Kingspan Group Plc · EURONEXT:KRX
Kingspan — H1 2020 Earnings Presentation
32 slides from Kingspan's earnings presentation, Aug 21, 2020
Slide 1: 2020 Interim Results
— 2020 INTERIM RESULTS 21st August 2020
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: Our Mission
Our Mission Ultra Energy-Efficient To accelerate a net-zero 172 million tonnes of CO2 will be saved over the life of our emissions built environment insulation systems sold in 2019 with the wellbeing of people Net-Zero Carbon and planet at its heart. Over 90% reduction in energy carbon intensity per
Slide 4: The Envelope
The Envelope Insulation Boards Global Leader 18% Revenue Insulated Panels Global Leader 64% Revenue Flat Roof Membrane Embryonic position presently – global scale opportunity Data & Flooring Global Leader 5% Revenue Light & Air Global Leader Water & Energy Global Leader 8% Revenue Industrial Insulat
Slide 5: Megatrends That Drive Us
Megatrends That Drive Us Politics and Regulation Averting a climate emergency Paris Agreement goal to limit the temperature increase above pre-industrial levels to 1.5ºC Market and Customers Sustainability and Resilience Society and Workforce Future proofing of asset values Resource Scarcity Health/
Slide 6: Envelope First and net-zero built environment
IPCC 1.5ºC – AECOM Research1 Embodied carbon in buildings also needs to The rate of retrofits be reduced through needs to dramatically low carbon accelerate and extend to deep energy materials and building designs. refurbishment: 4%/year Refurbishment is inherently lower embodied carbon than new-bui
Slide 7: Better Insulation is the Cornerstone of Envelope First
Better Insulation is the Cornerstone of Envelope First OPTIM-R ® 0.007 W/m.K KINGSPAN’S FULL SPECTRUM Insulates Better Kooltherm® 100 QuadCore™ 0.018 W/m.K PIR 0.018 W/m.K (0.018-0.023)2 0.022 W/m.K (0.022-0.027)2 Synthetic EPS XPS 0.030 W/m.K 0.030 W/m.K Mineral (0.030-0.038)2 (0.030-0.038)2 Hemp W
Slide 8: Solutions Driven Innovation – QuadCore versus Synthetic Mineral Fibre
Solutions Driven Innovation – QuadCoreTM versus Synthetic Mineral Fibre1 Market and Sustainability and Society and Politics and Customers Resilience Workforce Regulation 25% lower panel system cost2 297 fewer truck deliveries to site 12% savings in installation time (faster build programme) 40year t
Slide 9: Space Matters
Space Matters London, Office Tower Description Value Wall build-up Kingspan Kooltherm® K15 Rainscreen Board with Glass Mineral Fibre Lettable floor area 15,650 sq.m (168,455 sq.ft) Additional floor area 126.50 sq.m (1,361.63 sq.ft) Additional development cost £142,172.00 or 0.22% Capitalised value o
Slide 10: Planet Passionate targets
We are Energy Carbon Circularity Water • Our Net-Zero • Net-Zero carbon • 1 billion PET bottles • 5 active ocean clean-up energy status maintained manufacturing by 2030 upcycled into our projects by 2025 50% reduction in manufacturing processes 100 million • Increase our direct use of renewable ener
Slide 11: Global Organic Expansion
Global Organic Expansion Finland PIR/QuadCoreTM Board Line 2022 UK AlphaCore® Line 2021/2022 Industrial Insulation 2021 Sweden Kooltherm® Facility 2021 Kingscourt, Ireland Hungary Light & Air Facility 2021 K-RocTM Panel Line 2020 France PIR/QuadCoreTM Board Line 2022 PIR Panel Line 2022 Russia PIR P
Slide 12: Progress So Far
Progress So Far CAGR 17.2% 4.8 Sales (€bn) 4.6 4.4 4.2 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 12
Slide 13: 5 Year Financial Performance
5 Year Financial Performance Revenue (€m) Trading Profit (€m) CAGR (13.8%) CAGR (18.1%) 500.0 400.0 300.0 497.1 4,659.1 4,372.5 445.2 3,668.1 377.5 200.0 340.9 3,108.5 2,774.3 255.9 100.0 0.0 15 16 17 18 19 15 16 17 18 19 13
Slide 14: 2020 H1 In A Nutshell
2020 H1 In A Nutshell 8% Light & Air 64% 18% 5% Data & Flooring Insulated Panels Insulation Boards 5% Water & Energy Revenue €2.1 85% 15% Billion Energy Efficiency & Conversion Other 56% 20% 17% Applications 7% - Retail ROW - Distribution Europe Americas United Kingdom - Leisure - Accommodation 12%
Slide 15: 2020 H1 In Summary
2020 H1 In Summary > Insulated Panels sales decrease of 8%. Good recovery in key markets particularly in Europe. UK slower to recover with Revenue Americas softer recently. Continued progress on down 8% to QuadCoreTM adoption and Bacacier integrating well €2.1bn > Insulation Boards sales decrease of
Slide 16: Financial Highlights
Financial Highlights H1 2020 H1 2019 Change CC Change* Revenue (€m) 2,072.7 2,243.1 -8% -7% Trading Profit (€m) 200.1 230.4 -13% -12% Earnings per share (cent) 79.8 93.8 -15% Interim Dividend (cent) - 13.0 -100% Free Cashflow (€m) 260.4 80.6 +223% Net Debt (€m) 437.9 734.3 -296.4m Trading Margin 9.7
Slide 17: Trading Profit & Margin
Trading Profit & Margin CAGR 4.6% Trading Margin H1 20 FY 19 H1 19 Insulated Panels 9.3% 10.4% 10.1% Insulation Board 13.2% 13.4% 13.4% Light & Air 4.4% 7.7% 4.3% Water & Energy 7.4% 6.8% 5.7% Data & Flooring 12.8% 11.4% 11.2% Group 9.7% 10.7% 10.3% Broadwater Bay Business Park, Montana, USA Dri-Des
Slide 18: Group Sales & Profit Bridge
Group Sales & Profit Bridge Revenue (€m) Trading Profit (€m) 250.0 9.4 142.0 (293.8) (1.5) (38.2) (18.6) 200.0 150.0 230.4 2,243.1 2,072.7 200.1 100.0 50.0 0.0 Revenue Currency Acquisitions Underlying Revenue Trading Profit Currency Acquisitions Underlying Trading Profit H1 2019 H1 2020 H1 2019 H1 2
Slide 19: Strong Free Cash Flow
Strong Free Cash Flow 4.6 (10.4) (14.9) 95.6 (58.7) €m 260.4 244.2 EBITDA Working Capital Non Cash/Pension Interest Tax Net Capex Free Cash Flow 19
Slide 20: Net Debt Reconciliation
Net Debt Reconciliation (260.4) 23.1 42.0 €m 633.2 437.9 Net Debt Dec 19 Free Cash Flow Acquisitions FX/Other Net Debt Jun 20 20
Slide 21: Strong ROCE
Strong ROCE Alaska Airlines Hangar Insulated Panels 17.8% 17.3% 17.3% 16.9% 16.8% 2016 2017 2018 2019 H1 20 21
Slide 22: Sales by Geography
Sales by Geography 56% 53% H1 20 H1 19 7% 7% 20% 17% 20% 20% YOY % Constant Currency €m H1 20 H1 19 Change Change Europe 1,156.5 1,193.3 -3% -3% Americas 426.6 451.5 -6% -3% UK 350.9 450.6 -22% -22% Rest of World 138.7 147.7 -6% -5% Group Sales 2,072.7 2,243.1 -8% -7% 22
Slide 23: Strong Balance Sheet
Strong Balance Sheet Eyescan, Utrecht Insulated Panels > €300m revolving credit facility arranged in June 2019 - undrawn at 30 June 2020 > €451m revolving credit facility in place until June 2022 – undrawn at 30 June 2020 > €50m green loan to fund Planet Passionate initiatives signed in February 202
Slide 24: Insulated Panels
Insulated Panels > Global order intake down 7% in the first six months of 2020 H1 20 H1 19 having started the year ahead Sales (€m) 1,332.0 1,444.8 % of Group Sales 64% 64% > Backlog volume is 8% ahead pointing towards strong near- term deliveries assuming markets are open and receptive Analysis of
Slide 25: Insulated Panels (cont.)
Insulated Panels (cont.) MIVB Museum, Perth Haren, Belgium Australia Insulated Panels > During the first half the US performed exceptionally well as the business traded largely uninterrupted, as was also the case in Brazil, supported by the new facility close to Sao Paulo > Canada took more extreme
Slide 26: Insulation Boards
Insulation Boards > Pattern of sales in Insulation Boards mapped a similar H1 20 H1 19 Sales (€m) 367.9 450.5 path to that of Insulated Panels % of Group Sales 18% 20% > Of note, strong performance in Western European markets, in particular the Netherlands, Germany and Analysis of YoY % Change Denma
Slide 27: Light & Air
Light & Air > Overall the business performed robustly through the H1 20 H1 19 turbulence of H1, albeit like-for-like revenue negatively Sales (€m) 171.9 142.9 impacted % of Group Sales 8% 6% > Before and since then the underlying operation grew Analysis of YoY % Change encouragingly in France and Ge
Slide 28: Water & Energy
Water & Energy H1 20 H1 19 > Overall this business suffered at a revenue level in the Sales (€m) 92.9 103.1 UK and Ireland due to lockdown measures % of Group Sales 5% 5% > Cost containment in these regions was particularly Analysis of YoY % Change effective in delivering a relatively strong trading
Slide 29: Data & Flooring
Data & Flooring H1 20 H1 19 > Positive first half overall in key regions of the US, Western Sales (€m) 108.0 101.8 Europe and Australia % of Group Sales 5% 5% > UK was predictably weaker Analysis of YoY % Change Underlying Currency Acquisitions Total > Growing ‘Data’ dimension a key driver of robust
Slide 30: Outlook
Outlook Cube Smart Storage, Florida, USA Insulated Panels > Accurate predictions are impossible at present, albeit certain that general confidence will have suffered and investment decisions will be curtailed through 2021 > Conversely data, technology, online logistics and next generation automotive
Slide 31: Driving Penetration Growth
Driving Penetration Growth INSULATED PANELS 100% 100% 20% UK Germany North America 80% 80% 15% 60% 60% 10% 40% 40% 5% 20% Aim to Change 20% 0% 0% 0% Building Practices / 2005 2019 2025p 2005 2019 2025p 2005 2019 2025p Material Choices INSULATION BOARDS 50% 20% 14% UK Western Europe The Nordics 12% 4
Slide 32: Kingspan contact details
www.kingspan.com www.kingspan.com Dublin Road Dublin Road Kingscourt Kingscourt Co Cavan Co Cavan Ireland Ireland Tel:+353 Tel: +3534242969 9698000 8000 A82 A82 XY31 XY31 Email:admin@kingspan.com Email: admin@Kingspan.com