Letter from the CEO

CREATING VALUE FOR EVERYONE EVERYWHERE – The theme of our 2019 annual report summarises the benefits our technical equipment insulation and engineered foams products and solutions bring to people around the world. As a global, multi-material and multi-solution company, we regard our leadership in these markets as a clear commitment to create value for our global customer base and our stakeholders everywhere. We work with our customers for the long-term and develop value-generating solutions delivering practical benefits in many areas of people’s everyday lives.

2019 was a record year for Armacell. Our strong financial performance was a result of meticulous and strategic work. We continued to focus on operational excellence and are proud of our achievements in a year of profitable growth. A key milestone, for example, was the surpassing of one billion recycled PET bottles – plastic waste that is reused to manufacture our industry leading rPET foam products.

In the financial year ending 31 December 2019, our net sales rose to €644.4 million from €610.3 million in 2018, an increase of 5.6%. Our 2019 adjusted EBITDA was €133.5 million, and Armacell’s adjusted EBITDA margin reached a record 20.7%. All our business divisions contributed to the positive development and recorded strong net sales figures: Advanced Insulation EMEA €225.2 million (+ 7.0%), Advanced Insulation AMERICAS €162.7 million (+ 3.1%), Advanced Insulation APAC €114.3 million (+ 3.4%) and Engineered Foams €142.2 million (+ 8.1%).

While striving for excellence, the well-being and safety of our employees come first. Thanks to our enhanced safety measures and the dedication of our operating teams, half of our plants recorded more than 1,000 days without lost-time accidents in 2019.

On 4 December 2019, we announced the intention of PAI Partners, a leading European private equity firm, and KIRKBI, the holding and investment company of the Kirk Kristiansen family, to acquire Armacell from Blackstone. Following the successful capital markets refinancing and closing at the end of February 2020, PAI is our majority shareholder and KIRKBI, which has been an investor of Armacell since 2016, has significantly increased its stake in our company – a clear vote of confidence regarding our historical performance and future potential. Both PAI and KIRKBI are committed to supporting our total growth strategy as we become a global leader in advanced material technologies.

In 2019, we implemented a number of strategic investments to expand our production capacities and market access. In February, we held the ribbon-cutting ceremony for our new state-of-the-art manufacturing facility in the Kingdom of Bahrain. This strengthened our position in the Gulf region. In April, we signed a commercial cooperation agreement with Thermaflex to jointly serve the Russian market. In August, we launched our industrial-scale aerogel line at our new site in Cheonan, South Korea. This increased our annual production capacity for aerogel-based insulation products from 250,000 mto 750,000 m2. In October, we broke ground at the Cheonan site for a new administrative and logistics building. In the second half of the year, we also extended our rPET foam capacities with a fourth rPET extrusion line at our Suzhou facility in China.

We are proud of our recent innovations and successful new product launches. ArmaFlex Ultra, with FlameDefense technology, and ArmaGel DT, our new flexible aerogel blanket for cryogenic and dual-temperature applications, are the latest additions to our extensive technical insulation portfolio.

2020 will be an exciting year for all of us. Armacell is celebrating its 20th anniversary as a stand-alone company, and there is every reason to believe that we can add another chapter to the success story written in recent years. Our leitmotif in 2020 is ‘Creating Value for Our Customers’. Value creation is an exciting journey, and as the Chinese philosopher Lao Tzu once said: A journey of thousand miles begins with a single step.

As a company, we look forward to accompanying our customers on this journey to create value for them and the people around the world. As we move forward one step at a time, our eyes are firmly focused on the goal of delivering smart energy-preserving and safety-enhancing solutions for everyone, everywhere.

Yours sincerely,

signature Patrick Mathieu

Patrick Mathieu
President and CEO
Armacell Group

Armacell Worldwide