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.




We create genuine value for our customers, value them as partners, and are committed to developing equipment insulation solutions tailored to their requirements. The outcome is added value for end-users

and, most significantly energy savings and a longer working life for their critical equipment. Our strong business model is at the centre of five global megatrends: energy efficiency, urbanisation, food supply globalisation, acoustic comfort and lightweighting.

Armacell consequently drives energy efficiency through the substitution of existing insulation material, which increases the demand for its innovative high-tech solutions and systems. The infrastructure boom in countries such as China or India is boosting the demand for high-performing equipment insulation products, whereas in industrialised countries older, less efficient insulation materials are being replaced by flexible high-tech solutions. Increasing urbanisation leads to a concentration of equipment generating stressful noise and vibration levels, creating a growing demand for our acoustic attenuation products. Generally speaking, energy efficiency and equipment performance are crucial factors in tackling climate change and both effective cool chain-based refrigerated transportation and the lightweighting trend on mobile equipment prevent massive energy losses.

The strength of our business model was underlined by the addition of substantial external growth from acquisitions and by the successful completion of our debt repricing, with which we further optimised our capital structure. The repricing transactions in September 2016 and March 2017 have reduced our interest costs by more than 30%. That both issuances were significantly oversubscribed demonstrates the long-term attractiveness of Armacell.



The global megatrend of urbanisation exemplifies the relevance of our equipment insulation solutions. The infrastructure investments being made in cities in years to come will be both low-carbon and climate-resilient. We offer solutions to make the transportation of energy more efficient and therefore reduce greenhouse gas emissions. The wide variety of our innovative solutions addressing all relevant energy saving, energy efficiency and safety aspects of modern equipment make me optimistic about the future of our company.



I am pleased to report that 2016 was a good year for Armacell. Our consolidated revenues of € 558.6 million were up from € 540.2 million in 2015 and our average workforce rose from 2,448 to 2,870 employees. This underlines our position as a leading global manufacturer of high-performance flexible foam for equipment insulation and a leading provider of engineered foams as components of larger equipment.

We have a strong market position in the growing flexible equipment insulation market segment across all the regions. Our Advanced Insulation division operates in: Europe, the Middle East and Africa (EMEA), the Americas (AMERICAS) and Asia Pacific (APAC). Our exposure to a wide range of end-markets and applications provides a broad spectrum of growth opportunities and improves our resilience through economic cycles.

EMEA contributed €200 million to our group revenues, up 2.2% on 2015. We performed strongly in Scandinavia, Russia and most of the EU but growth was negatively influenced by geopolitical tensions and a volatile year in the energy markets. The revenue contribution from the AMERICAS was € 113 million, up 9.3% on 2015, and our investment in the sales network is paying off. APAC delivered € 119 million to our group revenues, an increase of 9.4% on 2015. We performed particularly well in China and India, and our Engineered Systems (Oil & Gas) unit substantially outperformed their growth plan. Our Engineered Foams division, split between Component Foams and PET foams, contributed € 127 million to group revenues, a figure that was up 1.8% on 2015. Whereas our Component Foams punit achieved modest growth in a difficult economic environment, we strengthened our leading market position in supplying PET core foams to wind turbine blade manufacturers and in the transportation market while increasingly discovering new applications in the broader infrastructure market.


Our exposure to a wide range of end-markets and applications provides a broad spectrum of growth opportunities.


In pursuit of our consolidating mergers and acquisitions strategy, we acquired the Brazilian company Polipex Indústria e Comércio Ltda., a leading manufacturer of extruded polyethylene (PE) insulation foams specialising in producing and selling insulation products for technical equipment to the Latin American market. We also established Armacell Jios Aerogels Ltd., a joint venture with JIOS Aerogel Ltd., South Korea, to develop and manufacture high-tech silica aerogel blankets, a segment with considerable market potential. Early in 2017 we acquired the insulation business of Nomaco, a leading US manufacturer of extruded polyethylene insulation foams.

On behalf of the Executive Management Team and Management Board, I would like to express my gratitude to our customers worldwide for the loyalty and confidence they continue to place in Armacell and its products. Furthermore, I would like to thank all our employees for their engagement, commitment and ongoing contribution to our success, as well as our Supervisory Board Members for their valuable support.

In 2017 we will continue to focus on expanding our market position, globally marketing our pioneering technologies and delivering on our international growth strategy. At the same time, we will continue to focus on our desire to be a good corporate citizen by taking a proactive, socially responsible role in our local communities, and by reducing the environmental footprint of our products and manufacturing facilities. As an undisputed global leader in our industry, we can truly make a difference around the world.



Yours sincerely,

Patrick Mathieu

President and CEO Armacell Group