Half Year 2026 Kingspan Group PLC Earnings Call

August 7, 2026

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. Welcome to today's Kingspan Half Year Results 2026 Conference Call. My name is Seb. I'll 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.

Operator: Good morning. Welcome to today's Kingspan Half-Year Results 2026 Conference Call. My name is Seb. I'll 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 yourselves to two questions each. I will now hand the floor over to Jean 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 and Summary." Really, quite a strong first half.

Gene Murtagh: Thank you. Good morning, everybody. Welcome to the Half Year Results 2026 here at Kingspan. We'll get straight into it on slide number three, which is titled H1 and Summary. Really quite a strong H1, bearing in mind that the Q1 was difficult worldwide and inter-sector, naturally. 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. Our pure trading profit number up 10% at EUR 487 million. All of which is, I think, reasonably positive in the environment that we're in. Importantly, by business segment pre-currency, the Envelope business was up 4% at a revenue level. Advnsys, which is heavily focused on the data side, was up 36% pre-currency at a revenue level.

Gene Murtagh: Thank you. Good morning, everybody. Welcome to the half-year results 2026 here at Kingspan. We'll get straight into it on slide number three, which is titled H1 and Summary. Really quite a strong H1, bearing in mind that Q1 was difficult worldwide and inter-sector, naturally. 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. Our pure trading profit number up 10% at EUR 487 million.

Speaker #2: Bearing in mind that the first quarter was difficult worldwide and in our sector, naturally. But for the first half, I think we have 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.

Gene Murtagh: All of which is, I think, reasonably positive in the environment that we're in. Importantly, by business segment pre-currency, the Envelope business was up 4% at a revenue level. ADVNSYS, which is heavily focused on the data side, was up 36% pre-currency at a revenue level. Both extremely encouraging. We 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. The outlook for the H2 of the year is even better again.

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: Both extremely encouraging. We 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. The outlook for the H2 of the year is even better again. We're 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%. Momentum is increasing. We expect that to obviously continue into 2027 as well. That's it in summary. I'll 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%.

Gene Murtagh: We're 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%. Momentum is increasing. We expect that to obviously continue into 2027 as well. That's it in summary. I'll just hand you over to Geoff for some detail on this.

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 Jeff for some detail on this.

Speaker #3: Thanks, Jean. I'm 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'm speaking to the financial highlights on page six. Going to the top, group revenue up 8% H1 on H1. I'll come to the constituents of that in a second. EBITDA up 9%. Trading profit up 10%. I would highlight that this year's reported number, EUR 487.2 million, is net of EUR 4.5 million of Advnsys IPO exploration costs. 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've 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.

Geoff Doherty: Thanks, Gene. I'm speaking to the financial highlights on page six. Going to the top, group revenue up 8% H1 on H1. I'll come to the constituents of that in a second. EBITDA up 9%. Trading profit up 10%. I would highlight that this year's reported number, EUR 487.2 million, is net of EUR 4.5 million of ADVNSYS IPO exploration costs. 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.

Speaker #3: EBITDA up 9%. Trading profit up 10%. But I would highlight that this year's reported number of €487.2 million is net of €4.5 million of advance 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 were 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.

Geoff Doherty: We would expect based on the guidance that we've 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. 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.

Speaker #3: Our interim dividend is at 27.1 cents, up 3%. We had a strong free cash flow performance in the first half of €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. Firstly, 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.

Geoff Doherty: 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. Firstly, to deal with revenue. Currency clipped EUR 61 million or about 1.5% of sales H1 and H1. 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.

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. Firstly, to deal with revenue.

Speaker #3: Currency clipped €61 million, or about 1.5%, off sales, half-year on half-year. Acquisitions contributed €125 million, or about 3%. And underlying sales grew by 6%, or €278 million, all combining to give us €4.86 billion for the first half.

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 four and a half 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: From a profit perspective, currency shaved a little under 2% off the half-year number, €8.4 million. M&A contributed €14 million, which is net of that €4.5 million that I referred to earlier.

Geoff Doherty: 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 four and a half 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 profit grew by €38.7 million in the first half, all combining to give the €487 million for the first half. Turning to page 8, just on our sales geography.

Speaker #3: 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% in constant currency.

Speaker #3: And our rest of world business grew by over a quarter, half-year on half-year. And 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 flow 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 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 '26. The working capital to sales ratio was 12.3% in June '26, compared to 13.1% in June '25.

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: Our CapEx guidance for the full year is EUR 360 million and a similar number going into 2027. The only other number I'd highlight on the page is our tax outflow, 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.

Geoff Doherty: The only other number I'd highlight on the page is our tax outflow, 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. With 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: The only other number I'd highlight on the page is our tax outflow—€47 million—which is slightly lower than the income statement charge. That will 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. The balance sheet remains in strong shape. Net debt to EBITDA is 1.56 times. We have an undrawn component of €700 million of our green revolving credit facility, which is committed to May 2028.

Geoff Doherty: 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. With 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: We've totaled outstanding private placement notes of €1.4 billion and public bonds of €750 million. The weighted average maturity of all our debt facilities is 3.7 years.

Speaker #3: And we've total available liquidity of €1.3 billion. And 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: With 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 2x. With that, I will hand back to Jean.

Speaker #3: And with that, I will hand back to Gene.

Speaker #2: Great, Jeff. 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'll take you to slide 25, which is outlook, and then head on to the Q&A. Obviously the general geopolitical environment remains, I guess, unpredictable. That's something we've got used to dealing with for some time now. Even considering that, we do expect the H2 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.

Gene Murtagh: Great, Geoff. We'll take you to slide 25, which is outlook, and then head on to the Q&A. Obviously the general geopolitical environment remains, I guess, unpredictable. That's something we've got used to dealing with for some time now. Even considering that, we do expect the H2 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.

Speaker #2: But that's something we've gotten 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 the prior year. That's an increase of 18% if we achieve that number.

Gene Murtagh: 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. 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's well backed by pipeline and customer engagement on projects. That's it really in a nutshell. We're happy now to take your questions.

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's well backed by pipeline and customer engagement on projects. That's it really in a nutshell. We're happy now to take your questions.

Speaker #2: And again, importantly, we expect that momentum to carry through into next year. 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.

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. And, to remind you, to ask a question, please press *1 on your telephone keypad. To withdraw your question, please press *2.

Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad, and 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 #3: Cheers. Thank you, and well done Gene, Jeff, on a stellar set of results. First one for 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 at 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 #3: Pretty exceptional stuff at around 13%. And, Gene, you gave us that really helpful slide back at the full year, showing the consistent outperformance of about 3% versus the market.

Speaker #3: 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. Then 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.

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. Then 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 #3: 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 #3: 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 #3: 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 in selected panels, 13% ahead by volume globally. And 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 the H1 on insulated panels, 13% ahead by volume globally, and you can take it the order book is kind of up at a similar level. That delivered a strong performance for the H1 and we expect that to continue with this sort of momentum into the 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. Indeed, 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 an 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.

Gene Murtagh: Good momentum there, and particularly in penetration growth and some new product introduction. North America has continued to be strong for us. Indeed, so has Latin America where the business has expanded way beyond Brazil into many surrounding countries, and even recently into Argentina. 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.

Speaker #2: And indeed, so has Latin America, with the business having expanded well 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. Then 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 evident and coming true 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 a 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.

Gene Murtagh: Then 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 evident and coming true now.

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.

Operator: Yeah.

Geoff Doherty: 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 #3: Really helpful. Thanks, Gene.

Shane Carberry: Really helpful. Thanks, Gene.

Speaker #1: Thank you. Next question is from Flora. Donna here from Davey. Please go ahead.

Operator: Thank you. Next question is from Flor O'Donoghue from Davy. Please go ahead.

Speaker #4: Thank you. Good morning, everyone. I have two questions as well. First, I might ask, just in advance, just wondering about the order book in terms of how long that now stretches out.

Flor 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? 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.

Flor 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? 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 #4: 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?

Speaker #4: And then the second one, just on the reference to the dry powder, I’m just interested in your thoughts on that in terms of what it might actually mean for the balance sheet capacity, et cetera, and what we might need to keep an eye out for in the coming while.

Speaker #4: So maybe those two, please.

Gene Murtagh: Yeah.

Flor O'Donoghue: If you could look at those two, please.

Speaker #2: Yeah, so on the advances side, really, Flora, it's been—it's around the environment we're operating in, which is growing significantly. There's no need for us to kind of focus on that.

Gene Murtagh: On the Advnsys side, really Flor, this has been, 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. 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. We would expect in the H2, and particularly into 2027 and beyond, that that will really gain momentum.

Gene Murtagh: On the ADVNSYS side, really Flor, this has been, 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. 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.

Speaker #2: That's clear. Our market share growth is hurtling along at a product-by-product level, and then 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 on very heavily. So the shape of this business is entirely different than it was even three or four years ago.

Gene Murtagh: 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. We would expect in the H2, and particularly into 2027 and beyond, that that will really gain momentum. 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.

Speaker #2: We've gone from floors to ceilings, to modular hacks into air management, and significantly now into liquid cooling in data centers. 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 this 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 pack 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. 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.

Gene Murtagh: 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. We want to be very clear about that.

Speaker #2: The dry powder comment is, you can take it as Jeff 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 would 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, which 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 hope to continue to move on as you'd normally expect us to.

Speaker #4: Very good. Thank you, Gene. That was very clear.

Flor O'Donoghue: Very good. Thank you, Gene. That was very clear.

Gene Murtagh: You're welcome.

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 JP Morgan. Please go ahead.

Speaker #5: Hi. Thanks for taking my question. Just following up on your M&A ambitions—could you maybe elaborate a little bit on 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.

Elodie Rall (JP Mo: 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.

Speaker #5: What would your financial firepower 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? If you can give us a bit more color about how big, what we could expect there, that would be helpful.

Speaker #5: And second, on margins—I mean, 11% margins for '26. That's versus roughly 10% for the last few years. And historically, so are we now in a different dynamic?

Elodie Rall (JP Mo: Are we now in a different dynamic and should we expect more margin progression from here? Thank you very much.

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. And 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 the H1 some progression on margin by 20 basis points at a group level. We expect the momentum and margin in the H2 to pick up to, at a group level, close to 12% in the 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 Jean 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.

Elodie Rall (JP Mo: Okay. Thanks very much.

Speaker #1: The next question is from Julian Radlinger from UBS. Please go ahead, Julian.

Operator: The next question is from Julian Radlinger from UBS. Please go ahead.

Speaker #4: Yeah. Thanks very much, guys. So, two questions from me, please. First of all, can you give us a sense of 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 #4: 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, a lot of investors would be interested to understand that a bit better.

Speaker #4: And then secondly, on commercial roofing, I didn't see too much in the release—maybe I missed it. Can you remind us of your sales targets there, and how the ramp is going?

Speaker #4: I think that should be happening now, right? What are your expectations for sales and EBITDA contribution either into '27 or in 2027? Thank you very much.

Julian Radlinger: What are your expectations for sales and EBITDA contribution, either into 2027 or in 2027? Thank you very much.

Speaker #2: So I'll just deal with the first bit there, if I can. And Julian, 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 positive 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, Maryland at the present time. The 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 well, commercial engagement is very positive with the customer base.

Speaker #2: We would expect revenue next year to be, hopefully, pushing up around $200 million. With a positive contribution as well. We're already manufacturing and delivering product from our facility in Oklahoma, which is a fairly stunning plant.

Speaker #2: And will be the location where CMD is later in the year. We're commissioning in Cumberland and Maryland at the present time, and hot on the heels of all that will be a facility for polyiso board in Utah.

Speaker #2: That we're working on right now. So that's kind of what's on our immediate horizon. As I say, development is going well, and commercial engagement is very positive with the customer base.

Gene Murtagh: That's kind of what's on our immediate horizon. As I say, developing well, commercial engagement is very positive with the customer base. 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. We're satisfied with the performance of that as well.

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. 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 business forward in the US. And, of course, in Europe, the business is performing exceptionally well too.

Speaker #2: And we have a business, as you know, right now that's in excess of €800 million in Europe, and we're satisfied with the performance of that as well.

Speaker #6: Yeah. And just to deal with the sales performance and Envelopes, I mean, firstly, it's worth highlighting that both divisions have contributed to the earnings upgrade that we've referenced this morning.

Geoff Doherty: Yeah, 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 it pre-currency, to avoid that. In Q1, our Insulated Building Envelopes sales were -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 #6: Both this year and our early guide on next year. But if you look at the trajectory of sales—and I'm just going to do a pre-currency, to avoid any of that.

Speaker #6: In the first quarter, our billing envelope sales were minus 2%. For the first half, they were up 4% pre-currency. That implies a pickup in momentum in the second quarter.

Geoff Doherty: 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. Suffice to say, we would expect the top line growth in envelopes to be better than 4% in H2. More importantly than that, the 11.25% 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.

Speaker #6: 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, and all of the factors around that.

Speaker #6: But suffice it to say, we would expect the top-line growth on envelopes to be better than 4% 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 11.25% 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 #6: But more importantly than that, the €1,125 million 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, and indeed, we expect the margin performance in envelopes to be north of 11% in the second half. That will be borne out through a combination of volume and pricing in different markets and different products.

Geoff Doherty: 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, Julian.

Julian Radlinger: Thanks, Eugene.

Gene Murtagh: Thanks, Eugene.

Speaker #1: Thank you. Next question is from Alexander Kramers from Chevron. Please go ahead.

Operator: Thank you. The next question is from Alexander Craeymeersch from Berenberg. Please go ahead.

Speaker #7: Hey, good morning. Yes, two questions on my side. So, first question would be on inflation. 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: Hey, 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. The question that I really have is now whether we still need to take into account the potential IPO of this Advnsys or whether this is completely behind us.

Alexander Craeymeersch: Hey, 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 #7: 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, so that would be one part.

Speaker #7: And then, yeah, the other one is on advances. I mean, clearly it's gaining steam here. So, a couple of months ago, you mentioned that you would postpone the IPO.

Speaker #7: I think it's—I mean, the market's sort of read into that, that this is canceled. But the question that I really have is now whether we still need to take into account a potential IPO of this Advances, or whether this is completely behind us.

Alexander Craeymeersch: The question that I really have is now whether we still need to take into account the potential IPO of this ADVNSYS or whether this is completely behind us. I would anticipate a positive read, considering the strong momentum. Thanks.

Speaker #7: But I would anticipate a positive read, considering the strong momentum. Thanks.

Alexander Craeymeersch: I would anticipate a positive read, considering the strong momentum. Thanks.

Speaker #2: Okay. So, in terms of cost inflation in the second half, that's obviously a moving feast. 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.

Speaker #2: True, particularly the second quarter. There may be some humps and bumps as we go through H2. Chemicals and steel may move in different directions.

Speaker #2: 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.

Speaker #2: And 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.

Gene Murtagh: 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. 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 the 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.

Speaker #2: So, 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 the maintenance of margins in the businesses.

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 the 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 insulation board, 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: And again, I would say that we'd expect that to be broadly stable in the second half. And in terms of what impact that's had in terms of H1 forward buying, that's always—honestly, that's very difficult for even us to assess.

Speaker #2: The majority of Kingspan's business, as you know, is made to order. The only part that is not is around insulation board, which can go into stock as standard items.

Gene Murtagh: 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 group. The bigger part by far in terms of insulated panels is all bespoke and it's impossible to actually buy forward. We have an order bank, like we said, that's extremely healthy for the H2 and that's for delivery through to the 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.

Speaker #2: And that's a relatively small part of the overall group. The bigger part by far, in terms of insulated panels, is already spoken.

Speaker #2: And it's impossible to actually buy forward. So we have an order bank, like we said, that's extremely healthy for the second half, and that's for delivery, true to the second half.

Gene Murtagh: We have an order bank, like we said, that's extremely healthy for the H2 and that's for delivery through to the 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: I think it's not unreasonable to think that there's been something we think has been a very significant feature of the business. You can take, on the advances side, the IPO discussion is over.

Speaker #2: It's very much a central part of Kingspan. By the way, it would have been the case even in the event of an IPO. If you recall, we were going to retain 75% of it in any event.

Gene Murtagh: 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: So there's one Kingspan. Altogether, it's all very tight, and we're blasting forward.

Speaker #1: Clear. Thank you.

Alexander Craeymeersch: Clear. Thank you.

Speaker #2: Thanks, Alex.

Gene Murtagh: Thanks, Alex.

Speaker #1: The next question is from Ben Radamartin from Goldman Sachs. Please go ahead.

Operator: The next question is from Ben Rada Martin from Goldman Sachs. Please go ahead.

Speaker #5: Hi Jane, and Jeff, thanks for the questions this morning. I have two, please. My first is around some of the 2027 comments that you made, Jane.

Ben Rada Martin: Hi, Jean 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, Jean. 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.

Ben Rada Martin: Hi, Jean 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, Jean. 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.

Speaker #5: 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 #5: Is it mainly the 'Advances' piece, or are there parts of IPE outside of maybe US roofing that you're also constructive on into 2027?

Speaker #5: And then second would just be 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. Thank you.

Ben Rada Martin: 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 #2: Okay, I think you've got about 400 questions in there. We'll try and break them down. In terms of the 2027 confidence, I think it's very difficult for us to predict total accuracy—like, where we're going to go in terms of envelope, insulation, etc., etc.

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 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.

Speaker #2: But you can take it. 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.

Speaker #2: Our forward project engagement in North America, where we have significant longer-term pipeline visibility, is actually still encouraging. Naturally, an awful lot of that is tech-oriented, but that's a positive thing.

Gene Murtagh: 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, a product called OneDek in one of our brands in the US that's getting significant traction, which means bodes well for the panels business, but 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.

Speaker #2: We have new product introductions, particularly around flat roofing and insulated panels. A product called One Deck, in one of our brands in the US, is getting significant traction, which bodes well for the panels business, but also creates a very interesting dynamic in our emerging flat roof presence.

Gene Murtagh: We've new product introductions, particularly around flat roofing and insulated panels, a product called OneDek in one of our brands in the US that's getting significant traction, which means bodes well for the panels business, but 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 1 year. We would even have some order engagement beyond that.

Speaker #2: That's extremely encouraging. As I said, LatAm at a volume level is doing extremely well. Even so, the penetration of our products in LatAm is still at a very low level compared to any other part of the world.

Speaker #2: So, 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.

Gene Murtagh: 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 1 year. We would even have some order engagement beyond that. Broadly speaking, you can take it, we have an order bank of around one year there, which gives us strong visibility.

Speaker #2: 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: But broadly speaking, you can take it. 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 #1: Thank you. Next question is from Ephraim Rabbi from Citi. Please go ahead.

Operator: Thank you. Next question is from Ephrem Ravi from Citi. Please go ahead.

Speaker #3: Thank you. So, you mentioned the €600 million in evidence 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've already done? Just clarifying that point.

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?

Speaker #3: You've given us a very helpful €1.3 billion organic expectation for operating profit next year. So, I guess advances in terms of how quickly the target could be met could also come from similar market assumptions as well.

Speaker #3: And secondly, in terms of the capex, obviously, you are accelerating growth significantly. Should we see a significant step-up in capex? And related to that, does the Utah plant also come under the $1 billion investment that you've already done? Just clarifying that point.

Ephrem Ravi: Related to that, does the Utah plant also come under the EUR 1 billion investment that you've already done? Just clarifying that point.

Speaker #2: Yeah, so the Utah facility absolutely comes as part of that. So that $1 billion was organic and acquisition—it's well underway. And yes, the Utah plant is included in that.

Gene Murtagh: Yeah. The Utah facility absolutely comes as part of that. That EUR 1 billion was organic and acquisition. It's well underway, and 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's difficult to be precise on that, but that'll happen long before 2030.

Gene Murtagh: Yeah. The Utah facility absolutely comes as part of that. That EUR 1 billion was organic and acquisition. It's well underway, and 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's difficult to be precise on that, but that'll happen long before 2030.

Speaker #2: And from this €600 million EBITDA target, if you like, we've put out there for advances, it's difficult to be precise on that. But it will happen long before 2030.

Speaker #3: And maybe 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: Rabby, just in terms of CapEx, this year's full year CapEx guidance, approximately EUR 360 million, and a similar CapEx investment in 2027.

Speaker #1: Thank you.

Ephrem Ravi: Thank you.

Speaker #2: Thanks, Robbie.

Gene Murtagh: Thanks, Rabby.

Speaker #1: Thank you. The next question is from Isaac Ossio from Omfield Investment Research. Please go ahead.

Operator: Thank you. The next question is from Isaac Osio from On Field Investment Research. Please go ahead.

Speaker #6: Hi, thank you for taking my questions. So first, on M&A: Is it fair to assume that a key area of interest is residential roofing, and your data center operations would be adjacent to that?

Isaac Osio: 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 clear valuation limits in terms of EV to 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?

Isaac Ocio: 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 clear valuation limits in terms of EV to 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 #6: 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 #6: And do you have clear valuation limits? Is it in terms of EV to EBITDA multiples, or do you have minimum thresholds in terms of returns?

Speaker #6: And finally, could you maybe 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. We've got a large portfolio of product opportunities. We've got a very broad geography.

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, 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: Residential roofing wouldn't feature very highly, certainly not in the near term. And yes, you'd be right in thinking that fleshing out our advances portfolio and building what we keep saying is our share of wallet opportunity is really important to us.

Speaker #2: 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 a critical area of focus. Then, obviously, right across the business, we see opportunity in panels and boards, and insulations of all different types.

Gene Murtagh: 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: So, yeah, 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 on capital and rebuilding that over time. Naturally, the sharpest way to do that is through margin and performance.

Geoff Doherty: Just on returns on capital, as a management team, we are absolutely focused on returns on capital and rebuilding that over time. 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, 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 the capital over time.

Speaker #3: 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.

Speaker #3: Anything we're contemplating, we would have an aspiration to incrementally add to return on capital over time.

Speaker #6: Okay. Thank you.

Gene Murtagh: Okay, thank you.

Speaker #1: Thank you. The next question is from Pujarini Ghosh from Ahead.

Operator: Thank you. The next question is from Pujarini Ghosh from Bernstein. Please go ahead.

Speaker #5: Hi, and thanks for taking my questions. So, if we talk about going back to the margin discussion, we are expecting around a 12% EBITDA margin 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 #5: Could you maybe talk about the different levers which are driving this margin expansion? Is it coming from price-cost, or is the product mix now geared towards higher margins?

Speaker #5: And looking at the medium term, how sustainable do you think these margins would be? So that's my question for today.

Speaker #2: Okay. Well, firstly,

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: And the 12% that I indicated earlier in the second half—that's the trading margin. Typically, our trading margin is higher in the second half than in the first half, bearing in mind the trading cycle in a typical year.

Speaker #3: That would leave us at 11%. And as we indicated earlier, as we ramp up further through 2027 and beyond, we fully expect to be able to add to margin each year in a developmental way—not a sea change in any one year—but to continually, incrementally add to margin.

Speaker #3: Whether that's through our new products or through the growth that we have in various segments, there is a whole strand of levers that we deploy to develop margin over time.

Geoff Doherty: 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. That rarely makes the difference between a good or a bad year in Kingspan. If we've got inflation, we've recovered, 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: The market often gets fixated on price and price recovery. 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 number of examples over our history that demonstrate that.

Geoff Doherty: That rarely makes the difference between a good or a bad year in Kingspan. If we've got inflation, we've recovered, 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: The margin expansion over time will be grounded in innovation, new product development, our business, developing our end markets, and developing new territories. All of that as a combination ought to be meaningful for margin over time.

Pujarini Ghosh: Okay.

Speaker #1: Thank you. Next question is from Chase Coughlan with Kempen. Please go ahead.

Operator: Thank you. The next question is from Chase Coughlan with Kempen. Please go ahead.

Speaker #6: 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 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 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.

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 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 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.

Speaker #6: And I'm just on a sales level, and I think the initial sort of target for the medium term was to have that data portion grow to above 50%.

Speaker #6: Does that seem conservative now? Where do you think that'll realistically end up in a few years? And my second question is just a quick one on the board's strategy in Europe.

Speaker #6: I believe you were repurposing some capacity there to more attractive products and end markets. Could you provide just a brief update on that strategy?

Chase Coughlan: Could you provide just a brief update on that strategy? Thanks.

Speaker #6: Thanks.

Speaker #2: Yeah. The exact advances 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.

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 split will exceed 50% in the not too distant future. That'd be our strong sense. The second question.

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 split will exceed 50% in the not too distant future. That'd be our strong sense. The second question.

Speaker #2: And in fact, we'd be very confident that that split will exceed 50% in the not too distant future. That would be our strong sense. And then the second question, board repurposing.

Geoff Doherty: Board repurposing.

Speaker #2: Oh, sorry. Repurposing board capacity, yes, indeed. So we're obviously increasing our polyisole opportunity around roofing in North America. One of the plants that has been taken down in Europe will be replaced, 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 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.

Speaker #2: So, they're the two likely repurposing projects that are underway at the moment.

Speaker #6: Okay. Jean, Jeff, thank you very much.

Chase Coughlan: Okay. Eugene and Jeff, thank you very much.

Speaker #2: Thanks.

Geoff Doherty: Thanks.

Speaker #1: Thank you. The next question is from Alison 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 #7: Good 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 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, 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 #7: Can you give us more color on which end market you see as a bit weaker, and what gives you confidence that the second half will be stronger?

Speaker #7: Thank you.

Speaker #3: Yeah. I mean, 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 second half in the UK.

Geoff Doherty: Yeah. 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 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: 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.

Speaker #3: But there's no standout, I think, categories in the UK that we would call out. 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 #7: Thank you very much.

Allison Sun: Thank you very much.

Speaker #1: 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 Jean for any closing remarks.

Speaker #2: Thank you very much. We obviously look forward to engaging with most of you individually as you go through the next day 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 in 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. 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 you're also all very welcome to our CMD, which takes place in 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.

Speaker #2: And we've lots to talk about there, right across our business worldwide, but clearly in particular about us—our continued push into the Americas. So thank you all.

Speaker #2: 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.

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Half Year 2026 Kingspan Group PLC Earnings Call

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