Kingspan Issues Trading Update April 2021

A STRONG FIRST QUARTER for sales and orders was reported by Kingspan Group Plc, global manufacturer of insulation and building envelopes in a trading update today.

Group sales of €1.28bn for the three-month period to 31 March were 24% ahead of 2020. This is in a context of significant raw material inflation in the current trading environment, the company says. Nevertheless, it reports that the associated recovery effort is on track, albeit with a lag.

By market during the first quarter, Mainland Europe was strongly ahead overall with Germany, France and the Benelux notably positive. The Americas has had an encouraging start to the year particularly in Latin America and order intake in North America significantly outpaced sales in the period. The UK business has also been strong year to date with buoyant sales and order intake activity.

Insulated Panels sales were up 25% (+27% underlying) in the first quarter. Sales and order intake patterns are reported as “very positive across all significant markets worldwide”.

The global backlog as the company started the year was significantly up on 2020 and has grown by a further 28% since then. QuadCore^TM specification continues to progress well internationally.

Insulation Boards sales were up 12% in the first quarter. The UK recorded double digit volume growth in the period. The breadth of the division will be bolstered by the recently announced acquisition of Logstor Group, a global supplier of technical insulation solutions focused on the growing District Heating model and with revenues of approximately €250m. The acquisition is conditional on regulatory clearance and is expected to complete in the third quarter.

Overall, Mainland Europe performed well with meaningful volume growth in a number of key markets. North America has seen strong trading in the early part of the year with Australia performing similarly.

Light & Air sales were up a substantial 65% (+8% underlying) in the first quarter boosted significantly by the acquisition of Colt Group in April 2020. The underlying sales performance was positive across all key markets with an encouraging pipeline of projects both in daylighting and increasingly in associated natural air ventilation applications.

Data & Flooring sales increased by 11% in the first quarter (+14% underlying). Datacentre projects continue to be very active in Europe and North America more than offsetting predictably subdued office activity.

Water & Energy has started the year well with sales 21% ahead in the first quarter (+17% underlying). Wastewater activity in particular has been strong across most markets.

Net debt as at 31 March 2021 was €352m after taking account of a cumulative acquisition spend of €167m in the period. The Group has, in aggregate, in excess of €2.0bn of cash on hand and committed undrawn facilities.

The Group’s trading outlook for the second quarter is described as positive with ongoing strong momentum across most key markets. Raw material inflation, and its availability is increasingly a challenge and the company says it is doing its utmost to limit the impact on end markets. Kingspan’s orders backlog augurs well for the period ahead, it says, adding, “although in the current environment we are cautious about looking too far forward”.

The company published its inaugural Planet Passionate Report on 12 April setting out its commitments and global 10 year sustainability plan. The report outlines Kingspan’s decarbonisation programme, which targets a reduction in manufacturing carbon (CO₂e) emissions to as close to zero as technically possible, together with halving carbon intensity in its primary supply chain, both by 2030. The 12 targets of the Planet Passionate programme will continue to be a centremost pillar of its strategy for years to come, Kingspan says.

Kingspan’s Annual General Meeting will take place at 10am on Friday 30 April.

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