REG - Kingspan Group PLC - Final Results
18/02/2022 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220218:nRSR0657Ca&default-theme=true
RNS Number : 0657C Kingspan Group PLC 18 February 2022
KINGSPAN GROUP PLC
PRELIMINARY RESULTS
Year Ended 31 December 2021
KINGSPAN GROUP PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
Kingspan, the global leader in high-performance insulation and building
envelope solutions, reports its preliminary results for the year ended 31
December 2021.
Financial Highlights:
• Revenue up 42% to €6.5bn, (pre-currency, up 42%).
• Trading profit up 49% to €755m, (pre-currency, up 49%).
• Acquisitions contributed 12% to sales growth and 11% to trading profit growth
in the year.
• Group trading margin of 11.6%, an increase of 50bps.
• Basic EPS up 48% to 305.6 cent.
• Final dividend per share of 26.0 cent giving a total dividend for the year of
45.9 cent.
• Year end net debt(1) of €756.1m (2020: €236.2m). Net debt(4) to EBITDA(4)
of 0.88x (2020: 0.4x).
• ROCE of 19.5% (2020: 18.4%).
Operational Summary:
• Unprecedented raw material inflation with strong price recovery effort.
• Strong underlying volume growth of 13% and 11% in Insulated Panels and
Insulation respectively.
• Insulated Panels sales increase of 45% driven by strong momentum generally in
construction activity, raw material led price growth further enhanced by
strong demand in high growth sectors. Year end order backlog volume 28% ahead
of the same point in 2020. 66% growth in sales value of QuadCore(TM).
• Insulation sales increase of 50% reflecting strong demand in key markets and
inflation recovery on pricing. Strong development activity during the year
including acquisition of Logstor, a leading global supplier of technical
insulation solutions.
• Light & Air sales growth of 24% reflecting the acquisition of Colt Group
in Q2 2020 and the acquisition of Skydome in 2021. Strong backlog at year end.
• Water & Energy sales increase of 29% reflecting a strong performance
across all key markets, with the exception of Australasia.
• Data & Flooring sales growth of 21% reflecting strong datacentre activity
and ongoing development of the European operations.
• Invested a total of €714m in acquisitions, capex and financial investments
during the period.
• Since period end, approximately €800m committed on three transactions
subject to customary approvals.
Summary Financials:
FY'21 FY'20 change
Revenue €m 6,497 4,576 +42%
Trading Profit(2) €m 755 508 + 49%
Trading Margin(3) 11.6% 11.1% + 50bps
EBITDA(5) €m 893 630 +42%
Profit after tax €m 571 385 + 48%
EPS (cent) 306 206 + 48%
(1) Net Debt pre-IFRS 16
(2) Operating profit before amortisation of intangibles
(3) Trading profit 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 and amortisation.
Prior period comparative has been re-presented to reflect this revised
definition.
Gene M. Murtagh, Chief Executive Officer of Kingspan commented:
"The business delivered an exceptional performance last year, with our growing
sales to customers in the technology, online distribution, and automotive
sectors instrumental in the results. Whilst dramatic input price inflation was
a major feature, our cost recovery efforts helped ensure continued margin
improvement.
We continue to drive expansion through acquisition, with over half a billion
euro invested in buying new businesses during the year. This was complemented
by our organic growth activity as we opened 5 new manufacturing facilities or
production lines this year, and plan for a further 25 over the next four
years. Since year end we have committed a further €800m on three
transactions, subject to customary approval, that create exciting new global
platforms for further development.
We have made good progress on our Planet Passionate targets, achieving an
absolute reduction in Scope 1 and 2 GHG emissions for the second year of the
programme, with a 4.3% reduction achieved this year. We will also implement a
€70 per tonne internal carbon charge from 2023 to accelerate the pace of
decarbonisation across our global business.
Despite a slower fourth quarter, with a large order backlog we are cautiously
optimistic about the outlook for this year, whilst mindful of the high bar in
comparison with last year's performance. High energy costs and supply threats
around the world are a catalyst for a focus on conservation measures, which is
likely to accelerate the demand for lower energy solutions which we believe
will be supportive of demand for our products."
For further information contact:
Murray Consultants Tel: +353 (0) 1 4980 300
Douglas Keatinge
Business Review
2021 was a year marked by extraordinary volatility in supply chains and wider
society. Whilst this dynamic created significant challenges to our business,
and indeed our industry, underlying demand remained strong through the year,
albeit somewhat weaker in quarter four. Our key raw materials also saw
dramatic price inflation, and in all, in the region of €700m of cost
increases were required to be passed through to market. The result of all of
this was a record performance by the Group with revenue growing by 42% to
€6.5bn, and trading profit growth of 49% to €755m. Basic EPS grew by 48%.
Activity was strong across most of our markets in both residential and
industrial construction, newbuild and RMI. Order intake trends displayed in
the first half eased off over the course of the second half. That said, the
Insulated Panels global order backlog finished the year ahead by 28% in
volume. North and South America, France and Britain were particular stand-out
positives. The Group's growing presence in the tech, online distribution and
automotive segments was instrumental in delivering this performance.
The demand for significantly more efficient materials and methods of
construction is clearly gaining much needed momentum and, with the prevailing
energy cost and supply threats around the world, it is likely that the drive
toward conservation will be accelerated.
Planet Passionate
2021 was the second year of our ambitious ten-year programme to further boost
the environmental ethos of Kingspan. This builds upon the foundations laid
over our previous ten-year Net Zero Energy programme that completed
successfully in 2020. The current programme encompasses stretching goals
across twelve targets (see below).
We have recently announced revised 1.5⁰C aligned science-based targets
bringing them in line with our Planet Passionate programme goals to reduce
Scope 1, 2 and 3 greenhouse gas (GHG) emissions. The Group has now committed
to reducing absolute Scope 1 and 2 GHG emissions by 90% by 2030 from a 2020
base year. It has also pledged to reduce absolute Scope 3 GHG emissions by 42%
within the same timeframe. We will also implement a €70 per tonne internal
carbon charge from 2023 which will galvanise full alignment across the
organisation.
Planet Passionate Targets Target 2020 2021** Change 2022
(f/c)
Year
Carbon Net Zero Carbon Manufacturing - scope 1 & 2(1) GHG emissions (t/CO2e) 2030 312,640* 299,077 -4.3% 287,000
50% reduction in product CO2e intensity from primary supply chain partners (%) 2030 0 0 - 0
Zero emission company funded cars (annual replacement %) 2025 11 29 164% 30
Energy 60% Direct renewable energy (%) 2030 19.5* 26.1 34% 28
20% On-site renewable energy generation (%) 2030 4.9* 4.8 -2.0% 6
Solar PV systems on all wholly owned facilities (%) 2030 21.7* 28.4 31% 34
Net Zero Energy (%) 2020 100 100 - 100
Circularity Zero Company waste to landfill (tonnes) 2030 18,642* 16,294 -13% 15,000
Recycle 1 billion PET bottles into our manufacturing processes (million 2025 573 843 47% 900
bottles)
QuadCore™ products utilising recycled PET (% sites) 2025 5 5 - 15
Water Harvest 100 million litres of rainwater (million litres) 2030 20.1* 20.6 2.5% 35
Support 5 Ocean Clean-Up projects (No.) 2025 1 2 100% 3
(1) excluding biogenic emissions
*Restated figures due to improved data collection methodologies
**Scope and boundaries: Planet Passionate targets include manufacturing &
assembly sites within the Kingspan Group in 2020 and organic growth.
Intensity Indicators Change YoY
Carbon Intensity (tCO(2)e/€m) 29% reduction
Energy Intensity (MWh/€m) 15% reduction
Landfill Waste Intensity (t/€m) 35% reduction
Water Intensity (million lt/€m) 14% reduction
Expansion
Over the course of the year we invested a total of €714m on acquisitions,
capex and financial investments. The largest of these was Logstor Group, a
European based provider of highly insulated district heating infrastructure,
acquired in June 2021 for €245m. The acquisition of Romania based TeraSteel
also completed in the period. Additionally, we entered the Uruguay Insulated
Panel market with the acquisition of 51% of Bromyros, and enhanced our
insulation channel in Australia and New Zealand with the acquisition of
Thermakraft. We also became a founding investor in the ground breaking H2
Green Steel in Sweden that aims to become the world's first zero carbon steel
facility. In the second half of 2021 we acquired California based Solatube
International, an exciting bolt-on to our North American Light & Air
offering.
Organically, we commissioned 5 new manufacturing facilities or lines across
the globe in 2021, enabling the ongoing conversion to high-performance
materials. We have plans for approximately 25 new manufacturing facilities or
lines over the next four years to support the growth of our full spectrum of
building envelope solutions.
Acquisitions After Year End
Following year end we have reached agreement to acquire Ondura Group
('Ondura') from Naxicap. Ondura, headquartered in France, is a leading global
provider of roofing membranes and associated roofing solutions with 14
manufacturing sites and a distribution network in 100 countries worldwide. The
business recorded sales in 2021 of €424m with EBITDA of €63m. The
consideration is €550m payable in cash on completion and conditional on
obtaining customary approvals. The acquisition of Ondura is fully aligned with
Kingspan's long stated strategy to develop multiple technologies in roofing
applications and will serve as our global platform for advancing these
solutions.
We have also reached agreement, subject to customary approvals, to acquire
Troldtekt, a leading Danish headquartered manufacturer of natural low carbon
acoustic insulation. In addition we have acquired THU Perfil, an architectural
and ceilings solutions business in Spain.
Innovation
PowerPanel(TM) (an engineered combination of QuadCore(TM) insulated panel and
solar PV) development completed during the period and a large scale project on
an in-house roof was completed in quarter three. This is now fully operational
with real time energy monitoring underway. The approval process is nearing
completion which should pave the way for a full scale market launch during
quarter two, in Britain and Ireland initially. We are also fine-tuning our
Rooftricity(TM) proposition, a funded solution whereby the customer outlay for
a re-roof or newbuild incorporating PowerPanel(TM) will be minimal.
Encouragingly, the soft launch project pipeline is ahead of our expectations.
QuadCore(TM) 2.0 is also progressing and in a coldstore application, the
product reached a 120 minute fire rating, which is a dramatic leap forward and
will in many cases match if not exceed the performance of synthetic mineral
fibre cored products. QuadCore(TM) sales value grew by 66% globally in 2021.
The team at our IKON Innovation Hub has also developed a low carbon insulated
panel in collaboration with our suppliers. This is a prime example of how our
Planet Passionate agenda is translating into market leading, sustainable
products. Initial testing suggests the development panel will have c.25% less
embodied carbon and contain upwards of 45% recycled content.
In addition, projects are underway to achieve an 'A' classification for
Optim-R(®), AlphaCore(®), and 'B' classification for key Kooltherm(®)
applications. Significant progress is also being made on entering the
'natural' insulation category.
Product Integrity
The Group's product integrity audit and compliance programme is extensive.
Over the course of the year, 576 third party external product and system
audits took place. A further 90 manufacturing sites were internally audited
under the process overseen by the Audit & Compliance Committee of the
Group's Board.
ISO37301 is the leading global standard for establishing, developing and
monitoring compliance systems. We have embarked on a programme of widespread
adoption of this standard across the Group and during 2021, the standard's
first year of implementation, 9 manufacturing facilities across Kingspan
achieved it. During 2022, we anticipate adding another 25 locations, including
the Kingscourt Insulated Panels facility which will be the first of its kind
in Europe. Two of our US plants in Modesto and Deland were fully approved in
2021 making them joint first in the world.
Insulated Panels
FY '21 FY '20 Change
Turnover €m 4,229.2 2,917.4 +45%((1))
Trading Profit €m 519.8 321.3 +62%
Trading Margin 12.3% 11.0% + 130bps
(1) Comprising underlying +38%, currency -1% and acquisitions +8%.
Like-for-like volume +13%.
Activity was particularly strong throughout the year in our largest segment.
Sales volumes reached a record at almost 80 million m(2), order intake by
volume was up by 20% and the volume backlog ended the year ahead by 28%.
QuadCore(TM) comprised 16% of global insulated panel order intake value and we
again expect that to increase in the year ahead.
Non-residential newbuild construction has been buoyant in many of our key
markets, and coupled with our growing segmental exposure to high growth end
markets combined to deliver a record year. Raw material expectations were
instrumental in driving demand early in the year and as inflation topped out,
so too did order intake leading to a reduction in backlog, albeit finishing
the year comfortably ahead of prior year.
Raw material movements for 2022 are unclear and we will respond appropriately
with pricing of our own products in the event of any significant movement.
The organic volume expansion we are experiencing necessitates a number of new
greenfield facilities across the world. These expansion projects are, or will
be shortly, underway in France, Romania, the US, Brazil, Vietnam and
Australia.
Insulation
FY '21 FY '20 Change
Turnover €m 1,182.9 787.0 +50%((1))
Trading Profit €m 146.7 110.1 +33%
Trading Margin 12.4% 14.0% -160bps
(1) Comprising underlying +26%, currency +1% and acquisitions +23%.
Like-for-like volume +11%.
Sales volumes in the first half of the year were particularly healthy, easing
back somewhat in the latter half as the distribution network began to unwind
high inventories accumulated during the period of rising prices earlier in the
year. In total, volume for the year was ahead by 11% accounting to just over
70 million m(2) of deliveries globally. Kooltherm(®) volume was modestly
ahead for the full year. Industrial insulation sales, including applications
like pipe, ducting and district heating/cooling were in the region of €300m
for the full year, including €150m from the acquisition of Logstor in the
second half. We believe industrial applications are a real opportunity for
significant growth potential over the longer term.
To support future organic growth we are either underway with, or planning, new
facilities for Optim-R(®) in the US, PIR board in France, industrial pipe
insulation in the Benelux, PIR board in Saudi Arabia and are carrying out a
viability assessment for a district heating pipe insulation plant in either
Britain or Ireland. Conversion of waste heat from manufacturing and data
warehousing processes will increasingly be captured and re-distributed through
such infrastructure.
We are relentless in our commitment to offer an unparalleled spectrum of
insulation solutions. In addition to the technologies referred to in the
innovation section, early feasibility work has begun on entering the
production of stone wool to support our existing and future requirement of
that material.
Light & Air
FY '21 FY '20 Change
Turnover €m 552.2 445.5 +24% ((1))
Trading Profit €m 36.0 31.2 +15 %
Trading Margin 6.5% 7.0% -50bps
(1) Comprising underlying +1% and acquisitions +23%
This relatively new segment for the Group has been evolving rapidly with
global revenue for the year of €552.2m. Organic growth in 2021 amounted to a
modest 1%, and the contribution of the Colt acquisition in 2020 delivered
€178m revenue in 2021. The recovery of cost inflation has been slower than
expected owing to the long contract lead time with customers. Recovery is now
well underway and should deliver a positive margin evolution during 2022.
France and Germany were both strong performers whilst the US slipped back a
little against very strong project comparatives in 2020.
In addition to bedding down the Colt acquisition, a number of bolt-ons were
added during 2021 including Solatube International and Major Industries in the
US. The former creates a wider global opportunity for the transmission of
natural light into buildings via tubular daylighting systems, whilst Major
Industries adds to our existing range of architectural wall daylighting
solutions.
Water & Energy
FY '21 FY '20 Change
Turnover €m 261.3 202.7 +29%((1))
Trading Profit €m 20.0 16.3 +23%
Trading Margin 7.6% 8.0% -40bps
(1) Comprising underlying +14%, currency +4% and acquisitions +11%
This division delivered a good performance despite the headwinds presented by
market constraints evident in Australia.
The focus of this business unit is water related storage, heating, treatment
and harvesting solutions all of which present attractive opportunities across
the world. The business has focused to date on Europe and Australia and the
Americas is a real development opportunity and will therefore become a region
of growing focus.
Separately, a product development initiative on hydrogen storage for the
transportation sector is underway and expected to be an interesting
opportunity over the longer term.
Data & Flooring
FY '21 FY '20 Change
Turnover €m 271.4 223.4 +21%((1))
Trading Profit €m 32.3 29.3 +10%
Trading Margin 11.9% 13.1% -120bps
(1) Comprising underlying +21%
This business unit offers solutions to both office flooring and multiple data
centre offerings, primarily designed to conserve the use of power in the
storage and management of data. Whilst the office sector has been
comparatively subdued, data applications are expanding apace worldwide. Our
aim is to partner with the leading global providers in helping optimise energy
consumption and related emissions.
Financial Review
The Financial Review provides an overview of the Group's financial performance
for the year ended 31 December 2021 and of the Group's financial position at
that date.
Overview of results
Group revenue increased by 42% to €6.5bn (2020: €4.6bn) and trading profit
increased by 49% to €754.8m (2020: €508.2m) with an increase of 50 basis
points in the Group's trading profit margin to 11.6% (2020: 11.1%). Basic EPS
for the year was 305.6 cent (2020: 206.2 cent), representing an increase of
48%.
The Group's underlying sales and trading profit growth by division are set out
below:
Sales Underlying Currency Acquisition Total
Insulated Panels +38% -1% +8% +45%
Insulation +26% +1% +23% +50%
Light & Air +1% - +23% +24%
Water & Energy +14% +4% +11% +29%
Data & Flooring +21% - - +21%
Group +30% - +12% +42%
The Group's trading profit measure is earnings before interest, tax and
amortisation of intangibles:
Trading Profit Underlying Currency Acquisition Total
Insulated Panels +52% - +10% +62%
Insulation +16% +1% +16% +33%
Light & Air +3% - +12% +15%
Water & Energy +4% +3% +16% +23%
Data & Flooring +11% -1% - +10%
Group +38% - +11% +49%
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 €11.3m to €36.3m (2020: €25.0m).
A net non-cash charge of €nil (2020: charge of €2.0m) was recorded in
respect of swaps on USD private placement notes which were fully repaid during
the year. The Group's net interest expense on borrowings (bank and loan notes
net of interest receivable) was €32.2m (2020: €19.3m). This increase
reflects higher average gross debt levels in 2021. In particular, this
includes a full year interest expense for the Green Private Placement loan
notes issued in December 2020, as well as a negative return on Euro
denominated cash balances. Lease interest of €3.7m (2020: €3.6m) was
recorded for the year. €0.2m (2020: €0.1m) 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 €118.4m (2020: €74.9m) which represents an
effective tax rate of 17.2% (2020: 16.3%). The increase in the effective rate
reflects, primarily, the change in the geographical mix of earnings year on
year.
Dividends and share buyback
The Board has proposed a final dividend of 26.0 cent (2020: 20.6 cent) per
ordinary share payable on 6 May 2022 to shareholders registered on the record
date of 25 March 2022. An interim dividend of 19.9 cent per ordinary share was
declared during the year (2020: nil). In summary, therefore, the total
dividend for 2021 is 45.9 cent compared to 20.6 cent for 2020. This is in line
with the previously announced revised shareholder returns policy.
During the year, the Company issued 405,588 shares in satisfaction of
obligations falling under share schemes which comprised newly issued shares of
189,444 and the reissuance of 216,144 treasury shares.
Separately, the Company repurchased 600,000 shares at a weighted average price
of €78.16 during the year. This is consistent with an objective of
maintaining a broadly constant issued share capital over time.
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. 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 €28.0m as at 31 December 2021 (2020: €45.9m)
with the decrease reflecting, primarily, the impact of actuarial gains in the
year.
Intangible assets and goodwill
Intangible assets and goodwill increased during the year by €440.3m to
€2,001.8m (2020: €1,561.5m). Intangible assets and goodwill of €418.9m
(2020: €57.3m) were recorded in the year relating to acquisitions completed
by the Group. An increase of €50.9m (2020: decrease of €72.4m) 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 €29.5m (2020: €23.5m).
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 and also in
achieving medium and long term targets to maximise shareholder return.
Key performance indicators 2021 2020
Basic EPS growth 48% 1%
Sales performance +42% -2%
Trading margin 11.6% 11.1%
Free cashflow (€m) 127.1 479.7
Return on capital employed 19.5% 18.4%
Net debt/EBITDA 0.88x 0.40x
(a) Basic EPS growth. The growth in EPS is accounted for primarily by a 49%
increase in trading profit partially offset by an increase in the Group's
effective tax rate by 90 basis points to 17.2% and an increase in minority
interest. The effective tax increased due to the geographical mix of earnings
year on year. The minority interest amount increased year on year due to a
strong performance at the Group's operations which have minority stakeholders.
(b) Sales performance of +42% (2020: -2%) was driven by a 30% increase in
underlying sales and a 12% contribution from acquisitions. The increase in
underlying sales reflected a combination of strong price growth due to raw
material inflation, volume growth due to ongoing structural adoption and
buoyant construction markets worldwide.
(c) Trading margin by division is set out below:
2021 2020
Insulated Panels 12.3% 11.0%
Insulation 12.4% 14.0%
Light & Air 6.5% 7.0%
Water & Energy 7.6% 8.0%
Data & Flooring 11.9% 13.1%
The Insulated Panels division trading margin advanced year on year reflecting
the market mix of sales as well as positive operating leverage driven by 13%
volume growth in the year. The trading margin decrease in the Insulation
division reflects, in the main, a strong margin performance in 2020 reflecting
a positive lag effect on raw material prices in the early part of 2020 and
short term overhead curtailment with both factors not applying in 2021. The
reduced trading margin in Light & Air reflects a lag in inflation recovery
and investment in specification and other processes as the division continues
to scale up. The Water & Energy trading margin decrease reflects the
category and geography mix and overhead curtailment in the prior year. The
decrease in trading margin in Data & Flooring reflects the geographic
market and product mix of sales year on year and impact of increased raw
material prices.
(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 2021 2020
€m €m
EBITDA* 893.2 630.2
Lease payments (38.6) (33.7)
Movement in working capital** (429.3) 107.7
Movement in provisions 6.9 (2.1)
Net capital expenditure (163.6) (126.1)
Net interest paid (34.5) (21.6)
Income taxes paid (126.8) (89.7)
Other including non-cash items 19.8 15.0
Free cashflow 127.1 479.7
*Earnings before finance costs, income taxes, depreciation and amortisation.
Prior period comparative has been re-presented to reflect this revised
definition.
**Excludes working capital on acquisition but includes working capital
movements since that point
Working capital at year end was €977.8m (2020: €450.8m) and represents
13.8% (2020: 8.8%) 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. Working capital
levels in the business were unusually low at the end of 2020 reflecting
constrained supply chains and restricted availability at that point.
Furthermore, the 30% growth in underlying sales in 2021 required a
consequential investment in working capital to support the sales growth. The
December 2021 working capital position is untypically high reflecting higher
than normal inventory levels. The business took the opportunity to build an
element of buffer stocks as availability opened up in the second half of 2021.
We expect working capital levels to normalise during 2022.
(e) Return on capital employed, calculated as operating profit divided by
total equity plus net debt, was 19.5% in 2021 (2020: 18.4%). 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. The increase in profitability was the key driver of enhanced returns
on capital during the year.
(f) Net debt to EBITDA measures the ratio of net debt to earnings and at 0.88x
(2020: 0.40x) is comfortably less than the Group's banking covenant of 3.5x in
both 2021 and 2020. 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 €540.2m.
In February 2021, the Group acquired 100% of the share capital of TeraSteel a
Romanian based manufacturer of insulated panels and ancillary products for a
consideration of €81.6m.
In June 2021, the Group acquired 100% of the Logstor Group a leading global
supplier of technical insulation solutions. The total consideration, including
debt acquired, amounted to €244.5m.
The Group also made a number of smaller acquisitions during the year for a
combined cash consideration of €214.1m.
· The Insulated Panels division acquired 51% of Bromyros in Uruguay, the
remaining 50% of Dome Solar in France, Solarsit in France and the assets of
Krohn in Russia.
· The Insulation division acquired Thermakraft in Australasia, Hectar in the
Netherlands and the assets of Dyplast Products, Diversifoam Products and
Thermal Visions in North America.
· The Light & Air division acquired Skydôme in Western Europe and Major
Industries and Solatube International in North America.
· The Water & Energy division acquired BAGA in Sweden, Heritage Tanks in
Australia and the assets of Enviro Water Tanks in Australia.
The Group's organic capital expenditure during the year was €168.8m
encompassing a number of strategic capacity enhancements and ongoing
maintenance.
EU Taxonomy
New disclosures are required in the current year under the EU Taxonomy
Regulation (Sustainable finance taxonomy - Regulation (EU) 2020/852). The
disclosures will be included in our Planet Passionate Sustainability Report
that will be published at a later date within the required timeframe.
COVID-19 Pandemic
The Group took a number of steps to protect its financial position at the
outset of the global pandemic in the first quarter of 2020. Many construction
markets were severely impacted at the early stage of the virus albeit most
experienced some element of recovery through 2020 and improving further in
2021. The key impact in 2021 was reduced availability of materials
particularly in the first half of the year. The Group did not avail of
Covid-19 related furlough and benefits in either 2020 or 2021 having repaid in
full €17m in supports received in 2020.
Capital structure and Group financing
The Group funds itself through a combination of equity and debt. Debt is
funded through a syndicated bank facility and private placement loan notes.
The primary bank debt facility is a €700m Planet Passionate Revolving Credit
Facility arranged in May 2021, maturing in May 2026, and which was undrawn at
year end. This substantially replaced outgoing facilities of €751m.
The Group's core funding is provided by six private placement loan notes
(2020: seven); one (2020: two) USD private placement totalling $200m (2020:
$400m) maturing in December 2028, and five (2020: five) EUR private placements
totalling €1.2bn (2020: €1.2bn) which will mature in tranches between
November 2022 and December 2032. The weighted average term, as at 31 December
2021, of all drawn debt was 6.3 years (31 December 2020: 6.3 years).
The Group had significant committed undrawn facilities and cash balances
which, in aggregate, were €1.3bn at 31 December 2021.
Net debt
Net debt increased by €519.9m during 2021 to €756.1m (2020: €236.2m).
This is analysed in the table below:
Movement in net debt 2021 2020
€m €m
Free cashflow 127.1 479.7
Acquisitions (540.2) (46.1)
Purchase of financial asset (5.0) -
Share issues 0.1 -
Repurchase of treasury shares (46.9) -
Dividends paid (73.5) -
Dividends paid to non-controlling interests (3.2) (1.2)
Cashflow movement (541.6) 432.4
Exchange movements on translation 21.7 (35.4)
Movement in net debt (519.9) 397.0
Net debt at start of year (236.2) (633.2)
Net debt at end of year (756.1) (236.2)
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:
2021 2020
Covenant Times Times
Net debt/EBITDA Maximum 3.5 0.88 0.40
EBITDA/Net interest Minimum 4.0 26.2 27.9
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 eight capital market conferences and conducted
586 institutional one-on-one and group meetings.
Share price and market capitalisation
The Company's shares traded in the range of €52.75 to €105.50 during the
year. The share price at 31 December 2021 was €105.00 (31 December 2020:
€57.40) giving a market capitalisation at that date of €19.0bn (2020:
€10.4bn). Total shareholder return for 2021 was 84% (2020: 5.4%).
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.
Looking Ahead
2022 has started well helped by the strong order backlog at the end of last
year, although it is still early days. Raw material prices which saw steep
increases through much of 2021 remain at elevated levels with no evidence yet
of this situation changing significantly. Our trading outlook beyond the first
quarter is less visible although the prevailing mood in our end markets, for
the most part, remains one of cautious optimism.
Our innovation pipeline is most encouraging and, in particular, this year
should see the market launch of PowerPanel(TM) and Rooftricity(TM) our fully
integrated insulated panel and solar propositions. Our Planet Passionate
agenda continues to meet all our targeted commitments and is resonating
strongly with our customers worldwide. The Group remains well capitalised with
approximately €1.3 billion of cash and undrawn facilities on hand.
Worldwide, there is a growing momentum amongst policy makers, consumers and
other stakeholders to design and occupy buildings which consume less energy
and we are evidently well positioned to harness this over the long term.
On behalf of the Board
Gene M. Murtagh Geoff Doherty
Chief Executive Officer Chief Financial Officer
18(th) February 2022 18(th) February 2022
Kingspan Group plc
Consolidated Income Statement
for the year ended 31 December 2021
2021 2020
€m €m
Note
REVENUE 2 6,497.0 4,576.0
Cost of sales (4,640.9) (3,190.5)
GROSS PROFIT 1,856.1 1,385.5
Operating costs, excluding intangible amortisation (1,101.3) (877.3)
TRADING PROFIT 2 754.8 508.2
Intangible amortisation (29.5) (23.5)
725.3 484.7
OPERATING PROFIT
Finance expense 3 (36.3) (26.1)
Finance income 3 - 1.1
689.0 459.7
PROFIT FOR THE YEAR BEFORE INCOME TAX
Income tax expense (118.4) (74.9)
570.6 384.8
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
554.1 373.6
Attributable to owners of Kingspan Group plc
Attributable to non-controlling interests 16.5 11.2
570.6 384.8
EARNINGS PER SHARE FOR THE YEAR
Basic 8 305.6c 206.2c
Diluted 8 303.0c 204.4c
Kingspan Group plc
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
2021 2020
€m €m
Profit for the year 570.6 384.8
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 123.1 (129.7)
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 gains/(losses) on defined benefit pension schemes 21.5 (19.9)
Income taxes relating to actuarial gains/losses on defined benefit pension
schemes
(5.5) 4.1
Total other comprehensive income 139.4 (145.5)
Total comprehensive income for the year 710.0 239.3
Attributable to owners of Kingspan Group plc 691.8 238.7
Attributable to non-controlling interests 18.2 0.6
710.0 239.3
Kingspan Group plc
Consolidated Statement of Financial Position
as at 31 December 2021
2021 2020
€m €m
ASSETS
NON-CURRENT ASSETS
Goodwill 1,908.6 1,478.8
Other intangible assets 93.2 82.7
Financial asset 13.2 8.2
Property, plant and equipment 1,155.8 972.9
Right of use assets 155.5 113.0
Retirement benefit assets 17.9 8.0
Deferred tax assets 34.7 23.0
3,378.9 2,686.6
CURRENT ASSETS
Inventories 1,138.9 505.9
Trade and other receivables 1,228.4 799.6
Derivative financial instruments 0.3 19.8
Cash and cash equivalents 641.4 1,329.7
3,009.0 2,655.0
TOTAL ASSETS 6,387.9 5,341.6
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,389.8 854.5
Provisions for liabilities 67.8 55.7
Lease liabilities 35.0 27.3
Derivative financial instruments - 0.2
Deferred contingent consideration 41.7 -
Interest bearing loans and borrowings 77.4 209.6
Current income tax liabilities 57.7 55.9
1,669.4 1,203.2
NON-CURRENT LIABILITIES
Retirement benefit obligations 45.9 53.9
Provisions for liabilities 74.9 63.3
Interest bearing loans and borrowings 1,320.1 1,376.1
Lease liabilities 123.0 87.5
Deferred tax liabilities 34.7 32.4
Deferred contingent consideration 160.6 127.6
1,759.2 1,740.8
TOTAL LIABILITIES 3,428.6 2,944.0
NET ASSETS 2,959.3 2,397.6
EQUITY
Share capital 23.9 23.8
Share premium 94.4 95.6
Capital redemption reserve 0.7 0.7
Treasury shares (57.3) (11.6)
Other reserves (277.7) (356.8)
Retained earnings 3,108.1 2,597.2
EQUITY ATTRIBUTABLE TO OWNERS OF KINGSPAN GROUP PLC 2,892.1 2,348.9
NON-CONTROLLING INTERESTS 67.2 48.7
TOTAL EQUITY 2,959.3 2,397.6
Kingspan Group plc
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Capital Cash Flow Share Total
Share Share Redemption Treasury Translation Hedging Based Put Option Liability Reserve Attributable Non- Controlling Interests Total
Capital Premium Reserve Shares Reserve Reserve Payment Revaluation Retained to Owners Equity
Reserve Reserve Earnings of the Parent
€m €m €m €m €m €m €m €m €m €m €m €m €m
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
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
Balance at 31 December 2021
Kingspan Group plc
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Capital Cash Flow Share Total
Share Share Redemption Treasury Translation Hedging Based Put Option Liability Reserve Attributable Non- Controlling Interests Total
Capital Premium Reserve Shares Reserve Reserve Payment Revaluation Retained to Owners Equity
Reserve Reserve Earnings of the Parent
€m €m €m €m €m €m €m €m €m €m €m €m €m
Balance at 1 January 2020
23.8 95.6 0.7 (11.8) (110.8) 0.3 38.9 0.7 (188.7) 2,221.6 2,070.3 50.1 2,120.4
Transactions with owners recognised directly in equity
Employee share based compensation - - - - - - 16.0 - - - 16.0 - 16.0
Tax on employee share based compensation - - - - - - (0.9) - - 4.4 3.5 - 3.5
Exercise or lapsing of share options - - - 0.2 - - (13.6) - - 13.4 - - -
Repurchase of shares - - - - - - - - - - - - -
Dividends - - - - - - - - - - - -
Transactions with non-controlling interests:
Arising on acquisition - - - - - - - - - - - (0.8) (0.8)
Dividends to NCI - - - - - - - - - - - (1.2) (1.2)
Fair value movement - - - - - - - - 20.4 - 20.4 - 20.4
Transactions with owners - - - 0.2 - - 1.5 - 20.4 17.8 39.9 (2.0) 37.9
Total comprehensive income for the year
Profit for the year - - - - - - - - - 373.6 373.6 11.2 384.8
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Cash flow hedging in equity
- current year - - - - - - - - - - - - -
- tax impact - - - - - - - - - - - - -
Exchange differences on translating foreign operations - - - - (119.1) - - - - - (119.1) (10.6) (129.7)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses on defined benefit pension scheme - - - - - - - - - (19.9) (19.9) - (19.9)
Income taxes relating to actuarial losses on defined benefit pension scheme - - - - - - - - - 4.1 4.1 - 4.1
Total comprehensive income for the year - - - - (119.1) - - - - 357.8 238.7 0.6 239.3
Balance at 31 December 2020 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
Kingspan Group plc
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
2021 2020
Note €m €m
OPERATING ACTIVITIES
Profit for the year 570.6 384.8
Add back non-operating expenses:
Income tax expense 118.4 74.9
Depreciation of property, plant and equipment 138.4 122.0
Amortisation of intangible assets 29.5 23.5
Impairment of non-current assets 3.1 2.4
Employee equity-settled share options 17.7 16.0
Finance income 3 - (1.1)
Finance expense 3 36.3 26.1
Loss/(profit) on sale of property, plant and equipment 0.4 (1.1)
Movement of deferred consideration 0.4 (0.7)
Changes in working capital:
Inventories (525.7) 38.2
Trade and other receivables (298.8) (1.8)
Trade and other payables 395.2 71.3
Other:
Change in provisions 6.9 (2.1)
Pension contributions (1.8) (1.6)
Cash generated from operations 490.6 750.8
Income tax paid (126.8) (89.7)
Interest paid (34.6) (22.6)
Net cash flow from operating activities 329.2 638.5
INVESTING ACTIVITIES
Additions to property, plant and equipment (168.8) (131.8)
Proceeds from disposals of property, plant and equipment 5.2 5.7
Purchase of subsidiary undertakings (including net debt/cash acquired) (540.2) (46.1)
Purchase of financial asset (5.0) -
Interest received 0.1 1.0
Net cash flow from investing activities (708.7) (171.2)
FINANCING ACTIVITIES
Drawdown of loans 5 55.1 751.2
Repayment of loans and borrowings 5 (263.2) (3.4)
Settlement of derivative financial instrument 18.5 -
Payment of lease liability 6 (38.6) (33.7)
Proceeds from share issues 0.1 -
Repurchase of shares (46.9) -
Dividends paid to non-controlling interests (3.2) (1.2)
Dividends paid 7 (73.5) -
Net cash flow from financing activities (351.7) 712.9
(731.2)
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS 5 1,180.2
Effect of movement in exchange rates on cash held 42.9 (41.4)
Cash and cash equivalents at the beginning of the year 1,329.7 190.9
641.4 1,329.7
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
Notes to the Preliminary Results
for the year ended 31 December 2021
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
2020 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 (http://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 2021 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 2020 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.
- 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
and amortisation.
The following amendments to standards and interpretations are effective for
the Group from 1 January 2021 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 9 Financial Instruments, IAS 39 Financial Instruments: 1 January 2021
Recognition and measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4
Insurance Contracts and IFRS 16 Leases - Interest Rate Benchmark Reform
The following standard amendment was issued for annual reporting periods
beginning on or after 1 April 2021 with earlier application permitted and does
not have a material effect on the results or financial position of the Group:
Effective Date - periods beginning on or after
Amendments to IFRS 16 Leases - COVID-19 related rent concessions beyond 30 1 April 2021
June 2021
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 1 Presentation of Financial Statements - Classification of 1 January 2023*
Liabilities as Current or Non-current
Amendments to IAS 12 Income Taxes - Deferred Tax Related to Assets and 1 January 2023*
Liabilities Arising from a Single Transaction
Amendment to IAS 1 Presentation of Financial Statements and IFRS Practice 1 January 2023*
Statement 2 - Disclosure of Accounting Policies
Amendments to IAS 8 Accounting Policies, Changes in Accounting Policies and 1 January 2023*
Errors - Definition of Accounting Estimates
Amendments to IFRS 3 Business Combinations -- Reference to the Conceptual 1 January 2022
Framework
Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended 1 January 2022
Use
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1 January 2022
- Onerous Contracts - Costs of Fulfilling a Contract
Amendments to IFRS 1 First-time Adoption of International Financial Reporting 1 January 2022
Standards - Subsidiary as a first-time adopter
Amendments to IFRS 9 Financial Instruments - Fees in the '10 per cent' test 1 January 2022
for derecognition of financial liabilities
Amendments to IAS 41 Agriculture - Taxation in fair value measurements 1 January 2022
* 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.
Operating segments
The Group has the following five operating
segments:
Insulated Panels Manufacture of insulated panels, structural framing and metal facades.
Insulation Manufacture of rigid insulation, technical insulation and engineered timber
systems.
Light & Air Manufacture of daylighting, smoke management and ventilation systems.
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.
Analysis by class of business
Segment revenue and disaggregation of revenue
Insulated Insulation Light & Water & Data &
Panels Air Energy Flooring Total
€m €m €m €m €m €m
Total revenue - 2021 4,229.2 1,182.9 552.2 261.3 271.4 6,497.0
Total revenue - 2020 2,917.4 787.0 445.5 202.7 223.4 4,576.0
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
Disaggregation of revenue 2020
Point of Time 2,908.4 759.8 227.3 200.9 199.8 4,296.2
Over Time & Contract 9.0 27.2 218.2 1.8 23.6 279.8
2,917.4 787.0 445.5 202.7 223.4 4,576.0
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 & Total Total
Panels Air Energy Flooring 2021 2020
€m €m €m €m €m €m €m
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)
506.1 138.1 30.2 18.8
Operating profit - 2021 32.1 725.3
Trading profit - 2020 321.3 110.1 31.2 16.3 29.3 508.2
Intangible amortisation (13.7) (4.6) (4.1) (0.9) (0.2) (23.5)
Operating profit - 2020 307.6 105.5 27.1 15.4 29.1 484.7
Net finance expense (36.3) (25.0)
Profit for the year before tax 689.0 459.7
Income tax expense (118.4) (74.9)
Net profit for the year 570.6 384.8
Segment assets
Insulated Insulation Light & Water & Data & Total Total
Panels Air Energy Flooring 2021 2020
€m €m €m €m €m €m €m
3,266.4 1,309.4 665.0 243.5
Assets - 2021 227.2 5,711.5
Assets - 2020 2,350.4 787.1 474.0 183.5 174.1 3,969.1
Derivative financial instruments 0.3 19.8
Cash and cash equivalents 641.4 1,329.7
Deferred tax assets 34.7 23.0
Total assets as reported in the Consolidated Statement of Financial Position 6,387.9 5,341.6
Segment liabilities
Insulated Insulation Light & Water & Data & Total Total
Panels Air Energy Flooring 2021 2020
€m €m €m €m €m €m €m
(1,240.7) (307.1) (218.1) (98.4) (1,938.7)
Liabilities - 2021 (74.4)
Liabilities - 2020 (778.8) (192.9) (184.1) (72.8) (41.2) (1,269.8)
Interest bearing loans and borrowings (current and non-current) (1,397.5) (1,585.7)
Derivative financial instruments (current and non-current) - (0.2)
Income tax liabilities (current and deferred) (92.4) (88.3)
(3,428.6) (2,944.0)
Total liabilities as reported in the Consolidated Statement of Financial
Position
Other segment information
Insulated Insulation Light & Water & Data &
Panels Air Energy Flooring Total
€m €m €m €m €m €m
164.3 94.2 32.3 8.4 304.7
Capital investment - 2021 * 5.5
Capital investment - 2020 * 92.5 17.4 40.6 2.8 3.7 157.0
Depreciation included in segment result - 2021 (77.7) (32.2) (15.8) (7.0) (138.4)
(5.7)
Depreciation included in segment result - 2020 (73.4) (23.9) (12.9) (6.5) (5.3) (122.0)
Non-cash items included in segment result - 2021 (10.2) (3.4) (1.4) (1.1) (17.7)
(1.6)
Non-cash items included in segment result - 2020 (9.0) (3.2) (1.1) (1.0) (1.7) (16.0)
* Capital investment also includes fair value of property, plant and equipment
and intangible assets acquired in business combinations.
Analysis of segmental data by geography
Western & Southern Central &
Europe ** Northern Rest of
€m Europe Americas World Total
€m €m €m €m
Income Statement Items
Revenue - 2021 3,239.8 1,629.8 1,269.8 357.6 6,497.0
Revenue - 2020 2,377.2 997.8 916.0 285.0 4,576.0
Statement of Financial Position Items
Non-current assets - 2021 * 1,535.8 842.2 720.8 245.4 3,344.2
Non-current assets - 2020 * 1,407.7 520.1 546.4 189.4 2,663.6
Other segmental information
Capital investment - 2021 97.3 130.6 66.3 10.5 304.7
Capital investment - 2020 81.0 42.2 32.1 1.7 157.0
* Total non-current assets excluding derivative financial instruments and
deferred tax assets.
** Prior year figures have been re-presented to include Britain in Western
& Southern Europe.
The Group has a presence in over 70 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 €988.3m (2020: €683.0m), €251.2m (2020:
€183.0m) and €29.3m (2020: €11.7m) respectively. Revenues, non-current
assets and capital investment (as defined in IFRS 8) attributable to Britain
were €999.8m (2020: €743.6m), €424.9m (2020: €388.8m) and €14.3m
(2020: €10.8m) respectively.
Revenues, non-current assets and capital investment (as defined in IFRS 8)
attributable to the country of domicile (Ireland) were €206.0m (2020:
€150.7m), €89.0m (2020: €72.6m) and €19.3m (2020: €16.4m)
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 FINANCE EXPENSE AND FINANCE
INCOME
2021 2020
€m €m
Finance expense
Lease interest 3.7 3.6
Deferred contingent consideration fair value movement 0.1 -
Bank loans 5.4 3.1
Private placement loan notes 26.8 17.3
Fair value movement on derivative financial instrument - 6.4
Fair value movement on private placement debt - (4.4)
Other interest 0.3 0.1
36.3 26.1
Finance income
Interest earned - (1.1)
Net finance expense 36.3 25.0
€3.9m of borrowing costs were capitalised during the period (2020: €0.2m).
No costs were reclassified from other comprehensive income to profit during
the year (2020: €nil).
4 ANALYSIS OF NET
DEBT
2021 2020
€m €m
Cash and cash equivalents 641.4 1,329.7
Derivative financial instruments - net - 19.8
Current borrowings (77.4) (209.6)
Non-current borrowings (1,320.1) (1,376.1)
Total Net Debt (756.1) (236.2)
The Group's core funding is provided by six private placement loan notes; one
USD private placement totalling $200m (2020: $400m) maturing in December 2028,
and five EUR private placements totalling €1.2bn (2020: €1.2bn) which will
mature in tranches between November 2022 and December 2032. The notes have a
weighted average maturity of 6.4 years (31 December 2020: 6.1 years).
The primary bank debt facility is a €700m revolving credit facility, which
was undrawn at year end, and which matures in May 2026. This replaces the
previously held revolving credit facilities of €451m and €300m which were
scheduled to mature in June 2022. During 2021, the bilateral 'Green Loan' of
€50m was also repaid.
Included in cash at bank and in hand are overdrawn positions of €1,439.8m
(31 December 2020: €1,047.2m). These balances form part of a notional cash
pool arrangement and are netted against cash balances of €1,463.6m (31
December 2020: €1,443.0m). The net cash pool balance of €23.8m (31
December 2020: €395.8m) 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 €0.3m (2020: €nil) and foreign currency
derivative liabilities of €nil (2020: €0.2m) 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.
5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2021 2020
€m €m
Movement in cash and bank overdrafts (731.2) 1,180.2
Drawdown of loans (55.1) (751.2)
Repayment of loans and borrowings 263.2 3.4
Settlement of derivative financial instrument (18.5) -
Change in net debt resulting from cash flows (541.6) 432.4
Translation movement - relating to US dollar loan (19.7) 13.5
Translation movement - other 42.7 (41.4)
Derivative financial instruments movement (1.3) (7.5)
Net movement (519.9) 397.0
(236.2) (633.2)
Net debt at start of the year
Net debt at end of the year (756.1) (236.2)
Further analysis of net debt at the start and end of the year is provided in
note 4.
6 LEASES
Right of use asset
2021 2020
€m €m
At 1 January 113.0 121.6
Additions 28.4 17.3
Arising on acquisitions 32.2 12.8
Remeasurement 17.3 2.2
Terminations (2.9) (2.6)
Depreciation charge for the year (37.0) (32.3)
Effect of movement in exchange rates 4.5 (6.0)
At 31 December 155.5 113.0
Lease liability
2021 2020
€m €m
At 1 January 114.8 122.3
Additions 27.0 17.1
Arising on acquisitions 32.1 12.6
Remeasurement 17.3 1.7
Terminations (3.0) (2.7)
Payments (38.6) (33.7)
Interest 3.7 3.6
Effect of movement in exchange rates 4.7 (6.1)
At 31 December 158.0 114.8
Split as follows:
Current liability 35.0 27.3
Non-current liability 123.0 87.5
At 31 December 158.0 114.8
7 DIVIDENDS
Equity dividends on ordinary shares: 2021 2020
€m €m
2021 Interim dividend 19.9 cent (2020: nil cent) per share 36.1 -
2020 Final dividend 20.6 cent (2019: nil cent) per share 37.4 -
73.5 -
Proposed for approval at AGM
Final dividend of 26.0 cent (2020: 20.6 cent) per share 47.2 37.4
The 2020 interim dividends were cancelled during 2020 due to the uncertainty
created by the pandemic.
This proposed dividend for 2021 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
2021 in accordance with IAS 10 Events after the Reporting Period. The proposed
final dividend for the year ended 31 December 2021 will be payable on 6 May
2022 to shareholders on the Register of Members at close of business on 25
March 2022.
8 EARNINGS PER
SHARE
2021 2020
€m €m
The calculations of earnings per share are based on the following:
Profit attributable to ordinary shareholders 554.1 373.6
Number of Number of
shares ('000) shares ('000)
2021 2020
Weighted average number of ordinary shares for
the calculation of basic earnings per share 181,348 181,212
Dilutive effect of share options 1,565 1,598
Weighted average number of ordinary shares
for the calculation of diluted earnings per share 182,913 182,810
2021 2020
€ cent € cent
Basic earnings per share 305.6 206.2
Diluted earnings per share 303.0 204.4
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 (2020: nil).
9 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 February 2021, the Group acquired 100% of the share capital of TeraSteel a
Romanian based manufacturer of insulated panels. The total consideration,
including net debt acquired amounted to €81.6m.
In June 2021, the Group acquired 100% of the share capital of the Logstor
Group a leading global supplier of technical insulation solutions. The total
consideration, including net debt acquired amounted to €244.5m
The Group also made a number of smaller acquisitions during the year for a
combined cash consideration of €214.1m:
· The Insulated Panels division acquired 51% of Bromyros in Uruguay, the
remaining 50% of Dome Solar in France, Solarsit in France and the assets of
Krohn in Russia;
· The Insulation division acquired Thermakraft in Australasia, Hectar in the
Netherlands, the assets of Dyplast Products, Diversifoam Products and Thermal
Visions in North America;
· The Light & Air division acquired Skydôme in Western Europe and Major
Industries and Solatube International in North America;
· The Water & Energy division acquired BAGA in Sweden, Heritage Tanks in
Australia and the assets of Enviro Water Tanks in Australia.
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.
Logstor TeraSteel Other* Total
€m €m €m €m
Non-current assets
Intangible assets 20.4 6.4 11.7 38.5
Property, plant and equipment 36.0 22.9 35.1 94.0
Right of use assets 10.8 0.3 21.1 32.2
Deferred tax asset 2.6 0.3 2.2 5.1
Current assets
Inventories 40.0 24.3 27.8 92.1
Trade and other receivables 53.6 9.4 32.7 95.7
Current liabilities
Trade and other payables (68.7) (19.5) (37.1) (125.3)
Provisions for liabilities (5.3) (2.2) (5.0) (12.5)
Lease liabilities (3.9) - (2.5) (6.4)
Non-current liabilities
Retirement benefit obligations (1.3) - (1.7) (3.0)
Lease liabilities (6.9) (0.3) (18.5) (25.7)
Deferred tax liabilities (4.2) (1.1) (2.4) (7.7)
Total identifiable assets 73.1 40.5 63.4 177.0
Non-controlling interests arising on acquisition** - - (3.5) (3.5)
Goodwill 171.4 41.1 167.9 380.4
Joint Venture becoming subsidiary - - (1.6) (1.6)
Total consideration 244.5 81.6 226.2 552.3
Satisfied by:
Cash (net of cash acquired) 244.5 81.6 214.1 540.2
Deferred consideration - - 12.1 12.1
Total consideration 244.5 81.6 226.2 552.3
*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.
**Non-controlling interests arising are measured at the proportionate share of
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 2022 Annual Report, as stipulated by IFRS 3.
In the post-acquisition period to 31 December 2021, the businesses acquired
during the current year contributed revenue of €478.8m and trading profit of
€64.1m to the Group's results.
10 POST BALANCE SHEET
EVENTS
In February 2022, the Group reached agreement, subject to customary approvals,
to acquire Ondura Group from Naxicap. Ondura Group, headquartered in France,
is a leading global provider of roofing membranes and associated roofing
solutions with 14 manufacturing sites and a distribution network in 100
countries worldwide.
The Group has also reached agreement in February 2022, subject to customary
approvals, to acquire Troldtekt, a leading Danish headquartered manufacturer
of low carbon acoustic insulation. In addition, the Group also completed the
acquisition of THU Perfil, an architectural and ceilings solutions business in
Spain.
There have been no other material events subsequent to 31 December 2021 which
would require disclosure in this report.
11 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 = 2021 2020 2021 2020
Pound Sterling 0.860 0.889 0.838 0.900
US Dollar 1.183 1.142 1.133 1.229
Canadian Dollar 1.483 1.530 1.442 1.567
Australian Dollar 1.575 1.655 1.558 1.596
Czech Koruna 25.642 26.463 24.851 26.264
Polish Zloty 4.565 4.444 4.588 4.589
Hungarian Forint 358.52 351.21 368.89 364.92
Brazilian Real 6.381 5.898 6.309 6.384
12 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.
13 BOARD APPROVAL
This announcement was approved by the Board on 18 February 2022.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UBRORUBUUAURRecent news on Kingspan
See all newsREG - Competition and Mkts - Merger Update: Kingspan / Coverworld
AnnouncementREG - Competition and Mkts - Merger Update: Kingspan / Coverworld
AnnouncementREG - Kingspan Group PLC Kingspan Group - KGP - KINGSPAN WELCOMES REPORT PUBLICATION
AnnouncementREG - Kingspan Group PLC Kingspan Group - KGP - Commencement of Share Buyback Programme
AnnouncementREG - Kingspan Group PLC Kingspan Group - KGP - Trading Statement
Announcement