Brussels - For Belgian foam group Recticel, total sales increased by 1.3 % from Euro 332.2 million ($452 million) in Q3/2010 to Euro 336.6 million in Q3/2011. Over the first nine months sales increased by 3.4 percent from Euro 1002.6 million to Euro 1036.4 million.
Recticel had a strong Q1/2011 (+7.4 percent), but says the slowing sales trend observed in Q2/2011 (+1.3 percent) extended into Q3/2011 (+1.3 percent). "Although all business segments reported stable or higher sales, overall softer demand in most markets is noticeable," Recticel commented in its Q3 results statement.
One noticeable effect from the suppliers is that raw material prices stabilised during Q3, Recticel commented. Raw materials caused cost increases of respectively Euro 7.9 million in Q3/2011 and Euro 37.2 million for the first nine months of 2011. Selling price increases have largely been passed through to most market segments, said the foamer.
Breakdown of Recticel's Q3 and 9-month sales by segment (million Euro)
Q3/2010 Q3/2011 Change, % Division YTD 2010 YTD 2011 Change, %
147. 147.3 0.0% Flexible foams 446.0 449.5 0.8%
73.7 76.8 4.3% Bedding 216.4 218. 4 0.9%
53.4 54.8 2.6% Insulation 141.8 163.4 15.2%
73.1 74.3 1.6% Automotive 241.1 2 49.4 3.4%
(15.3) (16.6) 9.1% Eliminations (42.7) (44.4) 3.9%
332.2 336.6 1.3% Total 1002.6 1036.4 3.4%
In flexible foams, sales increased by 0.8 percent to Euro 449.5 million, primarily as a result of higher sales in technical foams. For the third quarter 2011 overall sales (Euro 147.3 million) were stable.
Comfort foams reported lower sales (9M/2011: -3.7 percent; 3Q/2011: -2.6 percent) which Recticel said was a result of the deteriorating demand in Scandinavia and Spain."
Sales of composite (rebonded) foams (9M/2011: -12.5 percent; 3Q/2011: -16.7 percent) "continued to suffer from poor world market prices for trim ," as well as from lower than expected demand.
The group completed its restructuring of several production sites in Spain and announced the closure of the Carobel converting plant in the UK by the end of 2011. Recticel also decided to buy out the 50 percent joint venture partners in the holding company Enipur bv (The Netherlands), which controls operations in Greece (Teknofoam Hellas) and in Turkey (Teknofoam Turkey), a move which Recticel said will enable it to implement its strategy in the region.
Modernisation of a plant in Langeac (France), where a new foaming machine has been installed, is now completed.
In bedding, sales increased by 0.9 percent to Euro 218.4 million. For the third quarter 2011 overall sales (Euro 76.8 million) increased by 4.3 percent. Recticel said its performance remained under pressure in Austria and Switzerland, where the export activity (mainly Swissflex) suffered from the strong Swiss Franc.
In insulation, sales increased by 15.2 percent to Euro 163.4 million. For Q3 2011, overall sales (Euro 54.8 million) increased by 2.6 percent, but this is compared with "a very strong Q3/2010 sales where sales rose 18.0 percent versus 2009)," Recticel commented.
Sales of building insulation were the driver (9M/2011: +17.1 percent; 3Q/2011: +3.6 percent). Recticel said that, "despite a softer European construction market, structural demand for high performing polyurethane building insulation products remains high as a result of stricter insulation standards and regulations, higher energy prices and growing awareness of the need for more and better insulation."
In automotive, sales increased by 3.4 percent to Euro 249.4 million for the nine months, with sales for Q3, (Euro 74.3 million) increasing by 1.6 percent. Sales in 'Interiors' decreased slightly (9M/2011: +0.2 percent; 3Q/2011: -4.5 percent), with the premium car market segment remaining strong in Europe, the US and in China, said Recticel.
Recticel also noted two new contracts -- for Porsche (Cajun), to be started in 2013, and for Mercedes (E-class in China), to start in 2012.
Sales for its Proseat 51 percent/49 percent auto seating joint venture with Woodbridge, (9M/2011: +10.7 percent; Q3/2011: +12.7 percent) increased as a result of improving market share, and with the launch of an EPP (expanded poly propylene) project in its French site of Trilport.