TIDMKGP
RNS Number : 2172Q
Kingspan Group PLC
17 February 2023
KINGSPAN GROUP PLC
PRELIMINARY RESULTS
Year Ended 31 December 2022
KINGSPAN GROUP PLC
RESULTS FOR THE YEARED 31 DECEMBER 2022
Kingspan, the global leader in high-performance insulation and
building envelope solutions, reports its preliminary results for
the year ended 31 December 2022.
Financial Highlights:
Revenue up 28% to EUR8.3bn, (pre-currency, up 25%).
--
Trading profit up 10% to EUR833m, (pre-currency, up 7%).
--
Acquisitions contributed 9% to sales growth and 8% to trading
-- profit growth in the year.
Milestone EBITDA of c. EUR1bn (2021: EUR893.2m) in the financial
-- year.
Group trading margin of 10.0%, a decrease of 160bps.
--
Basic EPS up 8% to 329.5 cent.
--
Final dividend per share of 23.8 cent (2021: 26.0 cent) giving
-- a total dividend for the year of 49.4 cent (2021: 45.9 cent).
Year end net debt(1) of EUR1,539.6m (2021: EUR756.1m). Net
-- debt(4) to EBITDA(4) of 1.62x (2021: 0.88x).
ROCE of 15.9% (2021: 19.5%), or 16.5% after annualised impact
-- of acquisitions.
Operational Summary:
Record year overall in a testing environment and a tougher
-- second half.
Insulated Panels sales increase of 23% driven by raw material
-- price growth and a 46% increase in global sales volume of
QuadCore(TM) . Ground-breaking Lower Embodied Carbon (LEC)
insulated panel launched recently.
Insulation sales strongly ahead by 40% driven by inflation
-- and acquisitions. District heating applications a standout
performer. Significant progress on entry into the bio-based
insulation category. AlphaCore(R) launching shortly. Technical
insulation now comprising 35% of divisional revenue.
Roofing + Waterproofing platform embedded. Annualised revenue
-- run rate in excess of EUR500m. Ondura Group acquisition completed
in September 2022 following Derbigum acquisition and strategic
minority investment of 24% in Nordic Waterproofing.
Technical insulation and roofing significantly increase the
-- Group's exposure to RMI.
Significant progress at Light + Air, sales increase of 27%
-- and margins progressing year on year.
Strong performance in Data + Flooring with sales up 33% and
-- a strong data centre solutions pipeline into 2023.
Invested a total of EUR1.3bn in acquisitions, purchase of
-- minority interest and capex during the year.
Summary Financials:
FY'22 FY'21 change
------------------- ------ ------ --------
Revenue EURm 8,341 6,497 +28%
Trading Profit(2)
EURm 833 755 +10%
Trading Margin(3) 10.0% 11.6% -160bps
EBITDA(5) EURm 998 893 +12%
Profit after
tax EURm 616 571 +8%
EPS (cent) 330 306 +8%
------------------- ------ ------ --------
(1) Net Debt pre-IFRS 16
(2) Operating profit before amortisation of intangibles and non
trading item
(3) Operating profit before amortisation of intangibles and non
trading item divided by total revenue
(4) Net debt to EBITDA ratio is pre-IFRS 16 per banking
covenants
(5) Earnings before finance costs, income taxes, depreciation,
amortisation and non trading item
Gene M. Murtagh, Chief Executive Officer of Kingspan
commented:
"The 2022 outturn was very satisfactory in the context of
accumulating uncertainty over the course of a bumpy year that saw a
strong first half performance giving way to a more subdued
environment in the second half of the year.
Kingspan recorded another meaningful year in its contribution to
lowering the CO2 emissions of buildings combined with record
revenue and EBITDA touching EUR1 billion for the first time.
Notwithstanding ongoing challenges in the global economy, we expect
to see a continuation of the structural drive in favour of more
sustainable buildings over the longer term.
Given the powerful combination of our global scale, the
diversity of our end markets, our ability to grow organically and
through acquisition, alongside our strong innovation pipeline and
an ongoing societal drive for energy efficiency, we believe
Kingspan is very well placed for continuing progress for the
benefit of all stakeholders."
For further information contact:
Murray Group Tel: +353 (0)1 4980300/+353
Pat Walsh (0) 87 2269345
Business Review
The 2022 outcome for the Group as a whole was relatively
pleasing given the accumulating uncertainty as the year progressed.
Over-life carbon saved in buildings using insulation systems we
manufactured in 2022 is an estimated 173 million tonnes of CO2e,
driving record revenue of EUR8.3bn and record trading profit of
EUR833m. This was achieved at a time of exceptional inflation and
unprecedented disruption in supply chains globally, which was less
a feature in the latter part of the year.
The performance of individual markets and economies varied
significantly with the Americas, Germany and Australasia the most
stable for Kingspan, with much of Europe weaker. The pattern of
trade was also at odds with prior periods where many of our routes
to market built inventory in the earlier part of the year, largely
out of caution, followed by industry-wide efforts to lower stock
levels in the second half.
Virtually all walks of life have been and will be further
impacted by the prevailing energy cost and availability dynamics.
This has understandably led to broader and growing concerns which
may weigh on demand in the year or so ahead. Conversely it has also
generated an unprecedented impetus amongst governments and society
in general to ensure measures are taken to curtail reliance on
fossil fuel. Conservation in buildings is a key component of this
given almost 40% of all global energy related carbon emissions
emanate from buildings and construction. Our solutions can, and
are, playing a meaningful long-term role in this process.
Planet Passionate and our Impact
The vast majority of what we provide to the market enables
others to dramatically reduce energy consumption and its related
GHG emissions. That estimated impact during 2022 was 173 million
tonnes of CO2e saved from insulation systems we sold during the
year, taking into account their contributions over the life of the
building infrastructure that they serve. Internally, our Planet
Passionate initiative once again made tremendous progress, despite
being hampered by supply issues, largely related to the procurement
of solar panels from Asia.
The table below provides further detail on the progress within
Kingspan by category:
Intensity Indicators Change from 2020 base year
---------------------------------- ---------------------------
Carbon Intensity (tCO(2) e/EURm) 54% reduction
---------------------------
Energy Intensity (MWh/EURm) 28% reduction
---------------------------
Landfill Waste Intensity (t/EURm) 68% reduction
---------------------------
Water Intensity (million lt/EURm) 16% reduction
---------------------------
In summary, 18 solar PV projects were completed across our
facilities during the year which will generate 6.4 GWh of renewable
electricity annually. 803 million PET bottle equivalent of recycled
material was processed across the Group, and 14 rainwater
harvesting systems were installed. In addition, 58% of all new cars
within the Group in the year were zero emission vehicles, and our
waste to landfill for the whole business reduced by 42% since
2020.
Underlying Business Whole
Business
---------------------------------------- --------
Planet Passionate Targets Target 2020 2022 2020 2022
Year
-------- ------------ -------- ------------- -----------
Net Zero Carbon
Manufacturing -
scope 1 & 2 GHG
Carbon emissions(1) (t/CO2e) 2030 410,224(2) 242,734 517,972(2,3) 385,157(3)
------------------------- -------- ------------ -------- ------------- -----------
50% reduction in
product CO2e intensity
from primary supply
partners (%) 2030 - 0.04 - 0.04
------------------------- ---------------------- ------------ -------- ------------- -----------
Zero emission company
funded cars (annual
replacement %) 2025 11 60 11 58(4)
------------------------- ---------------------- ------------ -------- ------------- -----------
60% Direct renewable
Energy energy (%) 2030 19.5 34.3 19.5 33.4
------------------------- -------- ------------ -------- ------------- -----------
20% On-site renewable
energy generation
(%) 2030 4.9 7.2 4.9 7.1
------------------------- ---------------------- ------------ -------- ------------- -----------
Solar PV systems
on all wholly owned
sites (%) 2030 21.7 41.5 21.7 35.2
------------------------- ---------------------- ------------ -------- ------------- -----------
Net Zero Energy
(%) 2020 100 100 100 n/a(5)
------------------------- ---------------------- ------------ -------- ------------- -----------
Zero Company waste
Circularity to landfill (tonnes) 2030 18,642 9,081 18,642 10,828
------------------------- -------- ------------ -------- ------------- -----------
Recycle 1 billion
PET bottles into
our manufacturing
processes annually
(million bottles) 2025 573 803 573 803
------------------------- ---------------------- ------------ -------- ------------- -----------
QuadCore(TM) products
utilising recycled
PET (no. of sites) 2025 1 3 1 3
------------------------- ---------------------- ------------ -------- ------------- -----------
Harvest 100 million
litres of rainwater
annually (million
Water litres) 2030 20.1 26.3 20.1 26.4
------------------------- -------- ------------ -------- ------------- -----------
Support 5 Ocean
Clean-Up projects
(no. of projects) 2025 1 3 1 3
------------------------- ---------------------- ------------ -------- ------------- -----------
Whole Business includes all manufacturing, assembly and R&D sites
within the Kingspan Group, including acquisitions since 2020.
(1) Excluding biogenic emissions. Scope 2 GHG emissions calculated
using market-based methodology.
(2) Restated figures due to improved data collection & change
in calculation methodologies.
(3) GHG emissions were recalculated due to acquisitions that
occurred in 2021 & 2022.
(4) Excluding recent acquisitions due to unavailability of data
at this time.
(5) As we retire our Net Zero Energy target in favour of a
carbon charge, newly acquired businesses are not included for this
target.
Investing in our Future
Between organic and inorganic initiatives, we invested a total
of EUR1.3bn during the year. Capital projects, mainly focused on
capacity expansion, amounted to EUR276m and included significant
projects either completed or commenced in the US, Brazil, France,
Germany, Vietnam and Australia. Preparatory work is also underway
for the Ukraine Technology Campus that we announced last year.
Understandably, progress has been slow to date although we
anticipate investing over EUR200m in the project over the next four
years.
Acquisitions have long been a prominent feature of our strategy
and in 2022 we invested a total of EUR1,054m, a record, in adding
geographic footprint and new business lines to our portfolio
including deferred consideration and a strategic minority
investment. In total six transactions were completed, the largest
of which was Ondura, a French headquartered global provider of
roofing solutions. Together with Derbigum, this now forms the
platform for expansion deeper into the Roofing and Waterproofing
arena with combined run-rate revenues of approximately EUR500m
entering the current year. In addition, we also acquired a 24%
strategic holding in Nordic Waterproofing.
Innovation at Work
The nucleus of our innovation agenda is focused on driving
product improvement across thermal, renewable content, embodied
carbon and fire performance, while also incorporating more
bio-based solutions across our portfolio.
PowerPanel(TM) and Rooftricity(TM) made it to market during 2022
with very encouraging early signs. We have limited the launch to
Ireland and the UK for the time being due to component supply
constraints. Initial preparations are now underway for
PowerPanel(TM) production enablement in the US, France and the
Czech Republic, likely entering production sometime in 2024.
Our QuadCore(TM) LEC (Lower Embodied Carbon) insulated panel
launched recently, giving rise to an estimated 17% reduction in
embodied carbon (in life cycle modules A-C) relative to existing
product. We aim to achieve further reductions in embodied carbon as
we progress towards our 2030 supply chain targets. This is an
exciting new departure which we are confident will resonate
strongly with our global blue chip client base and beyond.
QuadCore(TM) 2.0 development is significantly advanced and
AlphaCore(R) is launching imminently following the acquisition of
Calostat(R) technology in late 2022. Progress is also being made on
the bio-based insulation front, albeit at a somewhat slower pace
than we would like.
Product and System Integrity
By the end of 2022, 26 of our sites were certified to ISO 37301,
with a plan to have 58 sites certified to the standard by the end
of 2023. ISO 37301 is the leading global standard for establishing,
developing and monitoring compliance systems. Our enhanced product
integrity programme is now deeply embedded across the Group. To
date, 133 of our sites have been audited by the Compliance Team. In
addition, 651 third party external products and system audits took
place throughout 2022.
Insulated Panels
FY '22 FY '21 Change
---------------- -------- -------- ---------
Turnover EURm 5,181.5 4,229.2 +23%(1)
Trading Profit
EURm 548.7 519.8 +6%
Trading Margin 10.6% 12.3% -170bps
---------------- -------- -------- ---------
(1) Comprising underlying +17%, currency +4% and acquisitions +2%. Like-for-like volume -7%.
The global and diverse nature of this business was reflected in
the broad and varying performances of the different regional
businesses and trends. Overall, the trading result has demonstrated
growth, albeit that volumes became more challenged during the
second half.
Advanced insulation cored products represented 85% of insulated
panels sales volumes, whilst mineral fibre cored was 11% with older
generation materials comprising the balance. QuadCore(TM) , our
highly differentiated and unique core material, represented 17% of
insulated panels volume, having grown by 46% over prior year.
Further progress is anticipated during 2023.
PowerPanel(TM) made its market entry, and we anticipate this
family of ground-breaking solutions to feature prominently over the
longer term. Supply chain consistency and reliability has been a
challenge and we continue to explore ways of ensuring this is
addressed.
Insulation
FY '22 FY '21 Change
--------------------- -------- -------- -----------
Turnover EURm 1,658.3 1,182.9 +40%(1)
Trading Profit EURm 165.2 146.7 +13%
Trading Margin 10.0% 12.4% -240bps
--------------------- -------- -------- -----------
(1) Comprising underlying +12%, currency +2% and acquisitions
+26%.
Worldwide sales grew encouragingly by 40% over prior year. Much
of the growth was delivered through pricing, and indeed the
acquisitions added during 2022. Sales volumes in Logstor(R) ,
Kingspan's main technical insulation platform and now 25% of the
division, grew by 18% in the second half of the year which was the
first like-for-like period of ownership. Insulation board activity
represents approximately 60% of the division with like-for-like
volume decreasing by 10% in the year.
The two larger businesses acquired were Logstor (June 2021) and
Troldtekt (April 2022), both Danish headquartered, but in entirely
different markets with significant growth potential. Logstor, the
larger of the two, focuses primarily on pre-insulated pipes for
district heating (and cooling) infrastructure, an area of
ever-growing opportunity as the world accelerates towards clean
power generation and distribution. Our capacity will be increased
by 30% during the current year, and by a further 50% over the
following three years. Troldtekt addresses both the acoustic and
bio-based insulation segments. Again, we expect to grow capacity by
60% over the next two years or so reflecting the opportunity
afforded by the extension of applications and geography.
On the innovation and new product agenda, AlphaCore(R) launches
imminently following the acquisition of Calostat(R) technology. An
A-Class Optim-R(R) should reach market in early 2024. We are in the
process of assembling the leadership and skills required to enter
the stone wool segment which is part of our long-established
ambition to be the sole global provider of the 'full spectrum' of
thermal solutions.
Light + Air
FY '22 FY '21 Change
--------------------- ------- ------- ------------
Turnover EURm 700.7 552.2 +27% (1)
Trading Profit EURm 52.3 36.0 +45%
Trading Margin 7.5% 6.5% +100bps
--------------------- ------- ------- ------------
(1) Comprising underlying +15%, currency + 2% and acquisitions
+10%
In 2022 this business delivered strong progress with revenue and
trading profit both ahead, by 27% and 45% respectively. Notable
growth was achieved in the Central European and Southern European
businesses. North America also improved its performance, enhanced
by the addition of the Solatube(R) product set and business model,
which we anticipate rolling out more regionally across the US over
the coming years.
As the Group grows, so too will the divisional structure that
supports it. To that end, going forward the Light, Air and Water
businesses will be reported as one enlarged division. Combining the
service businesses of both, leveraging the online success at Water
+ Energy, and having a wider global route to market and channel
synergy will make this combination compelling over the longer term.
The enlarged division will have real global scale and scope, with
revenue run-rate expected to be approximately EUR1bn in 2023.
Roofing + Waterproofing
FY '22 FY '21 Change
--------------- ------- ------- -------
Turnover EURm 153.2 - n/a
Trading Profit 8.5 - n/a
EURm
Trading Margin 5.5% - n/a
--------------- ------- ------- -------
The maiden year for this new business was marked by two
meaningful acquisitions, Ondura and Derbigum, acquired in September
2022 and June 2022 respectively. The annualised revenue run rate is
approximately EUR500m. This combination brings Kingspan into both
flat and pitched roof membrane solutions, from the primary outer
layer of the roof to the secondary underlay. In both applications,
the core basis of our strategy is to create pull-through for
Insulation products through a warranted system-sell. Early progress
has been encouraging. From a roofing technology perspective, we
intend to broaden our portfolio of waterproofing, and our
geographic presence, through both organic and inorganic routes. The
trading margin above reflects acquisition and other related costs
during 2022.
Data + Flooring
FY '22 FY '21 Change
---------------- ------- ------- ----------
Turnover EURm 360.1 271.4 +33%(1)
Trading Profit
EURm 43.1 32.3 +33%
Trading Margin 12.0% 11.9% +10bps
---------------- ------- ------- ----------
(1) Comprising underlying +26% and currency +7%
Strong progress was again achieved in the data solutions
activity in this business as large scale cloud services
infrastructure continued to expand globally, and as our share of
those internal solutions grew. This trajectory and the active
pipeline of live projects give us confidence that further growth
ought to be delivered during the current year.
Water + Energy
FY '22 FY '21 Change
---------------- ------- ------- ---------
Turnover EURm 287.1 261.3 +10%(1)
Trading Profit
EURm 15.4 20.0 -23%
Trading Margin 5.4% 7.6% -220bps
---------------- ------- ------- ---------
(1) Comprising underlying +6%, currency +1% and acquisitions +3%
This business delivered a reasonably solid outcome for the year
owing to some recovery of position in the Australian market, albeit
with margin pressures elsewhere reflecting a lag in the recovery of
raw material inflation.
Financial Review
The Financial Review provides an overview of the Group's
financial performance for the year ended 31 December 2022 and of
the Group's financial position at that date.
Overview of results
Group revenue increased by 28% to EUR8.3bn (2021: EUR6.5bn) and
trading profit increased by 10% to EUR833.2m (2021: EUR754.8m) with
a decrease of 160 basis points in the Group's trading profit margin
to 10.0% (2021: 11.6%). Basic EPS for the year was 329.5 cent
(2021: 305.6 cent), representing an increase of 8%.
The Group's underlying sales and trading profit growth by
division are set out below:
Sales Underlying Currency Acquisition Total
------------------------- ----------- --------- ------------ ------
Insulated Panels +17% +4% +2% +23%
Insulation +12% +2% +26% +40%
Light + Air +15% +2% +10% +27%
Roofing + Waterproofing - - +100% +100%
Water + Energy +6% +1% +3% +10%
Data + Flooring +26% +7% - +33%
------------------------- ----------- --------- ------------ ------
Group +16% +3% +9% +28%
------------------------- ----------- --------- ------------ ------
The Group's trading profit measure is earnings before interest,
tax, amortisation of intangibles and non trading item:
Trading Profit Underlying Currency Acquisition Total
------------------------- ----------- --------- ------------ ------
Insulated Panels +1% +4% +1% +6%
Insulation -16% +2% +27% +13%
Light + Air +29% +2% +14% +45%
Roofing + Waterproofing - - +100% +100%
Water + Energy -26% - +3% -23%
Data + Flooring +24% +9% - +33%
------------------------- ----------- --------- ------------ ------
Group -1% +3% +8% +10%
------------------------- ----------- --------- ------------ ------
The key drivers of sales and trading profit performance in each
division are set out in the Business Review.
Finance costs (net)
Finance costs for the year increased by EUR1.4m to EUR37.7m
(2021: EUR36.3m). The Group's net interest expense on borrowings
(bank and loan notes net of interest receivable) was EUR34.6m
(2021: EUR32.2m). This increase reflects higher average gross debt
levels in 2022. In particular, this includes the interest expense
relating to the two new acquisition related financing facilities
with an aggregated value of EUR800m which were arranged and fully
drawn in 2022. Lease interest of EUR4.7m (2021: EUR3.7m) was
recorded for the year. EUR0.1m (2021: EUR0.2m) was recorded in
respect of a non-cash finance charge on the Group's defined benefit
pension schemes.
Taxation
The tax charge for the year was EUR130.6m (2021: EUR118.4m)
which represents an effective tax rate of 17.5% (2021: 17.2%). The
increase in the effective rate reflects, primarily, the change in
the geographical mix of earnings year on year.
Dividends
The Board has proposed a final dividend of 23.8 cent (2021: 26.0
cent) per ordinary share payable on 9 May 2023 to shareholders
registered on the record date of 14 April 2023. An interim dividend
of 25.6 cent per ordinary share was declared during the year (2021:
19.9 cent). In summary, therefore, the total dividend for 2022 is
49.4 cent compared to 45.9 cent for 2021. This payout is in line
with our shareholder returns policy.
Retirement benefits
The primary method of pension provision for current employees is
by way of defined contribution arrangements. The Group has three
legacy defined benefit schemes in the UK which are closed to new
members and to future accrual. The total pension contributions to
these schemes for the year amounted to EUR1.8m (2021: EURnil) and
the expected contributions for 2023 are EURnil (2021: EURnil). On 6
December 2022, the Group completed a bulk insurance annuity
insurance policy 'buy in' for the Colt Life Assurance and
Retirement Scheme ('CLARS'). This buy-in ensures an insurance asset
that fully matches the remaining pension liability and was net
settled in cash for an amount of EUR15.9m in January 2023. There
was no impact on profit before tax from this transaction. In
addition, the Group has a number of smaller defined benefit pension
liabilities in Mainland Europe. The net pension liability in
respect of all defined benefit schemes was EUR49.5m as at 31
December 2022 (2021: EUR28.0m) with the increase reflecting,
primarily, a decrease in the value of scheme assets during the year
partially offset by actuarial gains on scheme liabilities.
Intangible assets and goodwill
Intangible assets and goodwill increased during the year by
EUR685.5m to EUR2,687.3m (2021: EUR2,001.8m). Intangible assets and
goodwill of EUR708.9m (2021: EUR418.9m) were recorded in the year
relating to acquisitions completed by the Group. An increase of
EUR9.0m (2021: increase of EUR50.9m) arose due to year end exchange
rates used to translate intangible assets and goodwill other than
those denominated in euro. There was an annual amortisation charge
of EUR32.4m (2021: EUR29.5m).
Financial key performance indicators
The Group has a set of financial key performance indicators
(KPIs) which are presented in the table below. These KPIs are used
to measure the financial and operational performance of the Group
and to track ongoing progress in achieving medium and long term
targets to maximise shareholder return.
Key performance indicators 2022 2021
---------------------------- ------ ------
Basic EPS growth +8% +48%
Sales performance +28% +42%
Trading margin 10.0% 11.6%
Free cashflow (EURm) 392.5 127.1
Return on capital employed 15.9% 19.5%
Net debt/EBITDA 1.62x 0.88x
---------------------------- ------ ------
(a) Basic EPS growth . The growth in EPS is accounted for
primarily by a 10% increase in trading profit partially offset by
an increase in the Group's effective tax rate by 30 basis points to
17.5% and an increase in minority interest. The effective tax rate
increased due to the geographical mix of earnings year on year. The
minority interest amount increased reflecting the performance at
the Group's operations which have minority stakeholders.
(b) Sales performance of +28% (2021: +42%) was driven by a 16%
increase in underlying sales, a 9% contribution from acquisitions
and positive currency translation of 3%. The increase in underlying
sales reflected a combination of strong year on year price growth
due to raw material inflation offset by an overall reduction in
volume particularly in the second half of the year as global
construction markets eased.
(c) Trading margin by division is set out below:
2022 2021
------------------------- ------ ------
Insulated Panels 10.6% 12.3%
Insulation 10.0% 12.4%
Roofing + Waterproofing 5.5% -
Light + Air 7.5% 6.5%
Water + Energy 5.4% 7.6%
Data + Flooring 12.0% 11.9%
------------------------- ------ ------
The Insulated Panels division trading margin decreased year on
year reflecting the market mix of sales, inventory cost dynamics as
well as negative operating leverage driven by year on year volume
declines. The trading margin decrease in the Insulation division
reflects, in the main, negative operating leverage associated with
year on year volume declines and the category mix of sales. The
increased trading margin in Light + Air reflects activity growth,
investment in specification and other processes as the division
continues to scale up. The Water + Energy trading margin decrease
reflects lag in the recovery of inflation in the first half of the
year. The trading margin in Data + Flooring is consistent year on
year.
(d) Free cashflow is an important indicator and reflects the
amount of internally generated capital available for re-investment
in the business or for distribution to shareholders.
Free cashflow 2022 2021
EURm EURm
-------- --------
EBITDA* 998.3 893.2
Lease payments (50.6) (38.6)
Movement in working capital** (136.2) (429.3)
Movement in provisions 7.7 6.9
Net capital expenditure (250.6) (163.6)
Net interest paid (31.9) (34.5)
Income taxes paid (158.4) (126.8)
Other including non-cash items 14.2 19.8
Free cashflow 392.5 127.1
-------- --------
*Earnings before finance costs, income taxes, depreciation,
amortisation and non trading item
**Excludes working capital on acquisition but includes working
capital movements since that point
Working capital at year end was EUR1,195.9m (2021: EUR977.8m)
and represents 14.5% (2021: 13.8%) of annualised sales based on
fourth quarter sales. This metric is closely managed and monitored
throughout the year and is subject to a certain amount of seasonal
variability associated with trading patterns and the timing of
significant purchases of steel and chemicals. The 16% growth in
underlying sales in 2022 required a consequential investment in
working capital to support the sales growth. The December 2022
working capital position is untypically high reflecting higher than
normal inventory levels although these have been reducing through
the second half. The business took the opportunity to build an
element of buffer stocks earlier in the year due to availability
constraints and has been steadily working through this in the
second half as supply chain bottlenecks and pricing eased. We
expect working capital levels to normalise further during 2023.
(e) Return on capital employed , calculated as operating profit
divided by total equity plus net debt, was 15.9% in 2022 (2021:
19.5%) and was 16.5% with annualised impact of acquisitions. The
decrease year on year reflects the 160bps reduction in trading
margin and elevated levels of working capital. The creation of
shareholder value through the delivery of long term returns well in
excess of the Group's cost of capital is a core principle of
Kingspan's financial strategy.
(f) Net debt to EBITDA measures the ratio of net debt to
earnings and at 1.62x (2021: 0.88x) is comfortably less than the
Group's banking covenant of 3.5x in both 2022 and 2021. The
calculation is pre-IFRS 16 in accordance with the Group's banking
covenants.
Acquisitions and capital expenditure
During the year the Group made a number of acquisitions for a
total upfront consideration of EUR887.0m.
In April 2022, the Group acquired 100% of the share capital of
Troldtekt, a Danish natural acoustic insulation producer. The total
consideration, including net debt acquired amounted to
EUR220.4m.
In September 2022, the Group acquired 100% of the share capital
of Ondura Group, a French headquartered global provider of roofing
membranes and associated roofing solutions, for a total
consideration, including net debt acquired of EUR515.6m.
The Group also made a number of smaller acquisitions during the
year for a combined cash consideration of EUR151.0m:
-- The Roofing + Waterproofing division acquired 100% of the share
capital of Derbigum, a Belgian producer of waterproofing membranes
for a total consideration, including net debt acquired of EUR95.0m
in June 2022;
-- The Insulated Panels division acquired 100% of the share capital
of THU Perfil in February 2022 and 100% of the share capital
of Invespanel in Spain in September 2022;
-- The Insulation division acquired the assets of Calostat in the
UK in September 2022.
The Group's organic net capital expenditure during the year was
EUR250.6m encompassing a number of strategic capacity enhancements
and ongoing maintenance.
EU Taxonomy and TCFD
Climate related disclosures are required under the EU Taxonomy
Regulation (Sustainable finance taxonomy - Regulation (EU)
2020/852) and by the Task Force on Climate-related Financial
Disclosures (TCFD). The disclosures will be included in our 2022
Planet Passionate Sustainability Report that will be published at a
later date within the required timeframe.
Non trading item
The Group recorded a non trading charge of EUR16.5m (2021:
EURnil) in the year in respect of the Group's net loss on the
complete divestment of its Russian operations.
Capital structure and Group financing
The Group funds itself through a combination of equity and debt.
Debt is funded through syndicated bank facilities and private
placement loan notes. The primary bank debt facility is a EUR800m
sustainability linked Revolving Credit Facility arranged in May
2021, maturing in May 2026, and which was undrawn at year end. The
Revolving Credit Facility was increased by EUR100m in December 2022
under the facility's accordion clause.
In April 2022, the Group arranged two additional banking finance
facilities with an aggregate value of EUR800m (EUR500m maturing in
April 2024, EUR300m in April 2025). The facilities were fully drawn
at year end.
In addition, as part of the Group's debt funding structure, the
Group has total private placement loan notes of EUR1,322.0m (2021:
EUR1,377.1m) which have a weighted average maturity of 5.7 years
(31 December 2021: 6.4 years).
The weighted average term, as at 31 December 2022, of all drawn
debt was 4.1 years (31 December 2021: 6.3 years).
The Group has significant available committed undrawn facilities
and cash balances which, in aggregate, were EUR1.45bn at 31
December 2022 (31 December 2021: EUR1.3bn).
Net debt
Net debt increased by EUR783.5m during 2021 to EUR1,539.6m
(2021: EUR756.1m). This is analysed in the table below:
Movement in net debt 2022 2021
EURm EURm
--------------------------------------- ---------- --------
Free cashflow 392.5 127.1
Acquisitions and divestments (893.4) (540.2)
Purchase of financial asset (113.3) (5.0)
Deferred consideration paid (45.4) -
Purchase of non-controlling interests (2.0) -
Share issues - 0.1
Repurchase of treasury shares (1.4) (46.9)
Dividends paid (93.7) (73.5)
Dividends paid to non-controlling
interests (3.5) (3.2)
---------- --------
Cashflow movement (760.2) (541.6)
Exchange movements on translation (23.3) 21.7
Movement in net debt (783.5) (519.9)
Net debt at start of year (756.1) (236.2)
---------- --------
Net debt at end of year (1,539.6) (756.1)
---------- --------
Key financial covenants
The majority of Group borrowings are subject to primary
financial covenants calculated in accordance with lenders' facility
agreements which exclude the impact of IFRS 16:
- A maximum net debt to EBITDA ratio of 3.5 times; and
- A minimum EBITDA to net interest coverage of 4 times.
The performance against these covenants in the current and
comparative year is set out below:
2022 2021
Covenant Times Times
--------------------- ------------- ------ ------
Net debt/EBITDA Maximum 3.5 1.62 0.88
EBITDA/Net interest Minimum 4.0 28.7 26.2
--------------------- ------------- ------ ------
Investor relations
Kingspan is committed to interacting with the international
financial community to ensure a full understanding of the Group's
strategic plans and its performance against these plans. During the
year, the executive management and investor team presented at 11
capital market conferences and conducted 624 institutional
one-on-one and group meetings.
Share price and market capitalisation
The Company's shares traded in the range of EUR43.60 to
EUR106.65 during the year. The share price at 30 December 2022 was
EUR50.58 (31 December 2021: EUR105.00) giving a market
capitalisation at that date of EUR9.2bn (2021: EUR19.0bn). Total
shareholder return for 2022 was -51.5% (2021: +84%).
Financial risk management
The Group operates a centralised treasury function governed by a
treasury policy approved by the Group Board. This policy primarily
covers foreign exchange risk, credit risk, liquidity risk and
interest rate risk. The principal objective of the policy is to
minimise financial risk at reasonable cost. Adherence to the policy
is monitored by the CFO and the Internal Audit function. The Group
does not engage in speculative trading of derivatives or related
financial instruments.
Board Changes
The Board of Kingspan is pleased to announce the appointment of
Louise Phelan, who will join the Board as an independent
Non-Executive Director with effect from 28 April 2023. Louise was
formerly Vice President Global Operations EMEA of PayPal, and is a
highly respected business leader and adviser with experience
leading global organisations in both the renewable energy and
finance sectors. The Board looks forward to benefitting from her
experience in the years ahead.
Following the conclusion of this year's Annual General Meeting,
both Michael Cawley and John Cronin will be retiring from the Board
on the expiration of their terms of office. Both Michael and John
have been valued Board and committee members over the past nine
years. The Board would like to thank them both for their
significant contributions to Kingspan during those years.
Looking Ahead
2022 was a bumpy year with the strong performance in the first
half giving way to a more subdued environment in the second half of
the year. The combination of war in Ukraine, the consequential
steep energy and consumer inflation, and an industry overstocked
due to supply chain concerns were all factors that weighed on
second half demand and performance.
The more recent performance of our business has differed
significantly by sector, end market and geography. Within the mix
of business there are strong sectors of out-performance led by a
need for ultra-energy efficiency and lower carbon. This is a theme
which is likely to play out more fully in the medium term as
society grapples with the need for a step change in energy
efficiency and de-carbonisation.
It is difficult to look too far ahead in this environment. We
anticipate delivering a broadly similar trading profit in the first
quarter of 2023 to that of 2022, aided in part by the contribution
from acquisitions. We are mindful of a more demanding comparative
to come in the second quarter. Longer term, Kingspan is very well
placed given the powerful combination of our global scale,
diversity of our end markets, strong innovation agenda and an
ongoing societal drive for energy efficiency.
On behalf of the Board
Gene M. Murtagh Geoff Doherty
Chief Executive Officer Chief Financial Officer
17(th) February 2023 17(th) February 2023
Kingspan Group plc
Consolidated Income Statement
for the year ended 31 December 2022
2022 2021
EURm EURm
Note
REVENUE 2 8,340.9 6,497.0
Cost of sales (6,124.6) (4,640.9)
---------- ----------
GROSS PROFIT 2,216.3 1,856.1
Operating costs, excluding intangible
amortisation (1,383.1) (1,101.3)
---------- ----------
TRADING PROFIT 2 833.2 754.8
Intangible amortisation (32.4) (29.5)
Non trading item 3 (16.5) -
OPERATING PROFIT 784.3 725.3
Finance expense 4 (39.4) (36.3)
Finance income 4 1.7 -
---------- ----------
PROFIT FOR THE YEAR BEFORE INCOME
TAX 746.6 689.0
Income tax expense (130.6) (118.4)
---------- ----------
PROFIT FOR THE YEAR FROM CONTINUING
OPERATIONS 616.0 570.6
---------- ----------
Attributable to owners of Kingspan
Group plc 598.0 554.1
Attributable to non-controlling
interests 18.0 16.5
---------- ----------
616.0 570.6
---------- ----------
EARNINGS PER SHARE FOR THE YEAR
Basic 9 329.5c 305.6c
Diluted 9 326.9c 303.0c
Kingspan Group plc
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
2022 2021
EURm EURm
Profit for the year 616.0 570.6
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating
foreign operations (24.7) 123.1
Effective portion of changes in
fair value of cash flow hedges - 0.3
Items that will not be reclassified subsequently to profit
or loss
Actuarial (losses)/gains on defined
benefit pension schemes (20.3) 21.5
Income taxes relating to actuarial
losses/gains on defined benefit
pension schemes 4.9 (5.5)
Equity investments at FVOCI - (32.6) -
net change in fair value
--------- ---------
Total other comprehensive (loss)/income (72.7) 139.4
--------- ---------
Total comprehensive income for
the year 543.3 710.0
--------- ---------
Attributable to owners of Kingspan
Group plc 521.3 691.8
Attributable to non-controlling
interests 22.0 18.2
--------- ---------
543.3 710.0
--------- ---------
Kingspan Group plc
Consolidated Statement of Financial Position
as at 31 December 2022
2022 2021
EURm EURm
ASSETS
NON-CURRENT ASSETS
Goodwill 2,495.5 1,908.6
Other intangible assets 191.8 93.2
Financial assets 93.6 13.2
Property, plant and equipment 1,437.9 1,155.8
Right of use assets 205.3 155.5
Retirement benefit assets 3.3 17.9
Deferred tax assets 40.1 34.7
---------- ----------
4,467.5 3,378.9
---------- ----------
CURRENT ASSETS
Inventories 1,235.8 1,138.9
Trade and other receivables 1,328.4 1,228.4
Derivative financial instruments 0.4 0.3
Cash and cash equivalents 649.3 641.4
---------- ----------
3,213.9 3,009.0
TOTAL ASSETS 7,681.4 6,387.9
---------- ----------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,368.7 1,389.8
Provisions for liabilities 74.0 67.8
Lease liabilities 43.2 35.0
Deferred contingent consideration 174.9 41.7
Interest bearing loans and
borrowings 85.0 77.4
Current income tax liabilities 54.9 57.7
---------- ----------
1,800.7 1,669.4
---------- ----------
NON-CURRENT LIABILITIES
Retirement benefit obligations 52.8 45.9
Provisions for liabilities 107.5 74.9
Interest bearing loans and
borrowings 2,103.9 1,320.1
Lease liabilities 153.6 123.0
Deferred tax liabilities 55.2 34.7
Deferred contingent consideration 12.2 160.6
2,485.2 1,759.2
---------- ----------
TOTAL LIABILITIES 4,285.9 3,428.6
---------- ----------
NET ASSETS 3,395.5 2,959.3
---------- ----------
EQUITY
Share capital 23.9 23.9
Share premium 112.4 94.4
Capital redemption reserve 0.7 0.7
Treasury shares (56.9) (57.3)
Other reserves (288.0) (277.7)
Retained earnings 3,527.6 3,108.1
---------- ----------
EQUITY ATTRIBUTABLE TO OWNERS
OF KINGSPAN GROUP PLC 3,319.7 2,892.1
NON-CONTROLLING INTERESTS 75.8 67.2
---------- ----------
TOTAL EQUITY 3,395.5 2,959.3
---------- ----------
Kingspan Group plc
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Total
Cash Share Put Attributable
Capital Flow Based Option to Owners Non-
Share Share Redemption Treasury Translation Hedging Payment Revaluation Liability Retained of the Controlling Total
Capital Premium Reserve Shares Reserve Reserve Reserve Reserve Reserve Earnings Parent Interests Equity
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January 2022 23.9 94.4 0.7 (57.3) (108.5) 0.6 57.3 0.7 (227.8) 3,108.1 2,892.1 67.2 2,959.3
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- --------
Transactions with owners recognised directly in equity
Employee share
based
compensation - - - - - - 18.4 - - - 18.4 - 18.4
Tax on employee
share
based
compensation - - - - - - (11.4) - - 2.5 (8.9) - (8.9)
Exercise or
lapsing of
share options - 18.0 - 1.8 - - (9.2) - - (10.6) - - -
Repurchase of
shares - - - (1.4) - - - - - - (1.4) - (1.4)
Dividends - - - - - - - - - (93.7) (93.7) - (93.7)
Transactions
with
non-controlling
interests:
Settlement of
put option - - - - - - - - 36.6 (28.3) 8.3 (8.3) -
Purchase of NCI - - - - - - - - - (0.4) (0.4) (1.6) (2.0)
Dividends to NCI - - - - - - - - - - - (3.5) (3.5)
Fair value
movement - - - - - - - - (16.0) - (16.0) - (16.0)
Transactions
with owners - 18.0 - 0.4 - - (2.2) - 20.6 (130.5) (93.7) (13.4) (107.1)
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- --------
Total
comprehensive
income
for the year
Profit for the
year - - - - - - - - - 598.0 598.0 18.0 616.0
Other
comprehensive
loss:
Items that may be reclassified subsequently to profit or loss
Exchange
differences on
translating
foreign
operations - - - - (28.7) - - - - - (28.7) 4.0 (24.7)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses
on defined
benefit pension
scheme - - - - - - - - - (20.3) (20.3) - (20.3)
Income taxes
relating
to actuarial
losses on
defined benefit
pension
scheme - - - - - - - - - 4.9 4.9 - 4.9
Equity
investments at
FVOCI - net
change in
fair value - - - - - - - - - (32.6) (32.6) - (32.6)
Total
comprehensive
income
for the year - - - - (28.7) - - - - 550.0 521.3 22.0 543.3
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- --------
Balance at 31
December
2022 23.9 112.4 0.7 (56.9) (137.2) 0.6 55.1 0.7 (207.2) 3,527.6 3,319.7 75.8 3,395.5
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- --------
Kingspan Group plc
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Total
Cash Share Put Attributable
Capital Flow Based Option to Owners Non-
Share Share Redemption Treasury Translation Hedging Payment Revaluation Liability Retained of the Controlling Total
Capital Premium Reserve Shares Reserve Reserve Reserve Reserve Reserve Earnings Parent Interests Equity
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January 2021 23.8 95.6 0.7 (11.6) (229.9) 0.3 40.4 0.7 (168.3) 2,597.2 2,348.9 48.7 2,397.6
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- ----------
Transactions with owners recognised directly in equity
Employee share
based
compensation 0.1 - - - - - 17.7 - - - 17.8 - 17.8
Tax on employee
share
based
compensation - - - - - - 9.7 - - 3.8 13.5 - 13.5
Exercise or
lapsing of
share options - (1.2) - 1.2 - - (10.5) - - 10.5 - - -
Repurchase of
shares - - - (46.9) - - - - - - (46.9) - (46.9)
Dividends - - - - - - - - - (73.5) (73.5) - (73.5)
Transactions
with
non-controlling
interests:
Arising on
acquisition - - - - - - - - - - - 3.5 3.5
Dividends to NCI - - - - - - - - - - - (3.2) (3.2)
Fair value
movement - - - - - - - - (59.5) - (59.5) - (59.5)
Transactions
with owners 0.1 (1.2) - (45.7) - - 16.9 - (59.5) (59.2) (148.6) 0.3 (148.3)
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- ----------
Total
comprehensive
income
for the year
Profit for the
year - - - - - - - - - 554.1 554.1 16.5 570.6
Other
comprehensive
income:
Items that may be reclassified subsequently to profit or loss
Cash flow
hedging in
equity
- current year - - - - - 0.3 - - - - 0.3 - 0.3
- tax impact - - - - - - - - - - - - -
Exchange
differences on
translating
foreign
operations - - - - 121.4 - - - - - 121.4 1.7 123.1
Items that will not be reclassified subsequently to profit or loss
Actuarial gains
on defined
benefit pension
scheme - - - - - - - - - 21.5 21.5 - 21.5
Income taxes
relating
to actuarial
gains on
defined benefit
pension
scheme - - - - - - - - - (5.5) (5.5) - (5.5)
Total
comprehensive
income
for the year - - - - 121.4 0.3 - - - 570.1 691.8 18.2 710.0
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- ----------
Balance at 31
December
2021 23.9 94.4 0.7 (57.3) (108.5) 0.6 57.3 0.7 (227.8) 3,108.1 2,892.1 67.2 2,959.3
--------- --------- ------------ ---------- ------------- --------- --------- ------------- ----------- ---------- -------------- ------------- ----------
Kingspan Group plc
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
2022 2021
Note EURm EURm
OPERATING ACTIVITIES
Profit for the year 616.0 570.6
Add back non-operating expenses :
Income tax expense 130.6 118.4
Depreciation 165.1 138.4
Amortisation of intangible assets 32.4 29.5
Impairment of non-current assets - 3.1
Loss on divestment of subsidiary 3 16.5 -
Employee equity-settled share options 18.4 17.7
Finance income 4 (1.7) -
Finance expense 4 39.4 36.3
(Profit)/loss on sale of property, plant
and equipment (0.4) 0.4
Movement of deferred consideration - 0.4
Changes in working capital:
Inventories 14.6 (525.7)
Trade and other receivables 25.7 (298.8)
Trade and other payables (176.5) 395.2
Other:
Change in provisions 7.7 6.9
Pension contributions (3.8) (1.8)
---------- --------
Cash generated from operations 884.0 490.6
Income tax paid (158.4) (126.8)
Interest paid (33.6) (34.6)
---------- --------
Net cash flow from operating activities 692.0 329.2
---------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment (269.2) (168.8)
Proceeds from disposals of property,
plant and equipment 18.6 5.2
Purchase of subsidiary undertakings (including
net debt/cash acquired) 10 (887.0) (540.2)
Purchase of non-controlling interest (2.0) -
Purchase of financial asset (113.3) (5.0)
Divestment of subsidiary (6.4) -
Payment of deferred contingent consideration (45.4) -
Interest received 1.7 0.1
---------- --------
Net cash flow from investing activities (1,303.0) (708.7)
---------- --------
FINANCING ACTIVITIES
Drawdown of loans 6 846.0 55.1
Repayment of loans and borrowings 6 (66.0) (263.2)
Settlement of derivative financial instrument - 18.5
Payment of lease liability 7 (50.6) (38.6)
Proceeds from share issues - 0.1
Repurchase of shares (1.4) (46.9)
Dividends paid to non-controlling interests (3.5) (3.2)
Dividends paid 8 (93.7) (73.5)
---------- --------
Net cash flow from financing activities 630.8 (351.7)
---------- --------
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 6 19.8 (731.2)
Effect of movement in exchange rates
on cash held (11.9) 42.9
Cash and cash equivalents at the beginning
of the year 641.4 1,329.7
---------- --------
CASH AND CASH EQUIVALENTS AT THE
OF THE YEAR 649.3 641.4
---------- --------
Notes to the Preliminary Results
for the year ended 31 December 2022
1 GENERAL INFORMATION
The financial information presented in this report has been
prepared using accounting policies consistent with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union and as set out in the Group's annual financial statements in
respect of the year ended 31 December 2021 except as noted below.
The financial information does not include all the information and
disclosures required in the annual financial statements. The Annual
Report will be distributed to shareholders and made available on
the Company's website www.kingspan.com in due course. It will also
be filed with the Company's annual return in the Companies
Registration Office. The auditor has consented to the publication
of this preliminary announcement. The audit of the Group's
statutory consolidated financial statements for the year ended 31
December 2022 is substantially complete and the report of the
auditor is expected to be unqualified and not contain any matters
to which attention will be drawn by way of emphasis. The principle
outstanding procedures as identified by our auditors include the
receipt of final ESEF financial statements incorporating their
observations in respect of the tagging alone, consequent completion
of subsequent event procedures and the receipt of final audit
representations from management. The financial information for the
year ended 31 December 2021 represents an abbreviated version of
the Group's statutory financial statements on which an unqualified
audit report was issued and which have been filed with the
Companies Registration Office.
Basis of preparation and accounting policies
The financial information contained in this Preliminary
Statement has been prepared in accordance with the accounting
policies set out in the last annual financial statements .
IFRS does not define certain Income Statement headings. For
clarity, the following are the definitions as applied by the
Group:
- Trading profit refers to the operating profit generated by
the businesses before intangible asset
amortisation and gains or losses from non trading items.
- Non trading items refer to certain items, which by virtue
of their nature and amount, are disclosed separately in order
for the user to obtain a proper understanding of the financial
information. Non-trading items include gains or losses on
the disposal or acquisition of businesses and material related
acquisition and integration costs, and material impairments
to the carrying value of intangible assets or property, plant
and equipment. It is determined by management that each of
these items relate to events or circumstances that are non-recurring
in nature.
- Trading margin refers to the trading profit, as calculated
above, as a percentage of revenue.
- Operating profit is profit before income taxes and net finance
costs.
- EBITDA is earnings before finance costs, income taxes, depreciation,
amortisation and non
trading items.
The following amendments to standards and interpretations are
effective for the Group from 1 January 2022 and do not have a
material effect on the results or financial position of the
Group:
Effective Date
- periods beginning
on or after
Amendments to IFRS 3 Business Combinations -- 1 January 2022
Reference to the Conceptual Framework
Amendments to IAS 16 Property, Plant and Equipment 1 January 2022
- Proceeds before Intended Use
Amendments to IAS 37 Provisions, Contingent Liabilities 1 January 2022
and Contingent Assets - Onerous Contracts - Costs
of Fulfilling a Contract
Annual improvements to IFRS Standards 2018-2020 1 January 2022
There are a number of new standards, amendments to standards and
interpretations that are not yet effective and have not been
applied in preparing these consolidated financial statements. These
new standards, amendments to standards and interpretations are
either not expected to have a material impact on the Group's
financial statements or are still under assessment by the Group.
The principal new standards, amendments to standards and
interpretations are as follows:
Effective Date
- periods beginning
on or after
IFRS 17 Insurance Contracts 1 January 2023
Amendments to IAS 12 Income Taxes - Deferred Tax 1 January 2023
Related to Assets and Liabilities Arising from
a Single Transaction
Amendment to IAS 1 Presentation of Financial Statements 1 January 2023
and IFRS Practice Statement 2 - Disclosure of Accounting
Policies
Amendments to IAS 8 Accounting Policies, Changes 1 January 2023
in Accounting Policies and Errors - Definition
of Accounting Estimates
Amendments to IFRS 17 Insurance Contracts: Initial 1 January 2023
Application of IFRS 17 and IFRS 9 - Comparative
information
Amendments to IAS 1 Presentation of Financial Statements 1 January 2024*
- Classification of Liabilities as Current or Non-current
Date, Classification of Liabilities as Current
or Non-current - Deferral of Effective Date and
Non-current Liabilities with Covenants
Amendments to IFRS 16 Leases: Lease Liability in 1 January 2024*
a Sale and Leaseback
* Not EU endorsed
2 SEGMENT REPORTING
In identifying the Group's operating segments, management based
its decision on the product supplied by each segment and the fact
that each segment is managed and reported separately to the Chief
Operating Decision Maker. These operating segments are monitored
and strategic decisions are made on the basis of segment operating
results.
The Group established a new division, Roofing + Waterproofing,
during the financial year. This encompasses the Group's waterproof
membrane roofing solutions activities which has resulted from the
acquisition of Ondura Group and Derbigum during the financial year.
There were no operations or activities in 2021 that are related to
the new segment and therefore no changes have been made to the
comparatives in relation to the new division.
Operating segments
The Group has the following six operating segments:
Insulated Panels Manufacture of insulated panels, structural framing
and metal facades.
Insulation Manufacture of rigid insulation boards, technical
insulation and engineered timber systems.
Light + Air Manufacture of daylighting, smoke management,
ventilation systems and service activities.
Water + Energy Manufacture of energy and water solutions and
all related service activities.
Data + Flooring Manufacture of data centre storage solutions
and raised access floors.
Roofing + Waterproofing Manufacture of roofing and waterproofing solutions
for renovation and new construction of buildings.
Analysis by class of business
Segment revenue and disaggregation of revenue
Insulated Insulation Light Water Data Roofing Total
Panels + + + + Waterproofing EURm
EURm EURm Air Energy Flooring EURm
EURm EURm EURm
Total revenue
- 2022 5,181.5 1,658.3 700.7 287.1 360.1 153.2 8,340.9
Total revenue
- 2021 4,229.2 1,182.9 552.2 261.3 271.4 - 6,497.0
Disaggregation of revenue 2022
Point of Time 5,147.7 1,633.1 409.5 286.6 325.4 153.2 7,955.5
Over Time & Contract 33.8 25.2 291.2 0.5 34.7 - 385.4
---------- ----------- ------ -------- ---------- ----------------- --------
5,181.5 1,658.3 700.7 287.1 360.1 153.2 8,340.9
---------- ----------- ------ -------- ---------- ----------------- --------
Disaggregation of revenue 2021
Point of Time 4,210.9 1,152.0 296.3 258.8 240.1 - 6,158.1
Over Time & Contract 18.3 30.9 255.9 2.5 31.3 - 338.9
---------- ----------- ------ -------- ---------- ----------------- --------
4,229.2 1,182.9 552.2 261.3 271.4 - 6,497.0
---------- ----------- ------ -------- ---------- ----------------- --------
The disaggregation of revenue by geography is set out in more
detail below.
The segments specified above capture the major product lines
relevant to the Group.
The combination of the disaggregation of revenue by product
group, geography and the timing of revenue recognition capture the
key categories of disclosure with respect to revenue. Typically,
individual performance obligations are specifically called out in
the contract which allow for accurate recognition of revenue as and
when performances are fulfilled. Given the nature of the Group's
product set, customer returns are not a significant feature of our
business model. No further disclosures are required with respect to
disaggregation of revenue other than what has been presented in
this note.
Inter-segment transfers are carried out at arm's length prices
and using an appropriate transfer pricing methodology. As
inter-segment revenue is not material, it is not subject to
separate disclosure in the above analysis. For the purposes of the
segmental analysis, corporate overheads have been allocated to each
division based on their respective revenue for the year.
Segment result (profit before net finance expense)
Insulated Insulation Light Water Data Roofing Total Total
Panels + + + + Waterproofing 2022 2021
EURm EURm Air Energy Flooring EURm EURm EURm
EURm EURm EURm
Trading profit
- 2022 548.7 165.2 52.3 15.4 43.1 8.5 833.2
Intangible
amortisation (13.0) (9.4) (4.6) (0.5) (0.1) (4.8) (32.4)
Non trading
item (16.5) - - - - - (16.5)
----------------- ------------
Operating
profit
- 2022 519.2 155.8 47.7 14.9 43.0 3.7 784.3
---------- ----------- ------- -------- ---------- ----------------- ------------
Trading profit
- 2021 519.8 146.7 36.0 20.0 32.3 - 754.8
Intangible
amortisation (13.7) (8.6) (5.8) (1.2) (0.2) - (29.5)
---------- -----------------
Operating
profit
- 2021 506.1 138.1 30.2 18.8 32.1 - 725.3
---------- ----------- ------- -------- ---------- -----------------
Net finance
expense (37.7) (36.3)
------------ --------
Profit for
the year before
tax 746.6 689.0
Income tax
expense (130.6) (118.4)
Net profit
for the year 616.0 570.6
------------ --------
Segment assets
Insulated Insulation Light Water Data Roofing Total Total
Panels + + + + Waterproofing 2022 2021
EURm EURm Air Energy Flooring EURm EURm EURm
EURm EURm EURm
Assets -
2022 3,350.6 1,683.4 686.5 247.6 240.4 783.1 6,991.6
Assets -
2021 3,266.4 1,309.4 665.0 243.5 227.2 - 5,711.5
Derivative financial instruments 0.4 0.3
Cash and cash equivalents 649.3 641.4
Deferred
tax assets 40.1 34.7
---------- ----------
Total assets as reported in the Consolidated
Statement of Financial Position 7,681.4 6,387.9
---------- ----------
Segment liabilities
Insulated Insulation Light Water Data Roofing Total Total
Panels + + + + Waterproofing 2022 2021
EURm EURm Air Energy Flooring EURm EURm EURm
EURm EURm EURm
Liabilities
- 2022 (1,080.7) (320.8) (248.1) (95.7) (77.9) (163.7) (1,986.9)
Liabilities
- 2021 (1,240.7) (307.1) (218.1) (98.4) (74.4) - (1,938.7)
Interest bearing loans and borrowings (current
and non-current) (2,188.9) (1,397.5)
Derivative financial instruments (current - -
and non-current)
Income tax liabilities (current and deferred) (110.1) (92.4)
---------- ----------
Total liabilities as reported in the Consolidated
Statement of Financial Position (4,285.9) (3,428.6)
---------- ----------
Other segment information
Insulated Insulation Light Water Data Roofing
Panels + + + + Waterproofing Total
EURm EURm Air Energy Flooring EURm EURm
EURm EURm EURm
Capital investment
- 2022 * 178.8 136.8 12.1 8.8 6.2 208.7 551.4
Capital investment
- 2021 * 164.3 94.2 32.3 8.4 5.5 - 304.7
Depreciation included
in segment result
- 2022 (85.1) (41.7) (18.9) (8.1) (6.6) (4.7) (165.1)
Depreciation included
in segment result
- 2021 (77.7) (32.2) (15.8) (7.0) (5.7) - (138.4)
Non-cash items included
in segment result
- 2022 (10.0) (4.1) (1.4) (1.3) (1.5) (0.1) (18.4)
Non-cash items included
in segment result
- 2021 (10.2) (3.4) (1.4) (1.1) (1.6) - (17.7)
* Capital investment also includes fair value of property, plant
and equipment and intangible assets acquired in business
combinations.
Analysis of segmental data by geography
Central
Western + Rest
+ Southern Northern of
Europe Europe Americas World Total
EURm EURm EURm EURm EURm
Income Statement
Items
Revenue - 2022 3,850.2 2,133.3 1,823.7 533.7 8,340.9
Revenue - 2021 3,239.8 1,629.8 1,269.8 357.6 6,497.0
Statement of Financial Position Items
Non-current assets
- 2022 * 2,248.0 1,121.9 784.4 273.1 4,427.4
Non-current assets
- 2021 * 1,535.8 842.2 720.8 245.4 3,344.2
Other segmental
information
Capital investment
- 2022 318.3 167.9 45.2 20.0 551.4
Capital investment
- 2021 97.3 130.6 66.3 10.5 304.7
* Total non-current assets excluding deferred tax assets.
The Group is trading in over 80 countries worldwide. Foreign
regions of operation are as set out above and specific countries of
operation are highlighted separately below on the basis of
materiality where revenue exceeds 15% of total Group revenues.
Revenues, non-current assets and capital investment (as defined
in IFRS 8) attributable to France were EUR1,238.1m (2021:
EUR988.3m), EUR734.1m (2021: EUR251.2m) and EUR161.1m (2021:
EUR29.3m) respectively.
Revenues, non-current assets and capital investment (as defined
in IFRS 8) attributable to the country of domicile (Ireland) were
EUR256.5m (2021: EUR206.0m), EUR168.0m (2021: EUR89.0m) and
EUR15.5m (2021: EUR19.3m) respectively.
The country of domicile is included in Western & Southern
Europe. Western & Southern Europe also includes France,
Benelux, Spain and Britain while Central & Northern Europe
includes Germany, the Nordics, Poland, Hungary, Romania, Czech
Republic, the Baltics and other South Central European countries.
Americas comprises the US, Canada, Central Americas and South
America. Rest of World is predominantly Australasia and the Middle
East.
There are no material dependencies or concentrations on
individual customers which would warrant disclosure under IFRS 8.
The individual entities within the Group each have a large number
of customers spread across various activities, end-uses and
geographies.
3 NON-TRADING ITEM
2022 2021
EURm EURm
Loss on disposal of subsidiary 16.5 -
During the year the Group's Russian operations were divested in
full which resulted in a loss on disposal of EUR16.5m (2021:
EURnil).
4 FINANCE EXPENSE AND FINANCE INCOME
2022 2021
EURm EURm
Finance expense
Lease interest 4.7 3.7
Deferred contingent consideration
fair value movement - 0.1
Bank loan interest 10.1 5.4
Private placement loan note interest 24.5 26.8
Other interest 0.1 0.3
39.4 36.3
Finance income
Interest earned (1.7) -
Net finance expense 37.7 36.3
------ ------
EUR0.7m of borrowing costs were capitalised during the year
(2021: EUR3.9m). No costs were reclassified from other
comprehensive income to profit during the year (2021: EURnil).
5 ANALYSIS OF NET DEBT
2022 2021
EURm EURm
Cash and cash equivalents 649.3 641.4
Current borrowings (85.0) (77.4)
Non-current borrowings (2,103.9) (1,320.1)
Total Net Debt (1,539.6) (756.1)
------------ ----------
The Group's core funding is provided by six private placement
loan notes; one USD private placement totalling $200m (2021: $200m)
maturing in December 2028 and five EUR private placements totalling
EUR1.1bn (2021: EUR1.2bn) which will mature in tranches between
March 2023 and December 2032. The notes have a weighted average
maturity of 5.7 years (31 December 2021: 6.4 years).
The primary bank debt facility is a EUR800m revolving credit
facility, which was undrawn at year end, and which matures in May
2026. The Revolving Credit Facility was increased by EUR100m in
December 2022 under the facility's accordion clause. In April 2022,
the Group arranged two additional banking finance facilities with
an aggregate value of EUR800m (EUR500m maturing April 2024, EUR300m
maturing April 2025). The facilities were fully drawn at year
end.
Included in cash at bank and in hand are overdrawn positions of
EUR1,456.8m (31 December 2021: EUR1,439.8m). These balances form
part of a notional cash pool arrangement and are netted against
cash balances of EUR1,480.2m (31 December 2021: EUR1,463.6m). The
net cash pool balance of EUR23.4m (31 December 2021: EUR23.8m) is
included in the cash and cash equivalents balance above. There is a
legal right of offset between these balances and the balances are
physically settled on a regular basis.
Net debt, which is an Alternative Performance Measure, is stated
net of interest rate and currency hedges which relate to hedges of
debt. Foreign currency derivative assets of EUR0.4m (2021: EUR0.3m)
and foreign currency derivative liabilities of EURnil (2021:
EURnil) which are used for transactional hedging are not included
in the definition of net debt. Lease liabilities recognised due to
the implementation of IFRS 16 and deferred contingent consideration
have also been excluded from the calculation of net debt which is
consistent with the terms and conditions of the covenants as set
out in the Group's external borrowing arrangements.
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2022 2021
EURm EURm
Movement in cash and bank overdrafts 19.8 (731.2)
Drawdown of loans (846.0) (55.1)
Repayment of loans and borrowings 66.0 263.2
Settlement of derivative financial instrument - (18.5)
Change in net debt resulting from cash
flows (760.2) (541.6)
Translation movement - relating to US
dollar loan (10.9) (19.7)
Translation movement - other (12.4) 42.7
Derivative financial instruments movement - (1.3)
------------ ----------
Net movement (783.5) (519.9)
Net debt at start of the year (756.1) (236.2)
Net debt at end of the year (1,539.6) (756.1)
------------ ----------
Further analysis of net debt at the start and end of the year is
provided in note 5.
7 LEASES
Right of use asset
2022 2021
EURm EURm
At 1 January 155.5 113.0
Additions 41.3 28.4
Arising on acquisitions 36.2 32.2
Remeasurement 19.6 17.3
Terminations (1.7) (2.9)
Depreciation charge for the year (47.2) (37.0)
Effect of movement in exchange rates 1.6 4.5
At 31 December 205.3 155.5
------- -------
Lease liability
2022 2021
EURm EURm
At 1 January 158.0 114.8
Additions 39.7 27.0
Arising on acquisitions 25.3 32.1
Remeasurement 19.6 17.3
Terminations (1.7) (3.0)
Payments (50.6) (38.6)
Interest 4.7 3.7
Effect of movement in exchange rates 1.8 4.7
At 31 December 196.8 158.0
------- -------
Split as follows:
Current liability 43.2 35.0
Non-current liability 153.6 123.0
At 31 December 196.8 158.0
------ ------
8 DIVIDS
Equity dividends on ordinary shares: 2022 2021
EURm EURm
2022 Interim dividend 25.6 cent (2021:
19.9 cent) per share 46.5 36.1
2021 Final dividend 26.0 cent (2020:
20.6 cent) per share 47.2 37.4
93.7 73.5
------- -----------------------
Proposed for approval at AGM
Final dividend of 23.8 cent (2021:
26.0 cent) per share 43.3 47.2
------- -----------------------
This proposed dividend for 2022 is subject to approval by the
shareholders at the Annual General Meeting and has not been
included as a liability in the Consolidated Statement of Financial
Position of the Group as at 31 December 2022 in accordance with IAS
10 Events after the Reporting Period. The proposed final dividend
for the year ended 31 December 2022 will be payable on 9 May 2023
to shareholders on the Register of Members at close of business on
14 April 2023.
9 EARNINGS PER SHARE
2022 2021
EURm EURm
The calculations of earnings per
share are based on the following:
Profit attributable to ordinary
shareholders 598.0 554.1
---------------- ---------------
Number of Number of
shares ('000) shares ('000)
2022 2021
Weighted average number of ordinary
shares for
the calculation of basic earnings
per share 181,487 181,348
Dilutive effect of share options 1,451 1,565
---------------- ---------------
Weighted average number of ordinary
shares
for the calculation of diluted earnings
per share 182,938 182,913
---------------- ---------------
2022 2021
EUR cent EUR cent
Basic earnings per share 329.5 305.6
Diluted earnings per share 326.9 303.0
Dilution is attributable to the weighted average number of share
options outstanding at the end of the reporting period.
The number of options which are anti-dilutive and have therefore
not been included in the above calculations is nil (2021: nil).
10 BUSINESS COMBINATIONS
A key strategy of the Group is to create and sustain market
leading positions through acquisitions in markets it currently
operates in, together with extending the Group's footprint in new
geographic markets. In line with this strategy, the principal
acquisitions completed during the year were as follows:
In April 2022, the Group acquired 100% of the share capital of
Troldtekt, a Danish natural acoustic insulation producer. The total
consideration, including net debt acquired amounted to
EUR220.4m.
In September 2022, the Group acquired 100% of the share capital
of Ondura Group, a French headquartered global provider of roofing
membranes and associated roofing solutions, for a total
consideration, including net debt acquired of EUR515.6m.
The Group also made a number of smaller acquisitions during the
year for a combined cash consideration of EUR151.0m:
-- The Roofing + Waterproofing division acquired 100% of the share
capital of Derbigum, a Belgian producer of waterproofing membranes
for a total consideration, including net debt acquired of EUR95.0m
in June 2022;
-- The Insulated Panels division acquired 100% of the share capital
of THU Perfil in February 2022 and 100% of the share capital
of Invespanel in Spain in September 2022;
-- The Insulation division acquired the assets of Calostat in the
UK in September 2022.
The table below reflects the fair value of the identifiable net
assets acquired in respect of the acquisitions completed during the
year. Any amendments to fair values will be made within the
twelve-month period from the date of acquisition, as permitted by
IFRS 3, Business Combinations.
Ondura Troldtekt Other* Total
EURm EURm EURm EURm
Non-current assets
Intangible assets 77.9 30.1 22.2 130.2
Property, plant and equipment 86.3 31.6 27.0 144.9
Right of use assets 27.0 1.8 7.4 36.2
Deferred tax asset 0.5 - 1.2 1.7
Current assets
Inventories 86.0 13.2 21.5 120.7
Trade and other receivables 75.1 16.6 35.6 127.3
Current liabilities
Trade and other payables (96.2) (14.7) (52.9) (163.8)
Provisions for liabilities (21.9) (0.3) (9.5) (31.7)
Lease liabilities (4.2) (0.8) (1.5) (6.5)
Non-current liabilities
Retirement benefit obligations (2.8) - (0.1) (2.9)
Lease liabilities (12.1) (1.0) (5.7) (18.8)
Deferred tax liabilities (21.7) (5.2) (2.1) (29.0)
------- ---------- ------------- ------------
Total identifiable assets 193.9 71.3 43.1 308.3
Goodwill 321.7 149.1 107.9 578.7
Total consideration 515.6 220.4 151.0 887.0
------- ---------- ------------- ------------
Satisfied by:
Cash (net of cash acquired) 515.6 220.4 151.0 887.0
Deferred consideration - - - -
Total consideration 515.6 220.4 151.0 887.0
------- ---------- ------------- ------------
*Included in Other are certain immaterial remeasurements of
prior year accounting estimates as a result of the finalisation of
the assignment of fair values to identifiable net assets.
The acquired goodwill is attributable principally to the profit
generating potential of the businesses, together with cross-selling
opportunities and other synergies expected to be achieved from
integrating the acquired businesses into the Group's existing
business.
The initial assignment of fair values to identifiable net assets
acquired has been performed on a provisional basis due to the
relative size of the acquisitions and the timing of the
transactions. Any amendments to these fair values within the
twelve-month timeframe from the date of acquisition will be
disclosable in the 2023 Annual Report, as stipulated by IFRS 3.
In the post-acquisition period to 31 December 2022, the
businesses acquired during the current year contributed revenue of
EUR252.0m and trading profit of EUR21.6m to the Group's
results.
11 POST BALANCE SHEET EVENTS
There have been no material events subsequent to 31 December
2022 which would require adjustment to, or disclosure in this
report.
12 EXCHANGE RATES
The financial information included in this report is expressed
in Euro which is the presentation currency of the Group and the
functional and presentation currency of the Company. Results and
cash flows of foreign subsidiary undertakings have been translated
into Euro at actual exchange rates or average, where this is a
reasonable approximation, and the related Statements of Financial
Position have been translated at the rates of exchange ruling at
the balance sheet date.
Exchange rates of material currencies used were as follows:
Average rate Closing rate
Euro = 2022 2021 2022 2021
Pound Sterling 0.853 0.860 0.886 0.838
US Dollar 1.054 1.183 1.067 1.133
Canadian Dollar 1.370 1.483 1.444 1.442
Australian Dollar 1.517 1.575 1.569 1.558
Czech Koruna 24.562 25.642 24.143 24.851
Polish Zloty 4.685 4.565 4.680 4.588
Hungarian Forint 391.09 358.52 400.190 368.89
Brazilian Real 5.442 6.381 5.632 6.309
13 CAUTIONARY STATEMENT
This report 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
uncertainties, assumptions and other factors that could cause the
actual results, performance or achievements of the Group to differ
materially from those in the forward-looking statements. The
forward-looking statements in this report reflect views held only
as of the date hereof. Neither Kingspan nor any other person gives
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statement in
this report will actually occur. Kingspan undertakes no duty to and
will not necessarily update any such statements in light of new
information or future events, except to the extent required by any
applicable law or regulation.
14 BOARD APPROVAL
This announcement was approved by the Board on 17 February
2023.
This information is provided by RNS, the news service of the
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END
FR UNVKROOUUAAR
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February 17, 2023 02:00 ET (07:00 GMT)
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