Kingspan Group Plc · EURONEXT:KRX
Kingspan — FY2018 Earnings Presentation
34 slides from Kingspan's earnings presentation, Feb 22, 2019
Slide 1: Full Year Results
Full Year Results 22nd February 2019
Slide 2: Disclaimer
Disclaimer Logements Equatoria, Rennes, France Joris Ide 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-l
Slide 3: The Business
The Business > A global 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 3
Slide 4: Our Strategy
Our Strategy > Be the leader in high performance INNOVATION insulation globally – proprietary and differentiating technologies PLANET PASSIONATE > Be the world’s leading provider of low energy building envelopes > Greater geographic reach – PENETRATION focus on the Americas, Continental Europe and c
Slide 5: Kingspan – The Full Spectrum
Kingspan – The Full Spectrum The complete ‘Toolbox’ for all applications and design preferences Servicing Demand Generating Demand FibreFree A-Core (Expected 2020) Stone Wool Panel Optim-R ® EPS Kooltherm® 100 XPS QuadCore™ PUR PIR 5
Slide 6: Kingspan Insulates Better
Kingspan Insulates Better OPTIM-R ® 0.007 W/m.K Conversion Growth Kooltherm® 100 QuadCore™ 0.018 W/m.K PIR 0.018 W/m.K (0.018-0.023)2 0.022 W/m.K (0.022-0.027)1 Stone EPS XPS 0.030 W/m.K 0.030 W/m.K1 Mineral (0.030-0.038)2 (0.030-0.038)2 Fibre 0.034 W/m.K (0.034-0.042)2 Reference 13% 13% 55% 89% 89%
Slide 7: Completing the Envelope
Completing the Envelope es" Kingspan Insulation Boards Global Leadership - continue to drive worldwide reach through greenfield and consolidation Kingspan Flatroof Membrane Embryonic position presently ~ Global Scale Opportunity Kingspan Light & Air Kingspan Water & Energy Global Leadership -continu
Slide 8: Planet Passionate
Planet Passionate /|_.-—'——(....l.___T—T ae Net-Zero Target 100% by 2020 611 Total Renewable Energy GWh Total Energy Use GWh 2012 2013 2014 2015 2016 2017 2018 «256 Kingspan. No. Bottles recycled (millions) A key QuadCore™ component by 2020 Bottle Size 50cl
Slide 9: Our Evolution - Revenue
Our Evolution - Revenue CAGR 17.6% 4.4 Sales (€bn) 4.2 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 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 9
Slide 10: 5 Year Financial Performance
5 Year Financial Performance Revenue (€m) Trading Profit (€m) CAGR (23.3%) CAGR (31.6%) 4,372.5 445.2 3,668.1 377.5 340.9 3,108.5 2,774.3 255.9 1,891.2 148.5 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 10
Slide 11: 2018 In A Nutshell
2018 In A Nutshell Products Drivers Geography 64% Insulated Panels 85% Energy Efficiency & Conversion 48% Mainland Europe 70% Commercial & Industrial 80% New Build Kingspan. Revenue €4.4 Billion Applications 11
Slide 12: 2018 In Summary
2018 In Summary > Insulated Panels sales growth of 21% driven by Revenue strong activity in the Americas, a positive performance UP 19% to in Continental Europe and a solid UK outturn against a difficult backdrop. Good contribution from acquisitions €4.4bn in Europe and Latin America. > Insulation B
Slide 13: Financial Highlights
Financial Highlights YoY % 2018 2017 cc change Change Revenue (€m) 4,372.5 3,668.1 +19% +22% Trading Profit (€m) 445.2 377.5 +18% +20% EBITDA (€m) 521.2 441.7 +18% +20% Earnings per share (cent) 184.0 159.0 +16% Total Dividend (cent) 42.0 37.0 +14% Free Cashflow (€m) 308.4 198.5 +55% Net Debt (€m) 7
Slide 14: Trading Profit & Margin
Trading Profit & Margin FY 16 FY 17 FY 18 CAGR 31.6% Insulated Panels 11.2% 10.0% 10.0% Insulation Boards 11.4% 11.9% 12.2% Light & Air 4.7% 7.2% 7.4% Water & Energy 7.0% 9.0% 7.0% Data & Flooring Technology 12.5% 11.8% 11.9% Group 11.0% 10.3% 10.2% Salle des Sports, Thuir, France Joris Ide 445.2 37
Slide 15: Group Sales & Profit Bridge
Group Sales & Profit Bridge Sales (€m) Trading Profit (€m) 172.6 623.6 (91.8) 25.6 (8.8) 50.9 4,372.5 445.2 3,668.1 377.5 Revenue 2017 Currency Acquisitions Underlying Revenue 2018 Trading Profit Currency Acquisitions Underlying Trading Profit 2017 2018 15
Slide 16: Strong Free Cash Flow
Strong Free Cash Flow 2.3 6.8 (15.6) (75.0) (131.3) 521.2 €’m 308.4 EBITDA Working Capital Non Cash/Pension Interest Tax Net Capex Free cash flow 16
Slide 17: Net Debt Reconciliation
Net Debt Reconciliation 2.2 30.0 68.3 472.3 (308.4) 728.3 €’m 463.9 Net Debt Dec 17 Free Cash Flow Acquisitions Dividend Deferred Shares issued/fx Net Debt Dec 18 Consideration etc. 17
Slide 18: ROCE
ROCE Amstel Tower, Netherlands 17.1%* Unidek 17.8% 17.3% 16.8% 15.2% 13.4% 2014 2015 2016 2017 2018 *After annualised impact of acquisitions 18
Slide 19: Strong Balance Sheet
Strong Balance Sheet Ali Bin Ali, Doha > €175m US Private Placement arranged in Insulated Panels, Light & Air December 2017, drawn in January 2018 > Total available cash balances and committed undrawn facilities of €675m > 5 year €500m revolving credit facility - €120m of which was drawn at year end
Slide 20: Sales by Geography
Sales by Geography 7% 7% 4% 21% 4% 25% 20% 20% 2018 2017 48% 44% Constant Currency YoY % €’m 2018 2017 Change Change UK 938.2 909.2 +4% +3% Mainland Europe 2,092.3 1,628.5 +29% +28% Americas 887.6 738.1 +28% +20% Republic of Ireland 156.0 138.1 +13% +13% Rest of World 298.4 254.2 +24% +17% Group Sal
Slide 21: Insulated Panels
Insulated Panels > Strong 2018 sales overall 2018 2017 Sales (€m) 2,823.1 2,328.5 > Continental Europe performed well overall – an % of Group Sales 64% 63% excellent performance in France and the Netherlands, solid outcomes in Germany and Belgium and market Analysis of YoY % Change penetration advan
Slide 22: Insulated Panels (cont.)
Insulated Panels (cont.) Entertainment & Sports Arena, Washington, US Insulated Panels > Volume, margin and profitability all improved considerably in North America during 2018 as steep cost inflation was passed to the market > Both businesses in LATAM made significant progress over prior year now d
Slide 23: Insulation Boards
Insulation Boards > Stable sales performance overall 2018 2017 > Strong start to 2018 in UK due to Kooltherm® Sales (€m) 864.1 769.4 penetration growth and selling price inflationary impact. % of Group Sales 20% 21% Since half year raw material prices have reversed resulting in deflated price of PIR
Slide 24: Light & Air
Light & Air 2018 2017 Sales (€m) 291.8 204.7 > Solid sales performance overall, underlying revenue up % of Group Sales 7% 6% 7% Analysis of YoY % Change > Continental Europe, particularly Germany, performed Underlying Currency Acquisitions Total well +7% -1% +37% +43% > A little more subdued in Bene
Slide 25: Water & Energy
Water & Energy 2018 2017 Sales (€m) 202.9 179.8 > Underlying sales relatively stable % of Group Sales 5% 5% > UK predictably weakened across most product Analysis of YoY % Change segments in H2 Underlying Currency Acquisitions Total > Ireland performed well as did much of Mainland Europe +3% -3% +13
Slide 26: Data & Flooring Technology (Access Floors)
Data & Flooring Technology (Access Floors) 2018 2017 Sales (€m) 190.6 185.7 > Overall sales 3% ahead of prior year % of Group Sales 4% 5% > Product offering has evolved – now includes a wide Analysis of YoY % Change range of sub-structure technology and air management Underlying Currency Acquisition
Slide 27: Outlook
Outlook > Solid start to 2019 with sales revenue and volume Residential House, Oldenburg, Germany ahead of prior year Insulated Panels > Order intake and order bank also ahead of prior year in many of our key markets > As competitive dynamics of insulation raw materials have recently changed, our pr
Slide 28: Additional Information
U Arnea Stadium 92 Nanterre, France Joris Ide Additional Information 28
Slide 29: Global Organic Expansion
Global Organic Expansion p Sweden Kooltherm® Facility 2019 7 UK ; sug a XPS Facility 2019 : Continental Europe ; “ 4 Kooltherm® Facility 2022 Central France ‘“ New Panel Line 2021 Saint-Priest, France New Light & Air Facility 2019 North East USA New Panel Line California, USA. me 2020 QuadCore™ Faci
Slide 30: Key Innovations
Key Innovations aaa FibreFree A-Core QuadCore™ Rollout QuadCore™ Generation 2 Kooltherm® 100 Series Kooltherm® 200 Series QuadCore™ Roof Insulation Board Therma* Standard Insulation Board Kooltherm® Pipe Generation 2 PowerPanel® Generation 2 2017 2018 2019 2020 2021 ttt 2022 30
Slide 31: Kingspan V Construction Macro
Kingspan V Construction Macro UK US Western Europe 190 280 200 180 250 180 170 160 220 160 150 190 140 140 130 160 120 120 130 110 100 100 100 90 70 80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 32: Driving Penetration Growth
Driving Penetration Growth INSULATED PANELS 100% 100% 20% UK Germany North America 80% 80% 15% 60% 60% 10% 40% 40% 5% 20% 20% 0% 0% 0% 2025p 2025p 2005 2018 2005 2018 2005 2018 2025p Aim to Change Building Practices / Material INSULATION BOARDS 50% 20% 14% Choices UK Western Europe 12% The Nordics 4
Slide 33: We are a community of doers. We are Kingspan
We are a community of doers. We are Kingspan people. See more at: kingspan.com 33
Slide 34: www.kingspan.com
www.kingspan.com Dublin Road Kingscourt Co Cavan Ireland Tel: +353 42 969 8000 A82 XY31 Email: admin@kingspan.com