Letter from the CEO

PERFORMING BEYOND THE EXPECTED – This annual report demonstrates how Armacell’s products and system solutions are going beyond the expected in adding value to your life. Our innovative and reliable products create long-lasting value that translates into an attractive offering for the users of our systems. The solutions we develop are based on an in-depth under- standing of how systems work and how we can improve their performance to optimise energy efficiency and enhance safety. As every system has unique requirements, our experts have to design and deliver a wide range of tailored solutions developed in close collaboration with our customers. In all we do, our overriding goal is to exceed expectations in energy efficiency.

An unprecedented year

2020 has been a year like no other. In a complex and challenging environ- ment our business model again proved resilient. With our global reach and multi-segment activity, we ended the year in relatively good shape. We took the appropriate measures to navigate changing circumstances and ensure we come out of the pandemic stronger than before. Our utmost priority was always to protect our employees, maintain operations and continuously support our customers.

What we now see is that the pandemic has brought the worldwide Armacell family closer together and shown it can be a greater force for good. Armacell supported regional relief projects by contributing insula- tion material to new hospitals in China, Turkey and the USA, as well as materials to make protective face shields in Europe and North America. Internally, over 60 employees and their families who were affected by Covid-19 benefited from our Solidarity Fund.

Business performance

In the financial year ending 31 December 2020, our net sales fell by 8.4 % from the record total of €644.4 million in 2019 to €590.5 million. Our adjusted EBITDA in 2020 was €119.6 million, and Armacell’s adjusted EBITDA margin reached 20.2%. The net sales figures recorded by our business units were as follows: Advanced Insulation EMEA €216.1 million (– 4.0 %), Advanced Insulation AMERICAS €145.9 million (– 10.3 %), Advanced Insulation APAC €92.2 million (– 19.4 %) and Engineered Foams €136.3 million (– 4.1 %).

Key developments

Throughout 2020, we sustained a regular supply of leading-edge products and launched innovative new ones like ArmaGel ® DT, which is suitable for cryogenic and dual-temperature applications. We expanded our system solutions’ portfolio, strengthened our passive fire protection business and streamlined our brand architecture to ten family-brands.

We successfully completed the extension of our PET foaming line at our Suzhou plant in China, finalised con- struction of our new plant for elastomeric foams in Cheonan, South Korea, and consolidated our Italian insulation activities in a new building in Turin. All achievements that went beyond the expected in a pandemic year.

Fresh faces

2020 also saw fresh faces in two key areas of our operations. Following the departure of Dr Max Padberg in September, Déborah Hutschemackers successfully took over as interim Chief Financial Officer (CFO). As of March 2021, the financial affairs of the Armacell Group will be managed by Wim Van Acker. Furthermore, we appointed Adrian Yeandle as Chief Legal & Compliance Officer and Laurent Couturier as Chief Information Officer, who both played a key role in minimising the impact of the cyberattack that hit us in December.

Digitalisation advancing

Another operational area we advanced was IT. We invested in new tools to further the digitalisation of our opera- tions and processes, while accelerating the company’s digital transformation and cyber-security efforts. Our objective in reshaping our IT approach is to enrich the customer experience. In this respect, we are aiming to create open lines of communication with our customers in order to better understand their needs and increase the added value of our products.

After the successful closure of our capital market refinancing in February 2020, our shareholders PAI Partners and KIRKBI expressed their commitment to our ongoing growth strategy. In 2021, we look forward to partnering with our customers in adding value to their businesses and to people’s lives around the world.

In the context of such an unprecedented year, we should like to express our sincere gratitude to our customers and other partners for their continued trust in Armacell, and to all our employees for their passionate commitment to “making a difference around the world”.

Yours sincerely,

signature Patrick Mathieu

Patrick Mathieu
President and CEO
Armacell Group

Armacell Worldwide