Kingspan is expecting to see a 10pc profit rise

Kingspan Group Plc, the leading international provider of low energy building solutions, today
issues the following Interim Management Statement for the period from 1 July to 30 September
Business Performance
Revenue in the nine month period to 30 September was €1.16 billion, up 1.6% on prior year. The
pace of sales growth moderated through the third quarter, decreasing by 0.7% compared to the
same period in 2011. The Group’s overall trading margin increased by 40bps year on year, in line
with the margin reported in the first half of the year.
As highlighted previously, sentiment in our end markets was relatively subdued in the first six
months of the year, with the Group recording solid progress despite this backdrop. In the period
since, sentiment has undoubtedly weakened further, driven in particular by a deepening lack of
confidence in Europe and with the US commercial construction market being in somewhat of a
holding pattern. Australian construction markets are evidently slowing although Kingspan’s sales
continue to grow reflecting improving levels of market penetration. Overall, general building
activity across a number of the Group’s markets has been easing, with some pockets of relative
buoyancy including Central and Eastern Europe, most notably Germany.
Divisional Reviews
Insulated Panels
Revenue increased by 3% in the first nine months (quarter three plus 2%) compared with the
same period last year. On a constant currency basis these measures were -1% and -3%
respectively. In the UK and Western Europe year to date order intake is flat but decreased by 7%
in quarter three. Our North American business has seen a relatively subdued sales performance
and order intake levels are behind year to date to 30 September by 2% although strongly ahead
by 15% in quarter three. Order intake in Central and Eastern Europe was ahead of last year in the
period up to 30 September by 4% and also by 4% in the third quarter. The early stage integration
of the ThyssenKrupp Construction Group and Rigidal Industries LLC acquisitions, as announced
earlier in the year, is fully on track.
Insulation Boards
Revenue in the first nine months was up 3% (quarter three plus 2%) compared with the same
period last year. On a constant currency basis these measures were 0% and -3% respectively.
Divisional revenues continue to benefit from a strong Kooltherm® business mix across all
markets as seen earlier in the year. The UK market was solid overall with some volume
weakness evident and the outlook for the near term trending similarly. The market in the
Netherlands remains persistently weak with little evidence of any near term recovery.
This division is experiencing a tough year owing to a UK market which has weakened
considerably through the year and the conclusion of a one-off contract in France as anticipated.
Sales in the first nine months decreased by 18% with quarter three decreasing by 27%. A
significant restructuring programme is underway which together with the emergence of a higher
growth renewables proposition and headway in new markets should position the division for
progress in 2013.Access Floors
Sales in the first nine months were 19% ahead or 11% ahead excluding the Australian acquisition
earlier in the year (quarter three up 20% and 10% on the same basis). Like for like sales
excluding the acquisition and currency were up 2% year to date and behind by 2% in the third
quarter. The trading margin was lower in the third quarter reflecting business mix, growth in
international activity and a slowing datacentre market.
Financial Position
Net debt at the end of September 2012 was €222.1m, an increase from €171.2m as at 30 June
last reflecting the acquisitions of ThyssenKrupp Construction Group in Europe and Rigidal
Industries LLC in the UAE. Net debt is expected to be approximately €200m at year end, which is
comfortably within the Group’s key financial covenants. The Group has significant operational and
developmental financing headroom with its syndicated bank facility of €300m currently fully
Albeit with much of quarter four remaining, the Group expects to deliver a trading profit of
approximately €105m, up 10% year on year, and in line with consensus.
While it is clearly difficult to fully counter persistent economic and construction weaknesses,
which have the potential to become more pronounced in early 2013, the structural and global
dimensions to Kingspan’s business should go some way to offsetting this, as it has done in the
past. Growing market penetration, a strong R&D pipeline, resilient refurbishment activity and
driving the returns from recent acquisitions should all combine to move Kingspan forward.
For further information contact:
Gene Murtagh, Chief Executive Officer Tel: +353 (0) 42 9698000
Geoff Doherty, Chief Financial Officer Tel: +353 (0) 42 9698000
Ed Micheau, Murray Consultants Tel: +353 (0) 1 4980300