Kingspan Group Plc · EURONEXT:KRX
Kingspan — H1 2012 Earnings Presentation
44 slides from Kingspan's earnings presentation, Aug 20, 2012
Slide 1: Kingspan Interim Results
Kingspan Interim Results 20th August 2012
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 (48%) (31
Slide 4: Kingspan Global
Kingspan Global United Kingdom 40% Ireland 4% Australasia 5% North America 15% Mainland Europe 34% Manufacturing and distribution operations throughout Europe, North America, Australasia >70 Locations: 45 Manufacturing 4
Slide 5: Strategic Goals
Strategic Goals Lead the field in high performance insulation globally, greater emphasis of proprietary and differentiating technologies. Kingspan IPN core Kooltherm® Optim-R®, Next Generation Insulation Benchmark® Architectural Become the world’s leading provider of low energy building solu
Slide 6: H1 2012 In Summary
H1 2012 In Summary Solid overall performance Revenue Insulated Panels divisional sales up 3% with solid performance in the UK and North America, good growth in CEE & Australasia up 3% Insulation Boards divisional sales up 4%, reflecting revenue to €757m growth on Mainland Europe & Australasia,
Slide 7: Financial Performance Since Trough
Financial Performance Since Trough Revenue (€’m) (CAGR 12%) 1,546.9 1,587.4 1,125.5 1,193.2 2009 2010 2011 2012F/C* Trading Profit (CAGR 16%) 105.0 95.7 67.1 72.0 2009 2010 2011 2012F/C * * Analyst consensus forecast 2012 7
Slide 8: Financial Review
Financial Review 8
Slide 9: Financial Highlights
Financial Highlights +3% Revenue €757m -1% like-for-like* +19% Trading Profit** €52.7m +14% like-for-like* Trading Margin 7.0% +100bps Profit after tax €37.2m +27% Basic EPS 22.1c +28% Operating cash flow €54.1m +16% Interim dividend 5.0c €32.4m +11% * Like-for-like comparisons exclude the impact of
Slide 10: Sales Bridge
Sales Bridge 900 800 26.2 32.0 22.1 5.1 700 600 500 €m 400 736.0 757.4 300 200 100 0 Revenue H1 11 Currency Volume Price/Mix Acquisition Revenue H1 12 10
Slide 11: Trading Profit & Margin Growth
Trading Profit & Margin Growth Trading Profit Margin % Margin % 60.0 H1 11 FY 11 H1 12 50.0 Insulated 6.2% 6.7% 7.5% Panels 40.0 Insulation 6.5% 5.6% 6.7% Boards 30.0 Environmental 1.2% 3.3% 1.4% €m 52.7 Access Floors 10.4% 10.2% 11.4% 44.2 20.0 35.7 Group 6.0% 6.2% 7.0% 33.3 10.0 0.0 H1 '09 H1 '10
Slide 12: H1 2012 Trading Profit Like-for-Like growth
H1 2012 Trading Profit Like-for-Like growth Like-for-like Currency Reported growth Impact Growth Insulated Panels +20% +4% +24% Insulation Boards +3% +4% +7% Environmental -8% +7% -1% Access Floors +26% +7% +33% Group +14% +5% +19% Merrimack County Nursing Home, New Hampshire, USA 12
Slide 13: Strong Operating Cash Flow
Strong Operating Cash Flow €m H1 12 H1 11 % change Operating profit 51.3 41.7 +23% Depreciation & amortisation 20.6 21.8 -6% Working Capital (increase)/decrease (17.8) (16.9) +5% Operating cash flow 54.1 46.6 +16% Interest and taxation (16.3) (8.6) +90% Net capital expenditure (16.0) (10.7) +50% Oth
Slide 14: Strong Net Debt Performance
Strong Net Debt Performance €m H1 12 H1 11 Free cash flow 27.6 29.7 Acquisitions (net of disposal proceeds) (7.2) (107.4) Settlement of legal costs (12.3) - Dividends paid/other (9.4) (9.6) Cashflow Movement (1.3) (87.3) Debt Translation 0.2 0.9 (Increase)/decrease in net debt (1.1) (86.4) Net debt
Slide 15: Key Ratios
Key Ratios FY 10 H1 11 FY 11 H1 12 ROCE 8.6% 9.1% 10.0% 10.5% Gearing (Net Debt: 18.1% 32.1% 23.1% 21.7% Shareholders Funds) Net Debt/EBITDA 1.12 1.83 1.27 1.21 Interest Cover 11.9 12.2 10.2 9.9 Working Capital as 13.6% 12.5% 12.2% 13.6% % of Sales 15
Slide 16: Strong Balance Sheet
Strong Balance Sheet Net Debt €171.2m – headroom c. €430m New revolving credit facility of €300m 2005 Private placement €151mn (USD200m) 2011 Private placement €150m (USD200m) Significant headroom on covenants Max 3.5x net debt:EBITDA; actual 1.21 Georgia Aquarium, Atlanta, USA Min 4.0
Slide 17: Business Review & Outlook
Business Review & Outlook 17
Slide 18: Sales by Geography
Sales by Geography H1 2011 H1 2012 4% 1% 5% 13% 5% 2% 4% 15% 40% 42% 35% 34% Republic of Ireland Britain & Northern Ireland €mn H1 12 H1 11 Constant YoY % Mainland Europe Currency Change Americas Change Australasia Other Republic of Ireland 32.8 36.2 -9% -9% Britain & Northern 303.9 308.1 -6% -1% Ir
Slide 19: Group Sales Outside UK/IRL
Group Sales Outside UK/IRL 1000 900 €863m 800 700 €610m 600 €’m 56% 500 400 €281m 51% 300 200 23% €109m 100 16% 0 2000 2005 2010 2011 Internationalisation of the Group through the cycle 19
Slide 20: Sales by Product Group
Sales by Product Group 400 350 300 250 €’m 200 H1 2012 H1 2011 150 100 50 0 Insulated Insulation Environmental Access Floors Panels & Renewables €m H1 12 H1 11 Constant YoY % Currency Change Insulated Panels 361.1 350.4 0% +3% Insulation Boards 232.1 222.6 +1% +4% Environmental 86.3 97.9 -16% -12% A
Slide 21: Insulated Panels
Insulated Panels 21
Slide 22: Insulated Panels UK, IRL, WE
Insulated Panels UK, IRL, WE Steady volume in key markets H1 12 H1 11 UK -2% Sales (€m) 202.9 201.0 Benelux -9% % of Group Sales 27% 28% Ireland -9% Analysis of YoY % Change Australia/NZ +13% Currency Volume Price & Mix Total Order intake positive, up 2% across the business unit. Current
Slide 23: Insulated Panels CEMEI
Insulated Panels CEMEI Mixed sales pattern across the H1 12 H1 11 territory but solid volume growth overall Sales (€m) 91.8 88.5 % of Group Sales 12% 12% Germany +15% Note: The above figures include Germany and Turkey Poland +10% Analysis of YoY % Change Czech 3% Currency Volume Price & Mix
Slide 24: Insulated Panels North America
Insulated Panels North America 9% growth in sales, despite 6% H1 12 H1 11 volume decline over same period prior year. Prioritising margin over Sales (€m) 66.4 60.9 volume % of Group Sales 9% 8% Overall order intake -9%, weak in Q1, but well improved in Q2 Analysis of YoY % Change Orderbook cur
Slide 25: Performance v. Construction Macros
Performance v. Construction Macros North America - Panels Growth Index 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 Kingspan North American Panels Volumes US Commercial and Industrial Construction (total market) * Growth in penetration *Source: McGraw Hill Construction 25
Slide 26: Acquisition of Thyssenkrupp Construction Group
Acquisition of Thyssenkrupp Construction Group Overview SPA signed 9 August 2012 with completion scheduled in September/October 2012 Consideration of €65m including acquired past service pension liabilities of €15.0m Net assets acquired of circa. €100m The Business Leading European player in
Slide 27: Insulation
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Slide 28: Insulation
Insulation Solid underlying performance in H1 12 H1 11 UK, growth in Western Europe, Ireland weak Sales (€m) 232.1 222.6 % of Group Sales 31% 30% Recovery of chemical price increases remained a key priority Kooltherm® conversion on track Analysis of YoY % Change in all markets Currency Volume
Slide 29: Performance v. Construction Macros
Performance v. Construction Macros UK Insulation Volumes Growth Index 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 Kingspan UK Insulation Volumes (excl. acquisition) UK Housing Starts 29
Slide 30: Environmental
Environmental 30
Slide 31: Environmental
Environmental Difficult trading period throughout the division H1 12 H1 11 Continental Europe weaker as Sales (€m) 86.3 97.9 France volume significantly reduced % of Group Sales 11% 13% Fuel storage and Hot Water weak in the UK as social housing Analysis of YoY % Change refurbishment is squeez
Slide 32: Access Floors
Access Floors 32
Slide 33: Access Floors
Access Floors Good performance in a weak H1 12 H1 11 environment Sales (€m) 77.9 65.1 US office activity showing early signs of % of Group Sales 10% 9% slow recovery Analysis of YoY % Change Datacentre market was steady Currency Volume Acquisition Price & Total UK office market volume in del
Slide 34: Outlook
Outlook Current macro expected to remain relatively stable Q2 weakness in construction environment to continue, possible further slippage in H2 Insulated Panels’ orderbook positive to prior year Moderate overall sales decline in H2 expected largely around Environmental sales and easing activ
Slide 35: Additional Information
Kingspan. Additional Information
Slide 36: Trends in Thermal Regulations
Trends in Thermal Regulations This graph shows the permitted consumption of energy in KW/H per m2 of domestic dwelling space and its historic and planned evolution, as a percentage of the permitted 2000 levels. Regulatory drivers in key markets: • EU - European Energy performance of Buildings Direct
Slide 37: The Energy Gap
The Energy Gap? P aS uw o = <= = co ° ENERGY 1 & GAP s (kWh/€) Reduced thermal = PER ANNUM performance of fibrous cc ; * args wi insulant in building = envelope and fabric systems will increase energy use, costs and CO, emissions'. 4% moisture content by Degradation of fibrous Air movement through f
Slide 38: Kingspan Insulates Better
Kingspan Insulates Better 38
Slide 39: Rigid Insulation: How it Performs
Rigid Insulation: How it Performs 39
Slide 40: US Architecture Billings Index
Billings Index (Greater than 50 = Expansion) 8 & at a KicSssan Architecture Billings Index ee ee ee http://wwwa.calculatedriskblog.com/
Slide 41: US Office Market
US Office Market Market (Mn Sq Ft) 160 140 120 100 80 60 40 20 0 2009A 2010A 2011A 2012F 2013F 2014F 2015F 2016F Source: McGraw Hill Construction 41
Slide 42: Penetration Potential
Penetration Potential 2005A 2011A 2015F Insulated Panels UK 55% 64% 75% Insulated Panels NA 5% 8.5% 11.5% UK Insulation 30% 35% 40% Germany External Wall 0% 2.5% 8% CEE Insulation Board 0% 0.9% 4% Insulated Panels Australia 6% 8.5% 12% Insulation Australia 2% 6% 8% 42
Slide 43: ings
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Slide 44: Kingspan Group plc contact details
Alternative2Energy 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