Brussels - Foam producer Recticel Group has announced a return to profit for 2007, saying its gross profit for the year was up 36 percent since 2005, and commenting that it has achieved a "stable cost structure."
Sales at the insulation, bedding and automotive group of Euro 1611.8 million for 2007 (Euro 1474.4 million: 2006) were 9.3 percent up, while gross profit of Euro 255 million was 8.2 percent higher than for the previous year.
Recticel said it has reaped the "full benefit of restructuring efforts over the last three years," and achieved a substantial improvement in its automotive operations as well as "strong profitable growth in insulation," where sales rose by 27 percent.
Earnings (EBIT) of Euro 65.2 million were 300 percent up on EBIT for 2006, while the result after tax was a positive figure of Euro 21.5 million, compared to losses of Euro 21.2 million for 2006 and Euro 28 million for 2005.
An interesting aspect its that Recticel said it was generally able to pass rises in raw materials prices on in the own sales prices.
The most important changes in consolidation are:
- integration of Icoa, Spain (flexible foams) (since 1 April 2006);
- consolidation of Teknofoam, Turkey (flexible foams) (since 1 January 2007);
- integration into the Proseat joint venture (automotive) of Woodbridge's seat cushion activities in the UK (since 1 March 2007);
- acquisition of Espe, Finland (flexible foams) (since 1 July 2007).
By business, Recticel's sales split is: flexible foams Euro 665.6 million (6.2 percent up on 2006); bedding Euro 396.4 million (5.7 percent up); insulation Euro 139.7 million (27.3 percent up) and automotive Euros 490.4 million (14.9 percent up) .
In flexible foams, Recticel has acquired a 70 000 sq.m industrial site in Turkey, where it plans to start construction of a new foaming unit in 2008, to become operational during 2009.
In building insulation, Recticel said, sales "rose spectacularly" by 31.6 percent to Euro 120.4 million in 2007, as a result of rising volumes following more rigorous insulation standards, higher energy prices and growing social environmental awareness of the need for more and better home insulation.
The group's planned investments in Wevelgem (Belgium) and in the new production plant in Stoke-on-Trent, UK - scheduled to start up in July 2008 - will put this business unit in a position to cater for the sharply rising demand in the market, the group's results statement said.
Recticel's automotive business managed to push sales up by 14.9 percent in 2007, in a "sluggish worldwide car market," the group pointed out.
This growth was achieved by the launch of new interiors projects (Euro 221 million, +5.6%), including the new Mercedes C-class, launched simultaneously from three plants.
At the same time, Recticel gained new projects for Volvo, Saab, Peugeot and Scania, to be started in 2008-2010.
But Recticel said the main contribution to the rise in automotive sales came from its Proseat seat foam joint venture with Woodbridge Group of Canada (Euro 225.1 million, +31.7 percent, 11.7 percent internal growth). During the year, Proseat integrated Woodbridge's UK activities into the JV (51/49) and Proseat also increased its volumes from the Czech Republic and Germany.
In 2007, Proseat and Johnson Controls set up a new production joint venture in Poland and Slovakia to support future growth of the eastern European markets.
Proseat also announced its intention in 2007 to cooperate with Foamline in Russia, which "should enable Proseat to expand and optimise its activities in this growth market," Recticel commented.