December 2016: Kingspan

Company of the Month | Wed 11 Jan | Author – Business & Finance Gene Murtagh
Gene Murtagh, CEO, Kingspan

Impressive revenue and profit figures, along with sustainability news, make for good times at the building materials provider.

Building materials firm Kingspan has been one of the great survivors of the industry’s collapse. That was confirmed throughout the past year, with a string of positive results and announcements building momentum.

“Assuming current exchange rates prevail, we expect to deliver a full year trading profit of approximately €335m, over 30% ahead of prior year, conscious that much of the seasonally variable fourth quarter remains,” the company announced in its November trading update.

Kingspan’s sales for the nine-month period were up 13% on the previous year, or 17% before currency headwinds, to come in at €2.27bn. Third-quarter sales rose by 5%, or 10% pre-currency. Growth was led by the group’s insulated panel sales, which rose by 17% (20% before currency headwinds), and were up 4% in the third quarter. The company highlighted the UK as a success story, with good performance evident in France and the Benelux countries.

The building sector contributes around 30% of global annual greenhouse gas emissions and consumes up to 40% of all energy

Insulation board sales also showed good growth of 6% (10% pre-currency) for the first nine months of the year, and the company highlighted its Light & Air category: having completed the acquisition of Essmann in Europe and Bristolite in the US, annual sales are expected to come in at €190m.

The announcement followed H1 interim results earlier in the year, which showed a 19% increase in revenue to €1.47bn and trading profit up 50% to €167.3m. “These results reflect our strongest ever six month performance, underpinned by solid organic growth and a robust contribution from the Joris Ide and Vicwest businesses acquired last year,” explained CEO Gene Murtagh.

“The expansion in profit margin has helped deliver a 50% increase in trading profit, and with good order intake momentum in the second quarter continuing into the current trading period, we expect a solid performance in the second half. We continue to acquire complementary businesses, with a total of €83m invested in two businesses in the first half and €126m paid for two further businesses after the period end.”

A-LISTERS

Away from the accounts, the company also announced an important boost to its environmentally friendly credentials: it is the only Irish-listed company to be recognised on the Climate “A” List published by the international non-profit CDP, measuring the environmental impact of thousands of companies worldwide. This is the second successive year that Kingspan has been included.

“The climate change agenda is core to Kingspan’s vision and will continue as an integral part of our approach to doing business as we expand our global footprint,” explained Murtagh.

“The building sector contributes around 30% of global annual greenhouse gas emissions and consumes up to 40% of all energy, which means our sector has a crucial role to play in helping countries hit the new targets set in last year’s Paris Agreement.”

Assuming current exchange rates prevail, we expect to deliver a full year trading profit of approximately €335m, over 30% ahead of prior year

Kingspan’s products – such as Kooltherm, Optim-R and Quadcore – have facilitated customers in reducing energy consumption by 188,600m kilowatt hours a year: six times the annual energy usage of Dublin city. It joins Microsoft, Citigroup and Unilever on the list of 193 companies in a report compiled for 827 investors, representing $100 trillion of assets under management.

The Cavan-headquartered company also says that it is on course to reach net-zero energy use at its facilities by 2020: renewable energy accounted for around 57% of the group’s energy use across its 90+ manufacturing sites in 2016.

About the CEO

Gene Murtagh has been CEO of Kingspan since 2005. The company was founded in the 1960s by his father Eugene, who remains non-executive chairman.

Gene joined the Kingscourt, Cavan-headquartered firm in 1993, gaining experience as managing director of its insulated panel business and environmental business before serving as chief operating officer from 2003 to 2005. He has been a member of the board since 1999.

A business graduate of the University of Limerick, he became the youngest CEO of an ISE-listed company in 2005, and was honoured by UL the following year.