Half-year Report
KINGSPAN GROUP PLC
HALF-YEARLY FINANCIAL REPORT
for the period ended 30 June 2022
KINGSPAN GROUP PLC
RESULTS FOR THE HALF YEAR 30 JUNE 2022
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 2022.
Financial Highlights:
|
• |
Revenue up 42% to €4.2bn, (underlying up 27%). |
|
• |
Trading profit up 32% to €434.2m, (underlying up 15%). |
|
• |
Group trading margin of 10.5%, a decrease of 80bps versus the same period in 2021. |
|
• |
Acquisitions contributed 12% to sales growth and 13% to trading profit growth in the period. |
|
• |
Net debt1 of €1,206.6m (H1 2021: €601.7m). Net debt4 to EBITDA4 of 1.25x (H1 2021: 0.83x). |
|
• |
Basic EPS up 29% to 170.6 cent (H1 2021: 132.4 cent). |
|
• |
Interim dividend up 29% to 25.6 cent (H1 2021: 19.9 cent) in line with policy guidance. |
|
• |
ROCE at 18.1 % (H1 2021: 18.9%) reflecting timing of acquisitions. |
Operational Highlights:
|
• |
Record performance overall in a testing environment, lower order intake in quarter two yet solid quotation pipelines in most key markets. |
|
• |
Insulated Panels sales increase of 39% driven by raw material led price growth and a 63% increase in global sales volume of QuadCore TM . |
|
• |
Insulation sales strongly ahead by 69%, driven by inflation and acquisitions. District heating applications order intake up by 50% year on year with an annualised run rate of c.€500m. Technical insulation now comprising c.35% of divisional revenue. |
|
• |
Roofing + Waterproofing global platform established. Annualised revenue run rate will be in excess of €500m post acquisition of Derbigum in June and acquisition of Ondura Group cleared in August. Strategic minority stake of 24% acquired in Nordic Waterproofing in August. |
|
• |
Technical insulation and Roofing significantly increase the Group's exposure to RMI. |
|
• |
Significant progress at Light + Air, margins progressing positively year on year. |
|
• |
Data + Flooring medium term pipeline stronger than at any time in the past. |
|
• |
Water + Energy margin recovery underway following a lag experienced in the first half of the year. |
|
• |
Invested a total of €522m in acquisitions, purchase of a minority interest and capex during the period. |
|
|
|
Summary Financials:
|
H1 '22
|
H1 '21
|
Change |
|
|
Revenue €m |
4,153.4 |
2,920.1 |
+42% |
|
Trading Profit €m 2 |
434.2 |
328.9 |
+32% |
|
Trading Margin 3 |
10.5% |
11.3% |
-80bps |
|
EBITDA €m 5 |
512.2 |
392.9 |
+30% |
|
EPS (cent per share) |
170.6 |
132.4 |
+29% |
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:
"Despite a challenging trading environment Kingspan delivered record half year results, with revenues over €4bn for the first time. We have been able to navigate large input cost increases with only modest margin impact.
We invested €522m in new businesses and capex in the period, including significant progress executing on our strategy of developing a new business division focussed on roofing and waterproofing solutions. We also continue our organic expansion plans, with the intention to build 25 new production lines in the next 5 years, including our plans to invest €200m in a new Building Technology Campus in Ukraine.
Looking forwards we retain the outlook flagged in our June trading update but are confident in the long term demand for the energy efficient solutions we deliver. Whilst inflationary pressures have eased in recent months, the context of energy supply constraints over the winter months in Europe will be something we will be closely monitoring."
For further information contact:
|
Murray Consultants Douglas Keatinge |
Tel: +353 (0) 1 4980 300
|
Business Review
The first half of 2022 was a period of remarkable contrast. The Group delivered a record trading performance with revenue and trading profit ahead by 42% and 32%. The momentum in deliveries across most of the business was solid although the opposite was the case on inbound orders particularly in the second quarter. The last two years have been characterised by untypical ups and downs in order placement with raw material pricing playing a part in these gyrations. As a consequence it is difficult to draw conclusions from movements month to month with the pattern over a longer period more reflective of trend. In that context global insulated panels order intake volume for the 6 month period to 30 June 2022 was precisely 50% of the total intake for the full year 2021.
Revenue for the six months exceeded €4bn for the first time, with EBITDA and trading profit reaching €512.2m and €434.2m respectively. Kingspan's exposure to high growth end markets and applications and a concerted worldwide move towards a more energy conscious future built environment all played a role in driving this outcome. Extraordinary levels of price inflation also had a meaningful influence as we passed on an unprecedented level of raw material increases received during 2021. Whilst the process has been broadly delivered, certain pockets of activity across the Group experienced a lag in the recovery effort. The raw material backdrop has become less hostile in recent months. It remains to be seen how this plays out particularly in a context of likely energy supply constraints in Europe in the months ahead.
Planet Passionate
Building upon the progress achieved during 2021, the first half of this year has again seen further advances in our global programme.
In 2021, we announced revised 1.5⁰C aligned science-based targets bringing them in line with our Planet Passionate programme goals to reduce Scope 1, 2 and 3 greenhouse gas (GHG) emissions. The Group is committed to reducing absolute Scope 1 and 2 GHG emissions by 90% by 2030 from a 2020 base year. We have also pledged to reduce absolute Scope 3 GHG emissions by 42% within the same timeframe. We will also be implementing a €70 per tonne internal carbon charge from 2023 which will galvanise full alignment across the organisation.
|
Planet Passionate Targets* |
Target Year |
2020 (A) |
2021 (A) |
2022 Forecast |
|
|
Carbon |
Net Zero Carbon Manufacturing (yoy % reduction scope 1 & 21) |
2030 |
5.2% |
4.3% |
5.0% |
|
50% reduction in product CO2e intensity from primary supply chain partners (% reduction) |
2030 |
- |
- |
- |
|
|
Zero emission company cars (annual replacement %) |
2025 |
11% |
29% |
30% |
|
|
Energy |
60% direct renewable energy use (%) |
2030 |
19.5% |
26.1% |
26.0% |
|
20% on-site renewable energy generation (%) |
2030 |
4.9% |
4.8% |
5.0% |
|
|
Solar PV systems on all wholly owned facilities (%) |
2030 |
21.7% |
28.4% |
36.0% |
|
|
Net Zero Energy (%) |
2020 |
100% |
100% |
100% |
|
|
Circularity |
Zero Company waste to landfill (tonnes) |
2030 |
18,642 |
16,294 |
14,500 |
|
Recycle 1 billion PET bottles into our manufacturing processes (million bottles) |
2025 |
573 |
843 |
800 |
|
|
QuadCore™ products utilising recycled PET (% sites) |
2025 |
5% |
5% |
10% |
|
|
Water |
Harvest 100 million litres of rainwater (million litres) |
2030 |
20.1 |
20.6 |
25.0 |
|
Support 5 Ocean Clean-Up projects (No. of projects) |
2025 |
1 |
2 |
3 |
|
|
1 excluding biogenic emissions |
|||||
|
*Scope and boundaries: Planet Passionate targets include manufacturing & assembly sites within the Kingspan Group in 2020 and organic growth. |
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Expansion
In the first six months we invested a total of €522m across acquisitions, the purchase of a minority interest and capex, the largest of which was Troldtekt, a natural acoustic insulation producer based in Denmark. This marks our first significant step into the 'natural insulation' category, an area in which we expect to make further advances in the foreseeable future. In June 2022 we completed the acquisition of Derbigum in our new Roofing + Waterproofing platform. The acquisition of Ondura Group is expected to complete shortly and when combined with the Derbigum business will take the annual run rate revenues of our wholly owned Roofing + Waterproofing activities to approximately €500m. Since period end, we acquired a strategic minority stake of 24% in Nordic Waterproofing.
Last year we entered the district heating market with the acquisition of Logstor with operations in the Nordics and Poland. We have been very pleased with progress to date and our excitement about its future prospects continues to grow. Full year 2022 order intake is heading for approximately €500m, ahead of prior year by over 50%.
Organically, within the next five years, we have internal requirements for more than 25 new production lines worldwide. Included in this is our recently announced intention to invest €200m on a Building Technology Campus in Ukraine to meet demand in the wider Central and Eastern European region. The site search is nearing completion and a full design of the complex is currently in preparation.
Innovation
PowerPanel™ has been launched in Britain and in Ireland where the initial interest has been encouraging. The team has had active engagement on projects that will generate over 75 MW of power (approximately €75m), with 5 MW already installed and operational. RooftricityTM, our funded solution, has also been launched in the same markets and is expected to catalyse increased momentum in the refurbishment category offering a complete solar-embedded re-roof, with no capital outlay for the building owner.
QuadCoreTM 2.0 is also progressing and in a coldstore application, the product reached a 120 minute fire rating, a significant advancement which will in many cases match if not exceed the performance of synthetic mineral fibre cored products. QuadCoreTM sales volume grew by 63% globally in the first half.
We have also developed QuadCoreTM LEC (lower embodied carbon) in collaboration with our suppliers. This is a prime example of how our Planet Passionate agenda is translating into market leading, sustainable products. QuadCoreTM LEC will have c.50% less embodied carbon, contain upwards of 45% recycled content and will launch in Q4 this year. The lower embodied carbon project ultimately envisages a 80% lower embodied carbon product within the next five years.
Furthermore, projects are underway to achieve an 'A' classification for Optim-R® and 'B' classification for key Kooltherm® applications. AlphaCore® will launch, with UK initial scale production, in Q1 2023. Significant progress is also being made on entering the 'natural' insulation category.
Insulated Panels
|
|
H1 '22 |
H1 '21 |
Change
|
|
Revenue €m |
2,665.2 |
1,922.8 |
+39%(1) |
|
Trading Profit €m |
299.4 |
223.6 |
+34% |
|
Trading Margin |
11.2% |
11.6% |
-40bps |
(1) Comprising underlying +32%, currency +4% and acquisitions +3%. Like-for-like volume -3%.
Revenue generation was very buoyant in the period reflecting solid volume and strong pricing. Margins were also strong reflecting effective cost recovery of inflated raw materials and ongoing advancement of QuadCore TM .
The Americas had a good performance overall with encouraging activity levels as we look towards the second half of the year. Our new facility in Pennsylvania opened in May with plans underway for an additional line in the region. Europe overall has been mixed with intake levels in the second quarter under some pressure although activity pipelines appear solid.
Insulation
|
|
H1 '22
|
H1 '21
|
Change |
|
Revenue €m |
842.0 |
499.5 |
+69% (1) |
|
Trading Profit €m |
88.2 |
69.9 |
+26% |
|
Trading Margin |
10.5% |
14.0% |
-350bps |
(1) Comprising underlying +16%, currency +3% and acquisitions +50%. Like-for-like volume -6%.
Revenue was significantly ahead of the same period last year, up by 69%. A significant transition and advancement is underway in the division with technical insulation now representing approximately 35% of the portfolio. The addressable market for technical insulation is vast and includes district heating and applications in acoustic, ducting and piping. Since its acquisition in June 2021, Logstor, focused on district heating, has made significant progress and order intake for 2022 is anticipated to be approximately €500m, over 50% ahead of prior year. Building insulation margins particularly in Britain and France decreased in the period due to a lag in recovery of raw material inflation, although reported margins in 2021 were abnormally strong. Margins have improved in more recent months. Volumes overall were weaker in the period due to generally high inventories in the distribution channel at the turn of the year. Pro-forma volumes, assuming acquisitions were owned for the full period, were down 1% in the half year. Business in North America and Australasia continues to trend positively.
Light + Air
|
|
H1 '22
|
H1 '21
|
Change |
|
Revenue €m |
327.8 |
239.5 |
+37% (1) |
|
Trading Profit €m |
16.3 |
6.5 |
+151% |
|
Trading Margin |
5.0% |
2.7% |
+230bps |
(1) Comprising underlying +17%, currency +2% and acquisitions +18%.
It's been another period of progress with solid volume and pricing reflecting margins and intake improving over prior year. This will be further evident in the second half which is typically the more significant trading period.
Water + Energy
|
|
H1 '22
|
H1 '21
|
Change |
|
Revenue €m |
146.4 |
126.3 |
+16% (1) |
|
Trading Profit €m |
8.5 |
11.9 |
-29% |
|
Trading Margin |
5.8% |
9.4% |
-360bps |
(1) Comprising underlying +8%, currency impact +2% and acquisitions +6%.
The division grew revenues principally on raw material led pricing although there was a lag in recovery particularly in the first quarter. Water applications continue to demonstrate structurally positive trends and is an area of increasing opportunity.
Data + Flooring
|
|
H1 '22
|
H1 '21
|
Change |
|
Revenue €m |
172.0 |
132.0 |
+30% (1) |
|
Trading Profit €m |
21.8 |
17.0 |
+28% |
|
Trading Margin |
12.7% |
12.9% |
-20bps |
(1) Comprising underlying +23% and currency impact +7%.
The division had a strong first half due largely to buoyant datacentre activity and this is expected to continue for the foreseeable future. Our innovations in recent years in industry leading datacentre solutions has positioned us well to capitalise on those opportunities.
Financial Review
Overview of results
Group revenue increased by 42% to €4,153.4m (H1 2021: €2,920.1m) and trading profit increased by 32% to €434.2m (H1 2021: €328.9m). This represents a 39% increase in sales and a 28% increase in trading profit on a constant currency basis. The Group's trading margin decreased by 80bps to 10.5% (H1 2021: 11.3%) primarily reflecting a lag in the recovery of raw material inflation and an abnormally high margin in Insulation in the prior period. The amortisation charge in respect of intangibles was €12.9m compared to €12.4m in the first half of 2021. Group operating profit after amortisation increased by 28% to €405.2m (H1 2021: €316.5m). Profit after tax was €319.9m compared to €246.7m in the first half of 2021, driven in the main by the increase in trading profit. Basic EPS for the period was 170.6 cent, representing an increase of 29% on the first half of 2021 (H1 2021: 132.4 cent).
The Group's underlying sales and trading profit performance by division are set out below:
|
Sales |
Underlying |
Currency |
Acquisition |
Total |
|
Insulated Panels |
+32% |
+4% |
+3% |
+39% |
|
Insulation |
+16% |
+3% |
+50% |
+69% |
|
Light + Air |
+17% |
+2% |
+18% |
+37% |
|
Water + Energy |
+8% |
+2% |
+6% |
+16% |
|
Data + Flooring |
+23% |
+7% |
- |
+30% |
|
Group |
+27% |
+3% |
+12% |
+42% |
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 |
+28% |
+4% |
+2% |
+34% |
|
Insulation |
-24% |
+3% |
+47% |
+26% |
|
Light + Air |
+66% |
+3% |
+82% |
+151% |
|
Water + Energy |
-35% |
+2% |
+4% |
-29% |
|
Data + Flooring |
+20% |
+8% |
- |
+28% |
|
Group |
+15% |
+4% |
+13% |
+32% |
Finance costs (net)
Finance costs for the period were lower than the same period last year at €17.6m (H1 2021: €19.3m). Finance costs include a non-cash charge of €0.1m (H1 2021: €0.2m) relating to the Group's defined benefit pension schemes. Lease interest of €2.3m was recorded during the period (H1 2021: €1.8m). The Group's net interest expense on borrowings (bank and loan notes) in the first half of 2022 was €15.2m compared to €17.2m in the same period in 2021. This decrease was due mainly to the repayment in August 2021 of a higher coupon 2011 private placement loan note.
Free cashflow
|
|
H1 '22 |
H1 '21 |
|
|
€m |
€m |
|
EBITDA* |
512.2 |
392.9 |
|
Lease payments |
(27.1) |
(19.5) |
|
Movement in working capital ** |
(261.8) |
(118.5) |
|
Net capital expenditure |
(117.5) |
(60.3) |
|
Pension contributions |
(2.7) |
(1.7) |
|
Net finance costs paid |
(16.2) |
(18.5) |
|
Income taxes paid |
(82.4) |
(40.9) |
|
Other including non-cash items |
8.4 |
8.3 |
|
Free cashflow |
12.9 |
141.8 |
*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 2022 was €1,307.2m (31 December 2021: €977.8m), an increase of €329.4m (€261.8m excl. acquisitions) in the period. The increase was driven by the increased level of year on year trading, with the Group investing in working capital to support the significant increase in sales as well as higher levels of inventory year on year. The average working capital to sales percentage was 14.5% compared with 9.7% in H1 2021. The working capital percentage in H1 2021 was unusually low reflecting very high levels of activity coupled with lower inventory days due to a lack of availability of certain raw materials. Since quarter four 2021 we have carried higher levels of inventory than is typical reflecting longer delivery lead times and supply chain constraints. We expect the working capital to sales ratio to reduce during the second half of 2022.
Net Debt
Net debt increased by €450.5m during the first half of the year to €1,206.6m (31 December 2021: €756.1m). The movement in debt is analysed in the table below:
|
Movement in net debt |
H1 '22 |
H1 '21 |
|
|
€m |
€m |
|
Free cashflow |
12.9 |
141.8 |
|
Acquisitions and divestments |
(357.2) |
(430.9) |
|
Deferred consideration paid |
(46.9) |
- |
|
Purchase of financial asset |
- |
(5.0) |
|
Repurchase of shares |
- |
(46.9) |
|
Dividends paid |
(47.2) |
(37.4) |
|
Dividends paid to non-controlling interests |
(2.1) |
(2.2) |
|
Cashflow movement |
(440.5) |
(380.6) |
|
Exchange movements on translation |
(10.0) |
15.1 |
|
Increase in net debt |
(450.5) |
(365.5) |
|
Net debt at start of period |
(756.1) |
(236.2) |
|
Net debt at end of period |
(1,206.6) |
(601.7) |
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 €15.8m at 30 June 2022 (31 December 2021: €28.0m).
Non trading item
The Group recorded a non trading charge of €16.1m (H1 2021: €nil) in the period 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 €67.7m (H1 2021: €50.5m) which represents an effective tax rate of 17.5% on profit before tax (H1 2021: 17.0%). The effective tax rate reflects the geographic mix of earnings year on year.
Acquisitions
The Group incurred €350.8m on acquisitions during the period. Of this, €220.5m was incurred on Troldtekt, €96.7m was incurred on Derbigum and an aggregate amount of €33.6m invested in other acquisitions.
The Group also made a payment of €36.6m to acquire the remaining 15% of shares in Bacacier which were held by a non-controlling interest.
Dividend
The Board has declared an interim dividend of 25.6 cent (H1 2021: 19.9 cent) payable on 7 October 2022 to shareholders on the register on the record date of 9 September 2022. 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 €700m 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 €1,392m (H1 2021: €1,538m) which have a weighted average maturity of 5.8 years (H1 2021: 6.2 years).
During the period, the Group arranged two new acquisition related financing facilities with an aggregate value of €800m. At period end, there was €150m drawn on one of these facilities and the other facility remained undrawn.
The weighted average maturity of all debt facilities is 4.3 years (H1 2021: 5.8 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 €1,743m at 30 June 2022 (H1 2021: €1,631m).
Related party transactions
There were no changes in related party transactions from the 2021 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 2021 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.
Board Changes
The Board of Kingspan is pleased to announce the appointment of Senan Murphy as a Non-Executive Director with effect from 1 October 2022. Senan was formerly the Group Finance Director and an executive director of CRH plc., and was previously Chief Operating Officer at Bank of Ireland Group, and Chief Financial Officer at Airtricity. He has over 30 years' experience in international business across multiple industries including building materials, renewable energy, financial services and banking.
Looking Ahead
We live at a time when climate, energy, social and economic challenges are escalating almost everywhere. Clearly, the answers are not straightforward although they do exist. The homes we live in, the buildings we work in and how we move around all hold the key. Radically more efficient solutions to each of these challenges exist and are gaining momentum, although to date progress has been too slow. The impending pinch points on a number of fronts should harden the global resolve to accelerate this transition.
In the more immediate term, the building economy is likely to contract in many parts of the world which leaves our sentiment similar to that expressed in our last trading update. Whilst we have seen softer order intake patterns in recent months, quotation activity generally remains solid. Our portfolio is growing and evolving with new business streams added, and we remain unrelenting in our longer term purpose to deliver an effective transition to a materially less consumptive, and lower emissions built environment.
2022 Statement of Directors Responsibilities
for the 6 month period ended 30 June 2022
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 2022 (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 2021 Annual Report.
On behalf of the Board
|
Gene M Murtagh |
Geoff Doherty |
|
Chief Executive Officer |
Chief Financial Officer |
|
|
|
|
19 August 2022 |
19 August 2022 |
Kingspan Group plc
Condensed consolidated income statement (unaudited)
for the 6 month period ended 30 June 2022
|
|
|
6 months |
|
6 months |
|
|
|
ended |
|
ended |
|
|
|
30 June 2022 |
|
30 June 2021 |
|
|
|
|
|
|
|
|
Note |
€m |
|
€m |
|
|
|
|
|
|
|
Revenue |
4 |
4,153.4 |
|
2,920.1 |
|
Cost of Sales |
|
(3,044.3) |
|
(2,087.8) |
|
Gross Profit |
|
1,109.1 |
|
832.3 |
|
Operating Costs |
|
(674.9) |
|
(503.4) |
|
Trading Profit |
4 |
434.2 |
|
328.9 |
|
Intangible amortisation |
|
(12.9) |
|
(12.4) |
|
Non trading item |
6 |
(16.1) |
|
- |
|
|
|
|
|
|
|
Operating Profit |
|
405.2 |
|
316.5 |
|
Finance expense |
7 |
(18.0) |
|
(19.5) |
|
Finance income |
7 |
0.4 |
|
0.2 |
|
|
|
|
|
|
|
Profit for the period before income tax |
|
387.6 |
|
297.2 |
|
Income tax expense |
8 |
(67.7) |
|
(50.5) |
|
|
|
|
|
|
|
Profit for the period |
|
319.9 |
|
246.7 |
|
|
|
|
|
|
|
Attributable to owners of Kingspan Group plc |
|
309.5 |
|
240.3 |
|
Attributable to non-controlling interests |
|
10.4 |
|
6.4 |
|
|
|
319.9 |
|
246.7 |
|
Earnings per share for the period |
|
|
|
|
|
Basic |
13 |
170.6c |
|
132.4c |
|
Diluted |
13 |
169.3c |
|
131.3c |
Kingspan Group plc
Condensed consolidated statement of comprehensive income (unaudited)
for the 6 month period ended 30 June 2022
|
|
|
6 months |
|
6 months |
|
|
|
ended |
|
ended |
|
|
|
30 June 2022 |
|
30 June 2021 |
|
|
|
|
|
|
|
|
|
€m |
|
€m |
|
|
|
|
|
|
|
Profit for financial period |
|
319.9 |
|
246.7 |
|
Other comprehensive income: |
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
Exchange differences on translating foreign operations |
|
49.0 |
|
69.5 |
|
Net changes in fair value of cash flow hedges |
|
- |
|
(0.4) |
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
Actuarial gains on defined benefit pension schemes |
|
10.0 |
|
8.3 |
|
Income taxes relating to actuarial gains on defined benefit pension schemes |
|
(2.5) |
|
(2.1) |
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
376.4 |
|
322.0 |
|
|
|
|
|
|
|
Attributable to owners of Kingspan Group plc |
|
358.6 |
|
312.6 |
|
Attributable to non-controlling interests |
|
17.8 |
|
9.4 |
|
|
|
376.4 |
|
322.0 |
|
|
|
|
|
|
Kingspan Group plc
Condensed consolidated statement of financial position
as at 30 June 2022
|
|
|
At 30 June |
|
At 30 June |
|
At 31 December |
|
|
|
2022 (unaudited) |
|
2021 (unaudited) |
|
2021 (audited) |
|
|
Note |
€m |
|
€m |
|
€m |
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Goodwill |
14 |
2,208.4 |
|
1,810.7 |
|
1,908.6 |
|
Other intangible assets |
|
82.6 |
|
93.5 |
|
93.2 |
|
Financial assets |
|
13.0 |
|
13.2 |
|
13.2 |
|
Property, plant and equipment |
15 |
1,285.3 |
|
1,089.6 |
|
1,155.8 |
|
Right of use assets |
16 |
173.9 |
|
131.8 |
|
155.5 |
|
Retirement benefit assets |
|
29.7 |
|
8.9 |
|
17.9 |
|
Deferred tax assets |
|
35.4 |
|
23.0 |
|
34.7 |
|
|
|
3,828.3 |
|
3,170.7 |
|
3,378.9 |
|
Current assets |
|
|
|
|
|
|
|
Inventories |
|
1,364.1 |
|
755.0 |
|
1,138.9 |
|
Trade and other receivables |
|
1,675.2 |
|
1,237.0 |
|
1,228.4 |
|
Derivative financial instruments |
10 |
0.5 |
|
18.3 |
|
0.3 |
|
Cash and cash equivalents |
10 |
392.7 |
|
931.4 |
|
641.4 |
|
|
|
3,432.5 |
|
2,941.7 |
|
3,009.0 |
|
Total assets |
|
7,260.8 |
|
6,112.4 |
|
6,387.9 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
1,732.6 |
|
1,360.1 |
|
1,389.8 |
|
Provisions for liabilities |
|
68.3 |
|
58.3 |
|
67.8 |
|
Lease liabilities |
16 |
38.1 |
|
31.6 |
|
35.0 |
|
Derivative financial instruments |
|
- |
|
0.2 |
|
- |
|
Deferred contingent consideration |
11 |
173.4 |
|
38.4 |
|
41.7 |
|
Interest bearing loans and borrowings |
9 |
133.3 |
|
172.3 |
|
77.4 |
|
Current income tax liabilities |
|
50.1 |
|
67.2 |
|
57.7 |
|
|
|
2,195.8 |
|
1,728.1 |
|
1,669.4 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Retirement benefit obligations |
|
45.5 |
|
48.2 |
|
45.9 |
|
Provisions for liabilities |
|
78.5 |
|
62.9 |
|
74.9 |
|
Interest bearing loans and borrowings |
9 |
1,466.0 |
|
1,379.1 |
|
1,320.1 |
|
Lease liabilities |
16 |
134.6 |
|
101.1 |
|
123.0 |
|
Deferred tax liabilities |
|
39.1 |
|
37.9 |
|
34.7 |
|
Deferred contingent consideration |
11 |
13.8 |
|
122.2 |
|
160.6 |
|
|
|
1,777.5 |
|
1,751.4 |
|
1,759.2 |
|
Total liabilities |
|
3,973.3 |
|
3,479.5 |
|
3,428.6 |
|
Net Assets |
|
3,287.5 |
|
2,632.9 |
|
2,959.3 |
|
Equity |
|
|
|
|
|
|
|
Share capital |
|
23.9 |
|
23.8 |
|
23.9 |
|
Share premium |
|
93.2 |
|
95.6 |
|
94.4 |
|
Capital redemption reserve |
|
0.7 |
|
0.7 |
|
0.7 |
|
Treasury shares |
|
(56.1) |
|
(58.5) |
|
(57.3) |
|
Other reserves |
|
(204.4) |
|
(301.7) |
|
(277.7) |
|
Retained earnings |
|
3,356.0 |
|
2,812.5 |
|
3,108.1 |
|
|
|
|
|
|
|
|
|
Equity attributable to owners of Kingspan Group plc |
|
3,213.3 |
|
2,572.4 |
|
2,892.1 |
|
Non-controlling interests |
|
74.2 |
|
60.5 |
|
67.2 |
|
Total Equity |
|
3,287.5 |
|
2,632.9 |
|
2,959.3 |
|
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited) for the 6 month period ended 30 June 2022
|
|||||||||||||||
|
|
|
|
Share capital |
Share premium |
Capital redemption reserve |
Treasury shares |
Translation reserve |
Cash flow hedging reserve |
Share based payment reserve |
Revaluation reserve |
Put option liability reserve |
Retained earnings |
Total attributable to owners of the parent |
Non- controlling interests |
Total equity |
|
|
|
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (unaudited) for the 6 month period ended 30 June 2021
|
|||||||||||||||
|
|
|
|
Share capital |
Share premium |
Capital redemption reserve |
Treasury shares |
Translation reserve |
Cash flow hedging reserve |
Share based payment reserve |
Revaluation reserve |
Put option liability reserve |
Retained earnings |
Total attributable to owners of the parent |
Non- controlling interests |
Total equity |
|
|
|
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2021 |
23.8 |
95.6 |
0.7 |
(11.6) |
(229.9) |
0.3 |
40.4 |
0.7 |
(168.3) |
2,597.2 |
2,348.9 |
48.7 |
2,397.6 |
||
|
Transactions with owners recognised directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share based compensation |
- |
- |
- |
- |
- |
- |
8.1 |
- |
- |
- |
8.1 |
- |
8.1 |
||
|
Exercise or lapsing of share options |
- |
- |
- |
- |
- |
- |
(6.2) |
- |
- |
6.2 |
- |
- |
- |
||
|
Repurchase of shares |
- |
- |
- |
(46.9) |
- |
- |
- |
- |
- |
- |
(46.9) |
- |
(46.9) |
||
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(37.4) |
(37.4) |
- |
(37.4) |
||
|
Transactions with non-controlling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Dividends paid to non-controlling interests |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(2.2) |
(2.2) |
||
|
Arising on acquisition |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
4.6 |
4.6 |
||
|
Fair value movement |
- |
- |
- |
- |
- |
- |
- |
- |
(12.9) |
- |
(12.9) |
- |
(12.9) |
||
|
Transactions with owners |
- |
- |
- |
(46.9) |
- |
- |
1.9 |
- |
(12.9) |
(31.2) |
(89.1) |
2.4 |
(86.7) |
||
|
Total comprehensive income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
- |
240.3 |
240.3 |
6.4 |
246.7 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Items that may be reclassified subsequently to profit or loss |
|||||||||||||||
|
Cash flow hedging in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
- current year |
- |
- |
- |
- |
- |
(0.4) |
- |
- |
- |
- |
(0.4) |
- |
(0.4) |
||
|
- tax impact |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||
|
Exchange differences on translating foreign operations |
- |
- |
- |
- |
66.5 |
- |
- |
- |
- |
- |
66.5 |
3.0 |
69.5 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Items that will not be reclassified subsequently to profit or loss |
|||||||||||||||
|
Actuarial gains on defined benefit pension scheme |
- |
- |
- |
- |
- |
- |
- |
- |
- |
8.3 |
8.3 |
- |
8.3 |
||
|
Income taxes relating to actuarial gains on defined benefit pension scheme |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(2.1) |
(2.1) |
- |
(2.1) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Total comprehensive income for the period |
- |
- |
- |
- |
66.5 |
(0.4) |
- |
- |
- |
246.5 |
312.6 |
9.4 |
322.0 |
||
|
Balance at 30 June 2021 |
23.8 |
95.6 |
0.7 |
(58.5) |
(163.4) |
(0.1) |
42.3 |
0.7 |
(181.2) |
2,812.5 |
2,572.4 |
60.5 |
2,632.9 |
||
|
Kingspan Group plc
Condensed consolidated statement of changes in equity (audited) for the year ended 31 December 2021
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Kingspan Group plc
Condensed consolidated statement of cash flows (unaudited) for the 6 month period ended 30 June 2022 |
||||
|
|
|
6 months ended 30 June 2022
€m |
|
6 months ended 30 June 2021
€m |
|
Operating activities |
|
|
|
|
|
Profit for the period |
|
319.9 |
|
246.7 |
|
|
|
|
|
|
|
Add back non-operating expenses: |
|
|
|
|
|
Income tax expense |
|
67.7 |
|
50.5 |
|
Depreciation of property, plant and equipment |
|
78.0 |
|
64.0 |
|
Amortisation of intangible assets |
|
12.9 |
|
12.4 |
|
Impairment of non-current assets |
|
- |
|
0.4 |
|
Loss on divestment of subsidiary |
|
16.1 |
|
- |
|
Employee equity-settled share options |
|
9.1 |
|
8.1 |
|
Finance income |
|
(0.4) |
|
(0.2) |
|
Finance expense |
|
18.0 |
|
19.5 |
|
Profit on sale of property, plant and equipment |
|
(0.7) |
|
(0.2) |
|
|
|
|
|
|
|
Changes in working capital: |
|
|
|
|
|
Inventories |
|
(181.2) |
|
(159.6) |
|
Trade and other receivables |
|
(367.9) |
|
(334.6) |
|
Trade, other payables and provisions |
|
287.3 |
|
375.7 |
|
|
|
|
|
|
|
Other: |
|
|
|
|
|
Pension contributions |
|
(2.7) |
|
(1.7) |
|
|
|
|
|
|
|
Cash generated from operations |
|
256.1 |
|
281.0 |
|
Income tax paid |
|
(82.4) |
|
(40.9) |
|
Interest paid |
|
(16.5) |
|
(18.8) |
|
Net cash flow from operating activities |
|
157.2 |
|
221.3 |
|
Investing activities |
|
|
|
|
|
Additions to property, plant and equipment |
|
(131.5) |
|
(62.9) |
|
Proceeds from disposals of property, plant and equipment |
|
14.0 |
|
2.6 |
|
Purchase of subsidiary undertakings (including net debt/cash acquired) |
|
(350.8) |
|
(430.9) |
|
Payment of deferred consideration in respect of acquisitions |
|
(46.9) |
|
- |
|
Divestment of subsidiary |
|
(6.4) |
|
- |
|
Purchase of financial assets |
|
- |
|
(5.0) |
|
Interest received |
|
0.3 |
|
0.3 |
|
Net cash flow from investing activities |
|
(521.3) |
|
(495.9) |
|
Financing activities |
|
|
|
|
|
Drawdown of interest bearing loans and borrowings |
|
185.6 |
|
47.0 |
|
Repayment of interest bearing loans and borrowings |
|
- |
|
(92.5) |
|
Payment of lease liabilities |
|
(27.1) |
|
(19.5) |
|
Repurchase of treasury shares |
|
- |
|
(46.9) |
|
Dividends paid to non-controlling interests |
|
(2.1) |
|
(2.2) |
|
Dividends paid |
|
(47.2) |
|
(37.4) |
|
Net cash flow from financing activities |
|
109.2 |
|
(151.5) |
|
Decrease in cash and cash equivalents |
|
(254.9) |
|
(426.1) |
|
Effect of movement in exchange rates on cash held |
|
6.2 |
|
27.8 |
|
Cash and cash equivalents at the beginning of the period |
|
641.4 |
|
1,329.7 |
|
Cash and cash equivalents at the end of the period |
|
392.7 |
|
931.4 |
|
|
|
|
|
|
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 2021 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 with regard to the Financial Reporting Council's International Standard on Review Engagements (UK and Ireland) 2410.
IFRS does not define certain Income Statement headings. For clarity, the following are the definitions as applied by the Group:
|
(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 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 19 August 2022.
(b) Significant accounting policies
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 2021.
The following amendments to standards and interpretations are effective for the Group from 1 January 2022 and do not have a material effect on the results or financial position of the Group:
|
|
Effective Date - periods beginning on or after |
|
|
|
|
Amendments to IFRS 3 Business Combinations -- Reference to the Conceptual Framework |
1 January 2022 |
|
Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use |
1 January 2022 |
|
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts - Costs of Fulfilling a Contract |
1 January 2022 |
|
Annual improvements to IFRS Standards 2018-2020 |
1 January 2022 |
There are a number of new standards, amendments to standards and interpretations that are not yet effective and have not been applied in preparing these 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 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies |
1 January 2023 |
|
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates |
1 January 2023 |
|
IFRS 17 Insurance Contracts |
1 January 2023 |
|
Amendments to IAS 12 Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
1 January 2023 |
|
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current |
1 January 2023* |
|
Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative information |
1 January 2023* |
* 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 2021.
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 2022 |
H1 2021 |
FY 2021 |
H1 2022 |
H1 2021 |
FY 2021 |
|
Euro = |
|
|
|
|
|
|
|
Pound Sterling |
0.842 |
0.868 |
0.860 |
0.861 |
0.860 |
0.838 |
|
US Dollar |
1.093 |
1.205 |
1.183 |
1.045 |
1.185 |
1.133 |
|
Canadian Dollar |
1.389 |
1.502 |
1.483 |
1.348 |
1.470 |
1.442 |
|
Australian Dollar |
1.520 |
1.563 |
1.575 |
1.518 |
1.583 |
1.558 |
|
Czech Koruna |
24.647 |
25.850 |
25.642 |
24.738 |
25.467 |
24.851 |
|
Polish Zloty |
4.636 |
4.537 |
4.565 |
4.663 |
4.516 |
4.588 |
|
Hungarian Forint |
375.38 |
357.800 |
358.52 |
394.50 |
351.690 |
368.89 |
|
Brazilian Real |
5.553 |
6.482 |
6.381 |
5.412 |
5.891 |
6.309 |
4 Operating segments
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 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 Panels €m |
Insulation
€m |
Light + Air €m |
Water + Energy €m |
Data + Flooring €m |
Total €m |
||
|
Total revenue - H1 2022 |
2,665.2 |
842.0 |
327.8 |
146.4 |
172.0 |
4,153.4 |
||
|
Total revenue - H1 2021 |
1,922.8 |
499.5 |
239.5 |
126.3 |
132.0 |
2,920.1 |
||
|
|
|
|
|
|
|
|
||
|
Disaggregation of revenue H1 2022 |
||||||||
|
Point in Time |
2,638.1 |
828.9 |
195.1 |
146.1 |
152.7 |
3,960.9 |
||
|
Over Time |
27.1 |
13.1 |
132.7 |
0.3 |
19.3 |
192.5 |
||
|
|
2,665.2 |
842.0 |
327.8 |
146.4 |
172.0 |
4,153.4 |
||
|
|
|
|
|
|
|
|
||
|
Disaggregation of revenue H1 2021 |
||||||||
|
Point in Time |
1,915.7 |
487.6 |
122.1 |
124.8 |
118.0 |
2,768.2 |
||
|
Over Time |
7.1 |
11.9 |
117.4 |
1.5 |
14.0 |
151.9 |
||
|
|
1,922.8 |
499.5 |
239.5 |
126.3 |
132.0 |
2,920.1 |
||
|
|
|
|
|
|
|
|
||
|
|
Insulated Panels €m |
Insulation
€m |
Light + Air €m |
Water + Energy €m |
Data + Flooring €m |
Total €m |
|
Trading profit - H1 2022 |
299.4 |
88.2 |
16.3 |
8.5 |
21.8 |
434.2 |
|
Intangible amortisation |
(7.0) |
(2.4) |
(3.0) |
(0.4) |
(0.1) |
(12.9) |
|
Non trading item |
(16.1) |
- |
- |
- |
- |
(16.1) |
|
Operating result - H1 2022 |
276.3 |
85.8 |
13.3 |
8.1 |
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 |
||
|
|
Insulated Panels €m |
Insulation
€m |
Light + Air €m |
Water + Energy €m |
Data + Flooring €m |
Total €m |
|
Trading profit - H1 2021 |
223.6 |
69.9 |
6.5 |
11.9 |
17.0 |
328.9 |
|
Intangible amortisation |
(7.1) |
(1.8) |
(2.8) |
(0.6) |
(0.1) |
(12.4) |
|
Operating result - H1 2021 |
216.5 |
68.1 |
3.7 |
11.3 |
16.9 |
316.5 |
|
Net finance expense |
|
|
|
|
|
(19.3) |
|
Profit for the period before income tax |
|
297.2 |
||||
|
Income tax expense |
|
|
|
|
|
(50.5) |
|
Profit for the period - H1 2021 |
|
|
|
246.7 |
||
|
Segment assets and liabilities |
|
|
|
|
|||||||
|
|
Insulated Panels €m |
Insulation
€m |
Light + Air €m |
Water + Energy €m |
Data + Flooring €m |
Total 30 June 2022 €m |
Total 30 June 2021 €m |
|
|||
|
Assets - H1 2022 |
3,763.2 |
1,823.1 |
727.5 |
258.7 |
259.7 |
6,832.2 |
|
|
|||
|
Assets - H1 2021 |
2,914.1 |
1,206.5 |
587.9 |
230.4 |
200.8 |
|
5,139.7 |
|
|||
|
Derivative financial instruments |
|
|
|
|
0.5 |
18.3 |
|
||||
|
Cash and cash equivalents |
|
|
|
|
392.7 |
931.4 |
|
||||
|
Deferred tax asset |
|
|
|
|
35.4 |
23.0 |
|
||||
|
Total assets |
|
|
|
|
7,260.8 |
6,112.4 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Liabilities - H1 2022 |
(1,427.4) |
(442.7) |
(237.0) |
(109.1) |
(68.6) |
(2,284.8) |
|
|
|||
|
Liabilities - H1 2021 |
(1,129.9) |
(327.9) |
(217.4) |
(91.6) |
(56.0) |
|
(1,822.8) |
|
|||
|
Derivative financial instruments |
|
|
|
|
|
- |
(0.2) |
|
|||
|
Interest bearing loans and borrowings (current and non-current) |
(1,599.3) |
(1,551.4) |
|||||||||
|
Income tax liabilities (current and deferred) |
(89.2) |
(105.1) |
|||||||||
|
Total liabilities |
(3,973.3) |
(3,479.5) |
|||||||||
|
Other segment information |
|
|
|
|
|
|
|
|
Insulated Panels €m |
Insulation
€m |
Light + Air €m |
Water + Energy €m |
Data + Flooring €m |
Total €m |
|
Capital Investment - H1 2022 * |
92.5 |
85.8 |
5.9 |
3.2 |
2.5 |
189.9 |
|
Capital Investment - H1 2021 * |
93.3 |
53.0 |
16.8 |
4.8 |
2.8 |
170.7 |
|
|
|
|
|
|
|
|
|
Depreciation included in segment result - H1 2022 |
(41.1) |
(20.7) |
(9.4) |
(3.9) |
(2.9) |
(78.0) |
|
Depreciation included in segment result - H1 2021 |
(38.3) |
(12.0) |
(7.6) |
(3.2) |
(2.9) |
(64.0) |
|
|
|
|
|
|
|
|
|
Non cash items included in segment result - H1 2022 |
(5.3) |
(1.8) |
(0.6) |
(0.5) |
(0.9) |
(9.1) |
|
Non cash items included in segment result - H1 2021 |
(4.7) |
(1.5) |
(0.6) |
(0.5) |
(0.8) |
(8.1) |
|
|
|
|
|
|
|
|
|
* 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 & Southern Europe** €m |
Central & Northern Europe m |
Americas €m |
Rest of World €m |
Total €m |
|
|||||
|
Income Statement Items |
|
|
|
|
|
|
|||||
|
Revenue - H1 2022 |
2,019.2 |
1,022.1 |
846.6 |
265.5 |
4,153.4 |
|
|||||
|
Revenue - H1 2021 |
1,558.7 |
657.8 |
539.4 |
164.2 |
2,920.1 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Non-current assets - H1 2022 * |
1,678.6 |
1,056.4 |
787.2 |
270.7 |
3,792.9 |
|
|||||
|
Non-current assets - H1 2021 * |
1,482.7 |
834.8 |
622.1 |
208.1 |
3,147.7 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Capital Investment - H1 2022 |
89.6 |
75.2 |
13.3 |
11.8 |
189.9 |
|
|||||
|
Capital Investment - H1 2021 |
43.4 |
93.5 |
31.2 |
2.6 |
170.7 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
||||||||||
|
* Total non-current assets excluding deferred tax assets. ** Prior period 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 Operating Segments) attributable to France were €677.3m (H1 2021: €484.4m), €263.8m (H1 2021: €212.0m) and €15.4m (H1 2021: €5.9m) respectively.
Revenues, non-current assets and capital investment (as defined in IFRS 8) attributable to the country of domicile (Ireland) were €131.0m (H1 2021: €94.1m), €91.0m (H1 2021: €79.6m) and €9.1m (H1 2021: €7.8m) 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. Activity is second half weighted.
6 Non trading item
|
|
|
6 months ended 30 June 2022 €m |
|
6 months ended 30 June 2021 €m |
|
Loss on disposal of subsidiary |
|
16.1 |
|
- |
|
|
|
|
|
|
During the period the Group's Russian operations were divested in full which resulted in a loss on disposal of €16.1m (H1 2021: €nil) .
7 Finance expense and finance income
|
|
|
6 months ended 30 June 2022 €m |
|
6 months ended 30 June 2021 €m |
|
Finance expense |
|
|
|
|
|
Bank loans |
|
3.1 |
|
3.0 |
|
Private placement loan notes |
|
12.5 |
|
14.4 |
|
Lease interest |
|
2.3 |
|
1.8 |
|
Defined benefit pension scheme, net |
|
0.1 |
|
0.2 |
|
Fair value movement on derivative financial instruments |
|
- |
|
3.5 |
|
Fair value movement on private placement debt Other interest |
|
- - |
|
(3.6) 0.2 |
|
|
|
18.0 |
|
19.5 |
|
Finance income |
|
|
|
|
|
Interest earned |
|
(0.4) |
|
(0.2) |
|
Net finance cost |
|
17.6 |
|
19.3 |
€0.9m of borrowing costs were capitalised during the period (H1 2021: €2.5m).
8 Taxation
Taxation provided for on profits is €67.7m (H1 2021: €50.5m) which represents 17.5% (H1 2021: 17.0%) of the profit before tax for the period. The full year effective tax rate in 2021 was 17.2%. 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 30 June 2022 €m |
|
At 30 June 2021 €m |
|
At 31 December 2021 €m |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
392.7 |
|
931.4 |
|
641.4 |
|
Derivative financial instruments |
|
- |
|
18.3 |
|
- |
|
Current borrowings |
|
(133.3) |
|
(172.3) |
|
(77.4) |
|
Non-current borrowings |
|
(1,466.0) |
|
(1,379.1) |
|
(1,320.1) |
|
Total net debt |
|
(1,206.6) |
|
(601.7) |
|
(756.1) |
Net debt, which is an Alternative Performance Measure, is stated net of interest rate and currency hedge asset of €nil (at 31 December 2021: asset of €nil) which relate to hedges of debt. Foreign currency derivative assets of €0.5m (at 31 December 2021: €0.3m), 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.
10 Financial instruments
The following table outlines the components of net debt by category:
|
|
Financial assets/ (liabilities) at amortised cost €m |
Liabilities in a fair value hedge relationship €m |
Derivatives designated as hedging instruments €m |
Total net debt by category €m |
|
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) |
|
|
Financial assets/ (liabilities) at amortised cost €m |
Liabilities in a fair value hedge relationship €m |
Derivatives designated as hedging instruments €m |
Total net debt by category €m |
|
Assets: |
|
|
|
|
|
Foreign exchange and interest rate swaps |
- |
- |
- |
- |
|
Cash at bank and in hand |
641.4 |
- |
- |
641.4 |
|
Total assets |
641.4 |
- |
- |
641.4 |
|
Liabilities: |
|
|
|
|
|
Private placement notes |
(1,377.1) |
- |
- |
(1,377.1) |
|
Other loans |
(20.4) |
- |
- |
(20.4) |
|
Total liabilities |
(1,397.5) |
- |
- |
(1,397.5) |
|
At 31 December 2021 |
(756.1) |
- |
- |
(756.1) |
|
|
|
|
|
|
|
|
Financial assets/ (liabilities) at amortised cost €m |
Liabilities in a fair value hedge relationship €m |
Derivatives designated as hedging instruments €m |
Total net debt by category €m |
|
Assets: |
|
|
|
|
|
Foreign exchange and interest rate swaps |
- |
- |
18.3 |
18.3 |
|
Cash at bank and in hand |
931.4 |
- |
- |
931.4 |
|
Total assets |
931.4 |
- |
18.3 |
949.7 |
|
Liabilities: |
|
|
|
|
|
Private placement notes |
(1,404.1) |
(134.2) |
- |
(1,538.3) |
|
Other loans |
(13.1) |
- |
- |
(13.1) |
|
Total liabilities |
(1,417.2) |
(134.2) |
- |
(1,551.4) |
|
At 30 June 2021 |
(485.8) |
(134.2) |
18.3 |
(601.7) |
The Group's private placement loan notes of €1,392.0m (at 31 December 2021: €1,377.1m) have a weighted average maturity of 5.8 years (at 31 December 2021: 6.4 years).
Included in cash at bank and in hand are overdrawn positions of €1,323.9m (30 June 2021: €1,433.6m) . These balances form part of a notional cash pool arrangement and are netted against cash balances of €1,375.9m (30 June 2021: €1,518.4m) . 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 30 June 2022 €m |
Level 2 30 June 2022 €m |
Level 3 30 June 2022 €m |
|
Financial assets Interest rate swaps Foreign exchange swaps Foreign exchange contracts for hedging
Financial liabilities Deferred contingent consideration Put option liabilities Foreign exchange contracts for hedging |
- - -
- - - |
- - 0.5
- - - |
- - -
(16.1) (171.1) - |
|
At 30 June 2022 |
- |
0.5 |
(187.2) |
|
|
Level 1 31 December 2021 €m |
Level 2 31 December 2021 €m |
Level 3 31 December 2021 €m |
|
Financial assets Interest rate swaps Foreign exchange swaps
Financial liabilities Deferred contingent consideration Put option liabilities Foreign exchange contracts for hedging |
- -
- - - |
- 0.3
- - - |
- -
(24.1) (178.2) - |
|
At 31 December 2021 |
- |
0.3 |
(202.3) |
|
|
Level 1 30 June 2021 €m |
Level 2 30 June 2021 €m |
Level 3 30 June 2021 €m |
|
Financial assets Interest rate swaps Foreign exchange swaps
Financial liabilities Deferred contingent consideration Put option liabilities Foreign exchange contracts for hedging |
- -
- - - |
0.1 18.2
- - (0.2) |
- -
(23.7) (136.9) - |
|
At 30 June 2021 |
- |
18.1 |
(160.6) |
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 fair value estimate of deferred contingent consideration is consistent with 31 December 2021 and is set out in notes 18 and 19 of the 2021 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 2022, 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 €m |
Fair value €m |
|
At 30 June 2022 |
1,392.0 |
1,383.6 |
|
At 31 December 2021 |
1,377.1 |
1,533.2 |
|
At 30 June 2021 |
1,538.3 |
1,726.1 |
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 30 June 2022 €m |
|
At 30 June 2021 €m |
|
At 31 December 2021 €m |
|
At the beginning of the period |
202.3 |
|
127.6 |
|
127.6 |
|
Deferred contingent consideration arising on acquisitions |
- |
|
12.4 |
|
12.1 |
|
Movement in deferred contingent consideration arising from fair value movement |
- |
|
- |
|
0.5 |
|
Movement in put liability arising from fair value movement |
8.0 |
|
12.9 |
|
59.5 |
|
Amounts paid |
(46.9) |
|
- |
|
- |
|
Effect of movement in exchange rates |
23.8 |
|
7.7 |
|
2.6 |
|
Closing balance |
187.2 |
|
160.6 |
|
202.3 |
|
|
|
|
|
|
|
|
Split as follows: |
|
|
|
|
|
|
Current liabilities |
173.4 |
|
38.4 |
|
41.7 |
|
Non-current liabilities |
13.8 |
|
122.2 |
|
160.6 |
|
|
187.2 |
|
160.6 |
|
202.3 |
Included in the amounts paid during the period was a payment of €36.6m to acquire the remaining 15% of shares in Bacacier which were held by a non-controlling interest.
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 technique |
Significant unobservable inputs |
Sensitivity of the input to the fair value |
|
Deferred contingent consideration |
Discounted cashflow method The net present value of the expected payment is calculated by using a risk adjusted discount rate. The expected payments are valued using the earn out formula in the shareholder's agreement and the most recent financial projections. |
· Risk adjusted discount rates of between 0.0% and 1.5%. · EBITDA multiples of between 2.8 and 8.1. |
· A 10% decrease in the risk adjusted discount rate would result in an increase in the fair value of the deferred contingent consideration of €0.1m. · A 5% increase in the assumed profitability of the acquired entities would result in an increase in the fair value of the deferred contingent consideration of €0.5m.
|
|
Put option liabilities |
Discounted cashflow method The net present value of the expected payment is calculated 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. |
· Risk adjusted discount rates of between 4.4% and 6.1%. · EBITDA multiples of between 6.5 and 8.57. |
· A 10% decrease in the risk adjusted discount rate would result in an increase in the fair value of the put option liabilities of €0.7m. · A 5% increase in the assumed profitability of the acquirees would result in an increase in the fair value of the put option liabilities of €8.2m. |
12 Dividends
A final dividend on ordinary shares of 26.0 cent per share in respect of the year ended 31 December 2021 (2020: 20.6 cent) was paid on 6 May 2022.
The directors have declared an interim dividend in respect of 2022 of 25.6 cent (2021: 19.9 cent) which will be paid on 7 October 2022 to shareholders on the register on the record date of 9 September 2022.
13 Earnings per share
|
|
|
6 months ended 30 June 2022 €m |
|
6 months ended 30 June 2021 €m |
|
The calculations of earnings per share are based on the following: |
|
|
|
|
|
Profit attributable to owners of the Company |
|
309.5 |
|
240.3 |
|
|
|
|
|
|
|
|
|
Number of shares ('000) 6 months ended 30 June 2022 |
|
Number of shares ('000) 6 months ended 30 June 2021 |
|
Weighted average number of ordinary shares for the calculation of basic earnings per share |
|
181,437 |
|
181,536 |
|
Dilutive effect of share options |
|
1,412 |
|
1,445 |
|
Weighted average number of ordinary shares for the calculation of diluted earnings per share |
|
182,849 |
|
182,981 |
|
|
|
|
|
|
|
|
|
€ cent |
|
€ cent |
|
Basic earnings per share |
|
170.6 |
|
132.4 |
|
Diluted earnings per share
|
|
169.3 |
|
131.3 |
At 30 June 2022, there were no anti-dilutive options (30 June 2021: Nil).
14 Goodwill
|
|
At 30 June 2022
€m |
|
At 30 June 2021
€m |
|
At 31 December 2021 €m |
|
|
|
|
|
|
|
|
At beginning of period |
1,908.6 |
|
1,478.8 |
|
1,478.8 |
|
Acquired through business combinations |
262.8 |
|
301.4 |
|
380.4 |
|
Effect of movement in exchange rates |
37.0 |
|
30.5 |
|
49.4 |
|
At end of period |
2,208.4 |
|
1,810.7 |
|
1,908.6 |
|
|
|
|
|
|
|
|
At end of period |
|
|
|
|
|
|
Cost |
2,276.1 |
|
1,878.4 |
|
1,976.3 |
|
Accumulated impairment losses |
(67.7) |
|
(67.7) |
|
(67.7) |
|
Net carrying amount |
2,208.4 |
|
1,810.7 |
|
1,908.6 |
15 Property, plant and equipment
|
|
At 30 June 2022
€m |
|
At 30 June 2021
€m |
|
At 31 December 2021 €m |
|
Cost or valuation |
2,723.4 |
|
2,364.3 |
|
2,488.3 |
|
Accumulated depreciation and impairment charges |
(1,438.1) |
|
(1,274.7) |
|
(1,332.5) |
|
Net carrying amount |
1,285.3 |
|
1,089.6 |
|
1,155.8 |
|
|
|
|
|
|
|
|
Opening net carrying amount |
1,155.8 |
|
972.9 |
|
972.9 |
|
Acquired through business combinations |
55.9 |
|
83.1 |
|
94.0 |
|
Divested |
(5.3) |
|
- |
|
- |
|
Additions |
133.1 |
|
65.2 |
|
172.2 |
|
Disposals |
(13.3) |
|
(2.4) |
|
(5.6) |
|
Depreciation charge |
(56.4) |
|
(47.1) |
|
(101.4) |
|
Impairment charge |
- |
|
(0.4) |
|
(3.1) |
|
Effect of movement in exchange rates |
15.5 |
|
18.3 |
|
26.8 |
|
Closing net carrying amount |
1,285.3 |
|
1,089.6 |
|
1,155.8 |
The disposals generated a profit in the period of €0.7m (H1 2021: €0.2m).
16 Leases
Right of use asset
|
|
At 30 June 2022
€m |
|
At 30 June 2021
€m |
|
At 31 December 2021 €m |
|
|
|
|
|
|
|
|
At beginning of period |
155.5 |
|
113.0 |
|
113.0 |
|
Additions |
21.1 |
|
12.6 |
|
28.4 |
|
Arising on acquisitions |
7.0 |
|
12.3 |
|
32.2 |
|
Remeasurement |
8.5 |
|
9.3 |
|
17.3 |
|
Terminations |
(0.8) |
|
(1.4) |
|
(2.9) |
|
Depreciation charge for the year |
(21.6) |
|
(16.9) |
|
(37.0) |
|
Effect of movement in exchange rates |
4.2 |
|
2.9 |
|
4.5 |
|
Closing net carrying amount |
173.9 |
|
131.8 |
|
155.5 |
Lease liability
|
|
At 30 June 2022
€m |
|
At 30 June 2021
€m |
|
At 31 December 2021 €m |
|
|
|
|
|
|
|
|
At beginning of period |
158.0 |
|
114.8 |
|
114.8 |
|
Additions |
20.5 |
|
12.0 |
|
27.0 |
|
Arising on acquisitions |
6.9 |
|
12.8 |
|
32.1 |
|
Remeasurement |
8.4 |
|
9.3 |
|
17.3 |
|
Terminations |
(0.8) |
|
(1.4) |
|
(3.0) |
|
Payments |
(27.1) |
|
(19.5) |
|
(38.6) |
|
Interest |
2.3 |
|
1.8 |
|
3.7 |
|
Effect of movement in exchange rates |
4.5 |
|
2.9 |
|
4.7 |
|
Closing net carrying amount |
172.7 |
|
132.7 |
|
158.0 |
Split as follows:
|
Current liability |
38.1 |
|
31.6 |
|
35.0 |
|
Non-current liability |
134.6 |
|
101.1 |
|
123.0 |
|
Closing net carrying amount |
172.7 |
|
132.7 |
|
158.0 |
17 Business combinations
During the period, the Group made three acquisitions for a combined total cash consideration of €350.8m.
In April 2022, the Group acquired 100% of the share capital of Troldtekt, a Danish natural acoustic insulation producer. The total consideration, including net debt acquired amounted to €220.5m. In June 2022, the Group acquired 100% of the share capital of Derbigum, a Belgian producer of waterproofing membranes for a total consideration, including net debt acquired of €96.7m.
Other acquisitions had a combined consideration of €33.6m. The Group acquired 100% of the share capital of THU Perfil in February 2022, a Spanish firm specialising in metal ceiling profiles. Also included within other are certain immaterial remeasurements of prior year estimates.
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 2021 acquisitions, are set out below:
|
|
Troldtekt |
Derbigum |
Other* |
Total |
|
|
€m |
€m |
€m |
€m |
|
Non-current assets |
|
|
|
|
|
Intangible assets |
0.3 |
0.7 |
(0.1) |
0.9 |
|
Property, plant and equipment |
40.4 |
16.5 |
(1.0) |
55.9 |
|
Right of use assets |
1.7 |
- |
5.3 |
7.0 |
|
Deferred tax assets |
- |
- |
2.7 |
2.7 |
|
Current assets |
|
|
|
|
|
Inventories |
13.9 |
13.7 |
5.5 |
33.1 |
|
Trade and other receivables |
18.1 |
23.2 |
11.6 |
52.9 |
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
(12.6) |
(21.7) |
(17.5) |
(51.8) |
|
Provisions for liabilities |
(0.2) |
- |
(2.5) |
(2.7) |
|
Lease liabilities |
(0.7) |
- |
(0.7) |
(1.4) |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Retirement benefit obligations |
- |
- |
(0.1) |
(0.1) |
|
Lease liabilities |
(0.9) |
- |
(4.6) |
(5.5) |
|
Deferred tax liabilities |
(1.1) |
- |
(1.9) |
(3.0) |
|
|
|
|
|
|
|
Total identifiable assets |
58.9 |
32.4 |
(3.3) |
88.0 |
|
|
|
|
|
|
|
Non-controlling interests arising in acquisition |
- |
- |
- |
- |
|
Goodwill |
161.6 |
64.3 |
36.9 |
262.8 |
|
Total consideration |
220.5 |
96.7 |
33.6 |
350.8 |
|
Satisfied by: |
|
|
|
|
|
Cash (net of cash/debt acquired) |
220.5 |
96.7 |
33.6 |
350.8 |
|
Deferred consideration |
- |
- |
- |
- |
|
Total consideration |
220.5 |
96.7 |
33.6 |
350.8 |
*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 2022, the businesses acquired in the current period contributed total revenue of €37.5m and trading profit of €4.5m 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 2021: 189,444) were issued as a result of the exercise of vested options arising from the Group's share option schemes.
During the period, 201,980 (H1 2021: nil) treasury shares were re-issued as a result of vested options arising from the Group's share options schemes (see the 2021 Annual Report for full details of the Group's share option schemes).
Options were exercised at an average price of €0.13 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 2021 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 August 2022, the Group acquired a strategic minority interest of 24% in Nordic Waterproofing Holding AB. Nordic Waterproofing Holding AB is a publicly listed company on the Nasdaq Stockholm and is a market leader in waterproofing products and services for the protection of buildings and infrastructure.
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 2022 |
30 June 2021 |
|
|
Financial Statements Reference |
€m |
€m |
|
Trading profit |
Note 4 |
434.2 |
328.9 |
Trading margin
Measures the trading profit as a percentage of revenue.
|
|
|
30 June 2022 |
30 June 2021 |
|
|
Financial Statements Reference |
€m |
€m |
|
Trading Profit |
Note 4 |
434.2 |
328.9 |
|
Total Group Revenue |
Note 4 |
4,153.4 |
2,920.1 |
|
Trading margin |
|
10.5% |
11.3% |
EBITDA
The Group has updated its definition of EBITDA as earnings before finance expenses, income taxes, depreciation, amortisation and non trading item. In prior statements the definition of EBITDA excluded the impact of IFRS 16 Leases, however as IFRS 16 Leases has been firmly embedded as an accounting standard for the last number of years, the Group determined that the associated definition of EBITDA was more appropriate going forward. This treatment is consistent with the 2021 Annual Report.
|
|
|
30 June 2022 |
30 June 2021 |
|
|
Financial Statements Reference |
€m |
€m |
|
Trading profit |
Condensed Consolidated Income Statement |
434.2 |
328.9 |
|
Depreciation |
Consolidated Statement of Cash Flows |
78.0 |
64.0 |
|
EBITDA* |
|
512.2 |
392.9 |
* Prior period comparative has been re-presented to reflect this revised definition.
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 2022 |
30 June 2021 |
|
|
Financial Statements Reference |
€m |
€m |
|
|
|
|
|
|
Net cash flow from operating activities |
Consolidated Statement of Cash Flows |
157.2 |
221.3 |
|
Additions to property, plant, equipment and intangibles |
Consolidated Statement of Cash Flows |
(131.5) |
(62.9) |
|
Proceeds from disposals of property, plant and equipment |
Consolidated Statement of Cash Flows |
14.0 |
2.6 |
|
Lease payments |
Consolidated Statement of Cash Flows |
(27.1) |
(19.5) |
|
Interest received |
Consolidated Statement of Cash Flows |
0.3 |
0.3 |
|
|
|
|
|
|
Free cash flow |
|
12.9 |
141.8 |
|
|
|
|
|
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 2022 |
30 June 2021 |
31 December 2021 |
|
|
Financial Statements Reference |
€m |
€m |
€m |
|
|
|
|
|
|
|
Net Assets |
Consolidated Statement of Financial Position |
3,287.5 |
2,632.9 |
2,959.3 |
|
Net Debt |
Note 9 |
1,206.6 |
601.7 |
756.1 |
|
|
|
4,494.1 |
3,234.6 |
3,715.4 |
|
|
|
|
|
|
|
Operating profit before interest and tax |
|
814.0 |
612.0 |
725.3 |
|
|
|
|
|
|
|
Return on capital employed |
|
18.1% |
18.9% |
19.5% |
|
|
|
|
|
|
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 2022 |
30 June 2021 |
31 December 2021 |
|
|
Financial Statements Reference |
€m |
€m |
€m |
|
|
|
|
|
|
|
Net Debt |
Note 9 |
1,206.6 |
601.7 |
756.1 |
|
|
|
|
|
|
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.
|
|
Financial Statements Reference |
30 June 2022 |
30 June 2021 |
|
|
€m |
€m |
|
|
H1 EBITDA |
EBITDA calculation |
512.2 |
392.9 |
|
Lease liability payments |
Note 16 |
(27.1) |
(19.5) |
|
H1 EBITDA (adjusted for the impact of IFRS 16) |
|
485.1 |
373.4 |
|
|
Financial Statements Reference |
30 June 2022 |
30 June 2021 |
31 December 2021 |
|
|
€m |
€m |
€m |
|
|
|
|
|
|
|
|
Net Debt |
Note 9 |
1,206.6 |
601.7 |
756.1 |
|
12 month EBITDA (adjusted for the impact of IFRS 16) |
|
966.3 |
725.7 |
854.6 |
|
|
|
|
|
|
|
Net Debt : EBITDA times |
|
1.25 |
0.83 |
0.88 |
|
|
|
|
|
|
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 2022 |
30 June 2021 |
31 December 2021 |
|
|
Financial Statements Reference |
€m |
€m |
€m |
|
|
|
|
|
|
|
Trade and other receivables |
Consolidated Statement of Financial Position |
1,675.2 |
1,237.0 |
1,228.4 |
|
Inventories |
Consolidated Statement of Financial Position |
1,364.1 |
755.0 |
1,138.9 |
|
Trade and other payables |
Consolidated Statement of Financial Position |
(1,732.6) |
(1,360.1) |
(1,389.8) |
|
Foreign currency derivatives excluded from net debt |
Consolidated Statement of Financial Position |
0.5 |
(0.2) |
0.3 |
|
|
|
|
|
|
|
Working capital |
|
1,307.2 |
631.7 |
977.8 |
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 2022 |
30 June 2021 |
31 December 2021 |
|
|
|
€m |
€m |
€m |
|
|
|
|
|
|
|
Working capital |
|
1,307.2 |
631.7 |
977.8 |
|
Annualised turnover |
|
9,033.8 |
6,529.0 |
7,070.0 |
|
Working Capital ratio |
|
14.5% |
9.7% |
13.8% |
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