Recticel sales down in Q1 2019

Brussels — Recticel, which recently rejected an offer from Kingspan, had total sales of EUR 317.6m in first quarter of 2019. This is down 8.0% on the previous financial year, according to a trading statement.

CEO Oliver Chappelle said: 'As previously announced, our net sales have decreased in Q1 2019. This is due to a combination of adverse automotive and comfort markets affecting volumes.' He added that prices were lower in the flexible and insulation segments, reflecting falling prices of TDI and MDI.

Flexible foam sales fell 13.4%, reaching EUR 148m in the first quarter of 2019.

This reflects a drop in sales, with lower volumes in both the comfort sector and the technical foams sector. The falling price of TDI accelerated the decline, the company said.

Chapelle added that his firm is focused on the German business, and on fully divesting the automotive interiors business.

Looking ahead, he said, the second half should be better than the first half of 2019.

Sales in the company's bedding business fell by 9.1%, to EUR 64m, between Q1 2018 and Q1 2019. This compares with EUR 70.7m in the previous period.

Most of the declines were a result of lower German sales. Branded sales fell by 3.5%, but the fall in white label sales was steeper, at 18.2%. Recticel is pinning its hopes on the Geltex 2.0 product range, introduced in the final quarter of 2018, to stabilise the business. 'It is very well received by our customers, and is expected to further strengthen our branded product range,' the company said.

There was a rise of 4.0% in sales for the insulation business, to EUR 62.5m, in the first quarter of 2019. The company said that lower prices in the sector had been more than compensated for by higher volumes.  Currently, lower MDI prices are helping PU/PIR boards regain market share. Additionally, the company's new Finnish plant is ramping up production, and will make a positive contribution from 2020 onwards.

Sales in the company's automotive business fell 7.2% between Q1 2018 and Q1 2019, to EUR 54m in the Q1 2019 period. This compares with EUR 58.3m in the previous period.

These numbers come after a restatement of the 2018 numbers to reflect a change in accounting, as the Proseat joint venture was divested on 28 February. Away from accounting changes, the European and Chinese markets were weak in the quarter, but they should improve in the second half of the year, Recticel said.