Belgian insulation specialist Recticel saw revenues jump by 12.2% in the first half of the year, as the company says it is seeing positive signs for the construction markets in Western Europe and the UK.
Headquartered in Brussels, Recticel employs around 1,250 people and is listed on the Belgian stock exchange (Euronext Brussels). The company provides insulation products for both residential and commercial buildings, across Europe and the US.
In the first half of 2024, Recticel reported net sales of €298.6 million, a 12.2% increase compared to the same period last year. Recticel also noted that growth accelerated in the second quarter.
The company said that it saw "double digit" growth in sales volumes for insulation boards and insulated panels, in what it said were "flat or contracting" Western European construction markets.
Bad weather slowing progress on construction sites
Recticel noted that European markets have "largely remained slow" in the first half of the year, with adverse weather conditions causing delays on construction sites. It said that the commercial construction market has shown more resilience than the residential sector, with the latter continuing to underperform.
However, Recticel said it believes the construction sector may be taking a turn for the better, having "reached the bottom of the cycle" in most Western European markets and with signs of a "return to market growth" in the UK.
The company also said the price for raw materials has fallen since Easter, with potential to fall further in the second half of the year.
Recticel's adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA, a measure of profit) grew by 37.9% to €25.1 million in the first half of the year, with its sales margin growing from 6.8% to 8.4%.
The company noted that its cash reserves have fallen from €161.9 million in December to €58.1 million at the end of June, but this is due to the recent acquisition of Belgian insulation panel manufacturer REX and seasonal factors.
Jan Vergote, Recticel CEO, said that the first half performance reflects the "effectiveness of our market driven strategy".
He said the company is focusing on lowering its cost base and increasing sales volumes for insulation boards, as well as building up an "innovation pipeline" of 15 new insulation board products which will launch over the next year and a half.
"At the same time, we are successfully rolling out Trimo’s premium Insulated Panels strategy throughout Western Europe. The integration of Rex panels is on track," he said, adding that the company's insulation materials have been used by all major US aerospace companies including SpaceX, Blue Origin, Boeing and Rocket Lab
Recticel predicts "continued volume growth" in the second half of the year, with adjusted EBITDA expected to reach around €50 million.
