TIDMKGP
RNS Number : 5380W
Kingspan Group PLC
19 August 2022
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 EUR4.2bn, (underlying up 27%).
-- Trading profit up 32% to EUR434.2m, (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 EUR1,206.6m (H1 2021: EUR601.7m). 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.EUR500m.
Technical insulation now comprising c.35% of divisional revenue.
-- Roofing + Waterproofing global platform established. Annualised
revenue run rate will be in excess of EUR500m 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 EUR522m in acquisitions, purchase of a
minority interest and capex during the period.
Summary Financials:
H1 '22 H1 '21 Change
---------------------- -------- -------- --------
Revenue EURm 4,153.4 2,920.1 +42%
Trading Profit
EURm (2) 434.2 328.9 +32%
Trading Margin
(3) 10.5% 11.3% -80bps
EBITDA EURm (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 EUR4bn for the first
time. We have been able to navigate large input cost increases with
only modest margin impact.
We invested EUR522m 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 EUR200m 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 Tel: +353 (0) 1 4980 300
Douglas Keatinge
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 EUR4bn for the first time,
with EBITDA and trading profit reaching EUR512.2m and EUR434.2m
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 1.5 C aligned science-based
targets bringing them in line with our Planet Passionate programme
goals to reduce Scope 1, 2 and 3 greenhouse gas (GHG) emissions.
The Group 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 EUR70 per tonne
internal carbon charge from 2023 which will galvanise full
alignment across the organisation.
Target 2020 2021 2022
Planet Passionate Targets* Year (A) (A) Forecast
Net Zero Carbon Manufacturing
(yoy % reduction scope 1 & 2(1)
Carbon ) 2030 5.2% 4.3% 5.0%
50% reduction in product CO2e 2030 - - -
intensity from primary supply
chain partners (% reduction)
Zero emission company cars (annual
replacement %) 2025 11% 29% 30%
60% direct renewable energy use
Energy (%) 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%
----------------------------------------- ---------------------- ------- ------- ----------
Zero Company waste to landfill
Circularity (tonnes) 2030 18,642 16,294 14,500
-------------
Recycle 1 billion PET bottles
into our manufacturing processes
(million bottles) 2025 573 843 800
QuadCore(TM) products utilising
recycled PET (% sites) 2025 5% 5% 10%
----------------------------------------- ---------------------- ------- ------- ----------
Harvest 100 million litres of
Water 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.
Expansion
In the first six months we invested a total of EUR522m 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 EUR500m. 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 EUR500m, 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
EUR200m 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(TM) 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 EUR75m), with 5 MW already installed and
operational. Rooftricity(TM) , 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.
QuadCore(TM) 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.
QuadCore(TM) sales volume grew by 63% globally in the first
half.
We have also developed QuadCore(TM) 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. QuadCore(TM) 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(R) and 'B' classification for key
Kooltherm(R) applications. AlphaCore(R) 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 EURm 2,665.2 1,922.8 +39%(1)
Trading Profit
EURm 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 EURm 842.0 499.5 +69% (1)
Trading Profit EURm 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 EUR500m, 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 EURm 327.8 239.5 +37% (1)
Trading Profit EURm 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 EURm 146.4 126.3 +16% (1)
Trading Profit EURm 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 EURm 172.0 132.0 +30% (1)
Trading Profit EURm 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 EUR4,153.4m (H1 2021:
EUR2,920.1m) and trading profit increased by 32% to EUR434.2m (H1
2021: EUR328.9m). 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
EUR12.9m compared to EUR12.4m in the first half of 2021. Group
operating profit after amortisation increased by 28% to EUR405.2m
(H1 2021: EUR316.5m). Profit after tax was EUR319.9m compared to
EUR246.7m 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 EUR17.6m (H1 2021: EUR19.3m). Finance costs include a
non-cash charge of EUR0.1m (H1 2021: EUR0.2m) relating to the
Group's defined benefit pension schemes. Lease interest of EUR2.3m
was recorded during the period (H1 2021: EUR1.8m). The Group's net
interest expense on borrowings (bank and loan notes) in the first
half of 2022 was EUR15.2m compared to EUR17.2m 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
EURm EURm
-------------------------------- -------- --------
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 EUR1,307.2m (31 December
2021: EUR977.8m), an increase of EUR329.4m (EUR261.8m 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 EUR450.5m during the first half of the
year to EUR1,206.6m (31 December 2021: EUR756.1m). The movement in
debt is analysed in the table below:
Movement in net debt H1 '22 H1 '21
EURm EURm
----------------------------------- ---------- --------
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 EUR15.8m at 30 June 2022 (31 December 2021:
EUR28.0m).
Non trading item
The Group recorded a non trading charge of EUR16.1m (H1 2021:
EURnil) 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 EUR67.7m (H1
2021: EUR50.5m) 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 EUR350.8m on acquisitions during the period.
Of this, EUR220.5m was incurred on Troldtekt, EUR96.7m was incurred
on Derbigum and an aggregate amount of EUR33.6m invested in other
acquisitions.
The Group also made a payment of EUR36.6m 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 EUR700m 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
EUR1,392m (H1 2021: EUR1,538m) 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 EUR800m. At
period end, there was EUR150m 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 EUR1,743m at 30
June 2022 (H1 2021: EUR1,631m).
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 30 June
2022 2021
Note EURm EURm
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 30 June
2022 2021
EURm EURm
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 At 30 June At 31 December
June
2022 (unaudited) 2021 (unaudited) 2021
(audited)
Note EURm EURm EURm
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 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 (unaudited)
for the 6 month period ended 30 June 2021
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 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
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
2021 23.8 95.6 0.7 (11.6) (229.9) 0.3 40.4 0.7 (168.3) 2,597.2 2,348.9 48.7 2,397.6
Transactions with owners recognised directly in equity
Employee share
based
compensation 0.1 - - - - - 17.7 - - - 17.8 - 17.8
Tax on employee
share
based
compensation - - - - - - 9.7 - - 3.8 13.5 - 13.5
Exercise or
lapsing of
share options - (1.2) - 1.2 - - (10.5) - - 10.5 - - -
Repurchase of
shares - - - (46.9) - - - - - - (46.9) - (46.9)
Dividends - - - - - - - - - (73.5) (73.5) - (73.5)
Transactions
with
non-controlling
interests:
Arising on
acquisition - - - - - - - - - - - 3.5 3.5
Dividends paid
to
non-controlling
interests - - - - - - - - - - - (3.2) (3.2)
Fair value
movement - - - - - - - - (59.5) - (59.5) - (59.5)
Transactions
with owners 0.1 (1.2) - (45.7) - - 16.9 - (59.5) (59.2) (148.6) 0.3 (148.3)
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Total
comprehensive
income for the
year
Profit for the
year - - - - - - - - - 554.1 554.1 16.5 570.6
Other
comprehensive
income:
Items that may be reclassified subsequently to profit or loss
Cash flow
hedging in
equity
- current year - - - - - 0.3 - - - - 0.3 - 0.3
- tax impact - - - - - - - - - - - - -
Exchange
differences
on translating
foreign
operations - - - - 121.4 - - - - - 121.4 1.7 123.1
Items that will not be reclassified subsequently to profit or loss
Actuarial gains
on defined
benefit pension
scheme - - - - - - - - - 21.5 21.5 - 21.5
Income taxes
relating
to actuarial
gains on
defined benefit
pension
scheme - - - - - - - - - (5.5) (5.5) - (5.5)
Total
comprehensive
income for the
year - - - - 121.4 0.3 - - - 570.1 691.8 18.2 710.0
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Balance at 31
December
2021 23.9 94.4 0.7 (57.3) (108.5) 0.6 57.3 0.7 (227.8) 3,108.1 2,892.1 67.2 2,959.3
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Kingspan Group plc
Condensed consolidated statement of cash flows (unaudited)
for the 6 month period ended 30 June 2022
6 months 6 months
ended ended
30 June 30 June
2022 2021
EURm EURm
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 (46.9) -
in respect of acquisitions
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:
- '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 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 1 January 2022
Contracts - Costs of Fulfilling a Contract
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 1 January 2023
of Accounting policies
Amendments to IAS 8 Accounting policies, Changes 1 January 2023
in Accounting Estimates and Errors - Definition
of Accounting Estimates
IFRS 17 Insurance Contracts 1 January 2023
Amendments to IAS 12 Income Taxes - Deferred Tax
related to Assets and Liabilities arising from 1 January 2023
a Single Transaction
Amendments to IAS 1 Presentation of Financial
Statements - Classification of Liabilities as 1 January 2023*
Current or Non-current
Amendments to IFRS 17 Insurance Contracts: Initial
Application of IFRS 17 and IFRS 9 - Comparative 1 January 2023*
information
* 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
Data
Insulated Insulation Light Water +
Panels + Air + Energy Flooring Total
EURm EURm EURm EURm EURm EURm
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
Data
Insulated Insulation Light Water +
Panels + Air + Energy Flooring Total
EURm EURm EURm EURm EURm EURm
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
---------
Data
Insulated Insulation Light Water +
Panels + Air + Energy Flooring Total
EURm EURm EURm EURm EURm EURm
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
Data Total Total
Insulated Insulation Light Water + 30 June 30 June
Panels + Air + Energy Flooring 2022 2021
EURm EURm EURm EURm EURm EURm EURm
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 Insulation Light Data
Panels + Air Water +
EURm EURm EURm + Energy Flooring Total
EURm EURm EURm
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 Central
& Southern & Northern Rest
Europe** Europe Americas of World Total
EURm EURm EURm EURm EURm
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 EUR677.3m
(H1 2021: EUR484.4m), EUR263.8m (H1 2021: EUR212.0m) and EUR15.4m
(H1 2021: EUR5.9m) respectively.
Revenues, non-current assets and capital investment (as defined
in IFRS 8) attributable to the country of domicile (Ireland) were
EUR131.0m (H1 2021: EUR94.1m), EUR91.0m (H1 2021: EUR79.6m) and
EUR9.1m (H1 2021: EUR7.8m) 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 6 months
ended ended
30 June 30 June
2022 2021
EURm EURm
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 EUR16.1m (H1 2021:
EURnil) .
7 Finance expense and finance income
6 months 6 months
ended ended
30 June 30 June
2022 2021
EURm EURm
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 - (3.6)
debt
Other interest - 0.2
--------- ---------
18.0 19.5
Finance income
Interest earned (0.4) (0.2)
---------
Net finance cost 17.6 19.3
--------- ---------
EUR0.9m of borrowing costs were capitalised during the period
(H1 2021: EUR2.5m).
8 Taxation
Taxation provided for on profits is EUR67.7m (H1 2021: EUR50.5m)
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 At At
30 June 30 June 31 December
2022 2021 2021
EURm EURm EURm
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 EURnil (at 31
December 2021: asset of EURnil) which relate to hedges of debt.
Foreign currency derivative assets of EUR0.5m (at 31 December 2021:
EUR0.3m), 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:
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 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)
---------------- --------------- ------------- ------------
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 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 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 - - 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 EUR1,392.0m (at 31
December 2021: EUR1,377.1m) 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
EUR1,323.9m (30 June 2021: EUR1,433.6m) . These balances form part
of a notional cash pool arrangement and are netted against cash
balances of EUR1,375.9m (30 June 2021: EUR1,518.4m) . 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 Level 2 Level
3
30 June 30 June 30 June
2022 2022 2022
EURm EURm EURm
Financial assets
Interest rate swaps - - -
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 - 0.5 (187.2)
----------- ---------- ----------
Level 1 Level 2 Level
3
31 December 31 December 31 December
2021 2021 2021
EURm EURm EURm
Financial assets
Interest rate swaps - - -
Foreign exchange swaps - 0.3 -
Financial liabilities
Deferred contingent consideration - - (24.1)
Put option liabilities - - (178.2)
Foreign exchange contracts for - - -
hedging
At 31 December 2021 - 0.3 (202.3)
--------------- -------------- --------------
Level 1 Level 2 Level
3
30 June 30 June 30 June
2021 2021 2021
EURm EURm EURm
Financial assets
Interest rate swaps - 0.1 -
Foreign exchange swaps - 18.2 -
Financial liabilities
Deferred contingent consideration - - (23.7)
Put option liabilities - - (136.9)
Foreign exchange contracts for - (0.2) -
hedging
----------- ---------- ----------
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 Fair value
EURm EURm
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 At At
30 June 30 June 31 December
2022 2021 2021
EURm EURm EURm
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
EUR36.6m 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 Significant Sensitivity of the
technique unobservable input to the fair
inputs value
Deferred Discounted
contingent cashflow * Risk adjusted discount rates of between 0.0% and * A 10% decrease in the risk adjusted discount rate
consideration method 1.5%. would result in an increase in the fair value of the
The net deferred contingent consideration of EUR0.1m.
present value
of the * EBITDA multiples of between 2.8 and 8.1.
expected * A 5% increase in the assumed profitability of the
payment acquired entities would result in an increase in the
is calculated fair value of the deferred contingent consideration
by of EUR0.5m.
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.
-------------- ------------------------------------------------------- ----------------------------------------------------------------
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 EUR0.7m.
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 EUR8.2m.
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 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 6 months
ended ended
30 June 30 June
2022 2021
EURm EURm
The calculations of earnings per
share are based on the following:
Profit attributable to owners
of the Company 309.5 240.3
----------- -----------
Number Number
of of
shares shares
('000) ('000)
6 months 6 months
ended ended
30 June 30 June
2022 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
----------- -----------
EUR cent EUR 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 At At
30 June 30 June 31 December
2022 2021 2021
EURm
EURm EURm
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 At At
30 June 30 June 31 December
2022 2021 2021
EURm
EURm EURm
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 EUR0.7m (H1
2021: EUR0.2m).
16 Leases
Right of use asset
At At At
30 June 30 June 31 December
2022 2021 2021
EURm
EURm EURm
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 At At
30 June 30 June 31 December
2022 2021 2021
EURm
EURm EURm
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 EUR350.8m.
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 EUR220.5m.
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 EUR96.7m.
Other acquisitions had a combined consideration of EUR33.6m. 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
EURm EURm EURm EURm
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
EUR37.5m and trading profit of EUR4.5m 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 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
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 30 June
2022 2021
Financial Statements Reference EURm EURm
---------------- -------------------------------- -------- --------
Trading profit Note 4 434.2 328.9
---------------- -------------------------------- -------- --------
Trading margin
Measures the trading profit as a percentage of revenue.
30 June 30 June
2022 2021
Financial Statements Reference EURm EURm
--------------------- -------------------------------- -------- --------
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 30 June
2022 2021
Financial Statements Reference EURm EURm
---------------- -------------------------------- -------- --------
Condensed Consolidated Income
Trading profit Statement 434.2 328.9
Consolidated Statement of Cash
Depreciation 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 30 June
2022 2021
Financial Statements Reference EURm EURm
-------------------------------- -------------------------------- -------- --------
Net cash flow from operating Consolidated Statement
activities of Cash Flows 157.2 221.3
Additions to property, plant, Consolidated Statement
equipment and intangibles of Cash Flows (131.5) (62.9)
Proceeds from disposals of Consolidated Statement
property, plant and equipment of Cash Flows 14.0 2.6
Consolidated Statement
Lease payments of Cash Flows (27.1) (19.5)
Consolidated Statement
Interest received 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 30 June 31 December
2022 2021 2021
Financial Statements
Reference EURm EURm EURm
------------------- ------------------------ ---------- ---------- ------------
Consolidated Statement
Net Assets 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 30 June 31 December
2022 2021 2021
Financial Statements
Reference EURm EURm EURm
---------- ---------------------- -------- -------- ------------
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.
30 June 30 June
2022 2021
----------------------
Financial Statements
Reference EURm EURm
------------------------------------ ---------------------- -------- --------
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
------------------------------------------------------------ -------- --------
30 June 30 June 31 December
2022 2021 2021
-------------
Financial
Statements
Reference EURm EURm EURm
----------------------------------- ------------- -------- -------- ------------
Note
Net Debt 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 30 June 31 December
2022 2021 2021
Financial Statements
Reference EURm EURm EURm
----------------------------- ------------------------ ---------- ---------- ------------
Consolidated Statement
Trade and other receivables of Financial Position 1,675.2 1,237.0 1,228.4
Consolidated Statement
Inventories of Financial Position 1,364.1 755.0 1,138.9
Consolidated Statement
Trade and other payables of Financial Position (1,732.6) (1,360.1) (1,389.8)
Foreign currency
derivatives excluded Consolidated Statement
from net debt 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 30 June 31 December
2022 2021 2021
EURm EURm EURm
--------------------- -------- -------- ------------
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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