Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2016 Earnings Presentation
32 slides from Kingspan's earnings presentation, Feb 17, 2017
Slide 1: 2016 Full Year Results
KINGSPAN 2016 FULL YEAR RESULTS 17TH FEBRUARY 2017
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 5% → A global leader in high Environmental performance insulation and building envelopes 6% 2% Access Floors Light & Air → Market leading positions in Products UK, Mainland Europe, North America and Australasia → Proprietary technology drives differentiation in product performance 22% 6
Slide 4: What We Deliver
WHAT WE DELIVER Fully Excellence Integrated Comfort in Energy Envelope & Savings Solutions Architectural Building Inspiration Science 4
Slide 5: 2016 in a Nutshell
2016 IN A NUTSHELL 6% Products 67%* 22% Access Floors Revenue Insulated Panels Insulation Boards 5% Environmental €3.1 Drivers 85% Energy Efficiency & Conversion Billion 8% Geography 41% Mainland Europe 27% United Kingdom 20% North America ROW Applications: › Retail › Distribution 4% Ireland › Leisu
Slide 6: Our Strategy
OUR STRATEGY → Be the leader in high INNOVATION performance insulation globally – proprietary PENETRATION and differentiating technologies → Be the world’s leading provider of low energy building envelopes NET ZERO → Greater geographic reach – focus on The ENERGY Americas, Continental Europe and cer
Slide 7: Completing the Envelope
COMPLETING THE ENVELOPE Kingspan Insulation Boards Global Leadership Kingspan – continue to drive Insulated Panels worldwide reach & Facades through greenfield Global Leadership and consolidation – continue to drive worldwide reach through greenfield and consolidation Kingspan Access Floors Global L
Slide 8: 5 Year Financial Performance
5 YEAR FINANCIAL PERFORMANCE 3,108.5 340.9 2,774.3 255.9 1,891.2 1,776.8 1,628.7 148.5 122.8 107.7 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Revenue Trading Profit (€m) (CAGR 17.5%) (€m) (CAGR 33.4%) 8
Slide 9: 2016 in Summary
2016 IN SUMMARY → Strong performance in the UK, clear recovery evident in much of Western Europe with the US more subdued in the second half. → Insulated Panels in the UK had a strong year Revenue and the North American market cooled off UP 12% somewhat towards year end. European sales were strong i
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS 2016 2015 Change cc* Revenue (€m) 3,108.5 2,774.3 +12% +16% Trading Profit (€m) 340.9 255.9 +33% +41% EBITDA (€m) 404.1 316.4 +28% +35% Earnings per share (cent) 143.8 106.7 +35% – Full Year Dividend 33.5 25.0 +34% – Free Cashflow (€m) 206.6 267.0 -23% – Net Debt (€m) 427.9 328.
Slide 11: Trading Profit & Margin Progression
TRADING PROFIT & MARGIN PROGRESSION 350.0 300.0 340.9 250.0 FY 14 FY 15 FY 16 255.9 200.0 Insulated Panels 8.0% 9.3% 11.0% 150.0 Insulation Boards 8.4% 9.2% 11.4% 148.5 Environmental 0.8% 5.1% 7.0% 100.0 122.8 107.7 Access Floors 11.7% 12.1% 12.5% 50.0 Group 7.9% 9.2% 11.0% 0.0 2012 2013 2014 2015 2
Slide 12: Group Sales & Profit Bridge
Revenue 2015 2,774.3 Currency 116.2 Sales (€m) Acquisitions 297.8 Underlying 152.6 Revenue 2016 3,108.5 GROUP SALES & PROFIT BRIDGE Trading Profit 2015 255.9 Currency 19.9 Trading Profit (€m) Acquisitions 17.2 Underlying 87.7 Trading Profit 2016 340.9 12
Slide 13: Strong Free Cash Flow
FLOW STRONG FREE CASH (€m) EBITDA 404.1 Working Capital (53.1) WC/Sales 12.3% Non Cash/Pension 23.2 Interest (14.2) Tax (50.3) Net Capex (103.1) Free cash flow 206.6 13
Slide 14: Working Capital %
WORKING CAPITAL % Average 12.2% 2012 12.3% 2013 12.0% 2014 13.4% 2015 10.9% 2016 12.3% 14
Slide 15: Movement in Net Debt
(€m) Net Debt Dec 15 328.0 MOVEMENT IN NET DEBT Free Cash Flow (206.6) Acquisitions 254.4 Dividend 48.4 Shares issued/fx etc. 3.7 Net Debt Dec 16 427.9 15
Slide 16: Growing ROCE
2012 10.7% GROWING ROCE 2013 12.3% 2014 13.4% 2015 15.2% 2016 17.3% 16
Slide 17: Strong Balance Sheet
STRONG BALANCE SHEET USA Kennesaw State University – → €250m US Private Placement completed Insulated Panels in November 2016 with a weighted average term of 9 years at a fixed coupon of 1.49%. → Cumulative total long term financing of €450m raised in last 2 years at an average fixed coupon of 1.74%
Slide 18: Sales by Geography
SALES BY GEOGRAPHY €m FY 16 FY 15 Constant Currency Change YoY % Change Britain & Northern Ireland 834.4 816.9 +14% +2% Mainland Europe 1,287.5 1,079.3 +20% +19% Americas 630.4 566.7 +12% +11% Republic of Ireland 118.0 92.4 +28% +28% Rest of World 238.2 219.0 +9% +9% Group Sales 3,108.5 2,774.3 +16%
Slide 19: Insulated Panels
INSULATED PANELS → Solid sales performance overall. FY 16 FY 15 → Encouraging increases in Netherlands Sales (€m) 2,074.1 1,776.6 & France, Germany by comparison % of Group Sales 67% 64% relatively flat. Analysis of YoY % Change → Hungary, South Central Europe and Underlying Currency Acquisitions To
Slide 20: Insulated Panels (cont.)
INSULATED PANELS (CONT.) → Considerable penetration advances in North America. → US strong H1 but tougher H2, Canada performed well. → Initial project pipeline in Mexico encouraging. → Light & Air standalone division from 2017 – 2016 sales €75m, annualised run rate c. €190m. → Quadcore® roll-out pro
Slide 21: Insulation Boards
INSULATION BOARDS → UK performed well owing to targeted market share gains & robust FY 16 FY 15 Kooltherm® penetration growth. Sales (€m) 688.1 662.8 % of Group Sales 22% 24% → Positive performance in The Netherlands, Germany and the Nordics Analysis of YoY % Change while Belgium and France more Und
Slide 22: Access Floors
ACCESS FLOORS → Solid sales performance overall, FY 16 FY 15 although regionally mixed. Sales (€m) 184.3 175.9 % of Group Sales 6% 6% → Grade A office construction activity in North America remains a challenge. Analysis of YoY % Change Underlying Currency Acquisitions Total → Ongoing diversification
Slide 23: Environmental
ENVIRONMENTAL → Stable sales performance amid FY 16 FY 15 continued recovery. Sales (€m) 162.0 159.0 % of Group Sales 5% 6% → Focus on geographic expansion and margin restoration. Analysis of YoY % Change Underlying Currency Acquisitions Total → Tankworks acquisition provides -1% -10% +13% +2% platf
Slide 24: Outlook
OUTLOOK → Orderbooks solidly ahead Hungary of same point in 2016, FCI Insulator – bodes well for early 2017. Insulated Panels → Input prices rising from untypically low levels in 2016. Further increases in cost base expected in H1 17 with recovery effort ongoing. → Kingspan well positioned for the g
Slide 25: Additional Information
ADDITIONAL INFORMATION USA Texas State Capitol – Light & Air 25
Slide 26: Our Evolution – Revenue
OUR EVOLUTION – REVENUE CAGR = 17.5% 3.2 3.0 EFFICENCY & PAY BACK* 2.8 2.6 ENVIRONMENTAL CODES* 2.4 2.2 2.0 SPECIFICATION* 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 Sales (€bn) * Key Drivers 26
Slide 27: Global Organic Expansion
GLOBAL ORGANIC EXPANSION Kankaanpää, Finland Quadcore Panel Line Q1 2017 Modesto, USA Leuze, Belgium Quadcore Door Panel Line Q2 2017 Panel Line 2019 Perpignan, France PIR Roofpanel Line Q4 2017 Novosibirsk, Russia Mixed Panel Winchester, USA Line 2018 XPS Insulation Line 2017 Monterrey, Mexico Duba
Slide 28: Kingspan Insulates Better
~~ MINIGIIDAN Kingspan. INSULATES BETTER 47% 30% ee More Heat Loss' More Heat Loss' Heat Loss' Kingspan Kingspan Kingspan Kingspan ptim-R QuadCore Kooltherm® IPN? | Jovy 22% 22% 13% Reference EPS — Glass Rock L L L Point 0.030 \ : nk Fibre Mineral C 50. 038 10 . ess ess ESS paiyurethane O.0sIW/mK Fi
Slide 29: Kingspan v Construction Macro
KINGSPAN V CONSTRUCTION MACRO UK US 160 200 150 180 140 160 130 140 120 120 110 100 100 80 90 60 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Germany The Netherlands 170 150 160 140 130 150 120 140 110 130 100 120 90 110 80 70 100 2009 2010 2011 2012 2013 2014 2015
Slide 30: 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% 2005 2016 2020P 2005 2016 2020P 2020P 2005 2016 INSULATION BOARDS 50% 14% 14% UK 12% Western Europe 12% Australia
Slide 31: Our Net Zero Energy Path
OUR NET ZERO ENERGY PATH 424 386 327 317 312 57% 243 33% 28% 126 18% 88 9% 60 27 2015 2012 2013 2014 2016 Total Renewable Energy GWh Total Energy Use GWh NZE% 31
Slide 32: Kingspan contact details
aw King span 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