TIDMKGP
RNS Number : 7280H
Kingspan Group PLC
22 August 2016
KINGSPAN GROUP PLC
HALF-YEARLY FINANCIAL REPORT
for the period ended 30 June 2016
KINGSPAN GROUP PLC
RESULTS FOR THE HALF YEAR 30 JUNE 2016
Kingspan, the global leader in high performance insulation and
building envelope solutions, issues its half-yearly financial
report for the six month period ended 30 June 2016.
Financial Highlights:
-- Revenue up 19% to EUR1.47bn, (pre-currency, up 22%).
-- Trading profit up 50% to EUR167.3m, (pre-currency up 55%).
-- Acquisitions contributed 15% to sales growth and 7% to trading profit growth in the period.
-- Group trading margin of 11.4%, an increase of 240bps versus the same period in 2015.
-- Net debt of EUR348.1m (H1 2015: EUR449.3m). Net debt to EBITDA of 0.9x (H1 2015: 1.9x).
-- Basic EPS up 52% to 70.6 cent (H1 2015: 46.5 cent).
-- Interim dividend per share up 25% to 10.0 cent (H1 2015: 8.0 cent).
-- 17.8% ROCE (H1 2015: 11.3%).
Operational Highlights:
-- Insulated Panel sales growth of 26% globally, with
significant advances in Western Europe and North America in
particular.
-- Insulation Board sales growth of 9%, with the strongest
performance in the UK, North America, and the Netherlands.
-- Environmental continues to rebuild profitability and Access
Floors is well ahead in the UK, whilst flatter in North
America.
-- The pass through of raw material increases in quarter two and
three remains the foremost challenge for the remainder of 2016.
-- Total investment in the period of EUR138m, comprising EUR55m
in capex and EUR83m in acquisitions.
Summary Financials:
H1 '16 H1 '15 % Change
EURm EURm
----------------- -------- -------- ----------
Revenue 1,468.1 1,235.3 +19%
EBITDA 196.8 137.9 +43%
Trading Profit* 167.3 111.7 +50%
Trading Margin 11.4% 9.0% +240bps
EPS (cent per
share) 70.6 46.5 +52%
----------------- -------- -------- ----------
*Operating profit before amortisation of intangibles
Gene Murtagh, Chief Executive of Kingspan commented:
"These results reflect our strongest ever six month performance,
underpinned by solid organic growth and a robust contribution from
the Joris Ide and Vicwest businesses acquired last year. The
expansion in profit margin has helped deliver a 50% increase in
trading profit, and with good order intake momentum in the second
quarter continuing into the current trading period, we expect a
solid performance in the second half. We continue to acquire
complementary businesses, with a total of EUR83m invested in two
businesses in the first half and EUR126m paid for two further
businesses after the period end."
For further information contact:
Murray Consultants Tel: +353 (0) 1 4980
Douglas Keatinge 300
Business Review
The first half of 2016 has been Kingspan's strongest trading
period on record, with revenue up 19% to EUR1,468m and trading
profit up 50% to EUR167m. This has been achieved through the
continued delivery of increased market penetration worldwide, and
building upon the significant platforms acquired over recent years,
all of which have bedded in very satisfactorily.
Activity in Central Europe, North America, and the UK improved
markedly year-over-year and provided a fertile environment for us
to further capitalise on our strategy of converting from more
traditional forms of construction to our higher performance
solutions, all in an increasingly global arena for Kingspan.
Margins expanded considerably in the period as a result of the
leverage impact of higher volumes, and supported significantly by
harnessing raw material savings, some of which we anticipate will
unwind in the second half.
During the period we invested a total of EUR138m, EUR55m of
which was in capex, and EUR83m on two acquisitions completed in the
first half. Our roll-out of facilities continued, completing a new
manufacturing line in Belgium and making significant headway on
new/extended plants in the Nordics, UAE, Australia, North America
and Mexico.
On the technology front, our proprietary Quadcore Insulated
Panel core has been launched, and will be progressively rolled out
throughout the world over the coming year or so. Initial
specification uptake has been encouraging.
Central to our strategy is the continued consolidation of our
end markets globally, and also what we term 'Completing the
Envelope'. By that, we aim to complement the Group's Insulated
Panels and Insulation Boards proposition to include Daylighting and
other related solutions. In support of this strategy we invested
EUR83m in acquisitons in total during the first half, the largest
of which was Euroclad in the UK. Following the period end, we
completed the acquisition of Eurobond, a former affiliate of
Euroclad, and agreed to acquire Essmann, a Daylighting business in
Germany & France, for a combined consideration of EUR126m.
Essmann, together with our existing Daylighting product set, will
now form a new stand-alone division called Kingspan Light &
Air. The complement of these products and our existing building
envelope technologies will deepen our presence in high performance
building solutions, which remains Kingspan's primary goal.
Insulated Panels
H1 '16 H1 '15 % Change
EURm EURm
---------------- ------- ------- ---------
Revenue 949.5 752.9 +26% (1)
Trading Profit 112.0 70.3 +59%
Trading Margin 11.8% 9.3% +250bps
---------------- ------- ------- ---------
(1) Comprising underlying +8%, currency impact -3% and acquisitions +21%
Mainland Europe
Now our largest end market, we delivered solid growth in
Germany, France, the Netherlands and pockets of Central Europe,
owing to an element of market recovery as well as growth in the
penetration of our systems. The Netherlands, in particular, grew
across all segments somewhat in contrast to Belgium which was
broadly flat. The pattern of order intake was similar, leaving us
with a strong orderbook from which to feed quarter three sales. The
Joris Ide business acquired last year has delivered a strong first
year in our ownership, and is undergoing significant operational
improvement to further enhance its unique service proposition.
UK
Sales grew at mid-single digit levels during the first half and
order intake at a slightly higher pace than that. Low rise
non-residential activity, our key target segment, was marginally up
overall, complemented by our continued growth in more
differentiated, and higher margin architectural solutions. As
penetration of our roof panels, in particular stretches towards
70%, our emphasis is firmly on achieving expansion in the product
range focusing on applications where our products' performance
advantage will deliver future revenue growth.
Americas
Our broadening range of solutions and brands in this region has
contributed to underlying year-on-year growth in revenues of 15%.
Penetration growth remains the most prominent dynamic for our
business in North America as the market moves progressively towards
lower energy building fabrics, still significantly lagging the
levels in other markets where we have so far built our presence.
Pricing competition intensified in the second quarter resulting in
some pressure on order intake during that time.
Australasia & UAE
Following a strong first half of last year, the comparative in
Australia was always going to be tough. Notwithstanding that, sales
were marginally ahead of a year earlier, and order intake
significantly ahead, boding well for the second half. Turkey and
the Middle East in general have seen a more difficult trading
environment although based on the project pipeline we anticipate
that this should stabilise in ther near term.
Ireland
This market has continued its compelling recovery with volume
significantly ahead of the same period last year. We anticipate
that pattern to continue through the second half.
Insulation Boards
H1'16 H1 '15 % Change
EURm EURm
---------------- ------ ------- ---------
Revenue 347.4 319.2 +9% (1)
Trading Profit 39.9 28.3 +41%
Trading Margin 11.5% 8.9% +260bps
---------------- ------ ------- ---------
(1) Comprising underlying +8%, currency impact -3% and acquisitions +4%
UK
Our UK volumes were very robust during the first half of the
year, owing to a relatively stable construction backdrop, growth in
penetration, and some element of market share improvement. The
leverage impact of this, combined with weaker raw materials,
contributed to significantly improved margins and profitability.
Broadly, this trading pattern has continued so far in the third
quarter.
Mainland Europe
In general, the Continental European market for rigid insulation
has been marred by over capacity in the last few years. The first
half of 2016 was no different, with the exception of the newbuild
market in the Netherlands which accounts for over 30% of divisional
revenue, and has demonstrated consistent recovery over the past two
years. In the other less active European construction markets our
focus on generating demand for our higher end solutions remains the
priority, and is delivering success in even the weaker end markets.
France, Germany and the Nordics all continue to offer significant
conversion potential for Kingspan over time.
Americas
Despite our capacity constraints in the US market, our business
has grown marginally by volume in the first half. Our focus in this
market is to simultaneously grow demand for Kingspan's proprietary
solutions, currently sourced from Europe, while doubling the
capacity for our XPS offering. This additional manufacturing
capability is due to come on stream from mid 2017 and is expected
to provide a significant boost to our Insulation Boards business in
North America.
Ireland
As with Insulated Panels, our Insulation Boards business in
Ireland has been experiencing a consistent improvement in end
market opportunity, as well as ongoing penetration growth of
Kooltherm. We expect this pattern to continue for the foreseeable
future.
Australasia
Sales of Kooltherm have continued growing in this region, ahead
of our new Melbourne plant being commissioned later this year. The
wider market remains dominated by traditional insulation. Over
time, we see the trend evolving along similar lines to that in
Europe, whereby higher performance products will drive penetration
growth. Our new facility provides us with the spring board to
orchestrate this change.
Environmental
H1 '16 H1 '15 % Change
EURm EURm
---------------- ------- ------- ---------
Revenue 79.5 77.5 +3% (1)
Trading Profit 4.2 3.3 +27%
Trading Margin 5.3% 4.3% +100bps
---------------- ------- ------- ---------
(1) Comprising underlying +2%, currency impact -6% and acquisitions +7%
Activity in this division has continued to improve gradually,
which in combination with a relentless focus on cost base, has
driven significant profit improvement over the past two years.
Revenue growth in our water products business unit, including
rainwater and treatment solutions, has also been key to this
dynamic, which has been further enhanced with the acquisition of
Tankworks in Australia earlier this year. Further
internationalisation of this division will be central to achieving
sustained growth.
Access Floors
H1 '16 H1 '15 % Change
EURm EURm
---------------- ------- ------- ---------
Revenue 91.7 85.7 +7% (1)
Trading Profit 11.2 9.8 +14%
Trading Margin 12.2% 11.4% +80bps
---------------- ------- ------- ---------
(1) Comprising underlying +10% and currency impact -3%
The trading pattern in this business unit during the first half
has largely mirrored that of recent years. Office activity in the
UK remains buoyant for now and the remainder of 2016, albeit
potentially subject to some tapering off thereafter. Datacentre
activity continues to drive revenue and margins in North America as
the office market has remained remarkably subdued, with little sign
of that changing. Our near and medium term focus will be on
creating a more uniform global approach to the datacentre
opportunity and ensuring that we continue to develop the product
suite, ensuring Kingspan remains at the vanguard of this fast
evolving segment.
Financial Review
Overview of results
Group revenue increased by 19% to EUR1,468.1m (H1 2015:
EUR1,235.3m) and trading profit increased by 50% to EUR167.3m (H1
2015: EUR111.7m). This represents a 22% increase in sales and a 55%
increase in trading profit on a constant currency basis. The
Group's trading margin increased by 240bps to 11.4% (H1 2015:
9.0%). The amortisation charge in respect of intangibles was
EUR5.3m compared to EUR3.7m in the first half of 2015 with the
increase reflecting, primarily, intangible assets acquired in
respect of Joris Ide in March 2015 and Vicwest in May 2015. Group
operating profit after amortisation grew 50% to EUR162.0m. Profit
after tax was EUR125.7m compared to EUR82.4m in the first half of
2015 driven, in the main, by the growth in trading profit. Basic
EPS for the period was 70.6 cent, representing an increase of 52%
on the first half of 2015 (H1 2015: 46.5 cent).
The Group's underlying sales and trading profit performance by
division is set out below:
Sales Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +8% -3% +21% +26%
Insulation Boards +8% -3% +4% +9%
Access Floors +10% -3% - +7%
Environmental +2% -6% +7% +3%
Group +7% -3% +15% +19%
----------- --------- ------------ ------
The Group's trading profit measure is earnings before interest,
tax and amortisation of intangibles:
Trading Profit Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +56% -5% +8% +59%
Insulation Boards +39% -4% +6% +41%
Access Floors +17% -3% - +14%
Environmental +12% -9% +24% +27%
Group +48% -5% +7% +50%
----------- --------- ------------ ------
Finance costs (net)
Finance costs for the period were modestly lower than the same
period last year at EUR7.2m (H1 2015: EUR7.6m). Finance costs
include a non-cash charge of EUR0.1m (H1 2015: EUR0.1m) relating to
the Group's legacy defined benefit pension schemes. A net non-cash
charge of EUR0.2m was recorded in respect of swaps on the Group's
USD private placement notes (H1 2015: EUR0.4m). The Group's net
interest expense on borrowings (bank and loan notes) was EUR6.9m
compared to EUR7.1m in the first half of 2015. The flat interest
charge, despite the higher level of debt, reflects in particular
the repayment of a higher coupon private placement loan note on
maturity in March 2015.
Taxation
The tax charge for the first half of the year was EUR29.1m (H1
2015: EUR18.0m) which represents an effective tax rate of 18.8% on
profit before tax and amortisation (H1 2015: 18%). The increase in
the effective rate reflects the global mix of earnings year on
year.
Retirement benefits
The Group has two legacy defined benefit schemes in the UK which
are closed to new members and to future accrual. In addition, the
Group assumed a defined benefit obligation in respect of certain
current and former employees of ThyssenKrupp Construction acquired
during 2012. The net pension liability in respect of all the
Group's defined benefit obligations was EUR7.1m as at 30 June 2016
(30 June 2015: EUR9.9m).
Acquisitions
On 30 April, the Group's subsidiary, Joris Ide, acquired
Euroclad in the UK and the Group's Environmental division acquired
Tankworks in Australia on 29 April. On 19 July, we reached an
agreement to acquire Essmann, a European Daylighting business. On
17 August, Joris Ide also acquired Eurobond, a former affiliate of
Euroclad. The combined consideration for these acquisitions was
EUR209m, of which EUR83m was incurred before the period end with
EUR126m payable on completion in the second half of 2016. Euroclad
and Eurobond will further develop the Group's presence in higher
end architectural facades and building envelopes in the UK. Essmann
will be the Group's Daylighting platform in Mainland Europe.
Tankworks, a rainwater harvesting business, will serve as the
platform for the Group's Environmental division in Australia.
Free cashflow
Free cashflow H1 '16 H1 '15
EURm EURm
-------------------------------- ------- -------
EBITDA* 196.8 137.9
Movement in working capital
** (26.0) 17.1
Net capital expenditure (52.5) (34.2)
Pension contributions (1.1) (1.4)
Net finance costs paid (7.5) (7.7)
Income taxes paid (20.3) (9.5)
Other including non-cash items 3.2 3.5
------- -------
Free cashflow 92.6 105.7
------- -------
*Earnings before finance costs, income taxes, depreciation and
amortisation
**Excludes working capital on acquisition but includes working
capital movements since that point
Working capital at 30 June 2016 was EUR314.7m (31 December 2015:
EUR301.8m), an increase of EUR12.9m in the period. This increase is
driven by the working capital on acquisitions in the period, a
seasonal build in the first half of the year and an untypically low
position at the end of 2015.
The average working capital to sales % was 10.5% in H1 2016
compared to 14.2% in H1 2015.
Net Debt
Net debt increased by EUR20.1m during the first half to
EUR348.1m (31 December 2015: EUR328.0m) and this is analysed in the
table below:
Movement in net debt H1 '16 H1 '15
EURm EURm
----------------------------- -------- --------
Free cashflow 92.6 105.7
Acquisitions (80.6) (414.8)
Share issues 1.0 7.2
Dividends paid (30.2) (17.6)
-------- --------
Cashflow movement (17.2) (319.5)
Exchange movements on
translation (2.9) (4.3)
-------- --------
Increase in net debt (20.1) (323.8)
Net debt at start of period (328.0) (125.5)
-------- --------
Net debt at end of period (348.1) (449.3)
-------- --------
Capital Structure and Group Financing
The Group funds itself through a combination of equity and debt.
Debt is funded through a combination of syndicated bank facilities
and private placement loan notes.
The primary bank debt facility is a EUR300m revolving credit
facility, with a syndicate of international banks, with a term to
March 2019. The Group also has bilateral agreements totaling EUR75m
which mature in January 2018. Total aggregate drawings on these
bank facilities at 30 June was EUR85m.
In addition, as part of the Group's longer term capital
structure the Group has total private placement loan notes of
EUR466m which have a weighted average maturity of 6 years.
As well as ongoing free cashflow generation, the Group has
significant available undrawn facilities and cash which provide
appropriate headroom for operational requirements and development
funding. Total available head room was approximately EUR456m at 30
June 2016.
Related Party Transactions
There were no changes in related party transactions from the
2015 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
Principal Risks & Uncertainties
Details of the principal risks and uncertainties facing the
Group can be found in the 2015 Annual Report. These risks, namely
volatility in the macro environment, failure to innovate, product
failure, business interruption (including IT continuity), credit
risks & credit control, employee development & retention,
fraud & cybercrime and acquisition & integration of new
businesses, remain the most likely to affect the Group in the
second half of the current year. The Group actively manages these
and all other risks through its control and risk management
processes.
Dividend
The Board has proposed an interim dividend of 10 cent per
ordinary share, an increase of 25% on the 2015 interim dividend of
8.0 cent per share. The interim dividend will be paid on 23
September 2016 to shareholders on the register on the record date
of 2 September 2016.
Outlook
Throughout the Group, order intake momentum through the second
quarter was exceptionally strong, driven by improved underlying
demand, coupled with a lift in June activity ahead of steel related
price increases in quarter three. This has resulted in like for
like Group revenue from June 30 to August 12 being comfortably
ahead of the same period last year.
In the same period, overall order intake in the UK specifically
is up 7% year on year. Over the same timeframe, the longer term
project pipeline has remained robust, and is broadly stable with
where it stood on June 30.
These metrics, when set in context of the wider global dimension
to Kingspan, combined with the Group's prudent balance sheet and
opportunity-laden development pipeline, sustain the Board's
confidence in our future, notwithstanding the current EUR/GBP
exchange rates and rising raw material costs being headwinds, in
the near term.
RESPONSIBILITY STATEMENT
Directors' Responsibility Statement in respect of the
half-yearly financial report for the six month period ended 30 June
2016
Each of the directors of Kingspan Group plc confirm our
responsibility for preparing the half-yearly financial report in
accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007, the Transparency Rules of the Republic of
Ireland's Financial Regulator and with IAS 34 "Interim Financial
Reporting" as adopted by the EU. We confirm that to the best of our
knowledge:
a) The condensed consolidated half-yearly financial statements
comprising the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the
Condensed Consolidated Statement of Financial Position, the
Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Statement of Cash Flows and related notes
have been prepared in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, the Transparency Rules of the
Republic of Ireland's Financial Regulator and with IAS 34 "Interim
Financial Reporting" as adopted by the EU.
b) The interim management report includes a fair review of the
information required by:
i) Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
ii) Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
The directors of Kingspan Group plc, and their functions, are as
listed in the 2015 Annual Report.
On behalf of the Board
Gene Murtagh Geoff Doherty
---------------- ------------------------
Chief Executive Chief Financial Officer
Officer
---------------- ------------------------
22 August 2016 22 August 2016
---------------- ------------------------
Independent Review Report to Kingspan Group PLC
Introduction
We have been engaged by the company to review the condensed set
of consolidated financial statements in the half-yearly financial
report for the six months ended 30 June 2016 which comprises the
Condensed Consolidated Income Statement, the Condensed Consolidated
Statement of Comprehensive Income, the Condensed Consolidated
Statement of Financial Position, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated
Statement of Cash Flows and the related explanatory notes. The
financial reporting framework that has been applied in their
preparation is International Financial Reporting Standards as
adopted by the EU ("IFRSs"). Our review was conducted in accordance
with the Financial Reporting Council's ("FRCs") International
Standard on Review Engagements ("ISRE") (UK and Ireland) 2410,
'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity'.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of consolidated
financial statements in the half-yearly report for the six months
ended 30 June 2016 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU, the TD Regulations and
the Transparency Rules of the Central Bank of Ireland.
Basis of our report, responsibilities and restriction on use
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the TD Regulations and the Transparency Rules of the Central Bank
of Ireland. As disclosed in note 1, the annual financial statements
of the Group are prepared in accordance with IFRSs as adopted by
the EU. The directors are responsible for ensuring that the
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the EU. Our
responsibility is to express to the company a conclusion on the
condensed set of consolidated financial statements in the
half-yearly financial report based on our review.
We conducted our review in accordance with the Financial
Reporting Council's International Standard on Review Engagements
(UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We read the other information contained in the half-yearly
financial report to identify material inconsistencies with the
information in the condensed set of consolidated financial
statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the review. If
we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended ("the TD Regulations") and the
Transparency Rules of the Central Bank of Ireland. Our review has
been undertaken so that we might state to the company those matters
we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
KPMG 22 August 2016
Chartered Accountants
1 Stokes Place
St.Stephen's Green
Dublin 2
Ireland
Kingspan Group plc
Condensed consolidated income statement (unaudited)
for the 6 month period ended 30 June 2016
6 months 6 months
ended ended
30 June 30 June
2016 2015
Note EURm EURm
Revenue 4 1,468.1 1,235.3
Cost of Sales (1,010.7) (874.2)
---------- ---------
Gross Profit 457.4 361.1
Operating Costs, excluding
intangible amortisation (290.1) (249.4)
---------- ---------
Trading Profit 4 167.3 111.7
Intangible amortisation (5.3) (3.7)
---------- ---------
Operating Profit 162.0 108.0
Finance expense 6 (7.4) (7.7)
Finance income 6 0.2 0.1
---------- ---------
Profit for the period before
income tax 154.8 100.4
Income tax expense 7 (29.1) (18.0)
---------- ---------
Net Profit for the period 125.7 82.4
---------- ---------
Attributable to owners
of Kingspan Group plc 125.4 81.7
Attributable to non-controlling
interests 0.3 0.7
---------- ---------
125.7 82.4
---------- ---------
Earnings per share for
the period
Basic 11 70.6c 46.5c
Diluted 11 69.7c 45.7c
Kingspan Group plc
Condensed consolidated statement of comprehensive income
(unaudited)
for the 6 month period ended 30 June 2016
6 months 6 months
ended ended
30 June 30 June
2016 2015
EURm EURm
Net profit for financial period 125.7 82.4
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations (57.6) 66.3
Effective portion of changes
in fair value of cash flow hedges 1.1 (2.0)
Income taxes relating to changes
in fair value of cash flow hedges (0.1) 0.2
Total comprehensive income for
the period 69.1 146.9
--------- ---------
Attributable to owners of Kingspan
Group plc 69.1 145.5
Attributable to non-controlling
interests - 1.4
--------- ---------
69.1 146.9
--------- ---------
Kingspan Group plc
Condensed consolidated statement of financial position
as at 30 June 2016
At 30 At 30 At 31
June June December
2016 2015 2015
(unaudited)
(unaudited) (audited)
As re-presented
*
Note EURm EURm EURm
Assets
Non-current assets
Goodwill 12 859.7 812.7 821.2
Other intangible assets 85.7 84.1 78.4
Property, plant and
equipment 13 625.0 631.3 619.1
Derivative financial
instruments 43.2 19.6 29.6
Retirement benefit assets 7.8 6.2 7.8
Deferred tax assets 10.9 6.9 10.9
------------- ----------------- -----------
1,632.3 1,560.8 1,567.0
Current assets
Inventories 322.6 359.3 293.5
Trade and other receivables 592.3 547.6 474.5
Derivative financial
instruments 2.7 0.1 2.1
Cash and cash equivalents 9 166.5 170.6 212.0
------------- ----------------- -----------
1,084.1 1,077.5 982.1
------------- ----------------- -----------
Total assets 2,716.4 2,638.3 2,549.1
------------- ----------------- -----------
Liabilities
Current liabilities
Trade and other payables 593.5 586.8 468.2
Provisions for liabilities 40.3 41.2 47.2
Derivative financial
instruments 0.4 2.6 0.1
Deferred contingent
consideration 6.6 8.3 9.5
Interest bearing loans
and borrowings 123.5 287.4 98.7
Current income tax liabilities 73.8 60.2 64.5
------------- ----------------- -----------
838.1 986.5 688.2
Non-current liabilities
Retirement benefit obligations 14.9 16.1 15.1
Provisions for liabilities 42.9 31.5 36.4
Interest bearing loans
and borrowings 434.3 352.1 470.9
Deferred tax liabilities 45.7 46.7 44.1
Deferred contingent
consideration 2.4 1.3 0.6
------------- ----------------- -----------
540.2 447.7 567.1
------------- ----------------- -----------
Total liabilities 1,378.3 1,434.2 1,255.3
------------- ----------------- -----------
Net Assets 1,338.1 1,204.1 1,293.8
------------- ----------------- -----------
Equity
Share capital 23.4 23.2 23.3
Share premium 93.4 90.5 92.5
Capital redemption reserve 0.7 0.7 0.7
Treasury shares (12.5) (11.3) (11.3)
Other reserves (73.6) (5.5) (17.7)
Retained earnings 1,294.2 1,097.1 1,194.9
------------- ----------------- -----------
Equity attributable
to owners of Kingspan
Group plc 1,325.6 1,194.7 1,282.4
Non-controlling interests 12.5 9.4 11.4
------------- ----------------- -----------
Total Equity 1,338.1 1,204.1 1,293.8
------------- ----------------- -----------
* Re-presented to reflect adjustments made to the provisional
fair values recognised in the Balance Sheet as at 30 June 2015.
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
for the 6 month period ended 30 June 2016
Share Total
Capital Cash based attributable Non-
Share redemption Treasury Translation flow payment Revaluation Retained to owners controlling Total
Share premium reserve shares reserve hedging reserve reserve Earnings of the interests equity
capital reserve parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January
2016 23.3 92.5 0.7 (11.3) (50.9) 2.9 29.6 0.7 1,194.9 1,282.4 11.4 1,293.8
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Transactions with owners
recognised directly in
equity
Employee share
based
compensation 0.1 0.9 - - - - 6.0 - - 7.0 - 7.0
Exercise or
lapsing of
share options - - - - - - (5.6) - 5.6 - - -
Repurchase of
shares - - - (1.2) - - - - - (1.2) - (1.2)
Dividends - - - - - - - - (30.2) (30.2) - (30.2)
Transactions with
non-controlling
interests:
Change of
ownership
interest - - - - - - - - (1.5) (1.5) 1.5 -
Dividends paid to
non-controlling
interests - - - - - - - - - - (0.4) (0.4)
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Transactions with
owners 0.1 0.9 - (1.2) - - 0.4 - (26.1) (25.9) 1.1 (24.8)
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Total
comprehensive
income
for the period
Profit for the
period - - - - - - - - 125.4 125.4 0.3 125.7
Other
comprehensive
income
Items that may be reclassified subsequently to profit or loss
Cash flow
hedging
in equity
- current year - - - - - 1.1 - - - 1.1 - 1.1
- tax impact - - - - - (0.1) - - - (0.1) - (0.1)
Exchange
differences
on translating
foreign
operations - - - - (57.3) - - - - (57.3) (0.3) (57.6)
Total
comprehensive
income
for the period - - - - (57.3) 1.0 - - 125.4 69.1 - 69.1
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Balance at 30
June 2016 23.4 93.4 0.7 (12.5) (108.2) 3.9 30.0 0.7 1,294.2 1,325.6 12.5 1,338.1
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
for the 6 month period ended 30 June 2015
Share Total
Capital Cash based attributable Non-
Share Share redemption Treasury Translation flow payment Revaluation Retained to owners controlling Total
capital premium reserve shares reserve hedging reserve reserve Earnings of the interests equity
reserve parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January
2015 23.0 48.4 0.7 (30.7) (90.6) (0.2) 26.9 0.7 1,022.9 1,001.1 8.0 1,009.1
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Transactions
with owners
recognised
directly in
equity
Employee share
based
compensation 0.2 7.0 - - - - 4.0 - - 11.2 - 11.2
Exercise or
lapsing of
share options - - - - - - (10.1) - 10.1 - - -
Transfer of
shares - 35.1 - 19.4 - - - - - 54.5 - 54.5
Dividends - - - - - - - - (17.6) (17.6) - (17.6)
Transactions with
owners 0.2 42.1 - 19.4 - - (6.1) - (7.5) 48.1 - 48.1
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Total
comprehensive
income
for the period
Profit for the
period - - - - - - - - 81.7 81.7 0.7 82.4
Other
comprehensive
income
Items that may be
reclassified
subsequently to
profit
or loss
Cash flow hedging
in
equity
- current year - - - - - (2.0) - - - (2.0) - (2.0)
- tax impact - - - - - 0.2 - - - 0.2 - 0.2
Exchange
differences
on translating
foreign
operations - - - - 65.6 - - - - 65.6 0.7 66.3
Total
comprehensive
income
for the period - - - 65.6 (1.8) - - 81.7 145.5 1.4 146.9
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Balance at 30
June 2015 23.2 90.5 0.7 (11.3) (25.0) (2.0) 20.8 0.7 1,097.1 1,194.7 9.4 1,204.1
--------- --------- ------------ ---------- ------------- --------- -------- ------------- ---------- ------------- ------------- ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (audited)
for the financial year ended 31 December 2015
Share Total
Capital Cash Based attributable Non
Share Share Redemption Treasury Translation flow Payment Revaluation Retained to owners Controlling Total
Capital Premium Reserve Shares Reserve Hedging Reserve Reserve Earnings of the Interests Equity
Reserve parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January
2015 23.0 48.4 0.7 (30.7) (90.6) (0.2) 26.9 0.7 1,022.9 1,001.1 8.0 1,009.1
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Transactions with owners recognised directly in equity
Employee share
based
compensation 0.3 9.0 - - - - 8.1 - - 17.4 - 17.4
Tax on
employee
share
based
compensation - - - - - - 6.3 - 2.4 8.7 - 8.7
Exercise or
lapsing
of share
options - - - - - - (11.7) - 11.7 - - -
Transfer of
shares - 35.1 - 19.4 - - - - - 54.5 - 54.5
Dividends - - - - - - - - (31.8) (31.8) - (31.8)
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Transactions
with owners 0.3 44.1 - 19.4 - - 2.7 - (17.7) 48.8 - 48.8
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Total
comprehensive
income for the
year
Profit for the
year - - - - - - - - 188.1 188.1 2.5 190.6
Other
comprehensive
income
Items that may be reclassified subsequently to profit or loss
Cash flow
hedging in
equity
- current year - - - - - 3.2 - - - 3.2 - 3.2
- tax impact - - - - - (0.1) - - - (0.1) (0.1)
Exchange
differences
on
translating
foreign
operations - - - - 39.7 - - - - 39.7 0.9 40.6
Items that will not be reclassified subsequently to profit or loss
Actuarial
gains on
defined
benefit
pension
scheme - - - - - - - - 1.8 1.8 - 1.8
Income taxes
relating
to actuarial
gains on
defined
benefit
pension
scheme - - - - - - - - (0.2) (0.2) - (0.2)
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Total
comprehensive
income for
the year - - - - 39.7 3.1 - - 189.7 232.5 3.4 235.9
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Balance at 31
December
2015 23.3 92.5 0.7 (11.3) (50.9) 2.9 29.6 0.7 1,194.9 1,282.4 11.4 1,293.8
-------- -------- ----------- --------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Kingspan Group plc
Condensed consolidated statement of cash flows
(unaudited)
for the 6 month period ended 30 June 2016
6 months 6 months
ended ended
30 June 30 June
2016 2015
EURm EURm
Operating activities
Net profit for the period 125.7 82.4
Add back non-operating expenses:
Income tax 29.1 18.0
Depreciation of property,
plant and equipment 29.5 26.2
Amortisation of intangible
assets 5.3 3.7
Impairment of non-current
assets 1.6 5.3
Employee equity-settled
share options 6.0 4.0
Finance income (0.2) (0.1)
Finance expense 7.4 7.7
Non-cash items - 0.9
Profit on sale of property,
plant and equipment - (0.2)
Changes in working capital:
Increase in inventories (28.3) (6.6)
Increase in trade and other
receivables (116.1) (91.8)
Increase in trade, other
payables & provisions 118.4 115.5
Other:
Pension contributions (1.1) (1.4)
--------- ---------
Cash generated from operations 177.3 163.6
Taxes paid (20.3) (9.5)
--------- ---------
Net cash flow from operating
activities 157.0 154.1
--------- ---------
Investing activities
Additions to property, plant
and equipment (54.8) (36.7)
Proceeds from disposals
of property, plant and equipment 2.3 2.5
Purchase of subsidiary undertakings
(including net debt/cash
acquired) (80.6) (414.8)
Payment of deferred consideration
in respect of acquisitions (2.8) (4.2)
Interest received 0.2 0.2
--------- ---------
Net cash flow from investing
activities (135.7) (453.0)
--------- ---------
Financing activities
(Repayment)/drawings of
bank loans (12.2) 294.9
Change in finance lease
liability 0.1 (0.1)
Proceeds from share issues 1.0 7.2
Repurchase of treasury shares (1.2) -
Interest paid (7.7) (7.9)
Dividends to non-controlling (0.4) -
interests
Dividends paid (30.2) (17.6)
--------- ---------
Net cash flow from financing
activities (50.6) 276.5
--------- ---------
Decrease in cash and cash
equivalents (29.3) (22.4)
Translation adjustment (16.2) 7.3
Cash and cash equivalents
at the beginning of the
period 212.0 185.7
--------- ---------
Cash and cash equivalents
at the end of the period 166.5 170.6
--------- ---------
Kingspan Group plc
Notes
forming part of the financial statements
1 Reporting entity
Kingspan Group plc ("the Company" or "the Group") is a public
limited company registered and domiciled in Ireland. The condensed
consolidated interim financial statements of the Company as at and
for the six month period ended 30 June 2016 comprise the Company
and its subsidiaries (together referred to as the "Group").
The Group is primarily involved in the manufacture of high
performance insulation and building envelope solutions.
The financial information presented in the half-yearly report
does not represent full statutory accounts. Full statutory accounts
for the year ended 31 December 2015 prepared in accordance with
IFRS, as adopted by the EU, upon which the auditors have given an
unqualified audit report, are available on the Group's website
(www.kingspan.com).
2 Basis of preparation
This Half-Yearly Financial Report is unaudited but has been
reviewed by the auditors.
(a) Statement of compliance
These condensed consolidated interim financial statements (the
Interim Financial Statements) have been prepared in accordance with
IAS 34 Interim Financial Reporting and do not include all of the
information required for full annual financial statements.
The Interim Financial Statements were approved by the Board of
Directors on 22 August 2016.
(b) Significant accounting policies
The accounting policies applied by the Group in the Interim
Financial Statements are the same as those applied by the Group in
its consolidated financial statements as at and for the year ended
31 December 2015, except for the adoption of the following:
-- Amendments to IAS 19 Defined Benefit Plans: Employee Contributions
-- Annual improvements to IFRSs 2010-2012 Cycle
-- Amendments to IFRS 11: Accounting for acquisitions of interests in Joint Operations
-- Amendments to IAS 16 and IAS 38: Clarification of acceptable
methods of depreciation and amortisation
-- Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Bearer Plants
-- Amendments to IAS 27 Equity method in Separate Financial Statements
-- Amendments to IAS 1: Disclosure Initiative
-- Annual Improvements to IFRSs 2012-2014 Cycle
The effect of the adoption of the above amendments to accounting
policies in the current period did not have any significant impact
on the Interim Financial Statements.
(c) Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing the Interim Financial Statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
as at and for the year ended 31 December 2015.
The Interim Financial Statements are available on the Group's
website (www.kingspan.com).
(d) Going concern
The Directors have reviewed forecasts and projected cash flows
for a period of not less than 12 months from the date of these
Interim Financial Statements, and considered its net debt position,
available committed banking facilities and other relevant
information including the economic conditions currently affecting
the building environment generally. On the basis of this review the
Directors have concluded that there are no material uncertainties
that would cast significant doubt over the Group's ability to
continue as a going concern. For this reason, the Directors
consider it appropriate to adopt the going concern basis in
preparing the financial statements.
3 Reporting currency
The Interim Financial Statements are presented in euro which is
the functional currency of the Company and presentation currency of
the Group.
Results and cash flows of foreign subsidiary undertakings have
been translated into euro at the average exchange rates for the
period, as these approximate the exchange rates at the dates of the
transactions. The related assets and liabilities have been
translated at the closing rates of exchange ruling at the end of
the reporting period.
The following significant exchange rates were applied during the
period:
Average rate Closing rate
H1 2015 FY H1 2015
H1 2016 2015 H1 2016 FY 2015
Euro =
Pound Sterling 0.780 0.733 0.726 0.827 0.713 0.735
US Dollar 1.117 1.117 1.110 1.113 1.120 1.090
Canadian
Dollar 1.484 1.378 1.419 1.440 1.386 1.515
Australian
Dollar 1.521 1.427 1.478 1.495 1.447 1.491
Czech Koruna 27.038 27.503 27.282 27.105 27.271 27.022
Polish Zloty 4.367 4.139 4.184 4.434 4.173 4.266
Hungarian
Forint 312.74 307.24 309.93 316.58 311.88 314.90
4 Operating segments
The Group has the following four reportable segments:
Insulated Manufacture of insulated panels, structural
Panels framing and metal facades.
Insulation Manufacture of rigid insulation boards,
Boards building services insulation and engineered
timber systems.
Environmental Manufacture of energy storage solutions,
water and microwind systems and all
related service activity.
Access Floors Manufacture of raised access floors
and data centre storage solutions.
Analysis by class
of business
Segment revenue
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Total revenue -
H1 2016 949.5 347.4 79.5 91.7 1,468.1
Total revenue -
H1 2015 752.9 319.2 77.5 85.7 1,235.3
Segment result (profit before finance expense)
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Trading profit
- H1 2016 112.0 39.9 4.2 11.2 167.3
Intangible amortisation (3.5) (1.6) (0.2) - (5.3)
---------- ----------- ---------------- -------- --------
Operating result
- H1 2016 108.5 38.3 4.0 11.2 162.0
---------- ----------- ---------------- --------
Net finance expense (7.2)
--------
Profit for the period before income
tax 154.8
Income tax expense (29.1)
--------
Profit for the
period - H1 2016 125.7
--------
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Trading profit
- H1 2015 70.3 28.3 3.3 9.8 111.7
Intangible amortisation (2.1) (1.6) - - (3.7)
---------- ----------- ---------------- -------- --------
Operating result
- H1 2015 68.2 26.7 3.3 9.8 108.0
---------- ----------- ---------------- --------
Net finance expense (7.6)
--------
Profit for the period before income
tax 100.4
Income tax expense (18.0)
--------
Profit for the
period - H1 2015 82.4
--------
Segment assets and liabilities
Total Total
Insulated Insulation Access 30 30 June
Panels Boards Environmental Floors June 2015
EURm EURm EURm EURm 2016 EURm
EURm
Assets - H1
2016 1,580.7 592.8 165.7 153.9 2,493.1
Assets - H1
2015 1,522.0 593.2 165.2 160.8 2,441.2
Derivative financial
instruments 45.9 19.6
Cash and cash
equivalents 166.5 170.6
Deferred tax
asset 10.9 6.9
---------- ------------
Total assets 2,716.4 2,638.3
---------- ------------
Liabilities
- H1 2016 (471.1) (156.2) (46.6) (26.8) (700.6)
Liabilities
- H1 2015 (461.7) (152.6) (46.2) (24.7) (685.2)
Interest bearing loans and borrowings
(current and non-current) (557.8) (639.5)
Derivative financial instruments (current
and non-current) (0.4) (2.6)
Income tax liabilities (current and
deferred) (119.5) (106.9)
---------- ------------
Total liabilities (1,378.3) (1,434.2)
---------- ------------
Other segment
information
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Capital Investment
- H1 2016 * 42.3 18.7 9.0 2.5 72.5
Capital Investment
- H1 2015 * 191.5 11.4 2.1 3.1 208.1
Depreciation included
in segment
result - H1 2016 (19.2) (7.4) (1.7) (1.2) (29.5)
Depreciation included
in segment
result - H1 2015 (15.6) (7.8) (1.7) (1.1) (26.2)
Non cash items
included in segment
result - H1 2016 (3.6) (1.4) (0.4) (0.6) (6.0)
Non cash items
included in segment
result -H1 2015 (2.2) (1.0) (0.3) (0.5) (4.0)
* Capital investment includes fair value of property,
plant and equipment and intangible assets acquired
in business
combinations.
Analysis of segmental
data by geography
Republic United Rest
of Kingdom of Americas Others Total
Ireland EURm Europe EURm EURm EURm
EURm EURm
Income Statement
Items
Revenue - H1
2016 59.5 410.1 592.3 291.4 114.8 1,468.1
Revenue - H1
2015 40.4 399.7 459.0 225.9 110.3 1,235.3
Statement of Financial Position Items
Non-current
assets - H1
2016 * 49.0 363.0 627.3 389.0 149.9 1,578.2
Non-current
assets - H1
2015 * 48.4 365.4 614.5 400.8 105.2 1,534.3
Capital Investment
- H1 2016 ** 2.1 20.1 16.5 11.5 22.3 72.5
Capital Investment
- H1 2015 ** 2.6 13.1 132.1 53.2 7.1 208.1
* Total non-current assets excluding derivative
financial instruments and deferred tax assets.
** Capital investment includes fair value of
property, plant and equipment and intangible
assets acquired in business
combinations.
In presenting information on the basis of geographic segments,
segment revenue is based on the geographic location of customers.
Segment assets are based on the geographic location of the
assets.
5 Seasonality of operations
Activity in the global construction industry is characterised by
cyclicality and is dependent to a significant extent on the
seasonal impact of weather in some of the Group's operating
locations. Activity is second half weighted and is likely to be
more pronounced in the future due to the activity profile of recent
acquisitions.
6 Finance expense and finance income
6 months 6 months
ended ended
30 June 30 June
2016 2015
EURm EURm
Finance expense
Bank loans 1.1 1.7
Private placement 6.0 5.5
Net defined benefit pension
scheme 0.1 0.1
Fair value movement on derivative
financial instruments (20.5) (2.9)
Fair value movement on private
placement debt 20.7 3.3
--------- ---------
7.4 7.7
Finance income
Interest earned (0.2) (0.1)
Net finance cost 7.2 7.6
--------- ---------
No borrowing costs were capitalised during the period (H1 2015:
Nil).
7 Taxation
Taxation provided for on profits is EUR29.1m which represents
18.8% of the profit before tax and amortization for the period (H1
2015: 18.0%). The full year effective tax rate in 2015 was 17.8%.
The taxation charge for the six month period is accrued using an
estimate of the applicable rate for the year as a whole.
8 Analysis of net debt
At At
30 June 30 June
2016 2015
EURm EURm
Cash and cash equivalents 166.5 170.6
Derivative financial instruments 43.2 19.6
Current borrowings (123.5) (287.4)
Non-current borrowings (434.3) (352.1)
Total net debt (348.1) (449.3)
---------- ----------
Net debt, which is a non GAAP measure, is stated net of interest
rate and currency hedges which relate to hedges of debt. Foreign
currency derivatives which are used for transactional hedging are
not included in the definition of net debt.
9 Financial instruments
The following table outlines the components of net debt by
category:
Loans & Liabilities
Receivables at Fair Derivatives
& Other Value Designated Total
Financial through as Hedging Net
Assets/(Liabilities) Profit Instruments Debt
at Amortised or EURm by Category
Cost Loss EURm
EURm EURm
Assets:
Interest rate swaps - - 43.2 43.2
Cash at bank and
in hand 166.5 - - 166.5
---------------------- ------------ -------------- --------------
Total assets 166.5 - 43.2 209.7
---------------------- ------------ -------------- --------------
Liabilities:
Interest rate swaps - - - -
Private placement
notes (312.5) (153.7) - (466.2)
Other loans (91.6) - - (91.6)
---------------------- ------------ -------------- --------------
Total liabilities (404.1) (153.7) - (557.8)
---------------------- ------------ -------------- --------------
At 30 June 2016 (237.6) (153.7) 43.2 (348.1)
---------------------- ------------ -------------- --------------
Loans & Liabilities
Receivables at Fair Derivatives
& Other Value Designated Total
Financial through as Hedging Net
Assets/(Liabilities) Profit Instruments Debt
at Amortised or EURm by Category
Cost Loss EURm
EURm EURm
Assets:
Interest rate swaps - - 19.6 19.6
Cash at bank and
in hand 170.6 - - 170.6
---------------------- ------------ -------------- --------------
Total assets 170.6 - 19.6 190.2
---------------------- ------------ -------------- --------------
Liabilities:
Interest rate swaps - - - -
Private placement
notes (202.0) (145.5) - (347.5)
Other loans (292.0) - - (292.0)
---------------------- ------------ -------------- --------------
Total liabilities (494.0) (145.5) - (639.5)
---------------------- ------------ -------------- --------------
At 30 June 2015 (323.4) (145.5) 19.6 (449.3)
---------------------- ------------ -------------- --------------
For information on the currency and maturity profile of net debt
please refer to note 20 in the 2015 Annual Report.
Fair value of financial instruments carried at fair value
Financial instruments recognised at fair value are analysed
between those based on quoted prices in active markets for
identical assets or liabilities (Level 1), those involving inputs
other than quoted prices that are observable for the assets or
liabilities, either directly or indirectly (Level 2); and those
involving inputs for the assets or liabilities that are not based
on observable market data (Level 3).
The following table sets out the fair value of all financial
instruments whose carrying value is at fair value:
Level Level Level
1 2 3
30 June 30 June 30 June
2016 2016 2016
EURm EURm EURm
Financial assets
Interest rate swaps - 43.2 -
Foreign exchange contracts
for hedging - 2.7 -
Financial liabilities
Deferred contingent consideration - - (9.0)
Interest rate swaps - (0.4) -
Foreign exchange contracts
for hedging - - -
---------- --------- ---------
At 30 June 2016 - 45.5 (9.0)
---------- --------- ---------
Level Level Level
1 2 3
30 June 30 June 30 June
2015 2015 2015
EURm EURm EURm
Financial assets
Interest rate swaps - 19.6 -
Foreign exchange contracts
for hedging - 0.1 -
Financial liabilities
Deferred contingent consideration - - (9.6)
Interest rate swaps - - -
Foreign exchange contracts
for hedging - (2.6) -
---------- --------- ---------
At 30 June 2015 - 17.1 (9.6)
---------- --------- ---------
All derivatives entered into by the Group are included in Level
2 and consist of foreign currency forward contracts, interest rate
swaps and cross currency interest rate swaps.
Where derivatives are traded either on exchanges or liquid
over-the-counter markets, the Group uses the closing price at the
reporting date. Normally, the derivatives entered into by the Group
are not traded in active markets. The fair values of these
contracts are estimated using a valuation technique that maximises
the use of observable market inputs, e.g. market exchange and
interest rates.
Deferred contingent consideration is included in Level 3.
Further details on deferred contingent consideration is set out in
notes 19 and 23 of the 2015 Annual Report. The contingent element
is measured on a series of trading performance targets, and is
adjusted by the application of a range of outcomes and associated
probabilities.
During the period ended 30 June 2016, there were no significant
changes in the business or economic circumstances that affect the
fair value of financial assets and liabilities, no
reclassifications and no transfers between levels of the fair value
hierarchy used in measuring the fair value of the financial
instruments.
Fair value of financial instruments at amortised cost
Except as detailed below, it is considered that the carrying
amounts of financial assets and financial liabilities recognised at
amortised cost in the Interim Financial Statements approximate
their fair values.
Private placement notes Carrying amount Fair value
EURm EURm
At 30 June 2016 466.2 507.1
At 30 June 2015 347.5 366.3
10 Dividends
A final dividend on ordinary shares of 17.0 cent per share in
respect of the year ended 31 December 2015 (2014: 10.0 cent) was
paid on 13 May 2016.
The Directors are proposing an interim dividend of 10.0 cent
(2015: 8.0 cent) per share in respect of 2016, which will be paid
on 23 September 2016 to shareholders on the register on the record
date of 2 September 2016.
11 Earnings per share
6 months 6 months
ended ended
30 June 30 June
2016 2015
EURm EURm
The calculations of earnings
per share are based on
the following:
Profit attributable to
owners of the Company 125.4 81.7
----------- -----------
Number Number
of of
shares shares
('000) ('000)
6 months 6 months
ended ended
30 June 30 June
2016 2015
Weighted average number
of ordinary shares for
the calculation of basic
earnings per share 177,523 175,706
Dilutive effect of share
options 2,226 3,117
----------- -----------
Weighted average number
of ordinary shares
for the calculation of
diluted earnings per share 179,749 178,823
----------- -----------
EUR cent EUR cent
Basic earnings per share 70.6 46.5
Diluted earnings per share 69.7 45.7
Adjusted basic (pre amortisation)
earnings per share 73.1 48.6
There are no options which are anti-dilutive included in the
above calculations. At 30 June 2016, there were no anti-dilutive
shares (30 June 2015: Nil) included in the above calculations.
12 Goodwill
At At At
30 June 30 June 31 Dec
2016 2015 2015
(As represented)
*
EURm EURm EURm
At beginning of period 821.2 475.3 475.3
Additions relating
to current year acquisitions 55.3 309.3 327.9
Written back during
year - - (4.3)
Net exchange difference (16.8) 28.1 22.3
--------- ------------------ ---------
At end of period 859.7 812.7 821.2
--------- ------------------ ---------
At end of period
Cost 925.3 878.3 886.8
Accumulated impairment
losses (65.6) (65.6) (65.6)
Net carrying amount 859.7 812.7 821.2
--------- ------------------ ---------
* Re-presented to reflect adjustments made to the provisional
fair values recognised in the Balance Sheet as at 30 June 2015.
13 Property, plant & equipment
At
At 30 June At
2015
30 June (As represented) 31 Dec
2016 * 2015
EURm EURm EURm
Cost or valuation 1,441.9 1,440.6 1,427.0
Accumulated depreciation
and impairment charges (816.9) (809.3) (807.9)
---------- ------------------ -------------
Net carrying amount 625.0 631.3 619.1
---------- ------------------ -------------
Opening net carrying
amount 619.1 497.0 497.0
Acquisitions through
business combinations 5.0 111.2 110.2
Additions 54.8 36.4 79.0
Disposals (2.3) (2.3) (7.7)
Depreciation charge (29.5) (26.2) (60.5)
Impairment charge (1.6) (5.3) (13.4)
Effect of movement
in exchange rates (20.5) 20.5 14.5
Closing net carrying
amount 625.0 631.3 619.1
---------- ------------------ -------------
* Re-presented to reflect adjustments made to the provisional
fair values recognised in the Balance Sheet as at 30 June 2015.
The disposals did not generate a profit in the period (H1 2015:
EUR0.2m profit).
14 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
EURm EURm EURm
(Decrease)/increase
in cash and bank overdrafts (29.3) (15.1) 22.5
Decrease/(increase)
in debt 12.2 (302.2) (217.2)
(Increase)/decrease
in lease finance (0.1) (2.2) 0.5
---------- ---------- -------------
Change in net debt
resulting from cash
flows (17.2) (319.5) (194.2)
Translation movement
- relating to US dollar
loans (0.6) (5.2) (24.0)
Translation movement
- other (15.9) 7.4 1.5
Derivative financial
instruments movement 13.6 (6.5) 14.2
---------- ---------- -------------
Net movement (20.1) (323.8) (202.5)
Net debt at start of
the period (328.0) (125.5) (125.5)
---------- ---------- -------------
Net debt at end of
the period (348.1) (449.3) (328.0)
---------- ---------- -------------
15 Business combinations
On 29 April 2016, the Group's Environmental division acquired
85% of Tankworks Australia Pty Limited ("Tankworks"), an Australian
company which manufactures water tanks and accessories for the
Australian residential and commercial markets. The total
consideration, including debt/cash acquired, deferred contingent
consideration and related costs, amounted to EUR24.1m.
The provisional fair values of the acquired assets and
liabilities in respect of the Tankworks acquisition at the
respective acquisition dates are set out below:
Tankworks
EUR'm
Non-current assets
Intangible assets 6.3
Property, plant and equipment 1.3
Current assets
Inventories 1.1
Trade and other receivables 4.1
Current liabilities
Trade and other payables (3.7)
Provisions for liabilities (0.3)
Non-current liabilities
Deferred tax liabilities (1.9)
------------
Total identifiable assets 6.9
Goodwill 17.2
------------
Total consideration 24.1
------------
Satisfied by:
Cash (net of cash/debt acquired) 22.2
Deferred contingent consideration 1.9
------------
Total consideration 24.1
------------
The goodwill is attributable principally to the profit
generating potential of the business, together with a strong
workforce and synergies expected to be achieved from integrating
the business into Kingspan's existing structure.
The deferred contingent consideration reflects the present
value, which is based on a multiple of EBITDA, of a put and call
option to acquire the non controlling interest in Tankworks. As
this option is expected to be exercised, the Group has consolidated
Tankworks as a 100% subsidiary.
On 30 April 2016, the Group's subsidiary, Joris Ide, acquired
100% of the ordinary share capital of Euroclad (Holdings) Limited
("Euroclad"), a manufacturer of built up metal roof and wall
systems and products based in the UK. The total consideration,
including debt/cash acquired and related costs, amounted to
EUR58.4m.
The fair value of the assets and liabilities on the Euroclad
acquisition cannot be ascertained at this point, however, the fair
value exercise will be completed prior to year-end.
In the post-acquisition period to 30 June 2016, the businesses
acquired in the current period contributed total revenue of EUR19m
and a trading profit of EUR1.5m to the Group's results.
16 Capital and reserves
Issues of ordinary shares
767,589 ordinary shares (H1 2015: 1,808,084) were issued as a
result of the exercise of vested options arising from the Group's
share option schemes (see the 2015 Annual Report for full details
of the Group's share option schemes). Options were exercised at an
average price of EUR1.31 per option.
17 Significant events and transactions
There were no individually significant events or transactions in
the period which contributed to the material changes in the
Statement of Financial Position; the more significant movements are
described below:
-- the changes in Inventories, Trade & other receivables and
Trade & other payables reflect the normal business cycle;
-- the fair value of derivatives primarily moved as a result of
the movements in the US dollar exchange rate against both sterling
and the euro; and
-- the negative currency translation movement of EUR57.6m
reflected in the Consolidated Statement of Comprehensive Income
reflects primarily the relative weakening of sterling year on
year.
18 Related party transactions
There were no changes in related party transactions from the
2015 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
19 Subsequent events
Subsequent to the period end, Kingspan reached an agreement to
acquire Essmann, a European Daylighting business based in Germany
and France, and Eurobond, a former affiliate of Euroclad, which is
based in the UK. The combined consideration for these acquisitions
was EUR126m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFEATSIALIR
(END) Dow Jones Newswires
August 22, 2016 02:00 ET (06:00 GMT)
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