Recticel delivers disappointing half year; appoints new CEO

Belgian foam producer Recticel has reported a decline in half year sales while also announcing the appointment of its new CEO.

According to its latest half year 2023 trading update, total sales fell 7.4% to €266.1m from €287.2m in 2022. Adjusted EBITDA resulted at €18.2m, down 42.6% from €31.7m.

Recticel said that sales and profits have been “disappointing” in the first half of 2023. “Recticel is entirely dependent on the European construction markets, which have remained very challenging in most segments and countries during the period,” the group said.

“In the residential markets, new build and renovation activities have been seriously impacted by a combination of high inflation and interest rate increases, weighing on disposable income. In the industrial and commercial markets, fewer projects were launched and some have been postponed. These market trends have been observed in most European countries, with the notable exception of France, which has remained quite dynamic.

“As a consequence of these subdued markets, our volumes have been lower year-on-year by more than 15%, in a context of substantial competition leading to price deflation and pressure on margins.

“After the closing of the Engineered Foams divestment to Carpenter on 12 and 13 June 2023, and the subsequent €142.3m net cash position, several acquisition opportunities are being pursued and progressing well, which will enhance our market and segment positions in Europe.”

During the period Recticel has also reached an agreement on the divestment of the 33% share in Orsa Foam. “Following the closing of the sale of Engineered Foams to Carpenter, Recticel has now reached an agreement in principle to divest its 33% participation in Italian foam company Orsa Foam srl to its joint venture partner Orsa srl.

“The purchase price amounts to €7.15m and will be paid in instalments with the last payment due in December 2025. The deal is expected to close by the end of the third quarter of 2023.”

Looking ahead, input costs of chemicals, steel, and to a lesser extent mineral wool have decreased, which should create the conditions for volume growth going forward. “Although still volatile, we see improvements in the demand, particularly in Insulated Panels. In this context, we expect our full year 2023 Adjusted EBITDA to reach between €40 and 45m,” the group added.

Furthermore, and at the same time of posting its trading update, Recticel has announced the appointment of Jan Vergote as its new CEO, replacing the outgoing Olivier Chapelle.

“After the finalisation of the transformation of Recticel in a pure insulation player, the Board of Directors and Olivier Chapelle have agreed that after 13 years at the helm of Recticel, the timing was ideal to pass the torch to a new CEO, who would lead the next phase of expansion of the Company,” the group said.

Olivier Chapelle and the Board of Directors have aligned on a handover, to begin on 1 September 2023, with Jan Vergote who succeeds him. Jan Vergote will resign from all his operational functions at Baltisse Group.

Johnny Thijs, Chairman. added: “In the name of the Board of Directors, I wish to thank Olivier Chapelle wholeheartedly for having successfully transformed Recticel under difficult circumstances. The company can now fully focus on its next phase of expansion as a pure insulation player.

“The successor of Olivier, Jan Vergote, has accumulated a lot of experience as Managing Director and CEO in several European and international companies, active in the construction industry. He brings the experience needed to realize our ambitious growth targets.”

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