Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2012 Earnings Presentation
40 slides from Kingspan's earnings presentation, Feb 25, 2013
Slide 1: Kingspan Full Year Results
Kingspan Full Year Results 25th February 2013
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forward-looking information involves risks and uncertainties that could affect expected r
Slide 3: At a Glance
At a Glance A world leader in high performance insulation and building envelopes Market leading positions in UK, Mainland Europe, North America and Australasia Proprietary technology drives differentiation in product performance Insulated Panels Insulation Access Floors Environmental (52%) (29
Slide 4: Kingspan Global
Kingspan Global United Kingdom 38% Ireland 4% Australasia North America 5% 14% Mainland Europe 37% Manufacturing and distribution operations throughout Europe, North America, Australasia >70 Locations: 59 Manufacturing
Slide 5: Strategic Goals
Strategic Goals Lead the field in high performance insulation globally, greater emphasis of proprietary and differentiating technologies. Kingspan IPN core Kooltherm® Optim-R®, Next Generation Insulation Benchmark® Architectural Become the world’s leading provider of low energy building solu
Slide 6: 2012 In Summary
2012 In Summary Solid overall performance in Insulated Panels, with sales revenue +11%, particularly strong in Germany, Canada and Australia. Revenue Robust performance in Insulation, where revenues were up +2%, up 5% stable in the UK, and slightly up in Continental Europe. to €1,628.7m Contin
Slide 7: Financial Performance Since Trough
Financial Performance Since Trough Revenue (€’m) (CAGR 13%) 1,628.7 1,546.9 1,125.5 1,193.2 2009 2010 2011 2012 Trading Profit (CAGR 17%) 107.7 95.7 67.1 72.0 2009 2010 2011 2012 7
Slide 8: Financial Review
Kingspan. Financial Review
Slide 9: Financial Highlights
Financial Highlights +5% Revenue €1,628.7m -5% like-for-like* +13% Trading Profit** €107.7m +6% like-for-like* Trading Margin 6.6% +40bps Profit after tax €74.7m +19% Basic EPS 43.8c +18.1% Free cash flow €106.6m +39% Total dividend 12.25c €32.4m +11% * Like-for-like comparisons exclude the impact o
Slide 10: Sales Bridge
Sales Bridge 1,800 66.0 86.4 85.7 15.1 1,600 1,400 1,200 1,000 €m 800 1,628.7 1,546.9 600 400 200 0 Revenue 2011 Currency Volume Price/Mix Acquisition Revenue 2012 10
Slide 11: Trading Profit & Margin Growth
Trading Profit & Margin Growth Trading Profit Margin % Margin % 120.0 FY10 FY 11 FY 12 100.0 Insulated 5.6% 6.7% 7.3% Panels 80.0 Insulation 6.7% 5.6% 6.3% Boards 60.0 Environmental 0.5% 3.3% 0.7% €m 107.7 95.7 Access Floors 13.8% 10.2% 9.9% 40.0 67.0 72.0 Group 6.0% 6.2% 6.6% 20.0 0.0 FY 2009 FY 20
Slide 12: FY 2012 Trading Profit Like-for-Like growth
FY 2012 Trading Profit Like-for-Like growth Like-for-like Acquisitions/ Currency Reported growth Disposals Impact Growth Insulated Panels +14% +2% +6% +22% Insulation Boards +8% - +7% +15% Environmental -85% - +3% -82% Access Floors +11% -1% +10% +20% Group +6% +1% +6% +13% Kingspan Energi Centre, H
Slide 13: Strong Operating Cash Flow
Strong Operating Cash Flow €m FY 12 FY 11 % change Operating profit 104.6 90.9 +15% Depreciation & amortisation 43.3 42.7 +1% Working Capital decrease/(increase) 31.9 (17.0) +288% Operating cash flow 179.8 116.6 +54% Interest and taxation (31.0) (21.5) +44% Net capital expenditure (31.8) (23.6) +35%
Slide 14: Strong Net Debt Performance
Strong Net Debt Performance €m FY 12 FY 11 Free cash flow 106.6 76.9 Acquisitions (net of disposal proceeds) (72.5) (107.0) Settlement of legal costs (12.3) - Dividends paid/other (16.6) (16.8) Cashflow Movement 5.2 (46.9) Debt Translation (0.6) (2.4) Decrease/(increase) in net debt 4.6 (49.3) Net d
Slide 15: Key Ratios
Key Ratios FY 10 FY 11 H1 12 FY 12 ROCE 8.6% 10.0% 10.5% 10.7% Gearing (Net Debt: 18.1% 23.1% 21.7% 20.4% Shareholders Funds) Net Debt/EBITDA 1.12 1.27 1.21 1.12 Interest Cover 11.9 10.2 9.9 10.0 Working Capital as 13.6% 12.2% 13.6% 12.3% % of Sales 15
Slide 16: Strong Balance Sheet
Strong Balance Sheet Net Debt €165.5m – headroom c. €477m New revolving credit facility of €300m 2005 Private placement €151mn (USD200m) 2011 Private placement €150m (USD200m) Significant headroom on covenants Max 3.5x net debt:EBITDA; actual 1.12x Indoor racing, New York, USA Min 4.0x
Slide 17: Business Review & Outlook
Business Review & Outlook 17
Slide 18: Sales by Geography
Sales by Geography FY 2011 FY 2012 4% 1% 5% 14% 5% 2% 4% 14% 39% 38% 37% 37% Republic of Ireland Britain & Northern Ireland €mn FY 12 FY 11 Constant Currency YoY % Mainland Europe Change Change Americas Britain & Northern 614.7 605.9 -5% +1% Australasia Ireland Rest of World Mainland Europe 606.0 58
Slide 19: Group Sales Outside UK/IRL
Group Sales Outside UK/IRL 1000 €949m 900 €863m 800 700 €610m 600 58% €’m 500 56% 400 51% €281m 51% 300 200 23% 23% 100 €109m 16% 0 2000 2005 2010 2011 2012 Internationalisation of the Group through the cycle 19
Slide 20: Sales by Product Group
Sales by Product Group 900 800 700 600 500 €’m FY 12 400 FY 11 300 200 100 0 Insulated Insulation Environmental Access Floors Panels & Renewables €m FY 12 FY 11 Constant YoY % Currency Change Insulated Panels 840.4 758.0 +7% +11% Insulation Boards 470.4 460.4 -1% +2% Environmental 163.8 202.3 -23% -
Slide 21: Insulated Panels
Insulated Panels Kingspan.
Slide 22: Insulated Panels UK, IRL, WE
Insulated Panels UK, IRL, WE Volume in key markets FY 12 FY 11 Britain -2% Sales (€m) 453.1 409.5 Benelux -10% % of Group Sales 28% 26% Ireland -17% Analysis of YoY % Change Australia/NZ +26% Currency Volume Price & Mix Acquisitions Total Order intake down 1%. Current orderbook is +2% on
Slide 23: Insulated Panels CEMEI
Insulated Panels CEMEI Mixed sales pattern across the FY 12 FY 11 territory but solid volume growth overall Sales (€m) 251.1 215.1 % of Group Sales 16% 14% Germany +10% Note: The above figures include Germany and Turkey Poland -9% Analysis of YoY % Change Czech +2% Currency Volume Price & Mi
Slide 24: Insulated Panels North America
Insulated Panels North America 2% growth in sales, despite 10% FY 12 FY 11 volume decline over same period prior year. Sales (€m) 136.2 133.4 % of Group Sales 8% 9% Insulated Panel order intake +9%, weak in Q1, but much improved later in the year Analysis of YoY % Change Panel orderbook curren
Slide 25: Insulation
Insulation Photo credit to Glasgow Life 25
Slide 26: Insulation
Insulation Solid underlying performance in FY 12 FY 11 UK, growth in Western Europe, Ireland weak Sales (€m) 470.4 460.4 % of Group Sales 29% 30% Kooltherm® conversion on track in all markets, Germany a little slower Analysis of YoY % Change Optim-R ® (Next Generation Insulation) launched Curr
Slide 27: Access Floors
Access Floors Kingspan.
Slide 28: Access Floors
Access Floors Good performance in a weak FY 12 FY 11 environment Sales (€m) 154.1 126.2 US office activity showing early signs of % of Group Sales 9% 8% slow recovery Analysis of YoY % Change Datacentre market was steady Currency Volume Acquisition Price & Total UK office market volume in re
Slide 29: Environmental
Environmental 29
Slide 30: Environmental
Environmental Difficult trading year for the division FY 12 FY 11 Continental Europe weaker as Sales (€m) 163.8 202.3 France volume significantly % of Group Sales 10% 13% reduced Fuel storage and Hot Water weak Analysis of YoY % Change in the UK as social housing Currency Volume, Price & Mix T
Slide 31: Outlook
Outlook More pronounced seasonality results in a slow start to 2013 Macro indicators mixed. Improvement expected in US, Germany, stable in UK, and weaker in Benelux and France Quarter 1 will be testing, however orderbooks positive year on year, should lead to growth in Q2 Broadway Pier, San Di
Slide 32: Additional Information
Additional Information WDD dasaoaaapiaaaaiaaiae on | {0 [s. r - ‘ i iE Me ~ } eg | iL i i al a t q\7 le eS H » —— i q | + —_—
Slide 33: Innovation Pipeline
Innovation Pipeline Primary objective: Growing differentiation and competitive advantage >40 active projects, annual spend ca. 1% turnover Ranging from continuous evolutionary developments, to fundamental advancements in basic materials Key projects: — NGI (Next Generation Insulation) — Sola
Slide 34: Innovation in Action
Innovation in Action 10 year organic growth of new/embryotic products* 250 200 €228m CAGR 25% 150 100 50 €25m 0 2002 2012 * includes Kooltherm®, Optim-R®, Benchmark®, Top Deck®, X Deck® 34
Slide 35: The Energy Gap?
The Energy Gap? dae o 2 = = c i ENERGY cc 1 A GAP a (kWh) Reduced thermal = _€ PER ANNUM performance of fibrous i insulant in building = envelope and fabric - systems will increase energy use, costs and CO, emissions’. % moisture content by Degradation of 0 Air movement through fibrous Impact: Moist
Slide 36: Kingspan Insulates Better
Kingspan Insulates Better 36
Slide 37: Rigid Insulation: How it Performs
Rigid Insulation: How it Performs 37
Slide 38: US Office Market Starts
US Office Market Starts Million Square Feet 180 160 140 120 100 80 60 40 20 0 2009A 2010A 2011A 2012F 2013F 2014F 2015F 2016F 2017F Source: McGraw Hill Construction 38
Slide 39: Penetration Potential
Penetration Potential 2005A 2012A 2015F Insulated Panels UK 55% 66% 75% Insulated Panels NA 5% 9% 12% Insulated Panels Germany 23% 38% 42% Insulated Panels Australia 6% 9.5% 12% Insulation Board UK 30% 36% 40% Insulation Board Germany 5% 7% 8.5% Insulation Board Australia 2% 6.5% 8% Insulation Board
Slide 40: Kingscourt, Co. Cavan, Ireland
Kingscourt, Co. Cavan, Ireland Telephone: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.ie www.kingspan.com