Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2020 Earnings Presentation
33 slides from Kingspan's earnings presentation, February 2021
Slide 1: Full Year Results
FEBRUARY 2021 Full Year Results
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 uncerta
Slide 3: 2020 in Summary
2020 in Summary REVENUE Insulated Panels sales decrease of 4% mainly due to Q2 lows. Solid performance with most end markets experiencing recovery in H2. Europe positive, particularly Germany and France, strong finish to the year in the €4.6bn UK and strong order intake in the Americas in Q4 -2%
Slide 4: Our Mission
Our Mission Ultra Energy-Efficient To accelerate a net-zero 164 million tonnes of CO2 will be saved over the life of our emissions future built insulation systems sold in 2020 environment with the Net-Zero Carbon wellbeing of people and 35% reduction in absolute Scope 1 & 2 greenhouse gas planet at
Slide 5: The Envelope
The Envelope Light & Air Global Leader Water & Energy 10% Revenue Global Leader 4% Revenue Flat Roof Membrane Embryonic position presently – global scale opportunity Industrial Insulation Embryonic position presently – global scale opportunity Insulated Panels Global Leader 64% Revenue Insulation Bo
Slide 6: Megatrends That Drive Us
Megatrends That Drive Us Politics and Regulation Averting a climate emergency Paris Agreement goal to limit the temperature increase above pre-industrial levels to 1.5ºC Market and Customers Sustainability and Resilience Society and Workforce Future proofing of asset values Resource Scarcity Health/
Slide 7: IPCC 1.5ºC – AECOM Research
IPCC 1.5ºC – AECOM Research1 Embodied carbon in buildings also needs to The rate of retrofits be reduced through needs to dramatically low carbon accelerate and extend to deep energy materials and building designs. refurbishment: 4%/year Refurbishment is inherently lower embodied carbon than new-bui
Slide 8: Better Insulation is the Cornerstone of Envelope First
Better Insulation is the Cornerstone of Envelope First OPTIM-R ® (0.007 W/m.K)3 KINGSPAN’S FULL SPECTRUM Insulates Better Kooltherm® 100 QuadCore™ (0.018 W/m.K)3 PIR (0.018 W/m.K)3 (0.018-0.023)2 (0.022 W/m.K)3 (0.022-0.027)2 Synthetic EPS XPS (0.030 W/m.K)3 (0.030 W/m.K)3 Mineral (0.030-0.038)2 (0.
Slide 9: Solutions Driven Innovation
Solutions Driven Innovation QuadCore™ versus Synthetic Mineral Fibre1 Market and Sustainability and Society and Politics and Customers Resilience Workforce Regulation 25% lower panel system cost2 297 fewer truck deliveries to site 12% savings in installation time (faster build programme) 40year up t
Slide 10: Space Matters
Space Matters UK Industrial/Office Description Value Kingspan External Wall Kingspan QuadCore Construction KS1000RW sandwich panels Lettable floor area 35,800 sq.m (385,348 sq.ft) Additional floor area 87.10 sq.m (937.54 sq.ft) Additional development cost £71,379 Capitalised value of £275,667 additi
Slide 11: Planet Passionate
Planet Passionate TARGET TARGET YEAR 2020 2020 KEY HIGHLIGHTS Net Zero Energy (%) 32 GWh 2020 100% 60% direct renewable energy use (%) 2030 28% Net Zero Energy IKON 22 Achieved On-site Achieved Solar PV 20% on-site renewable energy generation (%) 2030 5.3% LEED v4 renewable ENERGY systems in energy
Slide 12: Circularity & QuadCore – the LIFECycle approach
Circularity & QuadCoreTM – the LIFECycle approach Factory Processes By 2030, all factories across the world making QuadCoreTM panels will be zero waste to landfill. Input Materials QuadCoreTM panels Extended Life contain up to 25% recycled steel and will contain recycled QuadCoreTM’s feedstocks in r
Slide 13: Global Organic Expansion
Global Organic Expansion UK AlphaCore® Pilot Line 2022 Sweden Kooltherm® Facility 2021 Kingscourt, Ireland Light & Air Facility 2021 Central France PIR Board Line 2022 PIR Panel Line 2022 Russia New Panel Line 2021 North East USA New Panel Line 2021 Dubai, UAE Insulation, USA Insulation Facility 202
Slide 14: Key Innovations
Key Innovations PowerPanel® 2.0 FibreFree AlphaCore™ QuadCore™ Rollout \\ i eo SS a | | en eee ee Ce B-Class Kooltherm® A-Class Optim-R Kingspan, 14
Slide 15: Progress so Far
Progress so Far CAGR 16.4% 5.0 Sales (€bn) 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 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 17 18 19 20 15
Slide 16: 5 Year Financial Performance
5 Year Financial Performance REVENUE (€m) TRADING PROFIT (€m) CAGR (10.1%) CAGR (10.5%) 4,659.1 4,576.0 508.2 497.1 4,372.5 445.2 3,668.1 377.5 3,108.5 340.9 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 16
Slide 17: 2020 In a Nutshell
2020 In a Nutshell 10% 64% 17% Light & Air Products 5% Data & Flooring Insulated Panels Insulation Boards 4% Water & Energy Revenue Drivers 85% 15% €4.6 Billion Energy Efficiency & Conversion Other Geographic Regions 36% Western & 22% Central & 20% 16% 6% Applications - Retail - Distribution Souther
Slide 18: Financial Highlights
Financial Highlights YoY % 2020 2019 cc change* Change Revenue (€m) 4,576.0 4,659.1 -2% - Trading Profit (€m) 508.2 497.1 +2% +5% Earnings per share (cent) 206.2 204.6 +1% - Total Dividend (Cent) 20.6 13.0** +58% - Free Cashflow (€m) 479.7 337.1 +42% - Net Debt (€m) 236.2 633.2 -63% - Trading Margin
Slide 19: Trading Profit and Margin
Trading Profit and Margin TRADING PROFIT (€m) CAGR (10.5%) TRADING MARGIN FY 20 FY 19 FY 18 Insulated Panels 11.0% 10.4% 10.0% 508.2 497.1 Insulation Board 14.0% 13.4% 12.2% 445.2 Light & Air 7.0% 7.7% 7.4% 377.5 Water & Energy 8.0% 6.8% 7.0% 340.9 Data & Flooring 13.1% 11.4% 11.9% Group 11.1% 10.7%
Slide 20: Group Sales & Profit Bridge
Group Sales & Profit Bridge Revenue €m Trading Profit €m 335.1 (316.0) 31.8 (6.6) (102.2) (14.1) 508.2 497.1 4,659.1 4,576.0 Revenue Currency Acquisitions Underlying Revenue Trading Currency Acquisitions Underlying Trading 2019 2020 Profit 2019 Profit 2020 20
Slide 21: Strong Free Cash Flow (€m)
Strong Free Cash Flow (€m) 15.0 (2.1) (21.6) 107.7 (89.7) (126.1) 2019 596.5 €337.1m 479.7 EBITDA Working Capital Non Cash Provision Interest Tax Net Capex Free Cash Flow Movement 21
Slide 22: Net Debt Reconciliation (€m)
Net Debt Reconciliation (€m) (479.7) 633.2 36.6 46.1 236.2 Net Debt Dec 19 Free Cash Flow Acquisitions FX/Other Net Debt Dec 20 22
Slide 23: Dividend Policy
Dividend Policy In 2020 committed to reviewing policy Sought shareholder views Objective to balance dividend with capital allocation for longer term growth and to preserve balance sheet strength Outgoing policy was a 25% pay-out Revised policy is to pay-out 15% with effect from 2021 ECU Sc
Slide 24: Strong ROCE
Strong ROCE 18.4% 17.8% 17.3% 17.3% 16.8% Aperture Cellars, California, USA Insulated Panels 2016 2017 2018 2019 2020 24
Slide 25: Sales by Geography
Sales by Geography 36% 33% 6% Western & Southern Europe Central & Northern Europe 7% 2020 Americas 2019 Britain 21% 22% 16% Rest of World 18% 20% 21% YoY % €m 2020 2019 cc change* Change Western & Southern Europe 1,633.6 1,546.1 +6% +6% Central & Northern Europe 997.8 960.0 +4% +6% Americas 916.0 99
Slide 26: Insulated Panels
Belmont Hub, Australia Insulated Panels Global order intake recovered through H2 with year-end backlog ahead by 19% Insulated Panels QuadCoreTM sales grew by 33% in 2020 and comprised 12% of insulated panels product sales Most markets continued to recover well in the aftermath of the first sev
Slide 27: Insulated Panels
UK delivered a strong Q4 although still lagged 2019’s revenue by year-end and Ireland performed similarly. Both markets entered 2021 with orderbooks comfortably ahead of prior year Insulated Panels US market finished the year with revenue slightly behind prior year, albeit with an order bank wel
Slide 28: Insulation Boards
The Jewel, Sweden Insulation Boards Division delivered a strong performance in H2 across most of the markets in which it operates Insulation Boards Volumes were in line with H2 2019, a recovery from the sharp decreases in H1 2020 Western Europe posted a record year with revenue well ahead in t
Slide 29: Light & Air
Robust performance during the more challenging first half of the year Activity improved in a number of key markets through the latter half Light & Air The business performed particularly well in the Benelux and France and somewhat weaker in Germany toward year- end Médiathéque Angouleme, Franc
Slide 30: Water & Energy
Strong operating performance in 2020 owing largely to tight margin management across the units Steady year for the energy storage business Water & Energy Water unit delivered a result well ahead of prior year, particularly in the UK In Australia, rainwater harvesting still dominates the offe
Slide 31: Data & Flooring
2020 proved to be a positive year for this business Growing exposure to the datacentre market, predominantly Data & Flooring in North America and Europe Solutions provide flexibility in how buildings are configured with the combination of access floors, structural ceiling grids and airflow man
Slide 32: Outlook
Outlook 2021 has started well helped by the strong backlogs at the turn of the year Raw material price inflation is a very significant feature at present and a challenging recovery effort is underway Whilst there can be limited certainty in the near-term, sentiment across end markets remains p
Slide 33: Dublin Road Kingscourt, Co Cavan Ireland
Dublin Road Kingscourt, Co Cavan Ireland, A82 XY31 Tel: +353 42 969 8000 Email: admin@kingspan.com www.kingspan.com 33