive energy losses but also greatly reduce food waste. Last but not least, the lightweighting trend is driven by the desire for enhanced energy efficiency, e.g. reducing the weight of man-made machines to save energy.

 


 

 

MAKING A DIFFERENCE WORLDWIDE

 

 EQUIPMENT VERTICALS

 

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With a diverse range of products and markets that is unique in the industry, Armacell already supplies the products and solutions for around half the equipment insulation projects worldwide. In meeting the challenges of these megatrends, our product solutions stand out for functionality and ease of installation at low marginal cost – in facilities as varied as the Empire State Building, the International Space Station and the 35 trillion cubic feet Gorgon natural gas project in Western Australia.

Listening to customers and meeting their needs with the best-fitting products of the best quality: That’s what I work for every day and what makes Armacell a great service provider.

Florian Kotter, Research & Development, Germany

STRATEGY – THE WHYS AND WHEREFORES

At Armacell we focus on creating sustainable value for our highly diversified global customer base. We see this as an obligation derived from our global leadership in flexible foams for insulating technical equipment and engineered foams. We have a long track record of growth, superior profitability, cash generation and deleveraging orchestrated by a highly experienced management team who have positioned Armacell to outperform.

 

Click here to find out more about Armacell’s strategy

 


 

LETTER FROM THE CEO

 

Although Armacell is a relatively small international group, we have a strong business model.

 

 

 

DEAR FRIENDS OF THE COMPANY,
The rise of Armacell from a regional company to a truly global player is a success story in human and economic terms. Although our international group is still relatively small in terms of size, we have a strong business model and can adapt to market volatility as well as technological or geopolitical change. Headquartered in Luxembourg, Armacell is making significant progress on an extraordinary journey that I am delighted and privileged to be part of.

 

Click here to read the whole letter of the CEO

FINANCIAL RESULTS 2016

Following record results in 2015, Armacell increases its 2016 revenues by 3.4% (4.9% currency adjusted)

Sales growth generated across all business units and in all regions

2016 adjusted EBITDA increases by 5.1%; adjusted EBITA rises by 4.7%

Successful debt repricing optimises capital structure put in place as part of the LBO

The integration of recent acquisitions is on track

6th consecutive year of EBITDA margin increase, today at 18%

 

 

 


 

 

BUSINESS STRUCTURE AND POSITIONING

 

Armacell has two divisions, Advanced Insulation and Engineered Foams.

 

 

 

 

 

 

 

 


 

 

GROUP FINANCIAL PERFORMANCE

 

 

 

 

 

 

5-year Financial Overview (2012 - 2016)

 

 

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Click here to see 2016 Financial Results

OUR PEOPLE

 

 

At Armacell we firmly believe that our employees are our most valuable asset. That is why we are committed to motivating them, developing their talents and furthering their skills by offering a wide variety of training opportunities. We do our best to create a positive working environment and, in turn, expect our employees to perform to the best of their ability in an atmosphere of mutual respect, trust and reliability.

 

17% increase in workforce in 2016 

 

2,870 employees on 31 December 2016 

  

70 nationalities working at Armacell worldwide

  

 

 

 

 

 

 

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EMPLOYEE DEVELOPMENT

 

As an employer whose focus is on the well-being of all our employees, we offer a wide range of opportunities for further education and vocational training as part of our corporate responsibility towards our people. And we do our best to create a positive working atmosphere at all our sites.

Armacell is still relatively small in size but a globally operating, multinational company. This allows me to gain a macro-view of organisational structure and learn to work in an international company.

Charis Mah, Human Resources, Singapore

Find out more about Armacell as an employer

 

CORPORATE SOCIAL RESPONSIBILITY

 

In all its business activities Armacell is committed to living out its corporate responsibility towards its employees, the environment and the communities it operates in. Back in 2006, Armacell joined the UN Global Compact initiative, the world’s most important business network for sustainable globalisation, and, in 2011, Armacell adopted a specific Code of Conduct that obliges all employees worldwide to act ethically.

UN Global Compact Communication on Progress Report

 

ETHICS AND INTEGRITY

The Armacell Code of Conduct outlines the responsibilities of all Armacell employees to the company, to each other, and to all our stakeholders. The Code builds on Armacell’s basic corporate values (Customer Experience, Commitment, Empowerment and Accountability, Integrity and Sustainability), describes how these are to be put into practice, defines rules for everyday work and provides an ethical benchmark against which all business activities are to be evaluated.

Armacell Code of Conduct

 

ANTI-CORRUPTION

Armacell is committed to integrity. It is part of our Code of Conduct to comply with applicable laws and to implement appropriate measures to assist us with this. A key priority in our compliance efforts is the prevention of bribery and corruption. At Armacell, we are committed to operating our business with integrity, fairness and transparency. We operate a zero tolerance policy to the giving or receiving of bribes or any other corrupt practices. Such conduct is prohibited for all Armacell personnel as well as anyone else acting for or on behalf of Armacell. A reinforced global Anti-Corruption Policy introduced in early 2017 reflects our high standards in this area. 

 

SANCTIONS POLICY

Complying with economic, trade and financial sanctions is part of our business ethics. Sanctions safeguard values like human rights, the fight against terrorism and the non-proliferation of nuclear weapons, and we identify with each of these values. A global Sanctions Policy introduced in 2016 helps our employees to navigate through the international sanctions system and to avoid unethical transactions.

CSR - HEALTH & SAFETY

 

At Armacell we are focused on sustainable, profitable growth through the development and manufacturing of our products to ensure a positive impact on our communities, people and the environment. The high priority given to health and safety at Armacell is reflected in many ways. Group-wide, our safety statistics point to a very positive trend between 2014 and 2016.

Last year 16 out of 23 sites recorded zero accidents with greater than one day lost.

Roberto Mengoli, Chief Technology Officer, Armacell Group

 

 

 

 

 

CSR - THE ENVIRONMENT

 

The WAM Environmental Pillar was launched in 2016 and the figures for 2015 and 2016 generally point to a positive trend, which will be reinforced as we intensify our efforts in these fields.

 

 

 

 

 

 

CSR - SOCIAL ACTIVITIES

 

Armacell employees make a difference – all over the world. Given our Group’s global footprint, we see it as our responsibility to support citizenship projects in our local communities. By emphasising the social dimension of our corporate responsibility, Armacell and its employees are walking the talk in communities where the company operates. In 2016 Armacell’s Employees helped children, supported local communities and donated time and money.

 

 

Find out more about Armacell’s social engagement in 2016 in the Annual Report, p. 34

Annual Report

 

 Read the full Armacell Annual Report 2016 here

  

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