'In the automotive sector, some OEMs are temporarily reducing the production volumes because of trade tensions and new emission regulations.
In the insulation market, Chapelle explained that volumes 'continue to strengthen in a context of declining selling prices. This is as a consequence of decreasing raw material costs.'
The company has however managed to maintain its cash flow and reduced its debt in the quarter.
It added that it expects earnings by the end of 2018 to match those in 2017.
Recticel confirmed that the sale of its automotive divisions is continuing according to plan.
Across the company, combined sales decreased from EUR 356m in the third quarter of 2017 to EUR 341.3 m in the third quarter of 2018.
Looking at each of the companies for business divisions in turn, sales in flexible foams fell by 2.1% from EUR 148.6m in Q3 2017 to EUR 145.5m this quarter. Technical foam sales grew by 1.4%, but a 4.5% fall in comfort foam sales overshadowed this. Demand dropped in the furniture and bedding markets.
In September 2018, Recticel Iberia in Spain announced its intention to streamline foaming activities by closing production at its site in Catarroja, near Valencia. The company said that 38 of the 133 jobs in the company's Spanish flexible foam division are in peril.
In the company's beddings business, sales decreased by 11.7% in the third quarter of 2018 compared to the third quarter of 2017. Sales in Q3 2018 were EUR 57.3m, compared to EUR 64.9m in the third quarter of 2017.
The company also added that in mid-October this year, Recticel Schalfkomfort announced plans to close its site in Hassfurt, Germany. The site employs 79 people.
Sales in the insulation division fell by 4.3% to EUR 69.2m in the third quarter of 2018. This compares with EUR 72.4m in the equivalent 2017 quarter.
The decline was due to price erosion reflecting the decreasing MDI input prices. However, sales volumes were strong in the 2018 quarter, Recticel said.
The company confirmed that its Finnish project started production in October.
In the automotive sector, sales fell 2.5% in the third quarter of 2018, compared to the earlier year quarter. Sales in Q3 2018 were EUR 82m, compared to EUR 84.1m in the third quarter of 2017.
Proseat – a 51/49 joint venture between Recticel and Woodbridge hit sales. These were down 11.5% lower because of temporary volume reductions at car makers.
Production volumes most automotive OEMs have fallen and became more volatile recently, said the company. Introduction of new worldwide harmonised light vehicle emission test procedures has hit volumes. The trade war initiated by the US government has also hit volumes.
However, the company said it expects volume volatility will fall with the progressive completion of the vehicle, homologations to the new norm.