Record Year For Kingspan
Kingspan, the global leader in high performance insulation and building envelope solutions, has reported its preliminary results for the year ended 31 December 2017.
2017 was a significant year for Kingspan which, despite its challenges, was a record period for the group. Revenue rose by 18.0% to €3.7 billion, and trading profit grew by 10.7% to €377.5 million. The resultant increase in EPS was 10.6% to 159.0 cent per share. In addition to volume growth, price inflation also contributed to sales as Kingspan pushed to recover unprecedented raw material cost increases.
Activity across Kingspan’s Mainland European markets was somewhat mixed, led in particular by strong performances in France, Benelux and the Nordics as penetration of high performance insulation continues to increase in these regions. Germany, in contrast, was deeply competitive during the year as capacity increases weighed on market prices. The UK performed resiliently for much of the year. However, growing economic and political uncertainty made itself increasingly evident in market activity, with order intake weakening sharply towards year-end, largely in the non-residential segment.
North American revenue was modestly ahead and Latin America grew meaningfully through our new ventures in Brazil and Colombia. Chemical cost increases were at levels not experienced before, which when combined with supply tightness led to a period of balancing margin and growth priorities and the need for significant price increases for Kingspan’s own solutions. In all, Kingspan successfully recovered the input increases, although in the process conceded some market share to alternative products which over time the company expects to regain.
2017 was also a year of record acquisition activity for Kingspan. In total, between completions and signed contracts Kinspan committed almost €614 million, €174 million of which was incurred during the year with a further €440 million currently awaiting regulatory approval. A centrepiece of these developments has been Kingspan’s increased exposure to exciting new frontiers including Latin America and Southern Europe, as well as adding significantly to its insulation technology via the Synthesia business. In addition to these acquisitions Kingspan also invested a net amount of €85.6 million in capital expenditure with a strong emphasis on the organic global roll-out of its Insulated Panel and Insulation Boards businesses.
Kingspan continued to make progress on its internal and ongoing environmental agenda and reached a Net Zero Energy level of 69%, which brings the group a sizeable step closer to its 2020 target of achieving 100% across the globe.
Gene M Murtagh, Chief Executive of Kingspan commented: “2017 was another year of strong performance for Kingspan. We have continued our globalisation strategy with several significant acquisitions, including establishing a market leading presence in Latin America. Our new Light & Air division is performing ahead of expectations and expanding the range of product solutions the business offers. The challenge of increased input costs has been effectively managed to minimise the impact on profit margins. Notwithstanding the weakening UK market our well diversified business is well placed for the longer term.”
Kingspan’s strategic agenda is focused on the four pillars of Innovation, Globalisation, Penetration and Net Zero Energy. 2017 once again delivered notable advancements in all four areas.