DEAR FRIENDS OF THE COMPANY,

INVESTING IN YOUR FUTURE is the theme of this annual report and reflects our innovative and sustainable response to global megatrends such as urbanisation, globalisation of the food supply cold chain, acoustic comfort and vibration control, lightweighting and, above all, energy efficiency. As a global leader in flexible foam for the equipment insulation market and a leading provider of engineered foams, we offer much-needed solutions to the challenges associated with these megatrends.

Our pioneering past and innovative present are equipping us to address our planet’s challenging future. Driven by the global trends outlined in this report, our strong, asset-efficient and highly automated business model will prove as resilient in the coming financial year as it did in the year under review, although 2017 was indeed a rather demanding one for Armacell.

Strong figures in a challenging climate

The significant increases of raw material prices, ongoing geopolitical tensions in the Middle East, Turkey and Russia, oil price volatility and the hurricane season in the USA each made their individual contribution. The encouraging fact is that Armacell coped well with these developments.

Driven by the global trends outlined in this report, our strong business model will prove as resilient in the coming financial year as it did in the year under review.

In the financial year ending 31 December 2017, we increased our revenues by 8% to €603.2 million from €558.6 million in 2016. Our EBITDA excluding non-recurring items was €102.1 million, up from €100.4 million in 2016, and our EBIT increased to €40.6 million from €37.4 million in 2016. That the 2017 figures were good is mainly due to the ingenuity, drive and passion of our employees worldwide. All our business units delivered a strong operating performance: Advanced Insulation EMEA recorded net sales of €207.9 million, Advanced Insulation AMERICAS €151.2 million, Advanced Insulation APAC €117.4 million and Engineered Foams €126.7 million.

Global expansion

In 2017, we continued to deliver on our international growth strategy and expanded the Group’s market position across all regions. Armacell currently offers a complete portfolio of thermal and acoustic equipment insulation solutions. We successfully integrated two acquisitions – Danmat Iso Systems in Scandinavia and Nomaco’s PE insulation business in the USA – and right now I am very much looking forward to the benefits of our Partnership For Excellence with Köpp, a leading manufacturer and processor of cellular rubber and polyethylene bun foam.

Our ongoing M&A activities in combination with our internal operational efficiency programs will drive significant synergies in 2018 and beyond. We are making good progress in expanding Armacell’s global production footprint and adjusting capacity and technology requirements. The construction of our greenfield plant in the Kingdom of Bahrain, the launch of the commercial production of our PET foam core technology on the new extrusion line in Canada and the expansion of cross-linked polyethylene manufacturing in Spencer, USA, reflect the efforts of every single employee to calibrate Armacell for a sustainable future.

Continuous development driving innovation

We are proud of our recent innovations and the successful launches of ArmaForm multi-density PET foam core and the next-generation aerogel technology, ArmaGel. The latter is our largest new product development since ArmaFlex Ultima and already drawing significant customer enquiries. We are targeting to monetise these products in 2018 as we expand the product portfolio and our ArmaGel manufacturing capacity in Cheonan, South Korea.

On behalf of the Executive Management Team and Management Board, I would like to express my gratitude to our customers worldwide for the confidence they have continued to place in Armacell and its products. I also thank all our employees or their engagement, commitment and ongoing contribution to our success. Furthermore, I would like to extend our special thanks to our two shareholders Blackstone and KIRKBI and the members of the Supervisory Board for their valuable guidance and support. 

In 2018, we will continue to focus on expanding our market position, globally marketing our pioneering technologies and delivering on our international growth strategy. As a global leader in innovative technical insulation solutions and components, we truly make a difference around the world.

Yours sincerely,

Patrick Mathieu

President and CEO

Armacell Group