Half Year 2026 Kingspan Group PLC Earnings Call
Speaker #1: Good morning, and welcome to today's Kingspan half-year results 2026 conference call. My name is Seb, and I'll be the operator for your call today.
Operator: Good morning, and welcome to today's Kingspan H1 Results 2026 conference call. My name is Seb, and I will be the operator for your call today. If you would like to ask a question during the Q&A session, please press star one on your telephone keypad. If you would like to withdraw from the queue, please press star two. In the interest of time and fairness, we ask that you limit yourself to two questions each. I will now hand the floor over to Gene Murtagh, CEO, to begin the call. Please go ahead.
Speaker #1: If you would like to ask a question during the Q&A session, please press star 1 on your telephone keypad. If you would like to withdraw from the queue, please press star 2.
Speaker #1: In the interest of time and fairness, we ask that you limit yourself to two questions each. I will now hand the floor over to Gene Murtagh, CEO, to begin the call.
Speaker #1: Please go ahead.
Speaker #2: Thank you, and good morning, everybody. Welcome to the half-year results 2026 here at Kingspan. We'll get straight into it on slide number 3, which is titled "H1 in Summary." Really, quite a strong first half.
Gene Murtagh: Thank you. Good morning, everybody. Welcome to the H1 Results 2026 here at Kingspan. We will get straight into it on slide three, which is titled H1 Summary. Really quite a strong H1, bearing in mind that the Q1 was difficult worldwide and inter-sector naturally. But for the H1, I think a very pleasing outcome with revenue just under EUR 4.9 billion, which is 8% ahead of prior year. Our EBITDA was up 9% at EUR 626 million. And our pure trading profit number up 10% at EUR 487 million. All of which is, I think, reasonably positive in the environment that we are in. Importantly, by business segment, pre-currency, the envelope business was up 4% at a revenue level. And ADVNSYS, which is heavily focused on the data side, was up 36% pre-currency at a revenue level. So both extremely encouraging.
Speaker #2: Bearing in mind that the first quarter was difficult worldwide, and in our sector, naturally. But for the first half, I think a very pleasing outcome, with revenue just under €4.9 billion, which is 8% ahead of the prior year.
Speaker #2: Our EBITDA was up 9% at €626 million, and our trading profits—our pure trading profit number—were up 10% at €487 million. All of which is, I think, reasonably positive in the environment that we're in.
Speaker #2: Importantly, by business segment, pre-currency, the Envelope business was up 4% at a revenue level. And Advances, which is heavily focused on the data side, was up 36% pre-currency at a revenue level.
Speaker #2: So, both extremely encouraging, and we'll get into the order books in both businesses as we go through the presentation. We're holding back on our share buyback program just to preserve dry powder for some opportunities that are out there right now.
Gene Murtagh: We get into the order books in both businesses as we go through the presentation. We are holding back on our share buyback program, just to preserve dry powder for some opportunities that are out there right now. The outlook for the H2 of the year is even better again. We are upping our guidance to EUR 1.125 billion trading profit for the year as a whole, which would imply H2 trading profit growth of around 25%. So momentum is increasing, and we expect that to obviously continue into 2027 as well. So that is it in summary, and I will just hand you over to Geoff for some detail on this.
Speaker #2: And the outlook for the second half of the year is even better again. We're holding our guidance to €1.125 billion trading profit for the year as a whole, which would imply second half trading profit growth of around 25%.
Speaker #2: So momentum is increasing, and we expect that to obviously continue into 2027 as well. So that's it in summary, and I'll just hand you over to Geoff for some detail on this.
Speaker #3: Thanks, Gene. I’ll be speaking to the financial highlights on page 6. Starting from the top, group revenue is up 8% half-year on half-year, and I’ll come to the constituents of that in a second.
Geoff Doherty: Thanks, Gene. I am speaking to the financial highlights on page six. So going to the top, group revenue up 8%, H1 on H1. I will come to the constituents of that in a second. EBITDA up 9%. Trading profit up 10%. But I would highlight that this year's reported number of EUR 487.2 million is net of EUR 4.5 million of ADVNSYS IPO expiration costs. So actually stripping that out and adjusting for currency, the underlying trading profit was up 13%, H1 on H1. Earnings per share up 5%. As you recall, the interest number in the H1 of 2025 was flattered by a one-off credit. We would expect, based on the guidance that we have given for the full year on trading profit of EUR 1.125 billion, that our earnings per share growth on a full year basis will be closer to mid-teens for the full year.
Speaker #3: EBITDA is up 9%. Trading profit is up 10%. But I would highlight that this year's reported number of €487.2 million is net of €4.5 million of advanced IPO expiration costs.
Speaker #3: So actually, stripping that out and adjusting for currency, the underlying trading profit was up 13% half-year on half-year. Earnings per share up 5%. As you'll recall, the interest number in the first half of '25 was flattered by a one-off credit.
Speaker #3: We would expect, based on the guidance that we've given for the full year on trading profits of €1,125 million, that our earnings per share growth on a full-year basis will be closer to mid-teens for the full year.
Speaker #3: Our interim dividend at 27.1 cents, up 3%. A strong free cash flow performance in the first half, €144 million, and I'll come to the components of that shortly.
Geoff Doherty: Our interim dividend at EUR 0.271, up 3%. A strong free cash flow performance in H1, EUR 144 million. I'll come to the components of that shortly. A decent trading margin performance of 10%, up 20 basis points. The margin performance continues to evolve positively. We expect in H2 to be knocking on the door of 12% in H2. Our full year margin guidance for the year ought to be in the region of 11% on a full year basis. From a debt and leverage perspective, the balance sheet remains in good shape. Net debt to EBITDA standing us at a little over 1.5 times. Turning to page seven, just the bridges of revenue and profit. To deal with revenue. Currency clipped EUR 61 million, or about 1.5% of sales H1 and H1.
Speaker #3: A decent trading margin performance of 10%, up 20 basis points. The margin performance continues to evolve positively. We expect in the second half to be knocking on the door of 12% in the second half, so our full year margin guidance for the year ought to be in the region of 11% on a full year basis.
Speaker #3: From a debt and leverage perspective, the balance sheet remains in good shape, with net debt to EBITDA standing at a little over 1.5 times. Turning to page 7—just the bridges of revenue and profit.
Speaker #3: Firstly, to deal with revenue. Currency clipped €61 million, or about 1.5%, off sales, half-year on half-year. Acquisitions contributed €125 million, or about 3%.
Geoff Doherty: Acquisitions contributed EUR 125 million, or about 3%. Underlying sales grew by 6%, or EUR 278 million, all combining to give us the EUR 4.86 billion for H1. From a profit perspective, currency shaved a little under 2% off the H1 number, EUR 8.4 million. M&A contributed EUR 14 million, which is net of that 4.5 that I referred to earlier. Underlying profit grew by EUR 38.7 million in H1, all combining to give the EUR 487 million for H1. Turning to page eight, just on our sales by geography. I think a couple of particular highlights on this would be that our Americas business grew by a fifth in total, H1-over-H1, up 21% constant currency. Our rest of world business grew by over a quarter, H1 on H1.
Speaker #3: And underlying sales grew by 6%, or €278 million, all combining to give us the €4.86 billion for the first half. From a profit perspective, currency shaved a little under 2% off the half-year number, or €8.4 million.
Speaker #3: M&A contributed €14 million, which is net of that €4.5 million that I referred to earlier. And underlying profit grew by €38.7 million in the first half, all combining to give the €487 million for the first half.
Speaker #3: Turning to page 8, just on our sales biography, I think a couple of particular highlights on this would be that our Americas business grew by a fifth in total, half-year over half-year, up 21% constant currency.
Speaker #3: And our Rest of World business grew by over a quarter, half-year on half-year. The rest of the business grew nicely in the first half as well.
Geoff Doherty: The rest of the business grew nicely in H1 as well. You've got the components of the various territories there on the slide. Turning to free cash on page nine. Obviously, the strongest component of free cash flow performance is EBITDA, which was ahead in H1. On working capital, we typically build working capital in H1. Our trading balance sheet is larger in June than it is at year-end. Our working capital to sales ratio actually improved in H1 of 2026. The working capital to sales ratio was 12.3% in June 2026, compared to 13.1% in June 2025. A positive performance there. CapEx, a little under EUR 156 million. Our CapEx guidance for the full year is EUR 360 million, and a similar number going into 2027.
Speaker #3: And you've got the components of the various territories there on the slide. Turning to free cash on page 9: obviously, the strongest component of free cash flow performance is EBITDA, which was ahead in the half year.
Speaker #3: On working capital, we typically build working capital in the first half. Our trading balance sheet is larger in June than it is at year-end.
Speaker #3: Our working capital to sales ratio actually improved in the first half of 2026. The working capital to sales ratio was 12.3% in June 2026 compared to 13.1% in June 2025.
Speaker #3: So, a positive performance there. Capex was a little under €156 million. Our capex guidance for the full year is €360 million, and a similar number going into 2027.
Geoff Doherty: The only other number I'd highlight on the page is our tax outflow of EUR 47 million, slightly lower than the income statement charge. That'll normalize with the income statement charge as we move through the year. Reconciling that to the overall net debt position on page 10. The only other items of note on that, beyond free cash flow, are a modest acquisition spend in the period of a little under EUR 74 million, and our dividend payments of EUR 52.6 million. On page 11, some highlights on our balance sheet. Balance sheet remains in strong shape. Net debt to EBITDA 1.56 times. An undrawn component of EUR 700 million of our green revolving credit facility, which is committed to May 2028. We've total outstanding private placement notes of EUR 1.4 billion and public bonds of EUR 750 million. The weighted average maturity of all of our debt facilities is 3.7 years.
Speaker #3: And the only other number I'd highlight on the page is our tax outflow—€47 million—slightly lower than the income statement charge. That'll normalize with the income statement charge as we move through the year.
Speaker #3: Reconciling that to the overall net debt position on page 10, the only other items of note on that, beyond free cash flow, are a modest acquisition spend in the period of a little under €74 million, and our dividend payments of €52.6 million.
Speaker #3: On page 11, some highlights on our balance sheet. Balance sheet remains in strong shape. Net debt to EBITDA 1.56 times. And undrawn component of 700 million of our green revolving credit facility, which is committed to May 2028.
Speaker #3: We've totaled outstanding private placement notes of €1.4 billion and public bonds of €750 million. The weighted average maturity of all of our debt facilities is 3.7 years.
Speaker #3: And we have total available liquidity of €1.3 billion. What I would say is that the Group remains strongly committed to its investment-grade rating, which means maintaining leverage below 2 times.
Geoff Doherty: We have total available liquidity of EUR 1.3 billion. What I would say is that the group remains strongly committed to its investment-grade rating, which means maintaining leverage sub two times. With that, I will hand back to Gene.
Speaker #3: And with that, I will hand back to Gene.
Speaker #2: Great, Geoff. So we'll just take you to slide 25, which is Outlook, and then head on to the Q&A. So obviously, the general geopolitical environment remains, I guess, unpredictable.
Gene Murtagh: Great, Geoff. We will take you to slide 25, which is outlook. Then head on to the Q&A. Obviously, the general geopolitical environment remains, I guess, unpredictable. That is something we have got used to dealing with for some time now. Even considering that, we do expect the second half to deliver a strong performance, both on the building envelope business and on the ADVNSYS business, and pretty much across the world. Obviously, with some markets and some businesses doing better than others. In total, we expect the business to solidly break through EUR 10 billion in revenue for the year as a whole. As we said, to reach a trading profit of in and around EUR 1.125 billion, way up from prior year, 18%, if we achieve that number.
Speaker #2: But that's something we've got used to dealing with for some time now. Even considering that, we do expect the second half to deliver a strong performance, both in the Billing Envelope business and in the Advances business.
Speaker #2: And pretty much across the world, obviously, with some markets and some businesses doing better than others. But in total, we expect the business to solidly break through €10 billion in revenue for the year as a whole.
Speaker #2: And as we said, to reach a trading profit of in or around 1.125 billion. Way up from prior year. 18% if we achieve that number.
Speaker #2: And again, importantly, we expect that momentum to carry through into next year. And it kind of feels like about €1.3 billion as an organic rate of growth ought to be achievable at a trading profit level for 2027.
Gene Murtagh: Again, importantly, we expect that momentum to carry through into next year and kind of feels like about EUR 1.3 billion as an organic rate of growth ought to be achievable at a trading profit level for 2027. That is well backed by pipeline and customer engagement on projects. That is it really in a nutshell. We are happy now to take your questions.
Speaker #2: And that's well backed by pipeline and customer engagement on projects. And that's it, really, in a nutshell. So we're happy now to take your questions.
Speaker #1: Thank you. I want to remind everyone to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 2.
Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. Please limit yourself to two questions each in the interest of time. Our first question is from Shane Carberry with Goodbody. Please go ahead.
Speaker #1: And please limit yourself to two questions each in the interest of time. Our first question is from Shane Carberry with Goodbody. Please go ahead.
Speaker #4: Cheers, thank you, and well done, Gene, Geoff, on a stellar set of results. The first one from me is just in terms of the panel order intake growth.
Shane Carberry: Cheers. Thank you, and well done, Gene, Geoff, on a stellar set of results. First one for me is just in terms of the panel order intake growth, pretty exceptional stuff, that kind of 13%. Gene, you gave us that really helpful slide back at the full year talking about the consistent outperformance of about 3% versus the market.
Speaker #4: Pretty exceptional stuff at around 13%. And Gene, you gave us that really helpful slide back at the full year, talking about the consistent outperformance of about 3% versus the market.
Speaker #4: It probably feels like this is going to be an even bigger outperformance. So, could we dig a little bit deeper into exactly what you're seeing in terms of the kind of panel growth? That would be really helpful.
Gene Murtagh: Yeah.
Shane Carberry: It probably feels like this is going to be an even bigger outperformance. Could we dig a little bit deeper into exactly what you're seeing in terms of the kind of panel growth would be really helpful. Just on ADVNSYS, obviously we'd come into the year thinking about an outturn for 2026 at an EBITDA level of EUR 300 million, and you talked about doubling that. Obviously, it feels like you're running significantly ahead of that for 2026. How should we think about the medium-term target? Certainly feels like you're going to hit that EUR 600 million maybe sooner than we would have anticipated.
Speaker #4: And then just on advances, obviously, we'd kind of come into the year thinking about an outturn for '26 at an EBITDA level of €300 million.
Speaker #4: And you talked about doubling that. Obviously, it feels like you're running significantly ahead of that for 2026. So how should we think about, sort of, the medium-term targets?
Speaker #4: Certainly, it feels like you're going to hit that 600 million—maybe sooner than we would have anticipated.
Speaker #2: Okay, Shane, thank you. Yeah, the order intake was pretty pleasing for the first half, and insulated panels are 13% ahead by volume globally. You can take it that the order book is up at a similar level.
Gene Murtagh: Okay, Shane. Thank you. Yeah, the order intake was pretty pleasing for H1 on Insulated Panels, 13% ahead by volume globally. You can take it, the order book is kind of up at a similar level. That delivered a strong performance for H1, and we expect that to continue kind of with this sort of momentum into H2 as well, where actually we've seen quite an encouraging performance in some parts of Europe. Iberia, France, Germany, we would pull out as having been strong performers for us. They've been reasonably depressed for quite some time. Good momentum there, and particularly in penetration growth and some new product introduction. North America has continued to be strong for us. So has Latin America where the business has expanded way beyond Brazil into many surrounding countries, and even recently into Argentina.
Speaker #2: That delivered a strong performance for the first half, and we expect that to continue, with this sort of momentum, into the second half as well.
Speaker #2: We've actually seen quite encouraging performance in some parts of Europe. Iberia, France, and Germany we would pull out as having been strong performers first.
Speaker #2: They've been reasonably depressed for quite some time, so good momentum there, particularly in penetration growth and some new product introduction. North America has continued to be strong for us.
Speaker #2: And indeed, so has Latin America. The business has expanded way beyond Brazil into many surrounding countries, and even recently into Argentina. So that expansion is going very encouragingly.
Gene Murtagh: That expansion is going very encouragingly. We would see that whole market as really very early stage in terms of the adoption of this method of construction. We continue to focus on that. Yeah, I'd have to say that has been by and large a kind of a global trend that we've been driving and experiencing. From the ADVNSYS side, we had indicated an EBITDA in 2026 of around EUR 300 million. Yes, that's going to be significantly up on that. It could be EUR 400-ish. If you recall, at the time when we pulled back from the IPO, the very reason we gave, which some people didn't seem to catch at the time, was that momentum was just increasing way beyond our expectation, even in the near term. That's evidence and coming through now.
Speaker #2: And we would see that whole market as really very early stage in terms of the adoption of this method of construction. So we'll continue to focus on that.
Speaker #2: So yeah, I'd have to say that has been, by and large, a kind of global trend that we've been driving and experiencing. And then, from the Advances side, we had indicated an EBITDA in 2026 of around €300 million.
Speaker #2: Yes, that's going to be significantly up on that. It could be 400-ish. If you recall, at the time when we pulled back from the IPO, the very reason we gave (which some people didn't seem to catch at the time) was that momentum was just increasing way beyond our expectation, even in the near term.
Speaker #2: So that's evident and coming through now. And we'd be very confident that we'll break through that €600 million guide that we had given. I think it was for 2030.
Gene Murtagh: We'd be very confident that we break through that EUR 600 million guide that we had given, I think it was for 2030.
Shane Carberry: Yeah.
Gene Murtagh: Way in advance of that at an organic level. Clearly, that's not including any acquisitions, which of course we would expect to do. That's the general shape of those two questions.
Speaker #2: Way in advance of that, at an organic level. Clearly, that's not including any acquisitions, which, of course, we would expect to do. So that's the general shape of those two questions.
Speaker #4: Really helpful. Thanks, Gene.
Shane Carberry: Really helpful. Thanks, Gene.
Speaker #1: Thank you. Next question is from Flora O'Donoghue from Davy. Please go ahead.
Operator: Thank you. Next question is from Florence O'Donoghue from Davy. Please go ahead.
Speaker #3: Thank you. Good morning, everyone. I have two questions as well. First, I might ask, just on advances, just wondering about the order book in terms of how long that now stretches out.
Florence O'Donoghue: Thank you. Good morning, everyone. I have two questions as well. First I might ask is just on ADVNSYS. Just wondering about the order book in terms of how long that now stretches out, and just in terms of the kind of evolution of the business in terms of the nature of the orders, the type. Is there any kind of changes there, or what are you seeing? Then the second one, just on the reference to the dry powder. Just interested to hear your thoughts on that in terms of what it might actually mean in terms of the balance sheet capacity, et cetera, and what we might need to keep an eye out for in the coming while.
Speaker #3: And just in terms of the kind of evolution of the business, in terms of the nature of the orders, the type—is there any kind of change there?
Speaker #3: Or what are you seeing? And then the second one, just on the reference to the dry powder—just interested in your thoughts on that, in terms of what it might actually mean for the balance sheet capacity, etc.
Speaker #3: And what we might need to keep an eye out for in the coming while. So maybe those two, please.
Gene Murtagh: Yeah.
Florence O'Donoghue: If you could look at those two, please.
Gene Murtagh: Yeah. On the ADVNSYS side, really, Flora, it's around the environment we're operating is growing significantly. There's no need for us to focus on that. That's clear. Our market share growth is hurtling along at a product-by-product level. Then our share of wallet is expanding as we add different technologies to the offering, and that's something that we're going to continue to focus very heavily on. The shape of this business is entirely different than it was even three or four years ago, where we've gone from floors to ceilings, to modular racks into air management, and significantly now into liquid cooling in the data centers. That itself hasn't really kicked off yet, and we would expect in the H2, and particularly into 2027 and beyond, that that will really gain momentum.
Speaker #2: Yeah. So, on the advances side, really, Flora, this has been—it's around the environment we're operating in is growing significantly. There's no need for us to kind of focus on that.
Speaker #2: That's clear. Our market share growth is progressing rapidly at a product-by-product level. Additionally, our share of wallet is expanding as we add different technologies to the offering.
Speaker #2: And that's something that we're going to continue to focus very heavily on. So, the shape of this business is entirely different than it was even three or four years ago.
Speaker #2: We've gone from floors, to ceilings, to modular hacks into air management, and significantly now into liquid cooling in data centers. And that itself hasn't really kicked off yet.
Speaker #2: And we would expect in the second half, and particularly into 2027 and beyond, that that will really gain momentum. And this is all before we get into the next stage, which is more the electrical side, insofar as it's bolted onto the HAK itself, which is precisely what we're doing.
Gene Murtagh: This is all before we get into the next stage, which is more the electrical side insofar as it's bolted onto the rack itself, which is precisely what we're doing. That should pull the share of wallet up significantly again. We're really just evolving the whole product offering, gaining share, and gaining share of wallet. The dry powder comment is, you can take it as Geoff said, our focus is on ensuring that our investment-grade is maintained. We've heard speculation that we're going to be up to all sorts. You can take it, we're not going to be up to all sorts. We will look at chunky deals naturally, but nothing that kind of stretches us beyond 2x, and we want to be very clear about that.
Speaker #2: And that should pull the share of wallet up significantly again. So we're really just evolving the whole product offering, gaining share, and gaining share of wallet.
Speaker #2: The "dry powder" comment is, you can take it as Geoff said—our focus is on ensuring that our investment grade is maintained. So, we've heard speculation that we're going to be up to all sorts.
Speaker #2: You can take it. We're not going to be up to all sorts. We will look at chunky deals, naturally, but nothing that kind of stretches us beyond 2x.
Speaker #2: And we want to be very clear about that. But that still leaves us with encouraging opportunity that we'd hope to continue to move on, as you'd normally expect us to.
Gene Murtagh: That still leaves us with encouraging opportunity that we'd hope to continue to move on as you'd normally expect us to.
Speaker #3: Very good. Thank you, Gene. That was very clear.
Florence O'Donoghue: Very good. Thank you, Gene. That was very clear.
Speaker #1: Thank you. The next question is from Elodie Role with J.P. Morgan. Please go ahead.
Operator: Thank you. The next question is from Elodie Rall with JPMorgan. Please go ahead.
Speaker #5: Hi, thanks for taking my question. So, just following up on your M&A ambitions—could you maybe elaborate a little bit about, indeed, where you'd go?
Elodie Rall: Hi. Thanks for taking my question. Just following up on your M&A ambitions. Could you maybe elaborate a little bit about, indeed, where you'd go, what your financial firepower would be, that 2x leverage that you've mentioned, is that a hard cap, or would you be able to go a little bit above it? Would you use equity, eventually, for a deal? If you can give us a bit more color about how big, what we could expect there, that would be helpful. Second, on margins, I mean, 11% margins for 2026. That versus broadly 10% for the last few years and historically. Are we now in a different dynamic, and should we expect more margin progression from here? Thank you very much.
Speaker #5: What would your financial buying power be? That two times leverage that you've mentioned, is that a hard cap, or would you be able to go a little bit above it?
Speaker #5: Would you use equity eventually for a deal? So, if you can give us a bit more color about how big we could expect there, that would be helpful.
Speaker #5: And second, on margins: I mean, 11% margins for '26—that's versus, broadly, 10% for the last few years and historically. So, are we now in a different dynamic?
Speaker #5: And should we expect more margin progression from here? Thank you very much.
Speaker #2: Okay, Elodie. So, just on the first point, just to reiterate again, we have no intention of doing anything that involves equity anytime soon. We obviously would never dismiss that as a possibility long-term.
Gene Murtagh: Okay, Elodie. Just on the first point, just to reiterate again, we have no intention of doing anything that involves equity anytime soon. We obviously would never dismiss that as a possibility long term, but nothing remotely imminent on that front. If you think about us pushing it to 2x with an intention to rapidly de-lever, as we always have done, that implies we have headroom of approximately EUR 1 billion at the present time. That's about the height of it. We have lots of opportunities that would fill that scope.
Speaker #2: But nothing remotely imminent on that front. If you think about us pushing it to 2x, with an intention to rapidly deliver as we always have done, that implies we have headroom of approximately $1 billion at the present time.
Speaker #2: And that's about the height of it. We have lots of opportunities that would fill that scope.
Speaker #6: And just to pick up on your point around margin, Elodie, you'll have seen in the first half some progression on margin by 20 basis points at a group level.
Geoff Doherty: Just to pick up on your point around margin, Elodie. You'll have seen in H1 some progression on margin by 20 basis points at a group level. We expect the momentum and margin in H2 to pick up to, at a group level, close to 12% in H2. We ought to be at or around 11% for the full year. As we progress the business into next year and consistent with the EUR 1.3 billion of trading profit that Gene referenced earlier, we continue to see ongoing incremental improvement on that front as well as we move through the years.
Speaker #6: We expect the momentum and margin in the second half to pick up to, at a group level, close to 12% in the second half, so we ought to be at or around 11% for the full year.
Speaker #6: And as we progress the business into next year, and consistent with the €1.3 billion of trading profit that Gene referenced earlier, we'll continue to see ongoing incremental improvement on that front as well.
Speaker #6: As we move through the years.
Speaker #5: Okay. Thanks very much.
Elodie Rall: Okay, thanks very much.
Speaker #1: The next question is from Julian Radlinger at UBS. Please go ahead.
Operator: The next question is from Julian Radlinger from UBS. Please go ahead.
Speaker #3: Yeah, thanks very much, guys. So, two questions from me, please. First of all, can you give us a sense for the organic growth you're expecting in the second half for Envelope?
Julian Radlinger: Thanks very much, guys. Two questions from me, please. First of all, can you give us a sense for the organic growth you're expecting in H2 for envelope? Maybe how that splits between price and cost, roughly. I know you don't like to talk about that, but I think with the conflict going on and the input cost inflation currently, I think a lot of investors would be interested to understand that a bit better. Secondly, on commercial roofing, I didn't see too much in the release. Maybe I missed it. Can you remind us of the sales targets there, how the ramp there is going? I think that should be happening now, right? What are your expectations for sales and EBITDA contribution, either into 2027 or in 2027? Thank you very much.
Speaker #3: And maybe how that splits between price and cost, roughly. I know you don't like to talk about that, but I think with the conflict going on and the input cost inflation currently, I think a lot of investors would be interested to understand that a bit better.
Speaker #3: And then secondly, on
Speaker #1: On commercial roofing I didn't see too much in the release . Maybe I missed it . Can you remind us of your of the sales targets there ?
Speaker #1: How . That's how the ramp there is going . I think that should be happening now . Right ? What are your expectations for sales and EBITDA contribution either , you know , into 27 or or in 2027 ?
Speaker #1: Thank you very much .
Speaker #2: So I'll just deal with the first bit there . If I can , Julian . The the , the commercial roofing rollout in the US is going totally according to plan .
Gene Murtagh: I'll just deal with the first bit there, if I can, Julian. The commercial roofing rollout in the US is going totally according to plan. We would expect revenue next year to be hopefully pushing up around $200 million, with a +contribution as well. We're already manufacturing and delivering product from our facility in Oklahoma, which is a fairly stunning plant and will be the location where our CMD is later in the year. We're commissioning in Cumberland and Maryland at the present time. Hot on the heels of all that will be a facility for polyiso board in Utah that we're working on right now. That's kind of what's on our immediate horizon. As I say, developing while commercial engagement is very positive with the customer base.
Speaker #2: We would expect revenue next year to be , you know , hopefully pushing up around $200 million with a positive with a positive contribution as well .
Speaker #2: We're already manufacturing and delivering product from our facility in Oklahoma, which is a fairly stunning plant and will be the location where C and D is later in the year.
Speaker #2: And we're commissioning in Cumberland, in Maryland, at the present time. And hot on the heels of all that will be a facility for Poly in Utah that we're working on right now.
Speaker #2: So that's that's kind of what's on our immediate horizon . As I say , developing well , commercial engagement is very positive with the customer base .
Gene Murtagh: We'd be at least as confident as we ever were about how we will succeed in driving that business forward in the US. Of course, in Europe, the business is performing exceptionally well, too. We've a business, as you know right now, that's in excess of EUR 800 million in Europe, and we're satisfied with the performance of that as well.
Speaker #2: And we'd be at least as confident as we ever were about how we will succeed in driving that, driving that business forward in the US.
Speaker #2: And of course , in Europe , the business is performing exceptionally well to us . And , you know , with the business , as you know , right now , that's in excess of 800 million in Europe .
Speaker #2: And we're satisfied with the performance of that as well.
Speaker #3: Yeah . And just to deal with the with the sales performance and envelopes . I mean , firstly , and it's worth highlighting that both divisions have contributed to the earnings upgrade that we've .
Geoff Doherty: Just to deal with the sales performance in envelopes, I mean, firstly, it's worth highlighting that both divisions have contributed to the earnings upgrade that we've referenced this morning, both this year and our early guide on next year. If you look at the trajectory of sales, I'm just going to do a pre-currency to avoid that. In Q1, our building envelope sales were minus 2. For H1, they were up 4% pre-currency. That implies a pickup in momentum in Q2. We're not going to be drawn on the specifics of pricing and volumes. Given the category breadth that we have, the breadth of end markets that we're in, all of the factors around that.
Speaker #3: Referenced this morning , both this year and our and our early , early guide on next year . But if you look at the trajectory of sales , and I'm just going to do a pre easy .
Speaker #3: To avoid any . To avoid that in the in the first quarter , our building envelope sales were minus two . For the first half , they were up 4% pre currency that implies , you know , a pickup in momentum in the second quarter .
Speaker #3: We're not going to be drawn on the the specifics of pricing and volumes given the category breadth that we have , the the breadth of end markets that we're in , all of the , all of the factors around that .
Speaker #3: But suffice it to suffice to say , we would we would expect the , the top line growth in envelopes to be better than 4% in the , in the second half of the year .
Geoff Doherty: Suffice to say, we would expect the top line growth in envelopes to be better than 4% in H2. More importantly than that, the EUR 1,125 profit guidance is where we remain centrally focused. The margin recovery speaks for itself, in terms of the margin performance in envelopes in H1. Indeed, we expect the margin performance in envelopes to be north of 11% in H2. That will be borne out through a combination of volume and pricing in different markets and different products.
Speaker #3: But more importantly than that , the one one , two five profit guidance is where we remain centrally focused . The margin recovery speaks for itself in terms of the margin performance and envelopes in the first half .
Speaker #3: And indeed , we expect the margin performance in envelopes to be to be north of 11% in the second half . So you know that that that will be borne out through a combination of volume and pricing in different markets and different products
Speaker #1: Excellent. Thank you very much.
Julian Radlinger: Excellent. Thank you very much.
Speaker #2: Thanks .
Speaker #4: Julien
Gene Murtagh: Thanks, Julian.
Speaker #5: Thank you. The next question is from Alexander Kramer from Chevreau. Please go ahead.
Operator: Thank you. Next question is from Alexander Craeymeersch from Jefferies. Please go ahead.
Speaker #6: Hey . Good morning . Yes , two questions on my side . So first question would be on inflation . If you if you could say a word on what you expect for the second half in terms of chemical inflation and steel inflation , in terms of the cost .
Alexander Craeymeersch: Good morning. Yes, two questions on my side. First question would be on inflation, if you could say a word on what you expect for H2 in terms of chemical inflation and steel inflation in terms of the cost. If you also expect that some demand of your clients got put forward to Q2, considering they were anticipating some price increases in Q3. That would be one part. The other one is on ADVNSYS. Clearly it's gaining steam here. A couple of months ago, you mentioned that you would postpone the IPO. The market sort of read into that this is canceled.
Speaker #6: And if you also expect that some demand from your clients got put forward to Q2, considering they were anticipating some price increases in the third quarter.
Speaker #6: So that would be one part . And then , yeah , the one the other one is on advances . I , I , I mean , clearly it's gaining steam here .
Speaker #6: So a couple of months ago , you mentioned that you would postpone the IPO . I think it's I mean , the market sort of read into that that this is a canceled .
Speaker #6: But the question that I really have is whether we still need to take into account a potential IPO of this Advances, or whether this is completely behind us. But I would anticipate a positive read considering the strong momentum.
Alexander Craeymeersch: The question that I really have is now, whether we still need to take into account a potential IPO of this ADVNSYS or whether this is completely behind us, but I would anticipate a positive read, considering the strong momentum. Thanks.
Speaker #6: Thanks .
Speaker #2: Okay . So in terms of cost inflation , in the second half , that's obviously a a moving feast . You know , views on that kind of ebb and flow depending on the week and what's going on geopolitically .
Gene Murtagh: Okay. In terms of cost inflation in H2, that's obviously a moving feast. Views on that kind of ebb and flow depending on the week and what's going on geopolitically. Broadly speaking, I'd say we would feel that we have already taken on the cost inflation by and large that we would expect to, through particularly Q2. There may be some humps and bumps as we go through H2. Chemicals and steel may move in different directions and for entirely different reasons. I think if anything, steel could push on a little. I wouldn't expect it to be huge, but possibly a little. On our chemical input side, I think it's reasonable to expect it to remain broadly stable. Although that'll jump around depending on the obvious stuff.
Speaker #2: But broadly speaking , I'd say we would feel that , broadly speaking , we'd feel that we have already taken on the cost inflation by and large , that we would expect to through through , particularly the second quarter .
Speaker #2: There may be some humps and bumps as we go through H2. Chemicals and steel may move in different directions, and for entirely different reasons.
Speaker #2: I think, if anything, steel could push on a little. I wouldn't expect it to be huge, but possibly a little.
Speaker #2: And on our on our chemical input side , I think it's reasonable to expect it to remain broadly stable , although that'll that will jump around depending on the obvious stuff .
Speaker #2: So from a , from a selling price perspective , I'd also say that we've , you know , we've , we've , we've done a good job in terms of cost recovery .
Gene Murtagh: From a selling price perspective, I'd also say that we've done a good job in terms of cost recovery. That's evident in terms of the maintenance of margins in the businesses. Again, I would say that we'd expect that to be broadly stable in H2. In terms of what impact that's had in terms of H1 forward buying, honestly, that's very difficult for even us to assess. The majority of Kingspan's business, as you know, is made to order. The only bit that is not is around Insulated Panels, which can go into stock as standard items, and that's a relatively small part of the overall group. The bigger part by far in terms of Insulated Panels is all bespoke and it's impossible to actually buy forward.
Speaker #2: That's evident in terms of the maintenance of margins in the businesses . And again , I would say that we'd expect that to be broadly stable in the in the second half .
Speaker #2: And in terms of what impact that's had in terms of H1 forward buying , that's that's always honestly , that's very difficult for even us to assess the majority of Kingspan Group business , as you know , was made to order .
Speaker #2: The only bit that is not is around insulation board , which can go into stock as standard items . And that's a relatively small part of the overall of the overall group .
Speaker #2: The bigger part by far , in terms of insulated panels is , is all bespoke . And it's impossible to actually buy forward .
Speaker #2: So, we have an order bank, like we said, that's extremely healthy for the second half. And that's for delivery through to the second half.
Gene Murtagh: We have an order bank, like we said, that's extremely healthy for H2 and that's for delivery through to H2. I think it's not unreasonable to think that there's been some element of forward buying, but it's not something we think has been a very significant feature of the business. You can take it on the ADVNSYS side, the IPO discussion is over. It's very much a central part of Kingspan, as by the way, it would have been even in the event of IPO. If you recall, we were going to retain 75% of it in any event. There's one Kingspan. It's all together. It's all very tight, and we're blasting forward.
Speaker #2: And I think it's not it's not unreasonable to think that there's been some element of forward buying . But it's not something we think has been has been a very significant feature of the business .
Speaker #2: You can take the on the advanced side , the the IPO discussion is over . It's very much a central part of Kingspan as , by the way , it would have been even in the event of IPO , if you recall , we were going to retain 75% of it .
Speaker #2: In any event . So there's one Kingspan . It's all together . It's all very tight . And we're we're blasting forward
Speaker #6: Clear . Thank you .
Alexander Craeymeersch: Clear. Thank you.
Speaker #4: Thanks , Alex
Gene Murtagh: Thanks, Alex.
Speaker #5: The next question is from Ben Martin from Goldman Sachs. Please go ahead. Hi,
Operator: The next question is from Ben Rada Martin from Goldman Sachs. Please go ahead.
Speaker #7: Gene and Jeff , thanks for the questions this morning . I just had two . Please . My first was around some of the 2027 comments that you made .
Ben Rada Martin: Hi, Gene and Geoff. Thanks for the questions this morning. I just had two, please. My first was around some of the 2027 comments that you made, Gene. I think you spoke to EUR 1.3 billion in trading profit. I'd be interested, in terms of your optimism, which segments do you think you're mainly constructive on in terms of seeing greater visibility on 2027? Is it mainly the ADVNSYS piece, or I guess, are there parts of IPE outside of maybe US Roofing that you're also constructive on into 2027? Second would just be on the ADVNSYS performance in the H1. I'd be interested if you could kind of break down the contribution between new facilities that you've got coming online and also existing facilities as well. Thank you.
Speaker #7: Gene , I think you spoke to 1.3 billion in trading profit . I'd be interested in terms of your optimism . Which segments do you think you're mainly constructive on in terms of seeing greater visibility on 2027 ?
Speaker #7: Is it mainly the advances piece or I guess , are there parts of IB outside , outside of maybe US roofing that you're also constructive on into 2027 ?
Speaker #7: And then secondly, just on the advanced performance in the first half, I'd be interested if you could kind of break down the contribution between new facilities that you've got coming online and also existing facilities as well.
Speaker #7: Thank you .
Speaker #2: Okay. I think you got about 400 questions in there, but we'll try and break them down in terms of the 2027 confidence.
Gene Murtagh: Okay. I think you had about 400 questions in there. We'll try and break them down. In terms of the 2027 confidence, I think that it's very difficult for us to predict with total accuracy, like where we're going to go in terms of envelope insulation, et cetera. You can take it's not a particularly buoyant time. For our end markets right now worldwide, we're making progress. We're seeing recovery in the EU despite that, as we talked about a little earlier. Our forward project engagement in North America, where we've a significant longer-term pipeline visibility is actually still encouraging. Naturally, an awful lot of that is tech-oriented, but that's a positive thing. We've new product introductions, particularly around flat roofing and Insulated Panels.
Speaker #2: I think that's you know , it's very difficult for us to predict with total accuracy , like where we're going to go in terms of envelope , insulation , etc.
Speaker #2: , etc. . But , you know , you can take it . It's not a particularly buoyant time for our end markets right now worldwide , we're making progress .
Speaker #2: We're seeing recovery in the EU . Despite that , as we talked about a little earlier , our forward project engagement in North America , where we've a significant , you know , longer term pipeline visibility is , is actually still encouraging .
Speaker #2: Naturally , an awful lot of that is , is tech oriented , but that's a positive thing . We have new product introductions , particularly around flat roofing and insulated panels , a product called One Deck .
Gene Murtagh: A product called ONE DECK in one of our brands in the US that's getting significant traction, which means bodes well for the panels business. Also, it's a very interesting dynamic in our emerging flat roof presence. That's extremely encouraging. As I said, LatAm, at a volume level, is doing extremely well. Even having said that, penetration of our products in LatAm is still at a very low level by comparison to any other part of the world. All of that would give us confidence, if you like, heading into 2027. On the ADVNSYS side, there's naturally a very long lead time. I think it was asked earlier on, we would have an order bank of around one year. We would even have some order engagement beyond that.
Speaker #2: In one of our brands in the US that's getting significant traction, which means—well, which bodes well for the panels business.
Speaker #2: But also it's a very interesting dynamic in the in our emerging flat roof presence . That's extremely encouraging . As I said , Latam at a volume level is is doing extremely well .
Speaker #2: And even having said that, penetration of our products in Latin is still at a very low level by comparison to any other part of the world.
Speaker #2: So like all of that would give us confidence , if you like , heading into 2027 and on the advances side , there's naturally a very long lead time and I think it was asked earlier on , it's we would have an order bank of around one year .
Speaker #2: We would even have some order engagement beyond that. But, broadly speaking, you can take it that we have an order bank of around one year there, which gives us strong visibility.
Gene Murtagh: Broadly speaking, you can take it, we have an order bank of around one year there, which gives us strong visibility.
Speaker #5: Thank you. Next question is from Ephraim Rabie at Citi. Please go ahead.
Operator: Thank you. Next question is from Ephrem Ravi from Citigroup. Please go ahead.
Speaker #8: Thank you . So you mentioned the 600 million in advances could be achieved well before . Again . Could you from your perspective , give us a sense as to when that would be on your base case ?
Ephrem Ravi: Thank you. You mentioned the EUR 600 million in ADVNSYS could be achieved well before. Again, could you, from your perspective, give us a sense as to when that would be? On your base case, you give us very helpfully EUR 1.3 billion organic kind of expectation for operating profit next year. I guess ADVNSYS in terms of how quickly the target could be met could also be from that similar market assumptions as well. Secondly, in terms of the CapEx, obviously you are accelerating growth significantly. Should we see a significant step up in CapEx? Related to that, does the Utah plant also come under the EUR 1 billion investment that you have already done? Just clarifying that point.
Speaker #8: You gave us very helpfully , 1.3 billion organic kind of expectation for for operating profit next year . So I guess advances , you know , in terms of how quickly the target could be met , could also be from that similar market assumptions as well .
Speaker #8: And secondly , in terms of the CapEx , obviously you are accelerating growth significantly . Should we see , you know , a significant step up in CapEx and related to that , does a Utah plant also come under the 1 billion investment that you've already done ?
Speaker #8: Just clarifying that point ?
Speaker #2: Yeah . So the Utah facility absolutely comes as part of that . So that that 1 billion was organic and acquisition . It's it's well underway .
Gene Murtagh: The Utah facility absolutely comes as part of that. That EUR 1 billion was organic and acquisition. It is well underway. Yes, the Utah plant is included in that. From the EUR 600 million EBITDA target, if you like, we put out there for ADVNSYS. Look, it is difficult to be precise on that but that will happen long before 2030.
Speaker #2: And yes , the Utah plant is included in that . And from a from the 600 million EBITDA target , if you like , we put out there for advances .
Speaker #2: Look , it's it's it's difficult to be precise on that , but it'll be that'll happen long before 2030 .
Speaker #3: And Ravi, just in terms of CapEx, this year's full year CapEx guidance is approximately $360 million, and a similar CapEx investment is expected in 2027.
Geoff Doherty: Ravi, just in terms of CapEx, this year's full year CapEx guidance is approximately EUR 360 million and a similar CapEx investment in 2027.
Speaker #8: Thank you
Ephrem Ravi: Thank you.
Speaker #4: Ravi .
Speaker #5: Thank you. The next question is from Isaac Osio from Onfield Investment Research. Please go ahead.
Gene Murtagh: Thanks, Ravi.
Operator: Thank you. The next question is from Isaac Archer from Onfield Investment Research. Please go ahead.
Speaker #9: Hi . Thank you for taking my questions . So first , on M&A , so is it fair to assume a key interest of , you know , area of interest is residential roofing and your data center operations ?
Isaac Archer: Hi. Thank you for taking my questions. First on M&A. Is it fair to assume a key area of interest is residential roofing and your data center operations that would be adjacent to ADVNSYS? When you look at your M&A pipeline, could you maybe explain a bit more about your decision framework when you approve or pass on opportunities? Do you have key valuation limits? Is it in term of EV/EBITDA or other multiples, or do you have minimum thresholds in terms of returns? Finally, could you maybe accept a temporary dilution in returns on capital if the long-term strategic fit and EPS accretion were compelling?
Speaker #9: You know, that would be adjacent to advances. And then when you look at your M&A pipeline, could you maybe explain a bit more about your decision framework when you approve or pass on opportunities?
Speaker #9: And do you have clear valuation limits ? Is it in terms of , you know , EV to EBITDA or other multiples ? Or do you have minimum thresholds in terms of returns ?
Speaker #9: And finally, could you maybe, you know, accept a temporary dilution in returns on capital if the long-term strategic fit and EPS accretion were compelling?
Speaker #2: So in terms of M&A focus , it's right across the piece . Like we've got a large portfolio of product opportunity . We've got a very broad geography , residential roofing , wooden feature , very highly , certainly not in the near term .
Gene Murtagh: In terms of M&A focus, it's right across the piece. We've got a large portfolio of product opportunity. We've got a very broad geography. Residential roofing wouldn't feature very highly, certainly not in the near term. Yes, you'd be right in thinking that fleshing out our ADVNSYS portfolio and building what we keep saying is our share of wallet opportunity is really important to us. We've got an audience with some of the really critical decision makers and hyperscalers around the world, and the more we can include in that conversation, the better. That's a critical area of focus. Obviously right across the business, we see opportunity in panels and boards and insulations of all different types. Yeah, it's quite broad, but residential roofing would not feature highly at the present time.
Speaker #2: And yes, you'd be right in thinking that fleshing out our advances portfolio and building where we keep saying is our share of wallet opportunity is really important to us.
Speaker #2: Like we've got we've got , we've got an audience with some of the really critical decision makers and hyperscalers around the world . And the more we can include in that conversation , the better .
Speaker #2: And that's , that's a critical area of focus . And then obviously , right across the business , we see opportunity in , in panels and boards and installations of all different types .
Speaker #2: So yeah , it's , it's quite broad , but residential roofing would not feature highly at the present time .
Speaker #3: And just on returns on capital, as a management team, we are absolutely focused on returns and capital and rebuilding that over time.
Geoff Doherty: Just on returns on capital. As a management team, we are absolutely focused on returns on capital and rebuilding that over time. Naturally, the sharpest way to do that is through margin and performance, and you'll see in these numbers that actually we're on with that. As we think about allocating capital as we go forward, I mean, the proportionality of M&A capital relative to our existing capital base, is not going to materially alter the returns profile of the group. Anything we're contemplating, we would have an aspiration to incrementally add to return on capital over time.
Speaker #3: And naturally , the the sharpest way to do that is through is through margin and performance . And you'll see in these numbers that actually we're on with that as we think about allocating capital as we go forward .
Speaker #3: I mean , the type the proportionality of M&A capital relative to our existing capital base , you know , is not going to materially alter the returns profile of the group .
Speaker #3: Anything we're contemplating, you know, we would have an aspiration to incrementally add to return on capital over time.
Speaker #9: Okay . Thank you
Isaac Archer: Okay, thank you.
Speaker #5: Thank you. The next question is from Pooja Ghosh from Bernstein. Please go ahead.
Operator: Thank you. The next question is from Pujarini Ghosh from Bernstein. Please go ahead.
Speaker #10: Hi , and thanks for taking my questions . So if we talk about going back to the margin discussion , so we are expecting around 12% EBITDA margin in in H2 .
Pujarini Ghosh: Hi, thanks for taking my questions. If we talk about going back to the margin discussion. We are expecting around 12% EBITDA margin in H2. Could you maybe talk about the different levers which are driving this margin expansion? Is it coming from price cost or the product mix might be geared to higher margins now? Looking at the medium term, how sustainable do you think these margins would be? That's my question for today.
Speaker #10: Could you maybe , you know , talk about the different levers which are driving this margin expansion ? Is it coming from price cost or the product mix might be , you know , geared to higher margins now and , and looking at the medium term , how sustainable do you think these margins would be ?
Speaker #10: So that's my question for today.
Speaker #4: Okay . Well .
Speaker #3: Firstly , the 12% that I indicated earlier in the second half , that's the that's the trading margin . And typically our , our trading margin is higher in the second half than in the first half .
Geoff Doherty: Okay. Well, firstly, the 12% that I indicated earlier in H2, that's the trading margin. Typically, our trading margin is higher in H2 than in H1, bearing in mind the trading cycle in a typical year. That would leave us at 11%. As we indicated earlier, as we ramp up further through 2027 and beyond, we fully expect to be able to incrementally add to margin each year in a developmental way. Not a sea change in any one year, but to continually, incrementally to add to margin. Whether that's through our new products, whether it's through the growth that we have in various segments. There's a whole strand of levers that we deploy to develop margin over time. The market often gets fixated on price and price recovery.
Speaker #3: Bearing in mind that trading cycle in a typical year that that would leave us at 11% . And as we indicated earlier , as we as we ramp up further through 2027 and beyond , we fully expect to be able to incrementally add to margin each year in a in a developmental way , not a not a sea change in any one year , but to continually incrementally to add to margin , whether that's through our our new products , whether it's through the , the growth that we have in various segments .
Speaker #3: There's , there's a whole strand of , of , of , of levers that we deploy to , to develop margin over time .
Speaker #3: And the market often gets fixated on price and price recovery, but that rarely makes the difference between a good or a bad year in Kingspan.
Geoff Doherty: That rarely makes the difference between a good or a bad year in Kingspan. If we've got inflation, we've recovered, and we've got any amount of examples over our history that demonstrate that. The margin expansion over time will be grounded in innovation, new product, developing our business, developing our end markets, developing new territories, and all of that as a combination ought to be meaningful for margin over time.
Speaker #3: If we've got inflation, we've recovered it, and we've got any amount of examples over our history that demonstrate that the margin expansion over time will be grounded in innovation.
Speaker #3: New product , developing our business , developing our end markets , new territories and all of that as a combination , you know , ought to be , you know , meaningful for margin over time
Speaker #11: Okay .
Speaker #5: Thank you. Next question is from Chase Coughlin with Kempen. Please go ahead.
Pujarini Ghosh: Thank you.
Operator: Thank you. Next question is from Chase Coughlan with Kempen. Please go ahead.
Speaker #12: Hi . Good morning all , and thank you for taking my questions . I just have two . Perhaps I missed it , but starting with advances , could you provide the split between data and non data in the first half of 26 ?
Chase Coughlan: Hi, good morning, all, and thank you for taking my questions. I just have two. Perhaps I missed it, but starting with ADVNSYS, could you provide the split between data and non-data in H1 2026, just on a sales level? I think the initial sort of target for the medium term was to have that data portion grow to above 50%. Does that seem conservative now? Where do you think that'll sort of realistically end up in a few years? My second question, just a quick one on the board's strategy in Europe. I believe you are repurposing some capacity there to more attractive products and end markets. Could you provide just a brief update on that strategy? Thanks.
Speaker #12: And just on a sales level, I think the initial, sort of, target for the medium term was to have that data portion grow to above 50%.
Speaker #12: Is that does that seem conservative now where do you think that'll sort of realistically end up in a few years ? And my second question , just a quick one on the board's strategy in Europe , I believe you are repurposing some capacity there to more attractive products and end markets .
Speaker #12: Could you provide just a brief update on that strategy? Thanks.
Speaker #2: Yeah , the the exact advances split between data and non data . We haven't provided , but it's you can take it that the shift in that in that split towards data is , is increasing rapidly and , and in fact , we'd be very confident that that , that , that split will , will exceed 50% in the not too distant future .
Gene Murtagh: Yeah. The exact ADVNSYS split between data and non-data we haven't provided, but you can take it that the shift in that split towards data is increasing rapidly. In fact, we'd be very confident that that split will exceed 50% in the not-too-distant future. That'd be our strong sense. The second question.
Speaker #2: And that'll be , that'll be our strong , our strong sense . And then the second question .
Speaker #4: Board
Geoff Doherty: Board repurposing.
Speaker #3: Board .
Speaker #2: Oh , sorry , repurposing board capacity . Yes , indeed . So so we're doing we're obviously increasing our poly ISO opportunity around roofing in North America You know , one , one of one of the plans that has been taken down in Europe will be , will be will be put into the US .
Gene Murtagh: Board. Oh, sorry. Repurposing board capacity. Yes, indeed. We're obviously increasing our polyiso opportunity around roofing in North America. One of the plants that has been taken down in Europe will be put into the US. One of the facilities will also be put into Brazil as we start to just break into that opportunity in conversion from other traditional types of insulation in Brazil longer term. They're the two likely repurposing projects that are underway at the moment.
Speaker #2: And one of the one of the facilities will also be put into Brazil as we start to have . We start to just break into that conversion from other traditional types of insulation in Brazil .
Speaker #2: Longer term . So they're they're they're the two likely repurposing projects that that are underway at the moment .
Speaker #12: Okay. Jean, Jeff, thank you very much.
Chase Coughlan: Okay. Gene, Geoff, thank you very much.
Speaker #4: Thanks .
Gene Murtagh: Thanks.
Speaker #5: Thank you. The next question is from Allison Sun with Bank of America. Please go ahead.
Operator: Thank you. Our next question is from Allison Sun with Bank of America. Please go ahead.
Speaker #13: Morning . Congratulations on the very good result . I only have one question on the UK market . I think you mentioned that this market is more subdued in the revenue year over year , but the order intake was solid .
Allison Sun: Morning. Congratulations on the very good result. I only have one question on the UK market. I think you mentioned that this market is a lot more subdued in the revenue year-over-year, but the order intake was solid. Can you give us more color on which end market you see is a bit weaker, and what gives you confidence that you think the H2 will be stronger? Thank you.
Speaker #13: Can you give us a bit more color on which end market you see as a bit weaker? And what gives you confidence that you think the second half will be stronger?
Speaker #13: Thank you
Speaker #3: Yeah . I mean , I think it's always hard to , to , to call a particular trend in the in the UK .
Geoff Doherty: I think it's always hard to call a particular trend in the UK. It was encouraging to see a pickup in intake. I think we're gearing up for a solid H2 in the UK. I don't think we'd call out any one sector over the other. The residential sector, which is the smaller part of our business in the UK, remains pretty quiet, as it does in other markets as well. There's no standout, I think, categories in the UK that we would call out. We do expect it to be a little bit better in H2 than in H1 when it was particularly quiet in the early part of the year.
Speaker #3: It was encouraging to see a pickup in intake. I think we, you know, we're gearing up for a solid second half in the UK.
Speaker #3: I don't think we'd we'd , we'd call out any , any one sector over the other . The residential sector , which is the smaller part of our business in the U.K.
Speaker #3: it remains pretty quiet as it does in other markets as well . But there's no there's no standout . I think categories in the UK that we would that we would call out .
Speaker #3: So, but we do expect it to be a little bit better in the second half than in the first half, when it was particularly quiet in the early part of the year.
Speaker #13: Thank you very much
Allison Sun: Thank you very much.
Speaker #5: Thank you. We have no further questions on the line at this time, so I'll hand back to Jean for any closing remarks.
Operator: Thank you. We have no further questions on the line at this time, I'll hand back to Gene for any closing remarks.
Speaker #2: Thank you very much . We obviously look forward to engaging with most of you individually as we go through the next day . And , and next week .
Gene Murtagh: Thank you very much. We obviously look forward to engaging with most of you individually as we go through the next day and next week. You're also all very welcome to our CMD, which takes place.
Speaker #2: And you're also all very welcome to our CMD , which takes place in , in , in Oklahoma later in the year . We'd encourage you to get out there , but always makes a big difference to see stuff rather than just hear about it .
Geoff Doherty: Oklahoma
Gene Murtagh: Oklahoma later in the year. We'd encourage you to get out there. It always makes a big difference to see stuff rather than just hear about it, and we've lots to talk about there right across our business worldwide, but particularly in particular about our continued push into the Americas. Thank you all, and we'll be in touch.
Speaker #2: And we have lots to talk about. They're right across our business worldwide, but clearly in particular, virus and our continued push into the Americas.
Speaker #2: So, thank you all, and we'll be in touch.
Operator: This concludes today's call. Thanks everyone very much for joining, and have a wonderful rest of your day.
