recticel strategy and trading update

RECTICEL

STRATEGY & TRADING UPDATE

KBC Small Cap Conference

Brussels, 11 December 2012

Jean-Pierre Mellen – CFO Recticel

Michel De Smedt – IRO Recticel

1 Reminder of Recticel strategy:

Portfolio strategy – Internationalization - Simplification

2 Strategic actions

3 9M2012 Trading Update

4 Highlights per segment

5 Miscellaneous

6 Outlook FY2012

11 Dec 2012 KBC Small Cap Conference 2

REMINDER OF RECTICEL STRATEGY

► Recticel will pursue polyurethane applications, strive for growth via innovation and new product introduction, allocate resources on highest growth segments, develop on a broader international basis, improve capacity utilization and reduce complexity : Focus Insulation on Europe and organic growth through

innovation, new product introduction, complemented by acquisitions

Bedding : organic growth and acquisitions

Rationalize and modernize Flexible Foams and seize selective growth area

Automotive : minimize investment, optimize capacity utilization while pursuing innovative product development



► Financial objectives:

Achieve a CAGR of its sales turnover of minimum 5%, at same

scope of consolidation

Generate double-digit growth in earnings and dividends

Deliver a ROCE (EBIT / Average capital employed) of at least

15%.

Lower the gearing ratio (Net Financial Debt/Equity) under 50%



► 9-box grid: Portfolio strategy


► Positive contribution of PU to global megatrends such as: Energy conservation and environmental protection

Food & water supply due to demographic developments

Comfort, acoustics, luxury

Need for strong and lightweight materials



2 Strategic actions



5 Miscellaneous

6 Outlook FY2012


STRATEGIC ACTIONS

► Greenfield Insulation Plant in Bourges

Lean plant

Limited product range aiming at French market

Lower logistics costs

Investment : EUR 23 million

Capacity : 400,000 m³/year

Start of production : Sept 2012 → full capacity 2014


STRATEGIC ACTIONS

► External Insulation for Renovation - ISOFINISH


Innovative concept

• continuous insulation shield

• adjustable external wall system

• freedom of wall finishing

STRATEGIC ACTIONS ► External Insulation for Renovation – ETICS ETICS = External Thermal Insulation Composite System


Step 1:

Supporting wall

Step 2:

Mounting & fixing insulation

Eurothane EW PIR + special glassfleece 600x1200x100mm

Straight edges

Step 3:

Base coat

with mesh

Step 4:

Finishing

coat

STRATEGIC ACTIONS

► Geltex : New Comfort Foam for Bedding


New generation of foam developed by Recticel

Optimal pressure distribution

Maximum open celled

Market introduction in Jan-2012

► ZNOOOZ® : trial for specific own-developed retail distribution concept in Belgium

STRATEGIC ACTIONS

► International Expansion

China : - Automotive Interiors (3 plants) : Ningbo, Shengyang, Beijing

→ Growing with BMW, Volvo, Daimler and VW

- Flexible Foams (1 plant): Shanghaï. 2nd plant likely in 2013 in Chenzen

→Technical - fast growing

India : - Flexible Foams (1 plant): Mumbai. 2nd plant likely in 2013 in Bangalore

→ Technical/Acoustics - growing

Turkey : - Flexible Foams (1 plant) : Istanbul

→ Technical/Acoustics - Fast growing

USA : - Automotive Interiors (2plants) : Declining

- Flexible Foams (2 plants) : New Jersey, California

→ Acoustics - fast growing – expansion under consideration

Brazil : - Flexible Foams → JV under consideration

Russia : - Insulation → JV under consideration


STRATEGIC ACTIONS

► Simplification


2009 2012

# Segments 5 5

# Joint ventures

(T1/T2)

11/11 5/8

# Plants 124 103

# Employees 9,883 < 8,000

STRATEGIC ACTIONS

► Management Committee : renewed at 50%


Chief Executive Officer Olivier CHAPELLE

Group General Manager Bedding

Philipp BURGTORF (started 3/9/12)

Group General Manager Insulation

Paul WERBROUCK

Group General Manager Flexible Foams

Rik DE VOS (started 1/9/11)

Group General Manager Automotive

Marc CLOCKAERTS

Recticel Board of Directors Chairman

Etienne DAVIGNON

Audit Committee

Remuneration and Nomination

Committee

Chief Financial Officer

Jean-Pierre MELLEN IT & Business Support Manager

Betty BOGAERT

IDC Manager Bart WALLAEYS

Chief Procurement Officer François PETIT (started 2/5/11)

Corporate General Counsel & General Secretary

Dirk VERBRUGGEN (as from 1/1/13)

Group Human Resources & Corporate Communications Manager

Jan DE MOOR

Internal Auditor Patrick MICHALAK (started 1/3/12)

Chief Sustainability Officer Jean-Pierre DE KESEL (as from 1/11/12)

STRATEGIC ACTIONS

► Refinancing

Decision to refinance early made in May 2011 due to expected

reduced credit availability

Refinancing announced in December 2011: new club deal of EUR

175 million maturing in Dec 2016 :

• for 15 months, Recticel accepts higher margin and financial costs

• but assures the long term financing of the company

Elimination of financing risk


STRATEGIC ACTIONS

► Other financials




2 Strategic actions



5 Miscellaneous

6 Outlook FY2012


9M2012 TRADING UPDATE

► Net Sales: From EUR 1 036.4M to EUR 996.6M (-3.8%)

• 1Q/12: from EUR 359.6M to EUR 351.1M (-2.4%)



► YTD Sept/2012: All business lines recorded lower sales, except Insulation.

► Overall softer demand in most markets.

► The impact of lower sales on profitability has been substantially

compensated by the effect of cost reductions and efficiency

improvements.


Flexible

Foams42.9%

Bedding

18.9%

Insulation

15.5%

Automotive

22.8%

y/y: -1.3% y/y: -10.1%

y/y: 2.8%

y/y: -7.6%

Q3/2011 Q3/2012 D in million EUR YTD Sep/2011 YTD Sep/2012 D

147,3 140,1 -4,9% Flexible Foams 449,5 443,7 -1,3%

76,8 68,2 -11,2% Bedding 218,4 201,8 -7,6%

54,8 58,5 6,8% Insulation 163,4 168,0 2,8%

74,3 62,8 -15,4% Automotive 249,4 224,2 -10,1%

( 16,6) ( 13,3) -20,0% Eliminations ( 44,4) ( 41,1) -7,5%

336,6 316,4 -6,0% TOTAL 1 036,4 996,6 -3,8%

9M2012 TRADING UPDATE

► Financial situation On 30 September 2012, the Group net financial debt amounted to EUR 176.7 million excluding the drawn amounts under off-balance non-recourse factoring/forfeiting programs of EUR 43.1 million; compared to respectively EUR 191.8 million and EUR 47.6 million on 30 September 2011; and EUR 179.0 million and EUR 49.4 million on 30 June 2012.


► Status Shareholders’ Agreement Recticel has been informed by the shareholders group around Compagnie du Bois Sauvage, that they have formally ended their cooperation with effect as from 6 November 2012. They accordingly no longer act in mutual understanding as mentioned in the annual report and subsequent notifications. This has no influence on the shareholding of Compagnie du Bois Sauvage, which still holds 29.98% of the Recticel shares.



2 Strategic actions



5 Miscellaneous

6 Outlook FY2012



► Key events 9M2012

Sales from EUR 163.4M to EUR 168.0M (+2.8%)

1Q2012: from EUR 48.4M to EUR 53.0M (+9.5%)

2Q2012: from EUR 60.3M to EUR 56.5M (-6.2%)

3Q2012: from EUR 54.8M to EUR 58.5M (+6.8%)

► Building Insulation (9M/2012: EUR 155.8M, +2.8%)

Increasingly difficult 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.

New factory in Bourges (France) operational since end-October 2012.

► Industrial Insulation (9M/2012: EUR 12.2M, +2.2%)

00

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Sales Insulation (2010-2012)

2010 2011 2012

in million EUR 1H/2011 1H/2012 D Sales 108,6 109,5 0,8%

REBITDA 18,2 18,8 3,4%

as % of sales 16,7% 17,2%

EBITDA 18,2 18,8 3,4%

as % of sales 16,7% 17,2%

REBIT 16,4 16,8 2,3%

as % of sales 15,1% 15,3%

EBIT 16,4 16,8 2,3%

as % of sales 15,1% 15,3%

Building93%

Industrial7%

Brands54%

Private Label

46%



Sales from EUR 218,4M to EUR 201.8M (-7.6%)

• 1Q2012: from EUR 78.9M to EUR 73.6M (-6.7%)



► Lower sales in the ‘Brand’ sub-segment (9M/2012: -7.4%) as well as in ‘Private label’ sub-segment (9M/2012: -8.0%)

► Activity suffered from a globally weakening consumer confidence in Western Europe and lower shop visit rates

► Appointment of new Group General Manager Bedding since Sept 2012

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Sales Bedding (2010-2012)

2010 2011 2012

in million EUR 1H/2011 1H/2012 D Sales 141,6 133,6 -5,6%

REBITDA 7,7 4,6 -39,9%

as % of sales 5,4% 3,5%

EBITDA 7,5 4,0 -46,5%

as % of sales 5,3% 3,0%

REBIT 4,7 1,9 -60,2%

as % of sales 3,3% 1,4%

EBIT 4,5 1,2 -72,4%

as % of sales 3,2% 0,9%

Comfort61%

Technical Foams

35%

Composite Foams

4%



Sales from EUR 449.5M to EUR 443.7M (-1.3%)

• 1Q2012: from EUR 159,8M to EUR 157.4M (-1.5%)

• 2Q2012: from EUR 142,4M to EUR 146.1M (+2.6%)


► Comfort (9M/2012: EUR 270.8M, -1.0%) In most markets sales stabilized, except in

Scandinavia, Spain and Benelux

Signs of slowdown became tangible in CEE countries

► Technical foams (9M/2012: EUR 155,8M, -1.5%) Suffered from the lower demand from various

industrial and automotive markets, especially in Spain, France and Italy

Strong growth in Turkey, USA and China partially compensated for the negative trend in Europe

► Composite foams (9M/2012: EUR 17.2M, -4.6%)

125

130

135

140

145

150

155

160

165

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Sales Flexible Foams (2010-2012)

2010 2011 2012

in million EUR 1H/2011 1H/2012 D Sales 302,2 303,5 0,4%

REBITDA 13,5 17,2 27,4%

as % of sales 4,5% 5,7%

EBITDA 14,0 14,8 5,8%

as % of sales 4,6% 4,9%

REBIT 6,7 10,6 59,1%

as % of sales 2,2% 3,5%

EBIT 7,1 7,7 7,9%

as % of sales 2,4% 2,5%

Exteriors4%

Interiors50%

Seating46%



Sales from EUR 249.4M to EUR 224.2M (-10.1%)




► Interiors (9M/2012: EUR 111.4M, -12.5%) Decrease due to the anticipated phase-out of

some contracts, mainly in the USA

Interiors sub-segment resisted better than the market, because it supplies the premium car segment which remained more resilient thanks to the German and Asian demand

► Seating (Proseat – 51/49 JV) (9M/2012: EUR 104.0.2M, -7.2%).

Sales fell in line with the general automotive market

► Exteriors (9M/2012: EUR 8.7M, -12.7%)

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Sales Automotive (2010-2012)

2010 2011 2012

in million EUR 1H/2011 1H/2012 D Sales 175,1 161,3 -7,9%

REBITDA 16,3 15,8 -3,0%

as % of sales 9,3% 9,8%

EBITDA 15,7 14,3 -8,9%

as % of sales 9,0% 8,9%

REBIT 7,0 7,8 12,4%

as % of sales 4,0% 4,9%

EBIT 6,3 6,3 1,1%

as % of sales 3,6% 3,9%



2 Strategic actions



5 Miscellaneous

6 Outlook FY2012


MISCELLANEOUS

► Contingent assets & liabilities

Inspection by the Directorate for Competition of the EC

• No further developments to be reported

Inspection by the German Federal Cartel Office (“Bundeskartellamt”)

• No further developments to be reported


OUTLOOK 2012

► Given the increasingly challenging and uncertain environment

in the economies in which Recticel operates, the Board of

Directors reiterates that it is not in a position to assess the

growth potential for the remainder of 2012.

► In this environment the Group continues to act in order to

streamline operations and reduce complexity. These actions

are generating the expected contribution to recurring results.

► The Group will continue to focus on the execution of its

strategic plan 2010-2015 and the realization of its corporate

objectives, which remain unchanged.


Thank you for your attention !

Questions & Answers


CONTACTS


Recticel International Headquarters

2, avenue des Olympiades/Olympiadenlaan, 2

B-1140 Brussels

Tel: +32 (0)2 775 18 11

Fax: +32 (0)2 775 19 90

For more product information or direct business contacts, please consult our web site www.recticel.com, where interested parties can also find our press releases and slide presentations of our annual or half year results.

Customers, suppliers, shareholders, investors and all other stakeholders and interested parties who wish to receive Recticel’s annual

report and/or its regular press releases, are invited to subscribe to Recticel’s email alert on the above web site address. This service is free

of charge.

Investor Relations

Michel De Smedt

Email: [email protected]

Tel: +32 (0)2 775 18 09

Mob: +2 (0) 479 91 11 38

Fax: +32 (0)2 775 19 90

Press

Jan De Moor

Email: [email protected]

Tel: +32 (0)2 775 18 95

Mob: +2 (0) 475 42 78 26

Fax: +32 (0)2 775 19 90

Financial calendar

Annual results 2012 01.03.2013 (before opening of the stock exchange)

First quarter 2013 trading update 07.05.2013 (before opening of the stock exchange)

Annual General Meeting 28.05.2013 (at 10:00 AM CET)

First half-year 2013 results 30.08.2013 (before opening of the stock exchange)

Third quarter trading update 2013 31.10.2013 (before opening of the stock exchange)

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