REG - Kingspan Group PLC - Trading Statement

KingspanAnnouncement

07/11/2022 07:00

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RNS Number : 4456F  Kingspan Group PLC  07 November 2022

Kingspan Group Plc

Trading Update

 

07 November 2022

 

Kingspan Group plc, the global leader in high performance insulation and
building envelope solutions, today issues a Trading Update for the period to
30 September 2022.

Sales in the nine month period to 30 September were €6.25bn, up 33% on the
same period in the prior year, with sales growth of 17% in the third quarter.
Underlying sales (pre currency and acquisitions) were up 20% in the year to
date and by 9% in the third quarter.

 

Insulated Panels sales increased by 29% in the first nine months and by 13% in
the third quarter. Underlying sales were up 23% year to date and up 7% in the
third quarter. Global sales volumes in the third quarter were expectedly
sluggish reflecting the slowdown in order placement flagged mid-year.
Undoubtedly, a factor has been expectations around raw material pricing with
some pick up in order placement post the summer period. We have been carrying
higher levels of inventory than normal for much of the year and, as certain
inputs have seen deflation more recently, this has had a short-term impact on
margins as these materials sell through. In general, activity in the Americas
has held up reasonably well, as has Germany and the UK with softer activity
elsewhere in Europe. We continue to advance our innovation agenda notably
QuadCore™ LEC Panel comprising an estimated 45% of recycled materials and
with 40% less embodied carbon.

 

Insulation sales in the first nine months were up 48% and up 20% in the third
quarter. Underlying sales were up 12% year to date and by 8% in the third
quarter. The sales growth experienced in the third quarter was price led
reflecting input inflation with rigid board volumes soft overall with
decreased residential activity a factor. Technical insulation, in particular
district heating applications, continued to experience the momentum seen in
the first half. The Troldtekt business acquired earlier in the year is
integrating well and significant progress has also been made in the natural
insulation category with bio-based materials for ultra-low embodied carbon
insulation. Encouragingly, AlphaCore® is building a specification bank and is
likely to advance further in the years ahead.

 

Light + Air sales in the first nine months were up 33% and by 26% in the third
quarter. Underlying sales were up 17% year to date and by 18% in the third
quarter. Most end markets performed well reflecting the positive orderbook
year on year and the division is on track to record margin progression for the
year.

 

Roofing + Waterproofing had a milestone third quarter with the completion of
the acquisition of Ondura Group in September. The division now has annualised
revenues of approximately €500m including the acquisition of Derbigum in
June 2022. Furthermore, in August 2022 the Group acquired a 24% strategic
minority stake in Nordic Waterproofing. A significant element of the new
division is European and our ambition, and the opportunity, is global.

 

Data + Flooring sales in the first nine months were up 32% and up 33% in the
third quarter. Underlying sales were up by 24% in the first nine months and
were up 25% in the third quarter. Datacentre activity continues to drive
performance and the pipeline of activity is encouraging as we head towards
2023.

 

Water + Energy sales in the first nine months increased by 12% and up  5% in
the third quarter. Underlying sales were up 6% year to date and were up 1% in
the third quarter.

 

Net debt at the end of December 2022 is expected to be in the region of
€1.5bn (net debt/EBITDA 1.5x) reflecting a 2022 development spend in excess
of €1.2bn (acquisitions approximately €1.0bn and organic investment
approximately €0.2bn). Year end liquidity, representing cash balances and
undrawn committed facilities, is expected to exceed €1.5bn with the Group's
average cost of debt standing at 1.85%.

 

Looking ahead

A feature of the current environment is the lack of visibility beyond the next
short period of months. Sentiment is cautious for the most part although not
uniformly so. The sharp increases we have seen in raw material prices over the
last eighteen months appear to have peaked, at least for now. Certain key
inputs are likely to reduce in price in the fourth quarter. The global backlog
of orders has been reasonably stable over the past three months. The activity
pipeline in data, technology, EV automotive and district heating applications
are all notable positives.

 

There is still some way to go in 2022 with the seasonally important fourth
quarter remaining and, accordingly, we expect to deliver a full year trading
profit in the region of €830m, significantly ahead of the €755m recorded
in 2021.

 

For further information contact:

 

Gene Murtagh, Chief Executive Officer        Tel: +353 (0) 42 9698000

Geoff Doherty, Chief Financial Officer         Tel: +353 (0) 42 9698000

Pat Walsh, Murray Consultants
Tel: +353 (0) 1 4980300

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