Letter from the CEO

WHEN IT MATTERS – the theme of our annual report aptly describes 2021. This pandemic has taught us at a personal level what really matters in life. In the world of business, it is no different. When it really matters, it is through planners, implementers and Armacell working together well that added value is created. By staying in close contact with our customers and focusing on their needs, we have once again been making a difference around the world. When times are tough, that matters.

Servicing global customers in a challenging year

In 2021, our business was affected by challenging economic circumstances: significantly higher raw material costs, raw materials in short supply, sea freight fraught with difficulties. In this context, our historically high sales were remarkable. Once again, Armacell has confirmed the strength of its business model and demonstrated its resilience.

2021 was a year of fast recovery and capacity expansion. In the U.S., we purchased a production line for cross-linked polyethylene foams. In Turkey, we commissioned a new line for flexible elastomeric foam products at our manufacturing facility in Bursa. In China, we opened the first acoustic barrier production line at our Yingde plant and in Belgium, we inaugurated two new PET production lines in Thimister. In January 2022, we acquired the engineering business of SpiderPlus & Co. Ltd, Tokyo, Japan. Over the past twelve months, we launched important new products, such as ArmaFlex® Evo and ArmaPET® Eco. For ArmaGel®, 2021 was also an important milestone, and we had a significant project delivery for our aerogel blanket product.

The common denominator in all these developments is our continuing high level of investment to strategically increase our production capacities and capabilities, improve our product portfolio and manage our innovation project portfolio to sustain the company’s growth.

Business performance

In the financial year ending 31 December 2021, our net sales rose by 14.6% from €590.5 million in 2020 to €676.6 million. Our adjusted EBITDA in 2021 was €116.8 million, and our adjusted EBITDA margin 17.3%. The net sales figures recorded by our business units were as follows: Advanced Insulation EMEA €250.7 million (+16.0%), Advanced Insulation AMERICAS €164.8 million (+13.0%), Advanced Insulation APAC €110.9 million (+20.3%) and Engineered Foams €150.1 million (+10.0%).

Raw material shortages and cost inflation

Global supply chains are still under pressure for a wide variety of reasons, including labour shortages in key economies, severe congestion at major U.S., Chinese and European ports, and China’s zero-tolerance Covid-19 policy, which is impacting the country’s manufacturing output.

To cope with raw material bottlenecks, the shortage of suitable sales and production personnel and huge increases in energy costs, we changed some recipes and were always able to maintain our output levels despite the scarcity of some raw materials due to extraordinary demand. Our global procurement, logistics, operations and product conformity teams did a great job in analysing potential supply chain interruptions as early as possible and obtaining alternative suppliers or delivery routes.

Throughout the year under review, our production costs were constantly climbing due to soaring raw material, energy and freight costs. In the second half of the year, we raised our sales prices to offset the impact on our margins. In 2022, we are continuing to pass on these higher input costs to the market, and our customers generally accept our pricing policy.

Making a sustainable future possible

In 2021, we put even greater emphasis on sustainability in our operations. In the development of innovative thermal, acoustic and mechanical solutions, we are particularly concentrating on aspects of relevance to climate, energy consumption and carbon emissions.

What we saw throughout 2021 was that our innovative technologies are helping to make a more sustainable future possible. They also open up new business opportunities, for example, by significantly reducing the density of our flexible elastomeric foam products and advancing our passive fire protection business. Armacell’s high-performance rPET foams, which are manufactured from recycled plastic bottles, are also creating new business opportunities with a focus on insulation.

On behalf of the Executive Management Team, I should like to express our sincere gratitude to our customers and business 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