Kingspan Group Plc · EURONEXT:KRX
Kingspan — H1 2018 Earnings Presentation
35 slides from Kingspan's earnings presentation, Aug 24, 2018
Slide 1: Kingspan Interim Results
Kingspan Interim Results 24th August 2018
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 uncertai
Slide 3: The Business
The Business > A global leader in high 5% 7% Water & Energy Light performance insulation & Air and building envelopes. > Market leading positions 4% Access in UK, Continental Floors Europe, The Americas and Australasia. 21% > Proprietary technology Insulation drives differentiation in Boards product
Slide 4: Our Strategy
Our Strategy ➢ Be the leader in high performance insulation globally – proprietary and differentiating technologies. Innovation ➢ Be the world’s leading provider of low energy building envelopes. Penetration ➢ Greater geographic reach – focus on The Americas, Continental Europe and Net Zero certain
Slide 5: Kingspan – The Full Spectrum
Kingspan – The Full Spectrum The complete ‘Toolbox’ for all applications and design preferences Servicing Demand Generating Demand Next Gen Core* Stone Optim-R ® Wool Panel EPS Kooltherm® 100 XPS QuadCore™ PUR PIR *Currently in development – FibreFree Low Lambda Class A Fire 5
Slide 6: Kingspan – Insulates Better
Kingspan – Insulates Better OPTIM-R ® 0.007 W/m.K Conversion Growth Kooltherm® 100 0.018 W/m.K QuadCore™ (0.018-0.023)2 PIR 0.018 W/m.K 0.022 W/m.K (0.022-0.027)1 EPS XPS 0.030 W/m.K 0.030 W/m.K1 Stone (0.030-0.038)2 (0.030-0.038)2 Mineral Fibre 0.034 W/m.K (0.034-0.042)2 Reference 13% 13% 55% 89% 8
Slide 7: Completing the Envelope
Kings Kingspan Insulation Boards Global Leadership - continue to drive worldwide reach through greenfield and consolidation Kingspan Insulated Panels & Facades Global Leadership - continue to drive worldwide reach through greenfield and consolidation Kingspan Flatroof Membrane Embryonic position pre
Slide 8: Planet Passionate
Planet Passionate KisSspan. Net Zero Recycling PET (Land & Ocean) ° S a) N vt + ~ so 8 0 S c-2) nh Gia a NZE% m 2 » Fl, E ° pel B » No. Bottles a Total Renewable recycled Energy GWh (millions) o 2 * re) ° bcd Total Energy ~a- Use GWh N a Bottle Size: 53cl 2012 2013) 2014 2015 2016 2017 2018 2019 202
Slide 9: Energy Savings
Energy Savings Kingspan In 2017 the total energy saved* by our insulation systems is equivalent to: rt 100 it O| Over one The annual output hundred million of sixty-one power barrels of oil stations 19m #44.5 Taking nineteen Up to 4.3 times the million cars off annual electricity the road consumptio
Slide 10: Our Evolution - Revenue
Our Evolution - Revenue CAGR 17.5% 4.4 Sales (€bn) 4.2 2018 CONSENSUS 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 10
Slide 11: 5 Year Financial Performance
5 Year Financial Performance 4,231.2 422.8 377.5 3,668.1 340.9 3,108.5 2,774.3 255.9 1,891.2 148.5 2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018* Revenue Trading Profit (€m) (CAGR 22.3%) (€m) (CAGR 29.9%) * Analyst consensus 11
Slide 12: 2018 H1 In A Nutshell
2018 H1 In A Nutshell % Light & Air Products 6 3 % 2 1 % 4% Access Floors Insulated Panels Insulation Boards Revenue 85% <7 Energy Efficiency & Conversion 5% Water & Energy Drivers Applications = Retail United Kingdom Americas qe a > Distribution 1 a sheidobbiell ~ Leisure = Accommodation ~ Food 70%
Slide 13: 2018 H1 In Summary
2018 H1 In Summary ➢ Insulated Panels sales growth of 14% with notable improvement in Q2 after a sluggish start. QuadcoreTM revenue growth of 76%, now 6% of ↑ global Panels. Revenue ➢ Insulation Boards sales growth of 15% mainly UP 15% reflecting inflation recovery on pricing. Kooltherm® to €2.0bn r
Slide 14: Financial Highlights
Financial Highlights H1 2018 H1 2017 YoY % Change cc change* Revenue (€m) 2,009.9 1,749.3 +15% +19% Trading Profit (€m) 195.3 177.8 +10% +13% EBITDA (€m) 231.6 209.2 +11% +14% Earnings per share (cent) 80.7 74.4 +8% - Interim Dividend (cent) 12.0 11.0 +9% - Free Cashflow (€m) 38.4 39.4 -3% - Net Deb
Slide 15: Trading Profit & Margin Performance
Trading Profit & Margin Performance 100 West 125th Street, New York Insulated Panels 195.3 177.8 167.3 H1 17 FY 17 H1 18 111.7 Insulated Panels 10.5% 10.0% 9.7% 69.2 Insulation Boards 10.7% 11.9% 12.4% Light & Air 3.7% 7.2% 4.0% Water & Energy 7.5% 9.0% 5.7% H1 14 H1 15 H1 16 H1 17 H1 18 Access Floo
Slide 16: Group Sales & Profit Bridge
Group Sales & Profit Bridge 2.5 73.8 (6.1) 21.1 (70.7) 257.5 2,009.9 195.3 177.8 1,749.3 Sales (€m) Trading Profit (€m) 16
Slide 17: Free Cash Flow
Free Cash Flow WC/Sales 13.8% (92.0) 231.6 4.8 (7.1) (30.8) €’m (68.1) 38.4 EBITDA Working Capital Non Interest Tax Net Capex Free cash flow Cash/Pension 17
Slide 18: Net Debt Reconciliation
Net Debt Reconciliation 30.0 2.2 46.7 235.0 (38.4) 739.4 €’m 463.9 Net Debt Dec Free Cash Acquisitions Dividend Deferred Shares Net Debt Jun 17 Flow consideration issued/fx 18 18
Slide 19: ROCE
ROCE 17.8% 17.3% 16.6%* 15.6% 15.2% 13.4% Ombriére de l’Oeuf gascon, France Joris Ide 2014 2015 2016 2017 H1 18 * After annualised impact of acquisitions 19
Slide 20: Strong Balance Sheet
Strong Balance Sheet ➢ Total available cash balances and committed undrawn facilities of €671m. ➢ €175m US Private Placement arranged in December 2017, drawn January 2018. ➢ 5 year €500m revolving credit facility agreed in June 2017. ➢ €50m bilateral drawn February 2018. ➢ Weighted average maturity
Slide 21: Sales by Geography
Sales by Geography Republic of Ireland Republic of Ireland 4% 4% Britain & Britain & Northern Ireland Northern Ireland 23% 26% H1 18 H1 17 Mainland Europe Mainland Europe 47% 43% Americas Americas 19% 19% Rest of the World Rest of the World 7% 8% €m H1 18 H1 17 Constant Currency Change YoY % Change
Slide 22: Insulated Panels
Insulated Panels ➢ Overall solid performance, underlying sales up 4%. QuadcoreTM revenue H1 18 H1 17 growth of 76%, now 6% of global Sales (€m) 1,268.6 1,111.7 Panels. % of Group Sales 63% 64% ➢ Slow start for Continental Europe in most regions albeit activity improved Analysis of YoY % Change marke
Slide 23: Insulated Panels (cont.)
Insulated Panels (cont.) ➢ Orderbook in North America at record levels which bodes well for H2 18. ➢ LATAM encouraging with both Brazil and Colombia advancing materially in the period. ➢ Middle East growth boosted by recent success winning the roofing contract for Kuwait Airport. ➢ Activity in Austr
Slide 24: Insulation Boards
Insulation Boards ➢ Strong H1 18 sales overall. Kooltherm® revenue growth of 12%, now 35% of H1 18 H1 17 global Insulation. Sales (€m) 428.9 373.7 ➢ UK significantly up on prior year owing % of Group Sales 21% 21% to strong Kooltherm® performance and Analysis of YoY % Change inflationary benefit of
Slide 25: Light & Air
Light & Air ➢ Solid H1 sales performance for H1 18 H1 17 relatively embryonic division. Sales (€m) 128.6 81.7 ➢ Continue to build upon progress made % of Group Sales 7% 5% during 2017. Analysis of YoY % Change ➢ Western Europe, in particular Germany, Underlying Currency Acquisitions Total performed
Slide 26: Water & Energy
Water & Energy ➢ Stable sales performance overall, H1 18 H1 17 underlying sales up 1%. Sales (€m) 96.6 88.9 ➢ Increased momentum in quarter 2 % of Group Sales 5% 5% after slower start to the year. Analysis of YoY % Change ➢ Margins somewhat weaker with Underlying Currency Acquisitions Total price pr
Slide 27: Access Floors
Access Floors ➢ Overall sales slightly behind prior year H1 18 H1 17 and mixed performances regionally. Sales (€m) 87.2 93.3 % of Group Sales 4% 5% ➢ Some weakening in the UK in H1 albeit expect to stabilise in H2. Analysis of YoY % Change Underlying Currency Acquisitions Total ➢ Grade A office cons
Slide 28: Outlook
Outlook ➢ Improved momentum through quarter two has continued in key markets since half year. ➢ Relative strength of Western Europe and the Americas should compensate for any easing in UK activity during EU negotiations. ➢ Combination of solid order books, normalising raw material environment and re
Slide 29: Additional Information
Additional Information Salle de sports, France 29 Joris Ide
Slide 30: Panel & Board – Sales Volume
Panel & Board – Sales Volume 50.0 45.0 40.0 35.0 30.0 Millions M2 25.0 20.0 15.0 10.0 5.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Rigid Board Kooltherm Board Insulated Panel Quadcore Panel 30
Slide 31: Global Organic Expansion
Kingspan. Kankaanpaa, Finland QuadCore™ Panel Line Q1 2017 Nordics Kooltherm® Facility 2019 7 - UK = Perpignan, France PIR Roofpanel! Line Q4 2017 North East USA New Panel Line California, USA 2019 QuadCore™ Facility 2019 Winchester, USA XPS Insulation Line 2017 Kooltherm® Facility 2020 Monterrey, M
Slide 32: Key Innovations
Key Innovations Kingspan Next Gen Core (FibreFree A Class) 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 T 2015 2016 2017 2018 2019 2020 2021
Slide 33: Kingspan v Construction Macro
Kingspan v Construction Macro UK US 180 275 170 250 160 225 150 200 140 175 130 150 120 110 125 100 100 90 75 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 2010 2011 2012 2013 2014 2015 2016 2017 Western Europe 180 170 160 150 140 130 120 110 100 90 80 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 34: Driving Penetration Growth
Driving Penetration Growth Aim to change Building Practices / Material Choices INSULATED PANELS 100% 100% 20% UK Germany North America 80% 80% 15% 60% 60% 10% 40% 40% 5% 20% 20% 0% 0% 0% 2020P 2020P 2005 2016 2005 2016 2020P 2005 2016 INSULATION BOARDS 50% 14% 14% UK 12% Western Europe 12% Australia
Slide 35: www.kingspan.com
Dublin Road Kingscourt Co Cavan Ireland A82 XY31 Tel: +353 42 969 8000 Fax: +353 42 966 7501 Email: admin@kingspan.com www.kingspan.com