UNBOUNCE - EXAMPLE PAGE-REPORT-ENTERPRISE DOCUMENT-KINGSPAN - Flipbook - Page 48
Finance costs (net)
Finance costs for the year increased
by €11.3m to €36.3m (2020: €25.0m).
A net non-cash charge of €nil (2020:
charge of €2.0m) was recorded in
respect of swaps on USD private
placement notes which were fully repaid
during the year. The Group’s net interest
expense on borrowings (bank and loan
notes net of interest receivable) was
€32.2m (2020: €19.3m). This increase
reflects higher average gross debt
levels in 2021. In particular, this includes
a full year interest expense for the
Green Private Placement loan notes
issued in December 2020, as well as a
negative return on Euro denominated
cash balances. Lease interest of
€3.7m (2020: €3.6m) was recorded
for the year. €0.2m (2020: €0.1m)
was recorded in respect of a non-cash
finance charge on the Group’s defined
benefit pension schemes.
Taxation
The tax charge for the year was
€118.4m (2020: €74.9m) which
represents an effective tax rate of
17.2% (2020: 16.3%). The increase in
the effective rate reflects, primarily,
the change in the geographical mix
of earnings year on year.
Dividends and share buyback
The Board has proposed a final dividend
of 26.0 cent (2020: 20.6 cent) per
ordinary share payable on 6 May 2022
to shareholders registered on the record
date of 25 March 2022. An interim
dividend of 19.9 cent per ordinary share
was declared during the year (2020:
nil). In summary, therefore, the total
dividend for 2021 is 45.9 cent compared
to 20.6 cent for 2020. This is in line
with the previously announced revised
shareholder returns policy.
During the year, the Company issued
405,588 shares in satisfaction of
obligations falling under share schemes
which comprised newly issued shares
of 189,444 and the reissuance of
216,144 treasury shares.
Separately, the Company repurchased
600,000 shares at a weighted average
price of €78.16 during the year. This
is consistent with an objective of
maintaining a broadly constant issued
share capital over time.
44 - 45
Retirement benefits
The primary method of pension
provision for current employees
is by way of defined contribution
arrangements. The Group has three
legacy defined benefit schemes in the
UK which are closed to new members
and to future accrual. In addition,
the Group has a number of smaller
defined benefit pension liabilities in
Mainland Europe. The net pension
liability in respect of all defined
benefit schemes was €28.0m as
at 31 December 2021 (2020: €45.9m)
with the decrease reflecting,
primarily, the impact of actuarial
gains in the year.
Intangible assets and goodwill
Intangible assets and goodwill
increased during the year by
€440.3m to €2,001.8m (2020:
€1,561.5m). Intangible assets and
goodwill of €418.9m (2020: €57.3m)
were recorded in the year relating
to acquisitions completed by the
Group. An increase of €50.9m (2020:
decrease of €72.4m) arose due to year
end exchange rates used to translate
intangible assets and goodwill other
than those denominated in euro.
There was an annual amortisation
charge of €29.5m (2020: €23.5m).
Financial key performance
indicators
The Group has a set of financial key
performance indicators (KPIs) which
are presented in the table below.
These KPIs are used to measure the
financial and operational performance
of the Group and to track ongoing
progress and also in achieving
medium and long term targets to
maximise shareholder return.
Key Performance
Indicators
2021
2020
Basic EPS growth
48%
1%
Sales performance
+42%
-2%
Trading margin
11.6%
11.1%
Free cashflow
(€m)
127.1
479.7
Return on capital
employed
19.5% 18.4%
Net debt/EBITDA
0.88x
0.40x
(a) Basic EPS growth. The growth in
EPS is accounted for primarily by
a 49% increase in trading profit
partially offset by an increase in
the Group’s effective tax rate by
90 basis points to 17.2% and an
increase in minority interest. The
effective tax increased due to
the geographical mix of earnings
year on year. The minority interest
amount increased year on year
due to a strong performance at
the Group’s operations which have
minority stakeholders.
(b) Sales performance of +42%
(2020: -2%) was driven by a
30% increase in underlying
sales and a 12% contribution
from acquisitions. The increase
in underlying sales reflected a
combination of strong price growth
due to raw material inflation,
volume growth due to ongoing
structural adoption and buoyant
construction markets worldwide.
(c) Trading margin by division is set
out below:
2021
2020
Insulated
Panels
12.3%
11.0%
Insulation
12.4%
14.0%
Light & Air
6.5%
7.0%
Water &
Energy
7.6%
8.0%
Data &
Flooring
11.9%
13.1%
The Insulated Panels division
trading margin advanced year on
year reflecting the market mix of
sales as well as positive operating
leverage driven by 13% volume
growth in the year. The trading
margin decrease in the Insulation
division reflects, in the main, a
strong margin performance in 2020
reflecting a positive lag effect on
raw material prices in the early part
of 2020 and short term overhead
curtailment with both factors
not applying in 2021. The reduced
trading margin in Light & Air
reflects a lag in inflation recovery
and investment in specification