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Prices & Quotes - UK Markets - Kingspan Group (CDI) (KGP)

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Share Price:
Down  90.38
Change Today:
- 1.12
Market Cap:
 16,393m
Sector:
Construction & Materials

Kingspan sales performance slowing after solid growth through Q3

By Josh White

Date: Monday 08 Nov 2021

LONDON (ShareCast) - (Sharecast News) - Insulation and building envelope supplies company Kingspan Group said in a trading update on Monday that sales in the nine months ended 30 September totalled €4.72bn (4.05bn), up 44% year-on-year, with sales growth coming in at 50% in the third quarter.
The London-listed firm said underlying sales pre-currency and acquisitions were up 34% in the year-to-date, and by 33% in the third quarter.

Sales of insulated panels grew by 47% in the first nine months, and by 53% in the third quarter, with underlying sales in the division growing 42% for the year-to-date and by 43% in the third quarter.

"The sales performance across each of the group's key markets has evidently been strong both year-to-date and in the quarter," the board said in its statement.

"Raw material inflation has been extraordinary, with the associated recovery and the top line boosted further by buoyant volume growth overall year to date.

"Notably, however, order intake in the months of August and September was lower than in the same two month period last year, and this trend has continued in the weeks since."

Kingspan said the TeraSteel acquisition completed earlier in the year was performing strongly, adding that overall, the global insulated panels backlog was up 49% in volume as at 30 September compared to the same time last year.

Insulation boards sales, meanwhile, were up 51% in the first nine months and ahead 78% in the third quarter.

Underlying sales there were 32% higher for the year-to-date and 25% firmer in the third quarter.

"Sales volumes overall were in line with the third quarter of 2020 with the top line reflecting mainly the higher cost of raw materials year on year," the directors said.

"Sales in central and eastern Europe, the Nordics and North America were particular highlights in the third quarter, although all key markets performed well.

"Recent investments, such as our 'Kooltherm' line in Sweden, have been key in driving structural adoption to high performance insulation with further developments to come globally in 2022 and 2023.

"The Logstor acquisition, which was completed in June, is integrating fully to plan."

Sales in the light and air division in the first nine months were up 28%, and were ahead 12% in the third quarter, with underlying sales in the division growing by 1% for the year-to-date and level in the third quarter.

Kingspan said market activity for the operation, both in Europe and North America, had been "more subdued" than in other categories.

"The division has prioritised the integration of acquisitions made in the current and prior year and achieving category scale.

"2021 is shaping up to be a further year of progress in that context."

Data and flooring sales, meanwhile, grew in the first nine months by 22%, and by 21% for the third quarter, with underlying sales there ahead 23% for the year-to-date and 20% firmer in the third quarter.

Data centre demand globally was described by the board as "robust", offsetting a weaker office market.

Finally, water and energy sales in the first nine months increased 32%, and 24% in the third quarter, with underlying sales 18% and 8% firmer on those same two bases, respectively.

"The wastewater and rainwater harvesting categories continue to perform well," the board said.

Net debt at the end of September totalled €636m, with a cumulative acquisition spend for the year-to-date of €485m, and organic capital investment totalling €119m.

Looking ahead, Kingspan said its backlog was "strong", although it was reducing week-on-week as sales activity outpaced new order placement.

Underlying panels order intake volume was down 10% in the third quarter compared to the same period in 2020, with the board describing 2021 so far as "unusual", characterised by order placement earlier in the year than was typical, as customers sought to get ahead of ongoing inflation and availability pressures.

"It is likely what we are experiencing now is a fallow period in order placement following that," the directors explained.

"Raw material prices have been somewhat stable in more recent weeks, albeit at record high levels and following a period of unparalleled increases.

"There are no signs yet of any meaningful raw materials deflation although should that come the impact would be negative - we are acutely conscious of that."

Kingspan said its activity pipeline was "generally encouraging", particularly in large-scale logistics, data, technology and the electric vehicle automotive sectors.

"These applications demand high energy efficient solutions, not just on day one but over the lifetime of the building, with Kingspan technology well placed in that environment.

"2021 has still to play out fully with the seasonally important fourth quarter remaining and, accordingly, we expect to deliver a full-year trading profit in the region of €750m, significantly ahead of the €508.2m recorded in 2020."

At 0914 GMT, shares in Kingspan Group were flat at 101.85p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

KGP Market Data

Currency Euro
Price  90.38
Change Today - 1.12
52 Week High  107.00
52 Week Low  52.95
Volume 225,767
Shares Issued 181.38m
Market Cap  16,393m
Beta 0.08

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What The Brokers Say

Strong Buy 8
Buy 0
Neutral 7
Sell 0
Strong Sell 1
Total 16
buy
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KGP Dividends

  Latest Previous
  Interim Final
Ex-Div 09-Sep-21 25-Mar-21
Paid 08-Oct-21 07-May-21
Amount 19.90¢ 20.60¢

Trades for 17-Jan-2022

Time Volume / Share Price
17:55 33 @  91.50
18:28 842 @  90.09
18:28 37 @  90.09
18:08 116 @  89.64
18:07 40,810 @  89.47

KGP Key Personnel

CEO Gene M Murtagh
CFO Geoff P Doherty