Kingspan Group reports 75.5% Net Income growth and 1.5 pp EBITDA Margin growth from 9.9% to 11.4%
22 Feb 2016 • About Kingspan Group (
$KGP) • By InTwits
Kingspan Group reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kingspan Group is a fast growth stock: 2015 revenue growth was 46.7%, 5 year revenue CAGR was 18.4% at 2015 ROIC 15.1%
- Kingspan Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 12.6%.
- CAPEX is quite volatile: 79.3 in 2015, 45.4 in 2014, 41.8 in 2013, 34.2 in 2012, 28.8 in 2011
- The company has highly profitable business model: ROIC is at 15.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kingspan Group ($KGP) key annual financial indicators
| mln. € | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,547 | 1,629 | 1,777 | 1,891 | 2,774 | 46.7% |
| Gross Profit | 422 | 446 | 460 | 516 | 807 | 56.4% |
| SG&A | 83 | 87 | 84 | 91 | 138 | 52.7% |
| EBITDA | 134 | 148 | 159 | 187 | 316 | 69.0% |
| Net Income | 62 | 74 | 88 | 107 | 188 | 75.5% |
Balance Sheet
|
|---|
| Cash | 141 | 142 | 197 | 186 | 212 | 14.2% |
| Short Term Debt | 10 | 4 | 7 | 133 | 99 | -25.6% |
| Long Term Debt | 318 | 316 | 291 | 205 | 471 | 130.2% |
Cash flow
|
|---|
| Capex | 29 | 34 | 42 | 45 | 79 | 74.7% |
Ratios
|
|---|
| Revenue growth | 29.6% | 5.3% | 9.1% | 6.4% | 46.7% | |
| EBITDA growth | 24.1% | 10.8% | 7.5% | 17.7% | 69.0% | |
| Gross Margin | 27.3% | 27.4% | 25.9% | 27.3% | 29.1% | 1.8% |
| EBITDA Margin | 8.6% | 9.1% | 8.9% | 9.9% | 11.4% | 1.5% |
| Net Income Margin | 4.0% | 4.5% | 4.9% | 5.7% | 6.8% | 1.1% |
| SG&A, % of revenue | 5.4% | 5.3% | 4.8% | 4.8% | 5.0% | 0.2% |
| CAPEX, % of revenue | 1.9% | 2.1% | 2.4% | 2.4% | 2.9% | 0.5% |
| ROIC | 9.2% | 9.4% | 9.9% | 11.2% | 15.1% | 4.0% |
| ROE | 8.9% | 9.6% | 10.6% | 11.6% | 16.5% | 4.9% |
| Net Debt/EBITDA | 1.4x | 1.2x | 0.6x | 0.8x | 1.1x | 0.3x |
Revenue and profitability
The company's Revenue surged on 46.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.0 pp from 42.8% to 43.9% in 2015.
Gross Margin increased slightly on 1.8 pp from 27.3% to 29.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased slightly on 1.1 pp from 5.7% to 6.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
Kingspan Group's CAPEX/Revenue was 2.9% in 2015. Kingspan Group showed small growth in CAPEX/Revenue of 0.76 pp from 2.1% in 2012 to 2.9% in 2015. It's average CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at good ROIC (15.15%) and ROE (16.47%). ROIC increased on 4.0 pp from 11.2% to 15.1% in 2015. ROE increased on 4.9 pp from 11.6% to 16.5% in 2015.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from 0.8x to 1.1x in 2015. Debt surged on 68.9% in 2015 while cash jumped on 14.2% in 2015.
Appendix 1: Peers in Construction & Materials
Below you can find Kingspan Group benchmarking vs. other companies in Construction & Materials industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aukett Swanke Group ($AUK) | | 13.7% | 5.5% | 107.0% | 14.6% |
| Accsys Technologies ($AXS) | | 9.5% | 25.5% | 78.0% | 37.5% |
| Inch Kenneth Kajang Rubber ($IKK) | -28.4% | -18.7% | -14.2% | 68.0% | |
| LSR Group OJSC ($LSRG) | 4.0% | 17.6% | -1.4% | 54.1% | |
| Lucky Cement Ltd ($LKCS) | | 28.1% | 68.2% | 44.8% | 1.2% |
| |
|---|
| Median (25 companies) | 4.0% | 2.6% | 5.5% | 8.9% | 1.4% |
|---|
| Kingspan Group ($KGP) | | 5.3% | 9.1% | 6.4% | 46.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Heath(Samuel)& Sons ($HSM) | 49.2% | 49.5% | 47.3% | 48.6% | 47.6% |
| James Halstead ($JHD) | | 41.2% | 41.6% | 41.0% | 41.7% |
| Swp Group ($SWP) | 39.2% | 43.0% | 48.1% | 39.2% | 49.7% |
| Billington Hldgs ($BILN) | 30.4% | 41.1% | 41.7% | 38.8% | |
| Alumasc Group ($ALU) | 26.6% | 23.6% | 26.3% | 31.6% | 32.7% |
| |
|---|
| Median (24 companies) | 24.4% | 23.6% | 24.2% | 26.3% | 29.9% |
|---|
| Kingspan Group ($KGP) | 27.3% | 27.4% | 25.9% | 27.3% | 29.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucky Cement Ltd ($LKCS) | 25.0% | 31.5% | 26.8% | 24.4% | 26.5% |
| LSR Group OJSC ($LSRG) | 19.8% | 20.2% | 19.5% | 22.9% | |
| James Halstead ($JHD) | | 20.2% | 19.8% | 20.1% | 20.9% |
| Asia Cement Corp ($ASCD) | 20.2% | 13.5% | 16.3% | 18.3% | |
| Suez Cement Co ($SZCD) | 20.9% | 19.4% | 19.3% | 17.9% | |
| |
|---|
| Median (25 companies) | 7.9% | 8.5% | 7.3% | 9.5% | 9.9% |
|---|
| Kingspan Group ($KGP) | 8.6% | 9.1% | 8.9% | 9.9% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Steppe Cement ($STCM) | 1.8% | 8.4% | 13.0% | 18.7% | |
| Inch Kenneth Kajang Rubber ($IKK) | 15.9% | 74.2% | 5.4% | 12.8% | |
| Swp Group ($SWP) | 0.8% | 0.9% | 2.5% | 8.5% | 7.4% |
| Michelmersh Brick Hldgs ($MBH) | 1.3% | 1.1% | 3.6% | 7.3% | |
| Lucky Cement Ltd ($LKCS) | 7.3% | 3.2% | 5.2% | 6.9% | 12.0% |
| |
|---|
| Median (25 companies) | 2.1% | 2.2% | 2.5% | 2.6% | 2.1% |
|---|
| Kingspan Group ($KGP) | 1.9% | 2.1% | 2.4% | 2.4% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| James Halstead ($JHD) | | 49.3% | 46.2% | 46.7% | 45.3% |
| Aukett Swanke Group ($AUK) | -41.2% | 2.7% | 11.4% | 27.3% | 31.6% |
| Alumasc Group ($ALU) | 12.6% | 6.5% | 17.5% | 22.6% | 36.0% |
| Lucky Cement Ltd ($LKCS) | 13.5% | 23.8% | 22.9% | 20.3% | 20.0% |
| LSR Group OJSC ($LSRG) | 9.3% | 10.2% | 8.8% | 20.1% | |
| |
|---|
| Median (25 companies) | 5.2% | 4.0% | 7.2% | 5.4% | 7.9% |
|---|
| Kingspan Group ($KGP) | 9.2% | 9.4% | 9.9% | 11.2% | 15.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mountfield Group ($MOGP) | | 26.3x | 4.8x | 52.0x | |
| Asia Cement Corp ($ASCD) | 4.3x | 7.8x | 6.9x | 6.8x | |
| Steppe Cement ($STCM) | 2.6x | 1.6x | 1.2x | 2.9x | |
| Low & Bonar ($BD46) | | 2.7x | 2.1x | 2.1x | 2.4x |
| Saint-Gobain(Compagnie De) ($COD) | 1.8x | 2.1x | 2.0x | 2.1x | |
| |
|---|
| Median (19 companies) | 1.2x | 1.7x | 0.8x | 0.4x | -0.3x |
|---|
| Kingspan Group ($KGP) | 1.4x | 1.2x | 0.6x | 0.8x | 1.1x |
