Half Yearly Report

RNS Number : 8639X

Kingspan Group PLC

24 August 2009

 



KINGSPAN GROUP PLC 

2009 HALF-YEARLY FINANCIAL REPORT

Six months ended 30 June 2009

	H1 2009	H1 2008	% change at actual rates	% change at constant rates
Revenue	€552.5mn	€849.4mn	-35%	-29%
EBITDA	€50.7mn	€112.1mn	-55%	-50%
Trading Profit before Non-Trading Items	€36.7mn	€92.2mn	-60%	-55%
Operating Profit	€30.3mn	€90.1mn	-66%	-62%
Operating Margin	5.5%	10.6%
Non-Trading Items	€3.5mn	€nil
Earnings per Share	12.3c	41.4c	-70%
Dividend per Share	0c	8c
Net Debt	€230.8mn	€194.2mn
Interest Cover	9.5 times	18 times

Operational Highlights:

• Positive action over the last eighteen months has reduced the fixed costs base by €60mn to offset sales decline;

• Overall Insulated Panel volumes down 34%, impacted in the main by the global pullback in non-residential development;

• Solid progress in the integration of the Metecno Inc. acquisition, operating performance on plan; 

• Insulation Boards produced a strong performance in the circumstances, particularly solid in Western Europe;

• Access Floor volumes increasingly under pressure, but excellent operating result in the period;

• Environmental & Renewables weak due to continued low newbuild residential activity in the UK, slower demand for solar in Germany, and warranty issues as outlined previously.

Gene Murtagh, Chief Executive Officer, commented:

'A combination of global recession and unprecedented credit restrictions delivered a general market contraction in the first half of 2009 not experienced in the lifetime of this business. Throughout the period and beforehand, Kingspan has responded quickly and decisively to reorder its cost base appropriately. Nevertheless, our strategy has remained unchanged - to be at the forefront globally of efforts to drive deeper market penetration of sustainable, low energy building solutions.  

 The focus for now continues to be on cash generation and making further progress on debt reduction ensuring the Group has the balance sheet strength to consider opportunities which will present themselves beyond the global contraction.' 

For further information contact:

Ed Micheau: Murray Consultants Tel: [phone]

INTERIM MANAGEMENT REPORT 

• Turnover down 35% to €552.5mn, 

  • down 29% on a constant currency basis;

• EBITDA down 55% to €50.7mn, 

  • down 50% on a constant currency basis; 

• Operating Profit down 66% to €30.3mn,

  • down 62% on a constant currency basis,

• Basic Earnings 12.3c per share versus 41.4c in 2008;

• Net Debt €230.8mn, down from €299.6mn in the second half of 2008;

• Interest Cover 9.5 times; net debt/EBITDA 1.64 times, representing a well capitalised balance sheet; 

• Total investment in capex of €28.0mn;

• The UK accounted for 46% of sales, Mainland Europe 31%, North America 13%, Ireland 7% and others 3%.

The global economic turmoil, now a full 18 months into its cycle, continued apace during the first half of 2009, and has hit the UK and Ireland particularly severely, where GDP reductions in the period broke all records. As the UK in particular is a key market for Kingspan, this clearly represented a hostile environment for the business, but one that the organisation had prepared for through 2008. Virtually all economies in Western and Central Europe also declined, although less steeply, while North America was also affected by the same lack of confidence and credit issues.

Volume output suffered hefty reductions in the six months, as did order intake, which would point towards a pattern of ongoing weak volume levels for the latter part of 2009. Operating performance in the second half is, however, likely to be more stable than in the earlier part of the year, and further significant declines in the Group's larger businesses are not expected. Annualised fixed cost reductions from peak now stand at €60mn. This operational leanness, combined with a sharpened focus on cash management resulted in a €68.8mn reduction in net debt. This was achieved despite investing a further €28mn in capex, a figure that will reduce further in the second half and into the next year.

INSULATED PANELS 

Representing 51% of Group turnover, sales in this segment were €284.0mn in the period, down 32% on prior year. Excluding acquisitions, but incorporating the metal façade business in both periods, sales were down 42%.

Against this back drop of such a dramatic fall off in volumes, the Group had to take significant action to ensure that profitability was maintained. Since Insulated Panels has the highest operational leverage, this division was bound to suffer most from the drop in volume and also had to change from growth mode to one of consolidation, without damaging the future of the business in both product and market development. Timely action in reducing fixed costs, enabled the division to deliver an operating margin of 4.3% in the period. Inefficiencies at the cost of manufacturing level as a result of the drop off in volumes, were largely avoided through improved efficiency resulting mainly from the capital investment incurred through 2007 and 2008. This was offset somewhat from inefficient manufacturing, particularly in Canada, where the total manufacturing processes are being revamped. This will not be completed until first quarter 2010. 

In the UK, newbuild non-residential activity declined sharply on 2008 levels, and Insulated Panels volumes were consequently down by 39%. The order book is down 43%, however the project pipeline has remained broadly steady over the past nine months, which would support an expectation of stable sales volumes at current levels in the second half. Metal façades have now been integrated into Insulated Panels, and are part of the formula to drive Insulated Panels into the high-end, enhanced value added market in the UK and Ireland. Across all geographic markets, Kingspan intends to focus more sharply on developing a leading position within this niche for the Group.

Sales in Ireland dropped by 67% on top of what had been a significant decline in 2008. This is a reflection of the severity of the recession, which ranks as the worst in Western Europe. It is anticipated that any recovery is some years away, and local operations have been sized accordingly.

Activity in the Western European markets was comparatively better than the UK and Ireland, although down 18% on prior year. The pace of reduction in the second quarter was greater than in the first, and construction activity and volumes in the second half are likely to reduce further.

Although similar pressure exists in Central Europe, markets such as Germany performed relatively well for Kingspan, reflective of some market share gains.  Turkey and the Middle East region also performed at similar levels to 2008 and order intake was up 5%, while in India a small number of sizable contracts were won.

In Canada, much of the emphasis was on commissioning new and upgraded facilities in Toronto and Vancouver respectively which progressed well and on schedule. The market however deteriorated during the first half, and the operations were dogged by legacy inefficiencies that will be addressed by the new facility later in the year. Although the year as a whole will be down on 2008, the second half is likely to show a slight volume improvement on the first. This is also the case in the US, where our initial focus has been on the integration of the Metecno businesses and its re-organisation. Volumes are broadly in line with plan, although margins were squeezed by high steel inventory costs relative to current steel rates. That pressure will be alleviated in the second half.

In general, whilst the trading backdrop is not encouraging, management's energy throughout the Insulated Panel businesses is focused on bringing even more efficient products to market with the primary goal of driving conversion over the long haul.

INSULATION 

Representing 19% of Group turnover, sales in this segment were €106.9mn in the period, down 45% on prior year. These figures include that part of Off-site & Structural that relates to timber framing which has now been transferred to Insulation Boards. The fall-off in sales in Insulation Boards was 31% and in timber framing was 78%. 

Overall operating margins increased from 6.8% in the first half of 2008 to 8.5% in the first half of 2009. Despite the dramatic fall of 78% in timber framing sales, its profitability improved. This was achieved by consolidation of sites, reductions in overheads and by increasing the value added in the product offering.  

The underlying operating margin in insulation products fell by only circa two percentage points. This was achieved by overhead reductions, improved manufacturing efficiency and a continuing move by the market to highest performing insulation products.  

This business serves a broad base of end markets, ranging right across the spectrum from office and residential to schools and hospitals. It also serves the refurbishment sector, which has strong medium to longer term growth potential, and includes an unrivalled range of different high performance 'healthy' insulation technologies. The wide mix of products and end-uses has provided a cushion against the worst effects of the economic downturn, and this versatility is the cornerstone of its strategy into the future.

In the period, UK volumes were down 33% as all sectors of the construction industry shrank, and in Ireland volumes were down 40%. Greater focus on refurbishment and a positive product mix resulted in the business outperforming the construction sector in general.

Western and Central Europe performed well, with volumes down just 9% on prior year. The business built market share and made inroads into the German refurbishment and Polish newbuild segments. In support of this platform, a new phenolic insulation plant has been commissioned in the Netherlands which will begin production in the early part of quarter three.

Although the results clearly reflect the market pressures that exist, again overall stability in volumes is expected well into the second half with weaker demand in Ireland compensated for by more robust demand in Continental Europe.

ACCESS FLOORS

Representing 15% of Group turnover, sales in this segment were €80.0mn in the period, down 18% on prior year.

Office construction activity in all markets has been gradually reducing over the past nine months or so. This sector is late cycle and many of the projects are in the later stages of work that, having been commenced in better economic times, are now nearing completion. For the time being therefore, activity has continued, albeit that volume globally is down 29%. Data available on office starts, combined with quotation levels suggests that in the run up to year end sales will decline further in this business, possibly bottoming out during 2010. The impact of the economic contraction on current orders for office construction is being partly offset by a relatively robust data centre market

Margins were a very healthy 15.9% during the first half, arising from a combination of firm pricing and lower input costs, mainly steel. Steel prices are likely to rise later in the year, although fundamental demand levels would tend not to support such a move.

ENVIRONMENTAL & RENEWABLES 

Representing 15% of Group turnover in the period, sales in this segment were €81.6mn, down 42% on prior year (-32% excluding the impact of the disposal of a UK injection moulding business).

Weak residential demand has impacted this business so far in 2009, with slowing sales of storage and treatment products, as well as Solarthermal products, dominating the first half.

Whilst the market has been weak, this business has been significantly re-organised, resulting in the relocation of a number of smaller sites into two main manufacturing facilities, one in Ireland and one in the UK. This has already yielded the planned operational efficiencies, however their impact is largely masked by the overall market contraction and the continued warranty expenses that burden this business segment. As noted in the past, legal action was commenced during the period against the supplier of the raw materials, which is likely to run well into 2010.

Having performed strongly in 2008, activity in Solarthermal sales also declined, owing in the main to contraction in the German market. This weakness is not likely to subside in the short term, although this product will undoubtedly benefit longer term as construction recommences and the shift towards renewables accelerates. Near term, the building blocks for future growth are being put in place, with the establishment of a presence in both Continental Europe and North America. Operational efficiency will also benefit from the sizeable plant upgrade and relocation that will be completed by the end of the current year.

LOOKING AHEAD

The Group's end markets remain markedly less buoyant than in 2008. However, absolute demand for most product categories has stabilised over recent months and the year on year gap in output has been closing steadily. The project pipeline for Insulated Panels and Insulation has displayed a degree of consistency over the past nine months that should underpin a more stable performance for the remainder of the year, notwithstanding that activity will be significantly down on a year earlier. The Environmental & Renewables business should experience a similar pattern but the Access Floors business is expected to continue to fall off in line with office construction over the coming eighteen months or so.

Visibility through 2010 in the broader construction area is less certain, although the level of planning applications internationally would indicate any improvement in activity is unlikely in the near term. Against this anticipated backdrop, management remains focused on cash and cost containment to ensure the balance sheet strength necessary to enable Kingspan to take full advantage of the opportunities that will undoubtedly arise during these times.

Longer term, and despite the depth of the current recession, Kingspan is steadfast in its ambition to play a leading global role in what will inevitably evolve into a low energy buildings environment. Combined organic expansion and select acquisitions will cement this strategy ongoing.  

FINANCIAL REVIEW

Overview

The first half of 2009 saw a fall in Group turnover of 35% and a decrease in trading profits of 64%. When the effect of currency movements (€51mn) is stripped out the underlying turnover fall is 29% and trading profit is down by 59%. The Group has relatively high operational gearing in certain products, so the fall off in sales has had an amplified impact on operating profits. The negative effect of this operational gearing was mitigated somewhat by a rapid response to the market decline by fixed cost reductions and rationalisation of some manufacturing facilities. There are some indications that the downward trend in sales in the Group's main geographical markets is slowing. In Insulation products, both Panels and Boards, for the past few months order intake has marginally exceeded sales.  

As indicated in the Financial Review accompanying the 2008 results, gross profit margins in the first half of 2009 were negatively impacted in our steel based product groups. Following a significant drop in raw material prices at the start of the year, inventory of more expensive materials from quarter four of 2008 was carried into production in 2009, which has now substantially worked its way through the system. Pricing of raw materials of both steel and chemicals remains volatile however, and pressure is now upwards again. The challenge in the current economic environment will be to recover increases in these raw materials in the second half of 2009 and into 2010.

Fixed and semi-fixed overheads were reduced by approximately €31mn in the period compared to the first half of 2008. This is a like for like comparison, excluding the acquisition of the Panels business in the United States and in constant currency. For the full year 2009 this reduction should be approximately €44mn on a like for like basis against 2008 and €60mn from the peak. There were rationalisation costs in the period of €3.5mn. 

The weakness of Sterling against the Euro (average rate Half 1 2008; 0.775 v average rate Half 1 2009; 0.896) has had a material negative impact on the translation of results when compared with the first half of 2008. The overall impact of currency movements on Euro reported turnover was €51mn and operating profit was €4mn. 

Capital investment was €28mn in the period and in the second half it is expected to be €25mn.  

Working capital at period end of €181.5mn was €40.8mn lower than at 31 December 2008 and €60.3mn lower than June 2008.

Dividends

The Directors are not proposing to pay an interim dividend in respect of 2009. This is a prudent measure in the interest of conserving cash in the Group, ensuring that the balance sheet remains strong and this will enable the Group to explore development opportunities should they arise.

 Results

Income Statement

	Half 1 2009 €mn	Half 1 2008 €mn
Sales Revenue	552.5	849.4
Gross Profit	150.4	255.2
Gross Profit %	27.2%	30.1%
Operating Costs	(113.7)	(163.0)
Trading Profit before Non-Trading Items	36.7	92.2
Non-Trading Items	(3.5)	-
Trading Profit	33.2	92.2
Amortisation	(2.9)	(2.1)
Operating Result	30.3	90.1

Segment Reporting

Following on from the restructuring of the businesses and the requirements of IFRS 8, the segmental reporting of the results has been changed. Up to 31 December 2008 the following four business segments were reported on: 

Insulated Panels & Boards	Manufacture of Insulated Panels and Rigid Insulation Boards;
Offsite & Structural	Manufacture of Offsite Solutions, Timber and Metal Framing and Structural Products;
Environmental & Renewables	Manufacture of Environmental and Pollution Control Products;
Access Floors	Manufacture of Raised Access Floors.

From 1 January 2009 Insulated Panels and Insulation Boards have each become a segment in its own right. In addition, that part of Offsite & Structural that relates to timber framing and factory-insulated timber frames has been transferred to Insulation Boards and the rest of the business (relating to metal framing, facades and structural products) has been transferred to Insulated Panels. The following are now the four business segments that are reported on: 

Insulated Panels;

Insulation Boards;

Environmental & Renewables;

Access Floors.

Note 4 in the accounts for the period to 30 June 2009 gives further analysis of the segments and the rest of this report deals with results analysed under the new segments and corresponding comparisons.

Turnover

Turnover for the period was €552.5mn, a drop of 35% on the same period in 2008. The movements in average exchange rates for the Group's relevant operating currencies against the Euro resulted in an adverse translation impact on turnover of €51mn. Stripping out the impact of the adverse effect of movement in translation the underlying turnover was down by 29%.

Analysis by Class of Activity
	6 mths 30.6.09 €'mn	6 mths 30.06.08 €'mn		% Change	% Change @ constant rates
Insulated Panels	284.0	416.4		-32%	-26%
Insulation Boards	106.9	195.7		-45%	-40%
Environmental& Renewables	81.6	140.0		-42%	-33%
Access Floors	80.0	97.3		-18%	-19%
	552.5	849.4		-35%	-29%
Analysis by Geographic Market
	6 mths 30.6.09 €'mn	6 mths 30.06.08 €'mn		% Change	% Change @ constant rates
Ireland	39.8	101.8		-61%	-61%
UK	253.5	450.5		-44%	-36%
Mainland Europe	144.3	203.6		-29%	-25%
Americas	100.2	69.3		+45%	+34%
Other	14.7	24.2		-39%	-34%
	552.5	849.4		-35%	-29%

Sales Trends 

Insulated Panels and related products in the UK, Irish and Benelux markets:

Currency	Volume	Price & Mix	Total
-5%	-37%	-3%	-45%

• Revenues were down 45% for the period compared to the same period in 2008 on a volume reduction of 37%. Volume was down 45% against peak volumes in first half of 2007.

• Order intake in volume was down 40% in the first half, but 44% in quarter one and 36% in quarter two. In quarter two, order intake exceeded sales by over 10%.

Insulated Panels in Germany and Central & Eastern European markets: 

Currency	Volume	Price & Mix	Total
-7%	-28%	-0%	-35%

• Revenues were down 35% for the period on a volume reduction of 28%. Peak sales in these markets were in 2008 so comparators will remain tough for the balance of this year.  

• Order intake was down 40% in the first half compared to very strong figures in first half 2008 but marginally exceeded sales in the first half of 2009.  

Insulated Panels in the North American markets: 

Currency	Volume/Price	Acquisitions	Total
-3%	-30%	+235%	+202%

• The Insulated Panel business in the United States (Metecno Inc.) was acquired by the Group in August 2008. Sales in the first half of 2009 were $55.7mn, down 16% on the same period in 2008, when the business was not in Kingspan's ownership.  

• Turnover in the other North American panels business in Canada was down 30% for the period at constant currency. 

Insulation Boards:

Currency	Volume	Price & Mix	Total
-8%	-32%	+9%	-31%

Off-Site/Timber Framing:

Currency	Price/Mix/Volume	Total
-4%	-74%	-78%

• Sales of Insulation were down 31%, which was all accounted for in volume. The currency effect was off-set by increased revenue from the mix of product sold. Sales in Insulation peaked in the second half of 2007 and sales volumes in the first half of 2009 were down 35% against this high. Sales were up 4% in quarter two 2009 versus quarter one 2009.

• Sales of Off-site/Timber Framing were down by 78% versus the first half of 2008 and broadly flat versus the second half of 2008.

Environmental & Renewables:

Currency	Price & Volume	Disposals	Total
-9%	-23%	-10%	-42%

• Sales were down 42% of which price/volume was down 23%, currency down 9% and disposal of the UK injection moulding business unit in September 2008 was down10%.  

• Peak sales in this division were in H2 2008 so comparatives for H2 2009 remain challenging. 

Access Floors:

Currency	Volume	Price & Mix	Total
+1%	-29%	+10%	-18%

• Sales were down 18% of which volume was down 29% partly offset by an increase in pricing and mix of products. This volume decline was broadly similar across the European and North American markets.

• Order intake declined by 40% in volume and again as with sales, this decline was broadly similar across geographic markets.  

Operating Profit

Operating profit was €30.3mn compared to €90.1mn in the corresponding period last year, a decline of 66%. There was a negative impact of the translation of operating profits from non-Euro currencies at the average exchange rates for the first half of 2009 compared to the first half of 2008 of €4mn. Stripping out the translation impact the decline in operating profit was 62%.  

The return on sales was 5.5% compared to 10.6% in the same period last year.

The gross profit at €150.4mn represents a return of 27.2% on sales, compared to 30.1% last year. Cost of sales comprises variable costs i.e. raw material and direct labour plus other factory costs which are fixed or semi-fixed. Variable costs as a percentage of sales increased from 61.8% to 63%, which arose mainly from the dynamics of raw material price movements. Operating costs (including amortisation) at €120.1mn are down by €45mn. Excluding the effect of the acquisition on 2009 overheads and the effect of exchange rate movements between the two periods, the net overhead reduction in the first half of 2009 versus the first half 2008 was €31mn. In the second half of 2009 the reduction in overhead versus the second half of 2008 is expected to be approximately €13mn and the overhead reduction program resulted in reduced costs in the second half of 2008 of €16mn. The total overhead reduction achieved to date from peak is €60mn, which can be summarised as follows (all at constant currency)

	Actual Overheads €mn		Overhead Reduction €mn
	Half 1	Half 2
2007	145	149
2008	149	133
2009	118	120 (est)
Reduction H1 09 vs H1 08	31		31
Reduction H2 09 vs H2 08		13	13
H2 08 vs H2 07		16	16
			60

Trading margin by product group 

(excluding amortisation and rationalisation costs))

€'mn	HY1 08	HY1 09
Insulated Panels	13.5%	4.3%
Insulation Boards	6.8%	8.5%
Environmental & Renewables	6.0%	3.4%
Access Floors	14.6%	15.9%
Group	10.9%	6.6%

The table above shows the trading margin for the products groups. Rationalisation costs of €3.5mn, incurred in Insulated Panels Division in the first half of 2009, have been added back to profits in that division.  

Insulated Panels margin decreased to 4.3% (HY1 08: 13.5%). Raw materials purchased in quarter four 2008, acquired at higher prices and carried through in inventory into 2009, had a negative impact on margin. There were also specific issues in Canada where the Group is still manufacturing on an inefficient line pending the move to an up-graded manufacturing process later this year. In the United States incremental costs were incurred as the process of product, market and management development got underway. In addition, all geographical markets suffered from the loss of leverage on fixed costs resulting from the decline in volumes.  

Insulation Boards margin increased to 8.5% (HY1 08: 6.8%). The incorporation of Timber Framing into this business from Off-Site & Structural, depressed the margin, particularly in 2008 when this unit had a loss of €5mn. On significantly reduced turnover in the first half of 2009 this loss has been greatly reduced. The underlying profitability of the Division continues to remain robust and should not be materially affected by Timber Framing in the balance of the year.

The margin in Environmental & Renewables at 3.4% is down from 6.0% in the first half of 2008. Efficiencies have been coming through in the Environmental part of this Division since the consolidation of sites in Ireland was completed last year and further consolidation has now been completed in Britain in 2009. While costs continue to be incurred in relation to the warranty issues arising from faulty raw material supplied to the division in the past, the level is consistent with those of last year. In the Renewable energy business unit, sales have been disappointing in the first half of the year, particularly in mainland Europe, which accounts for approximately 75% of this units turnover. At the same time the Group has significantly increased costs in respect of new geographical market development and product development. The investment in a new manufacturing facility and consolidation of sites will be completed before year end with resultant cost savings. 

Access Floors delivered an operating margin of 15.9% (HY1 08: 14.6%). The gross margin has held up strongly, despite volatility of steel prices through last year and the first half of 2009. The mix of product also had a positive impact on sales pricing and related margins. There are challenges to come, given the position of these products in the construction cycle and indicated by the levels of quotations and order book, that may put pressure on the margins here in the medium term.

Taxation

Taxation provided for on profits is €4.4mn or 17.5%. This compares with an equivalent rate of 14.6% for the full year 2008. This is as a result of a different spread of profits across various jurisdictions with relatively higher tax rates. 

Earnings Per Share

Basic earnings per share at 12.3 cent, shows a drop of 70% compared to the first half of 2008. EPS is based on a weighted average number of ordinary shares of 166.1mn (H1 2008 170.8mn)

Funds Flow

The table below summarises the Group's funds flow:

	Half 1  2009	Year  2008	Half 1 2008
	€'mn	€'mn	€'mn
Operating profit	30.3	82.0	90.1
Depreciation	17.5	40.6	19.9
Amortisation	2.9	4.6	2.1
Working capital decrease/(increase)	49.6	43.6	32.6
Pension contributions	(1.4)	(2.6)	(0.5)
Interest	(8.6)	(12.7)	(6.4)
Taxation paid	(4.4)	(18.1)	(0.7)
Others	11.7	60.3	3.7
Free cash	97.6	197.7	140.8
Acquisitions	0.0	(92.6)	(5.3)
Net capital expenditure	(30.3)	(97.5)	(53.9)
Dividends paid	0.0	(42.3)	(29.0)
Share buy-back	0.0	(32.6)	(20.0)
	(30.3)	(265.0)	(108.2)
Cash flow movement	67.3	(67.3)	32.6
Debt translation	1.5	(7.3)	(1.8)
Decrease/(Increase) in net debt	68.8	(74.6)	30.8
Net debt at start of period	(299.6)	(225.0)	(225.0)
Net debt at end of period	(230.8)	(299.6)	(194.2)

Earnings before finance costs, tax, deprecation and amortisation (EBITDA) was €50.7mn (Half 1 2008: €112.1mn). In the period, the Group delivered free cash flow of €97.6mn, which was down 31% on the previous year. This included a positive contribution of €49.6mn from a working capital reduction. This was partially used to fund investment of €30.3mn in net capital expenditure. 

Net debt, at the end of June was €230.8mn, a reduction of €68.8mn on net debt at the start of 2009, analysed as follows: 

	30 June 2009 €mn	31 Dec. 2008 €mn
Cash and cash equivalents	113.5	75.3
Bank debt < 1 year	(34.1)	(16.8)
Private placement debt > 5 years	(151.4)	(151.4)
Revolving credit facility 2-5 years	(153.4)	(194.0)
Contingent deferred consideration	(5.4)	(12.7)
Total Net debt	(230.8)	(299.6)

The main borrowings are drawn down in the following currencies:

Euro:          €265mn

US$:        $101mn

Operational working capital at 30 June 2009 was €181.5mn (31 Dec 2008 €222.3mn) and represented 13.2% of the previous 12 months turnover (2008:14.3%). The trend in working capital as a percentage of the previous 6 months sales has been as follows: H1 07 16.4%; H2 07 15%; H1 08 17.5%; H2 08 15.0%; H1 09 16.4%. There is a continuing focus on further reductions in working capital but as a percentage of sales, especially in the current environment, maintaining a level of 15.0% of the previous 6 months sales will be extremely demanding.

Property for Disposal 

As a result of site rationalisations, fixed assets, principally property, with a net book value at 30 June 2009 of €19.5mn have been reclassified on the Balance Sheet as 'Assets held for sale'. It is currently estimated that these assets will realise at least the value at which they are carried in the books. Disposals are not expected to be achieved until 2010.

Financial Performance Indicators

Some key financial performance indicators which measure performance and the financial position of the Group are set out in the table below together with the convenant requirements under the Group's core financing facilities:

	30 June 2009	Year 2008	Bank Covenants
EBITDA interest cover (Rolling 12 Months)	10.8x	14.6x	4.0x (min)
Net debt:EBITDA (Rolling 12 Months)	1.64x	1.48x	3.5x (max)
Return on capital employed (Rolling 12 Months)	12.1%	19.2%	n/a
Effective tax rate	17.5%	14.6%	n/a
Net debt as % of total equity	40.1%	57.7%	n/a
Net Assets	€576.2mn	€519.1mn	€400mn (min)

As can be seen from the table the Group was comfortably within its banking covenants at 30 June 2009.

Financial Risk Management

Funding and Liquidity

The Group's core funding is provided by a private placing of $200mn converted into €151mn at the time of the placing. Of this debt, €119mn (79%) matures in March 2015 and the balance in March 2017. The Group also has a five year committed banking facility of €330mn which was put in place in September 2008. At 30 June 2009 the Private Placement debt was drawn down in full and €148mn of the revolving banking facility was drawn. The Group also has in place a number of uncommitted bilateral working capital/overdraft facilities amounting to circa €100mn.  

Foreign Exchange Risk - Balance Sheet

As the bulk of the Group's non-Euro investments are Sterling denominated, the translation of these investments into Euro has given rise to a significant favorable exchange adjustment, and this has been taken directly to reserves, thereby increasing the Group net assets by €45mn. The equivalent adjustment at 31 December 2008 gave rise to a reduction in Group net assets of €131mn. This translation adjustment can be positive or negative depending on the movement between the opening and closing currency exchange rates. These fluctuations in net assets arising from movements in exchange rates has been mitigated somewhat, since the end of June 2009, by increasing the amount of borrowings in Sterling with an equivalent reduction in Euro. It is intended that, if borrowings increase in the future, they will be drawn in a currency that will further mitigate exposure to balance sheet adjustments of this nature.

Interest Rates

The Private Placement, which represents 50% of the drawn down facilities, is fixed out to maturity in Euro at 4.15%. €14.3mn of the USD debt has been fixed at 2.77% (including margin) to December 2011 bringing the total fixed debt to 55%. The remainder of the drawn down facilities are subject to floating rates.

Customer Credit Risk

At the period end, the Group was carrying a Receivables book of €258mn expressed net of provisions for default in payment. Of these receivables approximately 60% were covered by credit insurance or other forms of collateral such as letters of credit or bank guarantee. In May 2009 the Group's credit insurance policy was renewed for 2009/2010. The conditions of the renewed policy are less favourable than the old policy with a higher excess threshold. In addition, there are still a large number of customers, who have had their insurance cover withdrawn or reduced and in the current climate the risk of bad debts is increased. We continue to manage the credit risk by working with our customers to reduce exposure levels, and with the insurance underwriters to increase the general level of cover. 

Pension Deficit

The Group has three legacy defined benefit pension schemes in the UK. These schemes have been closed and the liability relates only to past service. A full actuarial review is due in 2010 and in the meantime, in conjunction with the Actuary, the Group estimates that the deficit has increased to €9.4mn since 31 December 2008. Details on the movement giving rise to the increase in the deficit is set out below:

	€'mn
Opening net deficit	(3.7)
Translation	(0.4)
Contributions paid	1.4
Actuarial gains/(losses)	(6.5)
Net finance (charge)/credit	(0.2)
Closing deficit	(9.4)

Principal Risk and Uncertainties

Under the Transparency (Directive 2004/109/EC) Regulations 2007, Kingspan is required to give a description of the principal risks and uncertainties it faces. As with any large group, Kingspan faces a number of risks and uncertainties which are identified in the Business Risk section of the annual report. These risks and how Kingspan deals with them in order to mitigate their impact are set out on pages 22 to 25 of the 2008 Annual Report. In particular the principal risks that Kingspan faces in the second half of the financial period, as outlined in more detail in the Interim Management Report above, are:

• Uncertainties as to the depth and duration of the global economic turmoil, which have resulted in a weakened demand for products and a contraction of the construction market generally;

• Financial risks associated with interest rates, foreign currency exposure, liquidity and credit risk;

• Risks associated with volatility of pricing and availability of raw materials, especially steel and chemicals;

• Competitive pressures represent a risk for the Group in terms of expansion and pricing;

• Financial risks associated with the provision of credit to customers;

• The Group's defined benefit pension schemes are exposed to risk from changes in interest rates, the market value of investments and inflation rates.

Related Party Transactions

There were no related party transactions, or changes in those related party transactions described in the Annual Report in respect of the year ended 31 December 2008, that would have a material impact on the financial position or performance of the Group in the first six months of the 2009 financial year.

Summary

As outlined above, there are signs that the deterioration in sales is reducing and order intake, in most of the business units, has been exceeding dispatches. The cost reduction process has been successful in reducing overheads significantly and also in maintaining manufacturing efficiencies. This process has not damaged the long term prospects of the business and the Group continues to focus on the future in both product and market development and on having the people to deliver future growth. There is a continuing focus on cash generation ensuring that the balance sheet remains strong and this should enable the Group to explore development opportunities should they arise.  

RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge, in accordance with Transparency (Directive 2004/109/EC) Regulations 2007 (TR) and the Transparency Rules of the Financial Regulator:

• the condensed set of financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting';

• the Interim Management Report and the Financial Review include a fair review of the information required by Regulation 8 paragraph 2 of the TR (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

• the Interim Management Report and the Financial Review include a fair review of the information required by Regulation 8 paragraph 3 of the TR (disclosure of related parties' transactions and changes therein).

By order of the Board

24 August 2009

Gene Murtagh, Chief Executive Officer        Dermot Mulvihill, Finance Director

  INDEPENDENT REVIEW REPORT TO KINGSPAN GROUP PLC

Introduction

We have been engaged by the Company to review a condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Cash Flow Statement and the related explanatory notes that have been reviewed. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Republic of Ireland's Financial Regulator.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance International Standards on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in Ireland. A review of interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months period ended 30 June 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Republic of Ireland's Financial Regulator.

GRANT THORNTON

Chartered Accountants and Registered Auditors

24-26 City Quay

Dublin 2

21 August 2009

CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2009
						Total	Total
			Notes			6 months  ended	6 months  ended
						30.06.09	30.06.08
						(Unaudited)	(Unaudited)
						€ '000	€ '000
Revenue			4			552,525	849,362
Costs of sales						(402,125)	(594,115)
Gross Profit						150,400	255,247
Operating costs						(117,139)	(163,027)
Trading Profit						33,261	92,220
Intangible Amortisation						(2,944)	(2,072)
Operating Result						30,317	90,148
Finance costs						(6,924)	(7,002)
Finance income						1,598	772
Result for the period before tax						24,991	83,918
Income tax expense						(4,374)	(13,846)
Net result for the period						20,617	70,072
Attributable to shareholders of Kingspan Group plc						20,408	70,672
Attributable to minority interest						209	(600)
						20,617	70,072
Earnings per share for the period			6
Basic						12.3c	41.4c
Diluted						12.1c	41.0c

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
as at 30 June 2009
						6 months  ended	6 months  ended
						30.06.09	30.06.08
						(Unaudited)	(Unaudited)
						€ '000	€ '000
Net result for financial period						20,408	70,672
Other comprehensive income:
Cash flow hedging						(962)	(248)
Actuarial (losses)/gains in defined benefit pension scheme						(6,435)	(2,212)
Currency translation						44,678	(37,062)
Income taxes relating to items charged or credited to equity						1,802	619
Total comprehensive income for the period						59,491	31,769
Attributable to shareholders of Kingspan Group plc						59,282	32,369
Attributable to minority interest						209	(600)
						59,491	31,769

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2009						6 months  ended	Year ended
						30.06.09	31.12.08
						(Unaudited)	(Audited)
						€ '000	€ '000
Assets
Non-current assets
Goodwill						294,005	279,777
Other intangible assets						10,715	13,168		13,168
Property, plant and equipment						415,949	411,068		411,068
Long term financial assets						10	210		210
Deferred tax assets						2,138	1,228		1,228
						722,817	705,451
Current assets
Inventories						131,281	159,116
Trade and other receivables						258,006	299,189
Cash and cash equivalents						113,542	75,254
Assets held for sale						19,448	-
						522,277	533,559
Total assets						1,245,094	1,239,010
Liabilities
Current liabilities
Trade and other liabilities						207,815	236,029
Provisions for liabilities and charges						58,429	56,467
Contingent deferred consideration						4,624	4,980
Interest bearing loans and borrowings						34,121	16,857
Current tax liabilities						33,604	34,314
						338,593	348,647
Non-current liabilities
Pension and other employee obligations						9,411	3,738
Interest bearing loans and borrowings						304,771	345,249
Deferred tax liabilities						15,284	14,504
Contingent deferred consideration						839	7,790
						330,305	371,281
Total liabilities						668,898	719,928
NET ASSETS						576,196	519,082
Equity
Equity attributable to shareholders of Kingspan Group plc
Share capital						22,275	22,265
Additional paid-in share capital						35,929	35,751
Other reserves						(156,977)	(194,036)
Revaluation reserve						713	713
Capital redemption reserve						723	723
Retained earnings						668,716	651,841
						571,379	517,257
Minority interest						4,817	1,825
TOTAL EQUITY						576,196	519,082

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Share capital	Additional paid-in capital	Other reserves	Capital Redemption & Revaluation reserves*	Retained earnings	Total attributable to shareholders	Minority interest	Total equity 30.06.09
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 January 2009	22,265	35,751	(194,036)	1,436	651,841	517,257	1,825	519,082
Shares issued	10	178	-	-	-	188	-	188
Employee share based compensation	-	-	-	-	1,100	1,100	-	1,100
Exercise of employee share based compensation	-	-	-	-	-	-	-	-
Transactions with shareholders	10	178	-	-	1,100	1,288	-	1,288
Profit for the period	-	-	-	-	20,408	20,408	209	20,617
Other comprehensive income:
Cash flow hedging - in equity	-	-	(7,619)	-	-	(7,619)	-	(7,619)
Defined benefit pension scheme	-	-	-	-	(6,435)	(6,435)	-	(6,435)
Tax on defined benefit pension scheme	-	-	-	-	1,802	1,802	-	1,802
Currency translation	-	-	44,678	-	-	44,678	-	44,678
Movement in Minority Interest	-	-	-	-	-	-	2,783	2,783
Total comprehensive income for the period	-	-	37,059	-	15,775	52,834	2,992	55,826
Balance at 30 June 2009	22,275	35,929	(156,977)	1,436	668,716	571,379	4,817	576,196
	Share capital	Additional paid-in capital	Other reserves	Capital Redemption & Revaluation reserves*	Retained earnings	Total attributable to shareholders	Minority interest	Total equity 30.06.08
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 January 2008	22,146	31,917	(67,568)	1,436	681,755	669,686	3,230	672,916
Shares issued	104	2,306	-	-	-	2,410	-	2,410
Employee share based compensation	-	-	-	-	3,559	3,559	-	3,559
Exercise of employee share based compensation	-	1,060	-	-	(1,060)	-	-	-
Share buyback	-	-	-	-	(20,018)	(20,018)	-	(20,018)
Dividends	-	-	-	-	(28,982)	(28,982)	-	(28,982)
Transactions with shareholders	104	3,366	-	-	(46,501)	(43,031)	-	(43,031)
Profit for the period	-	-	-	-	70,672	70,672	(600)	70,072
Other comprehensive income:
Cash flow hedging - in equity	-	-	(248)	-	-	(248)	-	(248)
Defined benefit pension scheme	-	-	-	-	(2,212)	(2,212)	-	(2,212)
Tax on defined benefit pension scheme	-	-	-	-	619	619	-	619
Currency translation	-	-	(37,064)	-	-	(37,064)	25	(37,039)
Movement in Minority Interest	-	-	-	-	-	-	(120)	(120)
Total comprehensive income for the period	-	-	(37,312)	-	69,079	31,767	(695)	31,072
Balance at 30 June 2008	22,250	35,283	(104,880)	1,436	704,333	658,422	2,535	660,957
* Capital Redemption and Revaluation reserves are €723,000 and €713,000 respectively. There were no movements on these balances since 30 June 2008.

CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2009
																		6 months  ended			6 months ended
																		30.06.09			30.06.08
																		(Unaudited)			(Unaudited)
																		€ '000			€ '000
Operating activities
Result for the period before tax																		24,991			83,918
Adjustments																		39,673			30,174
Change in inventories																		32,067			(15,750)
Change in trade and other receivables																		56,217			(33,141)
Change in trade and other payables																		(41,075)			80,848
Pension contributions																		(1,434)			(526)
Cash generated from operations																		110,439			145,523
Taxes paid																		(4,495)			(716)
Net cash flow from operating activities																		105,944			144,807
Investing activities
Additions to property, plant and equipment																		(31,192)			(56,404)
Proceeds from disposals of property, plant and equipment																		910			2,552
Proceeds from investments																		200			-
Purchase of subsidiary undertakings																		-			(4,100)
Net cash acquired with acquisitions																		-			1
Payment of deferred consideration in respect of acquisitions																		(8,549)			(3,088)
Dividends paid to minorities																		(98)			-
Interest received																		1,585			786
Net cash flow from investing activities																		(37,144)			(60,253)
Financing activities
(Decrease)/increase of bank loans																		(36,490)			(13,633)
Discharge of finance lease liability																		(297)			(451)
Proceeds from share issues																		188			2,409
Buyback of own shares																		-			(20,018)
Interest paid																		(10,201)			(7,214)
Dividends paid																		-			(29,056)
Net cash flow from financing activities																		(46,800)			(67,963)
Cash and cash equivalents at the beginning of the period																		74,272			62,938
Net increase in cash and cash equivalents																		22,000			16,591
Translation adjustment																		2,526			(2,886)
Cash and cash equivalents at the end of the period																		98,798			76,643
Cash and cash equivalents as at 1 January 2009 were made up of:
	Cash and cash equivalents																	75,254			66,626
	Overdrafts																	(982)			(3,688)
																		74,272			62,938
Cash and cash equivalents as at 30 June 2009 were made up of:
	Cash and cash equivalents																	113,542			80,866
	Overdrafts																	(14,744)			(4,223)
																		98,798			76,643
1 Basis of preparation
These condensed interim consolidated financial statements are for the six months ended 30 June 2009. They have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required in the annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2008.
The 2009 interim results and balance sheet are presented in Euro. Results and cash flows of foreign subsidiary undertakings have been translated into Euro at the average exchange rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date.
The interim results for the half year to 30 June 2009 and 30 June 2008 are unaudited. The comparative figures for the year ended 31 December 2008 represent an abbreviated version of the Group's full accounts for that year which has been filed with the Registrar of Companies and on which the auditors, Grant Thornton, have issued an unqualified audit report.
These interim results are available on the Group's website (www.kingspan.com).
2 Significant accounting policies
These consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2008 except for the adoption of :
● IAS 1 Presentation of Financial Statements (Revised 2007)
● IFRS 8 Operating Segments
The adoption of IAS 1 (Revised 2007) makes certain changes to the format and titles to the primary financial statements and to the presentation of some items within these statements. IAS 1 affects the presentation of shareholder changes in equity and introduces 'Consolidated statement of comprehensive income'. In accordance with the new standard the entity does not present a 'Statement of recognised income and expense', as was presented in the 2008 financial statements. Further, a 'Consolidated statement of changes in equity' is now presented as a primary statement.
The adoption of IFRS 8 has affected the identified operating segments for the Group.
Insulated Panels & Boards will now be reported as separate segments called Insulated Panels and Insulation Boards respectively which in prior years would have been reported together. The Offsite & Structural segment will be split with the Offsite portion being reported under the new Insulation Boards segment and the Structural element being reported under the new Insulated Panels segment.
The trading profit of €33.2mn is arrived at after charging non-trading items of €3.5mn.
3 Reporting Currency
The currency used in this preliminary announcement is Euro. Results and cash flows of foreign subsidiary undertakings have been translated into Euro at the actual exchange rates, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date.
Exchange rates of material entities used were as follows:
		Average rate									Closing Rate
Euro =		30.06.09			30.06.08			31.12.08			30.06.09			30.06.08			31.12.08
Pound Sterling		0.896			0.775			0.796			0.850			0.791			0.951
US Dollar		1.334			1.530			1.471			1.403			1.558			1.381
Canadian Dollar		1.607			1.542			1.560			1.620			1.577			1.750
Australian Dollar		1.880			1.657			1.743			1.750			1.629			2.050
Czech Koruna		27.180			25.240			24.990			26.000			24.070			26.550
Polish Zloty		4.480			3.503			3.523			4.500			3.358			4.120
Hungarian Forint		291			254.601			252.430			276			237.50			265

4 Segment reporting
In identifying the operating segments, management generally follows the Groups product lines, which represent the main products provided by the Group. Each of these operating segments is managed separately as each requires different technologies and other resources as well as marketing approaches.
Reported segments and their results are now based on internal management reporting information that is regularly reviewed by the chief operating decision maker.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements.
The requirements of IFRS 8 are applied retrospectively and comparative figures restated
Business segments
The Group operates in the following four business segments:
Insulated Panels				Manufacture of insulated panels, structural framing and metal facades.
Insulation Boards				Manufacture of rigid insulation products and timber framing systems.
Environmental & Renewables				Manufacture of environmental and pollution control products.
Access Floors				Manufacture of raised access floors.

Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers.
Segment assets are based on the geographical location of the assets.
Analysis by class of business
				Insulated	Insulation	Environmental	Access	TOTAL
Segment Revenue				Panels	Boards	& Renewables	Floors
				€mn	€mn	€mn	€mn	€mn
Total Revenue - H1 2009				284.0	106.9	81.6	80.0	552.5
Total Revenue - H1 2008				416.4	195.7	140.0	97.3	849.4
Total Revenue - 2008				862.1	345.2	266.7	198.7	1,672.7
Intersegment revenue is not material and is thus not subject to separate disclosure in the above analysis.
Intersegment transfers are priced using an appropriate transfer pricing methodology.

Segment Result (profit before finance costs)
		Insulated	Insulation	Environmental	Access	TOTAL	TOTAL	Total
		Panels	Boards	& Renewables	Floors	30.06.09	30.06.08	31.12.08
		€mn	€mn	€mn	€mn	€mn	€mn	€mn
Trading profit pre non-trading items		12.1	9.1	2.8	12.7	36.7	92.2	161.7
Intangible Amortisation		(2.1)	(0.4)	(0.4)	-	(2.9)	(2.1)	(4.6)
Non Trading Items		(3.5)	-	-	-	(3.5)	-	(31.5)
Goodwill & Intangibles Impairment		-	-	-	-	-	-	(43.6)
Operating result - H1 2009		6.5	8.7	2.4	12.7	30.3
Operating result - H1 2008		55.4	12.9	7.7	14.1		90.1
Operating result - 2008		88.8	(31.0)	(3.6)	27.8			82.0
Finance costs (net)						(5.3)	(6.2)	(13.9)
Result for the period before tax						25.0	83.9	68.1
Tax expense, net						(4.4)	(13.8)	(24.2)
Minority interest						(0.2)	-	1.0
Net result for the period						20.4	70.1	45.0
Segment Assets and Liabilities
		Insulated	Insulation	Environmental	Access	TOTAL	TOTAL	Total
		Panels	Boards	& Renewables	Floors	30.06.09	30.06.08	31.12.08
		€mn	€mn	€mn	€mn	€mn	€mn	€mn
Assets - H1 2009		522.9	275.8	200.4	130.3	1,129.4
Assets - H1 2008		571.0	337.6	255.1	133.5		1,297.2
Assets - 2008		591.4	251.4	183.1	136.4			1,162.3
Liabilities - H1 2009		(125.2)	(61.7)	(58.7)	(30.0)	(275.6)
Liabilities - H1 2008		(193.1)	(89.4)	(70.3)	(33.7)		(386.5)
Liabilities - 2008		(156.8)	(73.3)	(40.0)	(26.0)			(296.1)
Total assets less total liabilities						853.8	910.7	866.2
Cash and cash equivalents						113.5	80.9	75.3
Deferred tax asset						2.1	2.4	1.2
Financial liabilities (current and non-current)						(338.9)	(266.6)	(362.1)
Deferred consideration (current and non-current)						(5.4)	(8.4)	(12.8)
Income tax liabilities (current and deferred)						(48.9)	(58.0)	(48.8)
Total Equity as reported in Group Balance Sheet						576.2	661.0	519.0

Other Segment Information
				Insulated	Insulation	Environmental	Access	TOTAL
				Panels	Boards	& Renewables	Floors
				€mn	€mn	€mn	€mn	€mn
Capital Investment - H1 2009				8.2	12.7	3.7	0.6	25.2
Capital Investment - H1 2008				36.4	18.6	4.1	2.3	61.4
Capital Investment - 2008				162.6	(38.0)	9.4	3.6	137.6
Depreciation included in segment result - H1 2009				(8.5)	(5.1)	(2.4)	(1.5)	(17.5)
Depreciation included in segment result - H1 2008				(9.8)	(5.3)	(3.3)	(1.5)	(19.9)
Depreciation included in segment result - 2008				(20.2)	(11.2)	(6.2)	(3.0)	(40.6)
Amortisation & intangibles impairment included in segment result -H1 2009				(2.1)	(0.4)	(0.4)	-	(2.9)
Amortisation & intangibles included in segment result - H1 2008				(1.0)	(0.4)	(0.7)	-	(2.1)
Amortisation & intangibles included in segment result - 2008				(6.7)	(40.8)	(0.6)	(0.1)	(48.2)
Non- Cash Items included in segment result - H1 2009				-	-	-	-	-
Non- Cash Items included in segment result - H1 2008				-	-	1.6	-	1.6
Non- Cash Items included in segment result -2008				(0.4)	-	0.6	-	0.2
Analysis of Segmental Data by Geography
			Republic of Ireland	United Kingdom	Rest of Europe	Americas	Others	TOTAL
			€mn	€mn	€mn	€mn	€mn	€mn
Income Statement Items
Revenue - H1 2009			39.8	253.5	144.3	100.2	14.7	552.5
Revenue -H1 2008			101.8	450.5	203.6	69.3	24.2	849.4
Revenue -2008			173.8	826.6	453.1	177.1	42.1	1,672.7
Balance Sheet Items
Assets - H1 2009			124.8	545.5	232.6	203.2	23.3	1,129.4
Assets - H1 2008			197.2	727.4	243.1	112.3	17.2	1,297.2
Assets -2008			128.1	549.8	246.6	218.4	19.5	1,162.3
Other segmental information
Capital Investment - H1 2009			2.9	6.8	12.1	3.1	0.3	25.2
Capital Investment - H1 2008			4.2	32.2	19.3	5.2	0.5	61.4
Capital Investment -2008			(22.2)	30.3	46.0	76.9	6.6	137.6
2008 Capital investment figures include goodwill impairment.
5 Dividends
There will be no interim dividend in respect of the half year ended 30 June 2009 (2008: 8.00c).
There was no Final Dividend on Ordinary Shares for the year ended 31 December 2008.

6 Earnings per share
						30.06.09	30.06.08
						€'000	€'000
The calculations of earnings per share are based on the following:
Profit attributable to ordinary shareholders						20,408	70,672
						Number of	Number of
						shares ('000)	shares ('000)
						30.06.09	30.06.08
Weighted average number of ordinary shares for the calculation of basic earnings per share						166,054	170,780
Dilutive effect of share options						2,281	1,625
Weighted average number of ordinary shares for the calculation of diluted earnings per share						168,335	172,405
						30.06.09	30.06.08
						€ cent	€ cent
Basic earnings per share						12.3	41.4
Diluted earnings per share						12.1	41.0
7 Cash flow statement
The following non-cash adjustments have been made to the pre-tax result for the period to arrive at operating cash flow:
						30.06.09	30.06.08
						€'000	€'000
Depreciation, amortisation and impairment charges of fixed and intangible assets						20,412	21,979
Employee equity-settled share options						1,100	3,559
Finance income						(1,598)	(772)
Finance cost						6,924	7,002
Non cash items						12,882	-
(Profit)/loss on sale of tangible assets						(47)	(1,594)
Total						39,673	30,174

8  Reconciliation of net cash flow to movement in net debt
						30.06.09	30.06.08
						€'000	€'000
(Decrease)/increase in cash and bank overdrafts						22,000	16,591
(Increase)/decrease in debt, lease finance and deferred consideration						45,336	17,154
Change in net debt resulting from cash flows						67,336	33,745
Loans and lease finance acquired with subsidiaries						-	(38)
Deferred consideration arising on acquisitions in the period						-	(1,138)
New finance leases						-	18
Translation movement						1,472	(1,840)
Net movement						68,808	30,747
Net debt at start of the period						(299,622)	(224,969)
Net debt at end of the period						(230,814)	(194,222)
9. Significant Events and Transactions
There were no significant individual events or transactions in the period which contributed to the material changes in the balance sheet.
The reductions in inventories, receivables and creditors reflect reductions in trade volumes and greater focus on working capital management.
10. Statutory Accounts
The financial information presented in the interim report does not represent full statutory accounts. Full statutory accounts for the year ended 31 December 2008 prepared in accordance with IFRS, upon which the Auditors have given an unqualified audit report, have been filed with the Registrar of Companies.
11. Board Approval
The Interim Report was approved by the Board of Directors of Kingspan Group plc on 21 August 2009.

 

END

 

 

IR BIGDIGUDGGCB