TIDMKGP
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 YEARED 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 EUR6.5bn, (pre-currency, up 42%).
-- Trading profit up 49% to EUR755m, (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 EUR756.1m (2020: EUR236.2m). 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 EUR714m in acquisitions, capex and financial
investments during the period.
-- Since period end, approximately EUR800m committed on three
transactions subject to customary approvals.
Summary Financials:
FY'21 FY'20 change
------------------- ------ ------ --------
Revenue EURm 6,497 4,576 +42%
Trading Profit(2)
EURm 755 508 + 49%
Trading Margin(3) 11.6% 11.1% + 50bps
EBITDA(5) EURm 893 630 +42%
Profit after tax
EURm 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 EUR800m 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 EUR70 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 EUR700m 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 EUR6.5bn, and trading profit growth of 49% to EUR755m. 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 1.5 C 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 EUR70 per tonne internal carbon
charge from 2023 which will galvanise full alignment across the
organisation.
Planet Passionate Targets Target 2020 2021** Change 2022
Year (f/c)
Net Zero Carbon Manufacturing
- scope 1 & 2(1) GHG
Carbon 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
--------------------------------- ---------------------- --------- --------- ------- --------
60% Direct renewable
Energy 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
--------------------------------- ---------------------- --------- --------- ------- --------
Zero Company waste to
Circularity landfill (tonnes) 2030 18,642* 16,294 -13% 15,000
--------------------------------- -------- --------- --------- ------- --------
Recycle 1 billion PET
bottles into our manufacturing
processes (million bottles) 2025 573 843 47% 900
--------------------------------- ---------------------- --------- --------- ------- --------
QuadCore(TM) products
utilising recycled PET
(% sites) 2025 5 5 - 15
--------------------------------- ---------------------- --------- --------- ------- --------
Harvest 100 million
litres of rainwater
Water (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/EURm) 29% reduction
--------------
Energy Intensity (MWh/EURm) 15% reduction
--------------
Landfill Waste Intensity (t/EURm) 35% reduction
--------------
Water Intensity (million lt/EURm) 14% reduction
--------------
Expansion
Over the course of the year we invested a total of EUR714m 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 EUR245m.
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 EUR424m with EBITDA of EUR63m. The consideration is EUR550m
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(R) , AlphaCore(R) , and 'B'
classification for key Kooltherm(R) 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 EURm 4,229.2 2,917.4 +45%(1)
Trading Profit
EURm 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 EURm 1,182.9 787.0 +50%(1)
Trading Profit EURm 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(R) 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 EUR300m for the full year,
including EUR150m 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(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 EURm 552.2 445.5 +24% (1)
Trading Profit EURm 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 EUR552.2m. Organic
growth in 2021 amounted to a modest 1%, and the contribution of the
Colt acquisition in 2020 delivered EUR178m 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 EURm 261.3 202.7 +29%(1)
Trading Profit
EURm 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 EURm 271.4 223.4 +21%(1)
Trading Profit
EURm 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 EUR6.5bn (2020: EUR4.6bn) and
trading profit increased by 49% to EUR754.8m (2020: EUR508.2m) 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 EUR11.3m to EUR36.3m
(2020: EUR25.0m). A net non-cash charge of EURnil (2020: charge of
EUR2.0m) 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 EUR32.2m (2020: EUR19.3m). 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 EUR3.7m
(2020: EUR3.6m) was recorded for the year. EUR0.2m (2020: EUR0.1m)
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 EUR118.4m (2020: EUR74.9m) 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 EUR78.16 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 EUR28.0m as at 31 December 2021 (2020: EUR45.9m) 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
EUR440.3m to EUR2,001.8m (2020: EUR1,561.5m). Intangible assets and
goodwill of EUR418.9m (2020: EUR57.3m) were recorded in the year
relating to acquisitions completed by the Group. An increase of
EUR50.9m (2020: decrease of EUR72.4m) 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 EUR29.5m (2020: EUR23.5m).
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 (EURm) 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
EURm EURm
-------- --------
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 EUR977.8m (2020: EUR450.8m) 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 EUR540.2m.
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 EUR81.6m.
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
EUR244.5m.
The Group also made a number of smaller acquisitions during the
year for a combined cash consideration of EUR214.1m.
-- 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
EUR168.8m 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
EUR17m 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 EUR700m
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 EUR751m.
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 EUR1.2bn (2020:
EUR1.2bn) 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 EUR1.3bn at 31 December
2021.
Net debt
Net debt increased by EUR519.9m during 2021 to EUR756.1m (2020:
EUR236.2m). This is analysed in the table below:
Movement in net debt 2021 2020
EURm EURm
----------------------------------- -------- --------
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 EUR52.75 to
EUR105.50 during the year. The share price at 31 December 2021 was
EUR105.00 (31 December 2020: EUR57.40) giving a market
capitalisation at that date of EUR19.0bn (2020: EUR10.4bn). 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 EUR1.3 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
EURm EURm
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)
OPERATING PROFIT 725.3 484.7
Finance expense 3 (36.3) (26.1)
Finance income 3 - 1.1
---------- ----------
PROFIT FOR THE YEAR BEFORE INCOME
TAX 689.0 459.7
Income tax expense (118.4) (74.9)
---------- ----------
PROFIT FOR THE YEAR FROM CONTINUING
OPERATIONS 570.6 384.8
---------- ----------
Attributable to owners of Kingspan
Group plc 554.1 373.6
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
EURm EURm
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 0.3 -
fair value of cash flow hedges
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
EURm EURm
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
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 Changes in Equity
for the year ended 31 December 2020
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 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 EURm EURm
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
-------- ----------
(DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS 5 (731.2) 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
-------- ----------
CASH AND CASH EQUIVALENTS AT THE
OF THE YEAR 641.4 1,329.7
-------- ----------
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 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 1 January 2021
39 Financial Instruments: 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 1 April 2021
rent concessions beyond 30 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 1 January 2023*
- Classification of Liabilities as Current or Non-current
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 3 Business Combinations -- Reference 1 January 2022
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
Amendments to IFRS 1 First-time Adoption of International 1 January 2022
Financial Reporting Standards - Subsidiary as a
first-time adopter
Amendments to IFRS 9 Financial Instruments - Fees 1 January 2022
in the '10 per cent' test for derecognition of
financial liabilities
Amendments to IAS 41 Agriculture - Taxation in 1 January 2022
fair value measurements
* 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 & Total
EURm EURm EURm EURm Flooring EURm
EURm
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 & & & 2021 2020
EURm EURm Air Energy Flooring EURm EURm
EURm EURm EURm
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
---------- ----------- ------- -------- ----------
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 & & & 2021 2020
EURm EURm Air Energy Flooring EURm EURm
EURm EURm EURm
Assets - 2021 3,266.4 1,309.4 665.0 243.5 227.2 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 & & & 2021 2020
EURm EURm Air Energy Flooring EURm EURm
EURm EURm EURm
Liabilities -
2021 (1,240.7) (307.1) (218.1) (98.4) (74.4) (1,938.7)
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)
---------- ----------
Total liabilities as reported in the Consolidated
Statement of Financial Position (3,428.6) (2,944.0)
---------- ----------
Other segment information
Insulated Insulation Light Water Data
Panels & & & Total
EURm EURm Air Energy Flooring EURm
EURm EURm EURm
Capital investment -
2021 * 164.3 94.2 32.3 8.4 5.5 304.7
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) (5.7) (138.4)
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) (1.6) (17.7)
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 Central
& Southern &
Europe Northern Rest of
** Europe Americas World Total
EURm EURm EURm EURm EURm
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 EUR988.3m (2020: EUR683.0m),
EUR251.2m (2020: EUR183.0m) and EUR29.3m (2020: EUR11.7m)
respectively. Revenues, non-current assets and capital investment
(as defined in IFRS 8) attributable to Britain were EUR999.8m
(2020: EUR743.6m), EUR424.9m (2020: EUR388.8m) and EUR14.3m (2020:
EUR10.8m) respectively.
Revenues, non-current assets and capital investment (as defined
in IFRS 8) attributable to the country of domicile (Ireland) were
EUR206.0m (2020: EUR150.7m), EUR89.0m (2020: EUR72.6m) and EUR19.3m
(2020: EUR16.4m) 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
EURm EURm
Finance expense
Lease interest 3.7 3.6
Deferred contingent consideration 0.1 -
fair value movement
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
------ ------
EUR3.9m of borrowing costs were capitalised during the period
(2020: EUR0.2m). No costs were reclassified from other
comprehensive income to profit during the year (2020: EURnil).
4 ANALYSIS OF NET DEBT
2021 2020
EURm EURm
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 EUR1.2bn (2020: EUR1.2bn) 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 EUR700m revolving credit
facility, which was undrawn at year end, and which matures in May
2026. This replaces the previously held revolving credit facilities
of EUR451m and EUR300m which were scheduled to mature in June 2022.
During 2021, the bilateral 'Green Loan' of EUR50m was also
repaid.
Included in cash at bank and in hand are overdrawn positions of
EUR1,439.8m (31 December 2020: EUR1,047.2m). These balances form
part of a notional cash pool arrangement and are netted against
cash balances of EUR1,463.6m (31 December 2020: EUR1,443.0m). The
net cash pool balance of EUR23.8m (31 December 2020: EUR395.8m) 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 EUR0.3m (2020: EURnil)
and foreign currency derivative liabilities of EURnil (2020:
EUR0.2m) 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
EURm EURm
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
Net debt at start of the year (236.2) (633.2)
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
EURm EURm
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
EURm EURm
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 DIVIDS
Equity dividends on ordinary shares: 2021 2020
EURm EURm
2021 Interim dividend 19.9 cent (2020: 36.1 -
nil cent) per share
2020 Final dividend 20.6 cent (2019: 37.4 -
nil cent) per share
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
EURm EURm
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
EUR cent EUR 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
EUR81.6m.
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 EUR244.5m
The Group also made a number of smaller acquisitions during the
year for a combined cash consideration of EUR214.1m:
-- 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
EURm EURm EURm EURm
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
EUR478.8m and trading profit of EUR64.1m 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
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END
FR UBRORUBUUAUR
(END) Dow Jones Newswires
February 18, 2022 02:00 ET (07:00 GMT)
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