Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2010 Earnings Presentation
32 slides from Kingspan's earnings presentation, Feb 28, 2011
Slide 1: Kingspan Full Year Results
Kingspan Full Year Results 28th February 2011
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
Slide 3: Agenda
Agenda Highlights for 2010 Financial Review Review by Business Unit Strategy & Outlook M3 Engineering – Tucson, Arizona, USA 3
Slide 4: 2010 Financial Performance
2010 Financial Performance Turnover up 6% to €1,193.2mn On constant currency +2% Operating Result up 8% to €67.4mn On constant currency +2% Basic EPS 29.2 cent, up 2% (+20% on an underlying basis) Net Debt €128.7mn, a reduction of €35.6mn, interest cover 11.9 times COTA – Columbus, Ohio, US
Slide 5: 2010 Operational Performance
2010 Operational Performance Sales increase of 6%, despite being in the toughest construction environment for decades. Operating profit increase of 8%, with an EBITDA and EBIT margin of 9% and 6% respectively. Stability in the UK market, Group sales in that region were +3%. Growth in the US
Slide 6: Summary P&L
Summary P&L €mn 2009 2010 YoY % Change Revenue 1,125.5 1,193.2 +6% Cost of Sales (816.6) (859.5) +5% Gross Profit 308.9 333.7 +8% Operating Costs (241.8) (261.7) +8% Trading Profit 67.1 72.0 +7% Amortisation (4.4) (4.6) +5% Operating Result 62.7 67.4 +8% Net Finance Cost (10.9) (9.0) -17% Non-cash F
Slide 7: Sales by Geography
Sales by Geography €mn 2009 2010 % Change at YoY % Constant Rates Change Republic of Ireland 78.1 65.2 -17% -17% 2009 Britain & Northern Ireland 503.3 517.1 -1% +3% Mainland Europe 310.9 345.1 +10% +11% 3% 7% Americas 192.7 199.5 -3% +4% 17% Other 40.5 66.3 +41% +64% Group Sales 1,125.5 1,193.2 +2%
Slide 8: Sales by Product Group
Sales by Product Group €mn 2009 2010 % Change at YoY % Constant Rates Change Insulated Panels 593.9 638.5 +4% +8% Insulation Boards 215.3 248.2 +11% +15% Environmental & Renewables 168.7 171.7 -1% +2% Access Floors 147.6 134.8 -13% -9% Group Sales 1,125.5 1,193.2 +2% +6% 700 600 500 400 €’mn 2009 30
Slide 9: Turnover Bridge
Turnover Bridge 1,200 10.3 9.4 22.4 44.4 1,000 800 €mn 600 1,193.2 1,125.5 400 200 0 Revenue 2009 Currency Volume Price/Mix Acquisition Revenue 2010 9
Slide 10: Trading Margin by Division
Trading Margin by Division 2009 2010 Group 6.0% 6.0% 17.3% 18.0% 16.0% 13.8% 14.0% 12.0% 10.0% 2009 8.0% 6.3% 6.7% 2010 5.6% 6.0% 4.4% 4.0% 1.1% 2.0% 0.5% 0.0% Insulated Panels Insulation Environmental & Access Floors Renewables 10
Slide 11: Operating Profit Bridge
Operating Profit Bridge 80.0 8.9 70.0 12.7 2.4 2.8 3.3 60.0 50.0 €mn 40.0 67.4 30.0 62.7 20.0 10.0 0.0 EBIT 2009 Currency Volume Margin Operating Acquisition EBIT 2010 Costs 11
Slide 12: Free Cash Flow
Free Cash Flow €197.7 250.0 €187.7 43.6 200.0 105.4 150.0 €57.8 202.3 €’mn 100.0 102.8 107.6 50.0 0.0 (20.5) (29.9) (48.2) (19.9) (50.0) 2008 2009 2010 EBITDA Change in Working Capital Other 12
Slide 13: Cashflow Statement
Cashflow Statement €mn 2009 2010 Inflows Operating Profit 62.7 67.4 Depreciation 35.8 35.6 Amortisation 4.3 4.6 Pension Contributions (2.9) (3.2) Working Capital (increase)/decrease 99.0 (29.9) Interest Paid (12.9) (9.6) Taxation Paid (10.1) (2.2) Others 11.8 (4.9) Free cash flow 187.7 57.8 Acquisit
Slide 14: Net Assets Statement & Key Ratios
Net Assets Statement & Key Ratios Net Asset Statement - €mn 2009 2010 Tangible Fixed Assets 419.0 410.3 Intangible Assets 310.3 324.7 Working Capital 123.3 153.2 Current Corporate & Deferred Tax (43.5) (46.7) Provisions (64.2) (51.0) Net Debt (164.3) (128.7) Net FX on PP Debt 4.9 5.1 Net Assets 585.
Slide 15: Capex
Capex 186.4 200.0 180.0 160.0 140.0 120.0 €’mn 100.0 80.0 48.1 60.0 40.0 22.1 20.0 0.0 2008 2009 2010 Capex Acquisitions 15
Slide 16: Working Capital
Working Capital 250 60 49 50 47 200 40 40 150 €’mn Days 30 €222.3 100 20 €153.2 €123.3 50 10 0 0 2008 2009 2010 Working Capital €mn Working Capital Days 16
Slide 17: Core Banking Facilities
Core Banking Facilities Revolving Credit Facility of €330mn – September 2013 maturity date Private placement €151mn (USD200mn) Repayable 2015 €119mn & 2017 €32mn Same covenants as Revolving Facility Various bilateral facilities totalling c. €55mn Significant headroom on covenants Max 3
Slide 18: Recovery of Input Price Inflation
Recovery of Input Price Inflation Potential cost inflation over the course of 2011 in the range of €80-100mn Plan in place, and being executed, for recovery of industry wide raw material price inflation. Partial lag to be expected Several strands to recovery plan including buffer stocks in han
Slide 19: Insulated Panels: UK, IRL, WE
Insulated Panels: UK, IRL, WE 2009 2010 Analysis of YoY % Change Sales (€mn) 331.4 340.1 Currency Volume Price & Mix Total % of Group Sales 30% 29% +4% +1% -2% +3% Stable year in the UK, volumes down 1%; intake up 6% Benelux volume solid at -4%, expected to weaken during 2011 Encouraging growt
Slide 20: Performance vs Construction Macro's UK Panels
Performance vs Construction Macro’s UK Panels Performance slightly ahead of market * Source: UK Construction Market 20
Slide 21: Insulated Panels CEMEI
Insulated Panels CEMEI 2009 2010 Analysis of YoY % Change Sales (€mn) 156.7 177.6 Currency Volume Price & Mix Total % of Group Sales 14% 15% +2% +6% +5% +13% Note: The above figures include Germany and Turkey A year of mild recovery in general Improved performance in most key markets Czech Rep
Slide 22: Insulated Panels North America
Insulated Panels North America 2009 2010 Analysis of YoY % Change Sales (€mn) 105.8 120.8 Currency Volume Price & Mix Total % of Group Sales 9% 10% +8% +11% -5% +14% Excellent performance in US, sales volume up 16%. Canada volume down 6% Clear evidence of penetration growth in the low niche insu
Slide 23: Performance vs Construction Macro's US Panels
Performance vs Construction Macro’s US Panels Growth in penetration *Source: McGraw Hill Construction 23
Slide 24: Insulation
Insulation 2009 2010 Analysis of YoY % Change Sales (€mn) 215.3 248.2 Currency Volume Price & Mix Acquisition Total % of Group Sales 19% 21% +4% +1% 0% +10% +15% Overall, 2010 was a year of progress and expansion of the Insulation business Tough environment in the UK (flat), and even more pronou
Slide 25: Performance vs Construction Macro's UK Insulation
Performance vs Construction Macro’s UK Insulation “Conversion” enabling out-performance 25
Slide 26: Insulation Europe Acquisition
Insulation Europe Acquisition First phase of acquisition complete (Unidek & Ecotherm) Second & final phase scheduled to complete 31st March Integration on track 2011 forecast financial impact Sales €180.0mn* Earnings neutral after restructuring and finance costs 2012 forecast financial
Slide 27: Environmental & Renewables
Environmental & Renewables 2009 2010 Analysis of YoY % Change Sales (€mn) 168.7 171.7 Currency Volume, Price & Mix Total % of Group Sales 15% 14% +3% -1% +2% UK housing recovery continued to be positive for Hot Water Systems & solarthermal Ireland weak but stable Scandinavia & Central Europe s
Slide 28: Access Floors
Access Floors 2009 2010 Analysis of YoY % Change Sales (€mn) 147.6 134.8 Currency Volume Price & Mix Total % of Group Sales 13% 11% +4% -11% -2% -9% Strong margin performance, in a weak macro environment North America sales volumes deteriorated in Q4, with an overall backlog at year-end down 45%
Slide 29: Performance vs Construction Macro's US Access Floors
Performance vs Construction Macro’s US Access Floors *Source: McGraw Hill Construction 29
Slide 30: Building Regulations by Region
Building Regulations by Region Percentage improvement in standards from 2005 250% 200% 150% 100% 50% 0% 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 UK US Germany Poland *Note: 2011/16 are estimates in UK & US 30
Slide 31: Penetration Potential
Penetration Potential 2005A 2010A 2015F Insulated Panels UK 55% 62% 75% Insulated Panels NA 5% 8% 11% UK Insulation 30% 34% 38% Germany External Wall 0% 2% 10% CEE Insulation Board 0% 0.7% 6% 32
Slide 32: Outlook
Outlook General improvement in UK residential and low rise commercial likely to continue in the near term. Office construction anticipated to fall further, and state-funded projects will decline Insulated Panels and Insulation expect solid H12011, stable in the UK, growth in Mainland Europe and