TIDMTTM
RNS Number : 7071J
Kingspan Group PLC
18 August 2023
KINGSPAN GROUP PLC
HALF-YEARLY FINANCIAL REPORT
for the period ended 30 June 2023
KINGSPAN GROUP PLC
RESULTS FOR THE HALF YEAR 30 JUNE 2023
Kingspan, the global leader in high performance insulation and
building envelope solutions, issues its half-yearly financial
report for the six-month period ended 30 June 2023.
Financial Highlights:
-- Revenue down 2% to EUR4.1bn, (underlying down 8%).
-- Trading profit up modestly to EUR435.5m, (underlying down 3%).
-- Group trading margin of 10.7%, an increase of 20bps versus
the same period in 2022.
-- Acquisitions contributed 7% to sales growth and 4% to trading
profit growth in the period.
-- Profit after tax of EUR324.0m (H1 2022: EUR319.9m). Effective
tax rate of 17.5% (H1 2022: 17.5%).
-- Strong free cashflow of EUR356.9m (H1 2022: EUR12.9m) reflecting
a significant reduction in working capital year on year.
-- Net debt(1) of EUR1,372.7m (H1 2022: EUR1,206.6m). Net debt(4)
to EBITDA(4) of 1.43x (H1 2022: 1.25x).
-- Basic EPS up 3% to 175.2 cent (H1 2022: 170.6 cent).
-- Interim dividend up 3% to 26.3 cent (H1 2022: 25.6 cent) in
line with policy guidance.
-- ROCE at 15.8% (H1 2022: 18.1%), or 16.3% after annualised impact
of acquisitions.
Operational Highlights:
-- Record performance in a testing environment, improving order
intake trend overall in recent months versus a softer comparative.
-- Direct GHG emissions reduced by 51% year on year.
-- Insulated Panels sales decrease of 10% driven by sluggish volumes
particularly in Central and Eastern Europe with strong activity
in France and the US.
-- Insulation sales behind by 5%, driven by weak residential markets.
Technical insulation continuing to advance reflecting ongoing
demand for district heating. Extending the full spectrum of
insulation offerings with planned acquisition of 51% of Steico
and completion of acquisition of HempFlax in the period.
-- Roofing + Waterproofing sales of EUR239m (H1 2022: EURnil).
Further development step with the acquisition of CaPlast. Business
integration plans fully on track in difficult end markets.
-- Significant progress at Light, Air + Water, with broader scale
and margins progressing positively year on year.
-- Data + Flooring medium term pipeline is encouraging driven
by the data sector with artificial intelligence applications
starting to feature.
-- Invested a total of EUR271m in acquisitions and capex during
the period.
Summary Financials:
H1 '23 H1 '22 Change
---------------------- -------- -------- --------
Revenue EURm 4,083.9 4,153.4 -2%
Trading Profit
EURm (2) 435.5 434.2 -
Trading Margin
(3) 10.7% 10.5% +20bps
EBITDA EURm (5) 528.4 512.2 +3%
EPS (cent per share) 175.2 170.6 +3%
---------------------- -------- -------- --------
1 Net debt pre-IFRS16
2 Operating profit before amortisation of intangibles and non
trading item
3 Operating profit before amortisation of intangibles and non
trading item divided by total revenue
4 Net debt to EBITDA ratio is pre-IFRS16 per banking
covenants
5 Earnings before finance costs, income taxes, depreciation,
amortisation and non trading item.
Gene Murtagh, Chief Executive of Kingspan commented:
"We are pleased with a strong first half performance in a
testing environment. Performance outcomes varied by product and by
market, against a backdrop of higher interest rates and a degree of
price deflation.
This year the harsh reality of climate change has become an
everyday reality for many, intensifying the urgency to deliver
meaningful and increasingly smart decarbonisation solutions.
Kingspan's Innovation and Planet Passionate strategies have the
firm aim of addressing this challenge through driving progressively
sustainable building envelope solutions. These strategies are
deeply embedded across Kingspan, delivering a reduction of direct
GHG emissions by over 50% in the first half and reinforcing a
common goal for our people globally.
Our expanding spectrum of insulation solutions continues to
progress apace. Since period end, we agreed to acquire 51% of
Steico, the world leader in wood-based insulation, adding to a
growing bio-based portfolio including hemp and wood-wool acoustic
insulation. Along with our portfolio of LEC (lower embodied carbon)
products, the first of which launched this year, we are now firmly
established as a leader in the growing market for lower embodied
carbon construction products.
As we look to the remainder of the year, we expect continuing
strategic momentum supported by a strong development pipeline, an
increasingly stable supply chain and pricing environment, and a
global decarbonisation drive."
For further information contact:
Murray Consultants Tel: +353 (0) 1 4980 300
Pat Walsh
Business Review
The first half of 2023 has been relatively pleasing for Kingspan
given the somewhat challenging environment we were confronted with.
Sales revenue reached EUR4.1bn and trading profit amounted to
EUR436m, edging slightly ahead of the record achieved in the same
period of 2022. Our direct GHG emissions reduced significantly in
the first half, by 51%, reflecting ongoing traction from the many
Planet Passionate initiatives underway across the business. In
contrast to recent years, deflation has been a prominent theme, as
has been de-stocking of our inventories which boosted the strong
cash generation in the period.
Similar to the trading backdrop reported in the 2022 full year,
conditions varied considerably by market and by end segment. The
Americas, and the US in particular, has performed exceptionally
well for us as Insulated Panels continued to deliver growth driven
by conversion from traditional building envelope solutions. Europe
has been more mixed with predominately weaker newbuild activity and
refurbishment suffering somewhat due to the current interest rate
environment. Broadly, France was strong with Southern and Eastern
Europe weaker. APAC, albeit relatively small for us at present,
performed well as our position in Australia improved and activity
in South East Asia grew.
Planet Passionate and our Impact
Our Planet Passionate agenda, central to our purpose at
Kingspan, continues to build upon the progress of recent years with
the implementation of many more initiatives across the Group. Total
Scope 1 & 2 emissions are expected to reduce by up to 60% since
2020 and direct renewable energy usage increase to 39%. The number
of our wholly owned sites with solar PV installations forecasted to
reach 48% and rainwater harvesting expected to double from 2020,
increasing to 42 million litres throughout the year.
The table overleaf provides further detail on the progress
within Kingspan by category:
Underlying Business Whole Business
---------------------------------------- --------
Planet Passionate Targets Target FY2020 FY2023(f) FY2020 FY2023(f)(4)
Year
---------------------------------------- -------- -------- ------------- ---------- -------------
Net Zero Carbon
Manufacturing -
scope 1 & 2 GHG
Carbon emissions(1) (t/CO2e) 2030 410k(2) 140k 518k(2,3) 206k
------------- ------------------------- -------- -------- ------------- ---------- -------------
50% reduction in 2030 - Not forecast - Not forecast
product CO2e intensity at half at half
from primary supply year year
partners (%)
------------- ------------------------- -------- -------- ------------- ---------- -------------
Zero emission company
funded cars (annual
replacement %) 2025 11 40 11 40(4)
------------------------- ---------------------- -------- ------------- ---------- -------------
60% Direct renewable
Energy energy (%) 2030 19.5 40.9 19.5 38.7
------------- ------------------------- -------- -------- ------------- ---------- -------------
20% On-site renewable
energy generation
(%) 2030 4.9 8.5 4.9 8.0
------------------------- ---------------------- -------- ------------- ---------- -------------
Solar PV systems
on all wholly owned
sites (%) 2030 21.7 55.2 21.7 48.5
------------------------- ---------------------- -------- ------------- ---------- -------------
Zero Company waste
Circularity to landfill (tonnes) 2030 18,642 6,000 18,642 8,300
------------- ------------------------- -------- -------- ------------- ---------- -------------
Recycle 1 billion
PET bottles into
our manufacturing
processes annually
(million bottles) 2025 573 602 573 602
------------------------- ---------------------- -------- ------------- ---------- -------------
QuadCore(TM) products
utilising recycled
PET (no. of sites) 2025 1 8 1 8
------------------------- ---------------------- -------- ------------- ---------- -------------
Harvest 100 million
litres of rainwater
annually (million
Water litres) 2030 20.1 42.1 20.1 42.3
------------- ------------------------- -------- -------- ------------- ---------- -------------
Support 5 Ocean
Clean-Up projects
(no. of projects) 2025 1 4 1 4
------------------------- ---------------------- -------- ------------- ---------- -------------
Underlying Business includes manufacturing, assembly and R&D sites
within the Kingspan Group in 2020 plus all organic growth.
Whole Business includes all manufacturing, assembly and R&D sites
within the Kingspan Group, including additions since 2020.
1: Excluding biogenic emissions. Scope 2 GHG emissions calculated
using market-based methodology.
2: Restated figures due to improved data collection and change
in calculation methodologies.
3: GHG emissions were recalculated due to acquisitions in 2021
and 2022.
4: Businesses acquired during the first half may not be fully reflected
in the 2023 forecast.
Investing in our future
A total of EUR271m in capital was deployed in the period,
EUR156m on acquisitions, and EUR115m in capex across all the
product streams, largely focused on capacity expansion and new
market entry. In addition, the planned Ukraine Technology Campus is
progressing with final site location having been selected in Lviv.
The scope of the development is likely to exceed the EUR200m
initially indicated when the campus completes, expected around 2026
(subject to geopolitical developments) reflecting the likely need
for increased capacity in the region.
The largest acquisition investment in the period was CaPlast at
EUR85m, adding to the growing array of solutions being offered by
our emerging Roofing + Waterproofing segment. Since period end, we
agreed to acquire 51% of Steico, the world leader in natural
wood-based insulation for an initial consideration of EUR251m.
Innovation at work
A number of LEC (lower embodied carbon) products have been
launched, including QuadCore(TM) Insulated Panels, Access Floors
and Insulation Boards. All are being well received by specifiers as
the demand for distinctive lower carbon building solutions gains
momentum. We expect to add to this proposition in the second
half.
Our PowerPanel(TM) and Rooftricity(TM) solutions have been reset
after considerable trial activity as we seek to significantly
enhance product performance and longevity with a completely new
design. Meaningful progress has also been made in recent months
with a strengthened and more robust supply chain. Extensive testing
and certification processes point towards market launch in Q2
2024.
In our Data + Flooring division, tremendous progress has been
made developing an advanced HAC (Hot Aisle Containment) offering
which has resulted in expanded long term revenue potential in the
data centre market. This initiative will require a new
manufacturing plant in the US which we plan to commission during
the first half of 2024.
Last year we acquired Troldtekt in Denmark, a world leader in
acoustic insulation and largely timber based. We recently added to
the 'natural insulation' category by acquiring HempFlax, an
emerging hemp materials business in Germany. Since period end we
announced the acquisition of 51% of Steico, the world's leading
wood-based insulation business based near Munich, Germany, which
will catapult our presence in this growing category.
Product and system integrity
By the end of the first half, 47 of our sites were certified to
ISO 37301, with a plan to have 60 sites certified to the standard
by the end of the year. ISO 37301 is the leading global standard
for establishing, developing and monitoring compliance systems. Our
enhanced product integrity programme is now deeply embedded across
the Group. In 2023 to date, 56 of our sites have been audited by
the Compliance Team, with a further 50 scheduled to be audited by
year end. In addition, 346 third party external products and system
audits took place through the first half.
Insulated Panels
H1 '23 H1 '22 Change
---------------- -------- -------- --------
Revenue EURm 2,386.7 2,665.2 -10%(1)
Trading Profit
EURm 291.2 299.4 -3%
Trading Margin 12.2% 11.2% +100bps
---------------- -------- -------- --------
(1) Comprising underlying -10%, currency -1% and acquisitions +1%. Like-for-like volume -7%.
Trading in our largest division was relatively positive, albeit
reflective of the regional variability in economic conditions.
Global revenue trailed last year owing to weaker volume in some
markets and a degree of price deflation, particularly in
Continental Europe. North America delivered a stellar performance
as conversion continued and the forward project pipeline of large
scale tech and automotive factories is extremely encouraging. Order
intake, which had been very lumpy in recent times due to general
economic unpredictability, improved versus prior year as the months
progressed. We expect quarter three order intake to be ahead of the
same period in 2022. QuadCore (TM) sales represented 19% of total
Insulated Panel volume as this unique advanced insulation core
continues to advance in the specifier and end-user market.
Insulation
H1 '23 H1 '22 Change
--------------------- ------- ------- --------
Revenue EURm 798.8 842.0 -5% (1)
Trading Profit EURm 75.8 88.2 -14%
Trading Margin 9.5% 10.5% -100bps
--------------------- ------- ------- --------
(1) Comprising underlying -7%, currency -1% and acquisitions +3%.
Global sales across the various insulation solutions fell back
in the first half with a corresponding reduction in trading profit.
The margin performance progressed during Q2 following a weaker
first quarter as we defended prices at the cost of short term
volume.
Demand in Western Europe has been notably weak for the board
businesses as the residential segment in particular feels the
pressure. Raw material costs have been reducing with a
consequential pricing impact in many markets. A deep program of
structural operating cost reduction measures is underway in the PIR
board business.
In contrast, the technical insulation segment has powered
forward with revenue in the District Heating product set growing by
17%. The growth rate may ease a little in the near-term as second
half comparatives are more demanding. That said, the forward
project pipeline is significantly ahead of the same point last year
which augurs well for the medium term.
Light, Air + Water
H1 '23 H1 '22 Change
--------------------- ------- ------- --------
Revenue EURm 470.6 474.2 -1% (1)
Trading Profit EURm 30.0 24.8 +21%
Trading Margin 6.4% 5.2% +120bps
--------------------- ------- ------- --------
(1) Comprising currency -1%
Total revenue in this enlarged division was broadly flat for the
period, again reflective of mixed performances by geography and
end-market. France, Benelux and Germany performed well as
commercial measures executed during 2022 took effect with a
positive margin performance.
North American performance was in line with prior year and the
Middle East was somewhat weaker.
Water applications continue to perform well with resource
scarcity on the minds of many.
Roofing + Waterproofing
H1 '23 H1 '22 Change
-------------------- ------- ------- -------
Revenue EURm 238.6 - n/a
Trading Profit EURm 10.7 - n/a
Trading Margin 4.5% - n/a
-------------------- ------- ------- -------
We have been assembling this new platform over the past year or
so. It is currently predominately European based and occupies
positions in the three key categories of flat roofing, rigid
pitched roofing and flexible pitched roofing. Rigid pitched roofing
performed robustly in the period, as did the flexible category to
which we added the EUR85m CaPlast acquisition earlier this
year.
Our flat roofing business has been weakest, reflecting a
difficult trading environment in Benelux and Germany in particular.
Insulation pull-through, operational efficiency and product range
expansion are the key priorities at present.
Data + Flooring
H1 '23 H1 '22 Change
--------------------- ------- ------- ---------
Revenue EURm 189.2 172.0 +10% (1)
Trading Profit EURm 27.8 21.8 +28%
Trading Margin 14.7% 12.7% +200bps
--------------------- ------- ------- ---------
(1) Comprising underlying +11% and currency impact -1%.
The data segment is, and has been, an important end-market for a
number of our businesses given the focus on energy efficiency,
emission conservation and lower carbon in that sector. It
represents in excess of 50% of this division which can be expected
to grow meaningfully in the near and medium term as we expand the
internal air management offering in projects across the US, Europe
and South East Asia. Many of these are supporting the world's
leading bluechip data providers.
To support this growth and ambition, we will develop a new
manufacturing facility in the North Eastern US to become
operational early 2024.
Financial Review
Overview of results
Group revenue decreased by 2% to EUR4,083.9m (H1 2022:
EUR4,153.4m) and trading profit increased modestly to EUR435.5m (H1
2022: EUR434.2m). This represents a 0.7% decrease in sales and a
1.4% increase in trading profit on a constant currency basis. The
Group's trading margin increased by 20bps to 10.7% (H1 2022: 10.5%)
primarily reflecting a strong margin performance in Insulated
Panels and the divisional mix of sales. The amortisation charge in
respect of intangibles was EUR20.6m compared to EUR12.9m in the
first half of 2022 reflecting acquisition activity year on year.
Group operating profit increased by 2% to EUR414.9m (H1 2022:
EUR405.2m) reflecting a combination of a higher amortisation charge
in H1 2023 and the non trading item of EUR16.1m recorded in H1
2022. Profit after tax was EUR324.0m compared to EUR319.9m in the
first half of 2022. Basic EPS for the period was 175.2 cent,
representing an increase of 3% on the first half of 2022 (H1 2022:
170.6 cent).
The Group's underlying sales and trading profit performance by
division are set out below:
Sales Underlying Currency Acquisition Total
------------------------- ----------- --------- ------------ ------
Insulated Panels -10% -1% +1% -10%
Insulation -7% -1% +3% -5%
Light, Air + Water - -1% - -1%
Data + Flooring +11% -1% - +10%
Roofing + Waterproofing - - +100% 100%
Group -8% -1% +7% -2%
----------- --------- ------------ ------
The Group's trading profit measure is earnings before interest,
tax, amortisation of intangibles and non trading item:
Trading Profit Underlying Currency Acquisition Total
------------------------- ----------- --------- ------------ ------
Insulated Panels -3% -1% +1% -3%
Insulation -18% - +4% -14%
Light, Air + Water +23% -2% - +21%
Data + Flooring +29% -1% - +28%
Roofing + Waterproofing - - +100% +100%
Group -3% -1% +4% -
----------- --------- ------------ ------
Finance costs (net)
Finance costs for the period were higher than the same period
last year at EUR22.1m (H1 2022: EUR17.6m). Finance costs include a
non-cash charge of EUR0.4m (H1 2022: EUR0.1m) relating to the
Group's defined benefit pension schemes. Finance income includes a
dividend received from an equity investment of EUR2.5m (H1 2022:
EURnil). Lease interest of EUR2.7m was recorded during the period
(H1 2022: EUR2.3m). The Group's net interest expense on borrowings
(bank and loan notes) in the first half of 2023 was EUR21.3m
compared to EUR15.2m in the same period in 2022. This increase was
due mainly to the higher levels of drawn debt year on year as a
consequence of the Group's development activity.
Free cashflow
H1 '23 H1 '22
EURm EURm
------------------------------------------ -------- --------
EBITDA* 528.4 512.2
Lease payments (32.8) (27.1)
Movement in working capital ** 84.8 (261.7)
Movement in provisions (3.1) (0.1)
Net capital expenditure (114.7) (117.5)
Pension contributions (2.1) (2.7)
Defined benefit scheme buy in settlement (15.9) -
Net finance costs paid (18.5) (16.2)
Income taxes paid (78.4) (82.4)
Other including non-cash items 9.2 8.4
-------- --------
Free cashflow 356.9 12.9
-------- --------
*Earnings before finance costs, income taxes, depreciation,
amortisation and non trading item. Calculation is set out in
Alternative Performance Measures at the end of the statement
**Excludes working capital on acquisition but includes working
capital movements since that point
Working capital on 30 June 2023 was EUR1,118.8m (31 December
2022: EUR1,195.9m), a decrease of EUR77.1m (EUR84.8m excl.
acquisitions) in the period. The decrease was driven by lower
levels of inventories compared to both last year end and June 2022.
As highlighted previously, inventory levels in 2022 were elevated
intentionally in an uncertain supply environment at that time.
Supply chains have now more or less returned to normal. The average
working capital to sales percentage was 13.2% compared with 14.5%
in H1 2022.
Net Debt
Net debt decreased by EUR166.9m during the first half of the
year to EUR1,372.7m (31 December 2022: EUR1,539.6m). The movement
in debt is analysed in the table below:
Movement in net debt H1 '23 H1 '22
EURm EURm
----------------------------------- ---------- ----------
Free cashflow 356.9 12.9
Acquisitions and divestments (149.7) (357.2)
Deferred consideration paid (6.6) (46.9)
Dividends paid (43.3) (47.2)
Dividends paid to non-controlling
interests (0.8) (2.1)
---------- ----------
Cashflow movement 156.5 (440.5)
Exchange movements on translation 10.4 (10.0)
---------- ----------
Decrease/(increase) in net debt 166.9 (450.5)
Net debt at start of period (1,539.6) (756.1)
Net debt at end of period (1,372.7) (1,206.6)
---------- ----------
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 aggregate pension liability in respect of all schemes and
obligations was EUR32.7m at 30 June 2023 (31 December 2022:
EUR49.5m). The Group cash-settled a pension buy-in arrangement in
respect of a legacy defined benefit scheme in the period for
EUR15.9m.
Non trading item
The Group recorded a non trading charge of EURnil (H1 2022:
EUR16.1m) in the period. The comparative charge was in respect of
the Group's net loss on the complete divestment of its Russian
operations.
Taxation
The tax charge for the first half of the year was EUR68.8m (H1
2022: EUR67.7m) which represents an effective tax rate of 17.5% on
profit before tax (H1 2022: 17.5%).
Acquisitions
The Group incurred EUR156.3m on acquisitions during the period
(H1 2022: EUR397.7m).
Dividend
The Board has declared an interim dividend of 26.3 cent (H1
2022: 25.6 cent) payable on 13 October 2023 to shareholders on the
register on the record date of 8 September 2023. This is in line
with the previously announced revised shareholder returns
policy.
Capital structure and Group financing
The Group funds itself through a combination of equity and debt.
Debt is funded through a combination of syndicated bank facilities
and private placement loan notes. The principal syndicated facility
is a green revolving credit facility of EUR800m entered into in May
2021 with a committed term to May 2026. There were no drawings on
this facility at period end.
In addition, as part of the Group's longer-term capital
structure, the Group has total private placement loan notes of
EUR1,594m (H1 2022: EUR1,392m) which includes a new private
placement issuance of EUR319m in June 2023 with a 6 year maturity.
The weighted average maturity of all outstanding private placement
loan notes as of 30 June 2023 was 5.5 years (H1 2022: 5.8
years).
During the period, the Group repaid part (EUR319m) of the 2022
acquisition related financing facility, with the remainder of the
facility fully drawn (EUR181m).
The weighted average maturity of all drawn debt facilities is
4.4 years (H1 2022: 5.4 years).
As well as ongoing free cashflow generation, the Group has
significant available undrawn committed facilities and cash which
provide appropriate headroom for operational requirements and
development funding. Total available headroom was EUR1,561m at 30
June 2023 (H1 2022: EUR1,743m).
Related party transactions
There were no changes in related party transactions from the
2022 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
Principal risks & uncertainties
Details of the principal risks and uncertainties facing the
Group can be found in the 2022 Annual Report. These risks, namely
volatility in the macro environment, failure to innovate, product
failure, business interruption (including IT continuity), climate
change, credit risks and credit control, employee development and
retention, fraud and cybercrime, acquisition and integration of new
businesses, health & safety, and laws and regulations remain
the most likely to affect the Group in the second half of the
current year. The Group actively manages these and all other risks
through its control and risk management processes. We will continue
to actively assess changes in the external environment on events
which could change our risk assessment and profile.
Looking Ahead
As we have highlighted previously, our end markets are not
uniform with varying activity levels in different regions and
applications. Our overall performance reflects the diversity and
breadth of the Group's proposition and sectors we serve. Our
spectrum of insulation solutions continues to progress apace with
natural and bio-based materials the latest milestone in this
advancement.
In more recent months, our order intake volumes have been
trending positively overall versus the same months last year albeit
with less demanding comparatives as we trade through the second
half. Raw material pricing, which experienced some level of
inflation in the second quarter, could see some deflation in Q3.
The Group's balance sheet is strong which is important given the
backdrop of a strong development pipeline.
The evidence of climate change is ever more apparent and the
need to decarbonise is now of hyper-importance. Kingspan's
solutions are at the vanguard of energy efficiency, and driving
lower carbon in the built environment, which ought to position the
Group well in the years ahead.
2023 Statement of Directors Responsibilities
for the 6 month period ended 30 June 2023
The Directors are responsible for preparing the half-yearly
financial report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, as amended, (the "Transparency
Regulations") and the Transparency Rules of the Central Bank of
Ireland.
Each of the Directors confirm that to the best of their
knowledge:
1) the condensed set of consolidated financial statements included
within the half-yearly financial report of Kingspan Group Plc
for the six months ended 30 June 2023 (the "interim financial
information") which comprises the Condensed Consolidated Income
Statement, the Condensed Consolidated Statement of Comprehensive
Income, the Condensed Consolidated Statement of Financial Position,
the Condensed Consolidated Statement of Changes in Equity,
the Condensed Consolidated Statement of Cash Flows and the
related explanatory notes, have been presented and prepared
in accordance with IAS 34, Interim Financial Reporting, as
adopted by the EU, the Transparency Directive and Transparency
Rules of the Central Bank of Ireland;
2) the interim financial information presented, as required by
the Transparency Regulations, includes:
a. a fair review of the important events that have occurred
during the first 6 months of the financial year, and their
impact on the condensed set of consolidated financial statements;
b. a description of the principal risks and uncertainties
for the remaining 6 months of the financial year;
c. a fair review of related parties' transactions that have
taken place in the first 6 months of the current financial
year and that have materially affected the financial position
or the performance of the enterprise during that period;
and
d. any changes in the related parties' transactions described
in the last annual report that could have a material effect
on the financial position or performance of the enterprise
in the first 6 months of the current financial year.
The directors of Kingspan Group plc, and their functions, are
listed in the 2022 Annual Report, with the exception of the
following changes during the period:
-- Michael Cawley and John Cronin both retired as non-executive
directors on 28 April 2023;
-- Louise Phelan was appointed as a non-executive director
on 28 April 2023.
On behalf of the Board
Gene M Murtagh Geoff Doherty
Chief Executive Officer Chief Financial Officer
18 August 2023 18 August 2023
Kingspan Group plc
Condensed consolidated income statement (unaudited)
for the 6 month period ended 30 June 2023
6 months 6 months
ended ended
30 June 30 June
2023 2022
Note EURm EURm
Revenue 4 4,083.9 4,153.4
Cost of Sales (2,903.0) (3,044.3)
---------- ------------------------
Gross Profit 1,180.9 1,109.1
Operating Costs (745.4) (674.9)
---------- ------------------------
Trading Profit 4 435.5 434.2
Intangible amortisation (20.6) (12.9)
Non trading item 6 - (16.1)
------------------------
Operating Profit 414.9 405.2
Finance expense 7 (32.0) (18.0)
Finance income 7 9.9 0.4
---------- ------------------------
Profit for the period before
income tax 392.8 387.6
Income tax expense 8 (68.8) (67.7)
---------- ------------------------
Profit for the period 324.0 319.9
---------- ------------------------
Attributable to owners of Kingspan
Group plc 318.4 309.5
Attributable to non-controlling
interests 5.6 10.4
---------- ------------------------
324.0 319.9
---------- ------------------------
Earnings per share for the period
Basic 13 175.2c 170.6c
Diluted 13 174.1c 169.3c
Kingspan Group plc
Condensed consolidated statement of comprehensive income
(unaudited)
for the 6 month period ended 30 June 2023
6 months 6 months
ended ended
30 June 30 June
2023 2022
EURm EURm
Profit for financial period 324.0 319.9
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations (2.1) 49.0
Net changes in fair value of cash flow hedges (0.5) -
Items that will not be reclassified subsequently
to profit or loss
Actuarial (losses)/gains on defined benefit
pension schemes (0.1) 10.0
Income taxes relating to actuarial losses/(gains)
on defined benefit pension schemes - (2.5)
Equity investments at FVOCI - net change (8.2) -
in fair value
Total comprehensive income for the period 313.1 376.4
--------- ---------
Attributable to owners of Kingspan Group
plc 304.3 358.6
Attributable to non-controlling interests 8.8 17.8
--------- ---------
313.1 376.4
--------- ---------
Kingspan Group plc
Condensed consolidated statement of financial position
as at 30 June 2023
At 30 At 30 June At 31 December
June
2023 (unaudited) 2022 (unaudited) 2022
(audited)
Note EURm EURm EURm
Assets
Non-current assets
Goodwill 14 2,611.6 2,208.4 2,495.5
Other intangible assets 185.3 82.6 191.8
Financial assets 84.8 13.0 93.6
Property, plant and equipment 15 1,518.5 1,285.3 1,437.9
Right of use assets 16 216.4 173.9 205.3
Retirement benefit assets 3.2 29.7 3.3
Deferred tax assets 40.1 35.4 40.1
-------------------- ------------------- ---------------
4,659.9 3,828.3 4,467.5
Current assets
Inventories 1,145.7 1,364.1 1,235.8
Trade and other receivables 1,555.9 1,675.2 1,328.4
Derivative financial instruments 10 - 0.5 0.4
Cash and cash equivalents 9 761.2 392.7 649.3
-------------------- ------------------- ---------------
3,462.8 3,432.5 3,213.9
-------------------- ------------------- ---------------
Total assets 8,122.7 7,260.8 7,681.4
-------------------- ------------------- ---------------
Liabilities
Current liabilities
Trade and other payables 1,582.8 1,732.6 1,368.7
Provisions for liabilities 73.0 68.3 74.0
Lease liabilities 16 41.6 38.1 43.2
Deferred contingent consideration 11 200.1 173.4 174.9
Interest bearing loans and
borrowings 9 258.0 133.3 85.0
Current income tax liabilities 39.6 50.1 54.9
-------------------- ------------------- ---------------
2,195.1 2,195.8 1,800.7
Non-current liabilities
Retirement benefit obligations 35.9 45.5 52.8
Provisions for liabilities 112.8 78.5 107.5
Interest bearing loans and
borrowings 9 1,875.9 1,466.0 2,103.9
Lease liabilities 16 171.5 134.6 153.6
Deferred tax liabilities 51.7 39.1 55.2
Deferred contingent consideration 11 13.4 13.8 12.2
-------------------- ------------------- ---------------
2,261.2 1,777.5 2,485.2
-------------------- ------------------- ---------------
Total liabilities 4,456.3 3,973.3 4,285.9
-------------------- ------------------- ---------------
Net Assets 3,666.4 3,287.5 3,395.5
-------------------- ------------------- ---------------
Equity
Share capital 23.9 23.9 23.9
Share premium 122.6 93.2 112.4
Capital redemption reserve 0.7 0.7 0.7
Treasury shares (55.9) (56.1) (56.9)
Other reserves (314.3) (204.4) (288.0)
Retained earnings 3,797.2 3,356.0 3,527.6
-------------------- ------------------- ---------------
Equity attributable to
owners of Kingspan Group
plc 3,574.2 3,213.3 3,319.7
Non-controlling interests 92.2 74.2 75.8
-------------------- ------------------- ---------------
Total Equity 3,666.4 3,287.5 3,395.5
-------------------- ------------------- ---------------
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
for the 6 month period ended 30 June 2023
Share Share Capital Treasury Translation Cash Share Revaluation Put Retained Total Non- Total
capital premium redemption shares reserve flow based reserve option earnings attributable controlling equity
reserve hedging payment liability to owners interests
reserve reserve reserve of the
parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January
2023 23.9 112.4 0.7 (56.9) (137.2) 0.6 55.1 0.7 (207.2) 3,527.6 3,319.7 75.8 3,395.5
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Transactions with owners recognised directly in equity
Employee share
based
compensation - - - - - - 10.2 - - - 10.2 - 10.2
Exercise or
lapsing of
share options - 10.2 - 1.0 - - (14.0) - - 2.8 - - -
Dividends - - - - - - - - - (43.3) (43.3) - (43.3)
Transactions with
non-controlling
interests:
Arising on
acquisition - - - - - - - - (3.1) - (3.1) 8.4 5.3
Dividends paid to
non-controlling
interests - - - - - - - - - - - (0.8) (0.8)
Fair value
movement - - - - - - - - (13.6) - (13.6) - (13.6)
Settlement of put - - - - - - - - - - - - -
option
Transactions with
owners - 10.2 - 1.0 - - (3.8) - (16.7) (40.5) (49.8) 7.6 (42.2)
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Total
comprehensive
income for the
period
Profit for the
period - - - - - - - - - 318.4 318.4 5.6 324.0
Other
comprehensive
income
Items that may be reclassified subsequently to profit or loss
Cash flow hedging
in
equity
- current year - - - - - (0.5) - - - - (0.5) - (0.5)
- tax impact - - - - - - - - - - - - -
Exchange
differences
on translating
foreign
operations - - - - (5.3) - - - - - (5.3) 3.2 (2.1)
Items that will not be reclassified subsequently to profit or loss
Actuarial loss on
defined
benefit pension
scheme - - - - - - - - - (0.1) (0.1) - (0.1)
Income taxes
relating
to actuarial loss
on
defined benefit
pension
scheme - - - - - - - - - - - - -
Equity investments
at
FVOCI - net
change in
fair value - - - - - - - - - (8.2) (8.2) - (8.2)
Total
comprehensive
income for the
period - - - - (5.3) (0.5) - - - 310.1 304.3 8.8 313.1
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Balance at 30
June 2023 23.9 122.6 0.7 (55.9) (142.5) 0.1 51.3 0.7 (223.9) 3,797.2 3,574.2 92.2 3,666.4
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
for the 6 month period ended 30 June 2022
Share Share Capital Treasury Translation Cash Share Revaluation Put Retained Total Non- Total
capital premium redemption shares reserve flow based reserve option earnings attributable controlling equity
reserve hedging payment liability to owners interests
reserve reserve reserve of the
parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January 2022 23.9 94.4 0.7 (57.3) (108.5) 0.6 57.3 0.7 (227.8) 3,108.1 2,892.1 67.2 2,959.3
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Transactions with owners
recognised
directly in equity
Employee share
based
compensation - - - - - - 9.1 - - - 9.1 - 9.1
Exercise or
lapsing of
share options - (1.2) - 1.2 - - (6.0) - - 6.0 - - -
Dividends - - - - - - - - - (47.2) (47.2) - (47.2)
Transactions with
non-controlling
interests:
Dividends paid to
non-controlling
interests - - - - - - - - - - - (2.1) (2.1)
Fair value
movement - - - - - - - - (8.0) - (8.0) - (8.0)
Settlement of put
option - - - - - - - - 36.6 (27.9) 8.7 (8.7) -
Transactions with
owners - (1.2) - 1.2 - - 3.1 - 28.6 (69.1) (37.4) (10.8) (48.2)
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Total
comprehensive
income
for the period
Profit for the
period - - - - - - - - - 309.5 309.5 10.4 319.9
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 - - - - 41.6 - - - - - 41.6 7.4 49.0
Items that will not be reclassified subsequently to profit or loss
Actuarial gains on
defined
benefit pension
scheme - - - - - - - - - 10.0 10.0 - 10.0
Income taxes
relating to
actuarial gains
on defined
benefit pension
scheme - - - - - - - - - (2.5) (2.5) - (2.5)
Total
comprehensive
income
for the period - - - - 41.6 - - - - 317.0 358.6 17.8 376.4
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Balance at 30
June 2022 23.9 93.2 0.7 (56.1) (66.9) 0.6 60.4 0.7 (199.2) 3,356.0 3,213.3 74.2 3,287.5
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (audited)
for the year ended 31 December 2022
Share Share Capital Treasury Translation Cash Share Revaluation Put Retained Total Non- Total
capital premium redemption shares reserve flow based reserve option earnings attributable controlling equity
reserve hedging payment liability to owners interests
reserve reserve reserve of the
parent
EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm EURm
Balance at 1
January
2022 23.9 94.4 0.7 (57.3) (108.5) 0.6 57.3 0.7 (227.8) 3,108.1 2,892.1 67.2 2,959.3
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Transactions with owners recognised directly in equity
Employee share
based
compensation - - - - - - 18.4 - - - 18.4 - 18.4
Tax on employee
share
based
compensation - - - - - - (11.4) - - 2.5 (8.9) - (8.9)
Exercise or
lapsing of
share options - 18.0 - 1.8 - - (9.2) - - (10.6) - - -
Repurchase of
shares - - - (1.4) - - - - - - (1.4) - (1.4)
Dividends - - - - - - - - - (93.7) (93.7) - (93.7)
Transactions
with
non-controlling
interests:
Settlement of
put option - - - - - - - - 36.6 (28.3) 8.3 (8.3) -
Purchase of NCI - - - - - - - - - (0.4) (0.4) (1.6) (2.0)
Dividends to NCI - - - - - - - - - - - (3.5) (3.5)
Fair value
movement - - - - - - - - (16.0) - (16.0) - (16.0)
Transactions
with owners - 18.0 - 0.4 - - (2.2) - 20.6 (130.5) (93.7) (13.4) (107.1)
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Total
comprehensive
income for the
year
Profit for the
year - - - - - - - - - 598.0 598.0 18.0 616.0
Other
comprehensive
loss:
Items that may be reclassified subsequently to profit or loss
Exchange
differences
on translating
foreign
operations - - - - (28.7) - - - - - (28.7) 4.0 (24.7)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses
on defined
benefit pension
scheme - - - - - - - - - (20.3) (20.3) - (20.3)
Income taxes
relating
to actuarial
losses on
defined benefit
pension
scheme - - - - - - - - - 4.9 4.9 - 4.9
Equity
investment at
FVOCI - net
change in
fair value - - - - - - - - - (32.6) (32.6) - (32.6)
Total
comprehensive
income for the
year - - - - (28.7) - - - - 550.0 521.3 22.0 543.3
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Balance at 31
December
2022 23.9 112.4 0.7 (56.9) (137.2) 0.6 55.1 0.7 (207.2) 3,527.6 3,319.7 75.8 3,395.5
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Kingspan Group plc
Condensed consolidated statement of cash flows (unaudited)
for the 6 month period ended 30 June 2023
6 months 6 months
ended ended
30 June 30 June
2023 2022
EURm EURm
Operating activities
Profit for the period 324.0 319.9
Add back non-operating expenses:
Income tax expense 68.8 67.7
Depreciation of property, plant
and equipment 92.9 78.0
Amortisation of intangible assets 20.6 12.9
Impairment of non-current assets 0.9 -
Loss on divestment of subsidiary - 16.1
Employee equity-settled share options 10.2 9.1
Finance income (9.9) (0.4)
Finance expense 32.0 18.0
Profit on sale of property, plant
and equipment (0.7) (0.7)
Movement of deferred contingent (1.2) -
consideration
Changes in working capital:
Inventories 114.4 (181.2)
Trade and other receivables (225.1) (367.9)
Trade and other payables 195.5 287.4
Other:
Change in provisions (3.1) (0.1)
Defined benefit pension scheme buy (15.9) -
in settlement
Pension contributions (2.1) (2.7)
-------- ----------
Cash generated from operations 601.3 256.1
Income tax paid (78.4) (82.4)
Interest paid (28.4) (16.5)
-------- ----------
Net cash flow from operating activities 494.5 157.2
-------- ----------
Investing activities
Additions to property, plant and
equipment (115.2) (131.5)
Additions to intangible assets (2.5) -
Proceeds from disposals of property,
plant and equipment 3.0 14.0
Purchase of subsidiary undertakings
(including net debt/cash acquired) (149.7) (350.8)
Payment of deferred contingent consideration
in respect of acquisitions (6.6) (46.9)
Divestment of subsidiary - (6.4)
Finance income 9.9 0.3
-------- ----------
Net cash flow from investing activities (261.1) (521.3)
-------- ----------
Financing activities
Drawdown of interest bearing loans
and borrowings 319.0 185.6
Repayment of interest bearing loans (370.3) -
and borrowings
Payment of lease liabilities (32.8) (27.1)
Dividends paid to non-controlling
interests (0.8) (2.1)
Dividends paid (43.3) (47.2)
-------- ----------
Net cash flow from financing activities (128.2) 109.2
-------- ----------
Increase/(decrease) in cash and
cash equivalents 105.2 (254.9)
Effect of movement in exchange rates
on cash held 6.7 6.2
Cash and cash equivalents at the
beginning of the period 649.3 641.4
-------- ----------
Cash and cash equivalents at the
end of the period 761.2 392.7
-------- ----------
Kingspan Group plc
Notes
forming part of the financial statements
1 Reporting entity
Kingspan Group plc ("the Company") is a public limited company
registered and domiciled in Ireland.
The Company and its subsidiaries (together referred to as "the
Group") are primarily involved in the manufacture of high
performance insulation and building envelope solutions.
The financial information presented in the half-yearly report
does not represent full statutory accounts. Full statutory accounts
for the year ended 31 December 2022 prepared in accordance with
IFRS, as adopted by the EU, upon which the auditors have given an
unqualified audit report, are available on the Group's website (
www.kingspan.com ).
2 Basis of preparation
This half-yearly financial report is unaudited and has not been
reviewed by the Company's auditor.
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 a mortisation and gains or
losses from non trading items.
- 'Non trading items' refer to certain items, which by virtue of
their nature and amount, are disclosed separately in order for the
user to obtain a proper understanding of the financial information.
Non-trading items include gains or losses on the disposal or
acquisition of businesses and material related acquisition and
integration costs, and material impairments to the carrying value
of intangible assets or property, plant and equipment. It is
determined by management that each of these items relate to events
or circumstances that are non-recurring in nature.
- 'Operating profit' is profit before income taxes and net finance costs.
(a) Statement of compliance
These condensed consolidated interim financial statements ("the
Interim Financial Statements") have been prepared in accordance
with IAS 34 Interim Financial Reporting, as adopted by the EU, and
do not include all of the information required for full annual
financial statements.
The Interim Financial Statements were approved by the Board of
Directors on 18 August 2023.
(b) Significant accounting policies and new standards,
interpretations and amendments adopted by the Group
The significant accounting policies applied by the Group in the
Interim Financial Statements are the same as those applied by the
Group in its consolidated financial statements as at and for the
year ended 31 December 2022.
The following amendments to standards and interpretations are
effective for the Group from 1 January 2023 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 IAS 12 Income Taxes - Deferred
Tax related to Assets and Liabilities arising 1 January 2023
from a single transaction
Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2 - 1 January 2023
Disclosure of Accounting Policies
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors - Definition 1 January 2023
of Accounting Estimates
IFRS 17 Insurance Contracts; including amendments 1 January 2023
to IFRS 17 Insurance Contracts: Initial Application
of IFRS 17 and IFRS 9
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 Interim 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
Amendments to IAS 7 Statement of Cash Flows and 1 January 2024*
IFRS 7 Financial Instruments: Disclosures: Supplier
Finance Arrangements
Amendments to IAS 1 Presentation of Financial
Statements - Classification of Liabilities as 1 January 2024*
Current or Non-current Date, Classification of
Liabilities as Current or Non-current - Deferral
of Effective Date and Non-current Liabilities
with Covenants
Amendments to IFRS 16 Leases: Lease Liability 1 January 2024*
in a Sale and Leaseback
Amendments to IAS 12 Income Taxes: International 23 May 2023*
Tax Reform - Pillar Two Model Rules
* Not EU endorsed
(c) Estimates and judgements
The preparation of Interim Financial Statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expense. Actual results
may differ from these estimates.
In preparing the Interim Financial Statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
as at and for the year ended 31 December 2022. The Interim
Financial Statements are available on the Group's website (
www.kingspan.com ).
(d) Going concern
The directors have reviewed forecasts and projected cash flows
for a period of not less than 12 months from the date of these
Interim Financial Statements, and considered its net debt position,
available committed banking facilities and other relevant
information including the economic conditions currently affecting
the building environment generally. On the basis of this review,
the directors have concluded that there are no material
uncertainties that would cast significant doubt over the Group's
ability to continue as a going concern. For this reason, the
directors consider it appropriate to adopt the going concern basis
in preparing the financial statements.
3 Reporting currency
The Interim Financial Statements are presented in Euro which is
the functional currency of the Company and presentation currency of
the Group.
Results and cash flows of foreign subsidiary undertakings have
been translated into Euro at the average exchange rates for the
period, as these approximate the exchange rates at the dates of the
transactions. The related assets and liabilities have been
translated at the closing rates of exchange applicable at the end
of the reporting period.
The following significant exchange rates were applied during the
period:
Average rate Closing rate
H1 2023 H1 2022 FY 2022 H1 2023 H1 2022 FY 2022
Euro =
Pound Sterling 0.876 0.842 0.853 0.864 0.861 0.886
US Dollar 1.081 1.093 1.054 1.092 1.045 1.067
Canadian Dollar 1.456 1.389 1.370 1.449 1.348 1.444
Australian Dollar 1.600 1.520 1.517 1.650 1.518 1.569
Czech Koruna 23.679 24.647 24.562 23.681 24.738 24.143
Polish Zloty 4.625 4.636 4.685 4.455 4.663 4.680
Hungarian Forint 380.240 375.38 391.09 370.970 394.50 400.190
Brazilian Real 5.479 5.553 5.442 5.293 5.412 5.632
4 Operating segments
In identifying the Group's operating segments, management based
its decision on the product supplied by each segment and the fact
that each segment is managed and reported separately to the Chief
Operating Decision Maker. These operating segments are monitored,
and strategic decisions are made on the basis of segment operating
results.
The Group established a new operating segment, Roofing +
Waterproofing, during the second half of 2022. This encompasses the
Group's waterproof membrane roofing solutions activities which has
resulted from the acquisition of Derbigum (acquired June 2022),
Ondura Group (acquired September 2022) and CaPlast (acquired April
2023). As Derbigum (acquired at the end of June 2022) was reported
within the Insulation operating segment in the 2022 half year
report, the prior period comparatives have been restated.
The Group also established a new operating segment, Light, Air +
Water effective 1 January 2023. This encompasses the Group's
previously reported operating segments "Light + Air" and "Water +
Energy". The prior period comparatives have been restated to
reflect this.
The Group has the following five reportable segments:
Insulated Panels Manufacture of insulated panels, structural
framing and metal facades.
Insulation Manufacture of rigid insulation boards, technical
insulation and engineered timber systems.
Light, Air Manufacture of energy and water solutions,
+ Water daylighting, smoke management and ventilation
systems.
Data + Flooring Manufacture of data centre storage solutions
and raised access floors.
Roofing + Waterproofing Manufacture of roofing and waterproofing solutions
for renovation and new construction of buildings.
Analysis by class of business
Segment revenue and disaggregation of revenue
Data Roofing
Insulated Insulation Light, + +
Panels Air + Water Flooring Waterproofing Total
EURm EURm EURm EURm EURm EURm
Total revenue
- H1 2023 2,386.7 798.8 470.6 189.2 238.6 4,083.9
Total revenue
- H1 2022 2,665.2 842.0 474.2 172.0 - 4,153.4
Disaggregation of revenue H1 2023
Point in Time 2,385.6 785.9 327.7 172.8 238.6 3,910.6
Over Time 1.1 12.9 142.9 16.4 - 173.3
------------ ----------- ------------- ---------- --------------- ----------
2,386.7 798.8 470.6 189.2 238.6 4,083.9
Disaggregation of revenue H1 2022
Point in Time 2,638.1 828.9 341.2 152.7 - 3,960.9
Over Time 27.1 13.1 133.0 19.3 - 192.5
------------ ----------- ------------- ---------- --------------- ----------
2,665.2 842.0 474.2 172.0 - 4,153.4
Data Roofing
Insulated Insulation Light, + + Waterproofing
Panels Air + Water Flooring EURm Total
EURm EURm EURm EURm EURm
Trading profit -
H1 2023 291.2 75.8 30.0 27.8 10.7 435.5
Intangible amortisation (5.4) (5.5) (1.7) (0.1) (7.9) (20.6)
Non trading item - - - - - -
---------- -----------------
Operating result
- H1 2023 285.8 70.3 28.3 27.7 2.8 414.9
---------- ----------- ------------- ---------- -----------------
Net finance expense (22.1)
---------
Profit for the period before income tax 392.8
Income tax expense (68.8)
---------
Profit for the period - H1 2023 324.0
---------
Data Roofing
Insulated Insulation Light, + + Waterproofing
Panels Air + Water Flooring EURm Total
EURm EURm EURm EURm EURm
Trading profit -
H1 2022 299.4 88.2 24.8 21.8 - 434.2
Intangible amortisation (7.0) (2.4) (3.4) (0.1) - (12.9)
Non trading item (16.1) - - - - (16.1)
---------- --------------
Operating result
- H1 2022 276.3 85.8 21.4 21.7 - 405.2
---------- ----------- ------------- ---------- --------------
Net finance expense (17.6)
------------
Profit for the period before income tax 387.6
Income tax expense (67.7)
------------
Profit for the period - H1 2022 319.9
------------
Segment assets and liabilities
Light, Data Total Total
Insulated Insulation Air + + Roofing 30 June 30 June
Panels Water Flooring + Waterproofing 2023 2022
EURm EURm EURm EURm EURm EURm EURm
Assets - H1 2023 3,541.0 1,714.1 948.3 231.9 886.1 7,321.4
Assets - H1 2022 3,763.2 1,703.7 986.2 259.7 119.4 6,832.2
Derivative financial
instruments - 0.5
Cash and cash
equivalents 761.2 392.7
Deferred tax asset 40.1 35.4
---------- ----------
Total assets 8,122.7 7,260.8
---------- ----------
Liabilities - H1
2023 (1,273.2) (382.2) (339.1) (68.5) (168.1) (2,231.1)
Liabilities - H1
2022 (1,427.4) (422.3) (346.1) (68.6) (20.4) (2,284.8)
Derivative financial - -
instruments
Interest bearing loans and borrowings (current
and non-current) (2,133.9) (1,599.3)
Income tax liabilities (current and deferred) (91.3) (89.2)
---------- ----------
Total liabilities (4,456.3) (3,973.3)
---------- ----------
Other segment information
Insulated Insulation Light, Roofing
Panels Air + Data + + Waterproofing
EURm EURm Water Flooring EURm Total
EURm EURm EURm
Capital Investment
- H1 2023 * 83.3 33.8 8.5 2.4 32.1 160.1
Capital Investment
- H1 2022 * 92.5 68.6 9.1 2.5 17.2 189.9
Depreciation included
in segment
result - H1 2023 (46.1) (22.3) (13.7) (3.8) (7.0) (92.9)
Depreciation included
in segment
result - H1 2022 (41.1) (20.7) (13.3) (2.9) - (78.0)
Non cash items included
in segment result
- H1 2023 (5.4) (2.0) (1.5) (0.9) (0.4) (10.2)
Non cash items included
in segment result
- H1 2022 (5.3) (1.8) (1.1) (0.9) - (9.1)
* 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 & Northern Rest
Europe Europe Americas of World Total
EURm EURm EURm EURm EURm
Income Statement Items
Revenue - H1 2023 1,933.6 979.2 916.5 254.6 4,083.9
Revenue - H1 2022 2,019.2 1,022.1 846.6 265.5 4,153.4
Non-current assets -
H1 2023 * 2,340.2 1,206.0 798.6 275.0 4.619.8
Non-current assets -
H1 2022 * 1,678.6 1,056.4 787.2 270.7 3,792.9
Capital Investment -
H1 2023 76.7 47.1 19.3 17.0 160.1
Capital Investment -
H1 2022 89.6 75.2 13.3 11.8 189.9
* Total non-current assets excluding deferred tax assets.
The Group has a presence in over 80 countries worldwide. Foreign
regions of operation are as set out above and specific countries of
operation are highlighted separately below on the basis of
materiality where revenue exceeds 15% of total Group revenues.
Revenues, non-current assets and capital investment (as defined
in IFRS 8 Operating Segments) attributable to France were EUR672.2m
(H1 2022: EUR677.3m), EUR730.4m (H1 2022: EUR263.8m) and EUR24.6m
(H1 2022: EUR15.4m) respectively.
Revenues, non-current assets and capital investment (as defined
in IFRS 8 Operating Segments) attributable to USA were EUR593.2m
(H1 2022: EUR532.0m), EUR488.7m (H1 2022: EUR496.7m) and EUR6.7m
(H1 2022: EUR6.9m) respectively.
Revenues, non-current assets and capital investment (as defined
in IFRS 8 Operating Segments) attributable to the country of
domicile (Ireland) were EUR124.9m (H1 2022: EUR131.0m), EUR165.2m
(H1 2022: EUR91.0m) and EUR5.2m (H1 2022: EUR9.1m)
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.
5 Seasonality of operations
Activity in the global construction industry is characterised by
cyclicality and is dependent, to a significant extent, on the
seasonal impact of weather in some of the Group's operating
locations.
6 Non trading item
6 months 6 months
ended ended
30 June 30 June
2023 2022
EURm EURm
Loss on disposal of subsidiary - 16.1
During the prior period the Group's Russian operations were
divested in full which resulted in a loss on disposal of EUR16.1m
.
7 Finance expense and finance income
6 months 6 months
ended ended
30 June 30 June
2023 2022
EURm EURm
Finance expense
Bank loans 15.7 3.1
Private placement loan notes 13.0 12.5
Lease interest 2.7 2.3
Defined benefit pension scheme,
net 0.4 0.1
Other interest 0.2 -
--------- ---------
32.0 18.0
Finance income
Interest earned (7.4) (0.4)
Equity investments at FVOCI - dividend (2.5) -
income
--------- ---------
(9.9) (0.4)
Net finance cost 22.1 17.6
--------- ---------
EUR0.8m of borrowing costs were capitalised during the period
(H1 2022: EUR0.9m).
8 Taxation
Taxation provided for on profits is EUR68.8m (H1 2022: EUR67.7m)
which represents 17.5% (H1 2022: 17.5%) of the profit before tax
for the period. The full year effective tax rate in 2022 was 17.5%.
The taxation charge for the six month period is accrued using the
estimated applicable rate for the year as a whole.
9 Analysis of net debt
At At At
30 June 30 June 31 December
2023 2022 2022
EURm EURm EURm
Cash and cash equivalents 761.2 392.7 649.3
Derivative financial instruments - - -
Current borrowings (258.0) (133.3) (85.0)
Non-current borrowings (1,875.9) (1,466.0) (2,103.9)
Total net debt (1,372.7) (1,206.6) (1,539.6)
------------ ------------ -------------
Net debt, which is an Alternative Performance Measure, is stated
net of interest rate and currency hedge asset of EURnil (at 31
December 2022: asset of EURnil) which relate to hedges of debt.
Foreign currency derivative assets of EURnil (at 31 December 2022:
EUR0.4m), which are used for transactional hedging, are not
included in the definition of net debt. Lease liabilities
recognised due to the implementation of IFRS 16 and deferred
contingent consideration have also been excluded from the
calculation of net debt which is consistent with the terms and
conditions of the covenants as set out in the Group's external
borrowing arrangements.
10 Financial instruments
The following table outlines the components of net debt by
category:
Derivatives
Financial Liabilities designated
assets/ in a fair as hedging Total net
(liabilities) value hedge instruments debt by
at amortised relationship EURm category
cost EURm EURm
EURm
Assets:
Foreign exchange and - - - -
interest rate swaps
Cash at bank and in
hand 761.2 - - 761.2
---------------- --------------- ------------- ------------
Total assets 761.2 - - 761.2
---------------- --------------- ------------- ------------
Liabilities:
Private placement notes (1,594.1) - - (1,594.1)
Other loans (539.8) - - (539.8)
Total liabilities (2,133.9) - - (2,133.9)
---------------- --------------- ------------- ------------
At 30 June 2023 (1,372.7) - - (1,372.7)
---------------- --------------- ------------- ------------
Derivatives
Financial Liabilities designated
assets/ in a fair as hedging Total net
(liabilities) value hedge instruments debt by
at amortised relationship EURm category
cost EURm EURm
EURm
Assets:
Foreign exchange and - - - -
interest rate swaps
Cash at bank and in
hand 649.3 - - 649.3
---------------- --------------- ------------- ------------
Total assets 649.3 - - 649.3
---------------- --------------- ------------- ------------
Liabilities:
Private placement notes (1,322.0) - - (1,322.0)
Other loans (866.9) - - (866.9)
Total liabilities (2,188.9) - - (2,188.9)
---------------- --------------- ------------- ------------
At 31 December 2022 (1,539.6) - - (1,539.6)
---------------- --------------- ------------- ------------
Financial
assets/ Liabilities Derivatives
(liabilities) in a fair designated Total net
at amortised value hedge as hedging debt by
cost relationship instruments category
EURm EURm EURm EURm
Assets:
Foreign exchange and - - - -
interest rate swaps
Cash at bank and in
hand 392.7 - - 392.7
---------------- --------------- -------------- ------------
Total assets 392.7 - - 392.7
---------------- --------------- -------------- ------------
Liabilities:
Private placement notes (1,392.0) - - (1,392.0)
Other loans (207.3) - - (207.3)
Total liabilities (1,599.3) - - (1,599.3)
---------------- --------------- -------------- ------------
At 30 June 2022 (1,206.6) - - (1,206.6)
---------------- --------------- -------------- ------------
The Group's private placement loan notes of EUR1,594.1m (at 31
December 2022: EUR1,322.0m) have a weighted average maturity of 5.5
years (at 31 December 2022: 5.7 years).
Included in cash at bank and in hand are overdrawn positions of
EUR1,483.4m (30 June 2022: EUR1,323.9m) . These balances form part
of a notional cash pool arrangement and are netted against cash
balances of EUR1,515.1m (30 June 2022: EUR1,375.9m) . There is
legal right of offset between these balances and the balances are
physically settled on a regular basis.
Fair value of financial instruments carried at fair value
Financial instruments recognised at fair value are analysed
between those based on quoted prices in active markets for
identical assets or liabilities (Level 1), those involving inputs
other than quoted prices that are observable for the assets or
liabilities, either directly or indirectly (Level 2), and those
involving inputs for the assets or liabilities that are not based
on observable market data (Level 3).
The following table sets out the fair value of all financial
instruments whose carrying value is measured at fair value:
Level 1 Level 2 Level
3
30 June 30 June 30 June
2023 2023 2023
EURm EURm EURm
Financial assets
Equity investments 67.8 17.0 -
Foreign exchange swaps - - -
Foreign exchange contracts for
hedging - - -
Financial liabilities
Deferred contingent consideration - - (14.7)
Put option liabilities - - (198.8)
Foreign exchange contracts for
hedging - - -
---------- ---------- ----------
At 30 June 2023 67.8 17.0 (213.5)
---------- ---------- ----------
Level 1 Level 2 Level
3
31 December 31 December 31 December
2022 2022 2022
EURm EURm EURm
Financial assets
Equity investments 76.0 17.6 -
Foreign exchange swaps - 0.4 -
Foreign exchange contracts for - - -
hedging
Financial liabilities
Deferred contingent consideration - - (15.7)
Put option liabilities - - (171.4)
Foreign exchange contracts for - - -
hedging
At 31 December 2022 76.0 18.0 (187.1)
-------------- -------------- --------------
Level 1 Level 2 Level
3
30 June 30 June 30 June
2022 2022 2022
EURm EURm EURm
Financial assets
Equity investments - 13.0 -
Foreign exchange swaps - - -
Foreign exchange contracts for - 0.5 -
hedging
Financial liabilities
Deferred contingent consideration - - (16.1)
Put option liabilities - - (171.1)
Foreign exchange contracts for - - -
hedging
----------- ---------- ----------
At 30 June 2022 - 13.5 (187.2)
----------- ---------- ----------
All derivatives entered into by the Group are included in Level
2 and consist of foreign currency forward contracts, interest rate
swaps and cross currency interest rate swaps.
Where derivatives are traded either on exchanges or liquid
over-the-counter markets, the Group uses the closing price at the
reporting date. Normally, the derivatives entered into by the Group
are not traded in active markets. The fair values of these
contracts are estimated using a valuation technique that maximises
the use of observable market inputs, e.g. foreign exchange and
interest rates.
Deferred contingent consideration is included in Level 3. The
valuation methodology for estimating the fair value of deferred
contingent consideration is consistent with 31 December 2022 and is
set out in notes 19 and 20 of the 2022 Annual Report. The
contingent element is measured on a series of trading performance
targets and is adjusted by the application of a range of outcomes
and associated probabilities.
During the period ended 30 June 2023, there were no significant
changes in the business or economic circumstances that affect the
fair value of financial assets and liabilities, no
reclassifications and no transfers between levels of the fair value
hierarchy used in measuring the fair value of the financial
instruments.
Fair value of financial instruments at amortised cost
Except as detailed below, it is considered that the carrying
amounts of financial assets and financial liabilities recognised at
amortised cost in the Interim Financial Statements approximate
their fair values.
Private placement notes Carrying amount Fair value
EURm EURm
At 30 June 2023 1,594.1 1,549.7
At 31 December 2022 1,322.0 1,455.7
At 30 June 2022 1,392.0 1,383.6
The fair value of the private placement notes, which are Level 2
financial instruments, is derived by using observable market data,
principally the relevant interest rates.
11 Deferred contingent consideration
At At At
30 June 30 June 31 December
2023 2022 2022
EURm EURm EURm
At the beginning of the period 187.1 202.3 202.3
Deferred contingent consideration 7.2 - -
arising on acquisitions
Put liabilities arising on acquisitions 3.1 - -
Movement in deferred contingent (1.2) - -
consideration arising from fair
value movement
Movement in put liability arising
from fair value movement 13.6 8.0 16.0
Amounts paid (6.6) (46.9) (45.4)
Effect of movement in exchange
rates 10.3 23.8 14.2
--------- --------- -------------
Closing balance 213.5 187.2 187.1
--------- --------- -------------
Split as follows:
Current liabilities 200.1 173.4 174.9
Non-current liabilities 13.4 13.8 12.2
--------- --------- -------------
213.5 187.2 187.1
--------- --------- -------------
For each acquisition for which deferred contingent consideration
has been provided, an annual review takes place to evaluate if the
payment conditions are likely to be met. For the purposes of the
fair value assessments all of the put option liabilities are valued
using the option price formula in the shareholder's agreement and
the most recent financial projections. These are classified as
unobservable inputs. The significant unobservable inputs used in
the fair value measurements and the quantitative sensitivity
analysis are shown in the table below:
Type Valuation Significant Sensitivity of the
technique unobservable input to the fair
inputs value
Deferred Discounted
contingent cashflow * EBITDA multiples of between 2.7 and 7.5. * A 5% increase in the assumed profitability of the
consideration method acquired entities would result in an increase in the
The net fair value of the deferred contingent consideration
present value of EUR0.4m.
of the
expected
payment
is calculated
by using
a risk
adjusted
discount
rate where
material.
Discounting
has not
been applied
in the
current
period as
it is not
deemed to
be material.
The expected
payments are
valued
using the
earn out
formula in
the
shareholder's
agreement and
the
most recent
financial
projections.
-------------- ------------------------------------------------------- ----------------------------------------------------------------
Put option Discounted
liabilities cashflow * Risk adjusted discount rates of between 4.4% and * A 10% decrease in the risk adjusted discount rate
method 6.1%. would result in an increase in the fair value of the
The net put option liabilities of EUR0.1m.
present value
of the * EBITDA multiples of between 6.5 and 8.57.
expected * A 5% increase in the assumed profitability of the
payment acquirees would result in an increase in the fair
is calculated value of the put option liabilities of EUR9.3m.
by using
a risk
adjusted
discount
rate. The
expected
payments are
valued
using the
option price
formula in
the
shareholder's
agreement and
the
most recent
financial
projections.
-------------- ------------------------------------------------------- ----------------------------------------------------------------
12 Dividends
A final dividend on ordinary shares of 23.8 cent per share in
respect of the year ended 31 December 2022 (2021: 26.0 cent) was
paid on 9 May 2023.
The directors have declared an interim dividend in respect of
2023 of 26.3 cent (2022: 25.6 cent) which will be paid on 13
October 2023 to shareholders on the register on the record date of
8 September 2023.
13 Earnings per share
6 months 6 months
ended ended
30 June 30 June
2023 2022
EURm EURm
The calculations of earnings per
share are based on the following:
Profit attributable to owners
of the Company 318.4 309.5
----------- -----------
Number Number
of of
shares shares
('000) ('000)
6 months 6 months
ended ended
30 June 30 June
2023 2022
Weighted average number of ordinary
shares for
the calculation of basic earnings
per share 181,691 181,437
Dilutive effect of share options 1,213 1,412
----------- -----------
Weighted average number of ordinary
shares
for the calculation of diluted
earnings per share 182,904 182,849
----------- -----------
EUR cent EUR cent
Basic earnings per share 175.2 170.6
Diluted earnings per share 174.1 169.3
At 30 June 2023, there were no anti-dilutive options (30 June
2022: Nil).
14 Goodwill
At At At
30 June 30 June 31 December
2023 2022 2022
EURm
EURm EURm
At beginning of period 2,495.5 1,908.6 1,908.6
Acquired through business
combinations 116.7 262.8 578.7
Effect of movement in exchange
rates (0.6) 37.0 8.2
---------- ---------- --------------
At end of period 2,611.6 2,208.4 2,495.5
---------- ---------- --------------
At end of period
Cost 2,679.3 2,276.1 2,563.2
Accumulated impairment losses (67.7) (67.7) (67.7)
----------
Net carrying amount 2,611.6 2,208.4 2,495.5
---------- ---------- --------------
15 Property, plant and equipment
At At At
30 June 30 June 31 December
2023 2022 2022
EURm
EURm EURm
Cost or valuation 3,112.4 2,723.4 2,942.6
Accumulated depreciation
and impairment charges (1,593.9) (1,438.1) (1,504.7)
---------- ---------- --------------
Net carrying amount 1,518.5 1,285.3 1,437.9
---------- ---------- --------------
Opening net carrying amount 1,437.9 1,155.8 1,155.8
Acquired through business
combinations 33.9 55.9 144.9
Divested - (5.3) (5.3)
Additions 111.9 133.1 276.3
Disposals (2.3) (13.3) (18.2)
Depreciation charge (65.7) (56.4) (117.9)
Impairment charge (0.9) - -
Effect of movement in exchange
rates 3.7 15.5 2.3
Closing net carrying amount 1,518.5 1,285.3 1,437.9
---------- ---------- --------------
The disposals generated a profit in the period of EUR0.7m (H1
2022: EUR0.7m).
16 Leases
Right of use asset
At At At
30 June 30 June 31 December
2023 2022 2022
EURm
EURm EURm
At beginning of period 205.3 155.5 155.5
Additions 24.6 21.1 41.3
Arising on acquisitions (7.1) 7.0 36.2
Remeasurement 25.7 8.5 19.6
Terminations (3.4) (0.8) (1.7)
Depreciation charge for the
year (27.2) (21.6) (47.2)
Effect of movement in exchange
rates (1.5) 4.2 1.6
Closing net carrying amount 216.4 173.9 205.3
--------- --------- -------------
Lease liability
At At At
30 June 30 June 31 December
2023 2022 2022
EURm
EURm EURm
At beginning of period 196.8 158.0 158.0
Additions 22.6 20.5 39.7
Arising on acquisitions 3.7 6.9 25.3
Remeasurement 25.5 8.4 19.6
Terminations (3.7) (0.8) (1.7)
Payments (32.8) (27.1) (50.6)
Interest 2.7 2.3 4.7
Effect of movement in exchange
rates (1.7) 4.5 1.8
Closing net carrying amount 213.1 172.7 196.8
--------- --------- -------------
Split as follows:
Current liability 41.6 38.1 43.2
Non-current liability 171.5 134.6 153.6
Closing net carrying amount 213.1 172.7 196.8
------ ------ ------
17 Business combinations
During the period, the Group made six acquisitions for a
combined total consideration of EUR156.9m.
In April 2023, the Group acquired 100% of the share capital of
CaPlast and subsidiaries Now Contec and AerO Coated Fabrics,
enhancing our roof & façade underlayment and vapour control
offerings in the DACH region. The total consideration, including
net debt acquired amounted to EUR84.8m.
The Group also made a number of smaller acquisitions during the
period for a combined consideration of EUR72.1m:
-- The Insulated Panels division acquired 100% of the share capital
of Alaço in Portugal in January 2023, 100% of the share
capital of LRM in France in May 2023 and 51% of the share capital
of Montfrio in Uruguay in June 2023.
-- In June 2023, the Insulation division acquired 80% of the share
capital of HempFlax Building Solutions in Germany and 100%
of the share capital of Thor Building Products in Australia.
The provisional fair values of the acquired assets and
liabilities in respect of these acquisitions at their respective
acquisition dates, along with fair value adjustments to certain
2022 acquisitions, are set out below:
CaPlast Other* Total
EURm EURm EURm
Non-current assets
Intangible assets 8.2 3.6 11.8
Property, plant and
equipment 17.2 16.7 33.9
Right of use assets 1.9 (9.0) (7.1)
Deferred tax assets - 6.0 6.0
Current assets
Inventories 11.0 11.0 22.0
Trade and other receivables 6.6 3.2 9.8
Current liabilities
Trade and other payables (6.8) (7.2) (14.0)
Provisions for liabilities (1.1) (5.6) (6.7)
Lease liabilities (0.4) (0.3) (0.7)
Non-current liabilities
Retirement benefit
obligations - (0.1) (0.1)
Lease liabilities (1.6) (1.4) (3.0)
Deferred tax liabilities (1.8) (1.5) (3.3)
-------- ------- -------
Total identifiable
assets 33.2 15.4 48.6
Non-controlling interests
arising in acquisition - (8.4) (8.4)
Goodwill 51.6 65.1 116.7
Total consideration 84.8 72.1 156.9
-------- ------- -------
Satisfied by:
Cash (net of cash/debt
acquired) 84.8 64.9 149.7
Deferred contingent
consideration - 7.2 7.2
Total consideration 84.8 72.1 156.9
-------- ------- -------
*Other includes the remaining acquisitions completed during the
period together with certain immaterial remeasurements of prior
year accounting estimates.
The goodwill is attributable principally to the profit
generating potential of the businesses, together with a strong
workforce, new geographies and synergies expected to be achieved
from integrating the businesses into Kingspan's existing
structure.
In the post-acquisition period to 30 June 2023, the businesses
acquired in the current period contributed total revenue of
EUR19.1m and trading profit of EUR2.2m to the Group's results.
The valuation of the fair value of the assets and liabilities
recently acquired is still in progress due to the relative size of
the acquisitions and the timing of the transactions. The initial
assignment of fair values to identifiable net assets acquired has
therefore been performed on a provisional basis.
18 Capital and reserves
No new ordinary shares (H1 2022: Nil) were issued as a result of
the exercise of vested options arising from the Group's share
option schemes.
During the period, 179,042 (H1 2022: 201,980) treasury shares
were re-issued as a result of vested options arising from the
Group's share options schemes (see the 2022 Annual Report for full
details of the Group's share option schemes).
Options were exercised at an average price of EUR0.13 per
option.
19 Significant events and transactions
Other than the acquisitions referenced in note 17, there were no
individually significant events or transactions in the period which
contributed to material changes in the Statement of Financial
Position.
20 Related party transactions
There were no changes in related party transactions from the
2022 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
21 Subsequent events
In July 2023, the Group reached agreement, subject to customary
approvals, to acquire 51% of the shares of Steico SE ("Steico")
from Schramek GmbH. Steico is the world leader in natural
insulation and wood-based building envelope products, based in
Germany and listed on the unofficial markets of several German
Stock Exchanges.
There have been no other material events subsequent to 30 June
2023 which would require disclosure in this report.
Alternative Performance Measures (APMs)
The Group uses a number of metrics, which are non-IFRS measures,
to monitor the performance of its operations.
The Group believes that these metrics assist investors in
evaluating the performance of the underlying business. Given that
these metrics are regularly used by management, they also give the
investor an insight into how Group management review and monitor
the business on an ongoing basis.
The principal APMs used by the Group are defined as follows:
Trading profit
This comprises the operating profit as reported in the Income
Statement before intangible asset amortisation and non trading
item. This equates to the Earnings Before Interest, Tax and
Amortisation ("EBITA") of the Group. Trading profit is used by
management as it excludes items which may hinder year on year
comparisons.
30 June 30 June
2023 2022
Financial Statements Reference EURm EURm
---------------- -------------------------------- -------- --------
Trading profit Note 4 435.5 434.2
---------------- -------------------------------- -------- --------
Trading margin
Measures the trading profit as a percentage of revenue.
30 June 30 June
2023 2022
Financial Statements Reference EURm EURm
--------------------- -------------------------------- -------- --------
Trading Profit Note 4 435.5 434.2
Total Group Revenue Note 4 4,083.9 4,153.4
-------- --------
Trading margin 10.7% 10.5%
------------------------------------------------------- -------- --------
EBITDA
The Group's definition of EBITDA is earnings before finance
expenses, income taxes, depreciation, amortisation and non trading
item.
30 June 30 June
2023 2022
Financial Statements Reference EURm EURm
---------------- ----------------------------------------- -------- --------
Trading profit Condensed Consolidated Income Statement 435.5 434.2
Depreciation Consolidated Statement of Cash Flows 92.9 78.0
-------- --------
EBITDA 528.4 512.2
----------------------------------------------------------- -------- --------
Free cash flow
Free cash flow is the cash generated from operations after net
capital expenditure, interest paid, income taxes paid and lease
payments and reflects the amount of internally generated capital
available for re-investment in the business or for distribution to
shareholders.
30 June 30 June
2023 2022
Financial Statements Reference EURm EURm
-------------------------------- -------------------------------- -------- --------
Net cash flow from operating Consolidated Statement
activities of Cash Flows 494.5 157.2
Additions to property, plant,
equipment and intangible Consolidated Statement
assets of Cash Flows (117.7) (131.5)
Proceeds from disposals of Consolidated Statement
property, plant and equipment of Cash Flows 3.0 14.0
Consolidated Statement
Lease payments of Cash Flows (32.8) (27.1)
Consolidated Statement
Finance income of Cash Flows 9.9 0.3
Free cash flow 356.9 12.9
--------
Return on capital employed (ROCE)
ROCE is the operating profit before interest and tax for the
previous 12 months expressed as a percentage of the net assets
employed. The net assets employed reflect the net assets, excluding
net debt, at the end of each reporting period.
30 June 30 June 31 December
2023 2022 2022
Financial Statements
Reference EURm EURm EURm
------------------- ------------------------ ---------- ---------- ------------
Consolidated Statement
Net Assets of Financial Position 3,666.4 3,287.5 3,395.5
Net Debt Note 9 1,372.7 1,206.6 1,539.6
5,039.1 4,494.1 4,935.1
---------- ----------
Operating profit
before interest
and tax 794.0 814.0 784.3
Return on capital
employed 15.8% 18.1% 15.9%
---------- ----------
Net debt
Net debt represents the net total of current and non-current
borrowings, current and non-current derivative financial
instruments, (excluding foreign currency derivatives which are used
for transactional hedging), and cash and cash equivalents as
presented in the Statement of Financial Position. Lease liabilities
recognised due to the implementation of IFRS 16 and deferred
contingent consideration have also been excluded from the
calculation of net debt. This definition is in accordance with the
terms and conditions of the covenants as set out in the Group's
external borrowing arrangements.
30 June 30 June 31 December
2023 2022 2022
Financial Statements
Reference EURm EURm EURm
---------- ---------------------- -------- -------- ------------
Net Debt Note 9 1,372.7 1,206.6 1,539.6
Net debt: EBITDA
Net debt as a ratio to 12-month EBITDA. EBITDA is solely
adjusted for the impact of IFRS 16 Leases which is in accordance
with the terms and conditions of the covenants as set out in the
Group's external borrowing arrangements.
30 June 30 June
2023 2022
----------------------
Financial Statements
Reference EURm EURm
------------------------------------ ---------------------- -------- --------
H1 EBITDA EBITDA calculation 528.4 512.2
Lease liability payments Note 16 (32.8) (27.1)
-------- --------
H1 EBITDA (adjusted for the impact
of IFRS 16) 495.6 485.1
------------------------------------------------------------ -------- --------
30 June 30 June 31 December
2023 2022 2022
-------------
Financial
Statements
Reference EURm EURm EURm
----------------------------------- ------------- -------- -------- ------------
Net Debt Note 9 1,372.7 1,206.6 1,539.6
12 month EBITDA (adjusted for the
impact of IFRS 16) 958.2 966.3 947.7
Net Debt : EBITDA times 1.43 1.25 1.62
Working capital
Working capital represents the net total of inventories, trade
and other receivables and trade and other payables, net of
transactional foreign currency derivatives excluded from net
debt.
30 June 30 June 31 December
2023 2022 2022
Financial Statements
Reference EURm EURm EURm
----------------------------- ------------------------ ---------- ---------- ------------
Consolidated Statement
Trade and other receivables of Financial Position 1,555.9 1,675.2 1,328.4
Consolidated Statement
Inventories of Financial Position 1,145.7 1,364.1 1,235.8
Consolidated Statement
Trade and other payables of Financial Position (1,582.8) (1,732.6) (1,368.7)
Foreign currency
derivatives excluded Consolidated Statement
from net debt of Financial Position - 0.5 0.4
Working capital 1,118.8 1,307.2 1,195.9
------------------------------------------------------- ---------- ----------
Working capital ratio
Measures working capital as a percentage of the previous three
months turnover annualised. The annualisation of turnover reflects
the current profile of the Group rather than a partial reflection
of any acquisitions completed during the period.
30 June 30 June 31 December
2023 2022 2022
EURm EURm EURm
--------------------- -------- -------- ------------
Working capital 1,118.8 1,307.2 1,195.9
Annualised turnover 8,474.8 9,033.8 8,272.2
Working Capital
ratio 13.2% 14.5% 14.5%
---------------------- -------- -------- ------------
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