Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2013 Earnings Presentation
41 slides from Kingspan's earnings presentation, Feb 24, 2014
Slide 1: Kingspan Full Year Results
Kingspan Full Year Results 24th February 2014
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: In a Nutshell
Ina Nutshell REVENUE PRODUCTS | DRIVERS [J GEOGRAPHY SECTOR END MARKET CHANNEL ff APPLICATIONS PROFIT Mainland Europe INSULATED PANELS Energy Efficiency & Conversion UK % 34% INSULATION BOARDS 25 % North America % 13% ENVIRONMENTAL Middle East 8% / Turkey 4% Australasia 4% onary yaaa Telarc 2 Other
Slide 4: 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 (58%) (2
Slide 5: Kingspan Global Manufacturing Locations
Kingspan Global Manufacturing Locations
Slide 6: 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 7: 2013 In Summary
2013 In Summary Insulated Panels sales up 23% and trading profit up Revenue 23%, with significant contribution from the ThyssenKrupp Construction and Rigidal Industries LLC up 10% acquisitions. Underlying sales pre-currency and to €1,790.3m acquisitions were up 2%. Solid performance in Insulatio
Slide 8: 5 Year Financial Performance
5 Year Financial Performance Revenue (€’m) (CAGR 12.3%) 1,790.3 1,546.9 1,628.7 1,125.5 1,193.2 2009 2010 2011 2012 2013 Trading Profit (CAGR 16.3%) 122.8 107.7 95.7 72.0 67.1 2009 2010 2011 2012 2013 8
Slide 9: Financial Review
Financial Review Abu Dhabi Midfield Terminal Design, UAE Insulated Panels 9
Slide 10: Financial Highlights
Financial Highlights +10% Revenue €1,790.3m +1% like-for-like* +14% Trading Profit** €122.8m +8% like-for-like* Trading Margin 6.9% +30bps Profit after tax €89.2m +19% Basic EPS 51.7c +18% ROCE 12.3% +160bps Total dividend 14.0c €32.4m +14% * Like-for-like comparisons exclude the impact of acquisiti
Slide 11: Sales Bridge
Sales Bridge 2,000 1,800 202.7 45.6 36.7 50.0 1,600 1,400 1,200 €m 1,000 1,790.3 800 1,628.7 600 400 200 0 Revenue 2012 Currency Volume Price/Mix Acquisition Revenue 2013 11
Slide 12: Trading Profit & Margin Growth
Trading Profit & Margin Growth Trading Profit Margin % 125.0 100.0 FY11 FY 12 FY 13 Insulated 6.7% 7.3% 7.3% Panels 75.0 Insulation 5.6% 6.3% 6.5% Boards 122.8 €’m 107.7 Environmental 3.3% 0.7% 1.0% 50.0 95.7 Access Floors 10.2% 9.9% 10.5% 67.1 72.0 Group 6.2% 6.6% 6.9% 25.0 0.0 FY '09 FY '10 FY '11
Slide 13: FY 2013 Trading Profit Like-for-Like growth
FY 2013 Trading Profit Like-for-Like growth Like-for-like Acquisitions/ Currency Reported growth Disposals Impact Growth Insulated Panels 10% 19% -6% 23% Insulation Boards 5% - -5% - Environmental 37% - -12% 25% Access Floors 10% - -4% 6% Group 8% 11% -5% 14% ABC HQ, Brisbane, Australia 13 Insulatio
Slide 14: Strong Operating Cash Flow
Strong Operating Cash Flow €m FY 13 FY 12 % change Operating profit 115.5 104.6 +10% Depreciation & amortisation 43.9 43.3 +1% Working Capital decrease/(increase) (16.9) 31.3 -154% Movement in provisions (5.1) 0.6 Operating cash flow 137.4 179.8 -24% Interest and taxation (28.7) (31.0) -7% Net capit
Slide 15: Strong Net Debt Performance
Strong Net Debt Performance €m FY 13 FY 12 Free cash flow 77.7 106.6 Acquisitions (net of disposal proceeds) (1.5) (72.5) Settlement of legal costs - (12.3) Dividends paid/other (19.2) (16.6) Cashflow Movement 57.0 5.2 Debt Translation 0.9 (0.6) Decrease/(increase) in net debt 57.9 4.6 Net debt at s
Slide 16: Re-building ROCE
Re-building ROCE 14.0 12.3% 12.0 10.7% 10.0% 10.0 8.6% 8.4% 8.0 6.0 4.0 2.0 0.0 2009 2010 2011 2012 2013
Slide 17: Key Ratios
Key Ratios FY 11 FY 12 H1 13 FY 13 ROCE 10.0% 10.7% 10.8% 12.3% Gearing (Net Debt: 23.1% 20.4% 20.1% 12.5% Shareholders Funds) Net Debt/EBITDA 1.27 1.12 1.1 0.66 Interest Cover 10.2 10.0 10.3 12.0 Working Capital as 12.2% 12.3% 12.8% 11.7% % of Sales 17
Slide 18: Strong Balance Sheet
Strong Balance Sheet Net Debt €107.6m – headroom c. €500m compared to committed facilities and cash balances Undrawn revolving credit facility of €300m 2005 Private placement €150m (USD200m) USD158 maturing March 2015 USD42 maturing March 2017 2011 Private placement €146m (USD200m) Sig
Slide 19: Business Review & Outlook
Business Review & Outlook University of Louisville Student Recreation Center Louisville, Kentucky Insulated Panels 19
Slide 20: Sales by Geography
Sales by Geography FY 2012 FY 2013 5% 3% 2% 4% 2% 4% 4% 4% 14% 13% 38% 34% 34% 39% Republic of Ireland Britain & Northern Ireland Mainland Europe €’m FY 13 FY 12 Constant Currency YoY % Americas Change Change Australasia Turkey & Middle East Britain & Northern Ireland 599.1 614.7 +2% -3% Rest of Wor
Slide 21: Group Sales Outside UK/IRL
Group Sales Outside UK/IRL 1200 €1,119m 1000 €949m €863m 62% 800 €610m 58% €’m 600 56% 51% 400 €281m 51% 200 23% €109m 16% 0 2000 2005 2010 2011 2012 2013 Internationalisation of the Group through the cycle 21
Slide 22: Sales by Product Group
Sales by Product Group 1,200 1,000 800 €’m 600 FY 13 FY 12 400 200 0 Insulated Insulation Environmental Access Floors Panels €m FY 13 FY 12 Constant YoY % Currency Change Insulated Panels 1,036.0 840.4 +26% +23% Insulation Boards 455.4 470.4 - -3% Environmental 144.7 163.8 -8% -12% Access Floors 154
Slide 23: Insulated Panels
Insulated Panels Mosaic Village Charlotte, North Carolina Insulated Panels 23
Slide 24: Insulated Panels UK, IRL, WE
Insulated Panels UK, IRL, WE Slow start to 2013 FY 13 FY 12 UK Sales up 1% overall recovering from poor Q1 Sales (€m) 525.6 453.1 % of Group Sales 29% 28% Improvement in general sentiment during H2, particularly UK Benelux stable, and improvement Analysis of YoY % Change visible in commercia
Slide 25: Insulated Panels CEMEI
Insulated Panels CEMEI Improving sentiment generally FY 13 FY 12 Germany penetration continues to Sales (€m) 364.8 251.1 grow and is now a key market post % of Group Sales 20% 16% ThyssenKrupp Construction acquisition (sales +70%) Note: The above figures include Germany and Turkey Poland recov
Slide 26: Insulated Panels North America
Insulated Panels North America Solid progress building upon that achieved in 2012 FY 13 FY 12 H2 in the US impacted by Sales (€m) 145.6 136.2 Government shutdown % of Group Sales 8% 8% Canada improved towards end of year Analysis of YoY % Change Market penetration continues to build Currency
Slide 27: Kingspan Energy
_— Le Kingspan. f Kingspan Energy On-roof integrated or plant-on Insulated Panel and Solar PV in combination Funding Options Client Kingspan > Direct sale of system > Lease client roofspace for 25 years to end client in return for a Power Purchase Agreement >» Lock-in the income streams (ROCs, FITs,
Slide 28: Insulation
Insulation Perth Arena, Australia Insulation 28
Slide 29: Insulation
Insulation UK market improved through 2013 FY 13 FY 12 Strong newbuild compensating for weaker refurbishment Sales (€m) 455.4 470.4 % of Group Sales 25% 29% Improving sentiment and activity levels in the Benelux New facility to serve eastern region of Analysis of YoY % Change Germany and CEE
Slide 30: Access Floors
Access Floors The Walkie Talkie , The Cheesegrater, and Heron Tower, London, UK Access Floors 30
Slide 31: Access Floors
Access Floors Recovery underway in UK office market FY 13 FY 12 Resilient datacentre activity, particularly Sales (€m) 154.2 154.1 in North America % of Group Sales 9% 9% New airflow management products Analysis of YoY % Change supporting datacentre activity Currency Volume Price & Mix Total
Slide 32: Environmental
Environmental Lane Community College, Eugene, Oregon, US Kingspan Solar 32
Slide 33: Environmental
Environmental A year of stabilisation FY 13 FY 12 Restructuring of cost base with €4m reduction in fixed costs Sales (€m) 144.7 163.8 % of Group Sales 8% 10% Improving sales trend through the year (Q1 –27%, Q4 -2%) Analysis of YoY % Change Solar thermal challenging Currency Volume, Price & M
Slide 34: Outlook
Outlook Tentative economic recovery, although patchy Growing global footprint creating wider opportunity Improvement in sentiment in the UK New products and propriety technology are key to continued margin recovery Encouraging start to 2014 Bro Alu School, UK 34 Kingspan Benchmark
Slide 35: Additional Information
Additional Information Seattle Commercial Hangar Seattle, Washington Insulated Panels 35
Slide 36: Innovation Pipeline
PowerPanel® Kingspan Energy a Kreate® (Benchmark®) QuadCore® opus i Next Generation Kooltherm® KW15 Microwind _— ~— Air Management Range T I T 2010 2011 2012 2013 2014 2015 2016 It's in the core 36
Slide 37: Innovation in Action
Innovation in Action 10 year organic growth of new/embryotic products* * Includes Kooltherm®, Optim-R®, BENCHMARK, Topdek, Kingspan Energy, X-Dek® 37
Slide 38: Kingspan Insulates Better
Kingspan Insulates Better Heat loss comparison assumes same thickness of insulation material. 30% Kingspan Kingspan Kingspan Kingspan MORE | Optim-R Kooltherm’ IPN? PIR HEAT LOSS’ 0.007 W/m.K 0.020 W/m.K 0.020 W/m.K (0.022 W/m.K | (0.020-0.023}° (0.020-0.022}° _(0.022-0.027\" ~~—-— ~~ “ | | 4% 13% 1
Slide 39: Kingspan v Construction Macro
Kingspan v Construction Macro Kingspan Other Addressable macro comparison with Insulated Panels and Rigid Boards. Source: Euroconstruct, McGraw Hill.
Slide 40: Penetration Rates
Penetration Rates Insulated Panels UK 100 80 60 a % 40 20 ome T T 1 2005A 2013 2017P Insulation Boards UK 50 40 —— 30 % 20 10 ope T T 1 2005A 2013 2017P It's in the core Germany North America 15 a 10 % 5 ot rT T 1 TT T 1 2005A 2013 2017P 2005A 2013 2017P Western Europe Australia 10 8 6 % 4 2 f rT T
Slide 41: Kingspan Group plc
Kingspan. Kingspan Group plc Dublin Road, Kingscourt, Co. Cavan, Ireland Telephone: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.ie www.kingspan.com