Kingspan Group Net Income jumped on 35.8% in 2016 and Revenue jumped on 12.0%
17 Feb 2017 • About Kingspan Group (
$KGP) • By InTwits
Kingspan Group reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kingspan Group is a growth stock: 2016 revenue growth was 12.0%, 5 year revenue CAGR was 15.0% at 2016 ROIC 16.0%
- EBITDA Margin is expanding: 13.0% in 2016 vs. 11.4% in 2015 vs. 9.1% in 2012
- Kingspan Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 12.4%.
- CAPEX is quite volatile: 113 in 2016, 79.3 in 2015, 45.4 in 2014, 41.8 in 2013, 34.2 in 2012
- The company has highly profitable business model: ROIC is at 16.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.2x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kingspan Group ($KGP) key annual financial indicators
| mln. € | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,629 | 1,777 | 1,891 | 2,774 | 3,109 | 12.0% |
| Gross Profit | 446 | 460 | 516 | 807 | 940 | 16.4% |
| SG&A | 87 | 84 | 91 | 138 | | -100.0% |
| EBITDA | 148 | 159 | 187 | 316 | 404 | 27.7% |
| Net Income | 74 | 88 | 107 | 188 | 255 | 35.8% |
Balance Sheet
|
|---|
| Cash | 142 | 197 | 186 | 212 | 222 | 4.7% |
| Short Term Debt | 4 | 7 | 133 | 99 | 41 | -58.4% |
| Long Term Debt | 316 | 291 | 205 | 471 | 657 | 39.6% |
Cash flow
|
|---|
| Capex | 34 | 42 | 45 | 79 | 113 | 42.9% |
Ratios
|
|---|
| Revenue growth | 5.3% | 9.1% | 6.4% | 46.7% | 12.0% | |
| EBITDA growth | 10.8% | 7.5% | 17.7% | 69.0% | 27.7% | |
| Gross Margin | 27.4% | 25.9% | 27.3% | 29.1% | 30.2% | 1.1% |
| EBITDA Margin | 9.1% | 8.9% | 9.9% | 11.4% | 13.0% | 1.6% |
| Net Income Margin | 4.5% | 4.9% | 5.7% | 6.8% | 8.2% | 1.4% |
| SG&A, % of revenue | 5.3% | 4.8% | 4.8% | 5.0% | | -5.0% |
| CAPEX, % of revenue | 2.1% | 2.4% | 2.4% | 2.9% | 3.6% | 0.8% |
| ROIC | 9.4% | 9.9% | 11.2% | 15.1% | 16.0% | 0.9% |
| ROE | 9.6% | 10.6% | 11.6% | 16.5% | 18.7% | 2.2% |
| Net Debt/EBITDA | 1.2x | 0.6x | 0.8x | 1.1x | 1.2x | 0.0x |
Revenue and profitability
Kingspan Group's Revenue surged on 12.0% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.1 pp from 4.1% to 7.2% in 2016.
Gross Margin increased slightly on 1.1 pp from 29.1% to 30.2% in 2016.
Net Income marign increased slightly on 1.4 pp from 6.8% to 8.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 3.6%. Kingspan Group's CAPEX/Revenue increased slightly on 1.3 pp from 2.4% in 2013 to 3.6% in 2016. It's average CAPEX/Revenue for the last three years was 3.0%.
Return on investment
The company operates at good ROIC (16.04%) and ROE (18.66%). ROIC increased slightly on 0.89 pp from 15.1% to 16.0% in 2016. ROE increased on 2.2 pp from 16.5% to 18.7% in 2016.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA increased on 0.049x from 1.1x to 1.2x in 2016. Debt jumped on 22.6% in 2016 while cash increased on 4.7% in 2016.
Valuation
The company's trades at EV/EBITDA 1.3x and P/E 0.2x while industy averages are 15.6x and 19.1x. Kingspan Group's EV/(EBITDA-CAPEX) is 1.8x with the industry average at 19.0x.
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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Accsys Technologies ($AXS) | | 25.5% | 78.0% | 37.5% | 14.5% |
| Billington Hldgs ($BILN) | -34.0% | 8.4% | 14.5% | 25.8% | |
| Crh ($CRH) | | -0.3% | 4.9% | 25.0% | 14.7% |
| Clarke(T.) ($CTO) | 5.5% | 12.0% | -4.2% | 16.6% | |
| Titon Hldgs ($TON) | | 8.2% | 22.3% | 15.6% | 6.6% |
| |
|---|
| Median (25 companies) | 0.0% | 5.5% | 8.9% | 1.6% | 7.8% |
|---|
| Kingspan Group ($KGP) | | 9.1% | 6.4% | 46.7% | 12.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 46.5% | 24.5% | 21.7% | 51.7% | |
| Swp Group ($SWP) | 43.0% | 48.1% | 39.2% | 49.7% | |
| Heath(Samuel)& Sons ($HSM) | 49.5% | 47.3% | 48.6% | 47.6% | 48.1% |
| James Halstead ($JHD) | 41.2% | 41.6% | 41.0% | 41.7% | 42.4% |
| Michelmersh Brick Hldgs ($MBH) | 35.3% | 28.4% | 31.1% | 38.2% | |
| |
|---|
| Median (23 companies) | 23.6% | 24.2% | 26.3% | 29.3% | 33.4% |
|---|
| Kingspan Group ($KGP) | 27.4% | 25.9% | 27.3% | 29.1% | 30.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucky Cement Ltd ($LKCS) | 31.5% | 26.8% | 24.4% | 26.5% | 30.4% |
| Steppe Cement ($STCM) | 20.8% | 23.2% | 14.3% | 24.7% | |
| James Halstead ($JHD) | 20.2% | 19.8% | 20.1% | 20.9% | 21.6% |
| Michelmersh Brick Hldgs ($MBH) | 10.6% | 7.9% | 14.1% | 20.3% | |
| LSR Group OJSC ($LSRG) | 20.2% | 19.5% | 22.9% | 19.3% | |
| |
|---|
| Median (25 companies) | 8.5% | 7.3% | 9.5% | 9.5% | 11.7% |
|---|
| Kingspan Group ($KGP) | 9.1% | 8.9% | 9.9% | 11.4% | 13.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 74.2% | 5.4% | 12.8% | 54.9% | |
| Lucky Cement Ltd ($LKCS) | 3.2% | 5.2% | 6.9% | 12.0% | 8.9% |
| Billington Hldgs ($BILN) | 1.0% | 1.1% | 2.9% | 10.8% | |
| Low & Bonar ($BD46) | 3.5% | 2.8% | 4.6% | 9.1% | 4.7% |
| Superglass Hldgs ($SPGH) | 12.9% | 14.2% | 3.4% | 7.9% | |
| |
|---|
| Median (25 companies) | 2.2% | 2.5% | 2.6% | 2.2% | 2.6% |
|---|
| Kingspan Group ($KGP) | 2.1% | 2.4% | 2.4% | 2.9% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| James Halstead ($JHD) | 49.3% | 46.2% | 46.7% | 45.3% | 47.1% |
| Alumasc Group ($ALU) | 6.5% | 17.5% | 22.6% | 36.0% | 47.8% |
| Heath(Samuel)& Sons ($HSM) | 9.7% | 8.7% | 19.7% | 32.0% | 89.2% |
| Aukett Swanke Group ($AUK) | 2.7% | 11.4% | 27.3% | 31.6% | 9.6% |
| Lucky Cement Ltd ($LKCS) | 23.8% | 22.9% | 20.3% | 20.0% | 20.8% |
| |
|---|
| Median (25 companies) | 4.0% | 7.2% | 5.4% | 7.8% | 11.4% |
|---|
| Kingspan Group ($KGP) | 9.4% | 9.9% | 11.2% | 15.1% | 16.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mountfield Group ($MOGP) | 26.3x | 4.8x | 52.0x | 18.8x | |
| Asia Cement Corp ($ASCD) | 7.8x | 6.9x | 6.8x | 8.6x | |
| Crh ($CRH) | 2.0x | 3.6x | 1.6x | 3.1x | 1.7x |
| Low & Bonar ($BD46) | 2.7x | 2.1x | 2.1x | 2.4x | 2.1x |
| Saint-Gobain(Compagnie De) ($COD) | 2.1x | 2.0x | 2.1x | 1.4x | |
| |
|---|
| Median (21 companies) | 1.7x | 0.8x | 0.4x | -0.1x | -0.9x |
|---|
| Kingspan Group ($KGP) | 1.2x | 0.6x | 0.8x | 1.1x | 1.2x |
