Kingspan Group Plc · EURONEXT:KRX
Kingspan — H1 2013 Earnings Presentation
41 slides from Kingspan's earnings presentation, Aug 19, 2013
Slide 1: Kingspan Interim Results
Kingspan Interim Results 19th August 2013
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 r
Slide 3: At a Glance
At a Glance 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: Kingspan Global
Kingspan Global United Kingdom 34% Ireland 4% Mainland Australasia Europe 38% 4% North America 14% Middle East, Turkey & ROW 6% Manufacturing and distribution operations throughout Europe, North America, Australasia >70 Locations: 59 Manufacturing 4
Slide 5: 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 6: H1 2013 In Summary
H1 2013 In Summary Revenue Solid performance overall considering the prevailing up 13% weakness in European construction markets. to €858.4m Insulated Panels sales up 34% and trading profit up 24% with significant contribution from both the ThyssenKrupp Construction and Rigidal Industries LLC ac
Slide 7: 5 Year Financial Performance
5 Year Financial Performance Revenue (€’m) (CAGR 13%) 1,837.0 1,546.9 1,628.7 1,125.5 1,193.2 2009 2010 2011 2012 2013* Trading Profit (CAGR 15%) 118.2 107.7 95.7 67.1 72.0 2009 2010 2011 2012 2013* * Analyst Consensus 7
Slide 8: Financial Review
Financial Review 8
Slide 9: Financial Highlights
Financial Highlights +13% Revenue €858.4m -3% like-for-like* +6% Trading Profit** €55.9m -6% like-for-like* Trading Margin 6.5% -50bps Profit after tax €39.2m +6% Basic EPS 23c +4% Net debt €165.9m -3% Interim dividend 5.5c €32.4m +10% * Like-for-like comparisons exclude the impact of acquisitions a
Slide 10: Sales Bridge
Sales Bridge 1,000 900 138.3 800 13.4 1.3 25.2 700 600 500 400 858.4 757.4 300 200 100 0 Revenue H1 12 Currency Volume Price/Mix Acquisition Revenue H1 13 10
Slide 11: H1 Trading Profit & Margin Growth
H1 Trading Profit & Margin Growth Trading Profit (CAGR 13.6%) Margin % 60.0 Margin % 50.0 H1 12 FY 12 H1 13 Insulated 7.5% 7.3% 6.9%* 40.0 Panels Insulation 6.7% 6.3% 6.0% 30.0 Boards €m 55.9 52.7 Environmental 1.4% 0.7% 1.1% 44.2 20.0 35.7 Access Floors 11.4% 9.9% 10.3% 33.3 Group 7.0% 6.6% 6.5%* 1
Slide 12: H1 2013 Trading Profit Like-for-Like growth
H1 2013 Trading Profit Like-for-Like growth Like-for-like Acquisitions/Dis Currency Reported growth posals Impact Growth Insulated Panels -3% +30% -3% +24% Insulation Boards -10% - -3% -13% Environmental -28% - -5% -33% Access Floors -7% - -2% -9% Group -6% +15% -3% +6% Budapest, Hungary 12
Slide 13: Strong Operating Cash Flow
Strong Operating Cash Flow €m H1 13 H1 12 % change Operating profit 53.9 51.3 +5% Depreciation & amortisation 22.0 20.6 +7% Working Capital decrease/(increase) (40.8) (17.8) -129% Operating cash flow 35.1 54.1 -35% Interest and taxation (11.6) (16.3) -29% Net capital expenditure (18.3) (16.0) +14% O
Slide 14: Strong Net Debt Performance
Strong Net Debt Performance €m H1 13 H1 12 Free cash flow 13.9 27.6 Acquisitions (net of disposal proceeds) - (7.2) Settlement of legal costs - (12.3) Dividends paid/other (10.8) (9.4) Cashflow Movement 3.1 (1.3) Debt Translation (3.5) 0.2 Decrease/(increase) in net debt (0.4) (1.1) Net debt at star
Slide 15: Key Ratios
Key Ratios FY 11 H1 12 FY 12 H1 13 ROCE 10.0% 10.5% 10.7% 10.8% Gearing (Net Debt: 23.1% 21.7% 20.4% 20.1% Shareholders Funds) Net Debt/EBITDA 1.27 1.21 1.12 1.1 Interest Cover 10.2 9.9 10.0 10.3 Working Capital as % 12.2% 13.6% 12.3% 12.8% of Sales 15
Slide 16: Strong Balance Sheet
Strong Balance Sheet Net Debt €166m – headroom (including cash) €437m Revolving credit facility of €300m 2005 Private placement €151m (USD200m) 2011 Private placement €150m (USD200m) Significant headroom on covenants Max 3.5x net debt: EBITDA; actual 1.1 Min 4.0x interest cover; actual
Slide 17: Business Review & Outlook
Business Review & Outlook 17
Slide 18: Sales by Geography
Sales by Geography H1 2012 H1 2013 6% 4% 5% 4% 4% 4% 15% 14% 34% 40% 32% 38% Republic of Ireland Britain & Northern Ireland €mn H1 13 H1 12 Constant YoY % Mainland Europe Currency Change Change Americas Britain & Northern 292.6 303.9 -1% -4% Australasia Ireland Rest of World Mainland Europe 320.7 24
Slide 19: Sales by Product Group
Sales by Product Group 500 450 400 350 300 €’m 250 HY 13 HY 12 200 150 100 50 0 Insulated Insulation Environmental Access Floors Panels & Renewables €m H1 13 H1 12 Constant Currency YoY % Change Insulated Panels 482.5 361.1 +36% +34% Insulation Boards 225.7 232.1 -1% -3% Environmental 71.3 86.3 -15%
Slide 20: Insulated Panels
Insulated Panels Kingspan. 20
Slide 21: Insulated Panels UK, IRL, WE
Insulated Panels UK, IRL, WE Tough quarter one with H1 13 H1 12 improvement towards mid year Sales (€m) 258.9 202.9 Underlying volume in key markets % of Group Sales 30% 27% Britain -5% Benelux -15% Analysis of YoY % Change France +9% Currency Volume Price & Mix Acquisitions Total Irelan
Slide 22: Insulated Panels CEMEI
Insulated Panels CEMEI Mixed sales pattern across the H1 13 H1 12 territory with Q2 showing improvement Sales (€m) 151.4 91.8 % of Group Sales 18% 12% Germany -10% Note: The above figures include Germany and Turkey Poland -2% Czech +16% Analysis of YoY % Change Turkey -2% Currency Volume P
Slide 23: Insulated Panels North America
Insulated Panels North America 11% growth in sales volume H1 13 H1 12 Order intake -2% Sales (€m) 72.2 66.4 % of Group Sales 9% 9% Panel order book +15% versus June 2012 Commercial & industrial Analysis of YoY % Change conversion growth continuously evident Currency Volume Price & Mix Total
Slide 24: Insulation
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Slide 25: Insulation
Insulation Solid performance overall H1 13 H1 12 notwithstanding difficult market in Q1 Sales (€m) 225.7 232.1 European markets particularly % of Group Sales 26% 31% Benelux persistently weak Good UK performance Analysis of YoY % Change Kooltherm® conversion slower in some markets Currency V
Slide 26: Access Floors
Access Floors Kingspan | i i —\ wr Ze \\ i ut wt rat fee ih
Slide 27: Access Floors
Access Floors Improving UK pipeline H1 13 H1 12 Grade A US office construction Sales (€m) 78.9 77.9 expected to improve late in 2013 % of Group Sales 9% 10% Stable datacentre activity with solid contribution from new air floor systems Analysis of YoY % Change Currency Volume Acquisition Price
Slide 28: Environmental
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Slide 29: Environmental
Environmental Stability evident from Q1 with H1 13 H1 12 Q2 sales -3% Sales (€m) 71.3 86.3 Restructuring benefits offsetting % of Group Sales 8% 11% the impact of lower year-on-year sales Improving sales performance a Analysis of YoY % Change key priority Currency Volume, Price & Mix Total K
Slide 30: Outlook
Outlook Penetration growth driven by conversion towards modern high performance insulation and building envelopes remains the core of our strategy Expanded geographic platform adding further to diversification Continuing focus on new product introductions and innovation Solid H2 expected ove
Slide 31: Additional Information
Additional Information 31
Slide 32: Innovation & Process Advancements
Innovation & Process Advancements 32
Slide 33: Innovation Pipeline
—_ VS Kingspan. Alternative2Energy Kingspan Energy Innovation Pipeline Kreate® (Benchmark®) Next Generation Kooltherm® KW15 Microwind Air Management Range T T l T 2010 2011 2012 2013 2014 2015 2016 33
Slide 34: Innovation in Action
Innovation in Action 10 year organic growth of new/embryotic products* 250 200 €228m 150 CAGR 25% 100 50 €25m 0 2002 2012 * Includes Kooltherm®, Optim-R®, BENCHMARK, Topdek, X-Dek® 34
Slide 35: Kingspan Insulates Better
Kingspan Insulates Better 36
Slide 36: Rigid Insulation: How it Performs
Rigid Insulation: How it Performs 37
Slide 37: Structural Growth
Structural Growth Alternative2Energy 38
Slide 38: Penetration Rates
% % Penetration Rates Insulated Panels UK Germany North America 100 15 80 10 60 % 40 5 20 —— 0 0) 2005A 2013E 2017P 2005A 2013E 2017P 2005A 2013E 2017P Insulation Boards UK Western Europe Australia 50 10 . a $ 30 f 6 % 20 4 10 2 0 0 2005A 2013E 2017P 20054 2013E 2017P 2005A 2013E 2017P 39
Slide 39: Group Sales Outside UK/IRL
Group Sales Outside UK/IRL 1200 €1bn 1000 €949m €863m 800 €610m €’m 600 58% 58% 56% 400 €281m 51% 200 23% €109m 16% 0 2000 2005 2010 2011 2012 2013 Internationalisation of the Group through the cycle (2013 estimate) 40
Slide 40: 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. 41
Slide 41: Kingscourt, Co. Cavan, Ireland
Kingscourt, Co. Cavan, Ireland Telephone: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.ie www.kingspan.com