Capital Market Day
15 October 2010
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Forward-looking statement
The statements on the future in this presentation, including expected sales and earnings, are associated with
risks and uncertainties and may be affected by factors influencing the activities of the group, e.g. the global
economic environment, including interest and exchange rate developments, the raw material situation,
production and distribution-related issues, breach of contract or unexpected termination of contract, price
reductions due to market-driven price reductions, market acceptance of new products, launches of competitive
products and other unforeseen factors
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Agenda
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
Group Development by CFO Gilles Maria

The French market by Managing director of Rockwool France,
Bernard Plancade

The Rockfon business by Director of marketing & business
development, Nicolas Limbach

Lunch

Factory tour
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Regional outlook
Western Europe: Euro zone
gradually recovering from
financial crisis with Germany,
France, Scandinavia as the
better performing areas
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4
Regional outlook
Central and Eastern Europe:
Still rather depressed with the
exception of Poland which
shows relative stability
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Regional outlook
Russia: Construction
Improving and strong
comeback in insulation
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6
Regional outlook
North America: Despite
general fragility of US
housing, our operations
are progressing both in
Canada and the US.
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Regional outlook
Asia: Solid growth
driven by strong
Chinese economy
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Green stimulus plans continue despite
austerity plans

Germany: Additional funding has been allocated to “Energy efficiency of Buildings”
support programme securing a budget of EUR 1.5 bn in 2011.

UK: CERT funding was expanded to end 2010 still focusing on loft and cavity. New
schemes CESP dedicated to specific poor areas will bring renovation of 100,000
houses as a pilot for the green deal expected in 2012.
US: Home Star funding (USD 5 bn over 2 years) awaiting approval by US Senate.
Approval unlikely until after November elections


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France: Energy efficiency of buildings government programmes set to continue.
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Long-term growth: The recast EPBD2 will
stimulate EU insulation demand

Renovation of existing buildings




New buildings



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Energy requirements for major renovations now includes all buildings, also <1,000 m2
Stricter energy requirements to building materials – also when renovating
Governments to set up control functions
2018: Passive house level for public buildings
2020: Passive house level for all buildings
National developments run ahead of EU demands: E.g. in Austria, where 30% of new
constructions is now passive houses
10
The Rockwool production process
Chimney
Filter
Recycling
Recycling of insulation
waste from building sites
Cupola
furnace
Environmental burner
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Special machinery
Spinning
chamber
Raw
material
silos
Raw material supply
Cooling zone
Weighing
conveyor
Binder
+ oil
Spinner
Curing
oven
Design cutting
machinery
Packing
Direct loading
11
The capacity expansion plan revisited
New factory in
Factory
Planned factory
New line in
Volga, Russia
Poland (2008)
(2012)
New factory
acquisition
New line in
in Russia
UK (2009)
(2010)
Renewed line
In France
(2009)
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New factory in
Ukraine
(suspended)
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The capacity expansion plan revisited
New line in
Canada (2009)
Factory
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The capacity expansion plan revisited
New factory in
India (2011)
Factory
Planned factory
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The capacity expansion plan revisited
New factory in
India (2011)
Acquired
factories
from CSR
(ETR 2010)
Factory
Planned factory
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The capacity expansion plan revisited
 The group has a total of 40 lines
(excluding CSR, Volga and India)
 Combined annual capacity is approx.
2.2 mill. tonnes
Sales office, administration, etc.
 Average line capacity 55,000 tonnes
Factory
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What makes a factory profitable?

Material efficiency, especially energy


Manning optimisation, skills, …


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Managing the constant changes in product - an order run is typically around 1 hour
Logistic flow



The efficient structure for shifts
Flexibility of changing the type of product produced


Optimising on the continuous flow from the melting oven
Time from order to delivery is between 24 and 72 hours – depending on country
Packaging/compression
Maintenance: minimize stop time
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Efficiency gains of the new super lines

Capacity of 100,000+ tonnes - double the average line

Energy usage
 Lower energy input per tonne

Manning optimisation
 Same manning for double capacity

Packaging/compression
 Newest technology in terms of compression and unit load
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Questions
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Rockwool France S.A.S.
1
Bernard Plancade
1
Rockwool France S.A.S.



Market presence as per 1978
Head office in Paris : 170 persons
Turnover and total headcount evolution:
250
1200
1000
800
150
600
100
Headcount
Turnover in M€
200
400
50
200
2
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
0
1980
0
2
Rockwool France S.A.S.
Production facilities since 1980 in Saint Eloy les Mines : 42 hectares
 3 production lines  Cupola on lines 1 & 2; Electrical on line 3; Rockfon production
 Logistic operations  more than 100 trucks per day
L1 rebuilt
 600 persons
Line 3 200
Line 2 Rockfon
'000 tons
Line 1 1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
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3
The French Insulation market and main
HELO
Industrial
actors
33%
22%
18.8 Mm3
Residential
45% in which 50% new and 50% refurbishment
Others 9%
Foams
36%
4
Mineral Wools
55%
4
The energy efficiency regulation in our
favour
”Grenelle de l’Environnement” goal  CO2 emissions / 4 in 2020
For housing  CO2 emissions reduction by 20%
+ 20% energy saving
+ reach 20% renewable energies
Planning for improving efficiency in buildings supported by Government incentives
NEW
HOUSING
OLD
HOUSING
5
105 kWh
/m²/y
85 kWh
/m²/y
50 kWh
/m²/y
0 kWh
/m²/y
2007
2010
2012
2020
2050
210 KwH
/m²/y
150 KwH
/m²/y
50 KwH
/m²/y
250 KwH
/m²/y
5
The French Government incentives
 NEW CONSTRUCTION
 Tax credit on loan interest  replaced in 2011
by 0% interest loan (PTZ+) to boost 1st acquisition
 REFURBISHMENT
 ”Eco prêt” 0% interest loan  20 to 30 K€ (2 or 3 types of works)
 Tax credit (cannot be cumulated with ”Eco prêt”)  25 to 40% on
insulation products with a limit of 8 K€/person)
 5.5% VAT insulation works
 In 2011 : ”Aide de solidarité écologique” if energy efficiency improvement
> 25%
 Renewable energies : photovoltaic works  from 50 to 25% tax credit
 Refurbishment plan for public buildings  accelerated processes from the
Government
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Rockwool products  Unique 4 in 1 offer
Fire performance
Acoustic performance
Thermal performance
Environment friendly
For Residential buildings
Rockwool
N°1
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Rockwool products  Unique 4 in 1 offer
Fire performance
Rockwool
N°1
Thermal performance
Acoustic performance
Environment friendly
Loft granulate
Low installation cost
RockPrime
 launched in 2000
 New construction
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Higher performances
Low disturbance
JetRock
 launched in 2002
 Refurbishment
Stop thermal bridges
RockAir
 launched in 2009
 DIY
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 The house in 2020 combining comfort, safety and performance
 Contest opened to architects and house builders, based on best thermal, acoustic and fire performances
 Jury made of professionals
 Building by house builders or architects of 4 houses in 4 different French areas
 Follow‐up and communication of the building sites
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Rockwool products  Unique 4 in 1 offer
Fire performance
Acoustic performance
Rockwool
N°1
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Thermal performance
Environment friendly
For Industrial buildings
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Metal Box  Global offer
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Route to market
Rockwool
DISTRIBUTION
CONTRACTORS
B to B
D I Y
Roofers
Blowers
Diffuse
market
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Questions
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Thanks for your attention
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Rockwool Group’s Capital Market Day
Rockfon® Group
October 2010
Nicolas Limbach
 Group Marketing & Business Development Director
 Based in Denmark
 Joined the Rockfon Group in 2007
 Previous career
– Managing Director of Areva T&D in Austria
– Corporate Strategy & Marketing Director of Areva T&D
– Management Consultant, A.T. Kearney
 38 year old, Married, German & French
Agenda
The
company
The
products
Market
drivers
Competitive
…
dynamics
Rockfon’s
goals and
strategy
Rockfon’s
performance
The company
Corporate facts
First
ceiling
produced
in the 50’s
Globally
organized
company,
subsidiary of
Rockwool
No. 2
suspended
ceiling supplier
in Europe
Ca. 180
employees
Sales
offices and
representatives
in more than
32 countries
Production by
sister
companies
in Poland,
France and
Netherlands
The product
Suspended ceilings – what are they used for?
Widely used and easy to install
Conceals and gives access to services
Provides acoustic and visual comfort
Supports compliance to building
regulation
The product
Rockfon customer segments
Leisure
Office
Health
Hotels
Industry
Shops
Education
Retail
The product
Suspended ceilings components
Suspension
systems
(grid)
Ceiling
Tiles
Service elements, eg. lights,
smoke detectors, a/c units,
speakers etc.
The product
Suspended ceiling market by technology
European Ceiling Market Size 2009
Estimation
Softwool
27%
Wood
2%
Metal
9%
Gypsum
9%
Source: RFN Analysis 2010
Wetfelt
53%
The product
A finished stone wool ceiling tile
Edge cutting
Painted finish
Veil
The product
Best in class fire safety
1200°c
Stone wool melts
1000°c
Most stone wool ceilings
are rated A1.
They are made from stone
wool and resist extreme
heat for up to 120 minutes
800°c
600°c
400°c
200°c
Glass wool melts
Steel loses load-bearing capacity
Polystyrene foam burns
Polyurethane foam burns
20
40
60
80
Minutes
100
120
140
The product
Best in class acoustic comfort
50
Sound insulation
45
Wetfelt products
db reinforced
Rockfon’s
dB range
40
Standard wetfelt
products
35
Standard softwool
products
30
25
0,40
0,50
0,60
0,70
Sound absorption
0,80
0,90
1,00
The product
World class acoustic innovation
dB range: The dB range provides outstanding sound insulation
as well as class A sound absorption.
The product
Humidity resistance
Stone wool products can withstand extreme climatic
conditions without affecting the dimensional stability.
For this reason the life expectancy is high.
The product
Humidity resistance
Stone wool has no nutritional value and therefore does not support harmful
micro organisms growth
The product
Design options
Surfaces
Colours
Sizes
Design
Freedom
The product
Design options
The product
World class design innovation
Mono® Acoustic: Smooth white, no edges visible, top
rated acoustics and fire performance
Market drivers
Ceiling market drivers
 Construction industry
– New build non-residential construction
– Renovation non-residential construction
 Interior finishing market
– Real estate market (changes of tenants)
– Company expansion, reorganisations
– Design trends: Colours, smooth white, wood look
– Maintenance
– Estimated average life cycle below 15 years.
 Standards, regulations & building guidelines
– Acoustics: Schools, offices
– Environmental: Certifications, Recycling,…
Market drivers
Building construction market growth
Rockfon relevant building construction market segment growth
15,0%
13,4%
10,0%
5,0%
10,4%
8,8%
6,6%
5,9%
4,3%
4,9%
2,8%
0,0%
-1,9%
2007
-1,6%
2008
-5,0%
-10,0%
1,9%
1,5%
0,9%
-0,2%
0,4%
-0,4%
-0,6%
-0,4%
-0,7%
2009
-1,9%
2010
2011
2012
-3,1%
-4,3%
-3,9%
-3,9%
-4,8%
-3,7%
Education
-11,4%
Health
Office
-15,0%
Non res renov
-20,0%
Source: Euroconstruct 06/2010
-14,2%
Commercial
-16,3%
-17,6%
Market drivers
Real estate market evolution
BNP Parisbas Real Estate - Research
Source: BNP Parisbas Real Estate July 2010
Market drivers
Suspended ceiling market size
European suspended ceiling market size evolution
Mil. m2
172
173
160
152
143
146
142
2010:
-6% to -4%
2003
Source: RFN Analysis 2010
2004
2005
2006
2007
2008
2009
2011 and 2012:
-2% to +8%
2010
2011
2012
Market drivers
Suspended ceiling market by country
s
B
al
tic
ar
k
Fi
nl
an
d
D
en
m
ia
tr
us
A
ed
en
Sw
d
Po
la
n
N
or
w
ay
m
iu
B
el
g
pe
Eu
ro
L
N
y
Ita
l
K
Sp
ai
n
Ea
st
Source: RFN Analysis 2010
U
y
G
er
m
an
ce
Fr
an
R
us
si
a
Market size by country 2009
Mil. m2
Rockfon’s goals
Rockfon strategic goals
 The leading ceiling brand in
Europe
 20% market share in Europe
 No.1 or 2 in each country
 Profitable growth
Rockfon strategy
Rockfon strategy
Differentiation profile
Customer
relations
αw
Technical performance
and support
Geographic expansion
Segmentation
Office
Education Health
Leisure Industry
Retail
Rockfon’s performance
Rockfon sales performance
Index Sales Evolution
1,06
Sales index m2
1,00
1,00
2008
2009
0,96
0,90
0,84
0,76
0,78
0,76
0,79
0,74
0,71
0,66
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2010T3
Rockfon’s performance
Suspended ceiling competition
24 %
European market shares of suspended ceiling market 2009
14 %
10 %
8%
Armstrong
Source: RFN Analysis 2010
Rockfon
AMF
Ecophon
(Knauf)
(St. Gobain)
7%
OWA
Rockfon’s performance
Rockfon market shares
Market share evolution
10,8%
11,0%
11,0%
13,9%
11,4%
Why do we win market share?
• Dynamic product management
• Passionate customer relationships
• Efficient local and global balance
• Strong in health, education & renovation
• Geographic expansion
• Strong stonewool technology
2005
Source: RFN Analysis 2010
2006
2007
2008
2009
Rockfon summary
 Globally organised, customer driven organisation
 Clear number 2 in Europe, gaining market share
 About 10% of Rockwool sales
 EBIT margin above Rockwool average
 High growth potential through geographic expansion in
Europe and the world