Kingspan Group plc
Trading
Update
26 April 2024
Kingspan Group plc, the global leader
in high performance insulation and building envelopes, issues this
Trading Update for the quarter ended 31 March 2024 ahead of our
Annual General Meeting at 9.00am today.
Overall, the Group had a reasonable
first quarter despite a sluggish start to the year due in part to
seasonal factors. Group sales approached €2bn for the three-month
period to 31 March and were 1% behind prior year (-8% underlying).
Trading volumes overall have been positive with pricing stable
since the turn of the year albeit behind year-on-year reflecting
lower raw material prices. It is possible however that our primary
input costs could rise again in the near term.
By market during the first quarter,
the Americas overall matched last year's strong start, Western
Europe was seasonally subdued for the most part, and was slow to
get going, with Central & Eastern Europe remaining regionally
tough. The Middle East and India recorded strong sales growth in
the period.
Insulated Panels sales were 6%
lower (-9% underlying) although notably global sales volumes were
up mid-single digit versus the first quarter of last year. Order
intake volumes at a group level continues to experience
year-on-year growth which augers well for sales activity in the
second quarter. The increasing interplay between our distinctive
Planet Passionate proposition and our customers' need for exemplar
solutions is notable. QuadCoreTM specification continues to
advance globally bolstered by the growing appeal of its lower
embodied carbon (LEC) model.
Insulation sales were 13% ahead
in the first quarter buoyed by the acquisition of a controlling
stake in Steico in early January. Underlying sales were 14% lower
as year-on-year reduction in pricing offset modest underlying
growth in rigid boards. Technical insulation, which experienced an
expected slow start, has seen more momentum in recent weeks.
Although it's very much early days in our journey with Steico we
are strongly encouraged by the market, channel and innovation
opportunities. We entered the mineral wool insulation category in
recent weeks with the completion of the acquisition of Bachl's
state of the art stonewool plant. The Group's spectrum of solutions
is unrivalled in meeting the thermal, acoustic and fire performance
needs of a vast array of building applications.
Light, Air + Water sales were
down 6% (-6% underlying) in the first quarter. Activity in the US
has been positive significantly offsetting softer activity in
Europe. Margins are holding up well year-on-year and the
development pipeline is encouraging.
Roofing + Waterproofing grew
sales by 10% in the first quarter with underlying sales up 3%.
Activity levels have generally been more positive compared to the
early part of 2023. Our US execution plan is on schedule with two
plant locations now secured in Middle America and the Northeast and
we anticipate being in production in both locations by early 2026.
We acquired a further 5% holding in Nordic Waterproofing in the
period, bringing our ownership to 36% at this point. Our
development pipeline in this category is progressing
positively.
Data
+ Flooring sales were up 14% (+3%
underlying) in the first quarter and this trend is expected to
accelerate through this year and into 2025. The pipeline of
datacentre opportunities is strong, and growing, in particular as
the AI rush takes hold. Our distinctive solutions underpin our
confidence in this sector and our rapid capacity ramp up reflects
this.
Net
debt at 31 March 2024 was €1,291m, an
increase of €311m in the first quarter, reflecting an aggregate
increase in net debt of €364m arising from the acquisition of the
Group's controlling stake in Steico. The Group's current
liquidity is very strong with €1.7bn in cash and undrawn
facilities. The balance sheet is robust with leverage levels
currently at c. 1.2 times net debt to EBITDA.
The Board proposes to instigate a
share buyback program of 1.5m ordinary shares, commencing after
today's AGM subject to market conditions, in order to offset
dilution from share issuances.
The Group's trading outlook as we move
through the early part of the second quarter remains encouraging
overall. The positive trends seen in order intake for much of 2023
have continued into 2024. Order intake volumes in each month of
2024 to date have been stronger than the same month last year.
Year-on-year pricing levels ought to more closely match as we
approach the mid-year period. With much of the second quarter
remaining we expect to deliver a broadly similar trading profit in
the first half as we did in the same period in 2023.
Overall, given ever increasing
concerns around energy conservation, and the need for practical,
implementable and compelling solutions to reduce carbon, Kingspan's
unrivalled range of products and Planet Passionate agenda position
the Group favourably for years ahead.
Kingspan's Annual General Meeting will
take place at 9.00am today.
For further information
contact:
Gene Murtagh, Chief Executive
Officer Tel: +353
(0) 42 9698016
Geoff Doherty, Chief Financial
Officer
Tel: +353 (0) 42 9698016
Pat Walsh, Murray
Consultants
Tel: +353 (0) 87 2269345