Kingspan Group Plc · EURONEXT:KRX
Kingspan — Investor Day (November 2013)
76 slides from Kingspan's investor day presentation, Nov 22, 2013
Slide 1: Kingspan Capital Markets Day
Kingspan Capital Markets Day 22nd November 2013 London
Slide 2: Meet the Team
fy 3” Meet the Team Kingspan n. Gilbert McCarthy MD Kingspan Panels UK/IRL/WE Paul O’Gorman MD Kingspan Panels CEME| Russell Shiels President Kingspan USA Peter Wilson MD Kingspan Insulation Ralph Mannion MD Kingspan Environmental Gene Murtagh CEO Geoff Doherty CFO
Slide 3: The Business
The Business • 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 (57%) (26
Slide 4: In a Nutshell
In a Nutshell oS Kingspan. REVENUE* PRODUCTS, DRIVERS GEOGRAPHY SECTOR END MARKET CHANNEL APPLICATIONS PROFIT* Mainland Europe INSULATED . Commercial ae & Industrial Newbuild Energy Direct Efficiency & Conversion et * : <1 18 non Oo illion 34% D ECRROST Residential 26% 20% North America 1 4 % Refurb
Slide 5: Kingspan Global
Kingspan Global Manufacturing Locations 5
Slide 6: Kingspan Global
Kingspan Global United Kingdom 34% Ireland 4% Mainland Europe 38% North America 14% Australasia 4% Middle East, Turkey & ROW 6% Manufacturing and distribution operations throughout Europe, North America, Australasia >70 Locations: 59 Manufacturing 6
Slide 7: Strategic Goals
Strategic Goals Lead the field in high performance insulation globally with proprietary and differentiating technologies. Become the world’s leading provider of low energy building solutions – Insulate & Generate Achieve greater geographic balance, primarily focusing on The Americas, Western E
Slide 8: Revenue Profile (1990-2013)
Revenue Profile (1990-2013) CAGR 15% * Financial Consensus 8
Slide 9: 5 Year Financial Performance
5 Year Financial Performance Revenue (€’m) Trading Profit (€’m) * Analyst Consensus 9
Slide 10: Innovation & Process Advancements
Innovation & Process Advancements 10
Slide 11: Innovation Pipeline
<> Kingspan. Alternative2Energy Innovation Pipeline PowerPanel® Kingspan Energy | Kreate® (Benchmark®) QuadCore® Optim-R® Next Generation Kooltherm® KW15 Microwind Air Management Range 2010 2011 2012 2013 2014 2015 2016 11
Slide 12: Kingspan Energy
Kingspan Energy Kingspan Energy Funded Systems Design & Delivery Integrated Powerpanel or Plant-on PV Roof Mounted PV System New Build Refurb PowerPanel Integrated Solar PV System Exit Investments 12
Slide 13: Innovation in Action
Innovation in Action 10 year organic growth of new/embryotic products* * Includes Kooltherm®, Optim-R®, BENCHMARK, Topdek, Kingspan Energy, X-Dek ® 13
Slide 14: Structural Growth
Structural Growth kingspa yy 14
Slide 15: Penetration Rates
% % 100 Penetration Rates Insulated Panels UK 2005A 2013E 2017P Insulation Boards — UK 2005A 2013E 2017P. Germany \ 20054 2013E 2017P Western Europe 20054 2013E 2017P > Kingspan. lernative2Energy North America ~ai 20054 2013E 2017P 15 Australia 2005A 2013E 2017P 15
Slide 16: Group Sales outside UK/IRL
Group Sales outside UK/IRL 58 % 23% 16% Internationalisation of the Group through the cycle (2013 estimate) 16
Slide 17: Kingspan v Construction Macro
Kingspan v Construction Macro Kingspan Other Addressable macro comparison with Insulated Panels and Rigid Boards. Source: Euroconstruct, McGraw Hill. *2013 Estimates. 17
Slide 18: Insulated Panels IRL/UK/WE/Australasia
Insulated Panels IRL/UK/WE/Australasia Gilbert McCarthy
Slide 19: Geographic Presence
Geographic Presence GCC Australia Major Manufacturing Locations Sales Offices 19 New Zealand
Slide 20: Sales by Region
Sales by Region a Benelux 16% Rest of Europe 7%
Slide 21: Key Products
Key Products 21
Slide 22: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 22
Slide 23: Penetration Growth
Penetration Growth UK Australia Momentum continues Relatively recent construction alternative Energy awareness very high Higher labour cost of tradtional systems Solar integration as an Build speed benefits of Insulated Panels additional driver Growing energy awareness Quadcore/Lo-La
Slide 24: Strategy
Strategy Differentiation • IPN-QuadCore • WBA • Excellence in Customer Service Quality Chemical Step Specification OTIF with New Focus on Innovation Change ‘End Client’ • Lambda - 0.017 Tool Kit: WBA / BIM / IPN-QC • Iso Phenic & Kingspan Energy • Fire (Joint): E160 / E190 Added BENCHMARK Rigi
Slide 25: Differentiation
Differentiation IPN-QuadCore™ To meet the global demand for energy efficient, high endurance building envelopes, Kingspan is developing IPN-QuadCore™- Intelligent Building Technology that offers: • Real ‘fact based’ performance step change • Lambda target 0.017 • Chemical composition, to include Phe
Slide 26: BENCHMARK
BENCHMARK Façade System Approach – Not just a Panel • ‘Through wall’ tested & warranted solution • System Solution – ALL in ONE Guarantee • Thermal • Fire • Acoustics • Airtightness • Weather tightness • Aesthetic Integrated Window details • Bespoke fabricated Façade elements • Comprehensive Detail
Slide 27: Kingspan Energy
Kingspan Energy Insulate & Generate to the Power of Kingspan What? Why? Who? How? To save our Kingspan, global Plant on to existing ‘one stop shop’ customers’ leader in Insulated Kingspan Roof money and energy Panels Systems or ‘Insulate & Generate’ Offering a full EPC ⁻Conserve through Kingspan Ene
Slide 28: Kingspan Energy
Kingspan Energy 3 Market opportunities for Kingspan Energy • Retrofit • New Build • Strip and Replace Critical Success Factors • A funding and exit model • Cost competitive integrated solution ‘Powerpanel’ • Manage route to market via ‘our partner installer specialists’ • ‘25 year’ Roof and PV combi
Slide 29: Insulated Panels CEMEI
Insulated Panels CEMEI Paul O’Gorman 29
Slide 30: Geographic Presence
Geographic Presence Major Manufacturing Locations Sales Offices 30
Slide 31: Sales by Region
Sales by Region Kingspan. Nordics | 4 5% « Eastern Europe 40% Germany | * 45%
Slide 32: Key Products
Key Products KGioSon
Slide 33: Key Products
K S e y Pp r O d uct S EX SS n
Slide 34: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 34
Slide 35: Strategy
Strategy Central & Eastern Europe • Strong market position • Grow penetration • New product introductions Germany BENCHMARK • Superb asset base • Strong brands • Product launch 2012 • Early specification success with sectorial focus • Well established routes to encouraging market – particular German
Slide 36: Regional Dynamics
Regional Dynamics <> g y gifeeran Alternative2Energy Commercial & industry activity very strong Turkey & Middle Limited but improving East appetite for low energy commercial & construction industrial activity . base Boot Economically Significant FDI riven vibrant growth Positive Burgeoning food popu
Slide 37: Panel Penetration (excl. flat roof)
Panel Penetration (excl. flat roof) PANEL PENETRATION (excluding flat roof) 2009 2013 2017 Germany 30% 41% 43% Czech 67% 65% 67% Hungary 46% 60% 60% Poland 88% 89% 90% 40% 48% 51% 37
Slide 38: New Products Sales – 2009/2017
New Products Sales – 2009/2017 These products include Xdek (flat roof), Roof Tile, Other, BENCHMARK ®, QuadCore 38
Slide 39: Branding Strategy in Germany
Branding Strategy in Germany Innovation / Service / Support German engineered full envelope solutions Cold store specialist from Germany High end architectural façade systems 39
Slide 40: Insulated Panels Americas
Insulated Panels Americas Russell Shiels 40
Slide 41: Geographic Presence
Geographic Presence 1 Langley, British Columbia 2 Concord, Ontario 3 Deland, Florida 4 Modesto, California 5 Columbus, Ohio 6 Bristol, Connecticut 7 Fontana, California 41
Slide 42: Key Products
Key Products Kingspan.
Slide 43: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 43
Slide 44: Penetration Growth
Penetration Growth • Market conversion remains the key focus • Panels penetration currently c. 10%, projected to increase to 15% by 2017 • Conversion driven by: − increasing energy costs − the increasing appetite for energy efficiency in the US − energy efficiency legislation, while slower than in E
Slide 45: Architectural Opportunity
Architectural Opportunity • Big opportunity for BENCHMARK ® product range – Designwall – Façades – Kreate • Build a bespoke dealer network and a sales team focusing on demand generation • Product innovation • Operational improvements including a significant upgrade to manufacturing process 45
Slide 46: Other Players
Other Players NCI / MetlSpan VicWest / AWI Centria 46
Slide 47: South America Opportunity
South America Opportunity • Continuing to build a knowledge base of the region • Brazil, in particular, is attractive – strong insulated panel growth (similar size market to Brazil North America) – very significant addressable market – 2 key incumbents • Penetration growth being driven by: – expandi
Slide 48: Insulation
LIGHT ON ENERGY ~~ LIGHT ON THE PLANET HIGH ON EFFICIENCY a JUST SAVE IT Insulation Peter Wilson
Slide 49: Insulation at a Glance
Insulation at a Glance • A world leader in high performance insulation • Market leading positions in UK, Ireland, Mainland Europe and Australia • Proprietary technology drives differentiation in product performance Applications • Insulation for Roofs, Walls & Floors • New build and Renovation • HVAC
Slide 50: Geographic Presence
Geographic Presence Major Manufacturing Locations Sales Offices 50
Slide 51: Sales by Region
Sales by Region Ireland 6% *2013 YTD United Kingdom Australia 6% oo Kingspa 51
Slide 52: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 52
Slide 53: Key Technologies
Key Technologies Optimum performance next generation vacuum insulation solution for space sensitive applications. Premium performance rigid insulation, with low lambda, class ‘O’ core and negligible smoke obscuration. High performance rigid urethane insulation, for general insulation applications. A
Slide 54: Kingspan Insulates Better
Kingspan Insulates Better 54
Slide 55: Optim-R
Optim-R™ • Product launched in H2 2012 • Propriety manufacturing capability presently under construction, expected completion Q1 2014 • Target specification: Space sensitive applications across the building spectrum 55
Slide 56: Rigid Board Market Penetration
Rigid Board Market Penetration 56
Slide 57: Kooltherm Penetration
Kooltherm® Penetration* *Kooltherm ® as a % of sales excluding the impact of the CIE Insulation acquisition 57
Slide 58: Strategy
Strategy • Generation • Kooltherm® • Continue to broaden penetration growth divisional footprint through export • Optim-R® expansion (SE Asia manufacturing and North America), local market • PIR structural roofing elements development (France, Nordics, • Capacity expansion CEE) and acquisition for K
Slide 59: Environmental
Environmental Ralph Mannion
Slide 60: Environmental
Environmental Environmental Sustainable Renewable PRODUCTS Management Water Technology MARKETS Domestic Commercial & Agricultural Industrial CHANNELS Trade Specification 60
Slide 61: Geographic Presence
Geographic Presence Major Manufacturing Locations Sales Offices 61
Slide 62: Sales by Region
Sales by Region North America 2% Y Kingspan n. Mainland Europe 19% 62
Slide 63: Key Products
Key Products 63
Slide 64: Product Split of Turnover
Product Split of Turnover 2007 2013 34% 38% 47% 41% 19% 21% Environmental Management Environmental Management Water Treatment Sustainable Water Hot Water Renewable Technologies 64
Slide 65: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 65
Slide 66: Strategy
Strategy Key account distribution • Focus across all regions and product groups to maintain and build upon current levels of trading Launch of activity sustainable water Margin Growth initiative and • 1% in 2012 to 6% in 2017 associated product suite Market Leading Positions Road • Sustainable water
Slide 67: Product and Geographic Expansion
Product and Geographic Expansion 1. EUR Wastewater Directive 2021 2. New product Development 3. Commercial Wastewater (GB & I, DACH, FR, PL, SCAN) Waste Water 1. UK Surface Water Legislation 2. New Product Development 3. Full System Design Surface Water (GB & I, expand to EU, NA) 1. On Grid Global D
Slide 68: Access Floors
Access Floors Russell Shiels 68
Slide 69: Geographic Presence
Geographic Presence Major Manufacturing Locations Sales Offices 69
Slide 70: Sales by Region
Sales by Region 70
Slide 71: Sales Revenue 2009-2013 (est)
Sales Revenue 2009-2013 (est) 71
Slide 72: Penetration in US Office Sales
Penetration in US Office Sales 72
Slide 73: Key Products
Key Products 73
Slide 74: Data Centre Airflow Solutions
Data Centre Airflow Solutions 74
Slide 75: Strategy
Strategy • Penetration growth in • Enhance our position • Drive a global strategy US office market in the Data Center with emphasis on market by becoming data centre • Establish Underfloor market leading Air Distribution provider of air flow (UFAD) as the management premier energy solutions – direct
Slide 76: Kingspan Group plc
P span Group plc n Road, Kingscourt, Co. Cavan, Ireland Telephone: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.ie www.kingspan.com