Our Mission
Our Planet
Our People
ANNUAL REPORT &
FINANCIAL STATEMENTS 2023
Our mission is to
accelerate a net zero
emissions future-built
environment with the
wellbeing of people and
planet at its heart.
Amager Bakke
Planet: Amager Bakke is
a combined heat and
power waste-to-energy
plant in Copenhagen.
People: Amager Bakke
doubles up as recreational
facility, supported by
our Derbigum® roofing
membrane.
Our Mission
Our Planet
Our People
ANNUAL REPORT &
FINANCIAL STATEMENTS 2023
CONTENTS
OUR PEOPLE
Our Clan
Our Communities
Our Customers
OUR IMPACT
OUR GLOBAL REACH
SUMMARY FINANCIALS
BUSINESS & STRATEGIC REPORT
Chairman’s Statement
Our Business Model and Strategy
Chief Executive’s Review
FInancial Review
Risk & Risk Management
Sustainability Report
DIRECTORS’ REPORT
The Board
Report of the Nominations
& Governance Committee
Report of the Remuneration Committee
Report of the Audit &
Compliance Committee
Report of the Directors
Independent Auditor’s Report
FINANCIAL STATEMENTS
Financial Statements
Notes to the Financial Statements
OTHER INFORMATION
Alternative Performance Measures
Principal Subsidiaries and Substantial
Undertakings
Shareholder Information
Corporate Information
Group 5 Year Summary
2
2
8
12
16
17
18
20
24
32
43
48
58
78
82
92
114
124
136
144
151
201
204
206
207
208
This copy of the statutory annual report of Kingspan Group plc for the
year ended 31 December 2023 is not presented in the ESEF-format as
specified in the Regulatory Technical Standards on ESEF (Delegated
Regulation (EU) 2019/815). The ESEF annual report is available at:
https://www.kingspan.com/group/investors/reports-presentations
People are the key driver
of our success. Kingspan
would not be what it is
today without the energetic
teams across the world
that are dedicated to
growing the business,
the customers that are
passionate about beautiful
and sustainable buildings,
and the communities which
support our growth.
Gene Murtagh
Chief Executive Officer
>22,500
Employees
>65,000
Customer viewpoints
through our Worldwide Voice
of Customer programme
224
Communities
Gene Murtagh and Keara Dunne at the global
launch of Kingspan’s People Passionate programme
There has always been a core focus on
people at Kingspan, in part to develop
a strong pipeline of future leaders. In
2023, we launched the People Passionate
programme which broadens the focus
on people, amplifying their voices and
enabling measurable outcomes and
collaborative learning.
Our
Clan
In 2023, we launched our People
Passionate programme to
enrich the experience of the
over 22.5k people who move
Kingspan forward every day.
Read some of our career stories.
Our
Communities
Kingspan’s success is enabled
by the communities in which we
operate, we aim to return that
support through community
engagement programmes.
Our
Customers
Our customers inspire us in
the innovation of our products
and services, leading to
breakthroughs such as our lower
embodied carbon portfolio.
See pages 2 to 7
See pages 8 to 11
See pages 12 to 15
1
Our People
Our
Clan
clan noun
/klæn/
a group of people united by
a strong common interest
It has been a great privilege
to lead Kingspan’s People
Passionate programme. Since
its launch, there has been
an overwhelmingly open
and positive response to the
initiative across the business,
endorsed by the whole senior
leadership team.
Keara Dunne
Group Head of
Leadership Development
We are People Passionate, it is core to who
we are. People Passionate is a Kingspan-wide
programme designed to make a significant
contribution to the success and sustainability
of our people and the business. We are
focusing our energy on creating a workplace
where people do their best work together,
grow and transform themselves and the built
environment sustainably, underpinned by
ethics and integrity.
Building on the success of our
Planet Passionate programme,
we have created a global
approach which enables the
sharing of good existing people
and organisation practices.
This programme will channel
our focus on creating positive
outcomes collaboratively and
enhancing the experience for our
people globally.
The reporting framework enables
every business to report their
progress monthly, against the plan,
to the senior leadership team across
the areas of Talent and Succession,
Capability and Leadership
Development, Organisational
Performance, Engagement and
Strong People Foundations.
We look forward to sharing the
People Passionate journey with you.
CAPABILITIES
AND LEADERSHIP
TRAINING AND
DEVELOPMENT
TALENT AND
SUCCESSION
STRONG PEOPLE
POLICIES AND
PROCESSES
CAREER
PLANNING
CLARITY
ON ROLE
EMPLOYEE
ENGAGEMENT
CONNECTING
THROUGH
CONVERSATIONS
IMPROVING AND
SUSTAINING
ORGANISATIONAL
PERFORMANCE
2 Kingspan Group plc Annual Report & Financial Statements 2023
3
Our People Our Clan 3
Louise’s career story
From the day I joined Kingspan
as a graduate I have been
empowered to be myself,
always looking for the next new
challenge and opportunity.
My proudest moment so far has been the launch of
Covolve which has the dual purpose of advancing
businesses digitally and accelerating the next big
breakthrough. We have big ambitions!
2005
Marketing
Executive
2007
Marketing
Manager North
America
2014
Global
Marketing
Director
2018
Steering
the digital
journey
2023
Covolve
Managing
Director
Excited to join Kingspan’s
first graduate programme.
Global goals
Returned to Ireland as Global Marketing
Director and spearheaded the launch of
QuadCoreTM, our first truly global product.
Realised opportunity
to drive Kingspan’s
digital transformation.
Established our Digital
Incubator to deeply
understand and improve
our customers’ experience
through digital and
led our BIM team to
win ICE’s Innovation in
Construction award 2022.
Launched Covolve
to drive radical
innovation and advance
businesses digitally.
Industry firsts
Moved to Canada and positioned
Kingspan as a leader in sustainability
through the launch of an industry-first
Environmental Product Declaration (EPD)
for a manufacturer in the region and
helped to educate the market through
a Net Zero Energy App.
Louise Foody
Manging Director,
Covolve
The launch of Covolve, our digital
acceleration business, is the culmination
of the empowerment I have experienced
throughout my career at Kingspan.
4 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Clan 5
Marcelo’s career story
I joined Kingspan in 2017 through
its acquisition of Isoeste in Brazil,
where I was CEO.
Kingspan’s highly driven, entrepreneurial culture
inspired me to stay on post-integration. Today, I am
the President of Kingspan for all of Latin America
with the opportunity to deliver exciting growth plans
for the region, while also respecting and advancing
the local communities in which we operate.
2017
CEO
Isoeste
Joined Kingspan through
the acquisition of a majority
stake in Isoeste.
2017-2023
CEO
Kingspan
Isoeste
4
new sites
commissioned
>190%
LATAM revenue growth since 2018
2023
President
Kingspan
LATAM
Some of my proudest moments
leading Isoeste and Kingspan
LATAM are centred around the
positive change we have made in
the lives of people, both internal to
Kingspan and in the communities
that help us to thrive.
It is the culture we create that
extracts what is good or bad
in individuals.
Marcelo
Mokayad
President,
Kingspan LATAM
I stopped looking for good
people and started looking for
what is good in people.
6 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Clan 7
REVENUE
PPhilipinnes
hilipinnes
Our People
Our
Communities
Kingspan Isoeste
in Brazil
2
5
3
1
4
1. Araquari
2. Vitória de Santo Antão
3. Anápolis
4. Cambuí
5. Várzea Grande
Kingspan is active in
224 communities across
the globe – here are some
of the ways Kingspan
Isoeste and its local
communities in Brazil
have grown together.
895
of our colleagues are
employed in Kingspan
Isoeste in Brazil
Casa da Carnaúba de Várzea Queimada
Kingspan Isoeste donated insulated panels
and daylighting panels to support artisanal
industry in north-eastern Brazil.
To support families in our
communities in Brazil, Kingspan
Isoeste offers childcare assistance
to our female employees.
Balanced Careers,
Supported Families
Kingspan Isoeste
promotes work-life
balance by offering
exclusive daycare
assistance for our
female employees.
Female employees can avail of direct
financial support to cover a chosen
school, nursery or daycare facility.
We contribute up to R$800 per child,
per month, for children up to seven
years of age.
This initiative promotes equal
opportunity and engagement for all
of our employees, ensuring everyone
can succeed in their career without
sacrificing family commitments.
8 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Communities 9
Creating comfortable spaces for
female artisans
Kingspan Isoeste partnered
with an important social
initiative in the remote north-
eastern Brazilian hinterlands,
donating insulated panels and
daylighting panels to establish
a tailored workspace for the
skilled female artisans of the
Várzea Queimada community,
enhancing conditions for
artisanal activities, promoting
wellbeing, and strengthening
the local community.
With a population of approximately 900 residents,
including over 80 children, and a high rate of
congenital deafness, the community heavily relies
on artisanal production as its main source of
income. Notably, 47 women actively contribute to
the artisanal industry in the community.
Kingspan’s mission is
centred around people and
planet. We understand the
role our communities play in
helping us to succeed and
we believe in reinvesting in
our communities so that we
can thrive together.
Carnaúba straw dries under Kingspan Isoeste
daylighting panels (left), a female artisan
braids carnaúba straw (above).
Kingspan Isoeste employees prepare
vegetables and eggs for donation.
At our facility in Anápolis, we cultivate
a variety of vegetables and keep free-
range hens, donating the produce to
charitable organisations in the city.
10 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Communities 11
Our People
Our
Customers
Our solutions
driven approach
to innovation
puts customers
at the core of
our innovation
agenda.
Customer Experience
Through our customer experience
programme we have captured the view
of over 65,000 customers, across over 80
countries and we continue to listen, learn
and make meaningful change happen.
>65,000
customer voices
Across our business we have
multiple touch points with
our customers.
Our teams engage with customers directly on
projects, meet them at industry events and trade
shows, and we canvass our customers for feedback
on their experience with Kingspan.
Our ambition is to create advantages for every part
of our downstream value chain, including innovating
our service experience.
Innovation
Our customers want to develop more
sustainable buildings. To this end,
our innovation team and our Planet
Passionate team worked in partnership
to take significant steps forward in the
development of lower embodied carbon
(LEC) alternatives across our portfolios. In
2023, we brought three LEC products to
market: QuadCore LEC TM insulated panel,
RMG600+ LEC and LEC Tate Grid.
QuadCore LEC TM
Sandra
Del Bove
Group Head
of Innovation
RMG600+ LEC
LEC Tate Grid
12 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Customers 13
Innovation in Action – QuadCore LEC ™
St. Modwen Park, UK
The LEC product aligns with our ambitions
to reduce embodied carbon across our
developments, whilst continuing to offer a
functional market-facing product and the
comfort of longevity.
St. Modwen Park is the first project to use our innovative QuadCore
LEC TM Roof Panel solution, delivering superior energy efficiency and
substantial carbon savings that can transform a building’s sustainability
credentials. QuadCore LEC TM has been developed specifically to help
reduce the carbon footprint of the buildings it is used on.
9,760m2
of 100mm panels were
supplied for St. Modwen Park
47.1%
Recycled content
18.8%*
reduction in embodied carbon
* QuadCore LEC TM RW has an LCA (Life Cycle Assessment) that shows an 18.8%
reduction in embodied carbon (measured by the Global Warming Potential
‘GWP’ kgCO2e) between life cycle modules A1 – A3 (product stage)
14 Kingspan Group plc Annual Report & Financial Statements 2023
Our People Our Customers 15
OUR
IMPACT
Our products directly
enable lower carbon and
healthier buildings, now
and into the future.
Kingspan’s insulation systems, sold in 2023, will
save an estimated 731 million MWh of energy or
164 million tonnes of CO2e over their lifetime.
SchafbergBahn
Valley Station
St Wolfgang, Austria
Insulation
Troldtekt® line
ceiling and wall
acoustic panels
Ultra Energy-Efficient
Conserved Water
Recycled Materials
Natural Daylight
164m tonnes
164 million tonnes of CO2e will
be saved over the life of our
insulation systems sold in 2023
Enough to power a major
airline for over 11 years1
41.3bn litres
Over 41 billion litres of
rainwater will be harvested by
our tanks produced in 2023
Enough water to fill over
500 million baths2
858m
In 2023 alone we
upcycled 858 million
waste plastic bottles
Enough recycled
bottles to fill over
1,100 football pitches
9bn lumens
The capacity to create 9
billion lumens of natural
light annually through our
daylighting systems
Enough to light
up 1 million homes3
16 Kingspan Group plc Annual Report & Financial Statements 2023
1 Assumes 60 year product life; based on an EU
airline disclosure of over 14.3m tonnes of CO2e
emissions for 12 months to March 2023
2 Assumes a 20 year product life
3 Assumes 10 x 60W bulbs per home
OUR GLOBAL
REACH
2023 was another year of
global expansion with our
manufacturing footprint
growing from 212 sites to 224.
2
2
2
2
2
2
2
2
4
Sales
Manufacturing
2
7
3
2 2
4
5
7
4
4
2
3
3
8
14
14
15
7
4
36
35
2
14
6
3
15
3
6
13
3
2
2
2
13
4 4
5
2
5
5
2
2
2
3
3
4
2
ASIA
China
India
Indonesia
Japan
Malaysia
Pakistan
Philippines
Singapore
Uzbekistan
Vietnam
AUSTRALASIA
Australia
New Zealand
OUR LOCATIONS
AMERICAS
Brazil
Canada
Chile
Colombia
Mexico
Panama
Peru
Uruguay
USA
EUROPE
Austria
Azerbaijan
Belgium
Bosnia
Bulgaria
Croatia
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Kazakhstan
Latvia
Lithuania
Netherlands
N. Ireland
Norway
Poland
Portugal
Romania
Serbia
Slovakia
Slovenia
Spain
Sweden
Switzerland
UK
Ukraine
MIDDLE EAST
Qatar
Turkey
UAE
AFRICA
Egypt
Kenya
Morocco
Our Impact / Our Global Reach 17
SUMMARY
FINANCIALS
Revenue
EBITDA1
Trading Profit2
Trading Margin3
Profit After Tax
EPS
€8.1bn
-3%
2022: €8.3bn
€1,068m
+7%
2022: €998m
€877m
+5%
2022: €833m
10.8%
+80bps
2022: 10.0%
€654m
+6%
2022: €616m
352.3c
+7%
2022: 329.5c
Vinospol
Svatobořice-Mistřín, Czech Republic
Insulated Panels
KS1000; KS1150 insulated wall panels
1 Earnings before finance
costs, income taxes,
depreciation, amortisation
and non trading item
2 Operating profit before
amortisation of intangibles
and non trading item
3 Trading profit divided by
total revenue
18 Kingspan Group plc Annual Report & Financial Statements 2023
Summary Financials 19
Collin College Technical Campus
Texas, USA
Light, Air + Water
UniQuad® Polycarbonate
Wall System
CHAIRMAN’S STATEMENT
Jost Massenberg
I am pleased to report that Kingspan
has delivered a strong performance in
2023. Trading profit rose by 5% to €877m
(2022: €833m) and earnings per share
by 7% to 352.3 cent (2022: 329.5 cent).
Trading Profit
€877m
+5%
2022: €833m
Delivering on strategy
These record results were achieved through our focused strategy
of offering an expansive range of sustainable and energy-saving
building solutions aligned with our four key pillars of Innovation,
Planet Passionate, Globalisation, and ‘Completing the Envelope’.
Throughout the year we continued to make significant progress
on our Planet Passionate programme, delivering a 54%
reduction in GHG emissions, while at the same time increasing
our proportion of on-site renewable energy usage by 34%.
Full details of this and other progress in our ongoing initiatives
across the four key pillars of Carbon, Energy, Circularity and
Water, will be published shortly in our annual Planet Passionate
Sustainability Report.
In our quest to decarbonise, we have focused our innovation
on two main strategies: refining existing products with lower
carbon alternatives, and exploring new bio-based materials and
solutions. During 2023, we launched several lower embodied
carbon (LEC) products in our Insulated Panel, Insulation Boards
and Data + Flooring businesses. We have also invested in new
bio-based technologies such as HempFlax insulation, and
more recently in 2024, in Steico wood wool insulation. Such
innovations ensure our products and systems help our end users
to meet the pressing need to reduce the carbon footprint of the
built environment.
During the year, we further expanded our building solutions
portfolio with the acquisition of CaPlast, enhancing our Roofing +
Waterproofing segment, and since year end we have acquired 51%
of Steico SE, a world leader in wood wool insulation, adding to our
growing bio-based portfolio. We have also continued our organic
global growth with new Insulated Panels and Data + Flooring
facilities commissioned or in progress during the year in Europe,
South East Asia and the Americas. Finally, after a considerable
diligence and search process we have selected a 50 hectare site
in Lviv, Ukraine, which is likely to be the location of our €250m+
Building Technology Campus over the next five years or so.
Welcome to Kingspan’s
2023 Annual Report.
Jost Massenberg
20 Kingspan Group plc Annual Report & Financial Statements 2023
Chairman’s Statement Business & Strategic Report 21
In June, Kingspan successfully completed a new
private placement loan notes issuance of €319m
with a 6 year maturity. In total the Group now
has c.€1.9bn in available cash and undrawn
facilities, ensuring the Group has strong levels of
development funding.
Dividend
Subject to approval at the Annual General Meeting,
the Board is recommending a final dividend of 26.6
cent per share. This will give a total dividend for the
year of 52.9 cent, (compared to 49.4 cent in the
prior year). This is in line with Kingspan’s established
shareholder returns policy. If approved, the final
dividend will be paid (subject to Irish withholding
tax rules) on 20 May 2024 to shareholders on the
register at close of business on 12 April 2024.
Our People
The success of 2023 could not have been achieved
without the hard work of our people. The Board
would like to thank our team for their commitment
and dedication, which has been central to the
delivery of another strong performance.
On behalf of the Board, I particularly want to
welcome those who joined the business during this
past year. They are now an important part of an
innovative and visionary group working together to
make a difference to our planet and to help meet
climate challenges.
Our People Passionate initiative, launched in 2023,
aims to enhance the employee experience across
Kingspan, while over time enabling the Board to
assess and monitor the evolution of the Group’s
performance and corporate culture. More details
of this programme are set out in the Report of the
Nomination & Governance Committee.
The Board continues to manage and monitor
governance and risk across the business, details of
which are set out in the Governance section of this
Annual Report. We also maintain an open dialogue
with our major shareholders on the Group’s
governance as well as on its strategic and financial
performance, as detailed in the Financial Review
and the Report of the Remuneration Committee in
this Annual Report.
Board changes
During the year, we were delighted to welcome
Louise Phelan to the Board as an independent
non-executive director. Louise is a highly
respected business leader and adviser, who has
experience in leading global organisations in
both the renewable energy and finance sectors.
Louise’s breadth of experience brings a fresh and
independent view to the Board.
Having both served for nine years respectively,
Michael Cawley and John Cronin retired from
the Board following the conclusion of last year’s
Annual General Meeting. On behalf of the
Board, I would like to thank them both for their
much valued contributions to the Board and its
committees over the years.
Looking ahead
Kingspan is well positioned with a robust balance
sheet, a diversified spectrum of sustainable
building solutions and a clear focus on our Planet
Passionate objectives.
Management’s strong track record of delivering on
our strategy, combined with an exciting product
and regional development pipeline, underscores
my confidence that we will continue to deliver
sustainable long-term value to our shareholders
and wider stakeholders alike.
Board governance
During 2023, the Board continued to build upon
the recommendations of the external evaluation
process carried out by Better Boards in 2022.
Jost Massenberg
Chairman
20 February 2024
Our People Passionate initiative,
launched in 2023, aims to enhance
the employee experience across
Kingspan, while over time enabling
the Board to assess and monitor
the evolution of the Group’s
performance and corporate culture.
Newton Staete
The Netherlands
Insulated Panels
JI insulated panels;
JI roof and wall profiles
22 Kingspan Group plc Annual Report & Financial Statements 2023
Chairman’s Statement Business & Strategic Report 23
OUR BUSINESS MODEL
AND STRATEGY
Our mission is to accelerate a zero
emissions future-built environment
with people and planet at its heart.
We believe buildings
of the future should:
Harness the power
of the natural
environment
Through natural
daylighting
and natural
ventilation.
Through solar
energy, rainwater
harvesting
and wastewater
treatment.
Conserve energy
and reduce carbon
emissions
Through ultra
energy efficient
building envelopes
and building
services.
OUR SOLUTIONS
Conserve energy and reduce carbon emissions
INSULATED PANELS
Kingspan Insulated Panels is
the world’s largest and leading
manufacturer of high-performance
insulated panel building envelopes.
Powered by Kingspan’s proprietary
and differentiated insulation core
technologies, a Kingspan panelised
envelope provides building owners
with consistently superior build quality
and lifetime thermal performance
compared with built-up constructions
using traditional insulation.
DATA + FLOORING
Kingspan is the world’s largest
supplier of raised access flooring and
data centre airflow management
systems. Our raised access flooring
systems have many benefits including
optimising overall building height,
achieving faster construction with
greater design flexibility, enabling
easier reconfiguration of a workspace,
and improving indoor air quality. Our
airflow management systems enable
data centres to optimise cooling
energy requirements while also
protecting expensive equipment such
as servers and storage devices.
INSULATION
Kingspan is a world leader in rigid
insulation boards, which accounts
for approximately two thirds of our
Insulation division. Our advanced
insulation technologies deliver
superior thermal performance and
air-tightness when compared with
traditional insulation, resulting in more
durable, thinner solutions that offer
multiple advantages including more
internal floorspace and daylight. More
recently, we have been expanding our
bio-based insulation offering through
the acquisitions of Troldtekt and
HempFlax, and the acquisition of 51%
of Steico SE in early 2024.
Technical insulation is a segment
which contains significant
opportunity for Kingspan to expand
in the future. The operation of
buildings accounts for 28% of carbon
emissions globally. While space
heating is the largest consumer of
energy in buildings, heating water
and space cooling are also key
energy consumers. Kingspan has
innovative and ultra-performance
products in both piping and ducting
insulation and we service the district
heating segment through supplying
pre-insulated piping through our
LOGSTOR business.
Harness the power of the natural environment
ROOFING +
WATERPROOFING
Kingspan has a long established
interest in developing a roofing
and waterproofing segment to
complement our insulation board
offering. Roofing membrane and
roofing components are essential
elements for the energy efficiency
and water protection of a building
envelope. Through the acquisitions
of Ondura Group and Derbigum
in 2022, and CaPlast in April 2023,
Kingspan has an annual revenue
run rate in this segment of over
€500m. Going forward, we expect to
offer single component membrane
solutions and to also offer roof
systems incorporating membrane
and insulation, giving our customers
increased warranty protection from a
single trusted supplier.
LIGHT, AIR + WATER
Kingspan Light, Air + Water is
established as a global leader providing
a full suite of daylighting solutions,
as well as natural ventilation and
smoke management solutions, which
complement our existing building
envelope technologies. Thermal
comfort, indoor air quality and natural
daylighting are widely recognised as
the most important factors affecting
occupant wellbeing in buildings.
Sustainable water management is
rapidly becoming one of the greatest
challenges of our time. We manufacture
and support pioneering new
technologies to preserve and protect
water, such as rainwater harvesting
systems and wastewater treatment
systems. Kingspan is also a market
leading manufacturer of innovative
energy management solutions.
POWERPANEL™
PowerPanel™ is part of our Insulated
Panels division. It is an engineering
innovation from Kingspan which has
integrated our QuadCore™ insulated
panel with solar technology, enabling
a single fix installation of high-
performance insulated panel with solar
power generation. We will launch our
upgraded PowerPanel™ during 2024.
24 Kingspan Group plc Annual Report & Financial Statements 2023
Our Solutions Business & Strategic Report 25
OUR STRATEGIC
PILLARS
Our business model and our
strategic pillars enable the ongoing
conversion to ultra-performance
building envelopes from outdated,
inefficient, methods of construction.
COMPLETING THE
ENVELOPE
Our strategy of
‘Completing the
Envelope’ aims to take
our innovation and
sustainability DNA
and apply them to
a wider portfolio of
products which are
complementary to our
current offering.
Our systems and
solutions driven
approach deepens our
relationships with our
customers and extends
the opportunities to
make buildings better
now and into the future.
GLOBAL
Kingspan is a truly
global business,
trading in over 80
countries with 224
manufacturing sites
across the globe.
We aim to continue
expanding globally to
bring ultra-performance
building envelope
solutions to markets
which are at an earlier
stage in their evolution
to sustainable and
efficient methods of
construction.
INNOVATION
PLANET PASSIONATE
Our Planet Passionate
agenda is inextricably
linked with innovation.
Planet Passionate
is Kingspan’s 10-
year sustainability
programme which
aims to impact three
big global issues
– climate change,
circularity and
protection of our
natural world.
By setting ourselves
challenging targets in
the areas of carbon,
energy, circularity
and water, we aim
to make significant
advances in both our
business operations
and our products.
Kingspan’s innovation
agenda is driven
across four key
themes - performance,
solutions,
sustainability, and
digitalisation.
We have a persistent
focus on iterative
performance
improvements in
our current portfolio
including characteristics
relating to thermal,
structural, sustainability,
fire and smoke. We
innovate solutions to
enable architects and
building designers to
create sustainable
buildings, such as our
integrated insulated
panel with solar-PV,
PowerPanel™. And by
progressively surfacing
our products digitally,
we are making it easier
to find them, specify
them, buy them and
track them.
Strategic Highlights 2023
INNOVATION
PLANET PASSIONATE
EXPANSION
PowerPanel™
PowerPanel™ is a fully integrated,
factory manufactured, insulated panel
with solar PV. The initial composition
has been enhanced based on pilot
project observations. The upgraded
design is currently in testing and will
be launched in 2024. PowerPanel™
has the capacity to advance the rapid
deployment of solar power generation
on widespan roofs.
Internal carbon charge
From the 1st of January 2023 we
introduced an internal charge of €70
per tonne for all energy related carbon
emissions (excluding process and
biogenic emissions).
This has helped to further
incentivise the rapid deployment of
decarbonisation projects to support
the achievement of our net zero
carbon manufacturing target.
Lower Embodied Carbon (LEC)
Portfolio
Our Innovation and Planet Passionate
teams worked in partnership to
take significant steps forward in the
development of lower embodied
carbon alternatives across our
portfolios. In 2023, we brought three
LEC products to market: QuadCore
LEC TM insulated panel, RMG600+ LEC
and LEC Tate Grid.
Energy and Carbon
2023 saw a reduction of 65% in Scope
1 & 2 carbon emissions from a 2020
baseline. This reduction was achieved
through reduction in use of high GWP
blowing agents in North America, the
implementation of new renewable
energy contracts and the deployment
of 25 new rooftop solar-PV projects
across our business, which added 6.8
MW of on-site generation capacity.
Adding value across the value chain
A core aim of our innovation effort
is to address pinch points across our
value chain. Given tightness in labour
markets and an aging construction
workforce, we saw a need for
improved efficiency in building
material installation. With this in
mind, we have been developing a
robotic alternative for panel fixings
installation, which we plan to bring to
market in 2024.
Roofing + Waterproofing
In 2023, we continued to expand
our presence in the Roofing +
Waterproofing category. We acquired
CaPlast in April, a technology
leader in the development and
production of membranes to ensure
watertight and airtight roofs and
facades. Towards the end of the
year, we launched a takeover offer
for Nordic Waterproofing, a leading
European producer and supplier of
waterproofing products and services
for buildings and infrastructure.
Bio-based Insulation
Kingspan announced its intention
to acquire a 51% stake in Steico SE
in July 2023, and the acquisition
completed in January 2024. This is an
exciting next step in our strategy to
provide the full spectrum of insulation
solutions. Steico’s suite of wood-
based building envelope solutions
broadens our ability to enable our
customers to meet their sustainability
and energy performance needs.
Global
We continued to expand organically
in 2023, including a new wall
panel line in our Joris Ide business
in Germany and a new plant in
Colombia. We have a significant
amount of planned new lines and
facilities, which has the capacity to
add over 15% to our current global
footprint over the next three years.
Within those plans is our ambition
to invest over €250m in a Building
Technology Campus in Ukraine.
26 Kingspan Group plc Annual Report & Financial Statements 2023
Our Strategic Pillars Business & Strategic Report 27
OUR
STRATEGIC
GOALS
Our strategic goals are aligned with our
mission to accelerate a zero emissions
future-built environment with people and
planet at its heart.
OUR
VALUES
Our values have always been the
foundation of our strategy and are
fundamental to how we do business
and interact with each other.
To advance materials,
building systems and digital
technologies to address issues
such as climate change,
circularity and the protection
of our natural world.
To be the world’s leading
provider of low energy
building envelopes – Insulate
and Generate.
To expand globally, bringing
high-performance building
envelope solutions to markets
which are at an earlier stage in
the evolution of sustainable and
efficient building methods.
Innovation
Global
Planet Passionate
Completing the Envelope
Vrå Children and Culture Centre
Vrå, Denmark
Insulation
Troldtekt® Plus acoustic panels;
Troldtekt® ventilation
Our
Belief
Our Culture
and Values
Code of
Conduct
Historically, construction has
taken from nature with little
consideration given to the finite
resources available. Buildings were
constructed without contemplating
how they might impact future
generations. We believe that
buildings now and into the
future need to deliver more than
ever before. They must combat
climate change by maximising
energy efficiency through superior
thermal performance while
incorporating products that are
lower in embodied carbon across
their entire lifecycle. Using less
energy is not enough; buildings
should generate their own energy
too. Buildings should be healthy
and inspirational, optimising the
benefits of daylight and clean
air. They should be designed,
constructed and operated to
protect natural resources and
conserve water as much as
possible. Above all they must
be safe, protecting people and
property from fire and other
natural hazards.
Kingspan expects the highest
standards of integrity, honesty
and compliance with the law from
our employees, our directors and
our partners, globally. We actively
encourage our employees to speak
out if they experience instances
that are not in keeping with the
principles outlined in our Code
of Conduct.
All new joiners in Kingspan must
complete training on our Code of
Conduct. Our business success
is inextricably linked to our
behaviours, and our aspiration is
to maintain a culture where our
everyday actions are built on five
core principles:
• Clear, ethical and
honest behaviours and
communications;
• Compliance with the law;
• Respect for the safety and
wellbeing of colleagues;
• Protection of our Group assets;
and
• Upholding our commitment to
a more sustainable future.
Please see further detail at:
Kingspan has grown from a family
business and many of the values
associated with family businesses
form the backbone of our culture
today. The business has been built
on trust in the integrity of our
people and of our offering. We
value this trust and recognise it as
being fundamental to our ongoing
success. We are entrepreneurial,
collaborative, honest, and we stand
behind a common cause – better
buildings for a better world.
We are innovative. We are the
market leader in the field of high-
performance building envelope
solutions, which ensure lifetime
carbon and resource savings. We
have gained this position through
a creative and solutions driven
mindset, which continues to inform
our innovation agenda today.
We think long-term. The strategy of
the business is driven by long-term
ambitions and not by quarterly
performance. The success of this
strategy can be seen in our long-
term growth. This ethos is apparent
in our multi-year commitments such
as our 10-year Planet Passionate
programme which will drive real,
positive, impact for the environment
and forms a common global goal
across the business.
In 2023 we launched our People
Passionate programme which
focuses on the development and
retention of our most important
resource, our people.
28 Kingspan Group plc Annual Report & Financial Statements 2023
Our Strategic Goals and Values Business & Strategic Report 29
2023 IN A
NUTSHELL
•
Revenue
€8.1bn
-3%
2022: €8.3bn
Trading
Profit1
€876.9m
+5%
2022: €833.2m
How we operate
How we create value
Applications
Value created
• Product innovation and differentiation
• Retail
• Excellent customer service
• Distribution
• Energy efficient sustainable building
• Leisure
envelope solutions
• We operate our businesses to the
highest standards
• We acquire excellent businesses
• We recycle capital to optimise returns
• We maintain financial discipline
• We balance our portfolio of businesses
across product and geography
• We are reducing our environmental
impacts throughout our Planet
Passionate initiatives
• Accommodation
• Food
• Manufacturing
• Data Management
•
Infrastructure
224
Global
manufacturing
facilities
22,500+
Employees
> Management controls
> Quality systems
> Responsible supply
chain partnerships
15%
Other
85%
Energy Efficiency & Conversion
34%
Via Distribution
66%
Direct
23%
Residential
11%
Office
& Data
66%
Commercial & Industrial
24%
Refurbishment
76%
New Build
EBITDA2
EPS
ROCE
€1,067.8m
+7%
2022: €998.3m
352.3c
+7%
2022: 329.5c
17.0%
2022: 15.9%
Products
Insulation
19%
Roofing +
Waterproofing
6%
Light, Air +
Water
12%
Insulated
Panels
58%
Geography
Western &
Southern
Europe
45%
Data +
Flooring
5%
Central &
Northern
Europe
25%
1 Operating profit before amortisation of intangibles and non trading item.
2 Earnings before finance costs, income taxes, depreciation, amortisation and non trading item.
Drivers
Channel
Sector
End-Market
Dividend
52.9c
+7%
2022: 49.4c
Rest of
World
7%
Americas
23%
30 Kingspan Group plc Annual Report & Financial Statements 2023
2023 In a Nutshell Business & Strategic Report 31
University of Missouri
Stephens Indoor Facility
Missouri, USA
Insulated Panels
Designwall 2000
insulated panels
2023 was a landmark period for our
Planet Passionate agenda, delivering
an enormous 65% reduction in
Scope 1 and 2 GHG emissions,
against a 2020 base year.
Gene Murtagh
Financial Highlights
CHIEF EXECUTIVE’S REVIEW
Gene Murtagh
Business Review
2023 edged ahead of the record achieved
in 2022 delivering a trading profit of €877m,
up 5% on prior year. EPS was up by 7%,
despite revenue declining marginally by 3%
in total, and by 7% on an underlying basis.
Whilst some markets displayed volume
pressure, the predominant reason for the
contraction in revenue was the knock-on
deflationary impact of raw material pricing
in the early part of the year.
Tremendous progress has been made to date on our Planet
Passionate agenda which saw over 300 projects implemented
across the entire group, delivering a 65% reduction in total
Greenhouse Gas Emissions.
In all, €482m capital was invested across businesses, €248m of
inorganic and €234m on internal capital projects, most of which
was focused on demand led growth in capacity.
The trading picture in end markets in the second half was similar
to that of the first, where patterns of activity around the globe
varied significantly. A poor start to the year in Germany, the
Nordics and Central Europe persisted in the latter part of the year.
France (our largest market) remained positive and the Americas
performed exceptionally well. Encouragingly, insulated panel order
intake was consecutively ahead of prior year in each of the last
seven months of 2023.
Planet Passionate and our impact
2023 was a landmark year for our Planet Passionate programme,
delivering a 65% reduction in scope 1 and 2 GHG emissions, against
a 2020 base year. As well as the ongoing initiatives across the four
key pillars of Carbon, Energy, Circularity and Water, the reduction
in process carbon was the most significant in the year. Direct
renewable energy usage increased to 34.1% and the percentage
of wholly owned sites with on-site solar PV systems increased to
49.6%. Total rainwater harvested from our manufacturing locations
increased to 56.7 million litres, almost triple the amount harvested
in the 2020 base year.
Operational Summary
• Record performance against a
challenging backdrop, improving
order intake trend through the year.
•
•
Insulated Panels sales decrease
of 9% with strong activity in
France, the US and LATAM offset
by subdued volumes in Central and
Eastern Europe and lower pricing
due to input deflation.
Insulation sales behind by 8%,
driven by weak residential markets
and price deflation led by inputs.
Technical insulation progressing
well. Extending the full spectrum of
insulation offerings with acquisition
of 51% of Steico in January 2024
and an agreement in February 2024
to acquire a stonewool production
business in Germany.
• Strong traction on our Roofing
+ Waterproofing strategy with
revenue touching €500m. Targeted
North American market entry
supported by a €750m capital
injection over the next five years
with the objective of achieving 15%
of the relevant flat roofing market
over time.
• Further progress at Light, Air +
Water, with broader scale and
margins progressing positively year
on year.
• Data + Flooring medium term
pipeline is very encouraging driven
by demand in data and artificial
intelligence applications.
•
Invested a total of €482m in
acquisitions and net capex during
the year.
3%
Revenue down
3% to €8.1bn,
(pre-currency, down 2%).
5%Trading profit1 up
5% to €877m,
(pre-currency, up 7%).
5%Acquisitions contributed
5% to sales growth and
4% to trading profit
growth.
6%Profit after tax of €654m
(2022: €616m).
80bps
Group trading margin2
of 10.8%, an increase
of 80bps.
32 Kingspan Group plc Annual Report & Financial Statements 2023
7%
Basic EPS up 7%
to 352.3 cent. Diluted EPS
also up 7% to 349.6 cent.
17.7%Effective tax rate of 17.7%
(2022: 17.5%).
26.6c
Final dividend per share of
26.6 cent (2022: 23.8 cent)
giving a total dividend for
the year of 52.9 cent
(2022: 49.4 cent).
0.97x
Year end net debt3 of
€979.5m (2022: €1,539.6m).
Net debt4 to EBITDA4 of
0.97x (2022: 1.62x).
17%ROCE increase to 17.0%
(2022: 15.9%).
1 Operating profit before amortisation of intangibles and non trading item
2 Trading profit divided by total revenue
3 Net debt pre-IFRS 16 per banking covenants
4 Net debt to EBITDA ratio is pre-IFRS 16 per banking covenants
Chief Executive’s Review Business & Strategic Report 33
The table below provides further detail on the progress within Kingspan by category:
Intensity Indicators
Carbon Intensity (tCO2e/€m)
Energy Intensity (MWh/€m)
Landfill Waste Intensity (t/€m)
Water Intensity (million lt/€m)
Change from 2020 base year
76% reduction
17% reduction
62% reduction
4% increase
In summary, 25 solar PV projects were completed across our facilities during the year, which added 6.8 MW of on-site
generation capacity. 858 million PET bottles equivalent of recycled material was processed across the Group and 11
rainwater harvesting systems were installed. Additionally, 69% of all company cars acquired during the year across the
Group were zero emission vehicles and our waste to landfill for the whole business reduced by 33% since 2020.
Investing in our Future
€482m of capital was invested during the year,
€248m on acquisitions and €234m in capex.
CaPlast in Germany was the largest single
acquisition completed in the period, at €87m,
bolstering our growing Roofing + Waterproofing
platform. As part of our continued path into this
exciting area, we acquired an additional 6.8% of
the publicly quoted Nordic Waterproofing which
increased our shareholding to 30.9% and triggered
our subsequent mandatory offer. This process
is now underway. During the year we made an
offer for 51% of Steico, the world-leader in wood
wool insulation and this transaction completed
in January 2024 for an initial consideration
of €263.5m (€188.5m cash, €75m equity).
Additionally, we will be consolidating Steico’s net
debt of c. €160m.
Further strategic investments completed during the
year including Alaço in Portugal, Toode Group in the
Baltics, MontFrío in Uruguay, HempFlax in Germany,
Provan Group in Belgium and Q-nis in Ireland.
Finally, after a considerable diligence and search
process we have selected a 50 hectare site in Lviv,
Ukraine, which is likely to be the location of our
€250m+ Building Technology Campus over the
next five years or so.
Innovation in Action
LEC (Lower Embodied Carbon), natural materials,
and PowerPanel™ are the priority areas of our
current innovation agenda. During 2023 we
launched several LEC products in QuadCore™,
insulation boards and access floors and this will
be expanded further across the wider product set
in 2024.
Our PowerPanelTM and RooftricityTM solutions are
approaching launch stage and, after extensive
testing and certification, we plan to be on the
market early in the third quarter.
In Data + Flooring, the HAC (Hot Aisle
Containment) solutions we have developed
are advancing well and will require up to four
additional manufacturing facilities across the
globe in the next two years. The first of these
will be in Virginia in the US, where we are well
underway with commissioning, having acquired
a facility last year. During the year, Data + Flooring
also completed the acquisition of Q-nis in Ireland
and Provan in Belgium.
Our ‘natural’ insulation category, branded BioKor®,
advanced materially in 2023 with market entry to
the Hemp insulation segment. This, together with
the acquisition of a controlling stake in Steico, the
world-leader in wood wool, firmly place Kingspan at
the vanguard of this growing category. We believe
that these and further innovations in the pipeline
will form a meaningful part of the Group’s offering
in the future.
Product and System Integrity
By the end of 2023, 59 of our global sites were
certified to ISO 37301, with a plan to have 85
sites certified to this standard by the end of
2024. ISO 37301 is the leading global standard
for establishing, developing and monitoring
compliance systems. Our enhanced product
integrity programme is deeply embedded across the
Group. In 2023 alone, 109 of our global sites were
audited by the Group Compliance and Certification
Team. In addition, 480 third party external products
and system audits took place throughout 2023.
34 Kingspan Group plc Annual Report & Financial Statements 2023
Chief Executive’s Review Business & Strategic Report 35
Planet Passionate TargetsTarget YearUnderlying Business1Whole Business2202020222023202020222023 CARBON• Net Zero Carbon Manufacturing (scope 1 & 2 GHG emissions3 - tCO2e)2030409,7834243,9544111,977515,8134,5387,5814,5178,6825• 50% reduction in product CO2e intensity from primary supply partners (% reduction)2030-3.243.4-3.243.4• Zero emission company cars6 (annual replacement %)2025116070115869 ENERGY• 60% direct renewable energy (%)203019.534.6438.019.533.7434.1• 20% on-site renewable energy generation (%)20304.97.449.94.97.348.8• Solar PV systems on all wholly owned sites(%)203020.9440.6454.120.9435.249.6CIRCULARITY• Zero company waste to landfill (tonnes)203018,64049,81948,28218,640411,584412,407• Recycle 1 billion PET bottles into our manufacturing processes annually (million bottles)2025573803858573803858• QuadCoreTM products utilising recycled PET (no. of sites)2025138138 WATER• Harvest 100 million litres of rainwater annually (million litres)203020.127.3456.320.127.4456.7• Support 5 ocean clean-up projects (no. of projects)20251341341: Underlying Business includes manufacturing, assembly and R&D sites within the Kingspan Group in 2020 plus all organic growth. 2: Whole Business includes all manufacturing, assembly and R&D sites within the Kingspan Group, including acquisitions that occurred in 2021 through to 30 September 2023. 3: Excluding biogenic emissions. Scope 2 GHG emissions calculated using market-based methodology. 4: Restated figures due to improved data collection, change in calculation methodologies and site disposal.5: GHG emissions were recalculated due to acquisitions that occurred in 2021 through to 30 September 2023.6: Kingspan defines a ‘zero emissions car’ as a vehicle with zero tailpipe emissions. The boundary does not include the energy used to power the vehicle or the embodied emissions from manufacturing.
The Harry M. Cornell Arts &
Entertainment Complex
Missouri, USA
Insulated Panels
KS Series and Optimo®
insulated panels
INSULATED PANELS
2023 was characterised by an extraordinary
mix of market activity globally for insulated
panels, our largest business category. Whilst
volumes were slightly ahead, revenue was
down 9% owing to price deflation from raw
material movements following steep inflation
in the prior year. Margins progressed reflecting
a positive market mix and progression due
to product innovation. Notably, global order
intake volume was ahead of prior year in each
of the last seven months of 2023.
In Europe, France and Benelux were strong
performers, as was Romania and the Balkans
where we continue to grow our presence. Germany
was weak although showed some sequential
volume improvement through the second half. The
Nordics market was weak albeit with more positive
signs towards year end.
In the Americas, the business performed
exceptionally well, largely owing to years of
missionary effort developing the right sector
exposure and ongoing penetration growth of
advanced building systems in North America and
LATAM. Ongoing capacity expansion and product
innovation should support further progress in the
years ahead.
Australia, New Zealand and India were all
ahead year on year and we expect this pattern
to continue with additional capacity coming
on stream. In Vietnam, we plan to commission
our new greenfield manufacturing plant by
mid-year 2024.
Globally, QuadCore™ sales were ahead by 7% and
now represent 18% of category volume.
Project Noorderwinkels
Nagele, The Netherlands
Insulation
TEK Building System
INSULATION
It was a challenging year for the insulation
category as many newbuild residential
markets were under considerable pressure
coupled with deflation led by input prices.
That said, the overall business performance
was reasonable in that context. Margins
decreased year on year and we fully expect
this to improve in 2024.
Technical insulation, and the district heating
category, was again a strong performer. It is
to be expected that, with the acute need for
alternatives in Europe, the move towards district
heating should continue.
Building insulation across Europe in general
has been tough, albeit more steady in the US.
An appropriate level of realignment of our cost
base has taken place in Europe which leaves the
business on a leaner footing heading into 2024.
New product categories including AlphaCore™,
Optim-R®, acoustic solutions and BioKor® are
experiencing evident market appetite that should
see each of these grow in the years ahead. The
first steps in executing on our previously stated
intention of entering the stonewool segment
came to fruition during the year with the
establishment of an experienced international
leadership team, followed by an agreement
in February 2024 to acquire a stonewool
manufacturing business in Germany from Karl
Bachl Kunststoffverarbeitung GmbH & Co. KG,
which is expected to complete in March 2024.
Turnover
Trading Profit
Trading Margin
€4,722.1m
-9%(1)
2022: €5,181.5m
€573.8m
+5%
2022: €548.7m
12.2%
+160bps
2022: 10.6%
(1) Comprising underlying
-9%, currency -1% and
acquisitions +1%. Like-
for-like volume +1%.
Turnover
Trading Profit
Trading Margin
€1,528.0m
-8%(1)
2022: €1,658.3m
€145.1m
-12%
2022: €165.2m
9.5%
-50bps
2022: 10.0%
(1) Comprising underlying
-9%, currency -1% and
acquisitions +2%.
36 Kingspan Group plc Annual Report & Financial Statements 2023
Chief Executive’s Review Business & Strategic Report 37
MHA Tribal Headquarters
North Dakota, USA
Light, Air + Water
GridSpan™ Polygon Skylight
LIGHT, AIR + WATER
2023 was a positive year for this segment as
trading margins progressed to 8.1%, moving
closer to our goal of exceeding 10%. Much of the
last three years has been focused on integrating
and streamlining many relatively small
acquisitions, and in the process, developing a
highly effective regionalised business structure
and product offering. As always, there is more
to do and ongoing opportunity.
In our core markets of Germany, France, Benelux
and North America, revenue was ahead of prior
year, offset somewhat by sluggish activity in
smaller fringe markets. Gross margins were
ahead by over 250bps, some of which flowed
through to the bottom line as we continue to
invest in service and innovation. This augers well
for further margin progress in 2024.
ZIN
Brussels, Belgium
Roofing + Waterproofing
Residek V3; Residek P VD;
Residek TOP SLS FR WW
ROOFING + WATERPROOFING
Similar to the ambition we set out for Light
+ Air five years ago, we are now firmly on a
path in the Roofing + Waterproofing segment
to develop a global presence covering
multiple technologies and combinations.
With annual revenue now touching €500m,
the concentration to date has been in Europe
where further strategic advances are planned
for the current year.
Our North American presence in this segment is
currently embryonic, although the ambition to
scale impactfully is clear. We have ring-fenced
€750m of capital over the next five years, through
organic and bolt-on acquisition activity, targeting
a 15% share of the relevant flat roofing market
over time, at a 15% return on sales. This will require
at least three combined roofing and insulation
facilities across the market and an executive team
has now been assigned to execute this plan.
Turnover
Trading Profit
Trading Margin
€967.4m
-2%(1)
2022: €987.8m
€78.7m
+16%
2022: €67.7m
8.1%
+120bps
2022: 6.9%
(1) Comprising underlying
-1% and currency -1%.
Turnover
Trading Profit
Trading Margin
€493.4m
+222%(1)
2022: €153.2m
€28.1m
+231%
2022: €8.5m
5.7%
+20bps
2022: 5.5%
(1) Comprising underlying
-10%, currency -5%
and acquisitions +237%.
38 Kingspan Group plc Annual Report & Financial Statements 2023
Chief Executive’s Review Business & Strategic Report 39
Frisco Public Library
Texas, USA
Data + Flooring
STONEWORKS panels;
ConCore 1250
DATA + FLOORING
2023 was a significant year of progress for
this segment, and marked a shift in the scale
of opportunity for Kingspan in this space.
Sales for the year were ahead by 5% although
order intake is significantly up on that number
and we expect that to accelerate in 2024 and
subsequent years.
As a result of this anticipated step-change in
demand from the global leaders in data centres,
we plan at least three new manufacturing facilities
over the next two years, beginning in the US and
Australia in 2024. It is conceivable that divisional
revenue will approach €1bn within the next five
years or so.
Turnover
Trading Profit
Trading Margin
€379.7m
+5%(1)
2022: €360.1m
€51.2m
+19%
2022: €43.1m
13.5%
+150bps
2022: 12.0%
(1) Comprising underlying
+6%, currency -3% and
acquisitions +2%.
LOOKING AHEAD
In the current environment it is difficult
to predict what is in store near term with
opportunities and challenges in equal measure.
The performance of the business is varied
across different geographies and sectors, a
theme we have referred to consistently over
the past year or so.
It is still very much early days in the current
financial year, although seasonal factors have
hampered early progress in some markets. Our
balance sheet is robust and this coupled with a
strong development pipeline, purposeful strategy
and innovation agenda ought to place us positively
in the year ahead.
The combination of a resolute focus on our
distinctive Planet Passionate strategy, strong
structural demand for energy efficiency, ever
increasing and obvious impacts of climate change
and the diversified nature of our end markets all
position Kingspan favourably for the long term.
Gene Murtagh
Chief Executive Officer
20 February 2024
40 Kingspan Group plc Annual Report & Financial Statements 2023
Chief Executive’s Review Business & Strategic Report 41
FINANCIAL REVIEW
Geoff Doherty
The Financial Review provides an overview
of the Group’s financial performance for the
year ended 31 December 2023 and of the
Group’s financial position at that date.
Overview of result
Group revenue decreased by 3% to €8.1bn (2022: €8.3bn) and trading
profit increased by 5% to €876.9m (2022: €833.2m) with an increase
of 80 basis points in the Group’s trading profit margin to 10.8% (2022:
10.0%). Basic EPS for the year was 352.3 cent (2022: 329.5 cent),
representing an increase of 7%.
The Group’s underlying sales and trading profit growth by division are
set out below:
Sales
Underlying Currency Acquisition
Total
Insulated Panels
Insulation
Light, Air + Water
Roofing +
Waterproofing
Data + Flooring
Group
-9%
-9%
-1%
-10%
+6%
-7%
-1%
-1%
-1%
-5%
-3%
-1%
+1%
+2%
-
-9%
-8%
-2%
+237%
+222%
+2%
+5%
+5%
-3%
The Group’s trading profit measure is earnings before interest, tax,
amortisation of intangibles and non trading item:
Trading Profit
Underlying Currency Acquisition
Insulated Panels
Insulation
Light, Air + Water
Roofing +
Waterproofing
Data + Flooring
Group
+6%
-13%
+18%
+10%
+21%
+3%
-2%
-1%
-2%
-8%
-4%
-2%
Total
+5%
-12%
+16%
+1%
+2%
-
+229%
+231%
+2%
+4%
+19%
+5%
The Valley Amsterdam
Planet: Kingspan’s structured
glass and glass fin systems
allow natural light into the
building and provide the base
for garden ponds.
People: The Valley is a mixed
use development, aiming
to bring a social dimension
back to a traditionally office
environment.
42 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Review Business & Strategic Report 43
The key drivers of sales and trading profit performance in each division
are set out in the Business Review.
Finance costs (net)
Net finance costs for the year increased by €3.3m
to €41.0m (2022: €37.7m). The Group’s net interest
expense on borrowings (bank and loan notes net
of interest receivable) was €37.3m (2022: €32.9m).
This increase in net interest expense reflects higher
interest rates paid on new debt issued in 2023,
which is mostly offset by higher interest received
on cash. Lease interest of €6.0m (2022: €4.7m)
was recorded for the year. €1.2m (2022: €0.1m)
was recorded in respect of a non-cash finance
charge on the Group’s defined benefit pension
schemes. Dividend income of €3.5m (2022: €nil)
was received in respect of the Group’s investment
in Nordic Waterproofing.
Dividends
The Board has proposed a final dividend of 26.6
cent (2022: 23.8 cent) per ordinary share payable
on 20 May 2024 to shareholders registered on the
record date of 12 April 2024. An interim dividend of
26.3 cent per ordinary share was declared during
the year (2022: 25.6 cent). In summary, therefore,
the total dividend for 2023 is 52.9 cent compared
to 49.4 cent for 2022. This payout is in line with our
shareholder returns policy.
Retirement benefits
The primary method of pension provision
for current employees is by way of defined
contribution arrangements. The Group has
three legacy defined benefit schemes in the UK
which are closed to new members and to future
accrual. The total pension contributions to these
schemes for the year amounted to €0.8m (2022:
€1.8m) and the expected contributions for 2024
are €0.3m. In addition, the Group has a number
of smaller defined benefit pension liabilities in
Mainland Europe. The net pension liability in
respect of all defined benefit schemes was €37.0m
as at 31 December 2023 (2022: €49.5m) with the
decrease reflecting, primarily, an increase in the
value of scheme assets during the year partially
offset by actuarial losses on scheme liabilities. The
Group cash-settled a pension buy-in arrangement
in respect of a legacy defined benefit scheme in
the year for €15.9m.
Intangible assets and goodwill
Intangible assets and goodwill increased during
the year by €161.7m to €2,849.0m (2022:
€2,687.3m). Intangible assets and goodwill of
€200.8m (2022: €708.9m) were recorded in the
year relating to acquisitions completed by the
Group. A decrease of €3.4m (2022: increase of
€9.0m) arose due to year end exchange rates
used to translate intangible assets and goodwill
other than those denominated in euro. An
increase of €6.0m (2022: €nil) was recorded
relating to the purchase of intangible assets.
There was an annual amortisation charge of
€41.7m (2022: €32.4m).
Financial key performance indicators
The Group has a set of financial key performance
indicators (KPIs) which are presented in the
table below. These KPIs are used to measure the
financial and operational performance of the
Group and to track ongoing progress in achieving
medium and long term targets to maximise
shareholder return.
Key performance
indicators
Basic EPS growth
Sales performance
Trading margin
Free cashflow (€m)
2023
2022
+7%
-3%
+8%
+28%
10.8% 10.0%
890.8
392.5
Return on capital employed
17.0% 15.9%
Net debt/EBITDA
0.97x
1.62x
(a) Basic EPS growth. The growth in EPS is
accounted for primarily by a 5% increase in
trading profit and a non trading item of €16.5m
in 2022 impacting 2022 basic EPS.
(b) Sales performance of -3% (2022: +28%)
was driven by a 7% decrease in underlying
sales, a 5% contribution from acquisitions and
negative currency translation of 1%. The decrease
in underlying sales reflected, primarily, the pass
through effect of lower raw material pricing year
on year.
(c) Trading margin by division is set out below:
Insulated Panels
Insulation
Roofing + Waterproofing
Light, Air + Water
Data + Flooring
2023
2022
12.2% 10.6%
9.5% 10.0%
5.7%
8.1%
5.5%
6.9%
13.5% 12.0%
The Insulated Panels division trading margin
increased year on year reflecting the market
mix of sales and inventory cost dynamics. The
trading margin decrease in the Insulation division
reflects, in the main, negative operating leverage
associated with year on year volume declines
and the category mix of sales. The Roofing
+ Waterproofing trading margin is broadly
consistent year on year and margin progression
is anticipated for 2024. The increased trading
margin in Light, Air + Water reflects activity
growth, investment in specification and other
processes as the division continues to scale up.
The increased trading margin in Data + Flooring
reflects volume growth and associated operating
leverage.
covenant of 3.5x in both 2023 and 2022. The
calculation is pre-IFRS 16 in accordance with the
Group’s banking covenants.
(d) Free cashflow is an important indicator and
reflects the amount of internally generated capital
available for re-investment in the business or for
distribution to shareholders.
Free cashflow
EBITDA*
Lease payments
Movement in working
capital**
2023
€m
2022
€m
1,067.8
998.3
(60.5)
(50.6)
298.1
(136.2)
Movement in provisions
(2.6)
7.7
Net capital expenditure
(233.5)
(250.6)
Defined benefit pension
scheme buy in settlement
(15.9)
-
Net finance costs paid
(36.3)
(31.9)
Income taxes paid
(147.5)
(158.4)
Other including non-cash
items
21.2
14.2
Free cashflow
890.8
392.5
* Earnings before finance costs, income taxes,
depreciation, amortisation and non trading item
** Excludes working capital on acquisition but includes
working capital movements since that point
Working capital at year end was €872.2m (2022:
€1,195.9m) and represents 11.3% (2022: 14.5%) of
annualised sales based on fourth quarter sales.
This metric is closely managed and monitored
throughout the year and is subject to a certain
amount of seasonal variability associated with
trading patterns and the timing of significant
purchases of steel and chemicals. The December
2022 working capital position was relatively high
reflecting higher than normal inventory levels
and these were reduced to more typical levels
during 2023. This was the key driver of the reduced
working capital to sales ratio.
(e) Return on capital employed, calculated
as operating profit divided by total equity plus
net debt, was 17.0% in 2023 (2022: 15.9%). The
increase year on year reflects the 80bps increase in
trading margin and structural reduction in working
capital. The creation of shareholder value through
the delivery of long term returns well in excess of
the Group’s cost of capital is a core principle of
Kingspan’s financial strategy.
(f) Net debt to EBITDA measures the ratio of
net debt to earnings and at 0.97x (2022: 1.62x)
is comfortably less than the Group’s banking
Acquisitions
The Group spent €248.4m on acquisitions during
the year as follows:
In April 2023, the Group acquired 100% of the
share capital of CaPlast, enhancing our Roofing
+ Waterproofing underlayment and vapour
control offerings in the DACH region. The total
consideration, including net debt acquired
amounted to €86.9m.
The Group also made a number of smaller
acquisitions during the year for a combined cash
consideration of €139.3m:
• The Insulated Panels division acquired 100%
of the share capital of Alaço in Portugal in
January 2023, 100% of the share capital of
LRM in France in May 2023, 51% of the share
capital of MontFrio in Uruguay in June 2023
and 100% of the share capital of Toode Group
in the Baltics in September 2023.
•
In June 2023, the Insulation division acquired
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 acquired 70% of
Q-nis in Ireland during September 2023 and
100% of the share capital of Provan Group in
Belgium in November 2023.
• Payment of deferred contingent consideration
of €6.6m on acquisitions made in previous
years.
In September 2023, the Group acquired an
additional 6.8% in Nordic Waterproofing Holding
AB for a consideration of €22.2m. This increased
the Group’s holding to 30.9% and triggered a
mandatory offer to the remaining shareholders.
EU Taxonomy and TCFD
Climate related disclosures are required under
the EU Taxonomy Regulation (Sustainable
finance taxonomy - Regulation (EU) 2020/852)
and by the Task Force on Climate-related
Financial Disclosures (TCFD). The disclosures
will be included in our 2023 Planet Passionate
Sustainability Report that will be published at a
later date within the required timeframe.
Non trading item
The Group recorded a non trading charge of €nil
(2022: €16.5m) in the year. The charge in the prior
year was incurred on the Group’s net loss on the
complete divestment of its Russian operations.
44 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Review Business & Strategic Report 45
Capital structure and Group financing
The Group funds itself through a combination
of equity and debt. Debt is funded through a
combination of syndicated bank facilities and
private placement loan notes. The principal
syndicated facility is a green revolving credit
facility of €800m entered into in May 2021 with
a committed term to May 2026. There were no
drawings on this facility at period end.
private placement loan notes as of 31 December
2023 was 5 years (2022: 5.7 years).
During the period, the Group repaid part (€500m)
of a 2022 acquisition related financing facility, with
the remainder of the facility fully drawn.
The weighted average maturity of all drawn debt
facilities is 4.4 years ( 2022: 4.1 years).
In addition, as part of the Group’s longer-term
capital structure, the Group has total private
placement loan notes of €1,592m (2022: €1,322m)
which includes a new private placement issuance
of €319m in June 2023 with a 6 year maturity.
The weighted average maturity of all outstanding
As well as ongoing free cashflow generation, the
Group has significant available undrawn facilities
and cash which provide appropriate headroom
for operational requirements and development
funding. Total available headroom was €1,874m at
31 December 2023 (2022: €1,450m).
Net debt
Net debt decreased by €560.1m during 2023 to €979.5m (2022: €1,539.6m). This is analysed in the
table below:
Movement in net debt
Free cashflow
Acquisitions and divestments
Purchase of financial asset
Deferred consideration paid
Transactions involving non-controlling interests
Repurchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Cashflow movement
Exchange movements on translation
Movement in net debt
Net debt at start of year
Net debt at end of year
2023
€m
890.8
(219.6)
(22.2)
(6.6)
1.0
(0.7)
(91.2)
(0.9)
550.6
9.5
560.1
(1,539.6)
2022
€m
392.5
(893.4)
(113.3)
(45.4)
(2.0)
(1.4)
(93.7)
(3.5)
(760.2)
(23.3)
(783.5)
(756.1)
(979.5)
(1,539.6)
Key financial covenants
The majority of Group borrowings are subject to primary financial covenants calculated in accordance
with lenders’ facility agreements which exclude the impact of IFRS 16:
• A maximum net debt to EBITDA ratio of 3.5 times; and
• A minimum EBITDA to net interest coverage
of 4 times.
The performance against these covenants in the current and comparative year is set out below:
Net debt/EBITDA
EBITDA/Net interest
Covenant
Maximum 3.5
Minimum 4.0
2023
Times
0.97
27.0
2022
Times
1.62
28.7
Investor relations
Kingspan is committed to interacting with the
international financial community to ensure a full
understanding of the Group’s strategic plans and
its performance against these plans. During the
year, the executive management and investor team
hosted a Capital Markets Day at our Light, Air +
Water facility in Lyon, conducted 818 institutional
one-on-one and group meetings, including
presenting at 14 capital market conferences.
Financial risk management
The Group operates a centralised treasury function
governed by a treasury policy approved by the
Group Board. This policy primarily covers foreign
exchange risk, credit risk, liquidity risk and interest
rate risk. The principal objective of the policy is
to minimise financial risk at reasonable cost.
Adherence to the policy is monitored by the CFO
and the Internal Audit & Compliance function. The
Group does not engage in speculative trading of
derivatives or related financial instruments.
Share price and market capitalisation
The Company’s shares traded in the range of
€50.70 to €82.62 during the year. The share
price at 29 December 2023 was €78.40 (30
December 2022: €50.58) giving a market
capitalisation at that date of €14.3bn (2022:
€9.2bn). Total shareholder return for 2023 was
+56.2% (2022: -51.5%).
On behalf of the Board
Geoff Doherty
Chief Financial Officer
20 February 2024
46 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Review Business & Strategic Report 47
RISK & RISK
MANAGEMENT
As a leading building
products manufacturer
in a highly competitive
international environment,
Kingspan is exposed to
a variety of risks and
uncertainties which are
monitored and controlled
by the Group’s internal risk
management framework.
Gilbert Place at Virginia Tech
Virginia, USA
Insulated Panels
QuadCoreTM, Designwall 2000 and
Designwall 4000 insulated panels
Overall responsibility for risk management lies with
the Board who ensure that risk awareness is set at
an appropriate level. To ensure that risk awareness
is set at an appropriate level, the Audit &
Compliance Committee assist the Board by taking
delegated responsibility for risk identification and
assessment, in addition to reviewing the Group’s
risk management and internal control systems and
making recommendations to the Board thereon.
The chairman of the Audit & Compliance
Committee reports to the Board at each board
meeting on its activities, both for audit matters
and risk management. The activities of the Audit &
Compliance Committee are set out in detail in the
Report of the Audit & Compliance Committee.
focus of each division’s monthly management
meeting, where divisional business performance is
also assessed against budget, forecast and prior
year. Key performance indicators are also used
to benchmark operational performance for all
manufacturing sites.
In addition to this ongoing assessment of risk
within the divisions, the Audit & Compliance
Committee oversees an annual risk assessment for
the Group whereby each divisional management
team is formally asked to prepare a detailed risk
assessment for their business. This assessment
involves evaluating group-wide risks, as put
forward by the Board, and presenting additional
risks that are specific to their business.
The Board monitors the Group’s risk management
systems through its consultation with the Audit
& Compliance Committee but also through
the Group’s divisional monthly management
meetings, where at least two executive directors
are present. Business risks and trends are the
While it is acknowledged that the Group faces a
variety of risks, the Board, through the processes
set out above, has identified the following
principal risks and uncertainties that could
potentially impact upon the Group’s short- to
medium-term strategic goals:
Boardman Fire Rescue
Station 81
Oregon, USA
Light, Air + Water
UniQuad® Polycarbonate
Wall System
48 Kingspan Group plc Annual Report & Financial Statements 2023
Risk & Risk Management Business & Strategic Report 49
Innovation
Global
Planet Passionate
Completing the Envelope
Innovation
Global
Planet Passionate
Completing the Envelope
VOLATILITY IN THE MACRO ENVIRONMENT
Risk and impact
Actions to mitigate
The exposure to cyclicality or downturn of any one construction market
is partially mitigated by the Group’s geographic diversification, by end
application and by product.
As set out in the Business Model & Strategy, the Group has mitigated this risk
through diversification as follows:
• an established globalisation strategy resulting in 224 global
manufacturing sites and a commercial presence in more than 80
countries;
•
the launch of new innovative products and an approach of continual
improvements to existing product lines; and
• acquisitions made during the year enhance the geographic and product
diversification of the Group.
Kingspan products are targeted
at both the residential and non-
residential (including industrial, retail,
commercial, public sector and office)
construction sectors. As a result,
demand is dependent on activity levels
which may vary by geographic market
and is subject to the usual drivers
of construction activity (i.e. general
economic conditions and volatility,
pandemics, political uncertainty and
wars in some regions, interest rates,
business/consumer confidence levels,
supply chain disruption, unemployment
and population growth).
While construction markets are
inherently cyclical, changing building
and environmental regulations continue
to act as an underlying positive
structural trend in demand for many
of the Group’s products.
PRODUCT FAILURE
Risk and impact
A key risk to the Kingspan business is
the potential for functional failure of
our products which could lead to health,
safety, and security issues for both our
people and our customers.
The Kingspan brands are well
established and are a key element
of the Group’s overall marketing and
positioning strategy. In the event of a
product failure, the Kingspan brands
could be damaged and if so, this could
lead to a loss of market share and other
adverse consequences.
808 Memorial Drive
Massachusetts, USA
Insulated Panels
Optimo® insulated panels
Actions to mitigate
Dedicated structures and processes are in place to manage and monitor
product quality controls throughout the business:
• New products go through rigorous internal testing at the Group’s Global
Innovation Centre, IKON, and industry leading Kingspan Fire Engineering
Research Centre before proceeding to a certification process which is
undertaken by internationally recognised and independent authorities
before being brought to market.
• The Group Head of Compliance & Certification, reporting to the Group
CEO, ensures a rigorous approach to certification, testing and product
compliance across the Group and ensures consistent and robust
application of processes centred around our core commitment to product
safety. The Group Product Compliance Team completed the audit of 109
manufacturing sites in 2023.
• A Group Marketing Integrity Manual (MIM) has been designed to
incorporate the Group Code of Conduct as well as the Code for
Construction Product Information. The MIM establishes a compliance
framework for product marketing materials and websites. Compliance
with the MIM is subject to audit by the Group Internal Audit function
under a dedicated audit programme.
• The Group’s Product Compliance function has been accredited to
the leading independent standard in compliance, ISO 37301. 59
manufacturing sites are already certified to ISO 37301 with a plan to have
85 sites certified to this standard by the end of 2024.
• Quality management is a key factor in ensuring long-term product
performance. ISO 9001 is a globally recognised standard for quality
management. 144 of Kingspan’s manufacturing sites are accredited to
ISO 9001.
• The terms of reference for the Audit & Compliance Committee include
oversight of the product compliance agenda.
• Our businesses employ quality control specialists and operate strict
policies to ensure consistently high standards are maintained in addition
to the sourcing and handling of raw materials.
• Effective training is delivered to our employees.
• Proactive monitoring of the public policy, regulatory and legislative
environment.
50 Kingspan Group plc Annual Report & Financial Statements 2023
Risk & Risk Management Business & Strategic Report 51
Innovation
Global
Planet Passionate
Completing the Envelope
Innovation
Global
Planet Passionate
Completing the Envelope
FAILURE TO INNOVATE
Risk and impact
Actions to mitigate
Failing to successfully manage and
compete with new product innovations,
changing market trends and consumer
tastes could have an adverse effect on
Kingspan’s market share, future growth
and profitability of the business.
Innovation is one of Kingspan’s four strategic pillars to increasing shareholder
value and delivering on our mission to accelerate a net zero emissions future-
built environment.
• There is a continual review of each division’s product portfolios at both
the executive and local management level to ensure that they target
current and future opportunities for profitable growth.
• The Head of Innovation and CEO host a bi-monthly executive innovation
forum where key product developments and opportunities are discussed
and innovation strategies are updated.
• The Group’s innovation strategy is intertwined with its Planet Passionate
sustainability strategy. Ambitious Planet Passionate goals require the
Group to invest in expanding its existing range of sustainable building
products and establish market leading supply chains for sustainable raw
materials.
• This risk is further mitigated by continuing innovation and compelling
marketing programmes. The launch of the IKON Global Innovation Centre
in 2019 has served to enhance the capabilities of the Group to innovate.
• The Kingspan Fire Engineering Research Centre enables large scale fire
testing to industry regulation standards thereby accelerating the pace of
innovation and certification on the path to commercialisation.
• Kingspan also has a deep understanding of changing consumer
and industry dynamics in its key markets and continues to refine its
omnichannel customer centric approach, enabling management to
respond appropriately to issues which may impact business performance.
• Kingspan has multiple touch points with our customers, engaging directly
on projects, attending trade shows and industry events and through our
Net Promoter Score surveys. Insights from these touch points directly
inform innovation in our products and in our service.
CLIMATE CHANGE
Risk and impact
Kingspan’s products provide a
solution to help mitigate climate
change, particularly with respect
to reducing carbon emissions in the
built environment. Climate change is
therefore both an opportunity and a risk
for Kingspan.
Climate risks within our business include
regulatory changes, substitution risk
should we fail to maintain our market
leading offering, rising energy or carbon
prices within our own operations or in
our supply chain and physical risk to our
operations or those of our suppliers.
Actions to mitigate
Transforming building and construction is an important element of
addressing the climate crisis as they represent approximately 37% of energy-
related carbon emissions. Kingspan is uniquely placed to help support the
decarbonisation of the building sector via our extensive offering of high-
performance, energy saving systems and solutions.
Risks relating to climate change are managed through a multi-disciplinary,
and company-wide, risk management process.
Examples of how climate change risks are mitigated include:
Planet Passionate
• Following the successful completion of our Net Zero Energy programme
(our programme that focused on reducing energy consumption and
increasing renewable energy use where possible), Kingspan launched
the next stage of our sustainability journey in 2020, our 10-year Planet
Passionate programme, which includes 11 ambitious targets in the areas
of Carbon, Energy, Circularity and Water. This strategic agenda will
enable significant advances in the sustainability of both our business
operations and our products.
• A core facet of our Planet Passionate programme is to reduce carbon
emissions within our value chain. To this end, we have been working
with new and existing suppliers on innovative raw materials, with
lower embodied carbon and higher recycled content, leading to lower
embodied carbon (LEC) products across our portfolio.
Innovation
• Our innovation agenda is inextricably linked with our Planet Passionate
programme, helping us to drive market leading products in the areas
of carbon savings and sustainability. Innovation is supported through
ongoing investments such as the opening of IKON in 2019.
•
•
In 2023, our insulation products sold globally are estimated to save 164
million tonnes of CO2e over their lifetime. In addition, we estimate 41.3
billion litres of rainwater will be harvested over the lifetime of the tanks
we produced and we recycled 858 million waste plastic bottles into our
manufacturing processes.
In addition to internal innovation, Kingspan observes the market for
inventive or alternate materials which can add value to our ambition to
offer the full spectrum of energy efficient building envelope solutions,
such as our investments in hemp and wood wool insulations.
Digitalisation
• Digital adoption is a key factor to enabling more efficiency and
sustainability in the manufacture, delivery, construction and operations
of the built environment.
• Enhanced digitalised processes for customer engagement provide faster
and deeper insight into the sustainability demands of our customers.
Global Presence
Kingspan operates out of 224 manufacturing sites across the globe,
diversifying our physical risk from climate change. We have also developed
relationships with a wide range of global supply partners to limit the reliance
on any one supplier or even a small number of suppliers.
52 Kingspan Group plc Annual Report & Financial Statements 2023
Risk & Risk Management Business & Strategic Report 53
Innovation
Global
Planet Passionate
Completing the Envelope
Innovation
Global
Planet Passionate
Completing the Envelope
BUSINESS INTERRUPTION (INCLUDING IT CONTINUITY)
Risk and impact
Actions to mitigate
Kingspan’s performance is dependent
on the availability and quality of its
physical infrastructure, its proprietary
technology, its raw material supply
chain and its information technology.
The safe and continued operation of
such systems and assets are threatened
by natural and man-made perils and
are affected by the level of investment
available to improve them.
Any significant or prolonged restriction
to its physical infrastructure, the
necessary raw materials or its IT systems
and infrastructure could have an
adverse effect on Kingspan’s business
performance.
• Kingspan insists on industry leading operational processes and procedures
to ensure effective management of each facility. The Group invests
significantly in a rigorous programme of preventative maintenance on all
key manufacturing lines to mitigate the risk of production line stoppages.
• With 224 manufacturing sites globally, the impact of production line
stoppages is also mitigated by having business continuity plans in place
to allow for the transfer of significant production volume to another plant
in the event of a shutdown.
•
In addition, and as part of our Property Damage & Business Interruption
(PDBI) insurance, Kingspan is subject to regular reviews of its
manufacturing sites by external risk management experts, with these
reviews being aimed at optimising Kingspan’s risk profile.
• Kingspan continues to focus on developing, enhancing and protecting
its intellectual property (IP) portfolio. As a global leader in building
envelope solutions, Kingspan considers its IP security to be paramount. In
addition to trade secret policies and procedures, Kingspan has developed
appropriate IP strategies to protect and defend against infringements.
• To reduce Kingspan’s exposure to raw material supply chain issues,
Kingspan retains strong relationships with a wide range of raw material
suppliers to limit the reliance on any one supplier or even a small number
of global suppliers.
• Kingspan’s IT infrastructure is constantly reviewed and updated to
meet the needs of the Group. Procedures have been established for the
protection of this infrastructure and all other IT related assets. These
include the development of IT specific business continuity plans, IT
disaster recovery plans and back-up delivery systems, to reduce business
disruption in the event of a major technology failure.
CREDIT RISKS AND CREDIT CONTROL
Risk and impact
Actions to mitigate
As part of the overall service package,
Kingspan provides credit to customers
and as a result there is an associated
risk that the customer may not be able
to pay outstanding balances.
At the year end, the Group was carrying
a receivables book of €1,051.8m (2022:
€1,136.8m) expressed net of provision
for default in payment. This represents
a net risk of 13% (2022: 14%) of sales.
Of these net receivables, approximately
60% (2022: 60%) were covered by credit
insurance or other forms of collateral
such as letters of credit and bank
guarantees.
• Each business unit has rigorous procedures and credit control functions
for managing its receivables and takes appropriate action when
necessary.
• Trade receivables are primarily managed through strong credit control
functions supplemented by credit insurance to the extent that it is
available. All major outstanding and overdue balances together with
significant potential exposures are reviewed regularly and concerns are
discussed at monthly meetings at which the Group’s executive directors
are present.
• Control systems are in place to ensure that credit authorisation requests
are supported with appropriate and sufficient documentation and are
approved at appropriate levels in the organisation.
TALENT DEVELOPMENT AND RETENTION
Risk and impact
Actions to mitigate
The success of Kingspan is built
upon effective management teams
committed to achieving a superior
performance in each division. Failure to
attract, retain or develop these teams
could have an impact on business
performance.
• Kingspan is committed to ensuring that the necessary policies are in
place to attract, develop and retain the skill levels needed to achieve
the Group’s strategic goals. These policies are underpinned by strong
recruitment processes, succession planning, remuneration reviews,
including both short- and long-term incentive plans and targeted career
development programmes.
• Kingspan’s People Passionate programme is a strategic framework
for attracting, retaining and developing talent within Kingspan. The
programme is sponsored by the Group CEO and senior leadership team.
The People Passionate programme enshrines all the key aspects of talent
development and engagement:
- health, safety and wellbeing;
- recruitment;
- onboarding;
- performance and reward;
- training and development;
- leadership development;
- career planning and progression;
- engagement and communication; and
- people and organisational policies.
• Kingspan’s leadership team holds an annual talent forum to review
succession plans, metrics on key positions hired throughout the year
and to forecast future talent gaps as part of our human capital risk
assessment.
• Kingspan’s internal career portal provides an open and transparent forum
for Kingspan employees to learn about and apply for career opportunities
across all our businesses worldwide. It has a wealth of information about
the types of roles and skills that are in demand to deliver on our strategic
objectives.
• Kingspan continues to be an attractive employer of choice for young,
talented graduates with over 2,000 applications to our global website for
our 2023 graduate positions.
• Graduates participated in our Yours to Shape development programme
which was in its seventh consecutive year in 2023. The objective of the
programme is to provide new graduates with a network to collaborate
across the Group and develop the capabilities to drive their careers in
Kingspan. It spans 12 months of interactive workshops, peer coaching,
masterclasses with senior executives and assignments on the Promote
e-learning platform.
• PEAK (Programme for Executive Acceleration in Kingspan) was launched
in 2018 and is targeted at middle to senior managers who are currently,
or will soon commence managing a team. It aims to increase leadership
diversity by deepening and widening the pool of potential senior leaders
to match the increasing scale and global nature of the business.
• An Advanced Management Programme was launched in 2021 in
partnership with INSEAD’s executive business school in France. This
programme supports Kingspan’s senior leaders to engage with enterprise
level goals in a more collaborative way while transforming their leadership
capabilities to drive significant long-term growth.
54 Kingspan Group plc Annual Report & Financial Statements 2023
Risk & Risk Management Business & Strategic Report 55
Innovation
Global
Planet Passionate
Completing the Envelope
FRAUD AND CYBERCRIME
Risk and impact
Actions to mitigate
Kingspan is potentially exposed to
fraudulent activity, with particular focus
on the Group’s online banking systems,
online payment procedures and
unauthorised access to internal systems.
• The Group issues extensive guidance and policies, which include critical
process and control policies for the mitigation of fraud risk and they must
be effectively adopted by all Group businesses.
• The Group internal audit programme includes rigorous tests of financial
controls and general IT controls to ensure they align with Group policies
that mitigate fraud risk.
• All fraud and cyber crime attempts, successful and unsuccessful, are
reported to the Audit & Compliance Committee.
• The Group’s cyber strategy is designed by a multi-discipline Group IT
function with support from external advisors and our Group Head of
Cyber Security. The Group Head of Cyber Security is responsible for
owning and executing the Group’s cyber security strategy to ensure
critical assets and technologies are protected against cyber risk.
• The Group’s Cyber Security Roadmap sets out the phased milestones for
the implementation of enhanced cyber risk policies and projects over a
period of 30 months to enhance the Group’s security posture.
• Proactive cyber security services are in place which provide global 24/7
critical security services that include managed threat protection (Security
Information and Event Management – SIEM), managed detection and
incident response services, including access to trusted and experienced
cyber security advisors.
• The Group Internal Audit & Compliance function perform cyber audits
with dedicated audit programmes in addition to separate audits of IT
general controls. Findings of cyber audits are reported to the Audit &
Compliance Committee and form the basis for enhanced IT policies.
• Mandatory implementation of multi-factor authentication (MFA) on all
internet facing and business critical services group-wide.
• High frequency phishing tests performed globally.
• The Group’s corporate assets can be swiftly ‘auto-contained’ in the event
of a significant cyber security incident to limit the business impact.
ACQUISITION AND INTEGRATION OF NEW BUSINESSES
Risk and impact
Actions to mitigate
Acquisitive growth is an important
element of Kingspan’s development
strategy. A failure to execute and
properly integrate significant
acquisitions and capitalise on the
potential synergies they bring may
adversely affect the Group.
• All potential acquisitions are rigorously assessed and evaluated, both
internally and by external advisors, to ensure any potential acquisition
meets Kingspan’s strategic and financial criteria.
• This process is underpinned by extensive integration procedures and the
close monitoring of performance post acquisition by both divisional and
Group management.
• New acquisitions are categorised as higher risk from a financial controls,
IT general controls and product compliance perspective and are therefore
subject to greater internal audit focus in the initial 12 month period post
acquisition.
• Kingspan’s global management team has extensive experience in the
successful integration of acquired businesses, which it leverages for
onboarding new acquisitions.
HEALTH AND SAFETY
Risk and impact
The nature of Kingspan’s operations
can expose its contractors, customers,
suppliers and other individuals to
potential health and safety risks.
Health and safety incidents can lead to
loss of life or severe injuries.
Actions to mitigate
• A robust health and safety framework is in place throughout the Group’s
operations requiring all employees to complete formal health and safety
training on a regular basis.
•
ISO 45001 is an internationally-recognised framework for managing
occupational health and safety risks. 111 of Kingspan’s manufacturing
sites are accredited to ISO 45001.
• The Group monitors the performance of its health and safety framework
and takes immediate and decisive action where non-adherence is
identified.
• The development of a strong safety culture is driven by management
and employees at every level and is a core part of doing business with
integrity.
LAWS AND REGULATIONS
Risk and impact
Actions to mitigate
Kingspan is subject to a broad range
of existing and evolving governance
requirements, environmental, health
and safety and other laws, regulations
and standards which affect the way
the Group operates. Non-compliance
can lead to potential legal liabilities and
curtail the development of the Group.
• Kingspan’s in-house legal team is responsible for monitoring changes to
laws and regulations that affect the business and is supported by external
advisors. Issued policies include, but are not limited to, the following:
- Sanctions Compliance Policy;
- Anti-Fraud, Bribery and Corruption Policy;
- Competition Law Compliance Policy;
- Supplier Policy;
- Environmental Policy;
- Directors’ Guidance Policy; and
- Human Rights Policy.
• The Group’s publicly available Code of Conduct sets out the fundamental
principles which it requires all its directors, officers and employees to
adhere to in order to meet those standards.
• Training is provided through a variety of mediums in key areas of legal
and regulatory compliance, including a suite of mandatory training for
those that join Kingspan.
• A robust whistleblowing process is in place that allows anonymous
reporting, through an independent hotline of any suspected wrongdoing
or unethical behaviour, including reporting instances of non-compliance
with laws and regulations. All reported cases are investigated and
findings reported to the Audit & Compliance Committee.
56 Kingspan Group plc Annual Report & Financial Statements 2023
Risk & Risk Management Business & Strategic Report 57
SUSTAINABILITY REPORT
Eden
Salford, UK
Insulated Panels
Steel Frame System
Kingspan’s Mission
To accelerate a net zero emissions future-
built environment with the wellbeing of
people and planet at its heart. We do
this through enabling high-performance
buildings via our systems and solutions
that help to save more energy, carbon
and water.
We recognise the vital importance of achieving this while:
• enhancing the safety and wellbeing of people
in buildings;
• supporting the transition to a circular
economy; and
• always delivering more performance and value.
We believe the answers lie in challenging building industry
traditions with innovation in advanced materials and digital
technologies. We are defined by our relentless pursuit for
better building performance whilst being Planet Passionate in
everything we do. Our commitment to sustainability is instilled
throughout our business.
In developing our approach to sustainability we worked with
an external consultant to conduct a thorough materiality
assessment across all of the key sustainability pillars. We are
in the process of refining the results of this assessment and
integrating the findings into our sustainability planning.
Kingspan recognises that it has a responsibility as a business
leader to contribute towards the achievement of the United
Nation’s Sustainable Development Goals (SDGs). We will be
publishing our third Kingspan Planet Passionate Sustainability
Report in March 2024 with more detail on how we contribute
to the SDGs.
We are defined by our relentless pursuit
for better building performance whilst
being Planet Passionate in everything we
do. Our commitment to sustainability is
instilled throughout our business.
58 Kingspan Group plc Annual Report & Financial Statements 2023
P
L
A
N
E
T
P
A
S
S
I
O
N
A
T
E
-
s
e
e
p
a
g
e
6
0
P
E
O
P
L
E
P
A
S
S
I
O
N
A
T
E
-
s
e
e
p
a
g
e
6
8
P
R
O
D
U
C
T
P
A
S
S
I
O
N
A
T
E
-
s
e
e
p
a
g
e
6
4
Scope 1+2
GHG Emissions
65%
Since 2020
Sustainability Report Business & Strategic Report 59
PLANET PASSIONATE
Increasingly, our customers want solutions which not
only enable them to preserve resources, but solutions
which are also sourced and manufactured in an
environmentally responsible way.
In December 2019, Kingspan launched the next
phase of our sustainability journey, our Planet
Passionate programme. Through this programme we
are working with our suppliers and throughout our
business to meet our ambitious goals in the areas
of carbon, energy, circularity and water. In an effort
to reduce a key source of carbon in construction,
embodied carbon, we are targeting Net Zero Carbon
Manufacturing by 2030 and a 50% reduction in
carbon intensity from our primary suppliers by 2030.
Our Group Head of Innovation works together with
our Global Head of Sustainability, and our CEO, to
ensure that product development is closely aligned
with our Planet Passionate objectives.
Our Planet Passionate programme is complemented
by our science-based targets to reduce our Scope 1, 2
and 3 emissions aligned to a 1.5°C future.
P
L
A
N
E
T
P
A
S
S
I
O
N
A
T
E
Caption
Location
Section
Product
60 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 61
Planet Passionate TargetsTarget YearUnderlying Business1Whole Business2202020222023202020222023CARBON• Net Zero Carbon Manufacturing (scope 1 & 2 GHG emissions3 - tCO2e)2030409,7834243,9544111,977515,8134,5387,5814,5178,6825• 50% reduction in product CO2e intensity from primary supply partners (% reduction)2030-3.243.4-3.243.4• Zero emission company cars6 (annual replacement %)2025116070115869ENERGY• 60% direct renewable energy (%)203019.534.6438.019.533.7434.1• 20% on-site renewable energy generation (%)20304.97.449.94.97.348.8• Solar PV systems on all wholly owned sites(%)203020.9440.6454.120.9435.249.6CIRCULARITY• Zero company waste to landfill (tonnes)203018,64049,81948,28218,640411,584412,407• Recycle 1 billion PET bottles into our manufacturing processes annually (million bottles)2025573803858573803858• QuadCoreTM products utilising recycled PET (no. of sites)2025138138WATER• Harvest 100 million litres of rainwater annually (million litres)203020.127.3456.320.127.4456.7• Support 5 ocean clean-up projects (no. of projects)2025134134 1: Underlying Business includes manufacturing, assembly and R&D sites within the Kingspan Group in 2020 plus all organic growth. 2: Whole Business includes all manufacturing, assembly and R&D sites within the Kingspan Group, including acquisitions that occurred in 2021 through to 30 September 2023. 3: Excluding biogenic emissions. Scope 2 GHG emissions calculated using market-based methodology.4: Restated figures due to improved data collection, change in calculation methodologies and site disposal. 5: GHG emissions were recalculated due to acquisitions that occurred in 2021 through to 30 September 2023. 6: Kingspan defines a ‘zero emissions car’ as a vehicle with zero tailpipe emissions. The boundary does not include the energy used to power the vehicle or the embodied emissions from manufacturing.
CARBON & ENERGY
Through our Planet Passionate programme, we aim to help enable lower carbon buildings, not only in the
operational phase but also in the upfront and construction phase. 2023 highlights include:
• Product: In 2023, we brought three new lower
embodied carbon (LEC) products to market;
QuadCore LEC ™ insulated panel, RMG600+
and LEC Tate Grid, all of which have reduced
embodied carbon (>15%) across their lifespan
when compared to their equivalent standard
Kingspan product.
• Zero emission cars: To date, we have
installed 573 EV charging points across our
business. In addition, 69% of our annual
replacement cars were zero emissions cars
in 2023.
• Renewable energy use: We made significant
progress with our energy suppliers and in
2023 we have 155 sites with renewable
electricity contracts.
• On-site renewable energy generation: We
deployed 25 new rooftop solar-PV projects
across our business, which added 6.8 MW of
on-site generation capacity, bringing the total
on-site generation capacity to 42.3 MW.
•
Internal carbon charge: From 1 January
2023, we implemented an internal charge of
€70 per tonne for all energy related emissions
(excluding process and biogenic emissions)
across our business. This has helped to
further incentivise the rapid deployment
of decarbonisation projects and support
the achievement of our net zero carbon
manufacturing target.
• Scope 1 & 2 GHG emissions: a 65%
reduction was achieved in 2023 against our
2020 base year. The reduction was achieved
via the implementation of new renewable
energy contracts, deployment of solar PV
systems and reduction in the use of high
GWP blowing agents.
• Scope 3 GHG emissions: A key facet of our
carbon ambition is to reduce our upstream
carbon emissions, particularly as they relate
to our purchased goods and services which,
in 2023, accounted for over 88% of our total
value chain emissions. We have had significant
engagement with our key raw material
suppliers and tracking of their decarbonisation
plans, and in 2023 we had over 40 meetings
on supply chain engagement, including
our third supplier forum hosted in our IKON
innovation centre. We also onboarded a
new Scope 3 GHG emissions calculation and
monitoring system, SWEEP, which will assist
with the continued development of our supply
chain decarbonisation strategy.
P
L
A
N
E
T
P
A
S
S
I
O
N
A
T
E
CIRCULARITY
WATER
Our vision is to deliver solutions to support the
transition to a circular economy within the
construction sector.
• Waste to Landfill: In 2023, we completed
over 20 landfill diversion projects resulting
in over 2,400 tonnes of waste being diverted
from landfill.
• Product: To achieve zero waste to
landfill, our Brazilian business developed
a new product called EcoPIR, using
remanufactured production waste from
scrap PIR insulated panels.
• Recycling: We recycled 63% of our waste
in 2023. Recycling trials are ongoing
to investigate ways in which Kingspan
production waste could be reutilised to
add value to other industries while helping
us divert waste from landfill. In 2023, we
installed a glycolysis chemical recycling
facility in our Winterswijk site. The facility
has the capacity to recycle up to 350 tonnes
of our insulation production waste in its first
year of operation and will produce key raw
materials for our insulation products.
As a manufacturer of solutions to harvest and
recycle water, we recognise the need for future
water security and the protection of our natural
water systems.
•
In 2023, we installed 11 rainwater harvesting
systems across our business, adding 9
million litres to our capacity. In total, we
harvested 56.7 million litres of rainwater
during the year.
• We are delighted to announce our fourth
Ocean Clean Up partnership with 4ocean,
in which we have sponsored a river boom
system - a mechanism placed in waterways
to prevent waste from flowing downstream.
This will be a three-year partnership and
is expected to help remove up to 150,000
pounds of plastic and trash from the Sungai
Yeh Kuning River in the Jembrana region of
Bali, Indonesia. Additionally, our sponsorship
includes supporting three ‘strike missions’
targeted to clean up Florida’s coastline.
62 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 63
In 2023 we had over 40 meetings on
supply chain engagement, including
our third supplier forum hosted in our
IKON innovation centre.
CRRA HQ
North Carolina, USA
Insulated Panels
Dri-Design® wall panels
PRODUCT PASSIONATE
Ultra Energy-Efficient
INTEGRITY OF PRODUCT INFORMATION
FOR THE DIGITAL ERA
Ensuring the safe performance and use of our products is central
to our approach to product development, testing, support
and marketing. At Kingspan we have implemented a global
product compliance and marketing programme that ensures
the accuracy of our product information, operating to the ISO
37301 global compliance standard and underpinned by a culture
of integrity, honesty and compliance with the law. In late 2022,
we introduced a new global Environmental Claims Guide to
ensure that all marketing claims relating to the sustainability
performance of our products are robust and support our group
vision of making a meaningful impact on decarbonisation and
circularity in the built environment. In parallel, we are developing
and delivering a technology backbone for accurate digital
product information that enables project efficiencies and better
design decisions.
PRODUCT COMPLIANCE
Product compliance operates first and foremost to the high
standards set out in our Group Code of Conduct, which has
been rolled out to all employees across the Group. The Kingspan
Code of Conduct incorporates a whistleblower policy which
was enhanced in 2021 with higher visibility in all manufacturing
sites across the Group. To support product compliance at
senior management levels, a new group-wide Directors’ Duties
handbook was introduced in February 2022 with associated
training. The Group Compliance and Certification function,
which was established in 2021, operates to the ISO 37301
compliance standard with internal auditing and Board oversight.
ISO 37301 is an internationally recognised Type A management
system standard which sets out the requirements and
provides guidelines for establishing, developing, implementing,
evaluating, maintaining, and continually improving a
compliance management system (CMS). Currently we have
59 manufacturing facilities around the world which are now
accredited to the ISO 37301 standard.
The following structures are in place:
P
R
O
D
U
C
T
P
A
S
S
I
O
N
A
T
E
Conserved Water
164m tonnes
164 million tonnes of CO2e will
be saved over the life of our
insulation systems sold in 2023
Enough to power a major
airline for over 11 years1
41.3bn litres
Over 41 billion litres of
rainwater will be harvested by
our tanks produced in 2023
Enough water to fill over
500 million baths2
Recycled Materials
858m
In 2023 alone we
upcycled 858 million
waste plastic bottles
Enough recycled bottles
to fill over 1,100 football
pitches
9bn lumens
The capacity to create 9
billion lumens of natural
light annually through our
daylighting systems
Enough to light
up 1 million homes3
1 Assumes 60 year product life; based on an EU airline
disclosure of over 14.3m tonnes of CO2e emissions
for 12 months to March 2023
2 Assumes a 20 year product life
3 Assumes 10 x 60W bulbs per home
Sustainability Report Business & Strategic Report 65
• Group Head of Compliance and Certification (appointed in
Natural Daylight
January 2021) reporting directly to the Group CEO.
Product compliance operates
first and foremost to the high
standards set out in our Group
Code of Conduct, which has been
rolled out to all employees across
the Group.
64 Kingspan Group plc Annual Report & Financial Statements 2023
• Product Compliance Officers in each business across Kingspan
Group who provide monthly reports to the Group Head of
Compliance together with updates to their divisional boards.
• The role of the Kingspan Group Audit Committee has been
expanded into an Audit & Compliance Committee, with
responsibility to monitor compliance in product testing
and marketing.
• The role of the Kingspan Group Internal Audit function has
been expanded into an Internal Audit & Compliance function
to audit product and marketing compliance.
The Group Head of Compliance and Certification and the Head
of Internal Audit & Compliance report regularly to the Audit &
Compliance Committee.
PRODUCT SAFETY AND TESTING
The safety of those working with our products,
and living in buildings that have used our
products, is absolutely paramount at Kingspan.
A cornerstone of our global compliance
programme has been the opening of Kingspan’s
new Fire Engineering Research Centre (FERC) in
Holywell, Wales which has enabled a significant
increase in the frequency and scope of fire testing
of products. The testing carried out at FERC
is also building a bank of knowledge which is
helping to ensure that fire safety continues to be
central to Kingspan product innovation.
Fire safety is often reduced to a simplistic
“combustible” versus “non-combustible”
definition, based on a small-scale test. Important
factors such as building design, installation
methodology and the interaction of the different
materials in the actual system are not tested in
small-scale materials classification testing.
Hence, our approach to the safe use of our
insulation and insulated panel products in
buildings is founded on the principle that system
testing is the best way to assess fire performance
of any roof or cladding system, regardless of the
classification of the insulation materials used.
A wide range of Kingspan insulated panels carry
an FM (FM Global) or LPCB (Loss Prevention
Certification Board) Approval, both of which are
system testing regimes developed by the insurance
industry. These approvals provide objective third-
party testing, which is underpinned by quarterly,
bi-annual and annual factory surveillance audits
(depending on the region) to verify compliance.
Independent certification bodies take samples
of insulated panels from our factories and send
them to their own laboratories for fire testing to
verify ongoing compliance. These independent
audits also include assessments of change control,
formulations, processing parameters, labelling and
internal testing.
The Kooltherm® range of insulation boards
and KoolDuct® pre-insulated ductwork are
manufactured with a phenolic insulation
core, which offers excellent fire and smoke
performance when compared with other
commonly used rigid thermoset insulants.
A comprehensive range of building facade
systems incorporating our insulation board and
insulated panels products have successfully
passed large-scale facade tests around the globe
including, but not limited to, NFPA 285 (North
America), LEPIR II (France), SP 105 (Nordics), AS
5113 (Australia), ISO 13785-2 (Czech Republic)
and MSZ 14800-6 (Hungary). As it relates to large
scale fire tests, there are a total of 15 systems
incorporating Kooltherm® which have met the
requirements of BR135 when tested to BS 8414
(UK) and there are six insulated panel-based
systems that have met the requirements of BR
135 when tested to BS 8414.
During 2023, a total of 480 third party external
products and system audits were carried out,
providing reassurance on the safety of our products.
Green Hills
Solrød Denmark
Insulated Panels
JI Vulcasteel Roof
INTEGRITY OF PRODUCT MARKETING
The overall programme includes:
The Group Compliance Manual, which was first
published in January 2021 and covers all aspects
of the processes which have been implemented
across the Group, includes the requirement for a
Register of External Certificates and Test Reports
for each product.
In 2021, the Marketing Integrity Manual (MIM)
was launched to ensure that the information in
the Product Compliance Register is represented
truthfully and accurately in product marketing
information. An updated version of the MIM was
released in February 2023. The MIM is built on 12
clauses aligned with the UK Code of Construction
Product Information.
• Group MIM e-learning which has been rolled
out to all marketing team members.
• Fire Approvals e-learning which has been rolled
out for appropriate marketing team members.
• A Skills, Knowledge, Experience and Behaviours
(SKEB) competency assessment model
which has been introduced with associated
training and strict rules for publishing product
information.
• A sign-off approvals process which has been
implemented for our new global website
infrastructure. Furthermore, an internal ISO
37301 accredited auditing team has been
appointed specifically for the MIM programme.
P
R
O
D
U
C
T
P
A
S
S
I
O
N
A
T
E
Kingspan PIM Model
We have built a Product Information Management (PIM) technology
platform and this is currently being deployed across our business:
WORKFLOWS
Manage compliance of
products data. Generate PCR
DOCUMENTATION
Generate DoP (60 data points),
Datasheets (16 data points),
Brochures (40 data points)
PIM
ERP/CRM
Exchange trusted products
data with ERP systems
WEB
Push trusted technical
products data to core Web
ADVANCED WEB
Push trusted product technical
data to e-commerce,
Configurators, BIM tools
Generate product
Digital Passport
66 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 67
PPIIMMPIM
P
E
O
P
L
E
P
A
S
S
I
O
N
A
T
E
PEOPLE PASSIONATE
We see diversity and inclusiveness as an essential
part of our productivity, creativity, and innovation.
Kingspan is committed to providing equal
opportunities from recruitment and appointment,
training and development to appraisal and
promotion opportunities for a wide range of people,
free from discrimination or harassment and in
which all decisions are based on work criteria
and individual performance. During 2023, we
established a Group Diversity and Inclusion Forum
to further advance our programme of work.
We are proud of the wide variety of skills, abilities,
backgrounds, experiences and perspectives
represented by employees across our Group.
Discrimination and other unfair practices in
the conduct of our day-to-day business are
absolutely prohibited.
Talent retention
At Kingspan, we use multiple tools to drive talent
retention. These include traditional motivational
tools such as reviews and objective setting, but
there is also the opportunity to join a network
of people across the Group to drive real change
through innovation and engagement with our
Planet Passionate initiatives. We are building a
network of Planet Passionate Champions to help
scale local action at our sites across the globe.
Kingspan’s Internal Career Portal provides an open
and transparent forum for Kingspan employees to
learn, search and apply for career opportunities
across all of our businesses worldwide. It has a
wealth of information about the types of roles
and skills that are in demand to deliver on our
strategic objectives.
Training and Development
People are at the heart of everything we do. We
unlock the potential of our employees and through
them make a difference in the world. Leadership
Development is a key bridge builder across all
businesses worldwide. It is aligned with our
strategic objectives and succession plans, which
are reviewed bi-annually across the Group. We
have an integrated talent management strategy
which ensures that our talent and succession
pipelines are robust.
During 2023, Kingspan continued to invest in
developing leader capability and strengthening
and deepening our talent pipelines to support
workforce sustainability. Our people play
a critical role in delivering our purpose and
strategy, aligned to our values. Customer
centricity is at the heart of our leadership
development, underpinned by our focus on
high-performance and continuous innovation.
We encourage our leaders to grow their
careers in line with the growth of the Group.
At Kingspan, we are more than aware of the
key role leaders play in achieving our strategy
including our Planet Passionate targets. Our
formal leadership development programmes are
designed to equip our people with the skills to
drive the business towards the achievement of
our mission to accelerate a net-zero emissions
future-built environment, with the wellbeing of
people and planet at its heart. For the first time,
we partnered with DDI, a global learning and
development organisation to design and develop
additional programmes at key career transitions.
Kingspan’s key development programmes:
• Yours to Shape – Graduate Attraction and
Development
• Developing Talent Programme
• Developing Leadership Coaching Capability
• Programme for Executive Acceleration in
Kingspan (PEAK)
• Kingspan Executive Development Programme,
in partnership with INSEAD
Terasteel
(Romania)
Planet
Passionate
Day
Joris Ide (Belgium)
Planet Passionate
Clean-up Day
We are proud of the
wide variety of skills,
abilities, backgrounds,
experiences and
perspectives represented
by employees across
our Group.
40%
of our most
recent graduate
programme
are female
68 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 69
P
E
O
P
L
E
P
A
S
S
I
O
N
A
T
E
In 2023, nine projects were showcased to an
internal audience of senior leaders in IKON, our
Global Innovation Centre in Ireland, and the
presentations were live streamed to our facilities
around the world. The level of innovation and
the integration of sustainability into the projects
was inspiring. The projects will be taken forward
for further assessment with an aspiration
to integrate the outcomes into the existing
processes and product range.
The Yours to Shape programme is a key pillar for
Kingspan’s leadership development strategy.
As talented people continue to join and
develop fulfilling careers the longer-term high
performance of the Group is safeguarded.
Developing Talent Programme
The Developing Talent Programme is an early
careers programme aimed at developing
participants to realise their full potential, now
and into the future, and enabling them to add
even more value to the business.
The design of the programme is based on four
key principles, ownership of personal and career
development, building self-awareness and
confidence, developing and embedding good
learning habits and enabling practical application.
There are six in-person modules in total, alongside
three 1-to-1 coaching sessions. Participants must
also identify and present on an improvement
project which will deliver tangible results for their
own role and their team.
Participants receive exposure to a range of
development experiences which will help them
clarify their future personal and career direction.
The programme allows participants to identify
and develop critical skills and capabilities and
to maximise their impact and contribution to
the business, all while creating a supportive peer
network and broadening their exposure to the
wider Kingspan business.
Developing Leadership Coaching Capability
The Developing Leadership Coaching Capability
Programme (DLCC) is a cross divisional coaching
programme aimed at mid-level managers. The
aim of the programme is to develop leaders’
coaching capability with the outcome of being
more effective in critical people conversations,
enabling them to have more impactful
conversations in order to develop, motivate and
retain their teams. The programme consists
of five online sessions, alongside three 1-to-
1 coaching sessions with an executive coach.
These sessions deepen the learning and provide
participants with coaching experience to enhance
their development as a coach.
This is an international programme hosting
participants from Ireland, the UK and throughout
Europe to date. DLCC ensures the ongoing
development of formal coaching skills and
consistency of practice globally.
Programme for Executive Acceleration
in Kingspan – PEAK
The high impact leadership development
Programme for Executive Acceleration in
Kingspan (PEAK) was launched in 2018 and
continues each year.
This is an accelerated development programme
focused on supporting the transition to a more
senior leadership position. The core objective of
the programme is to scale and sustain Kingspan’s
leadership capability in line with our growth
ambitions and Planet Passionate Commitments.
PEAK strengthens cross divisional relationships, as
well as enabling further integration of executive
talent from recent acquisitions.
The programme is delivered through a blend of
online and in-person modules and is underpinned
by individual coaching. Each workshop includes
insights and exposure to subject matter experts.
An executive business sponsor partners with
participants during the programme, sharing
leadership challenges and encouraging open
discussion to learn together. Participants work in
small groups for peer-to-peer coaching to apply
the module learning, engage with leaders from
Kingspan Group in a dialogue about topics of
strategic relevance and deliver a strategic project
that will practically impact on the performance
of the business.
Kingspan Executive Development Programme,
in partnership with INSEAD
This Programme was launched in partnership
with INSEAD’s executive business school in
France, one of the world’s leading and largest
business schools. This is a specific leadership
development programme for senior executive
leaders which runs every two years.
The programme supports Kingspan’s senior
leaders to engage with enterprise level goals
in a collaborative way while transforming their
leadership capabilities to drive significant long-
term growth. The programme consists of two
learning events across several months as well as a
number of 1-to-1 coaching sessions.
2023 Graduate
Programme
Yours to Shape - Graduate Attraction
and Development
Kingspan continues to build leadership pipelines
by investing in our global graduate attraction
and development programme called ‘Yours to
Shape’. Over 250 graduates have completed
the programme since it was launched. The
programme’s objective is to support the successful
transition of graduates from university to Kingspan,
create an international collaborative network within
the Group and develop their capabilities to drive
their career in Kingspan forward. It is clear from
the campaign that graduates are consistently
attracted to Kingspan for the Group’s active and
practical focus on sustainability.
This year we continued to attend University
Career Fairs in-person across all regions. To offset
our carbon emissions produced by attending
each of these Career Fairs, we partnered with
Naturefund to plant a tree in Costa Rica for
every person who registered their interest in our
Graduate Programme at each Career Fair. This
provided the students with an opportunity to give
back to the planet and make a difference in the
fight against climate change.
The Yours to Shape development programme
spans 12-months of virtual and in-person
workshops and assignments. A key feature of
the programme is the opportunity to gain an
understanding of the business across different
regions and divisions. In 2023, three modules
were delivered virtually and two modules were
delivered face-to-face. During the in-person
modules graduates visited our Light + Air
facility in Lyon, France and our Insulated
Panels facility in Újhartyán, Hungary where we
incorporated site visits, interactions with local
senior managers and insights into our various
products and processes.
At Kingspan we are a global leader in sustainable
business and innovation. As such, our leaders
are at the forefront of advances in combating
climate change, the digitalisation of the
construction industry and advanced material
research to name but a few. During the
programme graduates get the opportunity to
hear first hand from those leaders about the
progress that the Group is making in these areas,
through two or more masterclasses.
Each year the graduates work in cross functional,
regional teams and work on diverse business
projects. These projects are identified by
the business as real challenges. The projects
are innovative, align to Kingspan’s strategic
priorities, which include sustainability, and have a
commercial benefit.
70 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 71
P
E
O
P
L
E
P
A
S
S
I
O
N
A
T
E
The first learning event being a five-day intensive
in-person residential module which facilitates
participants to learn more about topics such as
Innovation, Digitalisation, Customer Centricity,
Leadership Transition, Sustainability and
Circularity to name but a few. As well as the
formal learning, a key benefit of this module
is to develop friendships, as well as a strong
global network.
Following the in-person module, participants
undertook an online module on innovation in the
Age of Disruption. An Action Learning Project
(ALP) is also completed in parallel with the online
module. This ALP is supported by an INSEAD
coach, line manager and Kingspan mentor.
PROTECT
Kingspan takes the safety of our employees
incredibly seriously. The Group aims to record
and review all accidents, as well as near misses.
Health and Safety (H&S) is under ongoing review
at a facility and divisional level. We hosted a
H&S Forum at IKON in September, attended by
over 20 H&S professionals from across the global
business. There were several presentations made
during the forum, covering topics such as H&S
management systems, learnings from serious
incidents, best practice commissioning of new
machinery, and employee training.
We are deeply saddened to report that during the
year, a fatal accident occurred while an employee
was undertaking repairs on a sewage treatment
plant in Roeselare, Belgium. An investigation is
underway to discover the circumstances leading
up to the tragedy. Policies and training will be
updated to reflect any learnings.
In 2023, we invested over €12m on improving
our H&S environment. 111 of Kingspan’s
manufacturing sites are accredited to ISO 45001,
an internationally recognised framework for
managing occupational health and safety risks.
Hazard Identification Processes include but are
not limited to:
• All near misses are assessed and processes
are updated;
• Employees are encouraged to make
suggestions for process improvements;
• Safety walks by responsible persons;
• Periodic workplace inspections; and
• Risk assessment on new machines at
installation.
Initiatives implemented throughout 2023:
• Site specific safety improvements including
machinery guarding across Kingspan LATAM,
Insulation and Data + Flooring business units;
• Safety animation movie developed for
external truck drivers in Zwevezele, Belgium;
• Roll out of standardised divisional Lock-Out
Tag-Out Try-Out (LOTOTO) procedures across
all Insulation business units;
• All new employees for Data + Flooring in the
United States, are required to complete 10
hours of OSHA (Occupational Safety and
Health Administration) training; and
• Roofing + Waterproofing organised a
Safety Day event at their Onduline, Alwitra
and Corotop facilities. Operations were
temporarily halted to facilitate comprehensive
first-aid training, fire prevention drills, and
housekeeping activities.
Equal opportunities, employee rights
and diversity
Kingspan is committed to providing
equal opportunities from recruitment and
appointment, training and development to
appraisal and promotion opportunities for a
wide range of people, free from discrimination
or harassment and in which all decisions
are based on work criteria and individual
performance. We see diversity and inclusiveness
as an essential part of our productivity, creativity
and innovation. Diversity is widely promoted
within Kingspan, 40% of our most recent
graduate programme are female and 31% of
our senior executive team, reporting to the CEO,
are female.
Gender Balance
Injury Frequency Rate
Fatalities
2023
2022
2021
79% 21%
79% 21%
80% 20%
2023
2022
2021
1.1
1.0
1.2
2023
2022
2021
0
1
1
Male
Female
p/100k hours
72 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 73
OUR COMMUNITIES
In Autumn 2021, we launched Planet Passionate
Communities, the philanthropic arm of our 10-
year Planet Passionate programme. At the heart
of Planet Passionate Communities is an ambition
to create a positive legacy as a business.
Locally, our businesses are devoting their time
and resources to support community projects.
The idea is to build a world that’s powered
by renewable energy, has net-zero carbon,
manages water sustainably, and protects the
earth’s valuable resources by reducing, re-using
and recycling.
We take pride in our diverse range of global
projects, showcasing our commitment to a
sustainable future for our communities.
P
E
O
P
L
E
P
A
S
S
I
O
N
A
T
E
Here are some
of our initiatives
in action:
World Cleanup Day,
Atlanta, USA
Kingspan Insulation’s
Atlanta team volunteered
at the Sandy Springs
Recycling Centre, Georgia.
Our Finnish team promised to
plant a tree for every visitor
at their exhibition booth at
FinnBuild. By June 2023, they
had planted 2,500 trees in
Virrat, Finland.
International
Water Day,
Romania
The Terasteel team
worked together to
clear up riverbeds
close to our
manufacturing sites.
74 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 75
OUR POLICIES
Aims
• Comply with all local laws in the countries
we operate in.
• Ensure supply chain accountability.
Modern slavery
Slavery and human trafficking are abhorrent
crimes and we all have a responsibility to ensure
that they do not continue. At Kingspan we pride
ourselves on conducting our business ethically
and responsibly.
The Modern Slavery Act 2015 became UK
legislation and required all large UK companies
and businesses who supply goods or services in
the UK to publish a slavery and human trafficking
statement each financial year on their website.
Kingspan is fully committed to ensuring that
modern slavery is not taking place in our business
or any of our supply chains. We adopted and
published our policy statement at the end of 2016
and all our businesses are responsible for ensuring
supplier compliance with the legislation.
Supply chain engagement
Kingspan continues to develop its ethical and
environmental strategy for procuring materials
and services. We seek to build and maintain
long-term relationships with key suppliers and
contractors to ensure that they are aligned to
the same goals and standards as Kingspan, to
address strategic global issues, emerging trends
and ultimately our customer needs. This approach
has divisional and regional variances based on the
local requirements and materials, but is built on
core social, ethical and environmental standards.
In all cases we aim to foster an environment of
collaboration. In 2022, we adopted and published
our Group Supplier Policy which sets out our
expectations of suppliers in terms of business
practices and integrity, ethical employment
practices, anti-corruption and bribery and
environmental responsibility.
EcoVadis
In late 2021, Kingspan subscribed to EcoVadis. The
EcoVadis sustainability management platform
will help us to monitor and track our suppliers
ESG performance, promote transparency,
reduce risk and identify areas for improvement.
EcoVadis is a sustainability rating platform which
assesses a company’s supply chain network
under environmental, ethics, labour and human
rights, and sustainable procurement criteria.
The outcome of the assessment process is a
company scorecard which provides an overall
ESG performance rating of the supplier. In 2022,
we began the roll out of EcoVadis questionnaire
requests across our key supplier base. To date we
have received scorecards that cover 48% of our
key supply base by spend.
Customer experience programme
Customers are at the core of what we do – what
this means in reality is us looking at how to
improve our business for them in every aspect. The
Global Customer Experience Team was established
in 2018 who designed, developed and introduced
our Worldwide Voice of Customer programme
enabling us to listen, capture and understand the
experiences our customers have across 200+ of our
businesses and multitude of brands. Through this
Kingspan continues to develop
its ethical and environmental
strategy for procuring materials
and services.
programme we identify changes in our customers’
expectations and behaviour allowing us to spot
challenges and innovative opportunities. The
programme helps us to prioritise where we need to
make improvements in the areas most important
to our customers; driving change not only in our
products, our services, our processes and our daily
business but also driving our Digital Agenda. Since
inception we have captured the views of over
65,000 customers, across over 80 countries and
we continue to listen, learn and make meaningful
change happen.
Human Rights Risk Assessment
In 2023, Kingspan engaged with an external
consultant to develop a human rights risk
assessment framework. The assessment involved
identifying salient human rights issues across
our value chain groups of employees, customers,
and communities, conducting human rights risk
assessment, and designing due diligence pathways.
An assessment to evaluate human rights risks within
our upstream supply-chain was also conducted
throughout the year in a separate piece of analysis.
The outcome of both assessments has allowed
Kingspan to develop and adopt our Human Rights
Policy, which outlines our commitment to upholding
international human rights. To further support our
commitment to promoting and respecting human
rights, the Board has established a Human Rights
Charter, which sets out our approach in terms of
how we assess impacts, those responsible, and how
we engage with the relevant stakeholders.
OLI
Aveiro, Portugal
Insulated Panels
QuadCoreTM
insulated panels
76 Kingspan Group plc Annual Report & Financial Statements 2023
Sustainability Report Business & Strategic Report 77
THE BOARD
NON-EXECUTIVE CHAIRMAN
Jost
Massenberg
(Age 67)
Germany
Independent
Jost Massenberg was appointed to the Board in February 2018 and was
appointed as non-executive Chairman of Kingspan in 2021.
Key strengths: Jost brings extensive board level experience, including at chairman
and chief executive level, and has a wealth of industry experience in European
steel and major manufacturing businesses. His in-depth knowledge of the steel
industry and its workings furnish him with a keen understanding of the sector and
challenges being addressed by Kingspan in decarbonising its supply chain.
CHIEF EXECUTIVE OFFICER
Gene
Murtagh
(Age 52)
Ireland
EXECUTIVE DIRECTORS
Geoff
Doherty
(Age 52)
Ireland
Previous relevant experience: Jost is the former Chairman of VTG
Aktiengesellschaft and former Chief Executive Officer of Benteler Distribution
International GmbH. Prior to that he was the Chief Sales Officer and a member
of the executive board of ThyssenKrupp Steel Europe AG.
Qualifications: PhD Business Admin.
Gene Murtagh is the Group Chief Executive Officer. He was appointed to
the Board in November 1999.
Key strengths: Gene has extensive experience across 30 years with Kingspan
at operational and leadership levels. His deep knowledge of all of the Group’s
businesses and the wider construction materials industry brings valuable insight
to lead the Group’s strategy and to advance our strategic pillars of Innovation,
Planet Passionate, Completing the Envelope and Global.
Previous Kingspan roles: Gene joined the Group in 1993 and was appointed
Chief Executive Officer in 2005. He was previously the Chief Operating Officer
from 2003 to 2005. Prior to that he was Managing Director of the Group’s
Insulated Panels and the Water + Energy businesses.
Geoff Doherty is the Group Chief Financial Officer. He joined the Group
and was appointed to the Board in January 2011.
Key strengths: Geoff is a qualified chartered accountant and brings extensive
experience of capital markets and financial management in an international
manufacturing environment. He oversees compliance of the Group’s financial
controls and cyber security programmes. Geoff was appointed as Chair of the
Audit Committee at Ryanair Holdings plc in September 2023.
Previous relevant experience: Prior to joining Kingspan, Geoff was the Chief
Financial Officer of Greencore Group plc and Chief Executive Officer of its
property and agribusiness activities.
Principal external appointments: Non-executive director of Ryanair
Holdings plc.
Russell
Shiels
(Age 62)
United States of America
Russell Shiels is President of Kingspan’s Insulated Panels business in the
Americas as well as Kingspan’s Data + Flooring business globally. He was
appointed to the Board in December 1996.
Key strengths: Russell brings to the Board his particular knowledge of the
building envelope market in the Americas, as well as his deep understanding of
the global office and data centre market.
Previous Kingspan roles: Russell has experience in many of the Group’s key
businesses, and was previously Managing Director of Kingspan’s Building
Components and Raised Access Floors businesses in Europe.
Board Committees:
Audit & Compliance
Nominations & Governance
Remuneration
Chair
Collège de Champier
Lyon, France
Light, Air + Water
Solarfin
Leadership
and Experience
78 Kingspan Group plc Annual Report & Financial Statements 2023
The Board Directors’ Report 79
EXECUTIVE DIRECTORS
Gilbert
McCarthy
(Age 52)
Ireland
Gilbert McCarthy is Managing Director of Kingspan’s Insulated Panels
businesses in Western Europe, Asia and Australasia. He was appointed to
the Board in September 2011.
Key strengths: Gilbert brings to the Board his extensive knowledge of the
building envelope industry, in particular in Western Europe and Australasia.
Previous Kingspan roles: Gilbert joined Kingspan in 1998 and has held a number
of senior management positions including Managing Director of the Off-Site
division and General Manager of the Insulation business.
NON-EXECUTIVE DIRECTORS
Linda
Hickey
Linda Hickey was appointed to the Board in June 2013 and is the Senior
Independent Director and the Workforce Engagement Director.
(Age 62)
Ireland
Independent
Anne
Heraty
(Age 63)
Ireland
Independent
Éimear
Moloney
(Age 53)
Ireland
Independent
Key strengths: Linda’s considerable knowledge and experience of capital markets
and corporate governance provide important insights to the Board. In addition,
she brings experience relating to environmental, social and governance matters
from her other board level positions to draw from as Senior Independent Director.
Previous relevant experience: Linda was previously the Head of Corporate
Broking at Goodbody Capital Markets where she worked closely with multi-
national corporates and the investor community. Prior to that Linda worked at
NCB Stockbrokers in Dublin and Merrill Lynch in New York. She also previously
served as Chair of the Irish Blood Transfusion Service.
Qualifications: B.B.S.
Principal external appointments: Non-executive director of Cairn Homes plc
and Greencore Group plc.
Anne Heraty was appointed to the Board in August 2019.
Key strengths: Anne brings a wealth of experience from a career in running
an international business and from her current role on the Board of Ibec. As
former Chief Executive Officer of Ireland’s largest recruitment and outsourcing
company, Anne has unparalleled experience of talent development and retention
strategies. Anne also brings insights from her position on the sustainability
committee of Outsourcing Inc.
Previous relevant experience: Anne is the founder and former Chief Executive
Officer of Cpl Resources Limited (formerly Cpl Resources plc). She previously held
a number of other public and private non-executive directorships.
Qualifications: B.A. in Mathematics & Economics.
Principal external appointments: Non-executive director of Ibec, Outsourcing
Inc. and Cpl Resources Limited.
Éimear Moloney was appointed to the Board in April 2021.
Key strengths: Éimear has excellent knowledge and experience of capital
markets and asset management. She has extensive financial and board
governance experience as a fellow of the Institute of Chartered Accountants in
Ireland, and a fellow of the Institute of Directors in Ireland. She also brings valued
compliance experience from the pharmaceutical manufacturing environment to
the Board and the Audit & Compliance Committee.
Previous relevant experience: Éimear was previously a senior investment
manager in Zurich Life Assurance (Irl) plc.
Qualifications: B.A. Accounting & Finance, MSc. Investment and Treasury.
Principal external appointments: Non-executive director of Hostelworld Group
plc, Irish Continental Group plc and Chanelle Pharma.
NON-EXECUTIVE DIRECTORS
Paul
Murtagh
(Age 50)
United States of America
Senan
Murphy
(Age 55)
Ireland
Independent
Louise
Phelan
(Age 57)
Ireland
Independent
Paul Murtagh was appointed to the Board in April 2021.
Key strengths: Paul is the Chairman and Chief Executive Officer of Tibidabo
Scientific Industries Limited and previously worked in investment banking at
Merrill Lynch in New York and Sydney. He brings to the Board his excellent
understanding of US industry and his significant experience in building successful
global businesses.
Previous relevant experience: Paul was formerly the Chairman and Chief
Executive Officer of Faxitron Bioptics LLC and Chairman of Deerland Probiotics
& Enzymes Inc.
Qualifications: B. Comm International.
Principal external appointments: Non-executive director in a number of
private companies.
Senan Murphy was appointed to the Board in October 2022.
Key strengths: Senan has over 30 years’ experience in international business
across multiple industries including building materials, renewable energy and
financial services.
Previous relevant experience: Senan was previously the Group Finance Director
of CRH plc where he also had responsibility for driving and reporting performance
against the company’s sustainability targets. Before that he was Bank of Ireland
Group’s Chief Operating Officer, having previously held positions as Chief
Operating Officer and Finance Director at Ulster Bank, Chief Financial Officer at
Airtricity and numerous senior financial roles in GE, both in Europe and the US.
Qualifications: B. Comm., F.C.A. and Dip. in Professional Accounting.
Principal external appointments: Non-executive director of Bluestar Energy
Capital, a US-based global investor in energy transition and renewable energy.
He is also a member of the UCD College of Business Irish Advisory Board.
Louise Phelan was appointed to the Board in April 2023.
Key strengths: Louise is a highly respected business leader and strategic
adviser with leading global companies in both the renewable energy and
financial services sectors. She has strong commercial executive experience
from her previous career, as well as valuable insights from her other board and
advisory positions.
Previous relevant experience: Louise was formerly Vice President of Global
Operations EMEA at PayPal, having previously held senior roles in customer
service, risk operations and compliance. She is also a former President of the
American Chamber of Commerce in Ireland and was previously a non-executive
director of Voxpro.
Qualifications: DPhil (hc).
Principal external appointments: Senior independent non-executive director
of Ryanair Holdings plc, a member of the Irish Government’s Top-Level
Appointments Committee (TLAC), and a member of the President’s advisory
group at Technological University Dublin.
COMPANY SECRETARY
Lorcan
Dowd
(Age 55)
Ireland
Lorcan Dowd was appointed Head of Legal and Group Company Secretary
in July 2005.
Relevant skills & experience: Lorcan qualified as a solicitor in 1992. Before
joining Kingspan he was Director of Corporate Legal Services in PwC in Belfast,
having previously worked as a solicitor in private practice.
Board Committees:
Audit & Compliance
Nominations & Governance
Remuneration
Chair
80 Kingspan Group plc Annual Report & Financial Statements 2023
The Board Directors’ Report 81
81
REPORT OF THE NOMINATIONS &
GOVERNANCE COMMITTEE
Jost Massenberg
I am pleased to present
the 2023 Nominations &
Governance Committee
report covering the work
and activities of the
committee during the year.
Canal Turn Island Quarter
Nottingham, UK
Insulated Panels
RF-Design Recess Cassette
The Kingspan Board recognises that
the values, integrity and behaviours
that shape our culture and corporate
governance are the foundation of
long-term success.
The Kingspan Board recognises that the values,
integrity and behaviours that shape our culture
and corporate governance are the foundation
of long-term success. We are committed to
ensuring that our long-term ambitions go
hand in hand with high standards of corporate
governance. We continually enhance our
governance practices to ensure that we not
only meet the standards expected of us but,
more importantly, that we promote the success
of the business and reduce risk for all of our
stakeholders. We consistently strive to ensure
that our reporting continues to be meaningful
in describing how we integrate our governance
principles into our decision making, values and
strategy. At the heart of all these endeavours is
an entrepreneurial board that adheres to high
standards of governance.
During 2023, the committee continued to build
upon the recommendations of the external
evaluation process carried out by Better Boards
in 2022. The Board Diversity Policy, which was
adopted in 2022, was a central pillar in the
search and appointment process culminating
in the appointment of Louise Phelan as a
non-executive director in April 2023. Further
details on the process followed in respect of Ms
Phelan’s appointment are set out later in this
report. In November, Kingspan launched its
People Passionate programme, which aims to
enhance the employee experience right across
Kingspan while, in time, enabling the Board to
assess and monitor the evolution of the Group’s
performance and corporate culture. More details
of this programme are set out in this report.
In 2024, the committee will continue to plan for
the renewal and succession of the Board and its
committees, whilst ensuring that the governance
frameworks remain robust and fit for purpose to
meet the Group’s strategy.
At Kingspan, we welcome shareholder feedback
and, where appropriate, we seek to incorporate
that feedback into our decision making
and reporting. During the year, we had the
pleasure of engaging with many shareholders
and stakeholders in relation to our strategy,
governance, remuneration and sustainability
proposals and I would like to thank all of those
shareholders who provided their views during
our various engagements. I look forward to
continuing these conversations both in the run up
to, and following, our AGM this year.
Jost Massenberg
Chairman
82 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Nominations & Governance Committee Directors’ Report 83
CORPORATE GOVERNANCE STATEMENT
Kingspan is committed to operating best practice
standards of good governance, accountability
and transparency. This tone is set by the
Group Board of Directors and communicated
throughout the Group regardless of division or
geographical location.
This statement outlines how Kingspan has
complied with Irish Listing Rule 6.1.82, and applied
the principles and complied with the provisions
set out in the UK Corporate Governance Code
(July 2018) (the ‘Code’) and the Irish Corporate
Governance Annex (the ‘Annex’). Both the Code
and the Annex can be obtained from the following
websites respectively: www.frc.org.uk and www.
euronext.com.
Statement of compliance
The directors confirm that the Company has,
throughout the accounting period ended 31
December 2023, complied with the provisions of
the Code and the Annex as set out in this report.
behaviours, and our aspiration is to promote and
maintain the Kingspan spirit based on our
core principles:
• Clear, ethical and honest behaviours and
communications;
• Compliance with the law;
• Respect for the safety and wellbeing of
colleagues;
• Protection of our Group assets; and
• Upholding our commitment to a more
sustainable future.
Board committees
The Board has established three standing
committees: Audit & Compliance, Nominations &
Governance, and Remuneration. All committees of
the Board have written terms of reference setting
out their authorities and duties (available on the
Group’s website www.kingspan.com).
Our spirit and values
Our mission is to accelerate a zero emissions
future built environment with people and planet at
its heart.
The Group recognises the importance of the
Kingspan spirit and the role it plays in delivering
the long-term success of the Company. Our
business success is inextricably linked to our
The details of each committee’s activities during
the year are detailed in their respective reports as
set out in this Annual Report.
The members of each committee as at the date
hereof, and the date of their first appointment
to the committee and attendance at Board
and committee meetings are set out in the
following tables.
Audit & Compliance Committee
Senan Murphy (Chair)
Anne Heraty
Éimear Moloney
Nominations & Governance Committee
Jost Massenberg (Chair)
Linda Hickey
Anne Heraty
Remuneration Committee
Linda Hickey (Chair)
Éimear Moloney
Louise Phelan
Appointed 2022
Appointed 2019
Appointed 2021
Appointed 2019
Appointed 2021
Appointed 2023
Appointed 2015
Appointed 2023
Appointed 2023
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Independent
The Board recognises the importance
of the Kingspan spirit and the role it
plays in delivering the long-term success
of the Company.
Attendance at AGM, Board and Committee meetings
during the year ended 31 December 2023
AGM 2023
Board
Audit &
Compliance
Nominations
& Governance
Remuneration
(maximum 8)
(maximum 4)
(maximum 1)
(maximum 4)
Jost Massenberg
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
Linda Hickey
Anne Heraty
Éimear Moloney
Paul Murtagh
Senan Murphy
Louise Phelan1
Michael Cawley2
John Cronin2
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
-
-
-
8/8
8/8
8/8
8/8
8/8
8/8
8/8
8/8
8/8
7/8
7/7
1/1
1/1
1 Appointed as a director as of 28 April 2023
2 Retired as a director as of 28 April 2023
1/1
1/1
1/1
4/4
4/4
4/4
1/1
4/4
1/1
3/3
3/3
1/1
The Nominations & Governance Committee met
once in 2023. The activities of the committee
included the following matters:
• Recommending the appointment of Louise
Phelan to the Board;
• Reviewing committee membership;
• Nominating directors for re-election
at AGM;
• Approving the Report of the Nominations
& Governance Committee; and
• Considering the feedback from the AGM.
Board responsibilities
There is a clear division of responsibilities within
Kingspan between the Board and executive
management, with the Board retaining control
of key strategic and other major decisions.
The Chairman leads the Board and is
responsible for its overall effectiveness in directing
the Company. One of the key roles of the
Chairman is promoting a culture of objectivity,
openness and debate. In addition, the Chairman
facilitates constructive Board relations and
the effective contribution of all non-executive
directors, and ensures that directors receive
accurate, timely and clear information.
The balance of skills, backgrounds and diversity of
the Board contributes to the effective leadership
and strategic development of the business. The
Board’s composition is central to ensuring all
directors contribute to discussions. The Board
continually reviews its composition to ensure
appropriate refreshment on an ongoing basis.
As a means of fostering open dialogue and
director engagement, the non-executive
directors, led by the Senior Independent Director,
meet without the Chairman present at least
annually. Likewise, the Chairman holds meetings
with the non-executive directors without the
executives present. These forums foster a
level of scrutiny, discussion and challenge in a
collaborative atmosphere.
All directors have access to the advice and services
of the Company Secretary. Where necessary, or
requested, directors can also avail of independent
third-party advice on Company issues or relevant
Board matters including, but not limited to, matters
such as remuneration and succession. The Company
has procedures whereby all new directors receive
formal induction and familiarisation with Kingspan’s
business operations, sustainability matters and
systems on appointment, including trips to
manufacturing sites with in-depth explanations of
the site operations.
84 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Nominations & Governance Committee Directors’ Report 85
Optima Lakeview
Illinois, USA
Light, Air + Water
KlearSky™
ROLES AND RESPONSIBILITIES
The Board
The Board is responsible for the effective
leadership and the long-term success of the
Group, generating value for shareholders and
contributing to wider society. It shapes the
ethos and values of the Group, oversees the
implementation of strategy and ensures good
corporate governance practices are in place.
Chairman
The Chairman’s primary responsibility is to
lead the Board. The Chairman is responsible
for setting the Board’s agenda and for the
efficient and effective working of the Board.
The Chairman ensures that all members of the
Board, particularly the non-executive directors,
have an opportunity to contribute effectively
and openly. The Chairman is also responsible for
ensuring that there is appropriate and ongoing
communication with shareholders.
Senior Independent Director
The Senior Independent Director of the
Board is available to shareholders who have
concerns that cannot be addressed through
the Chairman, Chief Executive Officer or Chief
Financial Officer. The Senior Independent
Director also leads an annual meeting with the
non-executive directors to appraise the workings
of the Board.
Chief Executive Officer
The Board has delegated executive responsibility
for running the Group to the Chief Executive
Officer and the executive management team.
The Chief Executive Officer is responsible for the
strategic direction and the overall performance
of the Group, and is accountable to the Board
for all authority so delegated.
Company Secretary
All directors have access to the advice and
services of the Company Secretary who is
responsible for ensuring that Board procedures
are followed. The Company Secretary is also
responsible for advising the Board, through the
Chairman, on all governance matters.
Workforce engagement
The Board recognises the importance of engaging
with all of our key stakeholders. Elsewhere in this
Annual Report we have detailed the long-lasting
partnerships we have developed with customers,
suppliers and communities. We are also aware of
the value of engagement with our workforce. Our
people are key to developing and delivering on
our strategy, and are fundamental to our long-
term success.
Linda Hickey, as Senior Independent Director, is
appointed as the director responsible for workforce
engagement, to facilitate the channelling of
employee views to Board discussions. During the
year, she had the opportunity to hear employee
views on a range of topics through engagement
with our People Passionate team, attendance
at our European Works Council meeting,
participation in our graduate development
programme and by meeting employees onsite
during Board visits.
In 2022, we worked with our employee
representatives to establish a European Works
Council (EWC) which provides a platform to
engage with our employees at a European level on
the strategy and development of the business, as
well as employment, investments and transnational
issues. The EWC represents over 13,000 Kingspan
employees across 24 countries. The first meeting
of the EWC took place online in June 2023,
and the inaugural plenary meeting was held in
IKON, Kingscourt in November 2023. Eighteen
representatives participated in a varied agenda
that included business and financial updates,
presentations on the wider business strategy
and our digital offerings, as well as our People
Passionate and Planet Passionate programmes.
Senior management attended along with Linda
Hickey, the Workforce Engagement Director. The
meetings have been constructive with a very high
level of engagement from the representatives.
In 2023, Kingspan launched its People Passionate
programme across all of its global businesses.
Similar to Planet Passionate, this is a Group wide
programme. Given the Group’s ever-growing scale,
it recognises that there is a benefit from aligning
people practices across the enterprise where it
makes sense to do so, allowing our people and
the business to continue to thrive. Divisions will
integrate the People Passionate programme into
their respective people and organisational plans.
The aim of the programme is to enhance the
employee experience by focusing on:
• career development;
•
learning;
•
leadership and management development;
• organisational performance;
•
team and individual performance;
• measuring and enhancing employee
engagement; and
• ensuring that the people policies and practices
underpin everything.
The Kingspan spirit is based on strong
foundations and enables our people to do their
best work together, to grow and transform
themselves and the built environment
sustainably, underpinned by ethics and integrity.
Kingspan is People Passionate, and in time, this
programme will allow the Board to consistently
assess and monitor the evolution of the
Company’s performance and corporate culture.
Board diversity
The Board values diversity in all its forms and
recognises the role it can play in contributing to
the Board’s perspective and decision making.
The Board adopted a Board Diversity Policy in
2022 which supports the recommendations set
out in the Hampton-Alexander Review on gender
diversity. The Board intends to:
•
increase female representation on the Board
over the coming years to achieve the best
practice benchmark of a minimum 40%
representation of both genders; and
•
increase the international representation on
the Board.
A copy of the Board’s policy is available on the
Group’s website www.kingspangroup.com. The
Board intends to achieve these objectives through
future appointments as the Board is refreshed,
having regard for the need to maintain a stable
and effective Board during this period. To this
end, three of the last five non-executive director
appointments have been female.
The Board currently comprises seven male and four
female directors (including the Senior Independent
Director) with female directors representing 36%
of the Board (2022: 25%). This meets the target
set by the Irish Government’s Balance for Better
Business of 33% female representation on Boards
by 2023, while the Company moves progressively
towards the gender and international targets set
out in our Board Diversity Policy.
Board composition and renewal
Kingspan is committed to the ongoing renewal
of the Board, which is essential to bring fresh
thinking and constructive challenge to the
Board’s decision making. The Nominations &
86 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Nominations & Governance Committee Directors’ Report 87
Governance Committee leads the process for
Board appointments while ensuring plans are in
place for orderly succession to both the Board
and senior management positions.
Following the conclusion of last year’s Annual
General Meeting, two non-executive directors,
Michael Cawley and John Cronin, retired from
the Board. Mr Cawley and Mr Cronin both served
on the Board for nine years and the Board and
management thank each of them for their
significant contribution to Kingspan during
that period.
In 2023, the committee led the search for
the appointment of a new independent non-
executive director. In considering candidates for
appointment as non-executive directors, the
committee remains guided by the principle that
all appointments will be made based on merit
and skills, whilst having regard to our Board
Diversity Policy, including diversity of gender, age,
nationality and ethnicity. The Board believes that
international skills and experience are equally as
important as nationality, and will have regard to
both factors in making appointments.
The committee agreed the criteria for the new
appointment, to include a background in industry
and broad international experience with relevant
operational and financial skills. The committee
considered whether or not to engage a firm of
consultants to assist in the process of recruiting
the new non-executive director, and agreed that
in order to ensure best fit with the Company, it
would use the extensive knowledge and contacts
of the committee to identify suitable candidates.
The committee maintains a pool of potential
candidates, and after considering Louise Phelan’s
skillset, which comprises of in-depth experience in
commercial and operational areas across multiple
industries including renewable energy and
financial services, the committee recommended
Ms Phelan as its preferred candidate of choice to
the Board for approval. Ms Phelan’s appointment
broadens the skillset and diversity of the Board
whilst reflecting Kingspan’s global business.
Aligning succession planning to Kingspan’s
wider strategy is a cornerstone of strong board
governance, and has been, and will continue to
be, a focus of the committee. A fundamental
aspect of overseeing appointments to senior
management remains the development of a
diverse leadership pipeline. Among Kingspan’s
senior management team, 31% of the senior
leadership roles reporting directly to the CEO are
held by females (2022: 25%), which compares
to the target set by the Irish Government’s
Balance for Better Business of 30% females in
senior leadership roles by 2023. Furthermore, this
year 22% and 40% of attendees on Kingspan’s
senior management and graduate development
programmes respectively were female, and 69%
and 67% of the participants in the respective
programmes were from an international (non UK/
Irish) background, as Kingspan is attracting more
and more diversity into senior leadership roles.
Key strengths and relevant experience of each
director are set out in the Directors’ Report and a
breakdown of the background and principal skills
and experience of the non-executive directors on
the Board is set out in the table below.
Experience/Skillset
Jost
Massenberg
Linda
Hickey
Anne
Heraty
Éimear
Moloney
Paul
Murtagh
Senan
Murphy
Louise
Phelan
Domicile
International
Financial
Banking
Governance
Leadership
Industry
Environmental*
Risk
Workforce
Germany
Ireland
Ireland
Ireland
USA
Ireland
Ireland
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
* In particular, with respect to Kingspan’s markets, raw materials and Planet Passionate strategy.
MHA Tribal Headquarters
North Dakota, USA
Light, Air + Water
GridSpan™ Polygon Skylight
Board induction programme
Upon joining the Board, Ms Phelan participated in
an induction programme to gain an understanding
of Kingspan and leverage her own experience to
enhance her effectiveness in her non-executive
role. The induction programme is built around a
series of meetings with the Board, the Company
Secretary and key members of the senior
management team as well as on-site visits to
understand the operations of the business. Ms
Phelan also completed online training on Directors’
Duties as well as the Market Abuse Regulations
and Kingspan’s Share Dealing Policy and Code.
Board evaluation
Kingspan has formal procedures for the
evaluation of its Board, committees and individual
directors. The purpose of this formal evaluation
is to ensure that the Board, on a collective
and individual basis, is performing effectively
and to ensure stakeholder confidence in the
Board. The Chairman reviews the performance
of the Board and the conduct of Board and
committee meetings annually, and an externally
facilitated review of the Board’s general corporate
governance is carried out in every third year.
As outlined in last year’s Annual Report, an
externally facilitated review of the Board’s
performance was carried out in 2022 by
Better Boards. The Board has since progressed
implementation of the recommendations from last
year’s externally facilitated evaluation, including
adoption of a formal Board Diversity Policy setting
out its commitment to improving diversity on the
Board, and proactively using upcoming vacancies
to respond to gender and diversity targets on
the Board.
During 2023, the Chairman conducted his
annual review process through a series of one
to one meetings with each of the executive and
non-executive directors, as well as by receiving
feedback through the Senior Independent
Director of the non-executive directors’ collective
views on the workings of the Board. The outcome
of the evaluation process was positive and
provided the Board with the assurance that it
was operating effectively.
Effectiveness and independence
The committee reviews the size and performance
of the Board during the year and this process
occurs annually. The Board continues to ensure
that each of the non-executive directors remain
impartial and independent in order to meet the
challenges of the role. Throughout the year, 55%
of the Board was comprised of independent
non-executive directors. Linda Hickey is the
Senior Independent Director on the Board who
provides a sounding board for the Chairman
and serves as an intermediary for the other
directors and shareholders when necessary. The
directors consider that there is strong independent
representation on the Board.
The Board has had due regard to various matters
which might affect, or appear to affect, the
independence of certain directors. The Board
considers that each of the non-executive
88 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Nominations & Governance Committee Directors’ Report 89
directors on the Board, excluding Paul Murtagh,
are independent.
Directors are not allowed to participate in
such considerations or to vote regarding their
own conflicts.
In assessing the independence of Linda Hickey,
the Board had due regard to her length of service
on the Board, and to her previous position as a
senior executive at Goodbody Stockbrokers, one of
the Company’s corporate brokers from which she
retired in April 2019. In 2022, the committee agreed
to extend the term of Ms Hickey for a period of up
to three years to 2025, subject to annual re-election
at the AGM, in order to maintain a stable and
effective Board during that period. In assessing
Ms Hickey’s independence, the committee formed
the view that she has always expressed a strongly
independent voice at the Board and its committee
meetings, including as Chair of the Remuneration
Committee, and that she has always exercised her
judgement as a non-executive director and as the
Senior Independent Director, independent of any
other relationships within the Board. The Board
also took into account her extensive experience in
capital markets and governance, which is hugely
valuable to the Company and our shareholders, and
concluded that her independence was not affected.
Conflicts of interests
The Board recognises the importance of
independent representation to the effective
functioning of the Board, as well as providing
scrutiny and, where necessary, challenge to
management, as part of an effective governance
framework. The committee has adopted a
conflicts of interest policy which guides all
decisions of the Board when actual or potential
conflicts of interest might arise.
The policy stipulates that directors are required to
avoid situations where they have, or could have,
a direct or indirect interest that conflicts, or may
conflict, with the Company’s interests. Directors
are required to give notice of any potential
situational and/or transactional conflicts, which
will then be notified to and considered by the
Board. In deciding what approach to take, the
Board will consider:
• whether the conflict needs to be avoided or
simply documented;
• whether the conflict will realistically impair
the disclosing person’s capacity to impartially
participate in decision making;
•
the possibility of creating an appearance
of improper conduct that might impair
confidence in, or the reputation of, the
Company; and
• any measures that may be taken to avoid or
mitigate the potential conflict.
External commitments
Directors may serve on other boards provided
they continue to demonstrate the requisite
commitment to discharge their duties effectively.
The committee reviews the extent of the
directors’ other interests on an ongoing basis
throughout the year. The committee is satisfied
that each of the directors commits sufficient
time to their duties in relation to the Company.
The Chairman and each of the directors have
also confirmed they have sufficient time to fulfil
their obligations to the Company. The committee
will continue to keep under review the external
commitments of all directors.
Shareholders’ meetings and rights
The Company operates under the Irish Companies
Act 2014 (the “Act”). This Act provides for two
types of shareholder meetings: the Annual General
Meeting (AGM) with all other meetings being
called Extraordinary General Meetings (EGM).
The Company must hold an AGM each year
in addition to any other shareholder meeting
in that year. The AGM is an important forum
for shareholders to meet with, and hear from,
Company directors. The ordinary business of an
AGM is to receive and consider the Company’s
Annual Report and statutory financial statements,
to review the affairs of the Group, to elect
directors, to declare dividends, to appoint or
reappoint auditors and to fix the remuneration of
auditors and directors.
The Chairman of the Board of Directors presides
as chairman of every general meeting and in his
absence, one of the directors present will act in the
capacity of chairman. The quorum for a general
meeting shall be not less than three members
present in person or by proxy and entitled to vote.
All ordinary shares rank pari passu and carry equal
voting rights. Every member present in person or
by proxy shall, upon a show of hands, have one
vote and every member present in person or by
proxy shall, upon a poll, have one vote for each
share of which they are the holder. In the case of
an equality of votes, both on a show of hands and
at a poll, the chairman shall have a casting vote.
Further details of shareholders rights with respect
to the General Meetings are set out in the Report
of the Directors and the Shareholder Information
section of this Annual Report.
Board Balance
Independence
45%
Gender Diversity
64%
Age Range
9%
36%
Independent
Non-independent
55%
Female
Male
36%
41-50
51-60
61-70
55%
Tenure
Less than 3 years
More than 3 and less than 6 years
More than 6 and less than 9 years
More than 9 years
18%
Wilmot Gateway Park
Washington, USA
Light, Air + Water
Briteway™ Polycarbonate
Walkway
36%
46%
90 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Nominations & Governance Committee Directors’ Report 91
REPORT OF THE
REMUNERATION
COMMITTEE
Linda Hickey
Dear Shareholders,
On behalf of the
Remuneration Committee
(the ‘committee’), I am
pleased to present the
2023 Report on Directors’
Remuneration.
Templemore
Swimming Baths
Belfast, Northern Ireland
Insulated Panels
QuadCoreTM insulated
panels; HK Design Facade
Work of the committee and our remuneration
philosophy and policy
Kingspan’s philosophy is to pay for performance
and delivery of our strategy, based on clear
transparent metrics, aligned with the interests of
shareholders and wider stakeholders.
Shareholders approved our current Directors’
Remuneration Policy in 2022, and the
committee’s focus during 2023 was on ensuring
that the policy operated as intended with the
selection of performance metrics to reflect our
strategy. I would like to thank our shareholders
for their support at our 2023 AGM when our
Remuneration Report was supported by over 97%
of votes cast.
2023 business performance and pay outcomes
Kingspan delivered record profits again in 2023,
notwithstanding tough prior year comparators
and challenging conditions in some of our core
markets. Management also delivered significant
progress across our key strategic pillars, increasing
geographic expansion both organically and
through acquisition, adding new innovative natural
insulations to our product suite, growing the range
and scale of our new Roofing + Waterproofing
division, and making excellent progress towards
our Planet Passionate objectives, all of which are
detailed elsewhere in this Annual Report. The result
was that Group revenues were €8.1bn (down 3%),
and trading profit was €877m (up 5%). Earnings
Per Share (‘EPS’), a key performance measure used
to determine the executives’ performance-related
pay, increased to 352.3 cent (up 7% over prior
year), and Total Shareholder Return for the year
was 56.2%.
For 2023, all of our executive directors received
basic salary increases of 3% compared to salary
ranges through the business of 4.5% to 6%.
Pensions reduced again in line with the step
reductions previously agreed to bring the executive
directors to 10% of salary from 2025.
Annual performance bonus targets for 2023
were a mixture of Group and divisional financial
performance measures, as well as non-financial
targets based on Net Promoter Score (NPS)
customer experience scores. At the end of 2022,
Kingspan was coming off a period of record
profits and high inflation, and facing into difficult
headwinds due to macro economic uncertainties
and weakening demand across many of
Kingspan’s markets. In view of the uncertain
outlook, financial performance targets for 2023
were based on analysts’ consensus forecasts at
that time and divisional budgets for the year,
combined with the results of the non-financial
measure of the NPS. Annual performance bonus
payments achieved by the executive directors
for 2023 were between 68.8% and 97.1% of
maximum, reflecting the excellent Group results
and robust divisional performances in the year.
Details of the targets set and performance
against them are set out later in this report.
Kingspan delivered record profits
again in 2023, notwithstanding
tough prior year comparators and
challenging conditions in some
of our core markets.
92 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 93
Last year, I explained about the impact of a
number of external factors on Kingspan’s share
price, including the ongoing war in Ukraine and
the continuing high levels of inflation leading to
general market uncertainty, with resulting zero
vesting of the Total Shareholder Return (‘TSR’) part
of the 2020 PSP award. There has been significant
recovery of our share price during the year,
resulting in a partial vesting of the TSR element
of this award. In addition, our strong long-term
EPS growth of 19.6% CAGR over the three-year
performance period and performance against our
Planet Passionate sustainability objectives has
resulted in 82.5% of the total 2021 PSP awards
vesting in 2024.
The committee has reviewed the incentive
payments for the year against overall business
performance and investor returns for 2023 as well
as the longer three-year performance period for
the 2021 PSP awards, and is satisfied that the
formulaic outcome of the incentives appropriately
reflects Group performance as well as individual
contribution and that no discretion to adjust is
necessary. The committee has also reviewed the
share price at the time of granting the 2021 PSP
awards (being €62.70 for the first grant, and
€96.16 for the second grant) compared to the
grant price for the 2020 PSP awards (€61.80) as
well as the average share price for December 2023
(€76.10) being a proxy for the vesting share price.
The committee is comfortable that there are no
circumstances that required the committee to
consider a scale back of the vesting levels.
The targets for the 2023 PSP awards are set out
in the main body of this report and provide a
robust level of stretch, particularly when taking
into account the high 2022 base point that the
2023 growth targets are derived from, the year on
year growth rates of the business as well as the
economic backdrop and market expectations for
the business.
2024 Remuneration
Salaries
As part of the annual salary review process the
committee has carefully considered the salaries
and overall remuneration packages of each of the
executive directors in the context of their roles,
responsibilities and market pay levels.
The committee is aware that all four executive
directors have remuneration packages that are
significantly below market for a company of the
size and complexity of Kingspan. The committee
is also aware that it needs to consider market
levels of remuneration in the markets in which
Kingspan operates and address any issues of pay
compression as the business looks to manage
recruitment and retention within all of its markets.
As a result, the committee will undertake, during
the course of the next 12 months, to review
the quantum and structure of the executive
directors’ remuneration, considering both the size
and complexity of the business as well as their
specific responsibilities and experience, and will
put forward its proposals to adjust the executive
directors remuneration to bring it closer to market
levels in the next Remuneration Policy review.
In the meantime the committee has agreed the
following salary increases effective 1 January 2024:
• Gene Murtagh, CEO, and Russell Shiels,
President of Insulated Panels Americas and
Data + Flooring Global, will receive a salary
increase of 5% with effect from 1 January
2024 which compares with wider workforce
increases (covering the vast majority of the
workforce) of c. 4% to 5%, depending on
region.
• Geoff Doherty, Group CFO, and Gilbert
McCarthy, Managing Director Insulated Panels
EAA, will each receive a salary increase of
9.5% also effective from 1 January 2024. The
CFO’s role has grown substantially, due to
organic growth and acquisitions which have
seen Kingspan grow almost fivefold in size over
the past decade with a correlative increase in
complexity, whilst at the same time the scope
of his responsibilities have greatly expanded
including for example in the areas of cyber
security and CSRD reporting. To date, there
has been no corresponding increase to the
CFO’s salary to take account of these factors.
Similarly Mr McCarthy’s role and responsibilities
have increased significantly in recent years
particularly as a result of expansion of the
Insulated Panels business into new markets
in Western Europe and Australasia. As a
result, the committee agreed that these two
executives should receive a salary increase this
year above those being applied to the wider
workforce. The resulting salaries remain, after
this increase, below market.
Pension
The pension contributions for the executive
directors will reduce once again for 2024 to
between 12% and 14%. There is one final reduction
to be made which will result in all four executive
directors receiving annual pension payments of
10% of salary from 2025.
Incentive opportunities
As explained above, last year due to market
uncertainties the annual performance bonus
targets were based in part on consensus profit
forecasts. For 2024, the annual performance
bonus targets will revert to the more usual EPS
growth relative to the prior year basis. As they
are commercially sensitive, they are not disclosed
in this report but will be provided retrospectively
in next year’s report. For the CEO and CFO, the
maximum opportunity will remain at 150% of
salary, with 140% of the award determined by
Group EPS and 10% for customer NPS. For the two
managing directors their maximum opportunity
will also remain at 150% of salary, with 140% of the
award split between divisional profits and Group
EPS, and the remaining 10% for customer NPS.
We will also continue to assess our Performance
Share Plan (PSP) against EPS, relative TSR and our
Planet Passionate targets. The remuneration policy
which was approved by c.80% of shareholders
in 2022 lifted the ceiling on PSP awards to 300%
to provide headroom to increase awards as the
business continued to grow in scale and complexity.
Recognising the growth in the scale of the business
in recent years, the committee has increased the
level of PSP awards to be granted to each of the
executive directors by 25% of salary. The grant
levels in 2024 will therefore be at 250% of salary to
the CEO (previously 225%), and to 225% of salary
(previously 200%) for the other executive directors,
which the committee considers to be well within
market norms and the policy limit of 300%. At the
same time we have increased the minimum share
ownership requirements to 250% for the CEO, and
to 225% for the other executive directors, which is
aligned to the increased award levels.
Policy review
Our current Directors’ Remuneration Policy was
approved by shareholders at our 2022 AGM.
Under Irish regulations we are required to seek
shareholder approval for a new policy at our 2026
AGM at the latest, but if considered appropriate
we can seek approval sooner for any earlier
changes. The committee will, during the course
of 2024, review the current executive directors’
remuneration arrangements and the performance
metrics in both the long-term and short-term
incentive schemes, and consider whether any
changes should be brought to the 2025 AGM. To
the extent the committee considers changes are
needed we will engage with investors to seek their
feedback on any new proposals.
Conclusion
Kingspan’s excellent performance against a
challenging market backdrop is fairly reflected in
the incentive outcomes for 2023. The committee
is satisfied that the incentive outturn for 2023
and the setting of targets for 2024 are in all the
circumstances appropriate and aligned with our
remuneration philosophy, noting the need to
incentivise and reward outstanding performance
while setting targets that drive superior
performance and are appropriately retentive.
I hope that you will join the Board in approving
the resolution on the Report of the Remuneration
Committee at the AGM on 26 April 2024. If
you have any queries in the meantime I can be
contacted through our Company Secretary.
Linda Hickey
Chair of the Remuneration Committee
94 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 95
2023 Outturn
2023 Fixed Pay v Variable Pay
70%
2023 Variable Pay Short-term v Long-term
54%
30%
Fixed
Variable
46%
Short-term
Long-term
REMUNERATION AT A GLANCE
Fixed pay
2024 salary
€1,004k
€677k
$732k
€625k
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
% increase
from 2023
Workforce
increase
Pension
5%
9.5%
5%
9.5%
Global workforce range of 4% to 5%
2023: 14% to 19%
2024: 12% to 14%
2025: all at 10%
Annual Bonus
2023 outturn
Maximum opportunity: 150% of salary
Outturn: 68.8% to 97.1% of maximum
2024
maximum
opportunity
2024
performance
conditions &
structure
150% of salary
(No change from 2023)
140% of salary Group EPS and
10% of salary NPS targets
70% of salary Divisional
profit targets, 70% of salary
Group EPS and 10% of
salary NPS targets
Any bonus in excess of 100% of salary paid in shares
deferred for two years
Performance
Share Plan
2021 Award
vesting level
Award level: CEO 200%, other Directors 175%
Vesting level: 82.5% of maximum
2024 Award
grant level
2024
performance
conditions &
structure
CEO: 250% of salary
Other Directors: 225% of salary
(2023: CEO 225% and others 200%)
45% EPS growth, 45% TSR vs peer group and
10% Planet Passionate goals
3-year performance period plus
2-year post vesting holding period
Share ownership requirements
from 2024
CEO: 250% of salary
Other directors: 225% of salary
96 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 97
Bleckmann Almelo
Almelo, Netherlands
Insulated Panels
QuadCoreTM insulated panels
DIRECTORS’ REMUNERATION POLICY
• Transparency so that it is objectively
This section of the report outlines the current
policy for the remuneration of the Company’s
directors. The current remuneration policy was
approved by shareholders at the AGM on 29
April 2022 and is set out in full in the 2021 Annual
Report, and can be found on the Company’s
website at www.kingspan.com.
Our remuneration philosophy
At Kingspan, we have developed a clear philosophy
around remunerating and incentivising employees
at all levels of the organisation. The principles
against which we determine our approach to
remuneration, and make decisions, are:
• Pay for performance ensuring that
variable remuneration is only paid for strong
performance and maximum payouts will only
be realised for truly exceptional performance.
• Clarity so that executives and shareholders
can understand our pay arrangements without
overly complex rules.
transparent with high levels of disclosure in the
Annual Report.
• Alignment with shareholders by delivering
a significant proportion of remuneration
through equity, and by setting executive share
ownership guidelines.
• Alignment to culture designed to drive
superior returns for shareholders based on our
high performance culture and key measures
aligned to strategy, and embedding our
Planet Passionate and Customer NPS goals
throughout the business.
This approach cascades through the organisation
and has played a key role in driving the growth
of the business and significant value creation for
stakeholders over the years.
The policy for the key elements of the executive
directors’ remuneration is set out in the table
below:
Key element
Operation
Opportunity and measures
FIXED REMUNERATION
Base Salary
To attract and retain the best
global talent of the calibre
required to deliver the Group’s
strategy.
Benefits
To provide benefits which are
competitive with the market.
Pensions
To provide a retirement
benefit which is competitive
with the market.
Base salaries are reviewed annually by the
Remuneration Committee in the last quarter of
each year. A broad assessment of individual and
business performance is used by the committee
as part of the salary review. Increases will
generally be in line with increases across the
Group, but may be higher or lower in certain
circumstances to reflect performance, changes
in remit, roles and responsibilities, or to allow
newly appointed executives to move progressively
towards market norms.
In addition to their base salaries, executive
directors’ benefits include but are not limited
to life and health insurance and the use by
the executive directors of company cars (or a
taxable car allowance) and relocation or similar
allowances on recruitment, each in line with
typical market practice.
Kingspan operates a defined contribution
pension scheme for executive directors. Pension
contributions are calculated on base salary only.
Alternatively, Kingspan may pay a cash amount
subject to all applicable employee and employer
payroll taxes and social security.
Any increase will typically be
in line with those awarded
to the broader employee pay
environment. The committee
has discretion to award higher
increases in circumstances that
it considers appropriate, such as
a change in role or responsibility.
Benefits are set at a level
which the committee considers
appropriate in light of the
market and depending on
the role and an individual’s
circumstances.
Incumbent executive director
pensions will be reduced to 10%
of salary from 2025.
Newly appointed executive
director pensions will be capped
at the rate applicable in the
relevant market.
Key element
Operation
Opportunity and measures
VARIABLE REMUNERATION
Annual performance bonus
To reward the delivery of short-
term performance targets and
business strategy, satisfied in
cash and deferred share awards,
aligning management interests
with shareholders and the longer
term performance of the Group.
Executive directors receive an annual performance
related bonus based on the attainment of
financial and non-financial targets set prior to the
start of each year. Bonuses are paid on a sliding
scale if the targets are met. Maximum bonus is
only achieved if ambitious incremental growth
targets are achieved.
The maximum potential bonus
for the executive directors is
150% of base salary.
The committee selects
stretching performance targets
each year.
No more than 100% of salary can be delivered in
cash through the bonus plan. Any performance
related bonus achieved in excess of the cash
amount is satisfied by the grant of share awards,
which are deferred for two years.
Bonus payment for financial
targets is 0% at threshold entry
point. Bonus is paid on a straight
line basis for achieving each
point on the NPS target scale.
Long-term incentive plan
(LTIP)
To reward the sustained strong
performance and delivery of
Group strategic objectives over
the longer term. Aligns the
interests of executive directors
and senior managers with those
of the Group’s shareholders and
recognises and rewards value
creation over the longer term.
The committee has discretion to adjust formulaic
bonus outcomes to reflect company performance.
Executive directors are entitled to participate in
Kingspan’s Performance Share Plan (PSP). Under
the terms of the PSP, performance shares are
awarded to the executive directors and the senior
management team. The performance shares
will vest after three years only if the Group’s
underlying performance has improved during
the 3-year performance period, and if certain
financial and non-financial sustainability targets
are achieved over the performance period.
The awards are subject to a two-year post vesting
holding period.
The policy on non-executive directors’ remuneration is as follows:
Key element
Operation
Non-executive director fees
To reflect time commitment,
experience and responsibilities,
and to attract and retain high
calibre non-executive directors
by offering a market competitive
fee level.
Non-executive director fee levels are reviewed
annually.
The Chairman receives a single fee for all their
responsibilities.
Other non-executive directors receive a basic
board membership fee. The chair of Board
committees and the Senior Independent Director
receive an additional fee for this role.
Non-executive directors are entitled to the
reimbursement of reasonable business expenses
including any tax (grossed up) that may be
payable on those expenses.
The maximum award level under
the policy is 300% of salary.
The committee will not increase
awards above 250% of salary in
the current policy period without
first engaging with its largest
investors and considering the
feedback received.
Prior to granting an award, the
committee sets performance
conditions which it considers
to be appropriately stretching.
On achieving the threshold
performance target, not more
than 25% of an award will vest.
Opportunity
Fees for non-executive directors
are within the limits set by the
shareholders from time to time,
with a current aggregate limit
of €975,000.
98 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 99
The following are key structural aspects of the remuneration policy in relation to the directors’ remuneration contracts:
Total Pay over 5 Years
Year 1
Year 2
Year 3
Year 4
Year 5
Clawback and malus
Ensures an appropriate balance
between risk and reward.
Covers material misstatement of financial results, material breach
of executive’s employment contract, error in contract, failure of risk
management, corporate failure, wilful misconduct, recklessness and/or fraud
resulting in serious damage to the financial condition or business reputation
of the Company.
Fixed Pay
Salary,
benefits
and
pension
Shareholding guideline
Ensures alignment between the
interests of executive directors
and shareholders.
Post cessation of employment
and general shareholding
requirements
Ensures alignment between the
interests of executive directors
and shareholders.
Approach to recruitment
To attract an executive director
of the calibre required to shape
and deliver the Group’s business
strategy.
Termination - notice periods
Termination - annual
performance bonus and
long-term incentive plans
The period within which clawback and malus can be operated is 2 years from
payment of annual bonus and/or vesting of LTIP awards.
250% of salary for the CEO and 225% for the other directors, to be achieved
through the retention of at least 50% of all vested variable pay awards.
Achievement of guideline is measured through beneficially owned shares only.
For new appointees, the committee may consider it appropriate to require a
percentage of the annual bonus paid to be deferred into shares (rather than
just bonus in excess of 100% of salary), in order to achieve this guideline.
All executive directors are subject to a post-employment shareholding
requirement of the lower of (i) shares or equity interests held on cessation, or
(ii) 200% of salary, for 2 years post-employment.
Achievement is measured through beneficially owned shares, and the
retention of vested deferred share and LTIP awards.
In exceptional circumstances, such as to facilitate recruitment, the
committee may exercise its discretion and grant LTIPs up to a maximum
of 400% of salary.
Each of the executive directors have service contracts with Kingspan which
provide for 12 months’ notice of termination by the Company (or, at the
discretion of the Company, payment for all or part thereof) and 6 or 12
months by the director and it is Kingspan’s policy that notice periods will
not exceed 12 months. The service contracts do not include any provision
for compensation for loss of office, other than the notice period provisions
set out above. There are no enhanced provisions on a change of control and
there are no specific severance arrangements.
The committee’s policy in relation to termination of service contracts is to
deal with each case on its merits having regard to the circumstances of the
individual, the termination of employment, any legal advice received and
what is in the best interests of Kingspan and its shareholders.
Annual performance bonuses and PSP awards are dealt with in accordance
with the rules of the relevant plans. At the discretion of the committee (and
normally where the individual has served a minimum of 6 months of the
bonus year), a pro-rata annual performance bonus may become payable
at the normal payment date for the period of service subject to full year
performance targets being met.
The default treatment for share based awards is that any unvested award
will lapse on termination of employment. However, under the rules of the
Performance Share Plan, in certain prescribed circumstances (e.g. “good
leaver”), awards are eligible to vest subject to the performance conditions
being met over the normal performance period (or a shorter period at the
committee’s discretion) and with the award being reduced pro-rata by an
amount to reflect the proportion of the vesting period not actually served.
Annual Bonus
(Malus and clawback
provisions apply)
Up to
100% of
salary in
cash
Excess bonus in shares
Two year deferral period
No further performance
conditions
LTIP
(Malus and clawback
provisions apply)
Three-year performance period
Two-year post-vesting
holding period
No further
performance conditions
Shareholding Requirement
(From 2024, 250% of salary
for the CEO and 225% for
the other directors)
Executive directors’ minimum shareholding requirement
Kingspan’s philosophy is to pay
for performance and delivery
of our strategy, based on clear
transparent metrics, aligned with
the interests of shareholders and
wider stakeholders.
100 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 101
2023 REMUNERATION OUTTURN
The table below sets out the total remuneration for the executive and non-executive directors for the financial years ended
31 December 2023 and 2022.
Base salary
All of the executive directors received basic salary increases
for 2023 of 3% which was below the overall global workforce
range of c.4.5% to 6%. The salaries for 2023 were:
Executive Directors
Gene Murtagh
EUR’000
Geoff Doherty
EUR’000
Russell Shiels(¹)
EUR’000
Gilbert McCarthy
EUR’000
Total
EUR’000
Fixed Remuneration
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Salary and Fees
Pension Contributions (2)
Benefits (3)
956
134
32
928
148
37
Total Fixed Remuneration
1,122
1,113
Performance Pay
Annual Incentives
Cash Element
Deferred Share Awards
Long Term Incentives
956
437
928
225
LTI - Grant Value (4) (5)
1,463
750
LTI - Share Price Growth (4) (5)
235
23
618
99
38
755
618
283
827
127
599
120
35
754
599
145
415
13
644
122
94
860
644
258
765
117
642
154
73
869
642
181
384
12
571
80
47
698
571
18
765
117
554
2,789
2,723
94
40
435
211
516
185
688
3,435
3,424
554
125
2,789
2,723
996
676
384
3,820
1,933
12
596
60
Total Performance Pay
3,091
1,926
1,855
1,172
1,784
1,219
1,471
1,075
8,201
5,392
Total Remuneration
4,213
3,039
2,610
1,926
2,644
2,088
2,169
1,763
11,636
8,816
Non-Executive Directors
2023
2022
Jost Massenberg
Linda Hickey
Anne Heraty
Éimear Moloney
Paul Murtagh
Senan Murphy(6)
Louise Phelan(7)
Michael Cawley(8)
John Cronin(9)
Total Non-Executive Pay
Total Directors’
Remuneration
350
105
75
75
75
85
50
30
25
350
105
75
75
75
19
-
90
75
870
864
12,506
9,680
(1) Russell Shiels’ remuneration is denominated in USD, and has been converted to Euro at the following average rates USD: 1.0818
(2022: 1.0544).
(2) The Group operates a defined contribution pension scheme for executive directors. Certain executives have elected to receive part
of their prospective pension entitlement as a non-pensionable cash allowance in lieu of the pension benefit foregone, subject to all
applicable employee and employer payroll taxes.
(3) Benefits principally relate to health insurance premiums and company cars/car allowances. In the case of Russell Shiels the cost of life
insurance and permanent health benefit is also included.
(4) The vesting value of the 2021 LTIP award (vesting in 2024) has been calculated using the average share price for December 2023,
being €76.10. The calculation for this award will be adjusted in next years’ annual report to reflect the share price on the vesting dates
(24/02/2024) and (23/08/2024). The share price increased from the date of grant in respect of the awards granted on 24/02/2021
(share price: €62.70) and the share price decreased in respect of the awards granted on 23/08/2021 (share price: €96.16) to the share
price used to determine the vesting value.
(5) The vesting value of the 2020 LTIP award (that vested in 2023) has been calculated using the share price at the date of vesting
(24/02/2023) of €63.68. The share price increased from the date of grant (share price: €61.80) to the date of vesting.
(6) Senan Murphy was appointed as a non-executive director on 1 October 2022.
(7) Louise Phelan was appointed as a non-executive director on 28 April 2023.
(8) Michael Cawley retired as a non-executive director on 28 April 2023.
(9) John Cronin retired as a non-executive director on 28 April 2023.
• Gene Murtagh: €956,000
• Geoff Doherty: €618,000
• Russell Shiels: $697,000
• Gilbert McCarthy: €571,000
Pension
As outlined in previous Annual Reports, all executive
directors’ contractual pension contributions will be
reduced to 10% of base salary from 2025. This approach,
which balances the legacy contractual entitlement of
the executive directors with the general expectations
of stakeholders, was adopted by the committee and
subsequently supported by shareholders following feedback
on the 2019 Remuneration Policy.
Executive Director
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
2021
18%
24%
33%
20%
Pension Contribution
2022
16%
20%
24%
17%
2023
14%
16%
19%
14%
2024
12%
13%
14%
12%
2025
10%
10%
10%
10%
2023 performance related bonus
All executive directors were eligible for a maximum performance related bonus opportunity of up to 150% of base salary.
Annual performance bonus targets are a mixture of Group and divisional financial performance measures, as well as
non-financial targets based on NPS customer experience scores. Financial performance targets for 2023 were based
on analysts’ consensus forecasts for trading profit as at that time (€747m) and divisional budgets for the year. NPS
measures brand loyalty and is one of the metrics we use to measure customer experience as part of the Worldwide
Voice of Customer programme. An external review by an independent third party validates the NPS scores and
underlying methodology.
Performance against targets, and bonus achieved, are set out in the tables below.
Bonus measure
Max.
opportunity/
weighting (as
% salary)
Threshold
target
Target for
maximum
Performance
Outcome
(% of
weighted
measure)
Chief
Executive
Group trading
profit
Chief
Financial
Officer
Russell
Shiels
Gilbert
McCarthy
NPS
Group trading
profit
NPS
Divisional profit
Group trading
profit
NPS
Divisional profit
Group trading
profit
NPS
140%
10%
140%
10%
70%
70%
10%
70%
70%
10%
€672m
€822m
€877m
100%
NPS of 41 to 47
€672m
€822m
NPS of 41 to 47
90% of prior year
105% of prior year
€672m
€822m
44
€877m
44
144.2%
€877m
Divisional NPS range not disclosed
90% of prior year
100% of prior year
€672m
€822m
93.3%
€877m
Divisional NPS range not disclosed
57.1%
100%
57.1%
100%
100%
0%
33.1%
100%
100%
102 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 103
Executive
Overall annual performance outcome
% of max. opportunity
% of salary
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
97.1%
97.1%
93.3%
68.8%
145.7%
145.7%
140.0%
103.1%
All bonuses earned in excess of 100% of base salary will be satisfied by the grant of share awards, which
are deferred for two years.
Sports Hall
Louvain-la-Neuve
Wallonia, Belgium
Insulated Panels
JI insulated panels;
JI roof and wall profiles
Performance Share Plan (PSP)
Vesting of awards granted in 2021
Performance against targets and vesting levels for the PSP awards granted in 2021 are set out below.
Weighting % of award that will vest
Outcome
Vesting %
EPS
TSR
45%
45%
Planet Passionate
10%
Total Vesting
Planet
Passionate
Carbon
Energy
0%
25%
100%
Less than 6%
CAGR
Less than
Median
See below
6% CAGR
12% CAGR
19.6% CAGR
Median
Upper Quartile
or higher
62nd percentile
See below
See below
45%
27.5%
10%
82.5%
Performance Measure
Weighting1
2020
Base Year
2023
Target
2023
Actual
Vesting
%
Net Zero carbon
manufacturing (scope 1 & 2
GHG emissions – tCO2e)2
Zero emissions company cars –
annual replacement (%)
60% direct renewable
energy use (%)
20% on-site energy
generation (%)
Solar PV systems on all wholly
owned facilities (%)
1.1% 409,7833
327,820
111,977
100%
1.1%
11
50
70
100%
1.1%
19.5
30.0
38
100%
1.1%
4.9
8.5
9.9
100%
1.1%
20.93
41.0
54.1
100%
Circularity Zero company waste to
1.1%
18,6403
13,937
8,282
100%
landfill (tonnes)
Recycle 1 billion PET bottles into
our manufacturing processes
annually (million bottles)
QuadCoreTM products utilising
recycled PET (no. of sites)
Water
Harvest 100 million litres
of rainwater annually
(million litres)
1.1%
573
600
858
100%
1.1%
1
8
8
100%
1.1%
20.1
44.0
56.3
100%
Overall Vesting of Planet Passionate measures
100%
All figures related to the underlying business. Underlying business includes manufacturing, assembly and R&D sites within the Kingspan
Group in 2020 plus all organic growth.
1 Net Zero Energy target was removed from the programme in 2022 and replaced with an internal carbon charge to put central focus on
absolute GHG emission reduction. Its 1% weighting was reallocated across the other measures on an equal basis.
2 Excluding biogenic emissions. Scope 2 GHG emissions calculated using market-based methodology.
3 Restated figures due to improved data collection, change in calculation methodologies and site disposal.
104 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 105
The peer group against which TSR performance was measured was as follows:
Armstrong World Industries Inc.
Mohawk Industries Inc.
Boral Ltd
Compagnie de Saint Gobain SA
CRH plc
Geberit AG
Grafton Group plc
Holcim AG
Owens Corning Inc.
Rockwool Intl. AS
Sika AG
Travis Perkins plc
Wienerberger AG
Grant of awards in 2023
The Executive Directors were granted the following PSP awards in 2023:
Executive
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
Basis of the
award (% of
salary)
225%
200%
200%
200%
Threshold vesting1
(% of award)
Number of
awards granted
Grant date
25%
25%
25%
25%
33,917
19,489
20,166
18,007
20 February 2023
20 February 2023
20 February 2023
20 February 2023
Summary of PSP awards
The table below sets out the total number of PSP awards held by the directors and the Company Secretary during the year:
Performance Share Plan
Director
At 31
Dec
2022
Granted
during
year
Vested
during
year
Exercised
or
cancelled
during the
year
At 31
Dec
2023
Option
price €
Earliest
exercise date
Latest expiry
date
Gene Murtagh
Unvested
76,149
33,917
(12,134)
(12,134) 1 85,798
Vested
75,220
-
12,134
-
87,354
151,369
33,917
-
(12,134)
173,152
Geoff Doherty
Unvested
42,944
19,489
(6,715)
(6,715) 1 49,003
Vested
-
-
6,715
(6,715) 2
-
42,944
19,489
-
(13,430) 49,003
Russell Shiels
Unvested
41,156
20,166
(6,211)
(6,211) 1 48,900
Vested
-
-
6,211
(6,211) 3
-
41,156
20,166
-
(12,422) 48,900
24/02/2024
20/02/2030
26/02/2021
24/02/2027
24/02/2024
20/02/2030
-
-
24/02/2024
20/02/2030
-
-
24/02/2024
20/02/2030
26/02/2021
24/02/2027
24/02/2024
20/02/2030
26/02/2021
24/03/2027
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
0.13
1. Except for Planet Passionate element where vesting is determined on achievement of each target.
Gilbert McCarthy
The vesting of the 2023 PSP awards is based on achievement of the EPS, TSR and sustainability targets
set out below.
Weighting
% of award that will vest
EPS1
TSR1
Planet Passionate
45%
45%
10%
0%
Less than 3% p.a.
Less than Median
Various
25%
3% p.a.
Median
-
100%
6% p.a.
Upper Quartile or higher
Various
1. Straight line vesting between threshold and 100% vesting.
The TSR peer Group for the 2023 PSP awards is set out below:
Armstrong World Industries Inc
Boral Ltd
Builders FirstSource Inc
Carlisle Companies Inc
Compagnie de Saint Gobain SA
CRH plc
Grafton Group plc
Holcim AG
Masco Corporation
Mohawk Industries Inc
Owens Corning Inc
Recticel NV
Rockwool Intl. AS
Sika AG
Wienerberger AG
Unvested
39,719
18,007
(6,211)
(6,211) 1 45,304
Vested
83,778
-
6,211
(44,859) 4
45,130
123,497
18,007
-
(51,070) 90,434
Company Secretary
Lorcan Dowd
Unvested
9,232
3,548
(2,080)
(2,080) 5
8,620
Vested
17,405
-
2,080
(8,710) 6
10,775
26,637
3,548
-
(10,790)
19,395
1 Cancelled on 24/02/2023 due to partial achievement of performance conditions.
2 Exercised on 27/02/2023. Market value on day of exercise €63.68.
3 Exercised on 21/03/2023. Market value on day of exercise €60.40.
4 Exercised 21,819 on 21/02/2023. Market value on day of exercise €64.00.
Exercised 23,040 on 12/10/2003. Market value on day of exercise €70.02.
5 Cancelled on 24/03/2023 due to partial achievement of performance conditions.
6 Exercised 3,958 on 17/02/2023. Market value on day of exercise €63.58.
Exercised 4,752 on 09/10/2023. Market value on day of exercise €69.69.
106 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 107
Deferred Share Awards
The table below sets out the total number of Deferred Share Awards held by the directors at year end:
Director
At 31 Dec
2022
Granted
during
year
Vested &
transferred
during year
At 31 Dec
2023
Earliest vesting/
transfer date
Gene Murtagh
Geoff Doherty
Russell Shiels
Unvested
Unvested
Unvested
5,021
3,242
3,107
Gilbert McCarthy
Unvested
2,998
3,545
2,288
2,860
1,971
-
-
-
-
8,566
5,530
5,967
4,969
31/03/2024
31/03/2024
31/03/2024
31/03/2024
Directors’ & Secretary’s interests in shares
The beneficial interests of the directors and secretary and their spouses and minor children in the shares
of the Company at the end of the financial year are as follows:
Executive directors
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
Non-executive directors
Jost Massenberg (Chairman)
Linda Hickey
Anne Heraty
Éimear Moloney
Paul Murtagh
Senan Murphy
Louise Phelan
Company Secretary
Lorcan Dowd
31 Dec 23
31 Dec 22
Shareholding
at 31 Dec 23¹
(% Salary)
Shareholding
requirement met
(200% salary)
1,080,020
1,080,020
253,547
226,008
282,833
256,635
219,797
282,833
8,597%
3,122%
2,669%
3,769%
Yes
Yes
Yes
Yes
1,000
5,000
2,250
2,000
-
-
-
-
5,000
2,250
2,000
-
-
n/a
3,667
3,457
1. Expressed as a percentage of base salary on 31 December 2023 and calculated using the average share price for
December 2023 (€76.10).
As at 16 February 2024, there have been no changes in the directors’ and secretary’s interests in shares
since 31 December 2023.
Non-executive directors
The Chairman’s fee is €350,000. The basic non-executive director fee is €75,000. An additional fee of
€15,000 is paid for chairing the Remuneration Committee and the Audit & Compliance Committee, as
well as for the Senior Independent Director.
Payments to former directors and for loss of office
Michael Cawley and John Cronin both retired from the board on 28 April 2023 and were paid their non-
executive director fee to that date. A payment of €8,065 was paid to former director, John Cronin, in
respect of consultancy services. There were no other payments to past directors or payments to directors
for loss of office.
Change in directors and employee remuneration
The table below shows the percentage change in fixed and variable remuneration using the single
figure methodology for the directors of the Company and the global average total remuneration of an
employee for the respective year ends.
Fixed Remuneration1
Variable Remuneration2
%
change
2022 to
2023
%
change
2021 to
2022
%
change
2020 to
2021
%
change
2022 to
2023
%
change
2021 to
2022
%
change
2020 to
2021
1%
0%
-1%
1%
0%
0%
-67%
-67%
0%
0%
0%
347%
N/A
2%
3%
1%
17%
1%
36%
24%
6%
0%
0%
50%
50%
N/A
N/A
7%
0%
0%
0%
0%
244%
0%
0%
0%
0%
N/A
N/A
N/A
N/A
0%
60%
58%
46%
37%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-1%
-59%
-56%
-51%
-57%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
110%
116%
136%
116%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-24%
32%
Executive directors
Gene Murtagh
Geoff Doherty
Russell Shiels
Gilbert McCarthy
Non-executive directors
Jost Massenberg (Chairman)
Linda Hickey
Michael Cawley3
John Cronin3
Anne Heraty
Éimear Moloney4
Paul Murtagh4
Senan Murphy5
Louise Phelan6
Average Employee7
1. Includes salary and fees, pension contributions and taxable benefits.
2. Includes annual bonus and long term incentives calculated at the market value on the vesting date.
3. Resigned as a director as of 28 April 2023.
4. Appointed as a director as of 30 April 2021.
5. Appointed as a director as of 1 October 2022.
6. Appointed as a director as of 28 April 2023.
7. Calculated by dividing the aggregate payroll costs of employees for the respective year ends (excluding social
welfare costs and costs related to executive directors) by the average number of employees for the respective year
ends as disclosed in note 4 to the consolidated financial statements.
IMPLEMENTATION OF REMUNERATION
POLICY FOR 2024
Base salary and pension
For 2024, the CEO and Mr Shiels will receive salary
increases of 5%, and the CFO and Mr McCarthy
will receive marginally higher increases of 9.5%
with a view to bringing their remuneration closer
to market levels, as set out below. This compares
with the general workforce increases for the
markets in which they are based and the overall
global workforce range of c.4% to 5%.
Base salary
2023
Base salary
2024
Gene Murtagh
€956,000
€1,003,800
Geoff Doherty
Russell Shiels
Gilbert McCarthy
€618,000
$697,000
€571,000
€676,710
$731,850
€625,245
As outlined previously, pension contributions
of all incumbent executives are being reduced
incrementally to 10% from 2025 with rates
applicable for 2024 set out in the table on page 103.
108 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 109
Annual bonus
The maximum bonus opportunity for all the
executive directors remains at 150% of salary and
continues to be measured as to 140% of salary on
financial metrics and 10% of salary on Customer
NPS. The executive directors’ financial element
is based solely on Group EPS and the divisional
directors split equally between Group EPS and
divisional profit targets. Targets are commercially
sensitive and will be disclosed retrospectively with
performance against them in the 2024 Report of
the Remuneration Committee.
Performance share awards
For 2024, the CEO will receive a PSP award
over shares with a market value of 250% of
base salary, and the other executive directors
225% of base salary. There are no changes to
the sustainability measures included in the LTIP,
which are measured against Kingspan’s ambitious
Planet Passionate goals, drawing a clear focus on
achieving one of our core strategic pillars.
The 2024 PSP targets are as set out below.
Performance
Measure
Weighting
EPS
TSR
Planet Passionate
45%
45%
10%
Percentage
vesting at
threshold
25%
25%
0%
Threshold vesting
target
Maximum vesting
target
3% CAGR
Median
-
6% CAGR
Upper quartile
Various
Non-executive director fees
There are no changes to the non-executive director fees for 2024.
Chairman’s annual fee
Non-executive director’s annual fee
Senior Independent Director’s annual fee
Audit or Remuneration Committee Chair’s annual fee
2023
€350,000
€75,000
€15,000
€15,000
2024
€350,000
€75,000
€15,000
€15,000
COMMITTEE GOVERNANCE
Committee membership and attendance
Name
Linda Hickey (Chair)
Michael Cawley1
Anne Heraty2
Éimear Moloney3
Louise Phelan3
Number of Meetings Attended
4/4
1/1
1/1
3/3
3/3
1. Michael Cawley retired from the committee as of 28 April 2023.
2. Anne Heraty retired from the committee as of 28 April 2023.
3. Éimear Moloney and Louise Phelan were appointed to the committee as of 28 April 2023.
The Chief Executive does not normally attend meetings but provides input, where relevant, to the
committee chair prior to the meeting. No individual is present at a meeting when the terms of his or her
own remuneration are discussed. The Company Secretary acts as the secretary to the committee. The
terms of reference are available on the Company’s website: www.kingspan.com
FEB
JUL OCT NOV
Key activities during the year
Salary and fees
Engage independent consultants for policy and benchmark review
Review implementation of overall remuneration policy
Review and approve executives’ salary, role and responsibilities for 2024
Review and approve non-executives’ fees for 2024
Review remuneration benchmark
Review non-financial performance measures
Review and approve Chairman’s fee
Performance pay
Assess Group and individual performance against targets for 2022
Review executive bonus measures and weighting for 2024
Agree Group and individual performance targets for 2024
PSP Awards
Assess performance of 2020/2022 PSP Awards against targets
Determine percentage of 2020/2022 PSP Awards which vest
Review performance measures for grants of PSP Awards for 2023
Agree targets and level for grants of PSP Awards for 2023
Review non-financial Planet Passionate measures for 2023
Governance
Review and approve Report of the Remuneration Committee for the
Annual Report 2022
Update on governance and remuneration trends generally
Consider shareholder votes and feedback from AGM 2023
Engage with shareholders post AGM
External advisors
The Remuneration Committee obtained advice during the year from independent remuneration
consultants Korn Ferry. Korn Ferry’s fees for advice to the committee were £72k. Korn Ferry is a member
of the Remuneration Consultants Group and a signatory to its Code of Conduct, and all advice is
provided in accordance with this code. Korn Ferry also provided some leadership and development
services to Kingspan during the year. The committee concluded that the associated fee for the provision
of this service was not material and would not affect Korn Ferry’s independence and objectivity.
Accordingly, the committee is satisfied that the advice obtained was objective and independent.
Shareholder Voting
The following table summarises the details of votes cast in respect of the resolution on the Report of the
Remuneration Committee at the 2023 AGM.
RESOLUTION
Votes For
Votes Against
Total Votes
Votes
Number
%
Number
%
Number % of Total
Withheld
Voting
Rights
Report of the
Remuneration
Committee
144,479,935
97.41% 3,838,268 2.59% 148,318,203
81.54%
1,560,987
110 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 111
CEO Remuneration vs Kingspan Performance
€10,000
€8,000
€6,000
€4,000
€2,000
€0
)
0
0
0
’
€
(
n
o
i
t
a
r
e
n
u
m
e
R
O
E
C
205c
100%
206c
105%
306c
194%
330c
352c
147%
94%
2019
2020
2021
2022 2023
Fixed
Remuneration
Total
Performance
Pay (excl.
share price
growth)
LTI Share Price
Growth
TSR
EPS
600
500
0
400
300
0
200
100
0
)
%
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
)
s
t
n
e
c
(
e
r
a
h
S
r
e
P
s
g
n
n
r
a
E
i
The graph below shows Kingspan’s TSR performance against the performance of the MSCI World and
MSCI Europe indices over the 10-year period to 31 December 2023:
Total Shareholder Returns %
Kingspan
MSCI World
MSCI Europe
1,000
900
800
700
600
500
400
300
200
100
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Sports Hall Louvain-la-Neuve
Wallonia, Belgium
Insulated Panels
JI insulated panels; JI roof
and wall profiles
112 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Remuneration Committee Directors’ Report 113
REPORT OF THE AUDIT &
COMPLIANCE COMMITTEE
Senan Murphy
Carton Factory
Leichhardt, Australia
Insulated Panels
KS1000RW Trapezoidal
insulated roof panels
As chairman of the Audit & Compliance
Committee, I am pleased to present the
report of the committee for the year
ended 31 December 2023 to stakeholders
and wider society.
114 Kingspan Group plc Annual Report & Financial Statements 2023
This report details how
the Audit & Compliance
Committee has met its
responsibilities under
its Terms of Reference,
the Irish Companies Act
2014 and under the UK
Corporate Governance
Code (July 2018) over the
last twelve months.
The Audit & Compliance Committee focused
particularly on the appropriateness of the
Group’s financial statements and product
compliance processes.
The Audit & Compliance Committee has satisfied
itself, and has advised the Board accordingly, that
the 2023 Annual Report and financial statements
are fair, balanced and understandable, and provide
the information necessary for shareholders to
assess the Group’s performance, business model
and strategy. The significant issues that the
committee considered in relation to the financial
statements and how these issues were addressed
are set out in this report.
The Audit & Compliance Committee has also
satisfied itself in relation to the effectiveness of
the controls and processes regarding product
compliance and monitoring the culture of
compliance across the Group.
Act 2014 and has ensured that the directors are
aware of their responsibilities and comply fully
with this provision.
One of the Audit & Compliance Committee’s
key responsibilities is to review the Group’s risk
management and internal controls systems,
including internal financial controls. During
the year, the committee carried out a robust
assessment of the principal risks facing the Group
and monitored the risk management and internal
controls system on an ongoing basis. Further
details regarding these matters are also set out
later in this report.
The Audit & Compliance Committee also
reviewed the effectiveness of both the external
audit process and the internal audit function
as part of the continuous improvement of
financial reporting and risk management across
the Group.
The Audit & Compliance Committee note the
requirements under section 225 of the Companies
Senan Murphy
Chairman, Audit & Compliance Committee
Report of the Audit & Compliance Committee Directors’ Report 115
ROLE AND RESPONSIBILITIES
The Board has established an Audit &
Compliance Committee to monitor the integrity
of the Group’s financial statements and the
effectiveness of the Group’s internal financial and
IT general controls. Additionally, the committee
has responsibility for reviewing the effectiveness
of the processes and controls associated with
product certification and the marketing of the
Group’s products.
The committee’s role and responsibilities are set
out in the committee’s Terms of Reference which
are available from the Company and are displayed
on the Group’s website (www.kingspan.com).
The Terms of Reference are reviewed annually
and amended where appropriate. During the
year the committee worked with management,
the external auditors and Group Internal Audit in
fulfilling these responsibilities.
The Audit & Compliance Committee report
deals with the key areas in which the Audit &
Compliance Committee plays an active role and
has responsibility. These areas are as follows:
4. The Group’s product compliance and
certification function;
5. Compliance with the Group Marketing Integrity
Manual; and
6. Governance.
Committee membership
As at 31 December 2023, the Audit & Compliance
Committee comprised three independent non-
executive directors, Senan Murphy (chairman),
Anne Heraty and Éimear Moloney. The biographies
of each can be found in the Directors’ Report.
In conjunction with his retirement from the
Board, Michael Cawley retired from the Audit &
Compliance Committee in April 2023.
The Board considers that the committee has an
appropriate and experienced blend of commercial,
financial and industry expertise to enable it to
fulfil its duties, and that the committee chairman,
Senan Murphy B.Comm., F.C.A, has appropriate
recent and relevant financial experience.
1. Financial reporting and related primary areas
of judgement;
2. The external audit process;
3. The Group’s internal audit function and risk
management controls;
Meetings
The committee met four times during the year
ended 31 December 2023. Attendance at the
meetings and matters under review by the Audit
& Compliance Committee at each meeting are
noted in the following tables.
Committee Member
Attended
Eligible
Appointment Date
Senan Murphy (chairman)
Anne Heraty
Éimear Moloney
Michael Cawley (retired)
4
4
4
1
4
4
4
1
2022
2019
2021
2014
Medical Centre
Orly, France
Insulated Panels
JI Sonora; JI Brise;
JI Albe
Audit & Compliance Committee Activities
FEB
JUN
AUG NOV
FINANCIAL REPORTING
Review and approve preliminary & half-year results
Consider key audit and accounting issues and judgements
Review correspondence with Irish Auditing and Accounting Supervisory Authority (IAASA)
Approve going concern and viability statements
Consider accounting policies and the impact of new accounting standards
Review management letter from auditors
Review of any related party matters and intended disclosures
Review Annual Report (including ESEF format) and confirm if fair, balanced
and understandable
EXTERNAL AUDITOR (EY)
Ongoing assessment of auditor performance – including feedback from management
Approval of external audit plan and ongoing review
Review reports and correspondence from the auditor to the Audit &
Compliance Committee
Review of digital audit findings and insights
Confirm auditor independence and consider non-audit services and materiality
of related fees
Review and consideration of audit fees
INTERNAL AUDIT AND RISK MANAGEMENT CONTROLS
Ongoing performance assessment of internal audit team
Review of internal audit reports and monitor progress on open actions
Approve internal audit plan and resources, taking account of risk management
Review of financial and IT general controls
Review of internal audit reports for cybersecurity controls
Review and approve the structure of the internal audit team
Review details of global fraud and cyber-attack attempts and management response
Monitor Group whistleblowing procedures and reports
Assessment of compliance with Group Global Sanctions policy
Review of Group liquidity position
Assessment of the principal risks and effectiveness of internal control systems
PRODUCT COMPLIANCE AND CERTIFICATION
Review and approve internal audit plan for audit of product marketing compliance
with Group Marketing Integrity Manual
Review of internal audit reports relating to product marketing compliance
Review and consider the structure and expertise of the product compliance and
certification team
Meetings and updates from Group Head of Compliance & Certification and divisional
compliance teams
Discussions with divisional management on product compliance and certification
matters as well as site visits
GOVERNANCE
Formal evaluation of external and internal audit functions
Review and approve Directors’ Compliance Statement
Update on Group treasury strategy and approve Group Treasury Policy
116 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Audit & Compliance Committee Directors’ Report 117
Each committee meeting was attended by the
Group Chief Financial Officer, the Head of Internal
Audit & Compliance and the external auditor. The
Company Secretary is the secretary of the Audit
& Compliance Committee. Other directors and
members of the senior management team may
attend meetings as required.
The chairman of the Audit & Compliance
Committee also met with both the Head of
Internal Audit & Compliance and the external
audit lead partner outside of committee meetings
as required throughout the year.
Committee evaluation
As outlined within the Report of the Nominations
& Governance Committee, the performance
of the Board also includes a review of the
committees. Any recommendations raised in
relation to the Audit & Compliance Committee
are acted upon in a formal and structured
manner. No issues were identified for the year
ended 31 December 2023.
Financial reporting
The committee is responsible for monitoring the
integrity of the Group’s financial statements and
reviewing the financial reporting judgements
contained therein. The financial statements are
prepared by a finance team with the appropriate
qualifications and expertise.
The committee confirmed to the Board that
the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders to assess
the Group’s position and performance, business
model and strategy.
In respect of the year to 31 December 2023, the
committee reviewed:
•
•
•
the Group’s Trading Updates issued in April,
July and November 2023;
the Group’s Interim Report for the six months
to 30 June 2023; and
the Preliminary Announcement and Annual
Report to 31 December 2023.
In carrying out these reviews, the committee:
•
reviewed the appropriateness of Group
accounting policies and monitored changes to,
and compliance with, accounting standards on
an ongoing basis;
• discussed with management and the external
auditor the critical accounting policies and
judgements that had been applied;
• compared the results with management
accounts and budgets and reviewed
reconciliations between these and the final
results;
• discussed a report from the external auditor
identifying the significant accounting and
judgemental issues that arose in the course of
the audit;
• considered the management representation
letter, requested by the external auditor for
any non-standard issues and monitored action
taken by management as a result of any
recommendations;
• discussed with management future accounting
developments which are likely to affect the
financial statements;
•
reviewed the budgets and strategic plans of
the Group to ensure that all forward looking
statements made within the Annual Report
reflect the actual position of the Group; and
• considered key areas in which estimates and
judgement had been applied in preparation
of the financial statements including, but
not limited to, a review of fair values on
acquisition, the carrying amount of goodwill,
intangible assets and property, plant
and equipment, litigation and warranty
provisions, recoverability of trade receivables,
determination of lease terms, valuation of
inventory, and tax matters.
The primary areas of judgement considered by the
committee in relation to the Group’s 2023 financial
statements, and how they were addressed by the
committee are set out overleaf.
Each of these areas received particular focus
from the external auditor, who provided detailed
analysis and assessment of the matter in their
report to the committee.
In addition, the Internal Audit team reviews
the businesses covered in its annual internal
audit plan, as agreed by the committee, and
reports its findings to the Audit & Compliance
Committee throughout the year. These internal
audit reviews are focused on areas of judgement
such as warranty provisions, trade receivables
and inventory, and provide the committee with
information on the adequacy and appropriateness
of provisions in these areas.
Primary areas of
judgement
Adequacy of warranty
provision
Recoverability of trade
receivables and adequacy
of provision
Accounting for
acquisitions
Consideration of
impairment of goodwill
Valuation of inventory
and adequacy of inventory
provision
Taxation
Committee activity
The committee reviewed the judgements applied by management in assessing both
specific and risk based warranty provisions at 31 December 2023. The committee
reviewed and discussed with management the monthly reports presented to the Board
which set out, for each of the Group’s divisions, warranty provisions, warranty costs and
an analysis of these costs as a percentage of divisional sales. Warranty provisions are
reviewed on an ongoing basis throughout the year in conjunction with the internal audit
process. The committee was satisfied that such judgements were appropriate and the
risk had been adequately addressed.
The committee reviewed the judgements applied by management in determining the
provision for expected credit loss at 31 December 2023. The committee reviewed and
discussed with management the monthly board report which sets out aged analysis
of gross receivables balances and associated provisions for expected credit loss and
reviewed security (including credit insurance) that is in place. Expected credit loss
provisions are reviewed on an ongoing basis throughout the year in conjunction with
the internal audit process. The committee was satisfied that such judgements were
appropriate and the risk had been adequately addressed.
Total acquisition consideration in 2023 amounted to €226.9m. The committee discussed
with management and the external auditors the accounting treatment for newly
acquired businesses, and the related judgements made by management, and were
satisfied that the treatment in the Group’s financial statements was appropriate.
The committee considered the annual impairment assessment of goodwill prepared
by management for each Cash Generating Unit (“CGU”) using a discounted cash flow
analysis based on the strategic plans approved by the Board, including a sensitivity
analysis on key assumptions. The primary judgement areas were the achievability
of the long-term business plans and the key macroeconomic and business specific
assumptions. In considering the matter, the committee discussed with management the
judgements made and the sensitivities performed. Further detail of the methodology is
set out in Note 10 to the financial statements.
EY also provided the committee with their evaluation of the impairment review process.
Kingspan completed nine acquisitions during the financial year. The measurement
of goodwill is not yet finalised for all acquisitions but the methodology of the
assessments of such items of goodwill was presented to the committee and the results
were deemed appropriate.
The committee reviewed the valuation and provisioning for inventory at 31 December
2023. The main area of judgement was the level of provisioning required for slow moving
and obsolete inventory. The committee reviewed and discussed with management the
monthly board report which sets out, for each of the Group’s divisions, gross inventory
balances and associated obsolescence provision including an analysis by inventory,
category and ageing. Inventory provisions are reviewed on an ongoing basis throughout
the year in conjunction with the internal audit process. The committee was satisfied that
such judgements were appropriate and the risk had been adequately addressed.
Provisioning for potential current tax liabilities and the level of deferred tax asset
recognition in relation to accumulated tax losses are underpinned by a range of
judgements. The committee addresses these issues through a range of reporting
streams from senior management and a process of challenging the appropriateness of
management’s views including the degree to which these are supported by professional
advice from external legal and other advisory firms. This assessment was conducted in
line with the provisions of IFRIC 23. The Group’s Accounting Manual sets out detailed
policies that prescribe the methodology to be used by management in calculating the
above provisions. Each division formally confirms compliance with these policies on an
annual basis. The committee was satisfied that such judgements were appropriate, and
the risk had been adequately addressed.
118 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Audit & Compliance Committee Directors’ Report 119
• a requirement that certain procedures are
followed for the selection of the new statutory
auditor; and
•
restrictions on the entitlement of the
statutory auditing firm to provide certain
non-audit services.
2020. The external auditor also confirmed that
they were not aware of any relationships
between the Group and the firm or between
the firm and any persons in financial reporting
oversight roles in the Group that may affect
its independence.
Kingspan Group plc has fully complied with EU
Audit Reform. With regard to audit firm rotation,
EY was selected as the external auditor for the
financial year commencing 1 January 2020 and is
therefore permitted to continue as auditor until
the financial year ended 31 December 2029 should
the committee consider it appropriate to do so.
Independence and objectivity
The committee is responsible for ensuring
that the external auditor is objective and
independent. EY was appointed as the Group’s
auditor on 1 May 2020, following a formal tender
process in which several leading global firms
submitted written tenders and delivered in-
person presentations.
The committee received confirmation from
the external auditor that they are independent
of the Group under the requirements of the
IAASA Ethical Standard for Auditors (Ireland)
Non-audit services
To further ensure independence, the committee
has a policy on the provision of non-audit services
by the external auditor that seeks to ensure that
the services provided by the external auditor are
not, or are not perceived to be, in conflict with
auditor independence. The committee ensured
that the independence of the external audit was
not compromised by obtaining an account of
all relationships between the external auditor
and the Group, by reviewing the economic
importance of the Group to the external auditor
and by monitoring the audit fees as a percentage
of total income generated from the relationship
with the Group. The committee’s policy on the
provision of non-audit services by the Group’s
external auditor is fully compliant with EU audit
reform legislation.
An analysis of fees paid to the external auditor,
including the non-audit fees, is set out in
Note 6 and below:
Audit v Non-Audit Services (€m)
2023
2022
2021
Audit services
Non-audit services
2020
2019
4.8
0.3
4.1 0.1
3.7
0.3
2.7 0.1
2.6 0.9
Stitch Design Shop
North Carolina, USA
Light, Air + Water
UniQuad® Polycarbonate
Wall System
External auditor
The Audit & Compliance Committee has
responsibility for overseeing the Group’s relationship
with the external auditor including reviewing
the audit team, the quality and effectiveness of
their performance, their external audit plan and
process, their independence from the Group, their
appointment and their audit fee proposals.
Performance and audit plan
Following the completion of the 2022 year end
audit, the committee carried out a review of the
effectiveness of the external auditor and the audit
process. This review involved discussions with both
Group management and internal audit, in addition
to feedback provided by divisional management.
The committee continues to monitor the
performance, independence and objectivity of the
external auditors and takes this into consideration
when making its recommendations to the Board
on the remuneration, the terms of engagement
and the re-appointment, or otherwise, of the
external auditors.
Prior to commencement of the 2023 year end
audit, the committee approved the external
auditor’s work plan and resources and agreed
with the auditor’s key areas of focus, including
accounting for acquisitions, warranty provisions
and revenue recognition.
During the year, the committee met with the
external auditor without management being
present. This meeting provided the opportunity
for direct dialogue and feedback between the
committee and the auditor, where they discussed
inter alia some of the key audit management
letter points.
EU audit reform
The regulatory framework for the Group’s statutory
audit is governed by EU legislation under Directive
2014/56/EU and Regulation EU No. 537/2014.
EU Audit reform legislation is applicable in the
Member States of the European Union, including
Ireland. Under this legislation, Kingspan Group
plc is considered a Public Interest Entity (PIE). Key
developments falling from the implementation of
this legislation are:
• a requirement that the PIE changes its
statutory auditor every ten years (following
rotation, the statutory audit firm cannot be
reappointed for four years);
120 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Audit & Compliance Committee Directors’ Report 121
Internal audit and compliance
The committee reviewed and agreed the annual
internal audit plan, which the committee
believes is appropriate to the scope and nature
of the Group. The internal audit plan is risk
based, with all divisions audited every year, and
all new businesses audited within 12 months of
acquisition.
The committee reviewed reports from the Head
of Internal Audit & Compliance at its quarterly
meetings. These reports enable the committee to
monitor the progress of the internal audit plan,
to discuss key findings and the plan to address
them, and to obtain status updates of previous
key findings.
The committee is responsible for reviewing the
effectiveness of the internal audit function
and does so based upon discussion with Group
management, the Group’s external auditor and
feedback provided by divisional management.
The committee was satisfied that the internal
audit function is working effectively, improves risk
management throughout the Group and that
the internal audit team is sufficiently resourced
in addition to having the adequate level of
experience and expertise.
The terms of reference of the Audit & Compliance
Committee were extended in December 2020 to
include oversight of the processes around product
certification and product marketing. The Head of
Internal Audit & Compliance also reports to the
committee in this regard.
Risk management and internal controls
The Audit & Compliance Committee has been
delegated, from the Board, the responsibility
for monitoring the effectiveness of the Group’s
system of risk management and internal control.
As part of both the year end audit and the half
year review process, the Audit & Compliance
Committee monitors the Group’s risk management
and internal control processes through detailed
discussions with management and executive
directors, the review and approval of the internal
and external audit reports, all of which highlight
the greatest areas of risk and control weakness
in the Group. All weaknesses identified by
either internal or external audits are discussed
by the committee with Group management
and an implementation plan for the targeted
improvements to these systems is put in place.
The implementation plan is overseen by the Group
Chief Financial Officer and the committee is
satisfied that this plan is being properly executed.
Medical Centre
Orly, France
Insulated Panels
JI Sonora; JI Brise;
JI Albe
of the business to formally identify the key
risks facing the Group. Full details of this risk
assessment and the key risks identified are set out
in the Risks & Risk Management section of this
Annual Report.
These processes, which are used by the Audit
& Compliance Committee to monitor the
effectiveness of the Group’s system of risk
management and internal control, are in place
throughout the accounting period and remain
in place up to the date of approval of this
Annual Report.
The main features of the Group’s internal control
and risk management systems that specifically
relate to the Group’s financial reporting and
accounts consolidation process are set out in the
Report of the Directors.
Product compliance and certification
The Audit & Compliance Committee has
responsibility for reviewing the effectiveness
of the processes and controls associated with
product compliance and monitoring the culture
of compliance across the Group.
The Group product compliance framework can be
split into two categories:
As part of its standing schedule of business, the
committee carried out an annual risk assessment
1. Compliance of products with product specific
laws and regulations, testing, certification and
accreditation; and
2. The accuracy and consistency of product
•
marketing materials.
109 internal product compliance audits were
conducted by the Group Product Compliance
and Certification team.
The Group Product Compliance & Certification
Team, led by the Group Head of Compliance
& Certification, is independent of divisional
management and performs the following
functions:
• 480 external product compliance audits were
conducted by independent certification bodies.
• 23 business unit marketing audits were
performed by the Group Internal Audit &
Compliance team.
• Supports compliance governance across the
Group in implementing policies, processes and
procedures to ensure continued improvement in
management systems. This includes ownership
of the Group Product Compliance Policy.
•
•
ISO 37301 education and training systems
launched.
Incorporation of newly acquired businesses into
the Compliance Management System (CMS).
• Performs extensive audits of processes and
• Recruitment of additional compliance
controls associated with product compliance
and the monitoring of compliance across
the Group.
• Leads the design and roll-out of the Group
Compliance Management System (CMS)
which has achieved the international ISO 37301
standard.
experts for Group Internal Audit and Group
Compliance & Certification teams.
• Divisional Compliance Managers reporting
to Group Compliance & Certification team
monthly.
• Product compliance registers maintained
across all divisions.
The Audit & Compliance Committee meet with
the Group Head of Compliance & Certification
for updates on the Group’s compliance and
certification agenda. This includes updates on
the product compliance audit schedule and the
results of completed audits as well as reviewing
the Group Compliance Auditing Guidelines. The
Audit & Compliance Committee visit sites with the
Group Product Compliance & Certification team to
better understand the product compliance culture
at an operational level.
The Audit & Compliance Committee also meet
regularly with the Group Head of Internal Audit
& Compliance in relation to product marketing
compliance matters. Following the adoption of the
Group Marketing Integrity Manual in September
2021, the Group Internal Audit Plan includes specific
audits, performed by appropriately trained internal
auditors, of product marketing compliance with the
Group Marketing Integrity Manual.
The Audit & Compliance Committee noted the
following product compliance highlights in 2023:
• An additional 29 sites have been accredited
with the leading international compliance
standard, ISO 37301. This now brings the total
number of sites with this accreditation to 59
with a plan to have 85 sites certified to this
standard by the end of 2024.
• Updated Group Compliance Auditing
Guidelines issued.
Whistleblowing procedures
The Group has a Code of Conduct, full details of
which are available on the Group’s website (www.
kingspan.com).
Based on the standards set out in this Code
of Conduct, the Group employs a comprehensive,
confidential and independent whistleblowing
phone service to allow all employees to raise
their concerns about their working environment
and business practices. This service then allows
management and employees to work together
to address any instances of fraud or other
misconduct in the workplace.
Any instances of fraud or misconduct reported
on the whistleblowing phone service are reported
to the Head of Internal Audit & Compliance
and the Company Secretary who ensure each
incident is appropriately investigated and then
report to the committee details of the incident,
key control failures, any financial loss and
actions for improvement. All reports through
the whistleblower line and all fraud attempts
are presented at each Audit & Compliance
Committee meeting.
During the year, the committee reviewed the
Group’s whistleblowing process and were satisfied
with the design and operating effectiveness of
the process.
122 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Audit & Compliance Committee Directors’ Report 123
REPORT OF THE
DIRECTORS
Gene Murtagh
Geoff Doherty
Hafenmeisterhaus
Rostock, Germany
Insulated Panels
Karrier BK insulated
panel system
The directors of Kingspan
Group plc (“Kingspan”) have
pleasure in presenting their
report with the audited financial
statements for the year ended
31 December 2023.
This Report of the
Directors and the Business
& Strategic Report on
pages Pages 20-77
together comprise the
‘Management Report’
for the purposes of the
Transparency (Directive
2004/109/EC) Regulations
2007 of Ireland.
Information incorporated by reference
The following information is provided in other appropriate sections of this Annual Report and the
financial statements and is incorporated into this Report of the Directors by reference.
Information
Reported in
A review of the business of the Group.
Chief Executive’s Review
The Group’s Key Performance Indicators.
Financial Review
A description of likely future developments in
the Group’s business.
Chief Executive’s Review
Page(s)
33-41
43-47
41
A description of the principal risks and uncertainties
that could affect the Group’s business.
The Company’s application of the principles, and
compliance with the provisions, of the 2018 UK
Corporate Governance Code and the Irish Corporate
Governance Annex.
Risk & Risk Management Report
50-57
Report of the Nominations &
Governance Committee
82-91
The names and biographical details of the Directors.
The Board
The Directors’ and Company Secretary’s interests
in shares and debentures.
Report of the Remuneration
Committee
The Group’s financial risk management objectives
and policies and a description of the use of
financial instruments.
Financial Statements
(Note 20)
79-81
107-108
178-187
The amount of interim dividends (if any) paid by
the Company during the year and the amount (if
any) that the directors recommend should be paid
by way of final dividend.
Information required by the European Union
(Disclosure of Non-Financial and Diversity
Information by certain large undertakings and
groups) Regulations 2017.
Financial Review
44
Sustainability Report
58-77
124 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Directors Directors’ Report 125
Principal Activities
Kingspan is the global leader in high-performance insulation and building envelope solutions. Kingspan Group plc is a
holding company for the Group’s subsidiaries and other entities. The Group’s principal activities comprise the
manufacture and distribution of the following product suites as part of the complete “Building Envelope”:
INSULATED
PANELS
INSULATION
LIGHT, AIR
+ WATER
DATA +
FLOORING
ROOFING +
WATERPROOFING
Manufacture of
insulated panels,
structural framing
and metal facades.
Manufacture of rigid
insulation boards,
technical insulation
and engineered
timber systems.
Manufacture of
energy and water
solutions, daylighting,
smoke management
and ventilation
systems and related
service activities.
Manufacture of
data centre storage
solutions and raised
access floors.
Manufacture
of roofing and
waterproofing
solutions for
renovation and new
construction of
buildings.
Kingspan’s five key business divisions offer a suite of complementary building envelope solutions for both the new build
and refurbishment markets.
Innovation
At Kingspan, innovation is a core pillar of our
strategy and we view it as a key strategic
advantage. We believe building industry traditions
must be challenged through innovation in
advanced materials and digital technologies in
order to achieve a net zero emissions future.
In the year ended 31 December 2023, the Group’s
research and development expenditure amounted
to €63.5m (2022: €60.3m). Research and
development expenditure is generally expensed
in the year in which it is incurred. Kingspan’s
continuing investment in research and development
involves a number of key projects which include:
We have innovated a portfolio of advanced
products and solutions for architects and building
owners which enable them to construct buildings
that consume less resources. Future proofing their
investment, generating returns through enhanced
internal space and operational performance,
and facilitating efficient construction through
thinner, lighter and safer to handle materials.
Increasingly we are enhancing our service and
solutions through digitisation. By surfacing our
products digitally, we’re making it easier to find
them, specify them, buy them, build with them
and track them.
• PV solar-integrated PowerPanel™ roof solution;
• QuadCore™ 2.0;
• Next generation Kooltherm®;
• A-class vacuum insulated panel;
• Launch of low embodied carbon insulated
panel (QuadCore LEC TM);
• Decarbonisation of materials;
• Digitalisation of the construction industry;
• Lower carbon acoustic solutions; and
• Bio-based low carbon insulation.
Internal control and risk management systems
The Board confirms that there is an ongoing
process for identifying, evaluating and managing
any significant risks faced by the Group. This
process has been in place for the year under
review and up to the date of approval of the
financial statements, and it is regularly reviewed
by the Board in compliance with ‘Guidance on
Risk Management, Internal Control and Related
Financial and Business Reporting’ issued by the
Financial Reporting Council.
We believe building industry
traditions must be challenged
through innovation in
advanced materials and
digital technologies in order
to achieve a net zero
emissions future.
The Board has delegated responsibility to the Audit
& Compliance Committee to monitor and review
the Group’s risk management and internal control
processes, including the financial, operational
and compliance controls. This is done through
detailed discussions with management and the
executive directors, the review and approval of the
internal audit reports, which focus on the areas of
greatest risk to the Group, and the external audit
reports, as part of both the year end audit and
the half year process, all of which are designed to
highlight the key areas of control weakness in the
Group. Further details of the work conducted by
the Audit & Compliance Committee in this regard
is detailed in the Report of the Audit & Compliance
Committee contained in this Annual Report.
The main features of the Group’s internal control
and risk management systems that relate
specifically to the Group’s financial reporting
processes are:
• Budgets and strategic plans are approved
annually by the Board and compared to actual
performance and forecasts on a monthly basis;
• Sufficiently sized finance teams with
appropriate level of experience and
qualifications throughout the Group;
• Formal Group Accounting Manual in place
which clearly sets out the Group financial
policies in addition to the formal controls;
• Formal IT and treasury policies and controls
in place;
• Sales reports are submitted and reviewed
on a weekly basis whilst full reporting packs
are submitted and reviewed on a monthly
basis; and
•
Internal audit function review financial
controls, IT general controls, cyber security
controls and report results/findings on a
quarterly basis to the Audit & Compliance
Committee.
The main features of the Group’s internal
control and risk management systems that
relate specifically to the Group’s consolidation
process are:
• The review of reporting packages for each
entity as part of the year end audit process;
• The reconciliation of reporting packages to
monthly management packs as part of the
audit process and as part of management
review;
• The validation of consolidation journals as
part of the management review process and
as an integral component of the year end
audit process;
• The review and analysis of results by the Chief
Financial Officer and the internal auditors with
the management of each division;
• Consideration by the Audit & Compliance
Committee of the outcomes from the annual
risk assessment of the business; and
• The review of internal and external audit
management letters by the Chief Financial
Officer, the Head of Internal Audit &
Compliance and the Audit & Compliance
Committee and the follow up of any critical
management letter points to ensure issues
highlighted are addressed.
In addition, the remit of the Audit & Compliance
Committee also includes reviewing the
effectiveness of the controls and processes relating
to product compliance by:
• Reviewing reports from the Group Head
of Compliance relating to product
compliance, certification and accreditation,
including implementation status of the
Group’s ISO 37301 Compliance Management
Systems targets;
• Auditing compliance with the Group Marketing
Integrity Manual incorporating the Code for
Construction Product Information (CCPI) best
practice principles; and
• Monitoring the culture of compliance across
• Centralised tax and treasury functions;
the Group.
126 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Directors Directors’ Report 127
Further information on the risks faced by the Group
and how they are managed are set out in the Risk &
Risk Management section of this Annual Report.
Accounting Records
The directors are responsible for ensuring that
accounting records, as outlined in Sections
281 to 285 of the Companies Act 2014, are
kept by the Group. The directors have provided
appropriate systems and resources, including the
appointment of suitably qualified accounting
personnel, to maintain adequate accounting
records throughout the Group, in order to ensure
that the requirements of Sections 281 to 285
are complied with. The accounting records of
the Company are maintained at the principal
executive offices located at Dublin Road,
Kingscourt, Co. Cavan, A82 XY31, Ireland.
Delisting from the London Stock Exchange
On 28 April 2023, the Company announced
proposals to cancel the admission of its Ordinary
Shares to the Official List of the Financial Conduct
Authority of the United Kingdom and to cease
trading on the London Stock Exchange’s (‘LSE’)
Main Market for listed securities. The Board noted
that in recent years the volume of trading in the
Ordinary Shares on the LSE was negligible as a
percentage of the overall trading volume in the
Ordinary Shares and in that context, the cost
and the legal and regulatory burden associated
with the listing and admission to trading on the
LSE was considered by the Board to be no longer
justified. The Delisting Resolution was approved
by shareholders at the Extraordinary General
Meeting of the Company held on 20 July 2023 and
Company’s Ordinary Shares delisted from the LSE
on 18 August 2023.
The Company’s Ordinary Shares continue to be
listed on the Main Market of the Euronext Dublin
Stock Exchange.
The European Communities (Takeover Bids
(Directive 2004/25/EC)) Regulations 2006
The information required by Regulation 21 of the
above Regulations as at 31 December 2023 is set
out below.
Structure of the Company’s share capital
At 31 December 2023, the Company had an
authorised share capital comprised of 250,000,000
(2022: 250,000,000) ordinary shares of €0.13
each and the Company’s total issued share
capital comprised 183,591,682 (2022: 183,591,682)
ordinary shares.
Analysis of registered shareholding accounts as at 31 December 2023:
Shareholding
range
1 - 1000
1,001 - 10,000
10,001 - 100,000
100,001 - 1,000,000
Over 1,000,000
Number of
accounts
% of total Number of shares
held
% of total
1,368
548
40
3
3
69.73
27.93
2.04
0.15
0.15
1,962
100.00
593,545
1,505,518
889,286
392,162
180,211,171
183,591,682
0.32
0.82
0.49
0.21
98.16
100.00
As at 16 February 2024, the Company had received notification of the interests outlined in the table
below, in its ordinary share capital, which were equal to, or in excess of, 3%.
Notification Date
Shareholder
27/01/2021
30/01/2024
30/06/2023
21/12/2023
07/11/2022
01/03/2023
Eugene Murtagh
The Capital Group Companies, Inc.
Blackrock, Inc.
FMR LLC
Generation Investment Management LLP
Allianz Global Investors GmbH
Shares held
27,018,000
14,629,606
12,723,914
9,156,541
7,273,788
7,258,035
%
14.88%
7.99%
6.98%
5.03%
4.00%
3.99%
The number of shares held as treasury shares at
the beginning of the year was 1,982,473 (1.09% of
the then issued share capital (excluding treasury
shares)) with a nominal value of €257,721. A
total of 327,872 shares (0.18% of the issued
share capital (excluding treasury shares)) with a
nominal value of €42,623 were re-issued during
the year relating mainly to the exercise of share
options under the Kingspan Group Performance
Share Plan and the Kingspan Group Employee
Benefit Trust. A further 13,547 shares (with a
nominal value of €1,761) were bought back by the
Company and held in treasury for the purpose of
the Deferred Bonus Scheme, leaving a balance
held as treasury shares as at 31 December 2023
of 1,668,148 (0.92% of the issued share capital
(excluding treasury shares)) with a nominal value
of €216,859.
Rights and obligations attaching to the
ordinary shares
The Company has no securities in issue conferring
special rights with regards control of the Company.
All ordinary shares rank pari passu, and the
rights attaching to the ordinary shares (including
as to voting and transfer) are as set out in the
Company’s Articles of Association (“Articles”).
The Articles also contain the rules relating to
the appointment and removal of directors,
procedures for amending the Articles, the powers
of the Company’s directors, and the issuing or
buying back by the Company of its shares. A
copy of the Articles may be found on www.
kingspan.com or may be obtained on request to
the Company Secretary.
Holders of ordinary shares are entitled to receive
duly declared dividends in cash or, when offered,
additional ordinary shares. In the event of any
surplus arising on the occasion of the liquidation of
the Company, shareholders would be entitled to a
share in that surplus pro rata to their holdings of
ordinary shares.
Holders of ordinary shares are entitled to receive
notice of and to attend, speak and vote in person
or by proxy, at general meetings having, on a
show of hands, one vote, and, on a poll, one vote
for each ordinary share held. Procedures and
deadlines for entitlement to exercise, and exercise
of, voting rights are specified in the notice
convening the general meeting in question.
There are no restrictions on voting rights except
in the circumstances where a “Specified Event”
(as defined in the Articles) shall have occurred
and the directors have served a Restriction
Notice on the shareholder. Upon the service of
such Restriction Notice, no holder of the shares
specified in the notice shall, for so long as such
notice shall remain in force, be entitled to attend
or vote at any general meeting, either personally
or by proxy.
Holding and transfer of ordinary shares
The ordinary shares may be held in either
certificated or uncertificated form (through the
Euroclear Bank system or (via a holding of CDIs)
the CREST system).
Save as set out below, there is no requirement
to obtain the approval of the Company, or of
other shareholders, for a transfer of ordinary
shares. The directors may decline to register (a)
any transfer of a partly-paid share to a person of
whom they do not approve, (b) any transfer of
a share to more than four joint holders, (c) any
transfer of a share on which the Company has a
lien, and (d) any transfer of a certificated share
unless accompanied by the share certificate and
such other evidence of title as may reasonably be
required. The registration of transfers of shares
may be suspended at such times and for such
periods (not exceeding 30 days in each year) as
the directors may determine.
Transfer instruments for certificated shares
are executed by or on behalf of the transferor
and, in cases where the share is not fully paid,
by or on behalf of the transferee. Transfers of
uncertificated shares may be effected by means
of a relevant system in the manner provided for in
the Regulation (EU) No. 909/2014 of the European
Parliament and of the Council of 23 July 2014 (the
“CSD Regulations”) and the rules of the relevant
system. The directors may refuse to register a
transfer of uncertificated shares only in such
circumstances as may be permitted or required by
the CSD Regulations.
Rules concerning the appointment and
replacement of the directors and amendment
of the Company’s Articles
Unless otherwise determined by ordinary resolution
of the Company, the number of directors shall not
be less than two or more than 15.
Subject to that limit, the shareholders in general
meeting may appoint any person to be a director
either to fill a vacancy or as an additional director.
The directors also have the power to co-opt
additional persons as directors, but any director
so co-opted is under the Articles required to be
submitted to shareholders for re-election at the
first Annual General Meeting (‘AGM’) following his
or her co-option.
128 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Directors Directors’ Report 129
The Articles require that at each AGM of the
Company one-third of the directors retire
by rotation. However, in accordance with
the recommendations of the UK Corporate
Governance Code, the directors have resolved they
will all retire and submit themselves for re-election
by the shareholders at the AGM to be held on 26
April 2024.
issued ordinary shares. At the AGM to be held on
26 April 2024, shareholders are being asked to
renew this authority.
Miscellaneous
There are no agreements between shareholders
that are known to the Company which may result
in restrictions on the transfer of securities or
voting rights.
The Company’s Articles may be amended by
special resolution (75% majority of votes cast)
passed at general meeting.
Powers of directors including powers in
relation to issuing or buying back by the
Company of its shares
Under its Articles, the business of the Company
shall be managed by the directors, who exercise
all powers of the Company as are not, by the
Companies Acts or the Articles, required to be
exercised by the Company in general meeting.
The directors are currently authorised to issue a
number of shares equal to the authorised but
as yet unissued share capital of the Company
on such terms as they may consider to be in
the best interests of the Company, under an
authority that was conferred on them at the
AGM held on 28 April 2023. The directors are also
currently authorised on the issue of new equity
for cash to disapply the strict statutory pre-
emption provisions that would otherwise apply,
provided that the disapplication is limited to
the allotment of equity securities in connection
with (i) any rights issue or any open offer to
shareholders, or (ii) the allotment of shares not
exceeding in aggregate 5% of the nominal value
of the Company’s issued share capital, or (iii)
for the purpose of financing (or refinancing) an
acquisition or other capital investment of a kind
contemplated by the UK Pre-emption Group not
exceeding in aggregate 5% of the nominal value
of the Company’s issued share capital. Both these
authorities expire on 28 July 2024 unless renewed
and resolutions to that effect are being proposed
at the AGM to be held on 26 April 2024.
Some of the Group’s banking facilities include
provisions that, in the event of a change of control
of the Company, could oblige early prepayment
of the facilities. Some of the Company’s joint
venture arrangements also contain provisions that
would allow the counterparty to terminate the
agreement in the event of a change of control of
the Company. The Company’s Performance Share
Plan contains change of control provisions which
allow for the acceleration of the exercise of share
options/awards in the event of a change of control
of the Company.
There are no agreements between the Company
and its directors or employees providing for
compensation for loss of office or employment
(whether through resignation, purported
redundancy or otherwise) that occurs because of
a takeover bid.
Directors and Secretary
The directors and secretary of the Company at
the date of this report are as shown in The Board
section of this Annual Report. Ms. Louise Phelan
was appointed as a non-executive director on 28
April 2023 and, Mr. Michael Cawley and Mr. John
Cronin retired as non-executive directors on 28
April 2023.
Conflicts Of Interest
None of the directors have any direct or indirect
interest in any contract or arrangement subsisting
at the date hereof which is significant in relation
to the business of the Company or any of its
subsidiaries nor in the share capital of the
Company or any of its subsidiaries.
The Company may, subject to the Companies Acts
and the Articles, purchase any of its shares and
may either cancel or hold in treasury any shares
so purchased, and may re-issue any such treasury
shares on such terms and conditions as may be
determined by the directors. The Company shall
not make market purchases of its own shares
unless such purchases have been authorised by a
special resolution passed by the members of the
Company at a general meeting. At the AGM held
on 28 April 2023, shareholders passed a resolution
giving the Company, or any of its subsidiaries, the
authority to purchase up to 10% of the Company’s
Financial Instruments
In the normal course of business, the Group has
exposure to a variety of financial risks, including
foreign currency risk, interest rate risk, liquidity
risk and credit risk. The Company’s financial risk
objectives and policies are set out in Note 20 of
the financial statements.
Political Donations
Neither the Company nor any of its subsidiaries
have made any political donations in the year
which would be required to be disclosed under
the Electoral Act 1997 (2022: €nil).
Subsidiary Companies
Kingspan is a truly global business, trading in
over 80 countries with 224 manufacturing sites
across the globe.
The Company’s principal subsidiary undertakings
at 31 December 2023, country of incorporation
and nature of business are listed on pages 204 to
205 of this Annual Report.
The Company does not have any branches outside
of Ireland.
Significant Events Since Year End
On 5 January 2024, Kingspan completed the
acquisition of a majority stake (51%) of the shares
of Steico SE, a world leader in wood wool insulation,
from Schramek GmbH for an initial consideration of
€263.5m (€188.5m cash, €75m equity).
On 16 February 2024, the Group signed a
series of agreements to acquire the stonewool
insulation business and assets of Karl Bachl
Kunststoffverarbeitung GmbH & Co. KG in
Germany. The transaction is expected to complete
by 31 March 2024 and will be funded from existing
cash reserves.
There have been no other significant events since
the year end which would require adjustment to,
or disclosure in this report.
Going Concern
The directors have reviewed budgets and
projected cash flows for a period of not less
than 12 months from the date of this Annual
Report, and considered its net debt position
and capital commitments, available committed
banking facilities and other relevant information
including the economic conditions currently
affecting the building environment generally
and the Group’s Strategic Plan. On the basis of
this review, the directors have concluded that
there are no material uncertainties that would
cast significant doubt over the Company’s
and the Group’s ability to continue as a going
concern. For this reason, the directors consider it
appropriate to adopt the going concern basis in
preparing the financial statements.
Viability Statement
The directors are required to assess the prospects
of the Company, explain the period over which
we have done so and state whether we have a
reasonable expectation that the Company will be
able to continue in operation and meet liabilities
as they fall due over this period of assessment.
The directors have assessed the prospects
of the Group over the three-year period to
February 2027.
The directors concluded that three years was an
appropriate period for the assessment, having had
regard to:
•
•
•
•
the Group’s rolling Strategic Plan which
extends to 2027;
the Group’s long-term funding commitments
some of which fall to be repaid during the
period;
the inherent short-cycle nature of the
construction market including the Group’s
order bank and project pipeline; and
the potential impact of macro-economic
events and political uncertainty in some
regions.
It is recognised that such future assessments are
subject to a level of uncertainty that increases
with time, and therefore future outcomes cannot
be guaranteed or predicted with certainty.
The Group Strategic Plan is approved by the
Board, building upon the several divisional
management plans as well as the Group’s
strategic goals. It is based on a number of
cautious assumptions concerning macro
growth and stability in our key markets, and
continued access to capital to support the
Group’s ongoing investments. The strategic plan
is subject to stress testing which involves flexing
a number of the main assumptions underlying
the forecast in severe but reasonable scenarios.
Such assumptions are rigorously tested by
management and the directors. It is reviewed
and updated annually and was considered
and approved by the Board at its meeting in
October 2023.
In making this assessment, the directors have
considered the resilience of the Group, taking
account of its current position and the principal
risks facing the business as outlined in the Risk
& Risk Management Report contained in this
Annual Report, and the Group’s ability to manage
those risks. The risks have been identified using
a top-down and bottom-up approach, and their
potential impact was assessed having regard to
the effectiveness of controls in place to manage
each risk. In assessing the prospects of the Group
such potential impacts have been considered as
have the mitigating factors in place.
Based on this assessment the directors have a
reasonable expectation that the Group will be
able to continue in operation and meet its
liabilities as they fall due over the three-year
period of their assessment.
130 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Directors Directors’ Report 131
Directors’ Responsibility Statement
Each of the directors whose names and functions
are set out in the Board section of this Annual
Report confirm their responsibility for preparing
the Annual Report and the consolidated and
Company financial statements in accordance
with applicable Irish law and regulations.
Company law in Ireland requires the directors to
prepare financial statements for each financial
year. Under that law the directors have to
prepare the consolidated financial statements in
accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European
Union (EU). The directors have elected to prepare
the Company financial statements in accordance
with IFRSs as adopted by the EU and as applied by
the Companies Act 2014. The financial statements
are required by law to give a true and fair view of
the assets, liabilities and financial position of the
Group and Company at 31 December 2023 and of
the profit or loss of the Group for that period. In
preparing those financial statements, the directors
are required to:
•
select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
•
state whether applicable IFRSs have been
followed, subject to any material departures
disclosed and explained in the financial
statements; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Company, and the Group as
a whole, will continue in business.
The directors are responsible for keeping
accounting records which disclose with reasonable
accuracy at any time the financial position of the
Group and the Company and which enable them
to ensure that the financial statements comply
with the Companies Act 2014 and Article 4 of the
IAS Regulation.
They are responsible for safeguarding the assets of
the Group and hence for taking reasonable steps
for the prevention and detection of fraud and
other irregularities.
The directors are responsible for the maintenance
and integrity of the corporate and financial
information on the Company’s website.
Legislation in the Republic of Ireland governing
the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
In accordance with Transparency (Directive
2004/109/EC) Regulations 2007 and the
Transparency Rules of the Financial Regulator,
the directors confirm that to the best of
their knowledge:
•
•
the Group financial statements and the
Company financial statements, prepared
in accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial
position and profit or loss of the Group and
Company; and
the Report of the Directors includes a fair
review of the development and performance of
the business and the position of the Group and
Company, together with a description of the
principal risks and uncertainties that they face.
They are also satisfied:
•
that the Annual Report and financial
statements, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders to
assess the Group’s position, business model
and strategy.
Directors’ Compliance Statement
The directors acknowledge that they are
responsible for securing the Company’s
compliance with its relevant obligations in
accordance with Section 225(2)(a) of the
Companies Act 2014 (the “Act”) (described below
as the “Relevant Obligations”).
In accordance with Section 225 (2)(b) of the Act,
the directors confirm that:
1. a Compliance Policy Statement has been
drawn up setting out the Company’s policies
(that are, in the opinion of the directors,
appropriate to the Company) in respect of the
compliance by the Company with its Relevant
Obligations;
2. appropriate arrangements or structures are
in place that, in the opinion of the directors,
provide a reasonable assurance of compliance
in all material respects with the Company’s
Relevant Obligations; and
3. during the financial year to which this report
relates, a review has been conducted of the
arrangements or structures that are in place
to ensure material compliance with the
Company’s Relevant Obligations.
Audit Information
Each of the directors have taken all the steps that
they should or ought to have taken as a director
in order to make himself or herself aware of any
relevant audit information and to establish that
the Group’s statutory auditor is aware of that
information. So far as the directors are aware,
there is no relevant information of which the
Group’s statutory auditor is unaware.
Auditor
In accordance with Section 383(2) of the
Companies Act 2014, the Company’s auditor, EY,
will continue in office. EY were first appointed as
the Company’s auditor on 1 May 2020, with effect
for the financial year ending 31 December 2020. A
resolution authorising the directors to determine
their remuneration will be proposed at the AGM.
On behalf of the Board
Gene Murtagh
Chief Executive Officer
Geoff Doherty
Chief Financial Officer
20 February 2024
132 Kingspan Group plc Annual Report & Financial Statements 2023
Report of the Directors Directors’ Report 133
SkyCity Casino
Adelaide, Australia
Insulation
Kooltherm® Soffit Boards K10 G2
and K10 Plus
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
136
144
144
145
146
148
149
150
150
151
151
1 Statement of Accounting Policies
160
2 Segment Reporting
163
3 Non Trading Item
164
4 Employees
165
5 Finance Expense and Finance Income
166
6 Profit For The Year Before Income Tax
166
7 Directors’ Remuneration
167
8
Income Tax Expense
168
9 Earnings Per Share
168
10 Goodwill
170
11 Other Intangible Assets
171
12 Property, Plant and Equipment
172
13 Financial Assets
172
14 Inventories
173
15 Trade And Other Receivables
173
16 Trade And Other Payables
174
17 Leases
175
18 Interest Bearing Loans And Borrowings
176
19 Deferred Contingent Consideration
178
20 Financial Risk Management And Financial Instruments
187
21 Provisions For Liabilities
188
22 Deferred Tax Assets And Liabilities
188
23 Business Combinations
192
24 Share Capital
192
25 Share Premium
192
26 Treasury Shares
193
27 Retained Earnings
193
28 Dividends
29 Non-Controlling Interest
193
30 Reconciliation Of Net Cash Flow To Movement In Net Debt 194
194
31 Guarantees And Other Financial Commitments
195
32 Pension Obligations
199
33 Related Party Transactions
200
34 Events Subsequent To Year End
200
35 Approval Of Financial Statements
OTHER INFORMATION
Alternative Performance Measures
Principal Subsidiaries and Substantial Undertakings
Shareholder Information
Corporate Information
Group 5 Year Summary
201
204
206
207
208
134 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 135
Financial Statements 135
Independent Auditor’s Report
to the Members of Kingspan Group plc
Report on the audit of
the financial statements
Opinion
We have audited the European Single
Electronic Format financial statements
(‘the financial statements’) of Kingspan
Group plc (‘the Company’) and its
subsidiaries (‘the Group’) for the year
ended 31 December 2023, which comprise
the Consolidated Income Statement, the
Consolidated Statement of Comprehensive
Income, the Consolidated Statement
of Financial Position, the Consolidated
Statement of Changes in Equity, the
Consolidated Statement of Cash Flows,
the Company Statement of Financial
Position, the Company Statement
of Changes in Equity, the Company
Statement of Cash Flows, and notes to
the financial statements, including the
material accounting policy information set
out in note 1. The financial reporting
framework that has been applied in their
preparation is Irish Law and International
Financial Reporting Standards (IFRS) as
adopted by the European Union and, as
regards the Company financial statements,
as applied in accordance with the provisions
of the Companies Act 2014.
In our opinion:
• the Group financial statements give a
true and fair view of the assets, liabilities
and financial position of the Group as at
31 December 2023 and of its profit for the
year then ended;
• the Company financial statements
gives a true and fair view of the assets,
liabilities and financial position of the
Company as at 31 December 2023;
• the Group financial statements
have been properly prepared in
accordance with IFRS as adopted by the
European Union;
• the Company financial statements have
been properly prepared in accordance
with IFRS as adopted by the European
Union as applied in accordance with the
provisions of the Companies Act 2014;
and
• the Group financial statements and
Company financial statements have
been properly prepared in accordance
with the requirements of the Companies
Act 2014 and, as regards the Group
financial statements, Article 4 of the
IAS Regulation.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(Ireland) (ISAs (Ireland)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s Responsibilities for the Audit of
the Financial Statements section of our
report. We are independent of the Group
and Company in accordance with ethical
requirements that are relevant to our audit
of financial statements in Ireland, including
the Ethical Standard as applied to public
interest entities issued by the Irish Auditing
and Accounting Supervisory Authority
(IAASA), and we have fulfilled our other
ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating
to going concern
In auditing the financial statements, we
have concluded that the Directors’ use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate. Our evaluation of the
Directors’ assessment of the Group and
parent company’s ability to continue
to adopt the going concern basis of
accounting included:
• We confirmed our understanding of
management’s going concern assessment
process and also engaged with
management to ensure all key factors
were considered in their assessment;
• We obtained management’s going
concern assessment, including the cash
forecasts and covenant calculations for
the going concern period which covers
a period of at least 12 months from
the date the financial statements are
authorised for issue;
• We considered the appropriateness of
the methods used to calculate the cash
forecasts and covenant calculations and
determined through inspection and testing
of the methodology and calculations that
the methods utilised were appropriately
sophisticated to be able to make an
assessment for the Group;
• We considered the mitigating factors
included in the cash forecasts and
covenant calculations that are within
control of the Group. This includes
review of the Group’s non-operating
cash outflows and evaluating the
Group’s ability to control these outflows
as mitigating actions if required. We
also verified credit facilities available to
the Group;
• We have performed reverse stress testing
in order to identify what factors would
lead to the Group utilising all liquidity or
breaching the financial covenant during
the going concern period; and
• We reviewed the Group’s going concern
disclosures included in the Annual Report
in order to assess that the disclosures
were appropriate and in conformity with
the reporting standards.
The Group continued to generate significant
operating cash flows of €1,162.2 million in
2023. The majority of the Group’s long-
term funding commitments (90% or €1.69
billion) matures after February 2025. At 31
December 2023, the Group has unrestricted
cash and cash equivalents of €0.94 billion
and unused committed debt facilities of up
to €0.8 billion from a revolving bank credit
facility expiring in May 2026. Further the
Group has access to significant liquidity.
Conclusion
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or collectively,
may cast significant doubt on the Group
and parent company’s ability to continue
as a going concern for a period of at least
twelve months from when the financial
statements are authorised for issue.
In relation to the Group and parent company’s
reporting on how they have applied the
UK Corporate Governance Code and Irish
Corporate Governance Annex, we have
nothing material to add or draw attention
to in relation to the Directors’ statement in
the financial statements about whether the
Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities
of the Directors with respect to going
concern are described in the relevant
sections of this report. However, because
not all future events or conditions can be
predicted, this statement is not a guarantee
as to the Group and parent company’s
ability to continue as a going concern.
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
Overview of our audit approach
Key audit matters
• The key audit matters that we identified in the current year were:
» Warranty provisions
» Revenue recognition
Audit scope
• We performed an audit of the complete financial information of 23 components and performed audit procedures
on specific balances for a further 37 components
• We performed procedures at a further 16 components that were specified by the Group audit team in response to
specific risk factors
• The components where we performed full or specific audit procedures accounted for 70% of the Group’s Profit
before tax, 68% of the Group’s Revenue and 80% of the Group’s Total Assets
• ‘Components’ represent business units across the Group considered for audit scoping purposes
Materiality
• Overall Group materiality was assessed to be €39.7 million which represents approximately 5% of Profit before tax.
• For the year ended 31 December 2022, our materiality was based on 5% of Profit Before Tax Adjusted for non-
trading items (PBTA). In the current year there were no such adjustments.
The key audit matters set out in the table below are consistent with those reported in 2022, with the exception of the removal of
“Accounting for significant acquisitions” due to a decrease in the size and level of acquisition activity in 2023. The risk associated with this
matter is no longer a fraud and significant audit risk in 2023.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key observations
communicated to the
Audit Committee
Our observations included
an outline of the audit
procedures performed,
management’s key
judgements and the
results of our testing.
Our planned audit
procedures in respect
of warranty provision
were completed without
exception.
Risk
Our response to the risk
Warranty provisions (2023: €183.9
million, 2022: €181.5 million)
The Group’s business involves the sale of
products under warranty, some of which
use new technology and applications. Due
to the nature of its product offering, the
Group has significant exposure to warranty
claims which are inherently uncertain
in nature. Management are required to
exercise significant judgement with regard
to warranty provision assumptions.
Changes in these assumptions, which may
be subject to management override, can
materially affect the levels of provisions
recorded in the financial statements due
to the higher estimation uncertainty
on the Group’s costs of repairing and
replacing, or otherwise making reparations
for the consequences of, product that is
ascertained to be faulty.
Refer to the Audit and Compliance
Committee Report (page 114); the
Statement of Accounting Policies (page
151); and note 21 of the Group Financial
Statements (page 187).
We performed audit procedures that included understanding
the Company’s process for recording and monitoring potential
warranty claims incorporating management’s review of significant
assumptions applied in the provision calculation and the recording
of the resulting amounts (including walkthroughs of the design
and implementation of relevant controls); consideration of the
nature and basis of the provision; review and assessment of
correspondence in relation to specific claims; progress on individual
significant claims; and relevant settlement history of claims and
utilisation of related provisions.
We tested the validity, completeness and accuracy of the data used
in the calculations of product return rates. We evaluated and tested
the Group’s assumptions developed and used in the determination
of the provisions by examining potential failure rates, considering
past failure rates, the costs estimated for remediation, examining
related settlements where necessary. We considered whether
alternative rates to those employed by management might be
more appropriate and further tested manual journal entries.
We substantively tested material movements in the provisions,
including warranty provisions arising on acquisitions, and
considered the accounting for movements in the provision balances
and the related disclosures for compliance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.
The above procedures are performed both locally and by the Group
audit team.
136 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 137
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
Risk
Our response to the risk
Revenue recognition (2023: €8,090.6
million, 2022: €8,340.9 million)
The Group has a number of revenue
streams with different revenue recognition
policies across its divisions.
There is a significant risk that revenue may
be recognised in an incorrect period as a
result of management accelerating revenue
recognition to achieve revenue targets
or forecasts.
Refer to the Audit and Compliance
Committee Report (page 114); the
Statement of Accounting Policies (page
151); and note 2 of the Group Financial
Statements (page 160).
We performed procedures on revenue at all relevant in-scope
components, as outlined in further detail in the ‘Tailoring the
scope’ section below. Detailed transactional testing of revenue
recognised throughout the year was performed, commensurate
with the higher audit risk assigned to revenue.
Dependent on the nature of the revenue recognised at each
component, we obtained an understanding of each in-scope
component’s revenue recognition policy and how it was applied,
including a walkthrough of the design and implementation of
relevant controls; examined supporting documentation including
customer contracts and terms of agreements, statements of
works or purchase orders, sales invoices, customer balance
confirmations and cash receipts to determine whether revenue
is recognised in accordance with terms of contracts and the
group accounting policies. We performed cut-off procedures and
review of credit memos and other adjustments such as discounts
and rebates. In addition we performed material revenue journal
entry testing and customer balance confirmations. In some
components data analytics procedures were also performed.
We audited key financial statement disclosures for compliance
with IFRS 15 Revenue from Contracts with Customers.
Key observations
communicated
to the Audit
Committee
Our observations
included an overview
of the risk, outline of
the audit procedures
performed, the
judgements we
focused on and the
results of our testing.
Our planned audit
procedures in respect
of revenue recognition
were completed
without exception.
Our application
of materiality
We apply the concept of materiality
in planning and performing the audit,
in evaluating the effect of identified
misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or
misstatement that, individually or in the
aggregate, could reasonably be expected
to influence the economic decisions of the
users of the financial statements. Materiality
provides a basis for determining the nature
and extent of our audit procedures.
We determined materiality for the Group to
be €39.7 million (2022: €38.2 million), which
is approximately 5% of Group’s Profit before
tax (2022: 5% of PBTA). Profit before tax is
a key performance indicator for the Group
and is also a key metric used by the Group
in the assessment of the performance of
management. We therefore considered
the Group’s Profit before tax to be the
most appropriate performance metric on
which to base our materiality calculation
as we consider it to be the most relevant
performance measure to the stakeholders
of the Group.
We determined materiality for the Company
to be €22.8 million (2022: €13.5 million),
which is approximately 1% of total equity.
During the course of our audit, we reassessed
initial materiality and considered that no
further changes to materiality were necessary.
Performance materiality
Performance materiality is the application
of materiality at the individual account
or balance level. It is set at an amount
to reduce to an appropriately low level
the probability that the aggregate of
uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments,
together with our assessment of the Group’s
overall control environment, our judgement
was that performance materiality should
be set at 50% (2022: 50%) of our planning
materiality, namely €19.9 million (2022:
€19.1 million). We have set performance
materiality at this percentage based on our
assessment of the risk of misstatements,
both corrected and uncorrected.
Audit work at component locations for the
purpose of obtaining audit coverage over
significant financial statement accounts is
undertaken based on a percentage of total
performance materiality. The performance
materiality set for each component is
based on the relative scale and risk of the
component to the Group as a whole and
our assessment of the risk of misstatement
at that component.
In the current year, the range of
performance materiality allocated to
components was €3.9 million to €5.89
million (2022: €3.5 million to €5.25 million).
Reporting threshold
Reporting threshold is an amount below
which identified misstatements are
considered as being clearly trivial.
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
We agreed with the Audit Committee that
we would report to them all uncorrected
audit differences in excess of €1.99 million
(2022: €1.91 million), which is set at 5% of
planning materiality, as well as differences
below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected
misstatements against both the
quantitative measures of materiality
discussed above and in light of other
relevant qualitative considerations in
forming our opinion.
An overview of the scope
of our audit report
Tailoring the scope
Our assessment of audit risk, our evaluation
of materiality and our allocation of
performance materiality determine our
audit scope for each entity within the
Group. Taken together, this enables us
to form an opinion on the consolidated
financial statements.
In determining those components in
the Group at which we perform audit
procedures, we utilised size and risk criteria
in accordance with ISAs (Ireland).
In assessing the risk of material
misstatement to the Group financial
statements, and to ensure we had adequate
quantitative coverage of significant
accounts in the financial statements, we
selected 80 components covering entities
across Europe, the Americas, the Middle
East and Australia, which represent the
principal business units within the Group.
The full scope components contributed
45% of the Group’s Profit before tax (2022:
45% of PBTA), 44% (2022: 48%) of the
Group’s Revenue and 58% (2022: 62%) of
the Group’s Total Assets. The specific scope
components contributed 25% of the Group’s
Profit before tax (2022: 29% of PBTA), 24%
(2022: 24%) of the Group’s Revenue and
22% (2022: 19%) of the Group’s Total Assets.
Of the 80 components selected, we
performed an audit of the complete
financial information of 23 components
(“full scope components”) which
were selected based on their size or
risk characteristics. For the remaining
37 components (“specific scope
components”), we performed audit
procedures on specific accounts within
that component that we considered had
the potential for the greatest impact on
the significant accounts in the financial
statements either because of the size of
these accounts or their risk profile.
In addition to the 60 components discussed
above; we selected a further 16 components
where we performed procedures at the
component level that were specified by the
Group audit team in response to specific
risk factors. Also, we performed review
procedures at an additional 4 components.
The reporting components where we
performed either full or specific scope
audit procedures accounted for 70% of
the Group’s Profit before tax (2022: 74%
of PBTA), 68% (2022: 72%) of the Group’s
Revenue and 80% (2022: 81%) of the
Group’s Total Assets.
The components where we either performed
procedures that were specified by the
Group audit team in response to specific
risk factors or review scope procedures
contributed 8% and 2% respectively of
the Group’s Profit before tax, 0% and 3%
respectively of the Group’s Revenue and
1% and 1% respectively of the Group’s
Total Assets. The audit scope of these
components may not have included testing
of all significant accounts of the component
but will have contributed to the coverage of
significant accounts tested for the Group.
Of the remaining components, which
together represent 20% of the Group’s
Profit before tax, none is individually greater
than 1% of the Group’s Profit before tax.
For these components, we performed other
procedures, including analytical review,
confirmation of cash balances, testing of
consolidation journals and intercompany
eliminations and foreign currency
translation recalculations to respond to any
potential risks of material misstatement to
the Group financial statements.
The charts below illustrate the coverage
obtained from the work performed by our
audit teams
Group’s Profit before tax
Group’s Revenue
Group’s Total Assets
20%
Other
procedures
29%
Other
procedures
18%
Other
procedures
1%
Review
scope
1%
Specified
procedures
3%
Review
scope
24%
Specific scope
45%
Full scope
44%
Full scope
22%
Specific scope
58%
Full scope
2%
Review
scope
8%
Specified
procedures
25%
Specific scope
138 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 139
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
Involvement with component teams
In establishing our overall approach to the
Group audit, we determined the type of
work that needed to be undertaken at each
of the components by us, as the primary
audit engagement team, or by component
auditors from other EY global network firms
operating under our instruction. Of the 23
full scope components, audit procedures
were performed on 3 of these directly by
senior members of the Group audit team
and on 20 by component audit teams.
For the specific scope components, where
the work was performed by component
auditors, we determined the appropriate
level of involvement to enable us to
determine that sufficient audit evidence
had been obtained as a basis for our opinion
on the Group as a whole.
We issued detailed instructions to each
component auditor in scope for the Group
audit, with specific audit requirements and
requests across key areas. The Group audit
team continued to follow a programme
of planned visits that has been designed
to ensure that senior members of the
Group audit team, including the Audit
Engagement Partner, visit a number of
overseas locations. During the current
year’s audit cycle, visits were undertaken by
the primary audit team to the component
teams in Belgium, the UK, Northern Ireland
and the USA. These visits involved discussing
the audit approach and any issues arising
with the component team and holding
discussions with local management and
attending closing meetings as well as review
of component team files.
The primary team interacted regularly with
the component teams where appropriate
during various stages of the audit, reviewed
key working papers and were responsible
for the scope and direction of the audit
process. This, together with the additional
procedures performed at Group level, gave
us appropriate evidence for our opinion on
the Group financial statements.
Conclusions relating to principal risks,
going concern and viability statement
We have nothing to report in respect of the
following information in the Annual Report,
in relation to which the ISAs (Ireland)
require us to report to you whether we
have anything material to add or draw
attention to:
• the disclosures in the Annual Report set
out on pages 48 to 57 that describe the
principal risks and explain how they are
being managed or mitigated;
• the Directors’ confirmation set out on
page 131 to 132 in the Annual Report
that they have carried out a robust
assessment of the principal risks facing
the Group and the parent company,
including those that would threaten its
business model, future performance,
solvency or liquidity;
• the Directors statement set out on
page 131 in the financial statements
about whether the Directors considered
it appropriate to adopt the going
concern basis of accounting in preparing
the financial statements and the
Directors identification of any material
uncertainties to the Group’s and the
parent company’s ability to continue to
do so over a period of at least twelve
months from the date of approval of the
financial statements;
• whether the Directors statement
relating to going concern required under
the Listing Rules of Euronext Dublin
is materially inconsistent with our
knowledge obtained in the audit; or
• the Directors’ explanation set out on
page 131 in the Annual Report as to how
they have assessed the prospects of the
Group and the Company, over what
period they have done so and why they
consider that period to be appropriate,
and their statement as to whether they
have a reasonable expectation that the
Group and the Company will be able
to continue in operation and meet its
liabilities as they fall due over the period
of their assessment, including any related
disclosures drawing attention to any
necessary qualifications or assumptions.
Corporate Governance
Statement
We report, in relation to information given
in the Corporate Governance Statement
included in the Directors’ Report and
elsewhere in the Annual Report that:
• in our opinion, based on the work
undertaken during the course of the
audit, the information given in the
Corporate Governance Statement
pursuant to subsections 2(c) and (d)
of section 1373 of the Companies Act
2014 is consistent with the Company’s
statutory financial statements in respect
of the financial year concerned and
such information has been prepared
in accordance with the Companies
Act 2014. Based on our knowledge
and understanding of the Company
and its environment obtained in the
course of the audit, we have not
identified any material misstatements in
this information;
• in our opinion, based on the work
undertaken during the course of the
audit, the Corporate Governance
Statement contains the information
required by Regulation 6(2) of the
European Union (Disclosure of Non-
Financial and Diversity Information by
certain large undertakings and groups)
Regulations 2017; and
• in our opinion, based on the work
undertaken during the course of the
audit, the information required pursuant
to section 1373 (2) (a), (b), (e) and (f) of
the Companies Act 2014 is contained in
the Corporate Governance Statement.
Other information
The Directors are responsible for the
other information. The other information
comprises the information included in the
Annual Report other than the financial
statements and our auditor’s report
thereon. Our opinion on the financial
statements does not cover the other
information and, except to the extent
otherwise explicitly stated in our report,
we do not express any form of assurance
conclusion thereon.
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
In connection with our audit of the financial
statements, our responsibility is to read
the other information and, in doing so,
consider whether the other information is
materially inconsistent with the financial
statements or our knowledge obtained
in the audit or otherwise appears to be
materially misstated. If we identify such
material inconsistencies or apparent
material misstatements, we are required
to determine whether there is a material
misstatement in the financial statements
or a material misstatement of the other
information. If, based on the work we
have performed, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact.
We have nothing to report in this regard.
In this context, we also have nothing to
report in regard to our responsibility to
specifically address the following items
in the other information and to report as
uncorrected material misstatements of the
other information where we conclude that
those items meet the following conditions:
• Fair, balanced and understandable
(set out on pages 131 to 132) – the
statement given by the Directors that
they consider the Annual Report and
financial statements taken as a whole is
fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Group’s and
the parent company’s performance,
business model and strategy, is materially
inconsistent with our knowledge obtained
in the audit; or
• Audit committee reporting (set out on
pages 114 to 123 – the section describing
the work of the audit committee does
not appropriately address matters
communicated by us to the Audit
Committee is materially inconsistent with
our knowledge obtained in the audit; or
• Directors’ statement of compliance with
the UK Corporate Governance Code (set
out on page 84) and the Irish Corporate
Governance Annex – the parts of the
Directors’ statement required under the
Listing Rules relating to the Company’s
compliance with the UK Corporate
Governance Code and the Irish Corporate
Governance Annex containing provisions
specified for review by the auditor in
accordance with the Listing Rules of
Euronext Dublin do not properly disclose
a departure from a relevant provision of
the UK Corporate Governance Code and
the Irish Corporate Governance Annex.
Opinions on other
matters prescribed by
the Companies Act 2014
In our opinion, based solely on the work
undertaken in the course of the audit, we
report that:
• the information given in the Directors’
Report, other than those parts dealing
with the non-financial statement
pursuant to the requirements of S.I. No.
360/2017 on which we are not required
to report in the current year, is consistent
with the financial statements; and
• the Directors’ Report, other than those
parts dealing with the non-financial
statement pursuant to the requirements
of S.I. No. 360/2017 on which we are not
required to report in the current year, has
been prepared in accordance with the
Companies Act 2014.
We have obtained all the information and
explanations which, to the best of our
knowledge and belief, are necessary for the
purposes of our audit.
In our opinion the accounting records of
the Company were sufficient to permit
the financial statements to be readily
and properly audited and the Company
statement of financial position is in
agreement with the accounting records.
Matters on which we
are required to report
by exception
Based on the knowledge and understanding
of the Group and its environment obtained
in the course of the audit, we have not
identified material misstatements in the
Directors’ report.
The Companies Act 2014 requires us
to report to you if, in our opinion, the
disclosures required by sections 305 to 312
of the Act, which relate to disclosures of
Directors’ remuneration and transactions,
are not complied with by the Company. We
have nothing to report in this regard.
We have nothing to report in respect of
section 13 of the European Union (Disclosure
of Non-Financial and Diversity Information
by certain large undertakings and groups)
Regulations 2017, which require us to report
to you if, in our opinion, the Company has
not provided in the non-financial statement
the information required by Section 5(2) to
(7) of those Regulations, in respect of year
ended 31 December 2022.
The Companies Act 2014 also requires
us to report to you if, in our opinion, the
Company has not provided the information
required by Section 1110N in relation to its
remuneration report for the financial 31
December 2022. We have nothing to report
in this regard.
The Listing Rules of the Irish Stock Exchange
require us to review:
• the Directors’ statement, set out on
pages 131 to 132, in relation to going
concern and longer-term viability;
• the part of the Corporate Governance
Statement on page 84 relating to
the Company’s compliance with
the provisions of the UK Corporate
Governance Code and the Irish Corporate
Governance Annex specified for our
review; and
• certain elements of disclosures in the
report to shareholders by the Board on
Directors’ remuneration.
140 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 141
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
Independent Auditor’s Report (continued)
to the Members of Kingspan Group plc
Respective responsibilities
Responsibilities of Directors for the
financial statements
As explained more fully in the Directors’
responsibilities statement set out on pages
131 and 132, the Directors are responsible for
the preparation of the financial statements
in accordance with the applicable financial
reporting framework that give a true and
fair view, and for such internal control as
they determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the
Directors are responsible for assessing the
Group and the parent Company’s ability
to continue as going concerns, disclosing,
as applicable, matters related to going
concern and using the going concern basis
of accounting unless management either
intends to liquidate the Group or the parent
Company or to cease operations, or has no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable
assurance is a high level of assurance but is
not a guarantee that an audit conducted in
accordance with ISAs (Ireland) will always
detect a material misstatement when it
exists. Misstatements can arise from fraud
or error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of these financial statements.
Explanation to what extent the audit
was considered capable detecting
irregularities, including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect irregularities, including
fraud, that could reasonably be expected
to have a material effect on the financial
statements. The risk of not detecting a
material misstatement due to fraud is
higher than the risk of not detecting one
resulting from error, as fraud may involve
deliberate concealment by, for example,
forgery or intentional misrepresentations,
or through collusion. In addition, the
further removed any non-compliance
is from the events and transactions
reflected in the financial statements, the
less likely it is that our procedures will
identify such non-compliance. The extent
to which our procedures are capable of
detecting irregularities, including fraud
is detailed below. However, the primary
responsibility for the prevention and
detection of fraud rests with both those
charged with governance of the company
and management.
Our approach was as follows:
• We obtained an understanding of the
legal and regulatory frameworks that
are applicable to the company and
determined that the most significant are
those that relate to the form and content
of external financial and corporate
governance reporting including company
law, tax legislation, employment law and
regulatory compliance
Explanation to what extent the audit
was considered capable detecting
irregularities, including fraud
• We understood how Kingspan Group
plc is complying with those frameworks
by making enquiries of management,
internal audit, those responsible for legal
and compliance procedures and the
Company Secretary. We corroborated
our enquiries through our review of the
Group’s Compliance Policies, board
minutes, papers provided to the Audit
Committee and correspondence received
from regulatory bodies
• We assessed the susceptibility of
Group’s financial statements to material
misstatement, including how fraud might
occur, by meeting with management,
including within various parts of the
business, to understand where they
considered there was susceptibility to
fraud. We also considered performance
targets and the potential for
management to influence earnings
or the perceptions of analysts. Where
this risk was considered to be higher,
we performed audit procedures to
address each identified fraud risk. These
procedures included testing manual
journals and were designed to provide
reasonable assurance that the financial
statements were free from fraud or error
• Based on this understanding we
designed our audit procedures to identify
non-compliance with such laws and
regulations. Our procedures included
a review of board minutes to identify
any non-compliance with laws and
regulations, a review of the reporting
to the Audit Committee on compliance
with regulations, enquiries of internal and
external legal counsel and management
A further description of our responsibilities
for the audit of the financial statements is
located on the IAASA’s website at: http://
www.iaasa.ie/getmedia/b2389013-1cf6-
458b-9b8f-a98202dc9c3a/Description_
of_auditors_responsibilities_for_audit.
pdf. This description forms part of our
auditor’s report.
Other matters which we
are required to address
We were appointed by the Board of
Directors following the AGM held on 1 May
2020 to audit the financial statements
for the year ended 31 December 2020 and
subsequent financial periods. The period of
total uninterrupted engagement including
previous renewals and reappointments of
the firm is four years.
The non-audit services prohibited by IAASA’s
Ethical Standard were not provided to the
Group and we remain independent of the
Group in conducting our audit.
Our audit opinion is consistent with the
additional report to the Audit Committee.
The purpose of our audit
work and to whom we owe
our responsibilities
Our report is made solely to the Company’s
members, as a body, in accordance with
section 391 of the Companies Act 2014. Our
audit work has been undertaken so that we
might state to the Company’s members
those matters we are required to state to
them in an auditor’s report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Company and the Company’s members, as
a body, for our audit work, for this report, or
for the opinions we have formed.
Pat O’Neill
for and on behalf of
Ernst & Young Chartered Accountants and
Statutory Audit Firm Dublin
21 February 2024
1.
The maintenance and integrity of the Kingspan Group
plc web site is the responsibility of the directors; the work
carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred
to the financial statements since they were initially
presented on the website.
142 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 143
Consolidated Income Statement
For The Year Ended 31 December 2023
Consolidated Statement of Financial Position
As At 31 December 2023
REVENUE
Cost of sales
GROSS PROFIT
Operating costs, excluding intangible amortisation
TRADING PROFIT
Intangible amortisation
Non trading item
OPERATING PROFIT
Finance expense
Finance income
PROFIT FOR THE YEAR BEFORE INCOME TAX
Income tax expense
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
Attributable to owners of Kingspan Group plc
Attributable to non-controlling interests
EARNINGS PER SHARE FOR THE YEAR
Basic
Diluted
Gene Murtagh
Chief Executive Officer
Geoff Doherty
Chief Financial Officer
20 February 2024
Consolidated Statement of Comprehensive Income
For The Year Ended 31 December 2023
Profit for the year
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Effective portion of changes in fair value of cash flow hedges
Items that will not be reclassified subsequently to profit or loss
Actuarial losses on defined benefit pension schemes
Income taxes relating to actuarial losses on defined benefit pension schemes
Equity investments at FVOCI – net change in fair value
Total other comprehensive loss
Total comprehensive income for the year
Attributable to owners of Kingspan Group plc
Attributable to non-controlling interests
Note
2
2
11
3
5
5
6
8
29
9
9
2023
€m
8,090.6
(5,750.9)
2,339.7
(1,462.8)
876.9
(41.7)
-
835.2
(63.7)
22.7
794.2
(140.3)
653.9
640.3
13.6
653.9
352.3
349.6
2022
€m
8,340.9
(6,124.6)
2,216.3
(1,383.1)
833.2
(32.4)
(16.5)
784.3
(39.4)
1.7
746.6
(130.6)
616.0
598.0
18.0
616.0
329.5c
326.9c
Note
2023
€m
2022
€m
653.9
616.0
(19.0)
(0.6)
(5.0)
0.4
12.5
(11.7)
642.2
626.4
15.8
642.2
(24.7)
-
(20.3)
4.9
(32.6)
(72.7)
543.3
521.3
22.0
543.3
32
22
13
29
ASSETS
NON-CURRENT ASSETS
Goodwill
Other intangible assets
Financial assets
Property, plant and equipment
Right of use assets
Retirement benefit assets
Deferred tax assets
CURRENT ASSETS
Inventories
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions for liabilities
Lease liabilities
Derivative financial instruments
Deferred contingent consideration
Interest bearing loans and borrowings
Current income tax liabilities
NON-CURRENT LIABILITIES
Retirement benefit obligations
Provisions for liabilities
Interest bearing loans and borrowings
Lease liabilities
Deferred tax liabilities
Deferred contingent consideration
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share premium
Capital redemption reserve
Treasury shares
Other reserves
Retained earnings
EQUITY ATTRIBUTABLE TO OWNERS OF KINGSPAN GROUP PLC
NON-CONTROLLING INTEREST
TOTAL EQUITY
Note
2023
€m
2022
€m
10
11
13
12
17
32
22
14
15
20
18
16
21
17
20
19
18
32
21
18
17
22
19
24
25
26
2,660.6
188.4
128.4
1,567.2
219.2
1.0
79.6
4,844.4
964.3
1,254.2
-
938.7
3,157.2
8,001.6
1,346.1
70.2
48.0
0.2
190.2
200.6
57.6
1,912.9
38.0
113.7
1,717.6
171.8
60.9
38.9
2,140.9
2,495.5
191.8
93.6
1,437.9
205.3
3.3
40.1
4,467.5
1,235.8
1,328.4
0.4
649.3
3,213.9
7,681.4
1,368.7
74.0
43.2
-
174.9
85.0
54.9
1,800.7
52.8
107.5
2,103.9
153.6
55.2
12.2
2,485.2
4,053.8
3,947.8
4,285.9
3,395.5
23.9
129.3
0.7
(55.8)
(336.7)
4,086.6
3,848.0
23.9
112.4
0.7
(56.9)
(288.0)
3,527.6
3,319.7
29
99.8
75.8
3,947.8
3,395.5
Gene Murtagh
Chief Executive Officer
Chief Financial Officer
Geoff Doherty
20 February 2024
144 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 145
Consolidated Statement of Changes in Equity
For The Year Ended 31 December 2023
Consolidated Statement of Changes in Equity
For The Year Ended 31 December 2022
Sh are B ased P a y m ent R eserve
C a pital R ede m ptio n R eserve
P ut O ptio n Lia bility R eserve
C ash Flo w H ed gin g R eserve
N o n- C o ntrollin g Interest
Total A ttrib uta ble to
R evalu atio n R eserve
Tra nslatio n R eserve
w n ers of th e P arent
R etain ed Earnin gs
Treasury Sh ares
Sh are Pre m iu m
Total Eq uity
Sh are C a pital
O
€m €m
Sh are B ased P a y m ent R eserve
C a pital R ede m ptio n R eserve
P ut O ptio n Lia bility R eserve
C ash Flo w H ed gin g R eserve
N o n- C o ntrollin g Interest
Total A ttrib uta ble to
R evalu atio n R eserve
Tra nslatio n R eserve
w n ers of th e P arent
R etain ed Earnin gs
Treasury Sh ares
Sh are Pre m iu m
Total Eq uity
Sh are C a pital
O
€m €m €m
€m
€m €m
€m €m
€m
€m
€m
€m €m €m
€m
€m €m
€m €m
€m
€m
€m
€m
€m
Balance at 1 January 2023
23.9 112.4 0.7
(56.9) (137.2) 0.6
55.1 0.7
(207.2) 3,527.6 3,319.7 75.8 3,395.5
Balance at 1 January 2022
23.9
94.4 0.7
(57.3)
(108.5) 0.6
57.3 0.7
(227.8) 3,108.1 2,892.1
67.2 2,959.3
Transactions with owners
recognised directly in equity
Employee share based
compensation
Tax on employee share
based compensation
Exercise or lapsing of share options
Repurchase of shares
Dividends
Transactions with
non‑controlling interests:
Arising on acquisition
Increase in NCI
Dividends to NCI
Fair value movement
Transactions with owners
Total comprehensive
income for the year
Profit for the year
Other comprehensive loss:
Items that may be reclassified
subsequently to profit or loss
Cash flow hedging in equity
- current year
- tax impact
Exchange differences on
translating foreign operations
Items that will not be
reclassified subsequently to
profit or loss
Actuarial losses on defined
benefit pension scheme
Income taxes relating to actuarial
losses on defined benefit pension
scheme
Equity investments at FVOCI –
net change in fair value
Total comprehensive
income for the year
Balance at 31 December 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16.9
-
-
-
-
-
-
16.9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23.9 129.3 0.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(0.6)
-
(21.2)
-
-
-
-
-
-
-
-
-
1.8
(0.7)
-
-
-
-
-
1.1
-
-
-
-
-
-
-
-
(21.2) (0.6)
-
(55.8) (158.4)
-
-
-
-
-
-
22.7
1.4
1.0
-
(91.2)
4.6
-
(0.7)
(91.2)
-
-
-
-
-
22.7
4.6
-
(0.7)
(91.2)
(22.9)
-
-
(10.2)
-
(0.4)
-
-
(22.9)
(0.4)
-
(10.2)
7.7
1.4
(0.9)
-
(15.2)
1.0
(0.9)
(10.2)
(33.1)
(89.2)
(98.1)
8.2
(89.9)
-
640.3
640.3 13.6
653.9
-
-
-
-
-
-
-
-
-
(0.6)
-
-
-
(0.6)
-
(21.2)
2.2
(19.0)
(5.0)
(5.0)
0.4
0.4
12.5
12.5
-
-
-
(5.0)
0.4
12.5
Transactions with owners
recognised directly in equity
Employee share based
compensation
Tax on employee share based
compensation
Exercise or lapsing of share
options
Repurchase of shares
Dividends
Transactions with
non‑controlling interests:
Settlement of put option
Purchase of NCI
Dividends to NCI
Fair value movement
Transactions with owners
Total comprehensive income
for the year
Profit for the year
Other comprehensive loss:
Items that may be reclassified
subsequently to profit or loss
Exchange differences on
translating foreign operations
Items that will not be
reclassified subsequently to
profit or loss
Actuarial losses on defined
benefit pension scheme
Income taxes relating to
actuarial losses on defined
benefit pension scheme
Equity investments at FVOCI –
net change in fair value
Total comprehensive income
for the year
Balance at 31 December 2022
-
642.2
(240.3) 4,086.6 3,848.0 99.8 3,947.8
626.4 15.8
648.2
22.7
3.2
(19.7)
-
-
-
-
-
-
6.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
61.3 0.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18.0
-
-
-
-
-
-
18.0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.8
(1.4)
-
-
-
-
-
0.4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18.4
(11.4)
(9.2)
-
-
-
-
-
-
(2.2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18.4
2.5
(8.9)
(10.6)
-
(93.7)
-
(1.4)
(93.7)
-
-
-
-
-
18.4
(8.9)
-
(1.4)
(93.7)
36.6
-
-
(16.0)
(28.3)
(0.4)
-
-
8.3
(0.4)
-
(16.0)
(8.3)
(1.6)
(3.5)
-
-
(2.0)
(3.5)
(16.0)
20.6
(130.5)
(93.7)
(13.4) (107.1)
-
598.0
598.0
18.0
616.0
-
-
-
(28.7)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(28.7)
4.0
(24.7)
(20.3)
(20.3)
4.9
4.9
(32.6)
(32.6)
-
-
-
(20.3)
4.9
(32.6)
-
-
23.9 112.4 0.7
-
-
(56.9)
(28.7)
-
(137.2) 0.6
-
-
55.1 0.7
-
521.3
550.0
(207.2) 3,527.6 3,319.7
22.0
543.3
75.8 3,395.5
146 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 147
Consolidated Statement of Cash Flows
For The Year Ended 31 December 2023
Company Statement of Financial Position
As At 31 December 2023
OPERATING ACTIVITIES
Profit for the year
Add back non‑cash and/or non‑operating expenses:
Income tax expense
Depreciation
Amortisation of intangible assets
Impairment of property, plant and equipment
Loss on divestment of subsidiary
Employee equity settled share options
Finance income
Finance expense
Profit on sale of property, plant and equipment
Movement of deferred contingent consideration
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Other:
Change in provisions
Defined benefit pension scheme buy in settlement
Pension contributions
Cash generated from operations
Income tax paid
Interest paid
Net cash flow from operating activities
INVESTING ACTIVITIES
Additions to property, plant and equipment
Additions to intangible assets
Proceeds from disposals of property, plant and equipment
Purchase of subsidiary undertakings (including net debt/cash acquired)
Transactions involving non-controlling interests
Purchase of financial asset
Divestment of subsidiary
Payment of deferred contingent consideration
Finance income received
Net cash flow from investing activities
FINANCING ACTIVITIES
Drawdown of loans
Repayment of loans and borrowings
Payment of lease liability
Repurchase of shares
Dividends paid to non-controlling interest
Dividends paid
Net cash flow from financing activities
INCREASE IN CASH AND CASH EQUIVALENTS
Effect of movement in exchange rates on cash held
Cash and cash equivalents at the beginning of the year
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
Note
2023
€m
2022
€m
653.9
616.0
8
6
11
12
3
4
5
5
6
32
23
13
19
30
30
17
26
29
28
30
140.3
190.9
41.7
2.9
-
22.7
(22.7)
63.7
(1.3)
0.3
299.2
74.0
(75.1)
(2.6)
(15.9)
(3.4)
1,368.6
(147.5)
(58.9)
1,162.2
(234.2)
(3.5)
4.2
(219.6)
1.0
(22.2)
-
(6.6)
22.6
(458.3)
319.0
(582.0)
(60.5)
(0.7)
(0.9)
(91.2)
(416.3)
287.6
1.8
649.3
938.7
130.6
165.1
32.4
-
16.5
18.4
(1.7)
39.4
(0.4)
-
14.6
25.7
(176.5)
7.7
-
(3.8)
884.0
(158.4)
(33.6)
692.0
(269.2)
-
18.6
(887.0)
(2.0)
(113.3)
(6.4)
(45.4)
1.7
(1,303.0)
846.0
(66.0)
(50.6)
(1.4)
(3.5)
(93.7)
630.8
19.8
(11.9)
641.4
649.3
ASSETS
NON-CURRENT ASSETS
Investments in subsidiaries
CURRENT ASSETS
Amounts owed by group undertakings
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Amounts owed to group undertakings
Payables
TOTAL LIABILITIES
NET ASSETS
EQUITY
Equity attributable to owners of Kingspan Group plc
Share capital
Share premium
Capital redemption reserve
Treasury shares
Retained earnings
TOTAL EQUITY
Note
2023
€m
2022
€m
13
15
16
16
24
25
26
27
2,118.4
1,238.5
165.9
0.4
300.1
0.4
2,284.7
1,539.0
0.1
0.2
0.3
195.5
0.2
195.7
2,284.4
1,343.3
23.9
129.3
0.7
(55.8)
2,186.3
23.9
112.4
0.7
(56.9)
1,263.2
2,284.4
1,343.3
In accordance with section 304 of the Companies Act 2014, the Company’s profit for the financial year was €1,000.1m (2022: loss of
€0.5m).
Gene Murtagh
Chief Executive Officer
Chief Financial Officer
Geoff Doherty
20 February 2024
148 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 149
Company Statement of Changes in Equity
For The Year Ended 31 December 2023
Share
Capital
Share
Premium
€m
€m
Capital
Redemption
Reserves
€m
Treasury
Shares
Retained
Earnings
Shareholders’
Equity
€m
€m
€m
Balance at 1 January 2023
23.9
112.4
0.7
(56.9) 1,263.2
1,343.3
Shares issued
Repurchase of shares
Employee share based compensation
Dividends paid
Transactions with owners
Profit for the year
-
-
-
-
-
-
16.9
-
-
-
16.9
-
-
-
-
-
-
-
1.8
(0.7)
-
-
(8.5)
-
22.7
(91.2)
1.1
(77.0)
10.2
(0.7)
22.7
(91.2)
(59.0)
-
1,000.1
1,000.1
Balance at 31 December 2023
23.9
129.3
0.7
(55.8) 2,186.3
2,284.4
Balance at 1 January 2022
Shares issued
Repurchase of shares
Employee share based compensation
Dividends paid
Transactions with owners
Loss for the year
Share
Capital
Share
Premium
€m
23.9
-
-
-
-
-
-
€m
94.4
18.0
-
-
-
18.0
-
Capital
Redemption
Reserves
€m
Treasury
Shares
Retained
Earnings
Shareholders’
Equity
€m
€m
€m
0.7
(57.3) 1,345.6
1,407.3
-
-
-
-
-
-
1.8
(1.4)
-
-
(6.6)
-
18.4
(93.7)
0.4
(81.9)
-
(0.5)
13.2
(1.4)
18.4
(93.7)
(63.5)
(0.5)
Balance at 31 December 2022
23.9
112.4
0.7
(56.9) 1,263.2
1,343.3
Company Statement of Cash Flows
For The Year Ended 31 December 2023
OPERATING ACTIVITIES
Profit/(loss) for the year after tax
Net cash flow from operating activities
FINANCING ACTIVITIES
Change in receivables
Change in payables
Repurchase of shares
Proceeds from equity settled share scheme
Dividends paid
Net cash flow from financing activities
INVESTING ACTIVITIES
Investment in subsidiaries
Net cash flow from investing activities
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
Net increase in cash and cash equivalents
CASH AND CASH EQUIVALENTS AT END OF YEAR
2023
€m
1,000.1
1,000.1
134.2
(195.4)
(0.7)
18.7
(91.2)
(134.4)
(865.7)
(865.7)
0.4
-
0.4
2022
€m
(0.5)
(0.5)
18.3
57.8
(1.4)
19.8
(93.7)
0.8
-
-
0.1
0.3
0.4
Notes to the Financial Statements
For The Year Ended 31 December 2023
1
Statement of Accounting Policies
General information
Kingspan Group plc is a public limited
company registered and domiciled in
Ireland. Its registered number is 70576 and
the address of its registered office is Dublin
Road, Kingscourt, Co Cavan.
The principal activities of Kingspan Group
plc (“the Group”) comprise the manufacture
of insulated panels, rigid insulation boards,
technical insulation, architectural facades,
roofing and waterproofing solutions, data
and flooring technology, daylighting and
ventilation systems and water and energy
solutions. The Group’s Principal Subsidiary
Undertakings are set out on page 204
to 205.
adopted by the EU and those parts of
the Companies Acts 2014, applicable to
companies reporting under IFRS and Article
4 of the IAS Regulation.
The Company has availed of the exemption
in Section 304 of the Companies Act 2014
and has not presented the Company
Income Statement, which forms part of
the Company’s financial statements, to its
members and the Registrar of Companies.
Basis of preparation
The financial statements have been
prepared on a going concern basis,
under the historical cost convention, as
modified by:
Statement of compliance
The consolidated and Company financial
statements have been prepared in
accordance with International Financial
Reporting Standards (IFRSs) and their
interpretations issued by the International
Accounting Standards Board (IASB) as
• measurement at fair value of share
based payments at initial date of award;
• certain financial assets (including
derivative financial instruments) and
deferred contingent consideration
recognised and measured at fair
value; and
• recognition of the defined benefit liability
as plan assets less the present value of
the defined benefit obligation.
The accounting policies set out below
have been applied consistently to all years
presented in these financial statements,
unless otherwise stated.
These consolidated financial statements
have been prepared in Euro. The Euro is the
presentation currency of the Group and the
functional and presentation currency of
the Company.
The Group uses a number of Alternative
Performance Measures (APMs) throughout
these financial statements to give
assistance to investors in evaluating the
performance of the underlying business
and to give a better understanding of
how management review and monitor the
business on an ongoing basis. These APMs
have been defined and explained in more
detail on page 201 to 203.
Changes in Accounting Policies and Disclosures
New and amended standards and interpretations effective during 2023
The following new standards, amendments to standards and interpretations are effective for the Group from 1 January 2023 and do not
have a material effect on the results or financial position of the Group:
Effective Date – periods
beginning on or after
IFRS 17 Insurance Contracts including Amendments to IFRS 17
Amendments to IAS 12 Income Taxes – Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 –
Disclosure of Accounting Policies
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors –
Definition of Accounting Estimates
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative information 1 January 2023
150 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 151
1
Statement of Accounting Policies (continued)
1
Statement of Accounting Policies (continued)
There are a number of amendments to standards and interpretations that are not yet effective and have not been applied in preparing
these consolidated financial statements. These amendments to standards and interpretations are either not expected to have a material
impact on the Group’s financial statements or are still under assessment by the Group. The principal new standards, amendments to
standards and interpretations are as follows:
Effective Date – periods
beginning on or after
Amendments to IAS 1 Presentation of Financial Statements – Classification of Liabilities as Current or Non-
current, Classification of Liabilities as Current or Non-current – Deferral of Effective Date and Non-current
Liabilities with Covenants
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures:
Supplier Finance Arrangements
1 January 2024
1 January 2024
1 January 2024*
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
1 January 2025*
*Not EU endorsed
Basis of consolidation
The Group consolidated financial
statements incorporate the financial
statements of the Company and its
subsidiary undertakings.
Subsidiaries
Subsidiaries are entities controlled by the
Group. The Group controls an entity when it
is exposed to, or has the rights to, variable
returns from its involvement with the entity
and has the ability to affect those returns
through its power over the entity.
Subsidiaries are included in the Group
financial statements from the date on which
control over the entity is obtained and cease
to be consolidated from the date on which
control is transferred out of the Group.
Transactions eliminated on consolidation
Intragroup transactions and balances,
and any unrealised gains arising from such
transactions, are eliminated in preparing the
consolidated financial statements. Unrealised
losses are eliminated in the same manner as
unrealised gains, but only to the extent that
there is no evidence of impairment.
Segment reporting
The Group’s accounting policy for
identifying segments is based on internal
management reporting information that is
routinely reviewed by the Board of Directors,
which is the Chief Operating Decision Maker
(CODM) for the Group.
The measurement policies used for the
segment reporting under IFRS 8 Operating
Segments are the same as those used in
the consolidated financial statements.
Segment results that are reported to the
CODM include items directly attributable
to a segment as well as those that can
be allocated on a reasonable basis.
Unallocated items comprise mainly
corporate assets, finance income and
expenses and tax assets and liabilities.
The Group has determined that it has five
(2022: six) operating segments: Insulated
Panels, Insulation, Light, Air + Water, Data +
Flooring, and Roofing + Waterproofing.
Revenue recognition
The Group recognises revenue exclusive
of sales tax and trade discounts which
would occur over time or at a point in
time. The Group uses the five-step model
as prescribed under IFRS 15 Revenue from
Contracts with Customers on the Group’s
revenue transactions. This includes the
identification of the contract, identification
of the performance obligations under
same, determination of the transaction
price, allocation of the transaction price to
performance obligations and recognition of
revenue. Typically, individual performance
obligations are specifically called out in
the contract which allows for accurate
recognition of revenue as and when
performances are fulfilled.
The Group has generally concluded that it
is the principal in its revenue arrangements,
because it typically controls the goods
or services before transferring them to
the customers.
The Group has identified a number
of revenue streams where revenue is
recognised at a point in time and/or over
time. These are detailed below:
Supply only contracts
The point of recognition arises when the
Group satisfies a performance obligation by
transferring control of a promised good or
service to the customer, which could occur
over time or at a point in time. Revenue
is recognised at the time of delivery at
the delivery address (where Kingspan
is to deliver the goods to the delivery
address) or at Kingspan’s works (where the
customer is to collect the goods) or, if the
customer wrongfully fails to take delivery
of the goods, the time when Kingspan has
tendered delivery of the goods. Invoicing
occurs at the point of final delivery of
the product or performance obligation,
at which point a right is established for
unconditional consideration as control
passes to the customer. Typically, payment
terms are 30 days from the end of the
month in which the invoice is raised.
Put options held by non-controlling
interest shares
Any contingent consideration is measured
at fair value at the date of acquisition.
Where a put option is held by a non-
controlling interest (“NCI”) in a subsidiary
undertaking, whereby that party can require
the Group to acquire the NCI’s shareholding
in the subsidiary at a future date, but the
NCI retains present access to the results
of the subsidiary, the Group applies the
present access method of accounting to
this arrangement. The Group recognises
a contingent consideration liability at fair
value, being the Group’s estimate of the
amount required to settle that liability
and a corresponding reserve in equity. Any
subsequent remeasurements required due
to changes in fair value of the put liability
estimation are recognised in the Put Option
Liability Reserve in equity.
Goodwill
Goodwill arises on business combinations
and represents the difference between the
fair value of the consideration and the fair
value of the Group’s share of the identifiable
net assets of a subsidiary at the date
of acquisition.
The Group measures goodwill at the
acquisition date as:
• the fair value of the consideration
transferred; plus
• the recognised amount of any non-
controlling interests in the acquiree; plus
• if the business combination is achieved in
stages, the fair value of the pre-existing
equity interest in the acquiree; less
• the net recognised amount (generally fair
value) of the identifiable assets acquired
and liabilities assumed.
Following initial recognition, goodwill is
measured at cost less any accumulated
impairment losses.
Supply and install projects
If a contract requires the Group to install
or commission a product and the product
can be separated or sold separately from
the installation service and the contract
specifically separates the performance
obligations then the product only supply
element is recognised in line with the
criteria set out in the supply only policy. The
installation element is recognised over time
in line with the milestones set out in the
contract. If there is significant integration
provided for in the contract then a single
purchase order is identified and the revenue
is recognised over time.
Service and maintenance
Where the Group provides a post-sale
service and maintenance offering the
revenue associated with this separately
identifiable performance obligation is
initially recognised in deferred income. The
revenue is recognised in the Consolidated
Income Statement as each site visit occurs.
Research and Development
Expenditure on research and development
is recognised as an expense in the period in
which it is incurred. An asset is recognised
only when all the conditions set out in IAS
38 Intangible Assets are met.
Non trading items
Non trading items refer to certain items,
which by virtue of their nature and amount,
are disclosed separately in order for the
user to obtain a proper understanding of
the financial information. Non trading
items include gains or losses on the disposal
or acquisition of businesses and material
related acquisition and integration costs,
and material impairments to the carrying
value of intangible assets or property,
plant and equipment. It is determined by
management that each of these items
relate to events or circumstances that are
non-recurring in nature.
Business Combinations
Business combinations are accounted for
using the acquisition method as at the date
of acquisition.
In accordance with IFRS 3 Business
Combinations, the fair value of
consideration paid for a business
combination is measured as the aggregate
of the fair values at the date of exchange
of assets given and liabilities incurred or
assumed in exchange for control. The
assets, liabilities and contingent liabilities
of the acquired entity are measured at
fair value as at the acquisition date.
When the initial accounting for a business
combination is determined, it is done so on
a provisional basis with any adjustments
to these provisional values made within
12 months of the acquisition date and are
effective as at the acquisition date.
To the extent that deferred contingent
consideration is payable as part of the
acquisition cost and is payable after
one year from the acquisition date, the
deferred contingent consideration is
discounted at an appropriate interest rate
and, accordingly, carried at net present
value (amortised cost) in the Consolidated
Statement of Financial Position. The
discount component is then unwound as an
interest charge in the Consolidated Income
Statement over the life of the obligation.
Where a business combination agreement
provides for an adjustment to the cost
of a business acquired contingent on
future events, other than put options held
by non-controlling interests, the Group
accrues the fair value of the additional
consideration payable as a liability at
acquisition date. This amount is reassessed
at each subsequent reporting date with any
adjustments recognised in the Consolidated
Income Statement.
If the business combination is achieved
in stages, the fair value of the acquirer’s
previously held equity interest in the
acquiree is re-measured at the acquisition
date through the Consolidated Income
Statement or the Consolidated Statement
of Other Comprehensive Income.
For each business combination, the Group
elects whether to measure the non-
controlling interests in the acquiree at fair
value or at the proportionate share of the
acquiree’s identifiable net assets.
Transaction costs are expensed to
the Consolidated Income Statement
as incurred.
152 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 153
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 1
Statement of Accounting Policies (continued)
1
Statement of Accounting Policies (continued)
As at the acquisition date, any goodwill
acquired is allocated to each of the cash
generating units expected to benefit from
the combination’s synergies. The cash
generating units represent the lowest
level within the Group which generate
largely independent cash inflows and
these units are not larger than the
operating segments (before aggregation)
determined in accordance with IFRS 8
Operating Segments.
Goodwill is tested for impairment at the
same level as the goodwill is monitored
by management for internal reporting
purposes, which is at the individual cash
generating unit level.
Goodwill is subject to impairment testing
on an annual basis and at any time during
the year if an indicator of impairment is
considered to exist. The goodwill impairment
tests are undertaken at a consistent time
each year. Impairment is determined by
assessing the recoverable amount of the
cash generating unit to which the goodwill
relates. Where the recoverable amount of
the cash generating unit is less than the
carrying amount, an impairment loss is
recognised in the Consolidated Income
Statement. Impairment losses arising
in respect of goodwill are not reversed
following recognition.
On disposal of a subsidiary, the attributable
amount of goodwill, not previously written
off, is included in the calculation of the
profit or loss on disposal.
Intangible Assets (other than goodwill)
Intangible assets separately acquired
are capitalised at cost. Intangible assets
acquired as part of a business combination
are capitalised at fair value as at the date
of acquisition.
Following initial recognition, intangible
assets, which have finite useful lives,
are carried at cost or initial fair value
less accumulated amortisation and
accumulated impairment losses.
The amortisation of intangible assets is
calculated to write off the book value of
intangible assets over their useful lives on
a straight-line basis on the assumption of
zero residual value. Amortisation charged
on these assets is recognised in the
Consolidated Income Statement.
The carrying amount of intangible assets
is reviewed for indicators of impairment
at each reporting date and is subject to
impairment testing when events or changes
of circumstances indicate that the carrying
values may not be recoverable.
The estimated useful lives are as follows:
Customer relationships
2 - 10 years
Trademarks & Brands
2 - 12 years
Patents
Technological know how
and order backlogs
8 years
1 - 10 years
Amortisation methods, useful lives and
residual values are reviewed at each
reporting date and adjusted as necessary.
Foreign currency
Functional and presentation currency
The individual financial statements of
each Group company are measured and
presented in the currency of the primary
economic environment in which the
company operates, the functional currency.
The Group financial statements are
presented in Euro, which is the Company’s
functional currency.
Transactions and balances
Transactions in foreign currencies are
translated into the functional currency
at the exchange rates at the date of the
transaction. Monetary assets and liabilities
denominated in foreign currencies are
translated to the functional currency at
the exchange rates at the reporting date.
All currency translation differences on
monetary assets and liabilities are taken to
the Consolidated Income Statement, except
when deferred in equity as qualifying net
investment hedges, which are recognised
in the Consolidated Statement of
Comprehensive Income.
Goodwill and fair value adjustments arising
on the acquisition of a foreign entity
are initially translated at the exchange
rate at the date of acquisition and then
subsequently these assets and liabilities are
treated as part of a foreign entity and are
translated at the closing rate.
Exchange rates of material currencies used were as follows:
Euro =
Pound Sterling
US Dollar
Canadian Dollar
Australian Dollar
Czech Koruna
Polish Zloty
Hungarian Forint
Brazilian Real
Average rate
Closing rate
2023
2022
2023
2022
0.870
1.082
1.459
1.629
24.000
4.541
381.550
5.401
0.853
1.054
1.370
1.517
24.562
4.685
391.090
5.442
0.869
1.106
1.464
1.622
24.701
4.344
382.520
5.374
0.886
1.067
1.444
1.569
24.143
4.680
400.190
5.632
Foreign operations
The Consolidated Income Statement,
Statement of Financial Position and Cash
Flow Statement of Group companies
that have a functional currency different
from that of the Company are translated
as follows:
• Assets and liabilities at each reporting
date are translated at the closing rate at
that reporting date.
• Results and cash flows are translated
at actual exchange rates for the year,
or an average rate where this is a
reasonable approximation.
All resulting exchange differences are
recognised in the Consolidated Statement
of Comprehensive Income and accumulated
as a separate component of equity, the
Translation Reserve.
On disposal of a foreign operation, any
such cumulative retranslation differences,
previously recognised in equity, are
reclassified to the Consolidated Income
Statement as part of gain or loss
on disposal.
Inventories
Inventories are stated at the lower of cost
and net realisable value.
Cost is based on the first-in, first-out
principle and includes all expenditure
incurred in acquiring the inventories and
bringing them to their present location
and condition.
• Raw materials are valued at the purchase
price including transport, handling costs
and net of trade discounts.
• Work in progress and finished goods
are carried at cost consisting of direct
materials, direct labour and directly
attributable production overheads and
other costs incurred in bringing them to
their existing location and condition.
Net realisable value represents the
estimated selling price less costs to
completion and appropriate marketing,
selling and distribution costs.
A provision is made, where necessary, in all
inventory categories for obsolete, slow-
moving and defective items.
Income tax
Income tax in the Consolidated Income
Statement represents the sum of current
income tax and deferred tax not recognised
in other comprehensive income or directly
in equity.
Current tax
Current tax represents the expected tax
payable or recoverable on the taxable
profit for the year using tax rates and laws
that have been enacted, or substantively
enacted, at the reporting date and taking
into account any adjustments from
prior years. Liabilities for uncertain tax
treatments are recognised in accordance
with IFRIC 23 Uncertainty Over Income Tax
Treatments and are measured using either
the most likely amount method or the
expected value method – whichever better
predicts the resolution of the uncertainty.
Deferred Tax
Deferred tax is provided using the liability
method on temporary differences at the
reporting date. Temporary differences are
defined as the difference between the tax
bases of assets and liabilities and their
carrying amounts in the consolidated
financial statements. Deferred tax assets
and liabilities are not subject to discounting
and are measured at the tax rates that are
expected to apply in the period in which
the asset is realised or the liability is settled
based on tax rates and tax laws that have
been enacted or substantively enacted at
the reporting date.
The Group offsets deferred tax assets
and deferred tax liabilities only if it has a
legally enforceable right to set off current
tax assets and current tax liabilities and
the deferred tax assets and deferred tax
liabilities relate to income taxes levied by
the same taxation authority on either the
same taxable entity or different taxable
entities which intend either to settle current
tax liabilities and assets on a net basis, or
to realise the assets and settle the liabilities
simultaneously, in each future period in
which significant amounts of deferred
tax liabilities or assets are expected to be
settled or recovered.
Deferred tax liabilities are recognised for
all taxable temporary differences (i.e.
differences that will result in taxable
amounts in future periods when the
carrying amount of the asset or liability is
recovered or settled).
Deferred tax assets are recognised in
respect of all deductible temporary
differences (i.e. differences that give
rise to amounts which are deductible in
determining taxable profits in future periods
when the carrying amount of the asset
or liability is recovered or settled), carry-
forward of unused tax credits and unused
tax losses to the extent that it is probable
that taxable profits will be available against
which to offset these items.
The carrying amounts of deferred tax assets
are subject to review at each reporting
date and reduced to the extent that
future taxable profits are considered to
be inadequate to allow all or part of any
deferred tax asset to be utilised.
Changes in deferred tax assets or liabilities
are recognised as a component of tax
income or expense in profit or loss,
except where they relate to items that
are recognised in other comprehensive
income or directly in equity, in which case
the related deferred tax is also recognised
in other comprehensive income or equity,
respectively.
The Group has applied the amendment
to IAS 12 Income Taxes on the mandatory
temporary exception to recognising and
disclosing information about deferred tax
assets and liabilities that are related to
tax law enacted or substantively enacted
to implement the Pillar Two model rules
published by the Organisation for Economic
Co-operation and Development (OECD).
The amendments require that entities
shall apply the amendments immediately
upon issuance.
Investments in subsidiaries
Investments in subsidiaries held by the
Parent Company are carried at cost less
accumulated impairment losses.
Property, Plant and Equipment
Property, plant and equipment is measured
at cost less accumulated depreciation and
accumulated impairment losses.
154 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 155
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 1
Statement of Accounting Policies (continued)
1
Statement of Accounting Policies (continued)
Depreciation is provided on a straight line
basis at the rates stated below, which are
estimated to reduce each item of property,
plant and equipment to its residual value by
the end of its useful life:
Freehold buildings
2% - 2.5% on cost
Plant and machinery
4% to 20% on cost
Fixtures and fittings
10% to 20% on cost
Computer equipment
12.5% to 33% on cost
Motor vehicles
10% to 25% on cost
Freehold land is stated at cost and is
not depreciated.
The estimated useful lives and residual
values of property, plant and equipment are
determined by management at the time
the assets are acquired and subsequently
reassessed at each reporting date. These
lives are based on historical experience with
similar assets across the Group.
In accordance with IAS 36 Impairment of
Assets, the carrying values of property,
plant and equipment are reviewed at
each reporting date to determine whether
there is any indication of impairment.
An impairment loss is recognised
whenever the carrying value of an asset
or its cash generating unit exceeds its
recoverable amount.
Impairment losses are recognised in the
Consolidated Income Statement. Following
the recognition of an impairment loss,
the depreciation charge applicable to the
asset or cash-generating unit is adjusted to
allocate the revised carrying amount, net
of any residual value, over the remaining
useful life.
Assets under construction are carried at
cost less any recognised impairment loss.
Depreciation of these assets commences
when the assets are ready for their
intended use.
Leases
The Group recognises right of use assets
representing its right to use the underlying
assets and lease liabilities representing its
obligation to make lease payments at the
lease commencement date. The right of
use assets are initially measured at cost,
and subsequently measured at cost less
accumulated depreciation and impairment
losses. The cost of the right of use asset
consists of the initial measurement of the
lease liability, any initial direct costs incurred
in entering into the lease, restoration costs
and any payments made on or before the
lease commencement date, net any lease
incentives received.
Depreciation is provided on a straight line
basis over the period of the lease, or useful
life if shorter.
Lease liabilities are measured at the
present value of the future lease payments,
discounted at the Group’s incremental
borrowing rate. Subsequent to the initial
measurement, the lease liabilities are
increased by the interest cost and reduced
by lease payments made.
The right of use assets and lease liabilities
are remeasured when there are changes in
the assessment of whether an extension
option is reasonably certain to be exercised
or a termination option is reasonably certain
not to be exercised or where there is a
change in future lease payments as a result
of a change in an index or rate. The Group
applies judgement when determining the
lease term where renewal and termination
options are contained in the lease contract.
The Group applies the short-term lease
recognition exemption to leases that
have a lease term of 12 months or less
from the commencement date. The
Group also applies the lease of low-value
assets recognition exemption to leases
of equipment that are considered to be
low value. Lease payments on short-term
leases and leases of low-value assets are
recognised as an expense on a straight-line
basis over the term of the lease.
Retirement benefit obligations
The Group operates defined contribution
and defined benefit pensions schemes.
Defined contribution pension schemes
The costs arising on the Group’s defined
contribution schemes are recognised in
the Consolidated Income Statement in
the period in which the related service
is provided. The Group has no legal or
constructive obligation to pay further
contributions in the event that these plans
do not hold sufficient assets to provide
retirement benefits.
Defined benefit pension schemes
The Group’s net obligation in respect
of defined benefit plans is calculated
separately for each plan by estimating the
amount of future benefit that employees
have earned in return for their service in the
current and prior periods, discounting that
amount and deducting the fair value of any
plan assets.
The calculation is performed annually by
a qualified actuary using the projected
unit credit method. When the calculation
results in a benefit to the Group, the
recognised asset is limited to the total of
any unrecognised past service costs and the
present value of economic benefits available
in the form of any future refunds from the
plan or reductions in future contributions to
the plan.
Remeasurements of the net defined benefit
liability or asset, which comprise actuarial
gains and losses, the return on plan assets
(excluding interest) and the effect of the
asset ceiling, are recognised immediately in
other comprehensive income.
The Group determines the net interest
expense on the net defined benefit liability
or asset by applying the discount rate used
to measure the defined benefit obligation
at the beginning of the annual period to the
then net defined benefit liability or asset,
taking into account any changes in the
net defined benefit liability or asset during
the period as a result of contributions and
benefit payments. Net interest expense and
other expenses related to defined benefit
plans are recognised in profit or loss.
When the benefits of a plan are changed
or when a plan is curtailed, the resulting
change in benefit that relates to past
service or the gain or loss on curtailment is
recognised immediately in profit or loss. The
Group recognises gains and losses on the
settlement of a defined benefit plan when
the settlement occurs.
Provisions
A provision is recognised in the Consolidated
Statement of Financial Position when the
Group has a present constructive or legal
obligation as a result of a past event and
it is probable that an outflow of economic
benefit will be required to settle the
obligation and the amount of the obligation
can be estimated reliably.
A specific provision is created when a claim
has actually been made against the Group
or where there is a known issue at a known
customer’s site, both relating to a product
or service supplied in the past. In addition, a
risk-based provision is created where future
claims are considered incurred but not
reported. The warranty provision is based
on historical warranty data and a weighting
of all possible outcomes against their
associated probabilities.
Derivative financial instruments
Derivative financial instruments, principally
interest rate and currency swaps, are used
to hedge the Group’s foreign exchange and
interest rate risk exposures.
Derivative financial instruments are
recognised initially at fair value and
thereafter are subsequently remeasured
at their fair value. Fair value is the price
that would be received to sell an asset
or paid to transfer a liability in an orderly
transaction between market participants
at the measurement date. The fair value
of these instruments is the estimated
amount that the Group would receive
or pay to terminate the swap at the
reporting date, taking into account current
interest and currency exchange rates
and the current creditworthiness of the
swap counterparties.
Specific provisions will generally be aged as
a current liability, reflecting the assessment
that a current liability exists to replace or
repair product sold on foot of an accepted
valid warranty issue. Only where the liability
is reasonably certain not to be settled within
the next 12 months, will a specific provision
be categorised as a long-term obligation.
Risk-based provisions will generally be aged
as a non-current liability, reflecting the fact
that no warranty claim has yet been made
by the customer.
Provisions which are not expected to give
rise to a cash outflow within 12 months of
the reporting date are, where material,
determined by discounting the expected
future cash flows. The unwinding of the
discount is recognised as a finance expense.
Dividends
Final dividends on ordinary shares are
recognised as a liability in the financial
statements only after they have been
approved at the Annual General Meeting of
the Company. Interim dividends on ordinary
shares are recognised when they are paid.
Cash and cash equivalents
Cash and cash equivalents principally
comprise cash at bank and in hand and
short-term deposits with an original
maturity of three months or less.
The Group designates all of its derivatives
in one or more of the following types
of relationships:
i.
Fair value hedge: Hedges the exposure
to movements in fair value of
recognised assets or liabilities that are
attributable to hedged risks.
ii. Cash flow hedge: Hedges the Group’s
exposures to fluctuations in future
cash flow derived from a particular risk
associated with recognised assets or
liabilities or forecast transactions.
iii. Net investment hedge: Hedges the
exchange rate fluctuations of a net
investment in a foreign operation.
At inception of the transaction, the Group
documents the relationship between the
hedging instruments and hedged items,
including the risk management objectives
and strategy in undertaking the hedge
transactions. The Group also documents its
assessment, both at inception and on an
ongoing basis, as to whether the derivatives
that are used in hedging transactions are
highly effective in offsetting changes in fair
values or cash flows of hedged items.
Fair value hedge
Any gain or loss resulting from the re-
measurement of the hedging instrument
to fair value is reported in the Consolidated
Income Statement, together with any
changes in the fair value of the hedged
asset or liability that are attributable to
the hedged risk. The gains or losses of a
hedging instrument that are in hedge
relationships with borrowings are included
within Finance Income or Finance Expense
in the Consolidated Income Statement. In
the case of the related hedged borrowings,
any gain or loss on the hedged item
which is attributable to the hedged risk is
adjusted against the carrying amount of
the hedged item and is also included within
Finance Income or Finance Expense in the
Consolidated Income Statement.
If the hedge no longer meets the criteria
for hedge accounting, the adjustment to
the carrying amount of the hedged item is
amortised on an effective interest basis to
the Consolidated Income Statement with
the objective of achieving full amortisation
by maturity of the hedged item.
Cash flow hedge
The effective part of any gain or loss
on the derivative financial instrument
is recognised in other comprehensive
income and presented in the Cash
Flow Hedge Reserve in equity with the
ineffective portion being recognised within
Finance Income or Finance Expense in the
Consolidated Income Statement. If a hedge
of a forecasted transaction subsequently
results in the recognition of a financial
asset or a financial liability, the associated
gains and losses that were recognised
directly in other comprehensive income are
reclassified into profit or loss in the same
period or periods during which the asset
acquired or liability assumed affects profit
or loss. For cash flow hedges, other than
those covered by the preceding statements,
the associated cumulative gain or loss
is removed from other comprehensive
income and recognised in the Consolidated
Income Statement in the same period
or periods during which the hedged
forecast transaction affects profit or loss.
The ineffective part of any gain or loss is
recognised immediately in the Consolidated
Income Statement.
156 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 157
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 1
Statement of Accounting Policies (continued)
1
Statement of Accounting Policies (continued)
Hedge accounting is discontinued when
a hedging instrument expires or is sold,
terminated or exercised, or no longer
qualifies for hedge accounting. The
cumulative gain or loss at that point
remains in other comprehensive income
and is recognised when the transaction
occurs. If a hedged transaction is no longer
expected to occur, the net cumulative gain
or loss recognised in other comprehensive
income is transferred to the Consolidated
Income Statement in the period.
Net investment hedge
Any gain or loss on the hedging instrument
relating to the effective portion of the
hedge is recognised in other comprehensive
income and presented in the Translation
Reserve in equity. The gain or loss relating
to the ineffective portion is recognised
immediately in either Finance Income
or Finance Expense in the Consolidated
Income Statement. Cumulative gains or
losses remain in equity until disposal of the
net investment in the foreign operation
at which point the related differences are
reclassified to the Consolidated Income
Statement as part of the overall gain or loss
on sale.
Financial Assets
On initial recognition, a financial asset is
classified as measured at amortised cost
and subsequently measured using the
effective interest rate (EIR) method and
subject to impairment. Financial assets
may also be initially measured at fair
value with any movement being reflected
through other comprehensive income or the
Consolidated Income Statement.
On initial recognition of an equity
investment that is not held for trading,
the Group may irrevocably elect to present
subsequent changes in the investment’s
fair value in other comprehensive income.
This election is made on an investment-by-
investment basis.
The Group applies the simplified approach
for expected credit losses (ECL) under IFRS
9 Financial Instruments, which requires
expected lifetime losses to be recognised
from initial recognition of receivables. Under
IFRS 9 Financial Instruments, the Group uses
an allowance matrix to measure Expected
Credit Loss (ECL) of trade receivables
from customers. Loss rates are calculated
using a “roll rate” method based on the
probability of a receivable progressing
through successive chains of non-payment
to write-off. The rates are calculated at a
business unit level which reflects the risks
associated with geographic region, age,
mix of customer relationship and type of
product purchased.
Financial Liabilities
Financial liabilities held for trading are
measured at fair value through the profit
and loss, and all other financial liabilities are
measured at amortised cost unless the fair
value option is applied.
Finance Income
Finance income primarily comprises interest
income on funds invested and any gains on
hedging instruments that are recognised
in the Consolidated Income Statement.
Interest income is recognised as it accrues
using the effective interest rate method.
Finance Expense
Finance expense comprises interest
charged on cash balances held in certain
currencies, interest payable on borrowings
calculated using the effective interest rate
method, fair value gains and losses on
hedging instruments that are recognised
in the Consolidated Income Statement,
the net finance cost of the Group’s defined
benefit pension scheme, lease interest and
the discount component of the deferred
contingent consideration which is unwound
as an interest charge in the Consolidated
Income Statement over the life of
the obligation.
Share-Based Payment Transactions
The Group grants equity settled share
based payments to employees through the
Performance Share Plan and the Deferred
Bonus Plan.
The fair value of these equity settled
transactions is determined at grant date
and is recognised as an employee expense
in the Consolidated Income Statement,
with the corresponding increase in equity,
on a straight line basis over the vesting
period. The fair value at the grant date is
determined using a combination of the
Monte Carlo simulation technique and the
Black Scholes model, excluding the impact
of any non-market conditions. Non-market
vesting conditions are included in the
assumptions about the number of options
that are expected to vest. At each reporting
date, the Group revises its estimates of the
number of options that are likely to vest
as a result of non-market conditions. Any
adjustment from this revision is recognised
in the Consolidated Income Statement with
a corresponding adjustment to equity.
Where the share based payments give
rise to the issue of new share capital, the
proceeds received by the Company are
credited to share capital (nominal value)
and share premium (where applicable)
when the share entitlements are exercised.
Where the share-based payments give
rise to the re-issue of shares from treasury
shares, the proceeds of issue are credited to
share premium.
The Group does not operate any cash-
settled share-based payment schemes or
share-based payment transactions with
cash alternatives as defined in IFRS 2 Share
Based Payments.
Treasury Shares
Where the Company purchases its own
equity share capital, the consideration paid
is deducted from total shareholders’ equity
and classified as treasury shares until such
shares are cancelled or reissued. Where such
shares are subsequently sold or reissued,
any consideration received is included in
share premium account. No gains or losses
are recognised on the purchase, sale,
cancellation or issue of treasury shares.
Non-controlling interest
Non-controlling interests represent the
portion of the equity of a subsidiary not
attributable either directly or indirectly to
the parent company and are presented
separately in the Consolidated Income
Statement and within equity in the
Consolidated Statement of Financial
Position, distinguished from shareholders’
equity attributable to owners of the
parent company.
Accounting Estimates and Judgements
In the process of applying the Group’s
accounting policies, as set out on pages
151 to 160, management are required to
make estimates and judgements that could
materially affect the Group’s reported
results or net asset position.
The preparation of the Group’s consolidated
financial statements requires management
to make judgements, estimates and
assumptions that affect the reported
amounts of revenues, expenses, assets
and liabilities, and the accompanying
disclosures, and the disclosure of
contingent liabilities. Uncertainty about
these assumptions and estimates could
result in outcomes that require a material
adjustment to the carrying amount of
assets or liabilities in future periods. The
Group has considered the impact of climate
change on the consolidated financial
statements, including the carrying value of
assets, the useful economic life of assets,
and provisions.
The areas where key estimates and
judgements were made by management
and are material to the Group’s reported
results or net asset position, are as follows:
Impairment (Note 10)
The Group is required to review assets for
objective evidence of impairment.
It does this on the basis of a review of the
budget and rolling 5 year forecasts (4 year
strategic plan, as approved by the Board,
plus year 5 forecasted by management),
which by their nature are based on a
series of assumptions and estimates.
The forecasts used for the Roofing +
Waterproofing CGU are based on a 4 year
financial plan approved by the Board of
Directors, plus years 5-10 as forecasted
by management.
The Group has performed impairment
tests on those cash generating units which
contain goodwill, and on any assets where
there are indicators of impairment. The key
assumptions associated with these reviews
are detailed in Note 10. The Group also
considered the potential impact of climate
change. This is an area of estimation
and judgement.
Guarantees & warranties (Note 21)
Certain products carry formal guarantees
of satisfactory functional and aesthetic
performance of varying periods following
their purchase. Local management evaluate
the constructive or legal obligation arising
from customer feedback and assess the
requirement to provide for any probable
outflow of economic benefit arising from
a settlement. This is an area of estimation
and judgement.
Recoverability of trade receivables
(Note 15)
The Group provides credit to customers
and as a result there is an associated risk
that the customer may not be able to pay
outstanding balances.
Under IFRS 9 the Group uses an allowance
matrix to measure Expected Credit Loss
(ECL) of trade receivables from customers.
Loss rates are calculated using a “roll rate”
method based on the probability of a
receivable progressing through successive
chains of non-payment to write-off. The
rates are calculated at a business unit
level which reflects the risks associated
with geographic region, age, mix of
customer relationship and type of product
purchased. This is an area of estimation
and judgement.
Valuation of inventory (Note 14)
Inventories are measured at the lower of
cost and net realisable value. The Group’s
policy is to hold inventories at original cost
and create an inventory provision where
evidence exists that indicates net realisable
value is below cost for a particular item
of inventory. Damaged, slow-moving or
obsolete inventory are typical examples of
such evidence. This is an area of estimation
and judgement.
Leases (Note 17)
The Group has applied judgement to
determine the lease term of contracts that
include termination and extension options.
If the Group is reasonably certain to
exercise such options, the relevant amount
of right of use assets and lease liabilities
are recognised.
The Group has also applied judgement in
determining the incremental borrowing
rates (IBR). The incremental borrowing
rate is the rate of interest that a lessee
would expect to incur on funds borrowed
over a similar term and security to obtain a
comparable value to the right of use asset
in the relevant economic environment. The
Group estimates the IBR using observable
inputs (such as market interest rates) when
available and makes certain entity-specific
estimates (such as country risk and entity
specific credit rating) as required.
Business Combinations (Note 23)
Business combinations are accounted for
using the acquisition method which requires
that the assets and liabilities assumed are
recorded at their respective fair values at
the date of acquisition. The application
of this method requires certain estimates
and assumptions relating, in particular, to
the determination of the fair values of the
acquired assets and liabilities assumed at
the date of acquisition.
For intangible assets acquired, the Group
bases valuations on expected future cash
flows. This method employs a discounted
cash flow analysis using the present value
of the estimated cash flows expected to
be generated from these intangible assets
using appropriate discount rates and
revenue forecasts. The period of expected
cash flows is based on the expected useful
life of the intangible asset acquired.
Measurement of deferred contingent
consideration and put option liabilities
related to business combinations require
assumptions to be made regarding profit
forecasts and discount rates used to arrive
at the net present value of the potential
obligations. The Group has considered
all available information in arriving at
the estimate of liabilities associated
with deferred contingent consideration
obligations. This is an area of estimation
and judgement.
158 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 159
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 1
Statement of Accounting Policies (continued)
Deferred tax assets are recognised to the
extent that it is probable that future taxable
profit will be available against which the
unused tax losses and unused tax credits
can be utilised. The Group estimates the
most probable amount of future taxable
profits, using assumptions consistent with
those employed in impairment calculations,
and taking into consideration applicable
tax legislation in the relevant jurisdiction.
These calculations also require the use of
estimates and judgement.
Deferred Contingent Consideration
(Note 19)
Measurement of put option liabilities require
assumptions to be made regarding profit
forecasts and discount rates used to arrive
at the net present value of the potential
obligations. The Group has considered
all available information in arriving at
the estimate of liabilities associated with
put option obligations. This is an area
of estimation.
Income taxes (Note 8)
The Group is subject to income tax
in numerous jurisdictions. Significant
judgement is required in determining the
worldwide provision for income taxes.
There are many transactions for which the
ultimate tax determination is uncertain.
The Group recognises liabilities based on
estimates of whether additional taxes
will be due. Once it has been concluded
that a liability needs to be recognised, the
liability is measured based on the tax laws
that have been enacted or substantially
enacted at the end of the reporting period.
The amount shown for current taxation
includes an estimate for uncertain tax
treatments where the Group considers it
probable that uncertain tax treatments will
not be accepted by tax authorities and the
estimate is measured using either the most
likely amount method or the expected value
method, as appropriate, prescribed by IFRIC
23. Where the final tax outcome of these
matters is different from the amounts that
were initially estimated, such differences
will impact the income tax and deferred
tax provisions in the period in which such
determination is made.
2 Segment Reporting
In identifying the Group’s operating segments, management based its decision on the product supplied by each segment and the fact
that each segment is managed and reported separately to the Chief Operating Decision Maker. These operating segments are monitored
and strategic decisions are made on the basis of segment operating results.
The Group established a new operating segment, Light, Air + Water effective 1 January 2023. This encompasses the Group’s previously
reported operating segments ‘Light + Air’ and ‘Water + Energy’. The prior year comparatives have been restated to reflect this.
Operating segments
The Group has the following five operating segments:
Insulated Panels
Insulation
Roofing + Waterproofing
Light, Air + Water
Manufacture of insulated panels, structural framing and metal facades.
Manufacture of rigid insulation boards, technical insulation and engineered
timber systems.
Manufacture of roofing and waterproofing solutions for renovation and new
construction of buildings.
Manufacture of energy and water solutions, daylighting, smoke management and
ventilation systems and related service activities.
Data + Flooring
Manufacture of data centre storage solutions and raised access floors.
2 Segment Reporting (continued)
Analysis by class of business
Total revenue – 2023
Total revenue – 2022
Disaggregation of revenue 2023
Point of Time
Over Time & Contract
Disaggregation of revenue 2022
Point of Time
Over Time & Contract
Insulated
Panels
€m
4,722.1
5,181.5
4,719.8
2.3
4,722.1
5,147.7
33.8
5,181.5
Insulation
€m
1,528.0
1,658.3
1,502.9
25.1
1,528.0
1,633.1
25.2
1,658.3
Roofing +
Waterproofing
€m
Light, Air +
Water
€m
Data +
Flooring
€m
493.4
153.2
493.4
-
493.4
153.2
-
153.2
967.4
987.8
671.8
295.6
967.4
696.1
291.7
987.8
379.7
360.1
333.3
46.4
379.7
325.4
34.7
360.1
Total
€m
8,090.6
8,340.9
7,721.2
369.4
8,090.6
7,955.5
385.4
8,340.9
The disaggregation of revenue by geography is set out in more detail on page 163.
The segments specified above capture the major product lines relevant to the Group.
The combination of the disaggregation of revenue by product group, geography and the timing of revenue recognition capture the key
categories of disclosure with respect to revenue. Typically, individual performance obligations are specifically called out in the contract
which allow for accurate recognition of revenue as and when performances are fulfilled. Given the nature of the Group’s product set,
customer returns are not a significant feature of our business model. No further disclosures are required with respect to disaggregation of
revenue other than what has been presented in this note.
Inter-segment transfers are carried out at arm’s length prices and using an appropriate transfer pricing methodology. As inter-segment
revenue is not material, it is not subject to separate disclosure in the above analysis. For the purposes of the segmental analysis, corporate
overheads have been allocated to each division based on their respective revenue for the year.
Trading profit – 2023
Intangible amortisation
Insulated
Panels
€m
573.8
(10.2)
Insulation
€m
145.1
(10.1)
Operating profit – 2023
563.6
135.0
Trading profit – 2022
Intangible amortisation
Non trading item
Operating profit - 2022
Net finance expense
Profit for the year before tax
Income tax expense
Net profit for the year
548.7
(13.0)
(16.5)
165.2
(9.4)
-
519.2
155.8
Roofing +
Waterproofing
€m
Light, Air +
Water
€m
Data +
Flooring
€m
Total
2023
€m
Total
2022
€m
28.1
(17.2)
10.9
8.5
(4.8)
-
3.7
78.7
(3.5)
75.2
67.7
(5.1)
-
62.6
51.2
(0.7)
876.9
(41.7)
50.5
835.2
43.1
(0.1)
-
43.0
(41.0)
794.2
(140.3)
653.9
833.2
(32.4)
(16.5)
784.3
(37.7)
746.6
(130.6)
616.0
160 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 161
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 2 Segment Reporting (continued)
Insulated
Panels
€m
Insulation
€m
Roofing +
Waterproofing
€m
Light, Air +
Water
€m
Data +
Flooring
€m
Total
2023
€m
Total
2022
€m
Assets – 2023
Assets – 2022
3,352.8
3,350.6
1,568.9
1,683.4
854.4
783.1
915.3
934.1
291.9
240.4
6,983.3
Derivative financial instruments
Cash and cash equivalents
Deferred tax assets
-
938.7
79.6
6,991.6
0.4
649.3
40.1
Total assets as reported in the Consolidated Statement of Financial Position
8,001.6
7,681.4
Insulated
Panels
€m
Insulation
€m
Roofing +
Waterproofing
€m
Light, Air +
Water
€m
Data +
Flooring
€m
Total
2023
€m
Total
2022
€m
Liabilities – 2023
Liabilities – 2022
(1,114.4)
(1,080.7)
(278.7)
(320.8)
(180.8)
(163.7)
(320.7)
(343.8)
(122.3)
(77.9)
(2,016.9)
Interest bearing loans and borrowings (current and non-current)
Derivative financial instruments (current and non-current)
Income tax liabilities (current and deferred)
(1,918.2)
(0.2)
(118.5)
(1,986.9)
(2,188.9)
-
(110.1)
Total liabilities as reported in the Consolidated Statement of Financial Position
(4,053.8)
(4,285.9)
Capital investment – 2023*
Capital investment – 2022 *
Depreciation included in segment result – 2023
Depreciation included in segment result – 2022
Non-cash items included in segment result – 2023
Non-cash items included in segment result – 2022
Insulated
Panels
€m
173.5
178.8
(95.1)
(85.1)
(12.7)
(10.0)
Insulation
€m
55.4
136.8
(45.7)
(41.7)
(4.4)
(4.1)
Roofing +
Waterproofing
€m
Light, Air +
Water
€m
Data +
Flooring
€m
51.5
208.7
(14.5)
(4.7)
(0.6)
(0.1)
20.2
20.9
(27.9)
(27.0)
(3.3)
(2.7)
13.1
6.2
(7.7)
(6.6)
(1.7)
(1.5)
Total
€m
313.7
551.4
(190.9)
(165.1)
(22.7)
(18.4)
2 Segment Reporting (continued)
Analysis of segmental data by geography
Income Statement Items
Revenue – 2023
Revenue – 2022
Statement of Financial Position Items
Non-current assets – 2023 *
Non-current assets – 2022 *
Other segmental information
Capital investment – 2023
Capital investment – 2022
Western &
Southern
Europe
€m
Central &
Northern
Europe
€m
Americas
Rest of
World
Total
€m
€m
€m
3,650.6
3,850.2
2,021.1
2,133.3
1,877.9
1,823.7
2,409.3
2,248.0
1,269.0
1,121.9
112.7
318.3
119.2
167.9
805.4
784.4
47.3
45.2
541.0
533.7
281.1
273.1
34.5
20.0
8,090.6
8,340.9
4,764.8
4,427.4
313.7
551.4
* Total non-current assets excluding deferred tax assets.
The Group is trading in over 80 countries worldwide. Foreign regions of operation are as set out above and specific countries of operation
are highlighted separately below on the basis of materiality where revenue exceeds 15% of total Group revenues.
Revenues, non-current assets and capital investment (as defined in IFRS 8 Operating Segments) attributable to France were €1,259.5m
(2022: €1,238.1m), €757.7m (2022: €734.1m) and €20.4m (2022: €161.1m) respectively.
Revenues, non-current assets and capital investment (as defined in IFRS 8 Operating Segments) attributable to the country of domicile
(Ireland) were €234.3m (2022: €256.5m), €230.5m (2022: €168.0m) and €16.1m (2022: €15.5m) respectively.
The country of domicile (Ireland) is included in Western & Southern Europe. Western & Southern Europe also includes France, Benelux,
Spain, and Britain while Central & Northern Europe includes Germany, the Nordics, Poland, Hungary, Romania, Czech Republic, the Baltics
and other South Central European countries. Americas comprises the US, Canada, Central Americas and South America. Rest of World is
predominantly Australasia and the Middle East.
There are no material dependencies or concentrations on individual customers which would warrant disclosure under IFRS 8 Operating
Segments. The individual entities within the Group each have a large number of customers spread across various activities, end-uses
and geographies.
* Capital investment also includes fair value of property, plant and equipment and intangible assets acquired in business combinations.
3 Non Trading Item
Loss on disposal of subsidiary
2023
€m
-
2022
€m
16.5
During the prior year the Group’s Russian operations were divested in full which resulted in a loss on disposal of €16.5m.
162 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 163
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 4 Employees
a) Employee numbers
The average number of persons employed by the Group in the financial year was:
4 Employees (continued)
The fair values of options granted under the PSP scheme during the current and prior year were determined using the Black Scholes Model
or the Monte Carlo Pricing Model as appropriate. The key assumptions used in the model were as follows:
Production
Sales and distribution
Management and administration
b) Employee costs, including executive directors
Wages and salaries
Social welfare costs
Pension costs - defined contribution (Note 32)
Share based payments and awards
Actuarial losses recognised in other comprehensive income
c) Employee share based compensation
2023
Number
2022
Number
13,437
5,032
3,915
12,491
4,598
3,501
22,384
20,590
2023
€m
1,126.1
144.2
37.8
22.7
1,330.8
5.0
1,335.8
2022
€m
1,025.2
128.3
32.3
18.4
1,204.2
20.3
1,224.5
The Group currently operates a number of equity settled share based payment schemes; two Performance Share Plans (PSP) and a Deferred
Bonus Plan, which was introduced in 2015. The details of these schemes are provided in the Report of the Remuneration Committee.
Performance Share Plan (PSP)
Outstanding at 1 January
Granted
Forfeited
Lapsed
Exercised
Outstanding at 31 December
Of which, exercisable
Number of PSP Options
2023
2022
1,714,879
505,989
(269,903)
-
(315,872)
1,635,093
1,713,261
347,121
(60,747)
-
(284,756)
1,714,879
468,760
554,517
The Group recognised a PSP expense of €22.7m (2022: €18.4m) in the Consolidated Income Statement during the year. All PSP options
are exercisable at €0.13 per share. For PSP options that were exercised during the year the average share price at the date of exercise was
€66.66 (2022: €71.33). The weighted average contractual life of share options outstanding at 31 December 2023 is 4.4 years (2022: 4.2
years). The weighted average exercise price during the period was €0.13 (2022: €0.13).
Share price at grant date
Exercise price per share
Expected volatility
Expected dividend yield
Risk-free rate
Expected life
2023 Awards
2022 Awards
20 February 2023
22 February 2022
€63.58
€0.13
43.8%
1.25%
2.6%
3 years
€88.60
€0.13
36.7%
1.25%
(0.2%)
3 years
The resulting weighted average fair value of options granted in the year was €47.95 (2022: €61.55).
As set out in the Report of the Remuneration Committee, the number of options that will ultimately vest is contingent on market
conditions such as Total Shareholder Return and non-market conditions such as the Earnings Per Share of the Group and achievement of
its Planet Passionate targets. Market conditions were taken into account in determining the above fair value, and non-market conditions
were considered when estimating the number of shares that will eventually vest. Expected volatility was determined by calculating the
historical volatility of the Group and peer company share prices over the previous 3 years. The Report of the Remuneration Committee sets
out the current companies within the peer group.
Deferred Bonus Plan
As set out in the Report of the Remuneration Committee, the Deferred Bonus Plan (DBP) is intended to reward incremental performance
over and above the growth targeted by the annual performance related bonus. Any DBP bonus earned for such incremental performance
is satisfied by the payment of deferred share awards. These shares are held for the benefit of the individual participants for two years
without any additional performance conditions. These shares vest after two years but are forfeited if the participant leaves the Group
within that period.
During the year, 13,547 (2022: 21,438) awards were granted under the DBP and nil (2022: 2,272) awards were exercised. 34,985 awards
remain outstanding at 31 December 2023 (2022: 21,438). A charge of €1.6m was recognised in the Consolidated Income Statement for
2023 (2022: €0.9m).
5 Finance Expense and Finance Income
Finance expense
Lease interest
Bank loan interest
Private placement loan note interest
Other interest
Finance income
Interest earned
Equity investments at FVOCI – dividend income
Net finance expense
2023
€m
6.0
24.9
31.6
1.2
63.7
(19.2)
(3.5)
(22.7)
41.0
2022
€m
4.7
10.1
24.5
0.1
39.4
(1.7)
-
(1.7)
37.7
€0.8m of borrowing costs were capitalised during the period (2022: €0.7m). No costs were reclassified from other comprehensive income
to profit during the year (2022: €nil).
164 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 165
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 6 Profit For The Year Before Income Tax
8
Income Tax Expense
The profit before tax for the year is stated after charging/(crediting):
Distribution expenses
Product development costs (total, including payroll)
Depreciation
Amortisation of intangible assets
Impairment of property, plant and equipment
Foreign exchange net (gains)/losses
Profit on sale of property, plant and equipment
Analysis of total auditor’s remuneration
Audit of Group
Audit of other subsidiaries
Tax compliance and advisory services
EY Ireland
2023
€m
1.5
-
0.3
1.8
Other EY
Offices
2023
€m
-
3.3
-
3.3
Total
2023
EY Ireland
2022
€m
1.5
3.3
0.3
5.1
€m
1.4
-
-
1.4
2023
€m
327.2
63.5
190.9
41.7
2.9
(1.6)
(1.3)
Other EY
Offices
2022
€m
-
2.7
0.1
2.8
2022
€m
339.5
60.3
165.1
32.4
-
13.0
(0.4)
Total
2022
€m
1.4
2.7
0.1
4.2
Included in Audit of Group are total fees of €0.4m which are due to EY in respect of the audit of the Parent Company (2022: €0.4m).
7 Directors’ Remuneration
Fees
Other emoluments
Pension costs
Performance Share Plan accounting charge
2023
€m
0.9
6.8
0.4
8.1
4.1
12.2
2022
€m
0.9
6.3
0.5
7.7
3.5
11.2
In accordance with the Statement of Accounting Policies (Share-Based Payment Transactions) and Note 4, the Performance Share Plan
accounting charge of €4.1m (2022: €3.5m) is the fair value expense, accounted for in accordance with IFRS 2 Share Based Payments, of
equity settled share-based payments attributable to directors for the period. The fair value of each equity settled share-based payment is
determined at grant date and is recognised as an employee expense in the Consolidated Income Statement on a straight-line basis over
the vesting period.
Pursuant to the Companies Act 2014 and related guidance, the Report of the Remuneration Committee only reports share-based
payments which vested in the period, and they are measured at market value rather than fair value. This explains differences between the
total Directors’ Remuneration expense of €12.2m (2022: €11.2m) in this Note and the total Directors’ Remuneration expense of €12.5m
(2022: €9.7m) in the Report of the Remuneration Committee.
Aggregate gains of €3.8m (2022: €4.9m) were realised with respect to share options exercised by directors during the financial year.
Details of the number of share options exercised by each director, the market value of the shares on the date of exercise, and the exercise
price are included in the Performance Share Plan section of the Report of the Remuneration Committee.
A detailed analysis of Directors’ Remuneration is contained in the Report of the Remuneration Committee.
Tax recognised in the Consolidated Income Statement
Current taxation:
Current tax expense
Adjustment in respect of prior years
Deferred taxation:
Origination and reversal of temporary differences
Effect of rate change
Income tax expense
2023
€m
2022
€m
160.2
(6.9)
153.3
(12.1)
(0.9)
(13.0)
148.9
1.0
149.9
(18.7)
(0.6)
(19.3)
140.3
130.6
The following table is the numerical reconciliation between tax expenses and the product of accounting profit multiplied by the applicable
tax rate:
Profit for the year
Applicable notional tax charge (12.5%)
Expenses not deductible for tax purposes
Net effect of differing tax rates
Utilisation of unprovided deferred tax assets
Other items
Total income tax expense
2023
€m
2022
€m
794.2
746.6
99.3
16.2
45.6
(3.6)
(17.2)
93.3
21.5
33.7
(1.6)
(16.3)
140.3
130.6
The total tax charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the
Group operates. Changes in the geographical mix of future earnings will also impact the total tax charge.
The Group will be subject to the Global Anti-Base Erosion Model Rules, also referred to as the Pillar Two model rules, with effect from 1
January 2024 in most of the countries in which it operates. The objective of these complex rules is to achieve minimum effective tax rates
of 15% globally. The Group is currently assessing the impact of these new rules, but as the Group already has a Pillar Two effective tax rate
of greater than 15% in most of the countries in which it operates, the Group does not expect these rules to have a material impact on the
Group’s total tax charge in future periods.
The methodology used to determine the recognition and measurement of uncertain tax positions is set out in Note 1 ‘Statement of
Accounting Policies’.
The total value of deductible temporary differences which have not been recognised is €33.4m (2022: €31.8m) consisting mainly of tax
losses forward. €0.1m (2022: €0.1m) of the losses expire within 5 years while all other losses may be carried forward indefinitely.
No provision has been made for tax in respect of temporary differences arising from unremitted earnings of foreign operations as there
is no commitment to remit such earnings and no current plans to do so. Deferred tax liabilities of €25.0m (2022: €19.6m) have not been
recognised for withholding tax that would be payable on unremitted earnings of €500.1m (2022: €391.3m) in certain subsidiaries.
166 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 167
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 9 Earnings Per Share
10 Goodwill (continued)
The calculations of earnings per share are based on the following:
Profit attributable to ordinary shareholders
Weighted average number of ordinary shares for the calculation of basic earnings per share
Dilutive effect of share options
Weighted average number of ordinary shares for the calculation of diluted earnings per share
Basic earnings per share
Diluted earnings per share
2023
€m
2022
€m
640.3
598.0
Number of
shares
(‘000)
2023
Number of
shares
(‘000)
2022
181,773
1,371
183,144
2023
€ cent
352.3
349.6
181,487
1,451
182,938
2022
€ cent
329.5
326.9
Dilution is attributable to the weighted average number of share options outstanding at the end of the reporting period.
The number of options which are anti-dilutive and have therefore not been included in the above calculations is nil (2022: nil).
10 Goodwill
At 1 January
Additions relating to acquisitions (Note 23)
Net exchange movement
Carrying amount 31 December
At 31 December
Cost
Accumulated impairment losses
Carrying amount
Cash generating units
2023
€m
2,495.5
168.2
(3.1)
2022
€m
1,908.6
578.7
8.2
2,660.6
2,495.5
2,728.3
(67.7)
2,563.2
(67.7)
2,660.6
2,495.5
Goodwill acquired through business combinations is allocated, at acquisition, to CGUs that are expected to benefit from synergies in that
combination. The CGUs are the lowest level within the Group at which the associated goodwill is monitored for internal management
reporting purposes and are not larger than the operating segments determined in accordance with IFRS 8 Operating Segments.
A total of 12 (2022: 12) CGUs have been identified and these are analysed between the five business segments in the Group as set out
below. Assets and liabilities have been assigned to the CGUs on a reasonable and consistent basis.
Insulated Panels
Insulation
Light, Air + Water
Data + Flooring
Roofing + Waterproofing
Total
Significant goodwill amounts
Cash-generating units
Goodwill (€m)
2023
2022
2023
2022
6
1
2
2
1
12
6
1
2
2
1
12
1,041.9
633.3
399.8
119.2
466.4
2,660.6
996.6
620.5
404.2
92.3
381.9
2,495.5
Management has assessed that, in line with IAS 36 Impairment of Assets, there are five CGUs that are individually significant (greater than
10% of total goodwill) that require additional disclosure and are as follows:
Panels
Western Europe
Panels
Joris Ide
Insulation
Light
+ Air
Roofing +
Waterproofing
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Goodwill (€m)
Discount rate (%)
Excess of value-in-use over
carrying amount (€m)
322.1
10.1
340.2
9.6
364.3
10.1
342.0
9.9
633.3
10.2
620.5
9.9
293.2
9.7
296.9
9.2
466.4
10.1
381.9
10.2
1,773.4 2,057.9 1,120.0 1,322.2 1,419.5 1,127.3
530.1
697.2
327.5
192.4
The goodwill allocated to these 5 CGUs (2022: 5 CGUs) accounts for 78% (2022: 79%) of the total carrying amount of €2,660.6m (2022:
€2,495.5m). The remaining goodwill balance of €581.3m (2022: €514.0m) is allocated across the other 7 CGUs (2022: 7 CGUs), none of
which are individually significant. Similar assumptions and techniques are applied on the impairment testing of these CGUs.
None of the individually significant CGUs are included in the “Sensitivity analysis” section as it is not considered reasonably possible that
there would be a change in the key assumptions such that the carrying amount would exceed value-in-use. Consequently, no further
disclosures have been provided for these CGUs.
Impairment testing
Goodwill acquired through business combinations has been allocated to the above CGUs for the purpose of impairment testing.
Impairment of goodwill occurs when the carrying value of the CGU is greater than the present value of the cash that it is expected to
generate (i.e. the recoverable amount). The Group reviews the carrying value of each CGU at least annually or more frequently if there is
an indication that a CGU may be impaired.
The recoverable amount of each CGU is determined from value-in-use calculations. The forecasts used in these calculations are based on
a 4 year financial plan approved by the Board of Directors, plus year 5 as forecasted by management, and specifically excludes any future
acquisition activity. The forecasts used for the Roofing + Waterproofing CGU are based on a 4 year financial plan approved by the Board of
Directors, plus years 5-10 as forecasted by management, and specifically excludes any future acquisition activity. This is a new CGU which
was formed in late 2022, therefore a longer forecast period is required in order to reach a year for which a long-term growth rate can be
applied which is more akin to the existing CGUs in order to calculate the terminal value. The forecasts for the others include assumptions
regarding future organic growth with cash flows after year 5 assuming to continue in perpetuity at a general growth rate of 2% to 5%
(Panels LATAM 5%), reflecting the relevant CGU market growth. The use of cash flows in perpetuity is considered appropriate in light of
the Group’s established history of earnings growth and cash flow generation, its strong financial position and the nature of the industry in
which the Group operates.
The value in use calculation represents the present value of the future cash flows, including the terminal value, discounted at a rate
appropriate to each CGU. The real pre-tax discount rates used range from 9.7% to 16.7% (2022: 9.2% to 18.4%). These rates are based on
the Group’s estimated weighted average cost of capital, adjusted for risk, and are consistent with external sources of information.
168 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 169
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 10 Goodwill (continued)
12 Property, Plant and Equipment
The cash flows and the key assumptions used in the value in use calculations are determined based on the historical performance of the
Group, its strong current financial position as well as management’s knowledge and expectation of future trends in the industry. Expected
future cash flows are, however, inherently uncertain and are therefore liable to material change over time. The key assumptions used in
the value in use calculations are subjective and include projected EBITDA margins, net cash flows, discount rates used and the duration
of the discounted cash flow model. Net cashflows incorporate the estimated capital expenditure required to meet the Group’s Planet
Passionate targets.
Sensitivity analysis
Sensitivity analysis was performed by reducing cash flows by 25%, increasing the discount rate by 20%, reducing the average operating
margin of each division by 20% and by reducing the long-term growth rate to 0%. Each test resulted in a positive recoverable amount for
each CGU under each approach. Management believes, therefore, that any reasonable change in any of the key assumptions would not
cause the carrying value of goodwill to exceed the recoverable amount, thereby giving rise to an impairment.
11 Other Intangible Assets
2023
Cost
At 1 January
Acquisitions (Note 23)
Additions
Net exchange difference
At 31 December
Accumulated amortisation
At 1 January
Charge for the year
Net exchange difference
At 31 December
Net Book Value as at 31 December 2023
2022
Cost
At 1 January
Acquisitions (Note 23)
Net exchange difference
At 31 December
Accumulated amortisation
At 1 January
Charge for the year
Net exchange difference
At 31 December
Net Book Value as at 31 December 2022
Customer
Relationships
€m
Patents &
Brands
€m
Other
Intangibles
€m
126.8
11.8
2.4
(0.5)
140.5
50.7
17.7
(0.5)
67.9
72.6
199.2
8.4
3.6
(0.2)
211.0
109.1
15.2
-
124.3
86.7
74.7
12.4
-
(0.5)
86.6
49.1
8.8
(0.4)
57.5
29.1
Customer
Relationships
€m
Patents &
Brands
€m
Other
Intangibles
€m
50.4
75.9
0.5
126.8
40.8
9.5
0.4
50.7
76.1
157.7
40.7
0.8
199.2
92.7
15.9
0.5
109.1
90.1
60.1
13.6
1.0
74.7
41.5
7.0
0.6
49.1
25.6
Total
€m
400.7
32.6
6.0
(1.2)
438.1
208.9
41.7
(0.9)
249.7
188.4
Total
€m
268.2
130.2
2.3
400.7
175.0
32.4
1.5
208.9
191.8
Other intangibles relate primarily to technological know how and order backlogs.
As at 31 December 2023
Cost
Accumulated depreciation and impairment charges
Net carrying amount
At 1 January 2023, net carrying amount
Acquisitions through business combinations (Note 23)
Divestment
Additions
Disposals
Reclassification
Depreciation charge for year
Impairment charge for year
Effect of movement in exchange rates
At 31 December 2023, net carrying amount
Land and
buildings
€m
Plant,
machinery
and other
equipment
€m
Motor
vehicles
Total
€m
€m
1,024.6
(334.4)
690.2
2,113.2
(1,264.8)
848.4
657.2
5.0
-
51.2
(0.3)
5.3
(22.5)
(0.3)
(5.4)
690.2
757.8
36.2
-
169.5
(2.0)
(6.5)
(103.9)
(2.6)
(0.1)
848.4
Land and
buildings
€m
Plant,
machinery
and other
equipment
€m
71.0
(42.4)
28.6
22.9
0.2
-
13.0
(0.6)
1.2
(8.0)
-
(0.1)
28.6
Motor
vehicles
3,208.8
(1,641.6)
1,567.2
1,437.9
41.4
-
233.7
(2.9)
-
(134.4)
(2.9)
(5.6)
1,567.2
Total
€m
€m
As at 31 December 2022
Cost
Accumulated depreciation and impairment charges
959.7
(302.5)
1,920.6
(1,162.8)
62.3
(39.4)
2,942.6
(1,504.7)
Net carrying amount
657.2
757.8
22.9
1,437.9
At 1 January 2022, net carrying amount
Acquisitions through business combinations (Note 23)
Divestment
Additions
Disposals
Reclassification
Depreciation charge for year
Impairment charge for year
Effect of movement in exchange rates
At 31 December 2022, net carrying amount
551.6
85.2
(3.0)
56.8
(11.1)
(0.2)
(21.8)
-
(0.3)
657.2
585.6
58.4
(2.1)
209.6
(6.5)
(0.8)
(88.9)
-
2.5
757.8
18.6
1.3
(0.2)
9.9
(0.6)
1.0
(7.2)
-
0.1
22.9
1,155.8
144.9
(5.3)
276.3
(18.2)
-
(117.9)
-
2.3
1,437.9
Included in land and buildings and plant, machinery and other equipment were amounts of €15.8m and €117.1m respectively (2022: of
€14.7m and €121.4m) relating to expenditure for assets in the course of construction. These assets have not yet been depreciated.
The Group has no material investment properties and hence no property assets are held at fair value.
No property, plant or equipment have been pledged as security for liabilities entered into by the Group.
170 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 171
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 13 Financial Assets
15 Trade And Other Receivables
Equity investments designated as FVOCI
At 1 January
Additions
Fair value remeasurement
Effect of movement in exchange rates
At 31 December
2023
€m
93.6
22.2
12.5
0.1
2022
€m
13.2
113.3
(32.6)
(0.3)
128.4
93.6
Amounts falling due within one year:
Trade receivables, gross
Expected credit loss allowance
Trade receivables, net
Other receivables
Prepayments
In August 2022, the Group acquired a strategic minority interest of 24.1% in Nordic Waterproofing Holding AB. Nordic Waterproofing
Holding AB is a publicly listed company on the Nasdaq Stockholm and is a market leader in waterproofing products and services for the
protection of buildings and infrastructure. An additional 6.8% was acquired in September 2023. The Group does not have significant
influence in this entity and therefore it is accounted for as an equity investment.
Investments in Subsidiaries
Company
At 1 January
Additions
Share options and awards
At 31 December
2023
€m
2022
€m
1,238.5
865.7
14.2
1,226.7
-
11.8
2,118.4
1,238.5
Company
Amounts falling due within one year:
Amounts owed by group undertakings
The maximum exposure to credit risk for trade and other receivables at the reporting date is their carrying amount.
The Group uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables from customers. The simplified approach
has been adopted and this gives rise to an ECL of €111.4m in 2023 (2022: €125.5m). This is presented in more detail in Note 20.
The share options and awards addition reflect the cost of share based payments attributable to employees of subsidiary undertakings,
which are treated as capital contributions by the Company. The carrying value of investments is reviewed at each reporting date and there
were no indicators of impairment.
The Company increased its investment in Kingspan Holdings Limited during the year.
14 Inventories
Raw materials and consumables
Work in progress
Finished goods
Inventory impairment allowance
At 31 December
2023
€m
732.4
40.1
359.5
(167.7)
2022
€m
920.4
49.2
400.2
(134.0)
964.3
1,235.8
A total of €4.7bn (2022: €5.1bn) of inventories was included in the Consolidated Income Statement as an expense. This includes a net
income statement charge of €18.6m (2022: €26.3m) arising on the inventory impairment allowance. Inventory impairment allowance
levels are continuously reviewed by management and revised where appropriate, taking account of the latest available information on the
recoverability of carrying amounts.
No inventories have been pledged as security for liabilities entered into by the Group.
The amounts due from group undertakings are unsecured, interest free and are repayable on demand.
16 Trade And Other Payables
Current
Trade payables
Accruals
Deferred income and customer prepayments
Income tax & social welfare
Value added tax
Deferred income primarily relates to service and maintenance and projected related revenue and is primarily short-term.
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
2023
€m
2022
€m
1,163.2
(111.4)
1,051.8
133.6
68.8
1,262.3
(125.5)
1,136.8
129.9
61.7
1,254.2
1,328.4
2023
€m
165.9
165.9
2023
€m
610.9
524.7
140.1
51.1
19.3
2022
€m
300.1
300.1
2022
€m
661.7
526.1
117.2
48.4
15.3
1,346.1
1,368.7
172 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 173
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 16 Trade And Other Payables (continued)
Company
Current
Amounts owed to group undertakings
Payables
The amounts due to group undertakings are unsecured, interest free and are repayable on demand.
2023
€m
0.1
0.2
0.3
2022
€m
195.5
0.2
195.7
17 Leases
Right of use asset
At 1 January 2023
Additions
Arising on acquisitions (Note 23)
Remeasurement
Terminations
Depreciation charge for the year
Reclassification
Effect of movement in exchange rates
At 31 December 2023
At 1 January 2022
Additions
Arising on acquisitions (Note 23)
Remeasurement
Terminations
Depreciation charge for the year
Reclassification
Effect of movement in exchange rates
At 31 December 2022
Land and
buildings
€m
154.3
17.9
(6.8)
33.3
(7.5)
(30.6)
(0.1)
(1.9)
158.6
Land and
buildings
€m
119.0
21.6
22.2
18.9
(1.1)
(28.1)
-
1.8
154.3
Plant,
machinery
and other
equipment
€m
Motor
vehicles
Total
2023
€m
€m
21.7
7.3
1.5
0.5
(0.1)
(7.6)
-
(0.4)
22.9
Plant,
machinery
and other
equipment
€m
14.7
3.8
8.0
(0.1)
(0.1)
(4.6)
-
-
21.7
29.3
26.4
0.2
0.3
(0.5)
(18.3)
0.1
0.2
37.7
Motor
vehicles
205.3
51.6
(5.1)
34.1
(8.1)
(56.5)
-
(2.1)
219.2
Total
2022
€m
€m
21.8
15.9
6.0
0.8
(0.5)
(14.5)
-
(0.2)
29.3
155.5
41.3
36.2
19.6
(1.7)
(47.2)
-
1.6
205.3
17 Leases (continued)
Lease liability
At 1 January
Additions
Arising on acquisitions (Note 23)
Remeasurement
Terminations
Payments
Interest
Effect of movement in exchange rates
At 31 December
Split as follows:
Current liability
Non-current liability
At 31 December
2023
€m
196.8
47.9
5.5
34.4
(8.2)
(60.5)
6.0
(2.1)
219.8
48.0
171.8
219.8
2022
€m
158.0
39.7
25.3
19.6
(1.7)
(50.6)
4.7
1.8
196.8
43.2
153.6
196.8
Expenses of €13.3m (2022: €9.6m) relating to short-term leases, leases of low-value assets and variable lease payments were recognised in
the Consolidated Income Statement.
18 Interest Bearing Loans And Borrowings
Current financial liabilities
Private placements
Bank loans (unsecured)
Lease obligations per banking covenants
Non-current financial liabilities
Private placements
Bank loans (unsecured)
Lease obligations per banking covenants
Analysis of Net debt
Cash and cash equivalents
Current borrowings
Non-current borrowings
Total Net debt
2023
€m
193.0
5.3
2.3
200.6
2023
€m
2022
€m
42.5
40.2
2.3
85.0
2022
€m
1,398.9
310.2
8.5
1,717.6
1,279.5
814.6
9.8
2,103.9
2023
€m
938.7
(200.6)
(1,717.6)
(979.5)
2022
€m
649.3
(85.0)
(2,103.9)
(1,539.6)
174 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 175
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 18 Interest Bearing Loans And Borrowings (continued)
19 Deferred Contingent Consideration (continued)
The Group’s core funding is provided by seven (2022: six) private placement loan notes; one (2022: one) USD private placement totalling
$200m (2022: $200m) maturing in December 2028 and six (2022: five) EUR private placements totalling €1.4bn (2022: €1.1bn) which
mature in tranches between January 2024 and December 2032. The notes have a weighted average maturity of 5.0 years (2022: 5.7 years).
In June 2023, the Group issued a new private placement note of €319m with a 6 year maturity.
For each acquisition for which deferred contingent consideration has been provided, an annual review takes place to evaluate if the
payment conditions are likely to be met. For the purposes of the fair value assessments all of the put option liabilities are valued using
the option price formula in the shareholders agreement and the most recent financial projections. These are classified as unobservable
inputs. The significant unobservable inputs used in the fair value measurements and the quantitative sensitivity analysis are shown in the
table below:
The primary bank debt facility is a €800m revolving credit facility, which was undrawn at year end, and which matures in May 2026.
Type
Valuation technique
During the year, the Group repaid part (€500m) of a 2022 acquisition related financing facility, with the remainder of the facility
fully drawn.
Included in cash at bank and in hand are overdrawn positions of €1,789.1m (31 December 2022: €1,456.8m). These balances form part of
a notional cash pool arrangement and are netted against cash balances of €1,805.9m (31 December 2022: €1,480.2m). The net cash pool
balance of €16.8m (31 December 2022: €23.4m) is included in the cash and cash equivalents balance above. There is a legal right of offset
between these balances and the balances are physically settled on a regular basis.
More details of the Group’s loans and borrowings are set out in Note 20.
Net debt, which is an Alternative Performance Measure, is stated net of interest rate and currency hedges which relate to hedges of debt.
Foreign currency derivative assets of €nil (2022: €0.4m) and foreign currency derivative liabilities of €0.2m (2022: €nil) which are used
for transactional hedging are not included in the definition of net debt. Lease liabilities recognised due to the implementation of IFRS 16
and deferred contingent consideration have also been excluded from the calculation of net debt which is consistent with the terms and
conditions of the covenants as set out in the Group’s external borrowing arrangements.
19 Deferred Contingent Consideration
At 1 January
Deferred contingent consideration arising on acquisitions (Note 23)
Movement in deferred contingent consideration arising from fair value adjustment
Put liability arising on acquisitions
Movement in put liability arising from fair value adjustment
Amounts paid
Effect of movement in exchange rates
At 31 December
Split as follows:
Current liabilities
Non-current liabilities
Analysed as follows:
Deferred contingent consideration
Put liability
2023
€m
187.1
7.3
0.3
22.9
10.2
(6.6)
7.9
229.1
190.2
38.9
229.1
16.2
212.9
229.1
2022
€m
202.3
-
-
-
16.0
(45.4)
14.2
187.1
174.9
12.2
187.1
15.7
171.4
187.1
The deferred contingent consideration arising on acquisitions relates to the acquisition of MontFrio. The put liability arising on acquisitions
relates principally to the acquisition of Q-nis and HempFlax Building Solutions.
Deferred contingent
consideration
Put option liabilities
Discounted cashflow method
The net present value of the
expected payment is calculated by
using a risk adjusted discount rate
where material. Discounting has not
been applied in the current period
as it is not deemed to be material.
The expected payments are valued
using the earn out formula in the
shareholders agreement and the
most recent financial projections.
Discounted cashflow method
The net present value of the
expected payment is calculated by
using a risk adjusted discount rate.
The expected payments are valued
using the option price formula in the
shareholders agreement and the
most recent financial projections.
Significant
unobservable inputs
Sensitivity of the input to the fair
value
• EBITDA multiples of
• A 5% increase in the assumed
between 2.7 and 5.75.
profitability of the acquired entities
would result in an increase in the
fair value of the deferred contingent
consideration of €0.4m.
• Risk adjusted discount
rates of between 4.7%
and 12.9%.
• EBITDA multiples of
between 6.5 and 8.57.
• A 10% decrease in the risk adjusted
discount rate would result in an
increase in the fair value of the put
option liabilities of €1.4m.
• A 5% increase in the assumed
profitability of the acquirees would
result in an increase in the fair value of
the put option liabilities of €10.0m.
The amount of the deferred contingent consideration and put liability that have been recognised are arrived at by the application of a
range of outcomes and associated probabilities in order to determine the carrying amounts.
Liabilities in the range of €nil (2022: €nil) to €16.2m (2022: €15.7m) could arise with respect to potential deferred contingent consideration
obligations and €nil (2022: €nil) to €212.9m (2022: €171.4m) with respect to potential put option obligations.
The put option in the shareholders’ agreement with non-controlling shareholders of Isoeste has been exercisable since 2023. The
undiscounted expected cash outflow is estimated to be €167.8m (2022: €157.2m).
The put option in the shareholders’ agreement with non-controlling shareholders of PanelMET has been exercisable since 2022. The
undiscounted expected cash outflow is estimated to be €14.8m (2022: €6.4m).
The put option in the shareholders’ agreement with non-controlling shareholders of Kingspan Jindal has been exercisable since 2022. The
undiscounted expected cash outflow is estimated to be €16.6m (2022: €10.1m).
The put option in the shareholders’ agreement with non-controlling shareholders of Q-nis can be exercised in 2029. The undiscounted
expected cash outflow is estimated to be €24.2m (2022: N/A).
In relation to the put options listed above, call options also rest over the remaining shareholding held by non-controlling interests, which
are exercisable by the Group in a very limited range of circumstances. No value has been attributed to these call options.
176 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 177
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 20 Financial Risk Management And Financial Instruments
20 Financial Risk Management And Financial Instruments (continued)
Financial Risk Management
The following are the carrying amounts and contractual maturities of financial liabilities (including estimated interest payments):
In the normal course of business, the Group and Company have exposure to a variety of financial risks, including foreign currency risk,
interest rate risk, liquidity risk and credit risk. The Group’s and Company’s focus is to understand these risks and to put in place policies
that minimise the economic impact of an adverse event on the Group’s performance. Meetings are held on a regular basis to review the
result of the risk assessment, approve recommended risk management strategies and monitor the effectiveness of such policies.
The Group’s and Company’s risk management strategies include the usage of derivatives (other than for speculative transactions),
principally forward exchange contracts, interest rate swaps, and cross currency interest rate swaps.
Liquidity risk
In addition to the high level of free cash flow, the Group operates a prudent approach to liquidity management using a mixture of long-
term debt together with short-term debt, cash and cash equivalents, to enable it to meet its liabilities when due.
The Group’s core funding is provided by a number of private placement loan notes totalling €1,591.9m (2022: €1,322.0m). The notes have a
weighted average maturity of 5 years (2022: 5.7 years).
In June 2023, the Group issued a new private placement note of €319m with a 6 year maturity.
The primary bank debt facility is a €800m revolving credit facility, which was undrawn at year end, and which matures in May 2026.
During the period, the Group repaid part (€500m) of a 2022 acquisition related financing facility, with the remainder of the facility
fully drawn.
Both the private placements and the banking facilities (revolving credit facility and one additional banking facility) have an interest
cover test (EBITDA: Net interest must not be less than 4 times) and a net debt test (Net debt: EBITDA must not exceed 3.5 times). These
covenant tests have been met for the covenant test period to 31 December 2023.
The Group also has in place a number of uncommitted bilateral facilities including working capital facilities totalling €212.8m (2022:
€64.0m) and are supported by a Group guarantee. Core funding arrangements arise from a wide and varied number of institutions and,
as such, there is no significant concentration of liquidity risk.
As at 31 December 2023
Carrying
amount
Contractual
cash flow
Within
1 year
Non derivative financial instruments
Bank loans
Private placement loan notes
Lease obligations per banking covenants
Lease liabilities
Trade and other payables
Deferred contingent consideration
Derivative financial liabilities/(assets)
Foreign exchange forwards used for hedging:
Carrying value assets
Carrying value liabilities
- outflow
- inflow
As at 31 December 2022
Non derivative financial instruments
Bank loans
Private placement loan notes
Lease obligations per banking covenants
Lease liabilities
Trade and other payables
Deferred contingent consideration
Derivative financial liabilities/(assets)
Foreign exchange forwards used for hedging:
Carrying value assets
Carrying value liabilities
- outflow
- inflow
2023
€m
315.5
1,591.9
10.8
219.8
1,206.0
229.1
-
0.2
-
-
€m
€m
333.6
1,784.6
10.8
244.0
1,206.0
244.1
19.4
230.0
2.3
54.7
1,206.0
202.1
-
-
4.4
(4.2)
-
-
4.4
(4.2)
Carrying
amount
Contractual
cash flow
Within
1 year
2022
€m
854.8
1,322.0
12.1
196.8
1,251.5
187.1
(0.4)
-
-
-
€m
€m
892.3
1,455.7
12.1
226.6
1,251.5
189.3
61.9
65.3
2.3
50.8
1,251.5
177.1
-
-
12.4
(12.8)
(0.4)
-
12.4
(12.8)
Between
1 and 2
years
€m
Between
2 and 5
years
€m
308.5
76.3
1.9
45.9
-
15.1
-
-
-
-
4.6
666.6
5.8
79.2
-
2.7
-
-
-
-
Between
1 and 2
years
€m
Between
2 and 5
years
€m
517.9
215.2
2.1
39.8
-
4.2
-
-
-
-
310.7
286.2
6.2
70.7
-
8.0
-
-
-
-
Greater than
5 years
€m
1.1
811.7
0.8
64.2
-
24.2
-
-
-
-
Greater than
5 years
€m
1.8
889.0
1.5
65.3
-
-
-
-
-
-
For provisions, the carrying amount represents the Group’s best estimate of the expected future outflows. As it does not represent a
contractual liability at the year end, no amount has been included as a contractual cash flow.
178 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 179
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 20 Financial Risk Management And Financial Instruments (continued)
20 Financial Risk Management And Financial Instruments (continued)
Deferred contingent consideration, which includes any put option liabilities, is valued using the relevant agreed multiple of the expected
future EBITDA in each acquired business which is appropriately discounted using a risk-adjusted discount rate. The estimated fair value
of deferred contingent consideration would decrease if EBITDA was lower or if the risk adjusted discount rate was higher. The range of
outcomes are set out in Note 19.
The actual future cash flows could be different from the amounts included in the tables above, if the associated obligations were to
become repayable on demand as a result of non-compliance with covenants or other contractual terms. No such non-compliance
is envisaged.
Market Risks
Foreign exchange risk
There are two types of foreign currency risk to which the Group is exposed, namely transaction risk and translation risk. The objective of
the Group’s foreign currency risk management strategy is to manage and control market risk exposures within acceptable parameters. As
set out below the Group uses derivatives to manage foreign exchange risk. Transactions involving derivatives are carried out in accordance
with the Treasury policy. The Group seeks to apply hedge accounting, where practicable, to manage volatility in profit or loss.
Transaction risk
Apart from transaction risk on debt, this arises where operating units have input costs or sales in currencies other than their functional
currencies. These exposures are internally hedged as far as possible. Group policy is to hedge up to a maximum of 75% of a forecast
exposure. Material exposures are hedged on a rolling 12 months basis. The Group’s principal exposure relates to GBP and USD, with less
significant exposures to the Canadian dollar.
In addition, where operating entities carry monetary assets and liabilities at year end denominated other than in their functional currency,
their translation at the year end rates of exchange into their functional currency will give rise to foreign currency gains and losses. The
Group seeks to manage these gains and losses to net to nil.
Based on current cash flow projections for the businesses to 31 December 2024, it is estimated that the Group is long GBP24m (2022: long
GBP95m) and long US$35m (2022: short US$9m). At 31 December 2023 these amounts were unhedged.
Translation risk
This exists due to the fact that the Group has operations whose functional currency is not the Euro, the Group’s presentational currency.
Changes in the exchange rate between the reporting currencies of these operations and the Euro, have an impact on the Group’s
consolidated reported result. For 2023, the impact of changing currency rates versus Euro compared to the average 2022 rates was
negative €19.0m (2022: negative €24.7m). The key drivers of the change year on year are the movements in GBP and USD. In common
with many other international groups, the Group does not currently seek to externally hedge its translation exposure.
As at 31 December 2023
Weighted average
effective interest rate
Total
€m
At fixed
interest rate
€m
At floating
interest rate
€m
Under
5 years
€m
Over
5 years
€m
Bank loans
Loan notes
Euro
USD
Other
4.68%
2.34%
315.5
1,591.9
1,907.4
15.5
1,591.9
1,607.4
300.0
-
300.0
314.3
809.4
1,123.7
1.2
782.5
783.7
Total
€m
At fixed
interest rate
€m
At floating
interest rate
€m
1,726.5
180.9
-
1,907.4
1,426.5
180.9
-
1,607.4
300.0
-
-
300.0
The weighted average maturity of debt is 4.4 years as at 31 December 2023 (2022: 4.1 years).
As at 31 December 2022
Weighted average
effective interest rate
Total
€m
At fixed
interest rate
€m
At floating
interest rate
€m
Under
5 years
€m
Over
5 years
€m
Bank loans
Loan notes
Euro
USD
Other
2.60%
1.76%
854.8
1,322.0
2,176.8
54.8
1,322.0
1,376.8
800.0
-
800.0
853.0
469.0
1,322.0
1.8
853.0
854.8
Total
€m
At fixed
interest rate
€m
At floating
interest rate
€m
1,989.3
187.5
-
2,176.8
1,189.3
187.5
-
1,376.8
800.0
-
-
800.0
An increase or decrease of 100 basis points in each of the applicable rates and interest rate curves would impact reported after tax profit
by €2.7m (2022: €7m) and equity by €2.7m (2022: €7m) as there are floating rate borrowings in place through the banking facilities
established in 2022.
Sensitivity analysis for primary currency risk
Credit risk
A 10% volatility of the EUR against GBP and USD in respect of transaction risk in the reporting entities functional currencies would impact
reported after tax profit by €6m (2022: €10m) and equity by €6m (2022: €9m).
Credit risk encompasses the risk of financial loss to the Group of counterparty default in relation to any of its financial assets. The Group’s
maximum exposure to credit risk is represented by the carrying value of each financial asset:
Interest rate risk
The Group has an exposure to movements in interest rates on its debt portfolio, and on its cash and cash equivalent balances and
derivatives. The Group policy is to ensure that at least 40% of its debt is fixed rate.
In respect of interest bearing loans and borrowings, the following table indicates the effective average interest rates at the year end and
the periods over which they mature. Interest on interest bearing loans and borrowings classified as floating rate is repriced at intervals of
less than one year. The table further analyses interest bearing loans and borrowings by currency and fixed/floating mix.
Cash & cash equivalents
Trade receivables
Derivative financial assets
2023
€m
938.7
1,163.2
-
2022
€m
649.3
1,262.3
0.4
180 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 181
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 20 Financial Risk Management And Financial Instruments (continued)
20 Financial Risk Management And Financial Instruments (continued)
Trade receivables arise from a wide and varied customer base spread across various activities, end users and geographies, and as such
there is no significant concentration of credit risk. The Group’s credit risk management policy in relation to trade receivables involves
periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors.
The utilisation of credit limits is regularly monitored and a significant element of credit risk is covered by credit insurance or other forms of
collateral such as letters of credit or bank guarantees.
At the year end, the Group was carrying a receivables book of €1,051.8m (2022: €1,136.8m) expressed net of provision for default in
payment. This represents a net risk of 13% (2022: 14%) of sales. Of these net receivables, approximately 60% (2022: 60%) were covered by
credit insurance or other forms of collateral such as letter of credit and bank guarantees.
At 31 December, the exposure to credit risk for trade receivables by geographic region was as follows:
Western & Southern Europe
Central & Northern Europe
Americas
Rest of World
At 31 December, the exposure to credit risk for trade receivables by customer type was as follows:
Insulated Panels customers
Insulation customers
Other customers
2023
€m
608.8
204.5
248.7
101.2
1,163.2
2023
€m
689.5
204.3
269.4
1,163.2
2022
€m
690.0
219.7
248.2
104.4
1,262.3
2022
€m
755.5
237.3
269.5
1,262.3
The following table provides the information about the exposure to credit risk and ECL’s for trade receivables as at 31 December 2022.
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
Weighted
average loss
rate
%
1%
3%
12%
30%
100%
Gross
carrying
amount
€m
887.3
207.4
50.1
19.3
98.2
1,262.3
Loss
allowance
€m
10.1
6.1
5.8
5.7
97.8
125.5
Loss rates are based on actual credit loss experience over an appropriate diverse sample of trading periods. Trade receivables are written
off when there is no reasonable expectation of recovery.
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Balance at 1 January
Arising on acquisition
Written off during the year
Net remeasurement of loss allowance
Effect of movement in exchange rates
At 31 December
2023
€m
125.5
3.2
(13.5)
(3.4)
(0.4)
111.4
2022
€m
87.4
5.1
(7.4)
40.3
0.1
125.5
The Group uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables from customers. The ECL simplified
approach has been adopted.
There are no material trade receivables written off during 2023 (2022: €nil) which are still subject to enforcement activity.
The decrease in the expected credit loss allowance during 2023 reflects the reduction in the gross carrying amount of trade receivables.
Loss rates are calculated using a roll rate method based on the probability of a receivable progressing through successive chains of non-
payment to write-off. The rates are calculated at a business unit level which reflects the risks associated with geographic region, age, mix
of customer relationship and type of product purchased. The identifiable loss pertaining to cash positions is immaterial.
Cash & cash equivalents
The following table provides the information about the exposure to credit risk and ECL’s for trade receivables as at 31 December 2023.
On the Group’s cash and cash equivalents and derivatives, counterparty risk is managed by dealing with banks that have a minimum
credit rating and by spreading business across a portfolio of 10 relationship banks (2022: 10).
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
Weighted
average loss
rate
%
1%
3%
7%
18%
91%
Gross
carrying
amount
€m
800.8
199.0
41.6
21.4
100.4
1,163.2
Loss
allowance
€m
7.3
6.2
3.1
3.9
90.9
111.4
182 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 183
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 20 Financial Risk Management And Financial Instruments (continued)
20 Financial Risk Management And Financial Instruments (continued)
Financial instruments by category
The carrying amount of financial assets presented in the Consolidated Statement of Financial Position relate to the following measurement
categories as defined in IFRS 9:
2023
Current:
Trade receivables, net
Other receivables
Cash and cash equivalents
Derivative financial instruments
Non‑current:
Financial asset
2022
Current:
Trade receivables, net
Other receivables
Cash and cash equivalents
Derivative financial instruments
Non‑current:
Financial asset
Financial
asset at fair
value through
OCI
€m
Assets at
amortised
cost
€m
Derivatives
designated
as hedging
instrument
€m
-
-
-
-
-
1,051.8
133.6
938.7
-
2,124.1
128.4
128.4
-
-
-
-
-
-
-
93.6
93.6
1,136.8
129.9
649.3
-
1,916.0
-
-
-
-
-
-
-
-
-
-
-
-
0.4
0.4
-
-
Total
€m
1,051.8
133.6
938.7
-
2,124.1
128.4
128.4
1,136.8
129.9
649.3
0.4
1,916.4
93.6
93.6
It is considered that the carrying amounts of the above financial assets approximate their fair values.
The carrying amounts of financial liabilities presented in the Consolidated Statement of Financial Position relate to the following
measurement categories as defined in IFRS 9:
Financial
liabilities at fair
value through
profit or loss
€m
Financial
liabilities
measured at
amortised cost
€m
Financial
liabilities at
fair value
though OCI
€m
Derivatives
designated
as hedging
instrument
€m
-
-
-
-
-
-
-
-
-
16.2
16.2
-
-
-
-
3.5
3.5
-
-
12.2
12.2
200.6
48.0
610.9
-
524.7
-
1,384.2
1,717.6
171.8
-
1,889.4
85.0
43.2
661.7
526.1
-
1,316.0
2,103.9
153.6
-
2,257.5
-
-
-
-
-
190.2
190.2
-
-
22.7
22.7
-
-
-
-
171.4
171.4
-
-
-
-
-
-
-
0.2
-
-
0.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
€m
200.6
48.0
610.9
0.2
524.7
190.2
1,574.6
1,717.6
171.8
38.9
1,928.3
85.0
43.2
661.7
526.1
174.9
1,490.9
2,103.9
153.6
12.2
2,269.7
2023
Current:
Borrowings
Lease liabilities
Trade payables
Derivative financial instruments
Accruals
Deferred contingent consideration
Non‑current:
Borrowings
Lease liabilities
Deferred contingent consideration
2022
Current:
Borrowings
Lease liabilities
Trade payables
Accruals
Deferred contingent consideration
Non‑current:
Borrowings
Lease liabilities
Deferred contingent consideration
Fair value hierarchy
Financial assets and liabilities recognised at fair value are analysed between those based on quoted prices in active markets for identical
assets or liabilities (Level 1), those involving inputs other than quoted prices that are observable for the assets or liabilities, either directly or
indirectly (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (Level 3) as set out
in Note 19.
Normally, the derivatives entered into by the Group are not traded in active markets. The fair values of these contracts are estimated
using a valuation technique that maximises the use of observable market inputs, e.g. market exchange and interest rates (Level 2). All
derivatives entered into by the Group are included in Level 2 and consist of foreign currency forward contracts, interest rate swaps and
cross currency interest rate swaps.
184 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 185
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 20 Financial Risk Management And Financial Instruments (continued)
20 Financial Risk Management And Financial Instruments (continued)
Financial Assets
Equity investments
Foreign exchange contracts for hedging
Financial Liabilities
Deferred contingent consideration
Put option liabilities
Foreign exchange contracts for hedging
As at 31 December 2023
As at 31 December 2022
Level 1
€m
Level 2
€m
Level 3
€m
Level 1
€m
Level 2
€m
Level 3
€m
110.8
-
-
-
-
17.6
-
-
-
0.2
-
-
76.0
-
17.6
0.4
16.2
212.9
-
-
-
-
-
-
-
-
-
15.7
171.4
-
The principal movements in Level 3 liabilities in 2023 are set out in the table below:
Deferred contingent consideration
Put option liabilities
Balance
1 January
2023
€m
15.7
171.4
187.1
Settlement
Fair value
movement
Arising on
acquisition
Translation
adjustment
€m
(6.6)
-
(6.6)
€m
0.3
10.2
10.5
€m
7.3
22.9
30.2
€m
(0.5)
8.4
7.9
The principal movements in Level 3 liabilities in 2022 are set out in the table below:
Deferred contingent consideration
Put option liabilities
Balance
1 January
Settlement
Fair value
movement
Arising on
acquisition
Translation
adjustment
2022
€m
24.1
178.2
202.3
€m
(8.8)
(36.6)
(45.4)
€m
-
16.0
16.0
€m
-
-
-
€m
0.4
13.8
14.2
Balance
31 December
2023
€m
16.2
212.9
229.1
Balance
31 December
2022
€m
15.7
171.4
187.1
During the year ended 31 December 2023, the put liabilities were reassessed based on the most recent available financial information.
There were no other significant changes in the business or economic circumstances that affect the fair value of the remaining financial
assets and liabilities, no reclassifications and no transfers between levels of the fair value hierarchy used in measuring the fair value of the
financial instruments.
Except as detailed below, it is considered that the carrying amounts of financial assets and financial liabilities recognised at amortised
cost approximate their fair values. The fair value of the Level 2 financial liabilities below has been determined through the use of external
market data available publicly.
Carrying
amount
€m
As at 31 December 2023
Fair Value
Level
€m
Carrying
amount
€m
As at 31 December 2022
Fair Value
Level
€m
€m
2
Private placement loan notes
1,591.9
1,594.8
2
1,322.0
1,251.2
Capital Management Policies and Procedures
The Group employs a combination of debt and equity to fund its operations. As at 31 December the total capital employed in the Group
was as follows:
Net debt
Equity
Total Capital Employed
2023
€m
979.5
3,947.8
4,927.3
2022
€m
1,539.6
3,395.5
4,935.1
The Board’s objective when managing capital is to maintain a strong capital base so as to maintain the confidence of investors,
creditors and the market. The Board monitors the return on capital (defined as total shareholders’ equity plus net debt), and targets a
return in excess of 20% together with a dividend level that is compatible with industry norms, but which also reflects any exceptional
market conditions.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position. The Group actively manages foreign currency and interest rate exposure, as
well as actively managing the net asset position, in order to create bottom line value. This necessitates the development of a methodology
to optimise the allocation of financial resources on the one hand and the return on capital on the other.
The Board closely monitors externally imposed capital restrictions which are present due to covenants within the Group’s core
banking facilities.
There were no material changes to the Group’s approach to capital management during the year.
21 Provisions For Liabilities
Guarantees and warranties
At 1 January
Arising on acquisitions (Note 23)
Provided during year
Claims paid
Provisions released
Effect of movement in exchange rates
At 31 December
Current liability
Non-current liability
2023
€m
181.5
6.3
71.4
(47.8)
(26.3)
(1.2)
183.9
70.2
113.7
183.9
2022
€m
142.7
31.7
84.6
(48.1)
(28.6)
(0.8)
181.5
74.0
107.5
181.5
The Group manufactures a wide range of insulation and related products for use primarily in the construction sector. Some products
carry formal guarantees of satisfactory performance of varying periods following their purchase by customers and a provision is carried in
respect of the expected costs of settling warranty and guarantee claims which arise. The Group in the course of its operations can be party
to claims, litigation or enforcement actions. Both the number of claims and the cost of settling the claim are sensitive to change. In most
cases, a reasonably reliable estimate can be made based on a range of possible outcomes. If the extent and cost of settling a claim or
potential claim or enforcement action is not yet reasonably determinable, no provision is made until such a reliable estimate can be made.
Provisions are reviewed by management on a regular basis, and adjusted to reflect the current best estimate of the economic outflow. If it
is no longer probable that an outflow of economic benefits will be required, the related provision is reversed.
For the non-current element of the provision, the Group anticipates that these will be utilised within three years of the reporting date.
Discounting of the non-current element has not been applied because the discount would be immaterial.
186 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 187
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 22 Deferred Tax Assets And Liabilities
23 Business Combinations (continued)
Deferred tax assets and liabilities arising from temporary differences and unused tax losses after offset are as follows:
The Group also made a number of smaller acquisitions during the year for a combined consideration of €140.0m:
Deferred tax assets
Deferred tax liabilities
Net position
2023
€m
79.6
(60.9)
18.7
2022
€m
40.1
(55.2)
(15.1)
Deferred tax arises from differences in the carrying value of items such as property, plant and equipment, intangibles, pension obligations,
and other temporary differences in the financial statements and the tax base established by the tax authorities.
The movement in the net deferred tax position for 2023 is as follows:
Balance
1 Jan
2023
Recognised
in profit
or loss
Recognised
in equity
€m
(53.4)
(60.9)
77.5
6.4
15.3
(15.1)
€m
(7.7)
5.5
8.5
(1.2)
7.9
13.0
€m
-
-
3.2
-
-
3.2
Recognised
in other
comprehensive
income
€m
-
-
-
0.4
-
0.4
Translation
adjustment
Arising on
acquisitions
Balance
31 Dec
2023
€m
0.5
(1.0)
(1.3)
(0.1)
-
(1.9)
€m
€m
(0.2)
11.5
7.7
-
0.1
19.1
(60.8)
(44.9)
95.6
5.5
23.3
18.7
Property, plant and equipment
Intangibles
Other temporary differences
Pension obligations
Unused tax losses
The movement in the net deferred tax position for 2022 is as follows:
Balance
1 Jan
2022
Recognised
in profit
or loss
Recognised
in equity
€m
(51.7)
(29.8)
73.3
0.7
7.5
-
€m
(3.4)
6.4
7.8
0.1
8.4
19.3
€m
-
-
(11.4)
-
-
(11.4)
Recognised
in other
comprehensive
income
€m
-
-
-
4.9
-
4.9
Translation
adjustment
Arising on
acquisitions
Balance
31 Dec
2022
€m
(0.4)
(0.4)
0.3
0.2
(0.3)
(0.6)
€m
€m
2.1
(37.1)
7.5
0.5
(0.3)
(27.3)
(53.4)
(60.9)
77.5
6.4
15.3
(15.1)
Property, plant and equipment
Intangibles
Other temporary differences
Pension obligations
Unused tax losses
23 Business Combinations
A key strategy of the Group is to create and sustain market leading positions through acquisitions in markets it currently operates in,
together with extending the Group’s footprint in new geographic markets. In line with this strategy, the principal acquisitions completed
during the year were as follows:
• The Insulated Panels division acquired 100% of the share capital of Alaço in Portugal in January 2023, 100% of the share capital of LRM
in France in May 2023, 51% of the share capital of MontFrio in Uruguay in June 2023 and 100% of the share capital of Toode Group in the
Baltics in September 2023.
• In June 2023, the Insulation division acquired 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 acquired 70% of Q-nis in Ireland during September 2023 and 100% of the share capital of Provan Group in
Belgium in November 2023.
The table below reflects the provisional fair value of the identifiable net assets acquired in respect of the acquisitions completed during
the year. Any amendments to fair values will be made within the twelve month period from the date of acquisition, as permitted by IFRS 3
Business Combinations.
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current liabilities
Trade and other payables
Provisions for liabilities
Lease liabilities
Non-current liabilities
Retirement benefit obligations
Lease liabilities
Deferred tax liabilities
Total identifiable assets
Non-controlling interest arising on acquisition
Goodwill
Total consideration
Satisfied by:
Cash (net of cash acquired)
Deferred contingent consideration
CaPlast
€m
Other*
€m
Total
€m
22.7
16.5
1.8
-
10.4
6.5
(7.9)
(2.0)
(0.6)
-
(1.2)
(7.0)
39.2
(0.2)
47.9
86.9
86.9
-
86.9
9.9
24.9
(6.9)
29.1
23.5
9.5
(51.7)
(4.3)
(0.8)
(0.1)
(2.9)
(3.0)
27.2
(7.5)
120.3
140.0
132.7
7.3
140.0
32.6
41.4
(5.1)
29.1
33.9
16.0
(59.6)
(6.3)
(1.4)
(0.1)
(4.1)
(10.0)
66.4
(7.7)
168.2
226.9
219.6
7.3
226.9
*Included in Other are certain immaterial remeasurements of prior year accounting estimates as a result of the finalisation of the
assignment of fair values to identifiable net assets.
In April 2023, the Group acquired 100% of the share capital of CaPlast, enhancing our Roofing + Waterproofing underlayment and vapour
control offerings in the DACH region. The total consideration, including net debt acquired amounted to €86.9m.
The acquired goodwill is attributable principally to the profit generating potential of the businesses, together with cross-selling
opportunities and other synergies expected to be achieved from integrating the acquired businesses into the Group’s existing business.
In the post-acquisition period to 31 December 2023, the businesses acquired during the current year contributed revenue of €110.6m and
trading profit of €12.8m to the Group’s results.
The full year revenue and trading profit had the acquisitions taken place at the start of the year, would have been €8,198.5m and
€889.6m respectively.
188 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 189
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 23 Business Combinations (continued)
23 Business Combinations (continued)
The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to €19.2m. The fair value of
these receivables is €16.0m, all of which is recoverable, and is inclusive of an aggregate impairment provision of €3.2m.
There is €nil of goodwill (2022: €nil) which is expected to be deductible for tax purposes.
The Group incurred acquisition related costs of €6.8m (2022: €8.3m) relating to external legal fees and due diligence costs. These costs
have been included in operating costs in the Consolidated Income Statement.
The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis due to the relative size
of the acquisitions and the timing of the transactions. Any amendments to these fair values within the twelve-month timeframe from the
date of acquisition will be disclosed in the 2024 Annual Report, as stipulated by IFRS 3 Business Combinations.
Prior year acquisitions
The following principal acquisitions completed during the prior year were as follows:
In April 2022, the Group acquired 100% of the share capital of Troldtekt, a Danish natural acoustic insulation producer. The total
consideration, including net debt acquired amounted to €220.4m.
In September 2022, the Group acquired 100% of the share capital of Ondura Group, a French headquartered global provider of roofing
membranes and associated roofing solutions, for a total consideration, including net debt acquired of €515.6m.
The Group also made a number of smaller acquisitions during the year for a combined cash consideration of €151.0m:
• The Roofing + Waterproofing division acquired 100% of the share capital of Derbigum, a Belgian producer of waterproofing membranes
for a total consideration, including net debt acquired of €95.0m;
• The Insulated Panels division acquired 100% of the share capital of THU Perfil in February 2022 and 100% of the share capital of
Invespanel in Spain in September 2022;
• The Insulation division acquired the assets of Calostat in the UK in September 2022.
The table below reflects the provisional fair value of the identifiable net assets acquired in respect of the acquisitions completed during
the year. Any amendments to fair values are made within the twelve month period from the date of acquisition, as permitted by IFRS 3
Business Combinations.
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current liabilities
Trade and other payables
Provisions for liabilities
Lease liabilities
Non-current liabilities
Retirement benefit obligations
Lease liabilities
Deferred tax liabilities
Total identifiable assets
Goodwill
Total consideration
Satisfied by:
Cash (net of cash acquired)
Ondura
€m
Troldtekt
€m
Other*
€m
77.9
86.3
27.0
0.5
86.0
75.1
(96.2)
(21.9)
(4.2)
(2.8)
(12.1)
(21.7)
193.9
321.7
515.6
515.6
515.6
30.1
31.6
1.8
-
13.2
16.6
(14.7)
(0.3)
(0.8)
-
(1.0)
(5.2)
71.3
149.1
220.4
220.4
220.4
22.2
27.0
7.4
1.2
21.5
35.6
(52.9)
(9.5)
(1.5)
(0.1)
(5.7)
(2.1)
43.1
107.9
151.0
151.0
151.0
Total
€m
130.2
144.9
36.2
1.7
120.7
127.3
(163.8)
(31.7)
(6.5)
(2.9)
(18.8)
(29.0)
308.3
578.7
887.0
887.0
887.0
*Included in Other are certain immaterial remeasurements of prior year accounting estimates as a result of the finalisation of the
assignment of fair values to identifiable net assets.
The acquired goodwill is attributable principally to the profit generating potential of the businesses, together with cross-selling
opportunities and other synergies expected to be achieved from integrating the acquired businesses into the Group’s existing business.
In the post-acquisition period to 31 December 2022, the businesses acquired during the year contributed revenue of €252.0m and trading
profit of €21.6m to the Group’s results.
The full year revenue and trading profit in 2022 had the acquisitions taken place at the start of the year, would have been €8,762.6m and
€875.7m respectively.
The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to €132.4m. The fair value of
these receivables is €127.3m, all of which is recoverable, and is inclusive of an aggregate impairment provision of €5.1m.
The initial assignment of fair values to identifiable net assets acquired was performed on a provisional basis due to the relative size of the
acquisitions and the timing of the transactions.
190 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 191
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 24 Share Capital
Authorised
250,000,000 Ordinary shares of €0.13 each (2022: 250,000,000 Ordinary shares of €0.13 each)
Issued and fully paid
Ordinary shares of €0.13 each
Opening balance – 183,591,682 (2022: 183,591,682) shares
Shares allotted– nil (2022: nil) shares
Closing balance – 183,591,682 (2022: 183,591,682) shares
There were no adjustments to the authorised share capital during the year (2022: nil).
Details of share options exercised are set out in Note 4 to the financial statements.
25 Share Premium
At 1 January
Re-issued treasury shares
At 31 December
2023
€m
2022
€m
32.5
32.5
23.9
-
23.9
23.9
-
23.9
2023
€m
112.4
16.9
129.3
2022
€m
94.4
18.0
112.4
During the year, the Company issued treasury shares in satisfaction of obligations falling under share schemes. The treasury shares were
issued for consideration exceeding their carrying value and the difference has been accounted for as share premium.
In the prior year, treasury shares were re-issued for consideration exceeding their carrying value and the difference was accounted for as
share premium.
26 Treasury Shares
Consideration paid
At 1 January
Repurchase of shares
Shares issued
At 31 December
No. of
shares
Consideration
paid
€
2023
Total
€m
No. of
shares
Consideration
paid
€
1,982,473
13,547
(327,872)
1,668,148
28.74
57.68
5.67
33.48
56.9
0.7
(1.8)
55.8
2,254,140
15,361
(287,028)
1,982,473
25.42
94.38
6.64
28.74
2022
Total
€m
57.3
1.4
(1.8)
56.9
192 Kingspan Group plc Annual Report & Financial Statements 2023
26 Treasury Shares (continued)
Nominal value
At 1 January
Repurchase of shares
Shares issued
At 31 December
No. of
shares
Nominal
value
€
2023
Total
€
No. of
shares
Nominal
value
€
2022
Total
€
1,982,473
13,547
(327,872)
1,668,148
0.13 257,721
1,761
0.13
0.13
(42,623)
0.13 216,859
2,254,140
15,361
(287,028)
1,982,473
0.13
0.13
0.13
0.13
293,037
1,997
(37,313)
257,721
During the year, the Company issued 327,872 (2022: 287,028) shares in satisfaction of obligations falling under share schemes.
The Company repurchased 13,547 shares during the year (2022: 15,361).
The Company holds 0.9% (2022: 1.1%) of the issued ordinary share capital as treasury shares.
27 Retained Earnings
In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual
Income Statement to the Annual General Meeting and from filing it with the Registrar of Companies. The Company’s profit for the
financial year was €1,000.1m (2022: loss of €0.5m).
28 Dividends
Equity dividends on ordinary shares:
2023 Interim dividend 26.3 cent (2022: 25.6 cent) per share
2022 Final dividend 23.8 cent (2021: 26.0 cent) per share
Proposed for approval at AGM
Final dividend of 26.6 cent (2022: 23.8 cent) per share
2023
€m
47.9
43.3
91.2
48.4
2022
€m
46.5
47.2
93.7
43.3
The proposed final dividend for 2023 is subject to approval by the shareholders at the Annual General Meeting and has not been
included as a liability in the Consolidated Statement of Financial Position of the Group as at 31 December 2023 in accordance with IAS
10 Events after the Reporting Period. The proposed final dividend for the year ended 31 December 2023 will be payable on 20 May 2024 to
shareholders on the Register of Members at close of business on 12 April 2024.
29 Non-Controlling Interest
At 1 January
Profit for the year attributable to non-controlling interest
Arising on acquisition (Note 23)
Purchase of non-controlling interest
Increase in non-controlling interest
Dividends paid to minorities
Share of foreign operations’ translation movement
At 31 December
2023
€m
75.8
13.6
7.7
-
1.4
(0.9)
2.2
99.8
2022
€m
67.2
18.0
-
(9.9)
-
(3.5)
4.0
75.8
Financial Statements 193
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 30 Reconciliation Of Net Cash Flow To Movement In Net Debt
31 Guarantees And Other Financial Commitments (continued)
Movement in cash and bank overdrafts
Drawdown of loans
Repayment of loans and borrowings
Change in net debt resulting from cash flows
Translation movement - relating to US dollar loan
Translation movement – other
Net movement
Net debt at start of the year
Net debt at end of the year
Lease liabilities of €219.8m (2022: €196.8m) are excluded from net debt.
A reconciliation of liabilities arising from financing activities in 2023 is set out below.
2023
€m
287.6
(319.0)
582.0
550.6
6.5
3.0
560.1
2022
€m
19.8
(846.0)
66.0
(760.2)
(10.9)
(12.4)
(783.5)
(1,539.6)
(756.1)
(979.5)
(1,539.6)
Balance
1 Jan 2023
€m
Repayments Drawdowns /
Receipts
€m
€m
Non cash
movements
€m
Balance
31 Dec 2023
€m
(ii) Future capital expenditure
Capital expenditure in subsidiary entities, approved by the directors but not provided in the financial statements, is as follows:
Contracted for
Not contracted for
32 Pension Obligations
2023
€m
93.1
74.1
2022
€m
96.9
97.9
167.2
194.8
The Group operates defined contribution schemes in each of its main operating locations. The Group also has a number of defined benefit
schemes in the UK and mainland Europe.
Defined contribution schemes
The total cost charged to profit or loss of €37.8m (2022: €32.3m) represents employer contributions payable to these schemes in
accordance with the rules of each plan. An amount of €5.7m (2022: €5.3m) was included at year end in accruals in respect of defined
contribution pension accruals.
Bank loans and borrowings
Loan notes
866.9
1,322.0
(539.5)
(42.5)
-
319.0
(1.1)
(6.6)
326.3
1,591.9
Defined benefit schemes / obligations
A reconciliation of liabilities arising from financing activities in 2022 is set out below.
2,188.9
(582.0)
319.0
(7.7)
1,918.2
Bank loans and borrowings
Loan notes
Balance
1 Jan 2022
€m
Repayments Drawdowns /
Receipts
€m
€m
Non cash
movements
€m
Balance
31 Dec 2022
€m
20.4
1,377.1
1,397.5
-
(66.0)
(66.0)
846.0
-
846.0
0.5
10.9
11.4
866.9
1,322.0
2,188.9
31 Guarantees And Other Financial Commitments
(i) Guarantees and contingencies
The Group’s principal debt facilities are secured by means of cross guarantees provided by Kingspan Group plc. These include drawn private
placement notes of US$200m (2022:US$200m) and €1,411.0m (2022: €1,134.5m), an undrawn bank facility of €800m (2022: €800m) and
one (2022: two) additional banking finance facilities with an aggregated value of €300m (2022: €800m).
Kingspan Group plc has guaranteed the relevant debts of certain of its Dutch and German subsidiaries in accordance with Article 403,
Book 2 of the Dutch Civil Code and Section 264 of the German Commercial Code (HGB) respectively. The respective entities (noted in
Principal Subsidiaries and Substantial Undertakings) have therefore availed of the exemption from preparing and filing audited financial
statements and management reports in the Netherlands and Germany.
The Group has three defined benefit schemes in the UK, all of which are closed to new members and to future accrual. The total pension
contributions to these schemes for the year amounted to €0.8m (2022: €1.8m) and the expected contributions for 2024 are €0.3m. On 6
December 2022, the Group executed a €150.8m bulk insurance annuity insurance policy ‘buy in’ for the Colt Life Assurance and Retirement
Scheme (‘CLARS’). This buy in ensures that an insurance asset fully matches the remaining pension liability. Therefore for this particular
scheme the Group is no longer exposed to the pension risks as outlined below. The Group cash-settled the pension buy in arrangement
during the year for €15.9m.
The Group also has pension obligations in mainland Europe which are accounted for as defined benefit obligations. These obligations have
been accounted for in line with the Group’s existing pension obligations whereby companies are not required to fund independent schemes
for post employment benefit obligations. Instead, commencing from the date the employee becomes eligible to receive the income
stream, this obligation is satisfied from available cash resources of the relevant employing company. A provision has been made for the
unfunded liability. €2.5m of pension entitlements have been paid to retired former employees during the year (2022: €1.7m).
The pension costs relating to all of the above defined benefit obligations are assessed in accordance with the advice of qualified
actuaries. In the case of the three UK legacy schemes, the most recent actuarial valuations were performed as of 31 December 2023.
In general, actuarial valuations are not available for public inspection; however, the results of valuations are advised to members of the
various schemes.
The UK and European defined benefit schemes expose the Group to the following risks:
Interest Rate Risk: The discount rates employed in determining the present value of the Group’s defined benefit liabilities are set with
reference to corporate bond yields. A decrease in corporate bond yields would increase the schemes’ defined benefit obligation. Such
movements in bond yields would result in volatility in the Group’s Consolidated Financial Statements.
Inflation Risk: A significant proportion of the Group’s defined benefit obligation is linked to inflation therefore higher inflation will result
in a higher defined benefit obligation (subject to the appropriate caps in place to protect the schemes against extreme inflation). This is
however expected to be offset to an extent by an increase in the value of the Group’s holdings in liability driven investments (LDI)-type
plan assets.
Longevity Risk: The present value of the Group’s defined benefit obligation is calculated with reference to the mortality of scheme
members, both during and after employment. If scheme members live longer than expected, the scheme’s benefits will need to be paid for
longer, increasing the scheme’s defined benefit obligation.
194 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 195
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 32 Pension Obligations (continued)
32 Pension Obligations (continued)
The directors note that the Group’s UK defined benefit schemes are also exposed to the following significant risk:
Movements in net liability recognised in the Consolidated Statement of Financial Position
Asset Volatility: The Group’s defined benefit obligations are calculated using discount rates set with reference to corporate bond yields.
The schemes’ assets comprise of equities, bonds, property and LDI, all of which may fluctuate significantly in value. These assets are
expected to outperform corporate bonds in the long-term, but provide volatility and risk in the short-term.
The extent of the Group’s obligation under these schemes is sensitive to judgemental actuarial assumptions, of which the principal ones
are set out below. It is not considered that any reasonable sensitivity analysis on these assumptions would materially alter the scheme
obligations.
2023
2022
Funded
Schemes
Un-funded
Schemes
Funded
Schemes
Un-funded
Schemes
Life expectancies
Life expectancy for someone aged 65 - Males
Life expectancy for someone aged 65 - Females
Life expectancy at age 65 for someone aged 45 - Males
Life expectancy at age 65 for someone aged 45 - Females
21.6
24.1
22.9
25.6
21.1
25.4
23.6
28.1
22.0
24.5
23.4
26.0
21.1
25.4
23.3
28.1
Net liability in schemes at 1 January
Acquired
Employer contributions
Defined benefit pension scheme buy in settlement
Recognised in consolidated income statement
Recognised in consolidated statement of comprehensive income
Foreign exchange movement
Net liability in schemes at 31 December
Defined benefit pension income/expense recognised in the Consolidated Income Statement
Rate of increase in salaries
Rate of increase of pensions in payment
Rate of increase for deferred pensioners
Discount rate
Inflation rate
2.20% - 2.55%
-
2.50% - 3.20%
-
0% - 3.05% 1.50% - 2.50% 0% - 3.03%
2.30%
4.85%
3.10%
-
4.50% 3.17% - 4.59%
3.20% 1.75% - 3.20%
2.50% - 3.50%
1.50% - 2.60%
-
0.40% - 3.99%
1.75% - 3.10%
Current service cost
Other expenses
Settlements of scheme obligations
Total, included in operating costs
It is noted that the ‘Funded Schemes’ relate to the wholly and partly funded UK schemes and 5 partially funded immaterial European
schemes. The ‘Un-funded Schemes’ covers all other European DBOs.
The table below gives an indication of the impact of a change in the principal actuarial assumptions on the funded defined benefit
scheme liabilities.
Assumption
Change in assumption
Impact on plan liabilities
2023
2022
Funded Schemes
Discount rate
Increase/decrease by
0.5%
Decrease by 6% /
increase by 7%
Decrease by 6% / increase
by 7%
Un-Funded Schemes
Discount rate
Increase by 0.25%
Decrease by 3%
Decrease by 3%
Movement on scheme obligations
Interest on scheme assets
Net interest expense, included in finance expense (Note 5)
Analysis of amount included in other comprehensive income
Actual return less interest on scheme assets
Experience loss arising on scheme liabilities
Actuarial gain/(loss) arising from changes in demographic assumptions
Actuarial (loss)/gain arising from changes in financial assumptions
Loss recognised in other comprehensive income
Funded Schemes
Inflation rate
Increase/decrease by
0.5%
Increase by 4% /
decrease by 4%
Increase by 4% / decrease
by 4%
The cumulative actuarial loss recognised in other comprehensive income to date is €42.2m (2022: €37.2m).
Un-Funded Schemes
Inflation rate
Increase by 0.25%
Increase by 2%
Increase by 3%
In 2023, the actual return on plan assets was a gain of €8.9m (2022: loss of €118.8m).
Funded Schemes
Mortality assumptions
Increase by 1 year
Increase by 3%
Increase by 3%
Un-Funded Schemes
Mortality assumptions
Increase by 1 year
Increase by 3% - 6%
Increase by 4% - 6%
The sensitivity analyses above have been determined on a method that extrapolates the impact on the defined benefit obligation as
a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analyses are based on a
change in a significant assumption, keeping all other assumptions constant. The sensitivity analyses may not be representative of an
actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.
2023
€m
(49.5)
(0.1)
3.4
15.9
(2.1)
(5.0)
0.4
(37.0)
2023
€m
(0.9)
(0.5)
0.5
(0.9)
(8.9)
7.7
(1.2)
2023
€m
6.5
(4.9)
2.0
(8.6)
(5.0)
2022
€m
(28.0)
(2.9)
3.8
-
(1.2)
(20.3)
(0.9)
(49.5)
2022
€m
(1.0)
(0.3)
0.2
(1.1)
(5.0)
4.9
(0.1)
2022
€m
(119.3)
(4.1)
(0.7)
103.8
(20.3)
196 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 197
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 32 Pension Obligations (continued)
Asset Classes and Expected Rate of Return
The assets in the scheme at each year end were as follows:
Asset Classes as % of Total Scheme Assets
Equities
Bonds (Corporates)
Bonds (Gilts)
Cash
Property
Liability Driven Investment
Insurance Policy net of Insurance Premium due
The net pension liability is analysed as follows:
2023
2022
2.0%
0.4%
6.1%
0.4%
4.3%
18.1%
68.7%
100%
10.3%
0.2%
-
0.6%
5.8%
19.2%
63.9%
100%
2022
€m
2023
€m
Funded
Schemes
Un-funded
Schemes
Funded
Schemes
Un-funded
Schemes
Equities
Bonds (Corporates)
Bonds (Gilts)
Cash
Property
Liability Driven Investment
Insurance Policy net of Insurance Premium due
Fair market value of plan assets
Present value of obligation
Surplus/(deficit)
3.5
0.7
10.4
0.6
7.4
30.8
116.8
170.2
(169.8)
0.4
-
-
-
-
-
-
-
-
(37.4)
(37.4)
Analysed between:
Funded schemes’ surplus
Unfunded obligations
Related deferred tax asset
15.0
0.7
-
0.9
8.2
27.8
93.0
145.6
(159.1)
(13.5)
2023
€m
1.0
(38.0)
(37.0)
(5.5)
-
-
-
-
-
-
-
-
(36.0)
(36.0)
2022
€m
3.3
(52.8)
(49.5)
(6.4)
32 Pension Obligations (continued)
Changes in present value of defined benefit obligations
At 1 January
Acquired through business combination (Note 23)
Current service cost
Other expenses
Interest cost
Benefits paid
Settlement
Actuarial losses/(gains)
Effect of movement in exchange rates
2023
€m
195.1
0.1
0.9
-
8.9
(11.6)
(0.5)
11.5
2.8
2022
€m
310.8
2.9
1.0
(0.2)
5.0
(10.9)
(0.3)
(99.0)
(14.2)
At 31 December
207.2
195.1
Changes in present value of scheme assets during year
At 1 January
Interest on scheme assets
Employer contributions
Defined benefit pension scheme buy in settlement
Benefits paid
Other expenses
Actual return less interest
Effect of movement in exchange rates
2023
€m
145.6
7.7
0.9
15.9
(9.1)
(0.5)
6.5
3.2
2022
€m
282.8
4.9
2.0
-
(9.1)
(0.6)
(119.3)
(15.1)
At 31 December
170.2
145.6
The weighted average duration of the defined benefit obligation at 31 December 2023 was 13.0 years (2022: 13.8 years).
33 Related Party Transactions
The principal related party relationships requiring disclosure under IAS 24 Related Party Disclosures relate to (i) transactions between group
companies, (ii) compensation of key management personnel and (iii) goods and services purchased from directors.
(i)
Transactions between subsidiaries are carried out on an arm’s length basis.
The Company received €1,000m dividends from subsidiaries (2022: €nil), and there was a net increase in the intercompany balance of
€61.2m (2022: €76.1m decrease).
Transactions with the Group’s non-wholly owned subsidiaries primarily comprise trading sales and capital funding, carried out on an arm’s
length basis. These transactions are not considered to be material.
For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the term “key management personnel” (i.e.
(ii)
those persons having the authority and responsibility for planning, directing and controlling the activities of the Company), comprise
the board of directors (executive and non-executive directors) who manage the business and affairs of the Company. As identified in the
Report of the Remuneration Committee, the directors, other than the non-executive directors, serve as executive officers of the Group.
Key management personnel compensation is set out in Note 7.
Dividends of €0.9m were paid to other key management personnel (2022: €1.0m). €Nil (2022: €nil) was outstanding at year end.
(iii) During the financial year, there were no disclosable goods and services purchased from directors (2022: €nil).
198 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 199
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 Alternative Performance Measures
34 Events Subsequent To Year End
The Group uses a number of metrics, which are non-IFRS measures, to monitor the performance of its operations.
In January 2024, the Group completed the acquisition of a majority stake (51%) of the shares of Steico SE (“Steico”) from Schramek
GmbH for an initial consideration of €263.5m (€188.5m cash, €75m equity). Additionally, the Group will be consolidating Steico’s net debt
of approximately €160m. Steico is the world leader in natural insulation and wood-based building envelope products, based in Germany
and listed on the unofficial markets of several German Stock Exchanges. Given the recent timing of the acquisition additional disclosures
required as per paragraph B66 of IFRS 3 Business Combinations cannot be made at this time.
On 16 February 2024, the Group signed a series of agreements to acquire the stonewool insulation business and assets of Karl Bachl
Kunststoffverarbeitung GmbH & Co. KG in Germany. The transaction is expected to complete by 31 March 2024 and will be funded from
existing cash reserves.
There have been no other material events subsequent to 31 December 2023 which would require adjustment to, or disclosure in this report.
The Group believes that these metrics assist investors in evaluating the performance of the underlying business. Given that these metrics
are regularly used by management, they also give the investor an insight into how Group management review and monitor the business on
an ongoing basis.
The principal APMs used by the Group are defined as follows:
Trading profit
This comprises the operating profit as reported in the Consolidated Income Statement before intangible asset amortisation and non
trading items. This equates to the Earnings Before Interest, Tax and Amortisation (“EBITA”) of the Group. Trading profit is used by
management as it excludes items which may hinder year on year comparisons.
35 Approval Of Financial Statements
The financial statements were approved by the directors on 20 February 2024.
Trading profit
Trading margin
Financial Statements Reference
2023
€m
2022
€m
Consolidated Income Statement
876.9
833.2
Measures the trading profit as a percentage of revenue.
Trading profit
Revenue
Trading margin
EBITDA
Financial Statements Reference
Consolidated Income Statement
Consolidated Income Statement
2023
€m
876.9
8,090.6
10.8%
2022
€m
833.2
8,340.9
10.0%
The Group defines EBITDA as earnings before finance expenses, income taxes, depreciation, amortisation and non trading item.
Trading profit
Depreciation
EBITDA
Free cash flow
Financial Statements Reference
Consolidated Income Statement
Consolidated Statement of Cash Flows
2023
€m
876.9
190.9
1,067.8
2022
€m
833.2
165.1
998.3
Free cash flow is the cash generated from operations after net capital expenditure, interest paid, income taxes paid and lease payments
and reflects the amount of internally generated capital available for re-investment in the business or for distribution to shareholders.
Net cash flow from operating activities
Additions to property, plant and equipment
Additions to intangible assets
Proceeds from disposals of property, plant and
equipment
Finance income received
Lease payments
Free cash flow
Financial Statements Reference
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
2023
€m
2022
€m
1,162.2
(234.2)
(3.5)
4.2
22.6
(60.5)
890.8
692.0
(269.2)
-
18.6
1.7
(50.6)
392.5
200 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 201
Notes to the Financial Statements (continued)For The Year Ended 31 December 2023 Alternative Performance Measures (continued)
Alternative Performance Measures (continued)
Return on capital employed (ROCE)
Net interest
ROCE is the operating profit before interest and tax expressed as a percentage of the net assets employed. The net assets employed reflect
the net assets, excluding net debt, at the end of each reporting period.
The Group defines net interest as the Group’s interest expense on borrowings net of bank interest receivable. The impact of IFRS 16 is
excluded from the calculation which is consistent with the terms and conditions of the covenants as set out in the Group’s external
borrowing arrangements.
Net assets
Net debt
Financial Statements Reference
Consolidated Statement of Financial Position
Note 18
2023
€m
3,947.8
979.5
4,927.3
2022
€m
3,395.5
1,539.6
4,935.1
Operating profit before interest and tax
Consolidated Income Statement
835.2
784.3
Financial Statements Reference
Bank loan interest
Private placement loan note interest
Bank interest earned
Net Interest
Note 5
Note 5
Note 5
2023
€m
24.9
31.6
(19.2)
37.3
2022
€m
10.1
24.5
(1.7)
32.9
Return on capital employed
Banking Covenants
17.0%
15.9%
Working capital
The Net debt:EBITDA and the EBITDA:Net Interest ratios disclosed in this report are calculated in accordance with the terms and conditions
of the covenants as set out in the Group’s external borrowing arrangements. Therefore, EBITDA and Net Interest are adjusted to exclude
the impact of IFRS 16 Leases for these calculations.
Net debt
Net debt represents the net total of current and non-current borrowings, current and non-current derivative financial instruments,
(excluding foreign currency derivatives which are used for transactional hedging), and cash and cash equivalents as presented in the
Consolidated Statement of Financial Position. Lease liabilities recognised due to the implementation of IFRS 16 and deferred contingent
consideration have also been excluded from the calculation of net debt. Consistent with the 2022 APMs, this definition is in accordance
with the terms and conditions of the covenants as set out in the Group’s external borrowing arrangements.
Net debt
Net debt:EBITDA
Financial Statements Reference
Note 18
2023
€m
2022
€m
979.5
1,539.6
Net debt as a ratio to 12 month EBITDA. For the purpose of this calculation, EBITDA is solely adjusted for the impact of IFRS 16 Leases.
EBITDA
Lease liability payments
EBITDA (adjusted for the impact of IFRS 16)
Financial Statements Reference
Consolidated Statement of Cash Flows
Financial Statements Reference
Net debt
EBITDA (adjusted for the impact of IFRS 16)
Net debt:EBITDA times
Note 18
2023
€m
1,067.8
(60.5)
1,007.3
2023
€m
979.5
1,007.3
0.97
2022
€m
998.3
(50.6)
947.7
2022
€m
1,539.6
947.7
1.62
Working capital represents the net total of inventories, trade and other receivables and trade and other payables, net of transactional
foreign currency derivatives excluded from net debt.
Financial Statements Reference
Note 15
Trade and other receivables
Note 14
Inventories
Trade and other payables
Note 16
Foreign currency derivatives excluded from net debt Note 20
Working capital
Working capital ratio
2023
€m
2022
€m
1,254.2
964.3
(1,346.1)
(0.2)
872.2
1,328.4
1,235.8
(1,368.7)
0.4
1,195.9
Measures working capital as a percentage of October to December turnover annualised. The annualisation of turnover reflects the current
profile of the Group rather than a partial reflection of any acquisitions completed during the period.
Working capital
October - December turnover annualised
Working capital ratio
Total shareholder return (TSR)
Financial Statements Reference
2023
€m
872.2
7,752.8
11.3%
2022
€m
1,195.9
8,272.2
14.5%
Total shareholder return (TSR) is a key performance metric for the Performance Share Plan (PSP).
The methodology for calculating the total shareholder return assumes the following: the open price is set as the closing price of the final
trading day prior to the beginning of the performance period; the close price is set as the closing price on the final trading day of the
performance period; the calculation assumes all dividends are reinvested on the ex-dividend date, at the closing price on that day.
Total Shareholder Return
Page 47
Financial Statements Reference
2023
%
56.2
2022
%
-51.5
202 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 203
Principal Subsidiaries and Substantial Undertakings
Principal Subsidiaries and Substantial Undertakings (continued)
%
Shareholding
Nature of
Business
%
Shareholding
Nature of
Business
%
Shareholding
Nature of
Business
%
Shareholding
Nature of
Business
AUSTRALIA
GERMANY
Kingspan Insulated Panels Pty Limited
100
Manufacturing
Alwitra GmbH
Kingspan Insulation Pty Limited
100
Manufacturing
Alwitra Holding (Germany) GmbH
100
100
Manufacturing
Holding Company
MALAYSIA
Onduline Building Materials
(M) SDN BHD
100
Manufacturing
Kingspan AB
SWEDEN
Kingspan Water & Energy Pty Limited
85
Manufacturing
CaPlast Kunststoffverarbeitungs GmbH 100
Manufacturing
MEXICO
Kingspan Insulation AB
Nordic Waterproofing Holding AB
BELGIUM
Imperbel NV/SA
Joris Ide NV
Kingspan Insulation NV
BRAZIL
Kingspan Isoeste Trade Importadora
E Exportadora Limitada
Kingspan-Isoeste Construtivos
Isotérmicos S/A
CANADA
Kingspan Insulated Panels Limited
Vicwest Inc.
CZECH REPUBLIC
Kingspan AS
DENMARK
LOGSTOR Denmark Holding ApS
Troldtekt A/S
FINLAND
Kingspan Oy
FRANCE
Comptoir du Batiment et
de L’Industrie SAS
Kingspan Light Air SAS
Groupe Bacacier SAS
Isocab France SAS
Joris Ide Auvergne SAS
Joris Ide Sud Ouest SAS
Metal SAS
Onduline France SAS
Profinord Sarl
Skydôme SAS
Societe Bretonne de Profilage SAS
100
100
100
51
51
100
100
Manufacturing
Manufacturing
Manufacturing
Colt International GmbH
Kingspan Light + Air GmbH
Joris Ide Deutschland GmbH
Kingspan Access Floors GmbH
Kingspan GmbH
Kingspan Holding GmbH
Sales & Marketing
Kingspan Insulation Gmbh & Co. KG
Manufacturing
Kingspan Services GmbH
LOGSTOR Deutschland GmbH
Kingspan STG GmbH
100
100
100
100
100
100
100
100
100
100
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Sales & Marketing
Holding Company
Manufacturing
Sales & Marketing
Sales & Marketing
Manufacturing
Kingspan Insulated Panels SA DE CV
100
Manufacturing
Powerpipe Systems AB
NETHERLANDS
Colt International Beheer BV
Colt International BV
Colt International Productie BV
Joris Ide Netherlands BV
Kingspan BV
Kingspan Holding Netherlands BV
Kingspan Insulation BV
Kingspan Light + Air NL BV
100
100
100
100
100
100
100
100
TURKEY
Holding Company
Kingspan Yapi Elemanlari A.S.
Sales & Marketing
Manufacturing
Onduline Avrasya Insaat Malzemeleri
Sanayi Ve Ticaret A.S.
Manufacturing
UNITED ARAB EMIRATES
Sales & Marketing
Holding Company
Manufacturing
Kingspan Insulated Panels
Manufacturing LLC
Kingspan Insulation LLC
Manufacturing
UNITED KINGDOM
Manufacturing
HUNGARY
Kingspan Light + Air Production NL BV
100
Manufacturing
Colt Group Limited
Manufacturing
Kingspan Kereskedelmi Kft
100
Manufacturing
INDIA
Kingspan Unidek BV
LOGSTOR Nederland BV
100
100
Manufacturing
Colt International Limited
Sales & Marketing
Euroclad Group Limited
100
Manufacturing
Kingspan Jindal Private Limited
51
Manufacturing
NEW ZEALAND
INDONESIA
Kingspan Insulation NZ Limited
100
Manufacturing
100
100
Manufacturing
PT Onduline Indonesia
100
Sales & Marketing
PHILIPPINES
Manufacturing
IRELAND
OFIC Philippines Inc.
100
Sales & Marketing
Kingspan Limited
Kingspan Group Limited
Kingspan Insulation Limited
Kingspan Services (UK) Limited
Kingspan Water & Energy Limited
100
Sales & Marketing
Kingspan Holdings (Irl) Limited
Kingspan Holdings (North
America) Limited
100
100
Management &
Procurement
Holding Company
100
100
100
100
100
100
100
100
100
100
100
Manufacturing
Kingspan Holdings (Overseas) Limited
100
Holding Company
Kingspan Holdings Limited
Sales & Marketing
Kingspan Insulation Limited
Kingspan International Finance
Unlimited Company
Kingspan Light & Air Limited
Kingspan Limited
Kingspan Nominees Limited
Kingspan Securities Limited
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
100
100
100
100
100
100
100
Holding Company
Manufacturing
Finance Company
Manufacturing
Manufacturing
Holding Company
Finance Company
POLAND
Balex Metal Sp. Z.o.o.
COROTOP SA
Kingspan Sp. Z.o.o.
LOGSTOR International sp. Z.o.o
ROMANIA
Terasteel SA
Wetterbest SA
SPAIN
Huurre Iberica SA
Kingspan Insulation SA
Synthesia Technology Europe SLU
Teczone Española SA
THU Perfil SLU
100
100
100
100
99
100
100
100
100
100
100
Manufacturing
Manufacturing
Manufacturing
Holding Company
UNITED STATES
Kingspan Insulated Panels Inc.
Kingspan Insulation LLC
Kingspan Light & Air LLC
Morin Corporation
Pre-insulated Metal Technologies Inc.
Tate Access Floors Inc.
URUGUAY
Bromyros SA
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
100
100
31
100
85
100
85
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Sales & Marketing
Manufacturing
Holding Company
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Holding Company
Sales & Marketing
Manufacturing
Manufacturing
Holding Company
Manufacturing
Management &
Procurement
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
51
Manufacturing
Pursuant to section 316 of the Companies Act 2014, a full list
of subsidiaries, joint ventures and substantial undertakings will
be annexed to the Company’s Annual Return to be filed in the
Companies Registration Office in Ireland.
204 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 205
Shareholder Information
Corporate Information
Stock exchange listing
The Company’s shares are listed on the main market of the
Euronext Dublin Stock Exchange.
Share Registrar
Computershare Investor Services (Ireland) Limited
(“Computershare”) maintains the Company’s register of
members. Should a shareholder have any queries in respect of their
shareholding, they should contact Computershare directly using
the contact details provided below:
The Company Registrar:
Computershare Investor Services (Ireland) Limited,
3100 Lake Drive,
Citywest Business Campus,
Dublin 24,
D24 AK82.
Telephone number +353 1 447 5103.
Annual General Meeting
The Annual General Meeting (‘AGM’) of the Company will be held
on Friday 26 April 2024 at 9.00 a.m.
Notice of the 2024 AGM will be made available to view online at
http://www.kingspan.com/agm2024
Shareholders’ right to table draft resolutions and to put items
on the agenda
A shareholder or a group of shareholders holding 3% of the issued
share capital, representing at least 3% of the total voting rights
of all shareholders who have a right to vote at the meeting, have
a right to table a draft resolution for an item on the agenda of
the meeting subject to any contrary provisions in company law. In
the case of the 2024 Annual General Meeting, the latest date for
submission of such requests is 15 March 2024 (being 42 days prior
to the date of the meeting).
The request:
Company Information
• may be in hard copy form or in electronic form;
• must set out in writing details of the draft resolution in full or, if
supporting a draft resolution sent by another shareholder, clearly
identify the draft resolution which is being supported;
• must be authenticated by the person or persons making it
(by identifying the shareholder or shareholders meeting the
qualification criteria and, if in hard copy, by being signed by the
shareholder or shareholders); and
• must be received by the Company not later than 42 days before
the meeting to which the request relates.
In addition to the above, the request must be made in accordance
with one of the following ways:
• a hard copy request which is signed by the shareholder(s), states
the full name and address of the shareholder(s) and is sent
to the Company Secretary, Kingspan Group plc, Head Office,
Dublin Road, Kingscourt, Co Cavan, Ireland; or
• a request which states the full name and address of the
‘Shareholder Reference Number’ (SRN), as printed on the
accompanying Form of Proxy of the shareholder(s) and is sent to
lorcan.dowd@kingspan.com .
A draft resolution must not be such as would be incapable of
being passed or otherwise be ineffective (whether by reason of
inconsistency with any enactment, the Company’s Memorandum
of Association, or for any other reason). Any draft resolution must
not be defamatory of any person.
Amalgamation of Shareholding Accounts
Shareholders who receive duplicate sets of Company mailings due
to multiple accounts in their name should write to the Company’s
Registrar to have their accounts amalgamated.
Dematerialisation
Under the EU Central Securities Depositories Regulation (EU)
909/2014 (“CSDR”), there is a requirement for all securities in
Irish issuers which are admitted to trading or traded on trading
venues in the European Economic Area to be represented in
book-entry form by 1 January 2025. Book-entry form means an
electronic record of ownership such as an entry in an electronic
register, without the need for any further document, such as a
share certificate, to be issued to a shareholder to evidence share
ownership. In accordance with CSDR, from 1 January 2023, all new
issues of shares in the Company must be held in book-entry form,
with all remaining shares to be held in book-entry by 1 January
2025. Therefore, share certificates for shareholders who currently
hold their shares in certificated form will remain valid until 1
January 2025.
Kingspan Group plc was incorporated on 14 August 1979. It is an Irish
domiciled company and the registered office is Kingspan Group plc,
Dublin Road, Kingscourt, Co. Cavan, A82 XY31, Ireland. The registered
company number of Kingspan Group plc is 70576.
16 February 2024
26 April 2024
26 April 2024
16 August 2024
4 November 2024
HSBC Bank plc
BNP Paribas
Danske Bank AS
NatWest Bank Plc
Unicredit Bank AG
Bank of America Merrill Lynch,
2 King Edward St,
Farringdon,
London,
EC1A 1HQ,
England.
Financial Calendar
Preliminary Results
Trading Update
AGM
Half-Yearly Results
Trading Update
Banks
Bank of America Merrill Lynch
ING Bank NV
Commerzbank
KBC Bank NV
Bank of Ireland
Stockbrokers
Goodbody,
2 Ballsbridge Park,
Ballsbridge,
Dublin 4,
Ireland.
Auditor
Ernst & Young,
Chartered Accountants,
EY Buildings,
Harcourt Centre,
Harcourt Street,
Dublin 2,
Ireland.
Solicitors
McCann FitzGerald,
Riverside One,
Sir John Rogerson’s Quay,
Dublin 2,
Ireland.
206 Kingspan Group plc Annual Report & Financial Statements 2023
Financial Statements 207
GROUP 5 YEAR SUMMARY
Results (amounts in €m)
2023
2022
2021
2020
2019
Revenue
Trading profit
Net profit before tax
Operating cashflow
8,090.6
876.9
794.2
1,368.6
8,340.9
833.2
746.6
884.0
6,497.0
754.8
689.0
490.6
4,576.0
508.2
459.7
750.8
4,659.1
497.1
454.4
627.1
Equity (amounts in €m)
2023
2022
2021
2020
2019
Gross assets
Working capital
Total shareholder equity
Net debt
8,001.6
872.2
3,947.8
979.5
7,681.4
1,195.9
3,395.5
1,539.6
6,387.9
977.8
2,959.3
756.1
5,341.6
450.8
2,397.6
236.2
4,288.4
582.8
2,120.4
633.2
Ratios
2023
2022
2021
2020
2019
Net debt as % of total shareholders’ equity
Current assets / current liabilities
Net debt / EBITDA
24.8%
1.65
0.97
45.3%
1.78
1.62
25.5%
1.80
0.88
9.9%
2.21
0.40
29.9%
1.66
1.09
Per Ordinary Share (amounts in €cent)
2023
2022
2021
2020
2019
Earnings
Operating cashflows
Net assets
Dividends
352.3
752.9
2,171.8
52.9
329.5
487.1
1,870.9
49.4
305.6
270.5
1,631.8
45.9
206.2
414.3
1,323.1
20.6
204.6
347.3
1,174.2
13.0
Average number of employees
22,384
20,590
17,880
15,424
14,529
Revenue (€m)
Trading Profit (€m)
EPS (Cent)
DPS (Cent)
9
.
0
4
3
,
8
6
.
0
9
0
,
8
0
.
7
9
4
,
6
9
.
6
7
8
2
.
3
3
8
8
.
4
5
7
3
.
2
5
3
5
.
9
2
3
6
.
5
0
3
9
.
2
5
4
.
9
4
9
.
5
4
1
.
9
5
6
,
4
0
.
6
7
5
,
4
1
.
7
9
4
2
.
8
0
5
6
.
4
0
2
2
.
6
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
6
.
0
2
0
.
3
1
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
83 Pirie Street
Adelaide, Australia
Insulation
Kooltherm® K17;
Kooltherm® K10
Aligned with our Planet
Passionate strategy, we are
committed to producing an
environmentally conscious
Annual Report. To reduce
our environmental impact,
this report is printed on
sustainably sourced,
carbon-balanced paper.
ENVIRONMENTAL CREDENTIALS
Paper
Essential Velvet 100% Recyclable
Paper Credentials
• Sustainably sourced from managed wood fibre
• Manufactured in accordance with ISO certified
standards for environmental, quality and
energy management
• Carbon balanced
• Recyclable and biodegradable
Print Credentials
• 98% vegetable based inks.
• The bioglaze laminate used on this cover can be
recycled along with paper, as it is an acetate
polymer made from wood pulp and cotton.
d
e
s
i
g
n
:
r
e
d
d
o
g
.
i
e
Our customers inspire
us in the innovation
of our products and
services, leading to
breakthroughs such
as our lower embodied
carbon portfolio.
Dublin Road, Kingscourt
Co. Cavan, Ireland, A82 XY31
Tel: +353 42 969 8000
Email: admin@kingspan.com
www.kingspan.com
The Exo Building
Dublin, Ireland
Data + Flooring
RMG600
Scan here to explore
our digital report
I
K
N
G
S
P
A
N
G
R
O
U
P
P
L
C
A
N
N
U
A
L
R
E
P
O
R
T
&
F
I
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
2
0
2
3
I