Kingspan reports record sales of almost €1.9bn for first quarter

Group's AGM takes place this morning

Kingspan's AGM is getting underway around now as the group is reporting record sales of €1.89bn for the first quarter of this year, with all divisions reporting between 24% and 72% increases.

The insulation firm issued a trading update this morning for the first three months of the year to March 31, ahead of the AGM at 10am.

The performance represents a 47% increase on the same period last year (+31% underlying).

The Kingscourt headquartered firm is reporting that raw material inflation, which had eased considerably at the turn of the year, has returned sharply over the past six weeks and the associated recovery effort is ongoing.

In a statement, a spokesperson said: "By market during the first quarter, Europe was strongly ahead overall, the Americas had a positive start to the year with a very encouraging pipeline in North America and robust order intake activity recently in Latin America. Australasia, which was subdued for most of last year, is looking better as we move through 2022."

Insulated panels sales were up 44% (+37% underlying) with strong sales across most significant markets worldwide with raw material inflation necessitating significant pricing activity year on year.

Order intake volumes overall were broadly flat versus the first quarter of 2021, which itself was very buoyant. The global backlog at the end of March was 19% ahead of the same point last year in volume. QuadCoreTM specification continues to advance globally.

Insulation sales were up 72% (+22% underlying) in the first quarter. The year on year sales comparison was helped considerably by Logstor, which was acquired mid year in 2021 and which is trading very well with district heating solutions a particular highlight.

"Much of the underlying sales growth reflected inflation led pricing with volumes broadly in line with a strong Q1 2021. Volumes grew strongly in Australasia which together with growth in Central and Eastern Europe offset modest decreases elsewhere against a strong comparative," reads the trading update.

Light & Air sales were up 41% (+16% underlying) in the first quarter. The firm reports that the pipeline in both daylighting and associated natural air ventilation applications is encouraging.

Data & Flooring sales increased by 32% in the first quarter (+26% underlying). "Datacentre solutions continue to grow and are offsetting the anticipated weakness in new office construction," the statement reads.

Water & Energy has started the year well with sales 24% ahead in the first quarter (+11% underlying) albeit margins have seen some pressure. Kingspan sees wastewater and rainwater solutions as an increasing area of opportunity.

The company is reporting net debt as at March 31 at €905M. This, it says, reflects an acquisition spend of €67m in the first quarter.

"Working capital levels remain elevated as we continue to hold higher than average levels in a choppy supply chain environment. The group’s current liquidity is very strong with in excess of €2.1bn in cash and undrawn committed facilities including €800m of new additional term facilities agreed on 13th April," the statement details.

Outlook

Kingspan Group’s trading outlook for the second quarter is positive with a strong order backlog on hand and decent activity in most end markets. Raw material inflation remains an issue to be firmly managed, coming on the back of a highly inflationary year in 2021.

"As previously highlighted, margins year on year are likely to see a lag associated with this. In addition to the €800m committed on acquisitions announced earlier in the year, the Group’s development agenda and pipeline are strong, although nothing can be certain on that front. The acquisition of Troldtekt has received competition clearances, and is expected to complete imminently," the company reports.

The update concludes: "Overall, given ever increasing concerns around energy conservation, availability and climate change, Kingspan’s distinctive range of solutions and Planet Passionate agenda positions the Group favourably for the years ahead."