TIDMKGP
RNS Number : 2429J
Kingspan Group PLC
20 August 2021
KINGSPAN GROUP PLC
HALF-YEARLY FINANCIAL REPORT
for the period ended 30 June 2021
KINGSPAN GROUP PLC
RESULTS FOR THE HALF YEAR 30 JUNE 2021
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 2021.
Financial Highlights:
-- Revenue up 41% to EUR2.9bn, (pre-currency and acquisitions,
up 36%).
-- Trading profit up 64% to EUR329m, (pre-currency and acquisitions,
up 60%).
-- Group trading margin of 11.3%, an increase of 160bps versus
the same period in 2020.
-- Acquisitions contributed 8% to sales growth and 7% to trading
profit growth in the period.
-- Net debt of EUR601.7m (H1 2020: EUR437.9m). Net debt to EBITDA
of 0.83x (H1 2020: 0.79x).
-- Basic EPS up 65.9 % to 132.4 cent (H1 2020: 79.8 cent).
-- Interim dividend 19.9 cent (H1 2020: nil) in line with policy
guidance.
-- Continued growth in ROCE at 18.9 % (H1 2020: 16.9%).
Operational Highlights:
-- Unprecedented and ongoing raw material inflation with the price
recovery effort on track.
-- Strong underlying volume growth of 30% and 27% in Insulated
Panels and Insulation Boards.
-- Insulated Panels sales increase of 44% driven by strong momentum
generally in construction activity, raw material led price
growth further enhanced by strong demand in high growth sectors.
Order backlog strongly ahead of the same point in 2020.
-- Insulation Boards sales increase of 36% reflecting strong demand
in key markets and inflation recovery on pricing. Acquisition
of Logstor, a leading global supplier of technical insulation
solutions, completed before the period end.
-- Light & Air sales growth of 39% reflecting the acquisition
of Colt Group in Q2 2020 and the acquisition of Skydome in
the period.
-- Water & Energy sales increase of 36% reflecting a strong performance
across all key markets, with the exception of Australasia,
and further acquisition activity.
-- Data & Flooring sales growth of 22% reflecting strong datacentre
activity and ongoing development of the European operations.
-- Invested a total of EUR496m in acquisitions, capex and financial
investments during the period.
Summary Financials:
H1 '21 H1 '20 Change
---------------------- -------- -------- --------
Revenue EURm 2,920.1 2,072.7 +41%
Trading Profit*
EURm 328.9 200.1 +64%
Trading Margin** 11.3% 9.7% +160bps
EPS (cent per share) 132.4 79.8 +66%
---------------------- -------- -------- --------
*Operating profit before amortisation of intangibles
** Operating profit before amortisation of intangibles divided
by total revenue
Gene Murtagh, Chief Executive of Kingspan commented:
"Growth in the first half of the year has been remarkably strong
with revenue and trading profit at record levels driven by high
levels of demand and a global recovery in the construction sector.
Despite inflation in our input costs, effective price management
has helped increase trading margins, with a stand out performance
in our largest division - insulated panels.
Our strategy of expanding through acquisition and diversifying
geographically has continued, with ten acquisitions made during the
period across four continents, and a robust balance sheet
positioned to support future growth. We also continue to invest in
organic expansion, product innovation, digitalisation, enhanced
compliance and executing on our ambitious Planet Passionate
sustainability targets.
A strong pipeline of future demand means we are positive about
the outlook for the second half of the year. Longer term, the
decarbonisation agenda and increasing awareness of the need to
reduce the contribution of the built environment to climate change
is supportive of our focus on delivering customers with high
performance solutions that deliver best-in-class thermal
performance."
For further information contact:
Murray Consultants Tel: +353 (0) 1 4980 300
Douglas Keatinge
Business Review
The first half of 2021 has proven to be an extraordinary period
for Kingspan during which we have experienced unprecedented demand,
coupled with increasingly acute supply constraints and an
inflationary curve never experienced before. The latter has meant
that over the course of the year price management activity will
have had to recover well in excess of EUR600m in cost increases.
Whilst a lag has been and can be expected, the recovery effort has
so far been a success. In all, and despite these pressures, the
business delivered record revenue and trading profit up 41% to
EUR2.92bn and up 64% to EUR329m respectively. Compared with 2019
those performance statistics were ahead by 30% and 43%. Given the
particularly unique backdrop it is an immense credit to the team
globally to have delivered this performance.
By market, and almost without exception, growth was achieved in
both order intake and deliveries, and in our largest category,
Insulated Panels, the backlog at half year grew further and was
significantly ahead of the same point in 2020. This clearly bodes
well for the remainder of the year, although we anticipate
disruption to our supply capability due to some critical raw
material constraints. Construction markets in general have been
buoyant and the palpable shift toward more energy efficient
building for both new builds and renovations has been, and will
remain, a positive driver of growth at Kingspan. In addition, our
increasing exposure to high growth end-markets including online
retail, data warehousing and electric vehicle production, are
likely to be key strands of the future development of the
Group.
Planet Passionate
Building upon the 2020 achievement of Net Zero Energy across the
Group, over a year ago we launched our Planet Passionate agenda, a
mission critical and distinctively ambitious programme across the
four pillars of Energy, Carbon, Circularity and Water. We have set
targets across twelve sub-categories in all of our businesses with
annual goals across the next ten years. Significant progress has
already been made in the first year of the programme, as detailed
in our inaugural Planet Passionate report published in April.
Further advancement is underway in 2021, even in the face of very
significant growth in manufacturing output.
Kingspan has recently announced ambitious new targets aligned
with its Planet Passionate programme for reducing its Scope 1, 2
and 3 CHG emissions. The Group has now committed to reducing
absolute Scope 1 and 2 CHG emissions by 90% by 2030 from a 2020
base year. It has also pledged to reduce absolute Scope 3 CHG
emissions by 42% within the same timeframe.
The ambitious new targets are in line with the scale of
reductions required to keep global warming below 1.5C from
pre-industrial levels.
Planet Passionate Targets Target 2020 2021
Year (A)
(F)
-------------------------------------------------------- -------- -------
Energy Net Zero Energy (%) 2020 100% 100%
-------------
60% direct renewable energy use
(%) 2030 28% 30%
20% on-site renewable energy generation
(%) 2030 4.7% 5%
Solar PV systems on all wholly owned
facilities (%) 2030 21% 29%
----------------------------------------- ---------------------- -------
Net Zero Carbon Manufacturing (%
yoy reduction in scope 1 & 2 GHG
Carbon emissions) 2030 5.2% 4%
-------------
Zero Emission company funded cars
(% annual conversion) 2025 11% 25%
50% reduction in product CO2e intensity
from our primary supply partners
(% reduction) 2030 0% 0%
---------------------- -------
Circularity Zero Company waste to landfill (tonnes) 2030 18,450 17,000
-------------
Recycle 1 billion PET bottles into
our manufacturing processes (bottles) 2025 573m 800m
QuadCore(TM) products utilising
recycled PET (% of sites) 2025 5% 5%
----------------------------------------- ---------------------- -------
Harvest 100 million litres of rainwater
Water (litres) 2030 21.1m 24m
-------------
5 Active Ocean Clean-Up projects
(No. of initiatives) 2025 1 2
----------------------------------------- ---------------------- ------- -------
Expansion
During the period we invested a total of EUR496m in
acquisitions, capex and financial investments. Of note, the EUR242m
purchase of Denmark headquartered Logstor completed in June, and
the Romanian based TeraSteel also completed in the period. We also
entered the Uruguayan insulated panel market through Bromyros and
bolstered our insulation channel in New Zealand and Australia with
the onboarding of Thermakraft, since the period end. Additionally,
we became a founding investor in H2 Green Steel, a start up in
Sweden that aims to become the world's first zero carbon steel
plant. Over a year ago we signed an agreement to acquire Trimo in
Slovenia and we remain fully engaged in, and committed to, what has
already been a lengthy regulatory process. These and other
investments, including our broadening organic footprint, will all
serve to increase our exposure to the growing global drive to
dramatically decrease building related emissions in the future.
Currently, the construction and operation of buildings accounts for
approximately 40% of all greenhouse gases.
Innovation
Continuing the trajectory of QuadCore(TM) as an industry-leading
solution particularly in the areas of thermal-efficiency and fire
performance, development of QuadCore(TM) 2.0 has continued with the
aim of launching in Britain and Ireland initially. We expect to
commence the extensive certification process before year end.
The production process for PowerPanel(R) is now fully
commissioned and the first trial project is underway with the
replacement of the existing roof at our Kingscourt facility in
Ireland. Comprehensive product testing and certification is in
progress and we plan a formal market launch during quarter four of
this year. Significant progress has been made in developing an
A-Class fibre free AlphaCore(R) insulation solution from a
materials perspective, and tests are currently underway to
determine the optimal thermal performance and installation
methods.
A separate development project is currently underway with the
objective of achieving an A-Class fire performance for our
Optim-R(R) product, the highest thermal performance insulation in
our offering. Our aim is still to have a product ready for market
by late 2022. Separately, over the next two years, we plan to have
a B-Class fire performance available as a standard offering across
much of the Kooltherm(R) range.
Kingspan Digital
The Kingspan Digitalisation Programme sets out to transform the
business across its value chain. We are now developing an entire
digitally integrated ecosystem that links products, services and
operational capabilities. We aim, over time, to reach a new bar in
seamless, flexible and accurate digital solutions for our
customers.
Product Integrity
A number of enhancements were made early in the year to bolster
the Group's product compliance processes. ISO37301 is the leading
standard for establishing, developing and maintaining compliance
management systems. In July, we achieved this standard for Kingspan
Group's Compliance function and at one of our manufacturing sites,
which is among the first production sites in the world of any type
to achieve it. This system will be embedded throughout our
organisation and in each of our current 182 manufacturing
locations, with 20 sites expected to have received the
accreditation by H1 2022.
During the period, in excess of 250 third party external product
and system audits took place across the Group. In addition, 50
manufacturing sites have been internally audited under the process
validated by the Audit and Compliance Committee.
Insulated Panels
H1 '21 H1 '20 Change
---------------- -------- -------- --------
Revenue EURm 1,922.8 1,332.0 +44%(1)
Trading Profit
EURm 223.6 123.3 +81%
Trading Margin 11.6% 9.3% +230bps
---------------- -------- -------- --------
(1) Comprising underlying +41% (volume +30% and price/mix +11%),
currency -3% and acquisitions +6%.
Activity in our largest segment has continued the momentum
demonstrated last year right through the first half of 2021 with
deliveries reaching a record 40 million m(2) . Revenue and volume
are both strongly ahead and order intake volume was ahead by 50%.
As noted earlier, this leaves the backlog significantly ahead of
the same point in 2020. Quadcore (TM) comprised 15% of insulated
panels order intake value in the period.
Construction activity is clearly ahead in most markets and for
Kingspan this is being further enhanced by the tangible increase in
the penetration of insulated panels in a number of key markets.
This dynamic has been particularly evident in the US, Brazil,
France and the Benelux where the category is growing encouragingly
in each case. Germany has also been strong, and significant growth
in order intake has also been registered in Britain. Ireland has
experienced a remarkably strong first half.
Work has begun on a new insulated panel facility in central
France, due for completion in late 2022. Similarly, in North
America work is progressing on a new greenfield facility in north
east US and an additional greenfield plant will be added in the
midwest region. This will bring our plant count to nine in the
region. Brazil has commenced production at the new facility in
Santa Catarina and plans are afoot to add further lines in the
north of the country.
Our plan for plant construction in Vietnam has experienced
understandable logistical challenges that we are confident will be
resolved, but remains central to our strategy for the region.
Insulation Boards
H1 '21 H1 '20 Change
--------------------- ------- ------- ---------
Revenue EURm 499.5 367.9 +36% (1)
Trading Profit EURm 69.9 48.5 +44%
Trading Margin 14.0% 13.2% +80bps
--------------------- ------- ------- ---------
(1) Comprising underlying +36% (volume +27% and price/mix +9%),
currency -2% and acquisitions +2%.
Sales value and volume were both well ahead of last year in all
key markets and deliveries reached a record 38 million m (2) .
Newbuild has recovered strongly in many regions and RMI activity is
becoming a more meaningful portion of our insulation offering.
Western Europe and North America in particular posted significant
volume increases and momentum in Australasia has improved
substantially. Volume growth in Britain was comfortably in excess
of 20%.
Production commenced in our new Kooltherm(R) facility in Sweden.
The new manufacturing plant is powered by 100% renewable
electricity, of which 20% is produced on-site, and it will support
the growing drive towards modern high performance insulation in
that region.
During the period a number of attractive insulation acquisitions
were either completed or signed. Key amongst these was Logstor, a
global leader in medium and large core insulated pipes for multiple
applications but predominately for the district heating sector. We
anticipate this end market will grow as Europe focuses increasingly
on deep improvements to achieve energy efficient infrastructure of
cities in particular. Separately we signed an agreement to acquire
Thermakraft, based in New Zealand, which will significantly enhance
our insulation presence in Australasia. Finally, in the US, we
acquired Dyplast based in Florida in the industrial insulation
sphere.
Light & Air
H1 '21 H1 '20 Change
--------------------- ------- ------- ---------
Revenue EURm 239.5 171.9 +39% (1)
Trading Profit EURm 6.5 7.6 -14%
Trading Margin 2.7% 4.4% -170bps
--------------------- ------- ------- ---------
(1) Comprising underlying +2%, currency -1% and acquisitions +38%.
The division took a significant step forward in 2020 with the
acquisition of Colt Group which added material scale to the
category with annual revenue in the order of EUR250m.
Geographically it also resulted in Northern Europe taking a leap
forward, in particular Germany and the Netherlands. More recently
we completed the acquisition of Skydome which broadly doubles our
presence in France and Major Industries in the US was acquired
close to the period end. In all, the division is on track to
deliver 2021 revenue of approximately EUR550m with a trading profit
margin in the region of 8%. It is our medium term aim to drive
revenue towards EUR1bn delivering a trading profit margin of 10%.
To achieve this, organic development will continue to be
supplemented with acquisitions across both the 'Light' and the
'Air' end markets. The first half demonstrated significant lag in
raw material recovery, more so than across the rest of the Group,
and we anticipate a more complete recovery during the second half.
Additionally, the segment bore the first quarter seasonal weakness
at Colt, which last year was pre-acquisition.
Water & Energy
H1 '21 H1 '20 Change
--------------------- ------- ------- ---------
Revenue EURm 126.3 92.9 +36% (1)
Trading Profit EURm 11.9 6.9 +72%
Trading Margin 9.4% 7.4% +200bps
--------------------- ------- ------- ---------
(1) Comprising underlying +24%, currency impact +3% and acquisitions +9%.
This segment delivered a robust half year result with notable
growth achieved in most regions, and across the product portfolio
that ranges from rainwater harvesting to water treatment and hot
water storage.
Of note, activity in Britain and Poland performed well across
water treatment and fuel storage, and encouraging progress is being
made in France in the waste water category. In the Nordics activity
has recovered well and, in contrast to this, the rainwater
harvesting business in Australia was more challenged as the
pandemic restrictions have continued to hamper activity.
Product range expansion and innovation are key to this
division's future growth and, as an example, work is well underway
on the design of hydrogen tanks for the transportation sector.
Data & Flooring
H1 '21 H1 '20 Change
--------------------- ------- ------- ---------
Revenue EURm 132.0 108.0 +22% (1)
Trading Profit EURm 17.0 13.8 +23%
Trading Margin 12.9% 12.8% +10bps
--------------------- ------- ------- ---------
(1) Comprising underlying +25% and currency impact -3%
Given the obvious pressure on the office construction market,
the Data & Flooring segment delivered a relatively strong
performance in the period with revenue and trading profit ahead by
22% and 23% respectively.
For some time now the predominant focus in this business has
been the pursuit of unique solutions aimed at the efficient running
of data warehouses.
The product suite includes airflow panels, aisle containment and
structural ceilings which are designed to minimise the energy
consumed in the cooling process of these facilities. As the wider
technology evolves, so too will our solutions to keep apace.
Financial Review
Overview of results
Group revenue increased by 41% to EUR2,920.1m (H1 2020:
EUR2,072.7m) and trading profit increased by 64% to EUR328.9m (H1
2020: EUR200.1m). This represents a 44% increase in sales and a 67%
increase in trading profit on a constant currency basis. The
Group's trading margin increased by 160bps to 11.3% (H1 2020: 9.7%)
primarily reflecting the impact of the inflation recovery effort
and the positive effect of year on year operating leverage, due to
increased trading. The amortisation charge in respect of
intangibles was EUR12.4m compared to EUR10.9m in the first half of
2020. Group operating profit after amortisation increased by 67% to
EUR316.5m (H1 2020: EUR189.2m). Profit after tax was EUR246.7m
compared to EUR147.5m in the first half of 2020, driven in the main
by the increase in trading profit. Basic EPS for the period was
132.4 cent, representing an increase of 65.9% on the first half of
2020 (H1 2020: 79.8 cent).
The Group's underlying sales and trading profit performance by
division are set out below:
Sales Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +41% -3% +6% +44%
Insulation Boards +36% -2% +2% +36%
Light & Air +2% -1% +38% +39%
Water & Energy +24% +3% +9% +36%
Data & Flooring +25% -3% - +22%
Group +36% -3% +8% +41%
----------- --------- ------------ ------
The Group's trading profit measure is earnings before interest,
tax and amortisation of intangibles:
Trading Profit Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +74% -3% +10% +81%
Insulation Boards +44% -2% +2% +44%
Light & Air -16% - +2% -14%
Water & Energy +50% +2% +20% +72%
Data & Flooring +28% -5% - +23%
Group +60% -3% +7% +64%
----------- --------- ------------ ------
Finance costs (net)
Finance costs for the period were higher than the same period
last year at EUR19.3m (H1 2020: EUR11.7m). Finance costs include a
non-cash charge of EUR0.2m (H1 2020: EUR0.4m) relating to the
Group's defined benefit pension schemes. Lease interest of EUR1.8m
was recorded during the period (H1 2020: EUR2.0m). The Group's net
interest expense on borrowings (bank and loan notes) in the first
half of 2021 was EUR17.2m compared to EUR9.2m in the same period in
2020. Net interest increased during the period due to drawdown of
the EUR750m Green Private Placement in December 2020 and reduced,
(and in some cases negative) returns on cash balances. Interest
charges will be lower in the second half of the year due to the
repayment on maturity of a more expensive historical $200m private
placement in August 2021.
Free cashflow
H1 '21 H1 '20
EURm EURm
-------------------------------- -------- -------
EBITDA* 373.4 244.2
Movement in working capital ** (118.5) 95.6
Net capital expenditure (60.3) (58.7)
Pension contributions (1.7) (0.6)
Net finance costs paid (18.5) (10.4)
Income taxes paid (40.9) (14.9)
Other including non-cash items 8.3 5.2
-------- -------
Free cashflow 141.8 260.4
-------- -------
*Earnings before finance costs, income taxes, depreciation,
amortisation and the impact of IFRS 16. 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 2021 was EUR631.7m (31 December 2020:
EUR450.8m), an increase of EUR180.9m (EUR118.5m excl. acquisitions)
in the period. The increase is driven by the increased level of
year on year trading, with the Group investing in working capital
to support the significant increase in sales. The average working
capital to sales percentage was 9.7% compared with 11.6% in H1
2020. Working capital management and cash generation continue to be
important financial metrics for the business. The lower than normal
working capital percentage is reflective of the very high levels of
activity coupled with lower inventory days due to raw material
supply constraints.
Net Debt
Net debt increased by EUR365.5m during the first half of the
year to EUR601.7m (31 December 2020: EUR236.2m). The movement in
debt is analysed in the table below:
Movement in net debt H1 '21 H1 '20
EURm EURm
----------------------------------- -------- --------
Free cashflow 141.8 260.4
Acquisitions and disposals (430.9) (42.0)
Purchase of financial asset (5.0) -
Repurchase of shares (46.9) -
Dividends paid (37.4) -
Dividends paid to non-controlling
interests (2.2) (0.5)
-------- --------
Cashflow movement (380.6) 217.9
Exchange movements on translation 15.1 (22.6)
-------- --------
(Increase)/decrease in net debt (365.5) 195.3
Net debt at start of period (236.2) (633.2)
Net debt at end of period (601.7) (437.9)
-------- --------
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 assumed a
number of defined benefit pension liabilities in Mainland Europe
through acquisitions completed in recent years. The net aggregate
pension liability in respect of all schemes and obligations was
EUR39.3m at 30 June 2021 (30 June 2020: EUR34.4m).
Taxation
The tax charge for the first half of the year was EUR50.5m (H1
2020: EUR30.0m) which represents an effective tax rate of 17.0% on
profit before tax (H1 2020: 16.9%). The effective rate is broadly
consistent year on year. Taxation payments of EUR40.9m (H1 2020:
EUR14.9) were higher than in the first half of 2020 with the prior
year benefitting from deferred payment programmes in place in a
number of jurisdictions in response to the pandemic, which have
since been paid in full.
Acquisitions
The Group incurred EUR435.9m on acquisitions and financial
investments during the period. Of this, EUR242.4m was incurred on
Logstor Group with an additional EUR193.5m incurred on 10 further
acquisitions and financial investments in the first 6 months of
2021.
Dividend & repurchase of shares
The Board has declared an interim dividend of 19.9 cent (H1
2020: nil) payable on 8 October 2021 to shareholders on the
register on the record date of 10 September 2021. This is in line
with the previously announced revised shareholder returns
policy.
During the period the Group bought back 600,000 shares at a
weighted average price of EUR78.16. This is consistent with an
objective of maintaining a broadly constant share count over
time.
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. This new facility was used to
substantially replace the outgoing revolving credit facility of
EUR461m and acquisition facility of EUR300m.
In addition, as part of the Group's longer-term capital
structure, the Group has total private placement loan notes of
EUR1,538m (H1 2020: EUR842m) which have a weighted average maturity
of 6.2 years (H1 2020: 4 years).
The weighted average maturity of all debt facilities is 5.8
years (H1 2020: 3.8 years).
As well as ongoing free cashflow generation, the Group has
significant available undrawn facilities and cash which provide
appropriate headroom for operational requirements and development
funding. Total available headroom was EUR1,631m at 30 June 2021 (H1
2020: EUR1,182m).
Related party transactions
There were no changes in related party transactions from the
2020 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year. Eugene Murtagh retired as Chairman and non-executive
director on 30 April 2021 and is no longer considered a related
party.
Principal risks & uncertainties
Details of the principal risks and uncertainties facing the
Group can be found in the 2020 Annual Report. These risks, namely
volatility in the macro environment, failure to innovate, product
failure, business interruption (including IT continuity and climate
change), credit risks and credit control, employee development and
retention, fraud and cybercrime, acquisition and integration of new
businesses, health & safety, and laws & regulations remain
the most likely to affect the Group in the second half of the
current year. The Group actively manages these and all other risks
through its control and risk management processes. We will continue
to actively assess changes in the external environment on events
which could change our risk assessment and profile.
Looking Ahead
The Group has had a very positive first half with a strong order
backlog on entering the second half of the year. A prevailing and
ongoing theme in the year to date has been the extent of raw
material inflation and constrained availability. This backdrop will
persist through the remaining part of 2021, and likely into 2022.
Construction industry activity has been lively in most key markets
with outperformance by Kingspan given the robustness of our global
supply chain. This dynamic may change in time when raw material
availability issues subside.
2021 is an abnormally buoyant year in an unparalleled
environment. Whatever way the market evolves, Kingspan is well
placed for the years ahead given the combined strength of our high
performance product suite, the global decarbonisation agenda, our
diversified end markets and strong balance sheet.
2021 Statement of Directors Responsibilities
for the 6 month period ended 30 June 2021
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 2021 (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 2020 Annual Report, with the exception of the
following changes during the period:
-- Eugene Murtagh retired as Chairman and a non-executive director
on 30 April 2021, and Jost Massenberg was appointed Non-Executive
Chairman on that date;
-- Éimear Moloney and Paul Murtagh were appointed as non-executive
directors on 30 April 2021.
On behalf of the Board
Gene M Murtagh Geoff Doherty
Chief Executive Officer Chief Financial Officer
20 August 2021 20 August 2021
Kingspan Group plc
Condensed consolidated income statement (unaudited)
for the 6 month period ended 30 June 2021
6 months 6 months
ended ended
30 June 2021 30 June
2020
Note EURm EURm
Revenue 4 2,920.1 2,072.7
Cost of Sales (2,087.8) (1,462.0)
------------- ----------
Gross Profit 832.3 610.7
Operating Costs (503.4) (410.6)
------------- ----------
Trading Profit 4 328.9 200.1
Intangible amortisation (12.4) (10.9)
----------
Operating Profit 316.5 189.2
Finance expense 6 (19.5) (12.5)
Finance income 6 0.2 0.8
------------- ----------
Profit for the period before income
tax 297.2 177.5
Income tax expense 7 (50.5) (30.0)
------------- ----------
Profit for the period 246.7 147.5
------------- ----------
Attributable to owners of Kingspan
Group plc 240.3 144.5
Attributable to non-controlling
interests 6.4 3.0
------------- ----------
246.7 147.5
------------- ----------
Earnings per share for the period
Basic 12 132.4c 79.8c
Diluted 12 131.3c 79.2c
Kingspan Group plc
Condensed consolidated statement of comprehensive income
(unaudited)
for the 6 month period ended 30 June 2021
6 months 6 months
ended ended
30 June 30 June
2021 2020
EURm EURm
Profit for financial period 246.7 147.5
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations 69.5 (71.6)
Net changes in fair value of cash flow hedges (0.4) 0.5
Items that will not be reclassified subsequently
to profit or loss
Actuarial gains/(losses) on defined benefit
pension schemes 8.3 (9.4)
Income taxes relating to actuarial gains/losses
on defined benefit pension schemes (2.1) 1.8
Total comprehensive income for the period 322.0 68.8
--------- ---------
Attributable to owners of Kingspan Group
plc 312.6 73.5
Attributable to non-controlling interests 9.4 (4.7)
--------- ---------
322.0 68.8
--------- ---------
Kingspan Group plc
Condensed consolidated statement of financial position
as at 30 June 2021
At 30 June At 30 June At 31 December
2021 (unaudited) 2020 (unaudited) 2020
(audited)
Note EURm EURm EURm
Assets
Non-current assets
Goodwill 13 1,810.7 1,498.5 1,478.8
Other intangible assets 93.5 87.5 82.7
Financial asset 13.2 8.2 8.2
Property, plant and equipment 14 1,089.6 968.3 972.9
Right of use assets 15 131.8 143.4 113.0
Derivative financial instruments 9 - 33.5 -
Retirement benefit assets 8.9 9.4 8.0
Deferred tax assets 23.0 15.9 23.0
------------------- ------------------- ---------------
3,170.7 2,764.7 2,686.6
Current assets
Inventories 755.0 542.6 505.9
Trade and other receivables 1,237.0 869.2 799.6
Derivative financial instruments 9 18.3 0.2 19.8
Cash and cash equivalents 9 931.4 431.0 1,329.7
------------------- ------------------- ---------------
2,941.7 1,843.0 2,655.0
------------------- ------------------- ---------------
Total assets 6,112.4 4,607.7 5,341.6
------------------- ------------------- ---------------
Liabilities
Current liabilities
Trade and other payables 1,360.1 932.6 854.5
Provisions for liabilities 58.3 59.8 55.7
Lease liabilities 15 31.6 30.3 27.3
Derivative financial instruments 0.2 - 0.2
Deferred contingent consideration 10 38.4 - -
Interest bearing loans and
borrowings 8 172.3 45.9 209.6
Current income tax liabilities 67.2 87.0 55.9
------------------- ------------------- ---------------
1,728.1 1,155.6 1,203.2
Non-current liabilities
Retirement benefit obligations 48.2 43.8 53.9
Provisions for liabilities 62.9 52.5 63.3
Interest bearing loans and
borrowings 8 1,379.1 856.7 1,376.1
Lease liabilities 15 101.1 114.3 87.5
Deferred tax liabilities 37.9 32.4 32.4
Deferred contingent consideration 10 122.2 156.2 127.6
------------------- ------------------- ---------------
1,751.4 1,255.9 1,740.8
------------------- ------------------- ---------------
Total liabilities 3,479.5 2,411.5 2,944.0
------------------- ------------------- ---------------
Net Assets 2,632.9 2,196.2 2,397.6
------------------- ------------------- ---------------
Equity
Share capital 23.8 23.8 23.8
Share premium 95.6 95.6 95.6
Capital redemption reserve 0.7 0.7 0.7
Treasury shares (58.5) (11.7) (11.6)
Other reserves (301.7) (323.8) (356.8)
Retained earnings 2,812.5 2,366.0 2,597.2
------------------- ------------------- ---------------
Equity attributable to owners
of Kingspan Group plc 2,572.4 2,150.6 2,348.9
Non-controlling interests 60.5 45.6 48.7
------------------- ------------------- ---------------
Total Equity 2,632.9 2,196.2 2,397.6
------------------- ------------------- ---------------
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 (unaudited)
for the 6 month period ended 30 June 2020
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 2020 23.8 95.6 0.7 (11.8) (110.8) 0.3 38.9 0.7 (188.7) 2,221.6 2,070.3 50.1 2,120.4
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Transactions with owners
recognised
directly in equity
Employee share
based
compensation - - - 0.1 - - 7.7 - - - 7.8 - 7.8
Exercise or
lapsing of
share options - - - - - - (7.6) - - 7.5 (0.1) - (0.1)
Dividends - - - - - - - - - - - - -
Transactions with
non-controlling
interests:
Dividends paid to
non-controlling
interests - - - - - - - - - - - (0.5) (0.5)
Arising on
acquisition - - - - - - - - - - - 0.7 0.7
Fair value
movement - - - - - - - - (0.9) - (0.9) - (0.9)
Transactions with
owners - - - 0.1 - - 0.1 - (0.9) 7.5 6.8 0.2 7.0
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Total
comprehensive
income
for the period
Profit for the
period - - - - - - - - - 144.5 144.5 3.0 147.5
Other
comprehensive
income
Items that may be reclassified subsequently to profit or loss
Cash flow hedging
in equity
- current year - - - - - 0.5 - - - - 0.5 - 0.5
- tax impact - - - - - - - - - - - - -
Exchange
differences on
translating
foreign
operations - - - - (63.9) - - - - - (63.9) (7.7) (71.6)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses
on defined
benefit pension
scheme - - - - - - - - - (9.4) (9.4) - (9.4)
Income taxes
relating to
actuarial losses
on defined
benefit pension
scheme - - - - - - - - - 1.8 1.8 - 1.8
Total
comprehensive
income
for the period - - - - (63.9) 0.5 - - - 136.9 73.5 (4.7) 68.8
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Balance at 30
June 2020 23.8 95.6 0.7 (11.7) (174.7) 0.8 39.0 0.7 (189.6) 2,366.0 2,150.6 45.6 2,196.2
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- ---------- ------------- ------------ ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (audited)
for the year ended 31 December 2020
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
2020 23.8 95.6 0.7 (11.8) (110.8) 0.3 38.9 0.7 (188.7) 2,221.6 2,070.3 50.1 2,120.4
Transactions with owners recognised directly in equity
Employee share
based
compensation - - - - - - 16.0 - - - 16.0 - 16.0
Tax on employee
share
based
compensation - - - - - - (0.9) - - 4.4 3.5 - 3.5
Exercise or
lapsing of
share options - - - 0.2 - - (13.6) - - 13.4 - - -
Repurchase of - - - - - - - - - - - - -
shares
Transactions
with
non-controlling
interests:
Arising on
acquisition - - - - - - - - - - - (0.8) (0.8)
Dividends paid
to
non-controlling
interests - - - - - - - - - - - (1.2) (1.2)
Fair value
movement - - - - - - - - 20.4 - 20.4 - 20.4
Transactions
with owners - - - 0.2 - - 1.5 - 20.4 17.8 39.9 (2.0) 37.9
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Total
comprehensive
income
for the year
Profit for the
year - - - - - - - - - 373.6 373.6 11.2 384.8
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 - - - - (119.1) - - - - - (119.1) (10.6) (129.7)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses
on defined
benefit pension
scheme - - - - - - - - - (19.9) (19.9) - (19.9)
Income taxes
relating
to actuarial
losses on
defined benefit
pension
scheme - - - - - - - - - 4.1 4.1 - 4.1
Total
comprehensive
income
for the year - - - - (119.1) - - - - 357.8 238.7 0.6 239.3
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Balance at 31
December
2020 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
-------- -------- ----------- --------- ------------ -------- -------- ------------ ---------- --------- ------------- ------------ ---------
Kingspan Group plc
Condensed consolidated statement of cash flows (unaudited)
for the 6 month period ended 30 June 2021
6 months 6 months
ended ended
30 June 2021 30 June
2020
EURm
EURm
Operating activities
Profit for the period 246.7 147.5
Add back non-operating expenses:
Income tax expense 50.5 30.0
Depreciation of property, plant
and equipment 64.0 60.4
Amortisation of intangible assets 12.4 10.9
Impairment of non-current assets 0.4 -
Employee equity-settled share options 8.1 7.7
Finance income (0.2) (0.8)
Finance expense 19.5 12.5
Profit on sale of property, plant
and equipment (0.2) (2.5)
Changes in working capital:
Inventories (159.6) 15.8
Trade and other receivables (334.6) (53.8)
Trade, other payables and provisions 375.7 133.6
Other:
Pension contributions (1.7) (0.6)
---------- --------
Cash generated from operations 281.0 360.7
Income tax paid (40.9) (14.9)
Interest paid (18.8) (11.1)
---------- --------
Net cash flow from operating activities 221.3 334.7
---------- --------
Investing activities
Additions to property, plant and
equipment (62.9) (63.8)
Proceeds from disposals of property,
plant and equipment 2.6 5.1
Purchase of subsidiary undertakings
(including net debt/cash acquired) (430.9) (42.0)
Purchase of financial assets (5.0) -
Interest received 0.3 0.7
---------- --------
Net cash flow from investing activities (495.9) (100.0)
---------- --------
Financing activities
Drawdown of interest bearing loans
and borrowings 47.0 51.5
Repayment of interest bearing loans
and borrowings (92.5) (1.1)
Payment of lease liabilities (19.5) (16.3)
Repurchase of treasury shares (46.9) -
Dividends paid to non-controlling
interests (2.2) (0.5)
Dividends paid (37.4) -
---------- --------
Net cash flow from financing activities (151.5) 33.6
---------- --------
(Decrease)/increase in cash and
cash equivalents (426.1) 268.3
Translation adjustment 27.8 (28.2)
Cash and cash equivalents at the
beginning of the period 1,329.7 190.9
---------- --------
Cash and cash equivalents at the
end of the period 931.4 431.0
---------- --------
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 2020 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.
(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 20 August 2021.
(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 2020.
The following amendments to standards and interpretations are
effective for the Group from 1 January 2021 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 9 Financial Instruments,
IAS 39 Financial Instruments: Recognition
and measurement, IFRS 7 Financial Instruments:
Disclosures, IFRS 4 Insurance Contracts and 1 January 2021
IFRS 16 Leases - Interest Rate Benchmark Reform
- Phase 2
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
IFRS 17 Insurance Contracts 1 January 2023*
Amendments to IAS 1 Presentation of Financial
Statements - Classification of Liabilities as 1 January 2023*
Current or Non-current
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 and IFRS Practice Statement 2 - Disclosure 1 January 2023*
of Accounting policies
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors - Definition 1 January 2023*
of Accounting Estimates
Amendments to IFRS 3 Business Combinations --
Reference to the Conceptual Framework 1 January 2022*
Amendments to IAS 16 Property, Plant and Equipment
- Proceeds before Intended Use 1 January 2022
Amendments to IAS 37 Provisions, Contingent Liabilities
and Contingent Assets - Onerous Contracts - Costs 1 January 2022*
of Fulfilling a Contract
Amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards - Subsidiary as 1 January 2022*
a first-time adopter
Amendments to IFRS 9 Financial Instruments - Fees
in the "10 per cent" test for derecognition of 1 January 2022*
financial liabilities
Amendments to IAS 41 Agriculture - Taxation in 1 January 2022*
fair value measurements
Amendments to IFRS 16 Leases - COVID-19 related
rent concessions beyond 30 June 2021 1 April 2021*
* 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 2020.
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 2021 H1 2020 FY 2020 H1 2021 H1 2020 FY 2020
Euro =
Pound Sterling 0.868 0.874 0.889 0.860 0.904 0.900
US Dollar 1.205 1.103 1.142 1.185 1.124 1.229
Canadian Dollar 1.502 1.503 1.530 1.470 1.534 1.567
Australian Dollar 1.563 1.679 1.655 1.583 1.637 1.596
Czech Koruna 25.850 26.351 26.463 25.467 26.738 26.264
Polish Zloty 4.537 4.413 4.444 4.516 4.457 4.589
Hungarian Forint 357.800 345.220 351.21 351.690 353.830 364.92
Brazilian Real 6.482 5.409 5.898 5.891 6.008 6.384
4 Operating segments
The Group has the following five reportable segments:
Insulated Panels Manufacture of insulated panels, structural framing
and metal facades.
Insulation Boards Manufacture of rigid insulation boards, building
services 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 activity.
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 Boards & Air & Energy Flooring Total
EURm EURm EURm EURm EURm EURm
Total revenue -
H1 2021 1,922.8 499.5 239.5 126.3 132.0 2,920.1
Total revenue -
H1 2020 1,332.0 367.9 171.9 92.9 108.0 2,072.7
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
Disaggregation of revenue H1 2020
Point in Time 1,330.4 356.4 96.3 92.4 96.0 1,971.5
Over Time 1.6 11.5 75.6 0.5 12.0 101.2
---------- ----------- -------- ---------- ---------- ----------
1,332.0 367.9 171.9 92.9 108.0 2,072.7
Data
Insulated Insulation Light Water &
Panels Boards & 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
---------
Data
Insulated Insulation Light Water &
Panels Boards & Air & Energy Flooring Total
EURm EURm EURm EURm EURm EURm
Trading
profit -
H1 2020 123.3 48.5 7.6 6.9 13.8 200.1
Intangible
amortisation (7.2) (2.5) (0.7) (0.4) (0.1) (10.9)
Operating
result
- H1 2020 116.1 46.0 6.9 6.5 13.7 189.2
----------- ----------- -------- ---------- ----------
Net finance
expense (11.7)
----------
Profit for the period before income tax 177.5
Income tax
expense (30.0)
----------
Profit for the period - H1 2020 147.5
----------
Segment assets and liabilities
Data Total Total
Insulated Insulation Light Water & 30 June 30 June
Panels Boards & Air & Energy Flooring 2021 2020
EURm EURm EURm EURm EURm EURm EURm
Assets - H1
2021 2,914.1 1,206.5 587.9 230.4 200.8 5,139.7
Assets - H1
2020 2,459.7 801.2 498.9 182.5 184.8 4,127.1
Derivative
financial
instruments 18.3 33.7
Cash and cash
equivalents 931.4 431.0
Deferred tax
asset 23.0 15.9
---------- ----------
Total assets 6,112.4 4,607.7
---------- ----------
Liabilities -
H1 2021 (1,129.9) (327.9) (217.4) (91.6) (56.0) (1,822.8)
Liabilities -
H1 2020 (877.7) (205.1) (200.5) (66.0) (40.2) (1,389.5)
Derivative (0.2) -
financial
instruments
Interest bearing loans and borrowings (current and non-current) (1,551.4) (902.6)
Income tax liabilities (current and deferred) (105.1) (119.4)
---------- ------------
Total liabilities (3,479.5) (2,411.5)
---------- ------------
Other segment information
Insulated Insulation Light Data
Panels Boards & Air Water &
EURm EURm EURm & Energy Flooring Total
EURm EURm EURm
Capital Investment
- H1 2021 * 93.3 53.0 16.8 4.8 2.8 170.7
Capital Investment
- H1 2020 * 54.7 9.4 16.7 0.7 1.1 82.6
Depreciation included
in segment
result - H1 2021 (38.3) (12.0) (7.6) (3.2) (2.9) (64.0)
Depreciation included
in segment
result - H1 2020 (36.7) (12.1) (5.6) (3.3) (2.7) (60.4)
Non cash items included
in segment result
- H1 2021 (4.7) (1.5) (0.6) (0.5) (0.8) (8.1)
Non cash items included
in segment result
- H1 2020 (4.5) (1.5) (0.4) (0.5) (0.8) (7.7)
Analysis of segmental data by geography
Western Central
& Southern & Northern Rest
Europe Europe Americas Britain of World Total
EURm EURm EURm EURm EURm EURm
Income Statement Items
Revenue - H1 2021 1,086.2 657.8 539.4 472.5 164.2 2,920.1
Revenue - H1 2020 734.2 438.2 426.6 335.0 138.7 2,072.7
Statement of Financial Position Items
Non-current assets -
H1 2021 ** 1,074.8 834.8 622.1 407.9 208.1 3,147.7
Non-current assets -
H1 2020 ** (***) 1,039.2 503.3 577.8 392.9 202.1 2,715.3
Capital Investment -
H1 2021 * 34.5 93.5 31.2 8.9 2.6 170.7
Capital Investment -
H1 2020 * 43.8 13.5 14.4 9.8 1.1 82.6
* Capital investment includes the fair value of property, plant,
equipment and intangible assets acquired through additions
in the period and also as part of business combinations.
Additions to right of use assets are excluded.
** Total non-current assets excluding derivative financial instruments
and deferred tax assets.
*** Non-current assets in H1 2020 have been restated to reflect
a change in the classification of the Colt retirement benefit
assets and liabilities which were shown gross instead of net
in the prior year.
Revenues, non-current assets and capital investment (as defined
in IFRS 8) attributable to the country of domicile were EUR94.1m
(June 2020: EUR60.6m), EUR79.6m (June 2020: EUR65.4m) and EUR7.8m
(June 2020: EUR4.1m) respectively. In presenting information on the
basis of geographic segments, segment revenue is based on the
geographic location of customers. Segment assets are based on the
geographic location of the assets.
The geographic regions have been revised to provide a more
detailed breakdown of the previously reported Mainland Europe
region which has seen significant growth in recent years. All prior
year comparatives have been restated on the same basis. The country
of domicile is included in Western & Southern Europe. Western
& Southern Europe includes France, Benelux, Spain and Ireland
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.
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 Finance expense and finance income
6 months 6 months
ended ended
30 June 30 June
2021 2020
EURm EURm
Finance expense
Bank loans 3.0 1.6
Private placement loan notes 14.4 8.4
Lease interest 1.8 2.0
Defined benefit pension scheme,
net 0.2 0.4
Fair value movement on derivative
financial instruments 3.5 (7.3)
Fair value movement on private placement
debt (3.6) 7.4
Other interest 0.2 -
--------- ---------
19.5 12.5
Finance income
Interest earned (0.2) (0.8)
---------
Net finance cost 19.3 11.7
--------- ---------
EUR2.5m of borrowing costs were capitalised during the period
(H1 2020: EUR0.2m).
7 Taxation
Taxation provided for on profits is EUR50.5m (H1 2020: EUR30.0m)
which represents 17.0% (H1 2020: 16.9%) of the profit before tax
for the period. The full year effective tax rate in 2020 was 16.3%.
The taxation charge for the six month period is accrued using the
estimated applicable rate for the year as a whole.
8 Analysis of net debt
At At At
30 June 30 June 31 December
2021 2020 2020
EURm EURm EURm
Cash and cash equivalents 931.4 431.0 1,329.7
Derivative financial instruments 18.3 33.7 19.8
Current borrowings (172.3) (45.9) (209.6)
Non-current borrowings (1,379.1) (856.7) (1,376.1)
Total net debt (601.7) (437.9) (236.2)
---------- ---------- -------------
Net debt, which is an Alternative Performance Measure, is stated
net of interest rate and currency hedge asset of EUR18.3m (at 31
December 2020: asset of EUR19.8m) which relate to hedges of debt.
Foreign currency derivatives of EUR0.2m (at 31 December 2020:
EUR0.2m), 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.
9 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 - - 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)
---------------- --------------- ------------- ------------
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 0.6 - 19.2 19.8
Cash at bank and in
hand 1,329.7 - - 1,329.7
---------------- --------------- ------------- ------------
Total assets 1,330.3 - 19.2 1,349.5
---------------- --------------- ------------- ------------
Liabilities:
Private placement notes (1,396.8) (131.3) - (1,528.1)
Other loans (57.6) - - (57.6)
Total liabilities (1,454.4) (131.3) - (1,585.7)
---------------- --------------- ------------- ------------
At 31 December 2020 (124.1) (131.3) 19.2 (236.2)
---------------- --------------- ------------- ------------
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 - - 33.7 33.7
Cash at bank and in
hand 431.0 - - 431.0
---------------- --------------- -------------- ------------
Total assets 431.0 - 33.7 464.7
---------------- --------------- -------------- ------------
Liabilities:
Private placement notes (699.3) (142.8) - (842.1)
Other loans (60.5) - - (60.5)
Total liabilities (759.8) (142.8) - (902.6)
---------------- --------------- -------------- ------------
At 30 June 2020 (328.8) (142.8) 33.7 (437.9)
---------------- --------------- -------------- ------------
The Group's private placement loan notes of EUR1,538.3m (at 31
December 2020: EUR1,528.1m) have a weighted average maturity of 6.2
years (at 31 December 2020: 6.1 years).
Included in cash at bank and in hand are overdrawn positions of
EUR1,433.6m ( June 2020: EUR1,141.7m) . These balances form part of
a notional cash pool arrangement and are netted against cash
balances of EUR1,518.4m ( June 2020: EUR1,257.8m) . 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
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)
---------- --------- ----------
Level 1 Level 2 Level 3
31 December 31 December 31 December
2020 2020 2020
EURm EURm EURm
Financial assets
Interest rate swaps - 0.6 -
Foreign exchange swaps - 19.2 -
Financial liabilities
Deferred contingent consideration - - (10.3)
Put option liabilities - - (117.3)
Foreign exchange contracts for - (0.2) -
hedging
At 31 December 2020 - 19.6 (127.6)
-------------- ------------- -------------
Level 1 Level 2 Level 3
30 June 30 June 30 June
2020 2020 2020
EURm EURm EURm
Financial assets
Interest rate swaps - 1.0 -
Foreign exchange swaps - 32.7 -
Financial liabilities
Deferred contingent consideration - - (11.2)
Put option liabilities - - (145.0)
---------- --------- ----------
At 30 June 2020 - 33.7 (156.2)
---------- --------- ----------
All derivatives entered into by the Group are included in Level
2 and consist of foreign currency forward contracts, interest rate
swaps and cross currency interest rate swaps.
Where derivatives are traded either on exchanges or liquid
over-the-counter markets, the Group uses the closing price at the
reporting date. Normally, the derivatives entered into by the Group
are not traded in active markets. The fair values of these
contracts are estimated using a valuation technique that maximises
the use of observable market inputs, e.g. foreign exchange and
interest rates.
Deferred contingent consideration is included in Level 3. The
fair value estimate of deferred contingent consideration is
consistent with 31 December 2020 and is set out in notes 18 and 19
of the 2020 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 2021, 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 2021 1,538.3 1,726.1
At 31 December 2020 1,528.1 1,726.4
At 30 June 2020 842.1 915.2
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.
10 Deferred contingent consideration
At At At
30 June 30 June 31 December
2021 2020 2020
EURm EURm EURm
At the beginning of the period 127.6 186.5 186.5
Deferred contingent consideration 12.4 - -
arising on acquisitions
Movement in deferred contingent
consideration arising from fair
value movement - - (0.7)
Movement in put liability arising
from fair value movement 12.9 0.9 (20.4)
Effect of movement in exchange
rates 7.7 (31.2) (37.8)
--------- --------- -------------
Closing balance 160.6 156.2 127.6
--------- --------- -------------
Split as follows:
Current liabilities 38.4 - -
Non-current liabilities 122.2 156.2 127.6
--------- --------- -------------
160.6 156.2 127.6
--------- --------- -------------
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 using of EUR0.4m.
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 0.6% 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 EUR6.7m.
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.
-------------- ------------------------------------------------------- -----------------------------------------------------------
11 Dividends
A final dividend on ordinary shares of 20.6 cent per share in
respect of the year ended 31 December 2020 (2019: nil cent) was
paid on 07 May 2021.
The directors have declared an interim dividend in respect of
2021 of 19.9 cent (2020: nil cent) which will be paid on 8 October
2021 to shareholders on the register on the record date of 10
September 2021.
12 Earnings per share
6 months 6 months
ended ended
30 June 30 June
2021 2020
EURm EURm
The calculations of earnings per
share are based on the following:
Profit attributable to owners
of the Company 240.3 144.5
--------------- -----------
Number of Number
shares ('000) of
6 months shares
ended ('000)
30 June 6 months
2021 ended
30 June
2020
Weighted average number of ordinary
shares for
the calculation of basic earnings
per share 181,536 181,013
Dilutive effect of share options 1,445 1,485
--------------- -----------
Weighted average number of ordinary
shares
for the calculation of diluted
earnings per share 182,981 182,498
--------------- -----------
EUR cent EUR cent
Basic earnings per share 132.4 79.8
Diluted earnings per share 131.3 79.2
At 30 June 2021, there were no anti-dilutive options (30 June
2020: Nil).
13 Goodwill
At At At
30 June 30 June 31 December
2021 2020 2020
EURm
EURm EURm
At beginning of period 1,478.8 1,506.9 1,506.9
Acquired through business
combinations 301.4 31.5 41.7
Effect of movement in exchange
rates 30.5 (39.9) (69.8)
---------- ---------- --------------
At end of period 1,810.7 1,498.5 1,478.8
---------- ---------- --------------
At end of period
Cost 1,878.4 1,566.2 1,546.5
Accumulated impairment losses (67.7) (67.7) (67.7)
----------
Net carrying amount 1,810.7 1,498.5 1,478.8
---------- ---------- --------------
14 Property, plant and equipment
At At At
30 June 30 June 31 December
2021 2020 2020
EURm
EURm EURm
Cost or valuation 2,364.3 2,088.8 2,099.8
Accumulated depreciation
and impairment charges (1,274.7) (1,120.5) (1,126.9)
---------- ---------- --------------
Net carrying amount 1,089.6 968.3 972.9
---------- ---------- --------------
Opening net carrying amount 972.9 965.2 965.2
Acquired through business
combinations 83.1 13.1 11.5
Additions 65.2 62.8 129.9
Disposals (2.4) (2.6) (4.6)
Depreciation charge (47.1) (44.8) (89.7)
Impairment charge (0.4) - (2.4)
Effect of movement in exchange
rates 18.3 (25.4) (37.0)
Closing net carrying amount 1,089.6 968.3 972.9
---------- ---------- --------------
The disposals generated a profit in the period of EUR0.2m (H1
2020: EUR2.5m).
15 Leases
Right of use asset
At At At
30 June 30 June 31 December
2021 2020 2020
EURm
EURm EURm
At beginning of period 113.0 121.6 121.6
Additions 12.6 8.3 17.3
Arising on acquisitions 12.3 33.6 12.8
Remeasurement 9.3 1.1 2.2
Terminations (1.4) (1.0) (2.6)
Depreciation charge for the
year (16.9) (15.6) (32.3)
Effect of movement in exchange
rates 2.9 (4.6) (6.0)
Closing net carrying amount 131.8 143.4 113.0
--------- --------- -------------
Lease liability
At At At
30 June 30 June 31 December
2021 2020 2020
EURm
EURm EURm
At beginning of period 114.8 122.3 122.3
Additions 12.0 8.0 17.1
Arising on acquisitions 12.8 33.1 12.6
Remeasurement 9.3 1.1 1.7
Terminations (1.4) (1.0) (2.7)
Payments (19.5) (16.3) (33.7)
Interest 1.8 2.0 3.6
Effect of movement in exchange
rates 2.9 (4.6) (6.1)
Closing net carrying amount 132.7 144.6 114.8
--------- --------- -------------
Split as follows:
Current liability 31.6 30.3 27.3
Non-current liability 101.1 114.3 87.5
Closing net carrying amount 132.7 144.6 114.8
------ ------ ------
16 Business combinations
During the period, the Group made ten acquisitions for a
combined total cash consideration of EUR430.9m.
In June 2021, the Group acquired 100% of the share capital of
Logstor a leading global supplier of technical insulation
solutions. The total consideration, including net debt acquired
amounted to EUR242.4m.
The Group also made a number of smaller acquisitions during the
year for a combined cash consideration of EUR188.5m.
-- The Insulated Panels division acquired TeraSteel in Romania,
Bromyros in Uruguay, the remaining 50% of Dome Solar in France,
and the assets of Krohn in Russia;
-- The Insulation Boards division acquired the assets of Dyplast
in North America;
-- The Light & Air division acquired Skydome in Western Europe
and Major Industries in North America;
-- The Water & Energy division acquired BAGA in Sweden and Heritage
Tanks in Australia.
The provisional fair values of the acquired assets and
liabilities in respect of these acquisitions at their respective
acquisition dates, along with fair value adjustments to certain
2020 acquisitions, are set out below:
Logstor TeraSteel Other* Total
EURm EURm EURm EURm
Non-current assets
Intangible assets 4.2 13.9 4.3 22.4
Property, plant and
equipment 37.1 22.0 24.0 83.1
Right of use assets 8.9 0.3 3.1 12.3
Deferred tax assets - - 0.3 0.3
Current assets
Inventories 41.0 24.8 13.9 79.7
Trade and other receivables 55.7 9.3 21.1 86.1
Current liabilities
Trade and other payables (66.7) (19.2) (26.9) (112.8)
Provisions for liabilities (2.9) (0.5) (1.0) (4.4)
Lease liabilities (2.8) (0.1) (0.8) (3.7)
Non-current liabilities
Retirement benefit
obligations (1.1) - (1.1) (2.2)
Lease liabilities (6.5) (0.2) (2.4) (9.1)
Deferred tax liabilities (0.6) (2.2) (0.7) (3.5)
-------- ---------- ------- --------
Total identifiable
assets 66.3 48.1 33.8 148.2
Non-controlling interests
arising in acquisition - - (4.6) (4.6)
Goodwill 176.1 33.5 91.8 301.4
Joint venture becoming
subsidiary - - (1.7) (1.7)
-------- ---------- ------- --------
Total consideration 242.4 81.6 119.3 443.3
-------- ---------- ------- --------
Satisfied by:
Cash (net of cash/debt
acquired) 242.4 81.6 106.9 430.9
Deferred consideration - - 12.4 12.4
Total consideration 242.4 81.6 119.3 443.3
-------- ---------- ------- --------
*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 2021, the businesses
acquired in the current period contributed total revenue of
EUR113.3m and trading profit of EUR15.6m 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.
17 Capital and reserves
189,444 ordinary shares (H1 2020: 368,873) were issued as a
result of the exercise of vested options arising from the Group's
share option schemes (see the 2020 Annual Report for full details
of the Group's share option schemes). Options were exercised at an
average price of EUR0.13 per option.
During the period the Group bought back 600,000 shares at a
weighted average price of EUR78.16 on dates between 19 May 2021 and
10 June 2021.
18 Significant events and transactions
Other than the acquisitions referenced in note 16, there were no
individually significant events or transactions in the period which
contributed to material changes in the Statement of Financial
Position.
19 Related party transactions
There were no changes in related party transactions from the
2020 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year. Eugene Murtagh retired as Chairman and non-executive
director on 30 April 2021 and is no longer considered a related
party.
20 Subsequent events
There have been no further material events subsequent to 30 June
2021 which would require disclosure in this report.
Alternative Performance Measures (APMs)
The Group uses a number of metrics, which are non-IFRS measures,
to monitor the performance of its operations.
The Group believes that these metrics assist investors in
evaluating the performance of the underlying business. Given that
these metrics are regularly used by management, they also give the
investor an insight into how Group management review and monitor
the business on an ongoing basis.
The principal APMs used by the Group are defined as follows:
Trading profit
This comprises the operating profit as reported in the Income
Statement before intangible asset amortisation and non trading
items. 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
2021 2020
Financial Statements Reference EURm EURm
---------------- -------------------------------- -------- --------
Trading profit Note 4 328.9 200.1
---------------- -------------------------------- -------- --------
Trading margin
Measures the trading profit as a percentage of revenue.
30 June 30 June
2021 2020
Financial Statements Reference EURm EURm
--------------------- -------------------------------- -------- --------
Trading Profit Note 4 328.9 200.1
Total Group Revenue Note 4 2,920.1 2,072.7
-------- --------
Trading margin 11.3% 9.7%
------------------------------------------------------- -------- --------
Net interest
The Group defines net interest as the net total of finance
expense and finance income as presented in the Income Statement.
The impact of IFRS 16 is excluded from the calculation which is
consistent with the terms and conditions of the covenants as set
out in the Group's external borrowing arrangements.
30 June 30 June
2021 2020
Financial Statements Reference EURm EURm
--------------------------- -------------------------------- -------- --------
Finance Expense Note 6 19.5 12.5
Finance Income Note 6 (0.2) (0.8)
Less lease interest (IFRS
16) Note 6 (1.8) (2.0)
-------- --------
Net Interest 17.5 9.7
------------------------------------------------------------- -------- --------
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
2021 2020
Financial Statements Reference EURm EURm
-------------------------------- -------------------------------- -------- --------
Net cash flow from operating Consolidated Statement
activities of Cash Flows 221.3 334.7
Additions to property, plant, Consolidated Statement
equipment and intangibles of Cash Flows (62.9) (63.8)
Proceeds from disposals of Consolidated Statement
property, plant and equipment of Cash Flows 2.6 5.1
Consolidated Statement
Lease payments of Cash Flows (19.5) (16.3)
Consolidated Statement
Interest received of Cash Flows 0.3 0.7
Free cash flow 141.8 260.4
--------
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
2021 2020 2020
Financial Statements
Reference EURm EURm EURm
------------------- ------------------------ ---------- -------- ------------
Consolidated Statement
Net Assets of Financial Position 2,632.9 2,196.2 2,397.6
Net Debt Note 8 601.7 437.9 236.2
3,234.6 2,634.1 2,633.8
---------- --------
Operating profit
before interest
and tax 612.0 445.0 484.7
Return on capital
employed 18.9% 16.9 % 18.4%
---------- --------
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
2021 2020 2020
Financial Statements
Reference EURm EURm EURm
---------- ---------------------- -------- -------- ------------
Net Debt Note 8 601.7 437.9 236.2
EBITDA
The Group defines EBITDA as earnings before finance costs,
income taxes, depreciation, amortisation and the impact of IFRS
16.
30 June 30 June
2021 2020
Financial Statements Reference EURm EURm
----------------- -------------------------------- -------- --------
Condensed Consolidated Income
Trading profit Statement 328.9 200.1
Consolidated Statement of Cash
Depreciation Flows 64.0 60.4
Lease liability Consolidated Statement of Cash
payments Flows (19.5) (16.3)
-------- --------
EBITDA 373.4 244.2
--------------------------------------------------- -------- --------
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 31 December
2021 2020 2020
Financial Statements
Reference EURm EURm EURm
------------------- ---------------------- -------- -------- ------------
Net Debt Note 8 601.7 437.9 236.2
EBITDA 725.7 552.9 596.5
Net Debt : EBITDA
times 0.83 0.79 0.40
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
2021 2020 2020
Financial Statements
Reference EURm EURm EURm
----------------------------- ------------------------ ---------- -------- ------------
Consolidated Statement
Trade and other receivables of Financial Position 1,237.0 869.2 799.6
Consolidated Statement
Inventories of Financial Position 755.0 542.6 505.9
Consolidated Statement
Trade and other payables of Financial Position (1,360.1) (932.6) (854.5)
Foreign currency
derivatives excluded Consolidated Statement
from net debt of Financial Position (0.2) - (0.2)
Working capital 631.7 479.2 450.8
------------------------------------------------------- ---------- --------
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
2021 2020 2020
Financial Statements
Reference EURm EURm EURm
----------------------- ---------------------- -------- -------- ------------
Working capital 631.7 479.2 450.8
Annualised turnover 6,529.0 4,134.0 5,151.2
Working Capital ratio 9.7% 11.6% 8.8%
----------------------------------------------- -------- -------- ------------
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