Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2017 Earnings Presentation
34 slides from Kingspan's earnings presentation, Feb 23, 2018
Slide 1: Kingspan Full Year Results
Kingspan Full Year Results 23rd February 2018
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation contains certain forward-looking statements including, without limitation, the Group’s financial position, business strategy, plans and objectives of management for future operations. Such forward-looking information involves risks and uncertai
Slide 3: The Business
The Business > A global leader in high 5% 6% Environmental Light performance insulation & Air and building envelopes > Market leading positions 5% Access in UK, Continental Floors Europe, The Americas and Australasia 21% > Proprietary technology Insulation drives differentiation in Boards product pe
Slide 4: What We Deliver
What We Deliver Excellence Architectural Fully Integrated in Energy Inspiration Envelope Solutions Building Comfort Science & Savings 4
Slide 5: 2017 In A Nutshell
2017 In A Nutshell 6% Light & Air Products 63% 2 1% 5% Access Floors Insulated Panels 85% Drivers Insulation Boards Energy Efficiency & Conversion 44% Mainland Europe Geography 70% Commercial & Industrial Sector End 80% “ETLCE New Build 70% Direct Channel Brand ~ Specification > Differentiation 20%
Slide 6: Our Strategy
Our Strategy Be the leader in high performance insulation globally – proprietary and differentiating technologies Innovation Be the world’s leading provider of low energy building envelopes Penetration Greater geographic reach – focus on The Americas, Continental Europe and Net Zero certain de
Slide 7: Completing the Envelope
Kingspa Kingspan Insulation Boards Global Leadership - continue to drive worldwide reach through greenfield and consolidation Kingspan Solar PV Embryonic position presently - Global Scale Opportunity Kingspan Insulated Panels & Fagades Global Leadership - continue to drive worldwide reach through gr
Slide 8: 5 Year Financial Performance
5 Year Financial Performance 377.5 3,668.1 340.9 3,108.5 2,774.3 255.9 1,891.2 1,776.8 148.5 122.8 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Revenue Trading Profit (€m) (CAGR 19.9%) (€m) (CAGR 32.4%) 8
Slide 9: 2017 In Summary
2017 In Summary Insulated Panels sales growth of 17% driven by a positive performance in ↑ Continental Europe and a solid outcome in Revenue North America offsetting a sharp slowdown UP 18% in the UK towards year end. to €3.7bn Insulation Boards sales growth of 12% owing to significant price inf
Slide 10: Financial Highlights
Financial Highlights 2017 2016 YoY % Change cc change* Revenue (€m) 3,668.1 3,108.5 +18% +20% Trading Profit (€m) 377.5 340.9 +11% +14% EBITDA (€m) 441.7 404.1 +9% +13% Earnings per share (cent) 159.0 143.8 +11% - Full Year Dividend (cent) 37.0 33.5 +10% - Free Cashflow (€m) 198.5 206.6 -4% - Net De
Slide 11: Trading Profit & Margin Progression
Trading Profit & Margin Progression 377.5 Lintel Office Building, USA 340.9 Insulated Panels 255.9 FY 15 FY 16 FY 17 148.5 Insulated Panels 9.3% 11.2% 10.0% 122.8 Insulation Boards 9.2% 11.4% 11.9% Light & Air n/a 4.7% 7.2% Environmental 5.1% 7.0% 9.0% 2013 2014 2015 2016 2017 Access Floors 12.1% 12
Slide 12: Group Sales & Profit Bridge
Group Sales & Profit Bridge 20.1 (10.0) 333.5 26.5 (68.6) 294.7 377.5 3,668.1 340.9 3,108.5 Sales (€m) Trading Profit (€m) 12
Slide 13: Strong Free Cash Flow
Strong Free Cash Flow WC/Sales 13.0% (85.3) 6.1 (16.8) 441.7 (61.6) (85.6) €’m 198.5 EBITDA Working Capital Non Interest Tax Net Capex Free cash flow Cash/Pension 13
Slide 14: Net Debt Reconciliation
Net Debt Reconciliation 4.6 61.7 (198.5) 168.2 463.9 €’m 427.9 Net Debt Dec 16 Free Cash Flow Acquisitions Dividend Shares issued/fx Net Debt Dec 17 etc. 14
Slide 15: Growing ROCE
Growing ROCE 17.8% 17.3% 15.2% 13.4% 12.3% 2013 2014 2015 2016 2017 The Word, UK Insulation 15
Slide 16: Strong Balance Sheet
Strong Balance Sheet Total available cash balances and committed undrawn facilities of c. €901m €175m US Private Placement arranged in December 2017, drawn January 2018 5 year €500m revolving credit facility agreed in June 2017 Weighted average maturity of debt of 6.5 years. Queens Universit
Slide 17: Sales by Geography
Sales by Geography Republic of Ireland Republic of Ireland 4% 4% Britain & Britain & Northern Ireland Northern Ireland 25% 27% 2017 2016 Mainland Europe Mainland Europe 44% 41% Americas Americas 20% 20% Rest of the World Rest of the World 7% 8% €m 2017 2016 Constant Currency Change YoY % Change Brit
Slide 18: Insulated Panels
Insulated Panels Solid sales performance overall 2017 2016 Positive year in continental Europe Sales (€m) 2,328.5 1,998.2 setting aside inflationary challenges faced % of Group Sales 63% 65% Germany flat overall but weaker towards end of year relinquishing market share in Analysis of YoY % Cha
Slide 19: Insulated Panels (cont.)
Insulated Panels (cont.) Low double digit order intake growth in US somewhat compensating weaker activity in Canada Marked step-change to position in Latin America –manufacturing presence in Mexico, Colombia and four facilities in Brazil Tangible progress on Dri-Design® and Quadcore™ specifica
Slide 20: Insulation Boards
Insulation Boards Outstanding year for the division overall Excellent UK performance driven by price 2017 2016 inflation, single digit volume growth and Sales (€m) 769.4 688.1 sharp shift in mix towards Kooltherm® % of Group Sales 21% 22% Continued progress across Continental Europe. New Nordi
Slide 21: Light & Air
Light & Air 2017 2016 Milestone year for newly formed Sales (€m) 204.7 75.9 division % of Group Sales 6% 2% Europe performed strongly, particularly Analysis of YoY % Change Germany and France Underlying Currency Acquisitions Total +1% -1% +170% +170% North America less positive, giving up mark
Slide 22: Environmental
Environmental Strong year overall with ongoing 2017 2016 improvement in profitability Sales (€m) 179.8 162.0 Excellent performance in % of Group Sales 5% 5% Australian water storage business. Analysis of YoY % Change Further benefit from acquired Underlying Currency Acquisitions Total Rhino® bra
Slide 23: Access Floors
Access Floors Stable sales performance overall. 2017 2016 Sales (€m) 185.7 184.3 UK performed well as a result of the % of Group Sales 5% 6% strong orderbook entering 2017 Analysis of YoY % Change UK backdrop weakened during the Underlying Currency Acquisitions Total latter half of the year re
Slide 24: Outlook
Outlook 2018 got off to a relatively slow start but improvement expected through the first quarter Project postponements in the UK have resulted in panel order intake value being down over 15% since the start of 2018 UK sales volumes of Insulation Boards holding up reasonably well Other end
Slide 25: Additional Information
Additional Information Grifols, Ireland 25 Insulated Panels
Slide 26: Our Evolution - Revenue
Our Evolution - Revenue CAGR 17.5% 3.8 Sales (€bn) 3.6 Efficiency & 3.4 financial returns 3.2 3.0 2.8 The Environment 2.6 Building codes and 2.4 incentives to lower carbon emissions 2.2 2.0 1.8 1.6 Focus on 1.4 Specification Early introduction of 1.2 high performance 1.0 insulation and Building Fabr
Slide 27: Panel & Board – Sales Volume
Panel & Board – Sales Volume 50.0 45.0 40.0 35.0 30.0 Millions M2 25.0 20.0 15.0 10.0 5.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Rigid Board Kooltherm Board Insulated Panel Quadcore Panel 27
Slide 28: Global Organic Expansion
Global Organic Expansion Kingspan Kankaanpaa, Finland QuadCore™ Panel Line Q1 2017 Nordics Kooltherm® Facility 2019, 5 UK | Leuze, Belgium A Door Panel Line Q2 2017 os Perpignan, France PIR Roofpanel Line Q4 2017 North East USA i 7 @ a os New Panel Line ‘ WW Novosibirsk, Russia California, USA 2019
Slide 29: Key Innovations
Key Innovations Kingspan. QuadCore™ Rollout QuadCore™ Generation 2 Kooltherm® 100 Series Kooltherm® 200 Series QuadCore™ Roof Insulation Board Therma* Standard Insulation Board Kooltherm® Pipe Generation 2 PowerPanel® Generation 2 I l ] | ] I 2015 2016 2017 2018 2019 2020 2021 29
Slide 30: Kingspan Insulates Better
Kingspan Insulates Better 30
Slide 31: Kingspan v Construction Macro
Kingspan v Construction Macro UK US 180 275 170 250 160 225 150 200 140 175 130 150 120 110 125 100 100 90 75 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 2010 2011 2012 2013 2014 2015 2016 2017 Western Europe 180 170 160 150 140 130 120 110 100 90 80 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 32: Driving Penetration Growth
Driving Penetration Growth Aim to change Building Practices / Material Choices INSULATED PANELS 100% 100% 20% UK Germany North America 80% 80% 15% 60% 60% 10% 40% 40% 5% 20% 20% 0% 0% 0% 2020P 2020P 2005 2016 2005 2016 2020P 2005 2016 INSULATION BOARDS 50% 14% 14% UK 12% Western Europe 12% Australia
Slide 33: Net Zero Energy
Net Zero Energy Kingspan, w S w+ wt N ri [e@) ON A De) O NZE% D Total Renewable Energy GWh BD Total Energy Use GWh 2012 2015 2014 2015 201 201 Oo N 33
Slide 34: www.kingspan.com
Dublin Road Kingscourt Co Cavan Ireland A82 XY31 Tel: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.com www.kingspan.com