Kingspan Revenues Up 33% with Milestone Roofing Quarter

IN THE 9-month period to 30 September Kingspan’s sales were €6.25bn, up 33% on the same period in the prior year, with sales growth of 17% in the third quarter, the company has announced in its latest trading update.

Underlying sales (pre currency and acquisitions) were up 20% in the year to date and by 9% in the third quarter.

Roofing and Waterproofing

Roofing and Waterproofing had a milestone third quarter with the completion of the acquisition of Ondura Group in September. The division now has annualised revenues of approximately €500m including the acquisition of Derbigum in June 2022. Furthermore, in August 2022 the Group acquired a 24% strategic minority stake in Nordic Waterproofing. A significant element of the new division is European and the company’s ambition, and the opportunity, is global, says Kingspan.

Insulated Panels

Insulated panels sales increased by 29% in the first 9 months of 2022 and by 13% in the third quarter. Underlying sales were up 23% year to date and up 7% in the third quarter.

Global sales volumes in the third quarter were expectedly sluggish reflecting the slowdown in order placement, flagged mid-year. The company says that a factor has been expectations around raw material pricing, with some increase in order placement after the summer.

Kingspan Insulated Panels has been carrying higher levels of inventory than normal for much of the year and, as certain inputs have seen deflation more recently, this has had a short-term impact on margins as these materials sell through.

Globally, activity in the Americas has held up reasonably well, as has Germany and the UK, with softer activity elsewhere in Europe. Kingspan says it continues to advance its innovation agenda with QuadCore LEC Panel comprising an estimated 45% of recycled materials and with 40% less embodied carbon.

Insulation

Kingspan’s insulation sales in the first 9 months of 2022 were up 48% and up 20% in Q3. Underlying sales were up 12% year to date and by 8% in the third quarter. The sales growth experienced in Q3 was price led, reflecting input inflation with rigid board volumes soft overall with decreased residential activity a factor.

Technical insulation, in particular district heating applications, continued to experience the momentum seen in the first half. Kingspan reports the Troldtekt business acquired earlier in the year is integrating well, and significant progress has also been made in the natural insulation category with bio-based materials for ultra-low embodied carbon insulation. The company says AlphaCore is building a specification bank, which it says is likely to advance further in the years ahead.

Light and Air

Daylighting and natural ventilation division, Light and Air sales in the first 9 months were up 33% and by 26% in the third quarter, Kingspan reports. Underlying sales were up 17% year to date and by 18% in the third quarter. Most end markets performed well reflecting the positive orderbook year on year, the company adds, and the division is on track to record margin progression for the year.

Data and Flooring 

Data and Flooring sales in the first 9 months were up 32% and up 33% in the third quarter. Underlying sales were up by 24% in the first 9 months and were up 25% in the third quarter. Datacentre activity continues to drive performance and the pipeline of activity for 2023 is encouraging, Kingspan says.

Water and Energy

Water and Energy sales in the first nine months increased by 12% and up 5% in the third quarter. Underlying sales were also up 6% year to date and were up 1% in the third quarter.

Outlook Visibility

The company reports net debt at the end of December 2022 is expected to be in the region of €1.5bn (net debt/EBITDA 1.5x), reflecting a 2022 development spend in excess of €1.2bn, with acquisitions of approximately €1.0bn and organic investment approximately €0.2bn.

Kingspan says a current feature is the lack of visibility beyond the next few months and sentiment is cautious for the most part.

The sharp increases in raw material prices over the last 18 months appear to have peaked, the firm says, and certain key inputs are likely to reduce in price in Q4.

The global backlog of orders has been reasonably stable over the past three months and the activity pipeline in data, technology, EV automotive and district heating applications are all notable positives.

Kingspan expects to deliver a full year trading profit in the region of €830m, which is around 10% ahead of the €755m recorded in 2021.

>> Read more about Kingspan in the news