Gene Murtagh, CEO, Kingspan

Kingspan profits rise by six per cent but revenues drop slightly

Dividend proposed for shareholders; new acquisition deal announced today

Kingscourt-based Kingspan has reported a rise in profits to the end of December 2023 but its latest results show revenues dipped slightly during the year due to deflation.

The insulation and building materials manufacturer said its profit after tax grew by six per cent to €654m; while revenues fell by three per cent to €8.091bn from €8.341bn.

The Kingspan board has proposed a dividend of 26.6 cent.

Gene Murtagh, CEO, said that despite markets and geographies moving at different speeds, Kingspan is pleased to deliver another year of record profits.

“Beyond insulation, each of our climate focused business units across Roofing & Waterproofing, Light, Air & Water and Data & Flooring are scaling at pace with every potential for each to exceed €1bn divisional revenue over the coming years.

"Our building envelope solutions now increasingly comprise Lower Embodied Carbon, bio-based materials, and in the case of roofing, integrated insulation, water and solar energy solutions," he revealed.

The company reiterated its commitment to lowering its carbon footprint and becoming more sustainable.

"Through our Planet Passionate initiative we are well progressed in meeting our net zero ambitions by 2030, or sooner, and are already on the cusp of our 2030 ambition to recycle one billion PET bottles annually," said Mr Murtagh.

Acquisitions remains a key part of the company's strategy to grow market share and revenues.

In 2023, the company spent €248.4M on acquisitions including a deal in April to buy 100% of the share capital of CaPlast for €86.9M.

Other smaller acquisitions during the year included Alaço in Portugal, LRM in France, 51% of the share capital of MontFrio in Uruguay, and Toode Group in the Baltics in September. The total cash investment for those amounted to €139.3M.

Kingspan's insulation division bought 80% of the share capital of HempFlax Building Solutions in Germany and 100% of the share capital of Thor Building Products in Australia. The Data + Flooring division, meanwhile, acquired 70% of Q-nis in Ireland and 100% of the share capital of Provan Group in Belgium late last year.

Today (Friday) the company announced it has agreed a deal to buy the stonewool insulation business and assets of German based Karl Bachl Kunststoffverarbeitung (Bachl).

The deal, which is being funded from cash reserves, is expected to complete by the end of the first quarter of 2024.

Mr Murtagh said these investments reflect the company's "continuing ambition" to innovate, diversify and future proof the business for sustainable, long-term growth.

“Given varying activity levels it is too early to provide any meaningful guidance on outlook, not least as seasonal factors have hampered early progress in some markets. However, given our robust balance sheet, strong development pipeline, strong structural demand for energy efficiency and the ever increasing and obvious impacts of climate change, we expect 2024 to be a year of continuing strategic and operational progress for Kingspan.”

Divisional performances

A more detailed look at the results shows sales of Kingspan's insulated panels dropped by nine per cent, with a strong performance reported in Frank, the US and LATAM. Lower volumes and pricing were recorded in European markets due to input deflation.

The firm said its insulation sales were behind by about eight per cent, impacted by weak residential markets and price deflation led by inputs.

However, Kingspan said its technical insulation was progressing well - bolsterd by a deal last month to acquire 51% of Steico.

Revenues for roofing and waterproofing products touched half a billion euros with plans to grow sales in the North American market. This is being supported by a €750m capital injection over the next five years with an objective of achieving 15% of the relevant flat roofing market over time.

Kingspan also saw further progress at its Light, Air + Water division, with broader scale and margins progressing positively year on year.

Its Data + Flooring medium term pipeline is described as "very encouraging" and is being driven by demand in data and artificial intelligence applications.