Kingspan : Annual Report 2019 (Interactive)

February 27, 2020 at 12:35 pm EST

Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Kingspan Group plc

Annual Report &

Financial Statements 2019

IKON

Global Innovation Centre Kingscourt, Ireland

We believe we have to challenge building industry traditions through innovating advanced materials and digital technologies to achieve a net zero emissions future.

IKON, our new Global Innovation Centre, empowers us to continue to thrive in a changing world, while asking the big questions that will lead us to a more sustainable, circular and healthy future.

Our Planet Passionate sustainability vision is driving everything that we do. IKON embodies this, being a high-performance,low-carbon building envelope.

at the core of our products, and how we run our business. Through Planet Passionate we will reduce carbon and energy in both our manufacturing processes and products, and continue our relentless pursuit of low-carbon buildings that deliver more performance and value, with clear targets to strive for by 2030.

Gene M. Murtagh

CEO, Kingspan

Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

The value we create	Product		18 Kingspan products and
Within our 2019 Annual Report			systems have been utilised on
	@	IKON, from across each of our
we highlight a number of case			five businesses.
studies which demonstrate
the many ways in which	Energy/		IKON's high-performance building
Kingspan creates superior
Carbon		envelope and optimised lighting
value for building owners and	Saving	@	contribute to an expected 50%
building occupants, utilising			outperformance versus the
innovative products that can			ASHRAE 90.1-2010 baseline.
meaningfully contribute to	Space/		QuadCore™ panels enabled us to
a more sustainable future.	Dimensions		reduce insulation thickness by
		@	over 50% versus mineral wool,
			increasing useable space and
			ultimately the value of the asset.

Reader note:	Health &		IKON uses sensors to measure light,
Please cross reference	Wellbeing		noise, temperature, air quality and
this information panel		@	air pressure to enhance indoor
with the case study pages			comfort for occupants and as
throughout the report.			research for future innovation.

	Speed/		Kingspan's unitised systems
	Ease of build		and coordinated supply chain
		@	delivered a significantly faster
CASE			build time when compared
		with a built-up system.
STUDY
	Aesthetics		IKON is a finalist for Project
			of the Year, Irish Construction
		@	Excellence (ICE) Awards 2020.
	Planet		The QuadCore™ panels used
	Passionate/		on IKON are made using
	Sustainability	@	renewable energy and contain
			over 15% recycled content.
	Awards/		IKON is targeting LEED
	Certifications	@	V.4 Gold Certification.

Sustainable Development
Goals (SDGs)		@
At Kingspan we recognise

that action, at scale,
is urgently needed to
avert a climate emergency.
As a business leader we are		@
committed to contributing
toward the UN's Sustainable
Development Goals through
our products, our processes,		@
our partnerships and

our people.
		@

Find out more in our	@
Sustainability Report

IKON is our new Global Innovation Centre, dedicated to advanced material science and the digitalisation of construction.

It has been built to the highest standards of sustainable design and is a showcase for high-performance building envelope design using 18 Kingspan products and systems. The building itself is a living research project, providing a foundation for future value creating innovation.

Our cover design is inspired by the facade design at our IKON Global Innovation Centre, Kingscourt, Ireland. The photos on this page are also from IKON.

Product: Dri-Design Perforated with QuadCore™ Karrier

Project Case Studies:

Madison Fire Station #14 USA 8-9

Haus Gables USA 40-41

Western Australia Museum Australia 56-57

Studley Castle Hotel UK 68-69

Aico UK 80-81

Holiday Inn USA 94-95

CONTENTS

Business & Strategic Report

Chairman's Statement 10

Business Model & Strategy 12

Chief Executive's Review 20

Financial Review 30

Risk & Risk Management 36

Sustainability Report 42

Directors' Report

The Board 58

Chairman's Introduction 60

Report of the Nomination &

Governance Committee 62

Report of the Remuneration Committee 70

Report of the Audit Committee 82

Report of the Directors 88

Financial Statements 96 Independent Auditor's Report 98 Financial Statements 102

Notes to the Financial Statements 109

Other Information

Alternative Performance Measures 148

Shareholder Information 151

Principal Subsidiary Undertakings 153

Group Five Year Summary 156

Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

OUR GLOBAL REACH

Kingspan Locations

Africa	Europe	Latvia	Middle East
Egypt	Austria	Lithuania	Qatar
Morocco	Azerbaijan	Netherlands	Turkey
Asia	Belgium	Northern Ireland	UAE
Bosnia	Norway	Americas
India	Croatia	Poland
Indonesia	Czech Republic	Portugal	Brazil
Singapore	Denmark	Romania	Canada
Thailand	Estonia	Russia	Chile
Vietnam	Finland	Serbia	Colombia
	France	Slovakia	Costa Rica
Australasia	Germany	Slovenia	Mexico
Australia	Hungary	Spain	Panama
New Zealand	Ireland	Sweden	Peru
	Kazakhstan	Switzerland	USA
		United Kingdom
Sales
Manufacturing

				4		2	2
	3			3		2
6
2	157	4 3			3 5
			11 3	9	5	2	3
		37
					2
		8				2
		9

2	2

1bn	35,000 400	2
2

CLYMB Abu Dhabi

Abu Dhabi, UAE

With its geometric exterior resembling a crystal-like structure, the venue has already become a Yas Island landmark, significantly adding to the integrated leisure, lifestyle and entertainment experiences available to visitors.

2019 Statementsplc Group FinancialKingspan& Report Annual -

We are committed to recycling 1 billion ocean recovered plastic bottles per annum from 2025.

Find out more in our

Sustainability Report

Our manufacturing facility at Castleblayney will use nearly 100% energy generated by solar panels. We will save over 35,000 tonnes of CO₂.

Our wind turbine at Holywell in Wales, will save over 800 tonnes of CO₂ emissions per year. This is roughly the equivalent to the combined annual emissions from 400 average petrol cars.

Insulated Panels:

KingZip® Linea Standing Seam Roof System Kingspan Karrier Panel

3 - 2

Business & Strategic Report

Sustainability Report

WE ARE

PLANET

PASSIONATE

OUR IMPACT

The total projected energy savings* over the lifetime of the Kingspan insulation systems, sold worldwide in 2019, is equivalent to:

441m	259
Over four hundred	The annual output
and forty-one million	of 259 gas-fired
barrels of oil	power stations

18.1	79m
Up to 18.1 times the	Taking seventy-
the annual electricity	nine million cars
consumption of	off the road
Greater London	annually

*figures are based on savings of insulation systems in use for 60 years.

Directors' Report

Financial Statements

Other Information

Lower Mill Estate
Cotswolds, UK
The Lower Mill Estate, a development of
sustainable holiday homes in the Cotswolds,
is offering holiday homemakers the best in
bespoke, energy efficient properties. The
Kingspan TEK System has enabled a high
level of design flexibility and exceptional
out-of-the-box building fabric performance,	-
as well as maximising construction
efficiency and minimising site waste.	FinancialKingspan& Report Annual

	Statementsplc Group
Insulation:	2019
Kingspan TEK Building System

OUR COMMITMENTS

			2020	2025	2030

	ENERGY	- Maintain our Net Zero Energy status	•	•	•
		- Increase our direct use of renewable energy to 60% by 2030	-	-	•
		- Increase our on-site generation of renewable energy to 20% by 2030	-	-	•
		- Install solar PV systems on all wholly owned facilities by 2030	-	-	•

	CARBON	- Net zero carbon manufacturing by 2030	-	-	•
		- 50% reduction in product CO₂ intensity from our primary	-	-	•
		supply partners by 2030	-
		- 100% zero emission company funded cars by 2025	•	•

	CIRCULARITY	- 1 billion PET bottles upcycled into our manufacturing processes by 2025	-	•	•
		- All QuadCore™ insulation to utilise upcycled PET by 2025	-	•	•
		- Zero company waste to landfill by 2030	-	-	•

	WATER	- 5 active ocean clean-up projects by 2025	-	•	•	4
		- 100 million litres of rainwater harvested by 2030	-	-	•
						-

Credit: Habitat First Group

Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

SUMMARY FINANCIALS

2	2	2	2	2	2
Revenue	EBITDA1	Trading Profit2	Trading Margin	Profit After Tax	EPS
€4.7bn	€579.8m	€497.1m	10.7%	€377.8m	204.6c
+7%	+11%	+12%	+50bps	+13%	+11%
2018: €4.4bn	2018: €521.2m	2018: €445.2m	2018: 10.2%	2018: €335.8m	2018: 184.0c

		Germany
1	Earnings before finance costs, income taxes, depreciation,	Zon Eichen

	amortisation and the impact of IFRS 16	Kingspan Insulated Panels:
2	Operating profit before amortisation of intangibles	Kingspan1000 AWP Micro

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Business & Strategic Report	Sustainability Report	Directors' Report	Financial Statements	Other Information
Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

Product		UniQuad® Translucent Walls
	@

Energy/		The UniQuad® translucent daylighting
Carbon		system contributed to the station's LEED
Saving	@	Platinum rating and its 70% energy
		saving versus comparable facilities.

Space/	2,630 square feet of natural
Dimensions	daylighting and its associated
@	health benefits.

Health &	Optimal light levels help to reduce
Wellbeing	stress, improve concentration and

promote positive emotional functioning to the fire fighters on duty.

Speed/		Unitised design enabled fast, efficient
Ease of build	@	installation and superior quality control.

Aesthetics		Soft, ambient light illuminates the
		station at night, giving it a strong,
	@	visible presence in the community.
Planet		UniQuad® aluminium contains up
Passionate/		to 40% recycled content, with
Sustainability	@	polycarbonate containing up to
		10% recycled content and the product
		itself is continuously recyclable.
Awards/		LEED Platinum
Certifications	@

@	-
@
@
@
@

Madison Fire Station #14

Wisconsin, USA

We wanted daylighting, but with a west orientation for the main facade of the building, we knew we'd have to work hard to control solar gain and glare. Instead of all glass, we looked for another material. How could we minimise solar gain and glare? The product really stood out for its qualities of daylighting and energy efficiency. The patterning, and the modularity of the system all worked out with our design.

Mark Kruser, AIA, Project Manager, OPN Architects

Click here to see more

BUSINESS & STRATEGIC REPORT

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

CHAIRMAN'S STATEMENT

In 2019 Kingspan continued its evolution as the global leader in high- performance insulation and building envelope solutions. It marked another year of record financial performance with total sales of €4.7bn and a trading profit of over €497m.

Hungary

APZ Test Track, Zalaegerszeg

Insulated Panels:

Dri-Design Rainscreen Facade

IPN Karrier Panel

By focusing on our four key strategic pillars: increased penetration of our existing product suite; the continued evolution of Kingspan's geographic footprint; differentiation from our competitors driven by innovation; and our new Planet Passionate goals; Kingspan has delivered a ninth straight year of trading profit growth.

Deeper penetration into our existing markets remains a core focus, and the successful integration of our Synthesia and Balex acquisitions throughout 2019 bolstered our position in Europe, whilst the acquisition of Bacacier during the year also gives us a market leading position in France.

At the same time we built on our entry into new geographies, such as Latin America and Southeast Asia, which are converting from traditional building methods to more advanced building solutions. We continued our organic expansion with the successful commissioning of a new insulated panel facility in the south of Brazil. The first full year of our partnership with Jindal Mectec has performed well, whilst our office in Singapore continues to grow and provides

a bridgehead to explore further opportunities in Southeast Asia.

2019 was also a landmark year for Kingspan's commitment to innovation, with the completion of IKON, our new Global Innovation Centre in Kingscourt. IKON has been built to the highest standards of sustainable design and is a showcase for Kingspan products and systems. Significant research activities going on in this state- of-the-art facility include the development of a new fibre-free

A1 AlphaCore® insulation board, the next generation of our market- leading QuadCore™ insulated panels and Kooltherm® insulation boards, and a revolutionary new integrated

solar PV panel, all designed to help our customers efficiently reduce energy costs and the environmental footprint of their businesses.

This year Kingspan also unveiled the next phase in its programme to be a leader in tackling climate change. As part of our 10-year Planet Passionate strategy, Kingspan has committed to hitting 12 ambitious targets by 2030, including increasing on-site generation of renewable energy to 20%, achieving a net zero carbon impact from our manufacturing processes, and committing to a target of upcycling one billion PET plastic bottles per annum from 2025.

Management and employees During the year the Board visited our Joris Ide site in Germany, and the recently acquired Balex facility in Poland. We were pleased to have the opportunity to meet with local staff and management, to see the great work they are doing and to hear, from them, their plans for the future.

On behalf of the Board, I want to thank all Kingspan's management and employees across the globe for their hard work and contribution to Kingspan's success in 2019, and we look forward to visiting and meeting with more of the local teams in 2020.

Dividend

The Board is recommending a final dividend of 33.5 cent per share, which if approved at the Annual General Meeting, will give a total dividend for the year of 46.5 cent, an increase

of 11% on prior year. This continues the Board's policy of growing the shareholder dividend in line with the Company's continued progression.

If approved, the final dividend will be paid (subject to Irish withholding tax rules) on 7 May 2020 to shareholders on the register at close of business on 27 March 2020.

Board governance and composition

The Board is committed to high standards of corporate governance and has refined its approach to align with the principles of the new UK Corporate Governance Code (2018). Further details of the best practice governance policies and procedures we have adopted are set out in the Directors' Report of this annual report. The Board, through the Audit Committee, carefully monitors and manages risk across the business, and throughout the year the Board engaged in dialogue with our major shareholders on the Company's strategic and financial performance as detailed in the Financial Review in this Annual Report, as well as on our remuneration policy as set out in the Remuneration Report. We look forward to continuing this open dialogue with our stakeholders in the years ahead.

As part of the process of continually refreshing the Board, we were pleased to announce the appointment of Anne Heraty as a non-executive director to the Board last August. Anne has more than two decades of experience as an entrepreneur and CEO of an international plc, and we are delighted to welcome her to our Board.

Earlier during 2019, Helen Kirkpatrick retired as a non-executive director having served for almost 12 years on the Board and various committees. On behalf of the Board, I would like to thank Helen for her wise counsel and contribution to Kingspan during those years.

Looking ahead

Whilst 2019 presented challenges which the business has successfully navigated, I am confident that the diverse and globalised business we have built is well placed to address whatever new challenges and opportunities 2020 may present. Our focus remains on continued growth both organically and through a disciplined acquisition strategy. This is supported by investment in research and development to ensure we have a product suite that outperforms the competition, and a sustainable business model through our Planet Passionate goals, which leads our customers to choose Kingspan.

Eugene Murtagh

Chairman

21 February 2020

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

BUSINESS MODEL & STRATEGY

THE VALUE WE CREATE

Report Strategic & Business

Kingspan is the global leader in high-performance insulation and building envelopes. Our mission is to accelerate a net zero emissions future with the wellbeing of people and planet at its heart. We do this through enabling high-performance buildings that can save more energy, carbon and water.

Through our relentless development of innovative and proprietary technology we have created a portfolio of products which create value across a number of key metrics. Critically, through the differentiated thermal performance of our innovative solutions, we help design teams, architects and ultimately our customers to play their part in tackling climate change. Today, the construction and operation of buildings together account

for 36% of global energy use and 39% of energy-related CO₂ emissions when upstream power generation is included.

Action, at scale, is urgently needed.

Founded in Kingscourt, Co Cavan, Kingspan has expanded into a truly global business operating in over

70 countries and employing more than 15,000 people. We execute our strategy across four strategic pillars and five businesses.

Our businesses:

1.Insulated Panels Kingspan Insulated Panels is the world's largest and leading manufacturer of high-performance insulated panel building envelopes. Powered by Kingspan's proprietary and differentiated insulation core technologies, a Kingspan panelised envelope provides building owners with consistently superior build quality and lifetime thermal performance compared with built-up constructions using traditional insulation.

Insulation Boards
Kingspan is a world leader in Insulation Boards, pipework and ducting. Our advanced insulation technologies deliver superior thermal performance and air-tightness when compared with traditional insulation, resulting in thinner solutions that offer multiple advantages including more internal floorspace and daylighting.
Light & Air

Kingspan Light & Air is established as a global leader providing a full suite of daylighting solutions, as well as natural ventilation and smoke management solutions, which complement our existing building envelope technologies.

Thermal comfort, indoor air quality and natural daylighting are widely recognised as the most important factors affecting occupant wellbeing in buildings.

Data & Flooring
Kingspan is the world's largest supplier of raised access flooring. Raised access flooring is the most cost effective way of creating a flexible working environment by utilising the floor void to manage the distribution of M&E services and HVAC systems. Our systems have many benefits including optimising overall building height, achieving faster construction with greater design flexibility, enabling easier reconfiguration of a workspace, and improving indoor air quality.
Water & Energy

Sustainable water management is rapidly becoming one of the greatest challenges of our time. We manufacture and support pioneering new technologies to preserve and protect water. Kingspan is also a market leading manufacturer of innovative energy management solutions.

Product

Product is at the core of Kingspan's mission to deliver better buildings for all. We are the market leader in innovating high-performance building envelopes and continue to push the boundaries of what is possible for efficiency in buildings. We extended our commitment to innovation in 2019 with the opening of our state-of-the-art innovation centre, IKON, at our home base in Ireland.

Energy/Carbon Saving

Kingspan's innovative insulation technologies significantly improve the energy performance of building envelopes. Our QuadCore™ and Kooltherm® solutions are up to twice as thermally efficient as traditional fibre based materials and unlike legacy insulation, our advanced insulation doesn't slump or sag and so retains its performance for its lifetime.

Space/Dimensions

High-performance insulation enables a thinner application of insulation for the same energy performance, thereby adding valuable internal space in construction or renovation. In an environment where space is becoming an increasingly scarce commodity, this drives real value for a building owner or occupier.

Health & Wellbeing

Our range of insulation systems enable optimised air tightness, improving thermal comfort within a building, while thinner dimensions of insulation and our daylighting solutions bring more natural light into a building. Access floors help to circulate air for heating or cooling and can enable personal comfort controls to individual occupants. Our water harvesting solutions can help to prevent flooding and polluted run-off to local waterways.

Speed/Ease of build

Kingspan's insulated panel is a single component system. The system can be quickly and easily installed through a single-fix installation process. As well as reducing days of labour on-site, the rapid speed of installation reduces the risk of accidents, as less time is spent working at height. It also means that the building is weathertight sooner, allowing internal fit-out and external finishing to commence earlier, minimising delays and the need for multiple trades.

Aesthetics

The outer envelope forms your first impression of a building. The case studies we present throughout this report and online are testament to the impact of a high-end architectural facade finish. Kingspan's facade and daylighting solutions integrate with our high-performance insulation systems to deliver a truly exceptional building envelope.

Planet Passionate/Sustainability

At Kingspan we understand the importance of the resources that we rely on to deliver our best-in-class products - the people that drive a culture of innovation and entrepreneurship, the communities that we embrace, and the natural resources that we employ. We have committed to Net Zero Energy operations from 2020, Net Zero Carbon operations from

2030 and a 50% reduction in product CO₂ intensity from our primary suppliers by 2030. Read more about our Planet Passionate commitments in the Sustainability Report.

Awards/Certification

Environmental certification can help to attract tenants and purchasers and to protect and enhance future asset value. Kingspan's products contribute to the achievement of credits in green building rating systems such as BREEAM, LEED and WELL across multiple categories including energy, materials, indoor air quality and innovation.

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

BUSINESS MODEL & STRATEGY STRATEGIC GOALS & PILLARS

Goals	→ To be the leader in high-performance
insulation globally with proprietary and
differentiating technologies.

→ To be the world's leading provider of low
energy building envelopes - Insulate and
Generate.

→ To expand globally, bringing high-
performance building envelope solutions
to markets which are at an earlier stage in
the evolution of sustainable and efficient
building methods.

→ To deliver 20% Return on Investment.

→ To progress our Net Zero Energy goal

	by delivering on our ambitious 10-year

Strategic Pillars

INNOVATION

Differentiation from competitors driven by superior innovation:

Kingspan's IKON, our new Global Innovation Centre, opened its doors in 2019. Built to the highest standards of sustainable design, IKON is a showcase for high-performance building materials, incorporating 18 Kingspan products and systems. Containing state-of-the-art research equipment and prototyping capabilities, IKON is home to a team of people dedicated to research and development in advanced material science and will further our commitment to a more sustainable, circular and healthy future.
Development of a pioneering integrated insulated panel with solar technology,
and the fibre-free,A-Class insulation material.
The digitalisation of Kingspan, transforming how we do business and how our specifiers and customers interact with us now and in the future.
Co-innovatingwith the industry. Kingspan sponsored the 2019 Rotman Design Challenge, tasking students with the topic of disruption in the construction industry and sought innovative solutions to the question of where disruption will come from in the industry and in what form.

GLOBAL

The continued evolution of Kingspan's geographic footprint as we build market leading positions globally:

Kingspan has evolved into a truly global business. Ten years ago 52% of our end-market exposure was in the UK and Ireland, in 2019
it was less than 25. Over the past two years we have entered markets which are only beginning to embark on the conversion to high- performance building envelopes such as Brazil, Colombia and India.
In 2019 we opened a new facility in Cambui, Brazil, to support the ongoing development of Kingspan Isoeste and conversion of the Brazilian market.
Kingspan Light & Air opened a new facility in Saint-Priest in 2019. The 30,000m2 campus will be central to expanding our capabilities and presence in France and Southern Europe and exemplifies what can be achieved with Kingspan systems, achieving BREEAM "Very good" certification.
We acquired Bacacier, an integrated metal profiling and insulated panel distributor with an extensive network across France. We look forward to working with the Bacacier team to further develop the region.

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

Strategic

Planet Passionate commitments which aim to make significant advances in the sustainability of both our business operations and our products.

→ To advance materials, building systems and digital technologies to address issues such as climate change, circularity and the protection of our natural world.

Left:

Ireland

Project Showrooms,

Dublin

Insulated Panels:

QuadCore™ Trapezoidal

Roof and Wall Panels;

Day-Lite Trapezoidal

Rooflights

PENETRATION

Increased penetration of Kingspan's product suite. Underpinned by efficiency gains from high-performance building envelopes, regulatory changes and an increasing awareness of the long-term environmental impact of inefficient building design:

Continued penetration growth and conversion from traditional insulation and building methods has been, and will continue to be,
a core driver of our success.
Ongoing revisions to key EU legislation including the Energy Performance of Buildings Directive (EPBD) continue to drive industry to take action.
QuadCore™ now represents 9% of Kingspan's global insulated panel sales and Kooltherm® represents 39% of Kingspan's insulation board sales. Kingspan's best-in-class proprietary products continue to drive penetration as architects and design teams seek out advanced solutions for energy efficient building envelopes.
The rising tide of climate awareness and compulsion to take action is an underlying positive trend for structural penetration gains over the long-term.

PLANET PASSIONATE

In 2019, we launched our new Planet Passionate programme across Kingspan and to the industry. This is a critical first step in the next phase of our journey to proactively address the key sustainability challenges that face our planet. Through our Net Zero Energy programme, we have already made great strides in powering our business on renewable energy, and with Planet Passionate we are setting ourselves even more challenging goals for the next 10 years. We are committing to hard targets in the areas of energy, carbon, circularity and water.

Energy: Increase our direct use of renewable energy to 60% of total energy use, increase on-site generation to 20% and deploy rooftop Solar PV on all wholly owned sites by 2030.
Carbon: Net zero carbon manufacturing,
100% zero emission company funded cars, and a 50% reduction in product carbon intensity from primary supply partners by 2030.
Circularity: Zero company waste to landfill
by 2030 and upcycling 1 billion PET bottles into our manufacturing processes per annum from 2025.
Water: Harvest 100 million litres of rainwater by 2030 and support 5 ocean clean up projects by 2025.

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Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

BUSINESS MODEL & STRATEGY 2019 IN A NUTSHELL

ProductsDrivers

5%	4%
Data & Flooring	Water & Energy
7%
Light & Air

19%	65%
Insulation Boards	Insulated Panels
Geography		Sector
7%	53%	18%
Rest of World	Europe	Residential
19%
UK		12%

		Office & Data

21%

Americas

15%

Other

85%

Energy Efficiency & Conversion

70%

Commercial & Industrial

Ireland

IMC Cinema, Kilkenny

Insulated Panels:

Steel Framing System; QuadCore™ Karrier;

Dri-Design Shadow, Shingle, Evolution Axis

Revenue	How we operate	How we create value
€4.7bn	159	>	Product innovation and
	differentiation
>	Excellent customer service
	Global manufacturing facilities	>	Energy efficient sustainable

Applications	15,000+		building envelope solutions
> We operate our businesses

> Retail		to the highest standards
> We acquire excellent businesses
> Distribution	Employees
> Leisure		> We recycle capital to
> Management controls		optimise returns
> Accommodation

> Quality systems	>	We maintain financial discipline
> Food
> Responsible supply	> We balance our portfolio of
> Manufacturing
chain partnerships		businesses across product

> Data Management			and geography
> Infrastructure		> We drive sustainable practices
			in our operations through our
			Planet Passionate initiatives
Trading Profit2	Value created
€497.1m	EBITDA1	Free cash
€579.8m	€337.1m

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

End-MarketChannel

20%	30%
Refurbishment	Via Distribution

80%	70%
New Build	Direct

Total Shareholder Return	ROCE
47.2%	17.3%
EPS	Dividend
204.6c	46.5c

1 Earnings before finance costs, income taxes, depreciation, amortisation and the impact of IFRS 16

2 Operating profit before amortisation of intangibles

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Business & Strategic Report	Sustainability Report	Directors' Report	Financial Statements	Other Information
Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

Product		Kingspan TEK™ Cladding Panel
	@

Energy/		Kingspan's TEK™ Cladding Panels
Carbon		supported construction of an airtight,
Saving	@	high-performance building envelope,
		helping to reduce estimated energy
		demand to below 15 kWh/m2/yr.

Space/	Changing the specification to a thinner
Dimensions	build using Kingspan TEK™ Cladding
@	Panels saved up to 250mm wall
	depth versus the original specification,
	maximising the useable floor space.

Health &	The RAD Building prioritises user
Wellbeing	wellbeing by maintaining thermal
@	comfort levels through carefully
	regulated internal environments.

Speed/	The offsite production and dry, panelised
Ease of build	construction of the Kingspan TEK™ Panels
@	supported a fast and predictable build,
	making the building weathertight at an
	early stage.

Aesthetics	The factory-engineered SIPs afforded
	considerable design freedom,

allowing the architects to create a striking building with a unique and dynamic appearance.

Planet		The facility at which Kingspan
Passionate/		TEK™ Cladding Panels are produced,
Sustainability	@	carries FSC®- C109304 and PEFC
		Chain of Custody certification.
Awards/		The RAD Building has been designed
Certifications		to achieve BREEAM 'Excellent'
	@	and was the 2019 winner of the East
		Midlands Constructing Excellence
		Sustainability Award.
	@	-
	@
	@
	@
	@

The RAD Building

Nottingham University, UK

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Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Financial Statements

Other Information

Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

CHIEF EXECUTIVE'S REVIEW

2019 capped off a decade of great progress for Kingspan with revenue and trading profit ahead of prior year by 7% and 12% respectively.

Dubai

Bluewaters Island

Insulation Boards:

Kooltherm® K10 Soffit Board

Financial Highlights:

Revenue up 7% to €4.7bn, (pre-currency, up 6%).
Trading profit up 12% to €497.1m, (pre-currency, up 10%).
Free cashflow up 9% to €337.1m.
Group trading margin of 10.7%, an increase of 50bps.
Basic EPS up 11% to 204.6 cent.
Final dividend per share of
33.5 cent. Total dividend for the year up 10.7% to 46.5 cent.
Year-endnet debt1 of €633.2m (2018: €728.3m). Net debt to EBITDA2 of 1.1x (2018: 1.4x).
ROCE of 17.3% (2018: 16.8%).

Business Review

2019 capped off a decade of great progress for Kingspan with revenue and trading profit ahead of prior year by 7% and 12% respectively. Over the past decade sales and trading profit grew in excess of fourfold and sevenfold respectively. Group sales reached almost €4.7bn, and trading profit €497m. Despite the significant macro instability in a number of our key markets the Group performed well in the first half, but was weaker towards year end. Predictably, the UK was the most notable illustration of this.

Underlying volume growth at the larger Insulated Panels and Insulation Boards divisions was 4% and 8% respectively. Underlying revenue was 1% ahead in Insulated Panels and 1% lower in Insulation Boards reflecting the impact of lower pricing due to raw material deflation over prior year.

Operational Highlights:

Insulated Panels sales growth of 7%. Strong performance in the Americas, Mainland Europe performed well overall with the notable exception of Germany. Difficult UK market particularly in the second half. Further headway in key markets on QuadCore™, now 9% of global sales.
Insulation Boards sales growth of 2%. Continuing progress on Kooltherm® and share gain from traditional materials.
Strong underlying volume growth of 4% and 8% in Insulated Panels and Insulation Boards partially offset by the pricing impact of raw material deflation.

During the year we invested a total of €305m continuing on our path of both organic and new acquisition expansion worldwide. New facilities were either completed or commenced in Sweden, UAE, USA, the Netherlands and Brazil. Acquisition investment was €144m, comprising most notably Bacacier in France for €122m.

2019 marked the launch of our global Planet Passionate initiative, building upon the last decade of progress on our Net Zero Energy agenda. We have now embarked on our next ambitious 10 year journey to radically advance Kingspan across the four key themes of Energy, Carbon, Circularity and Water. This agenda is central to our purpose and entails the following targets and timelines:

Light & Air sales growth of 12% buoyed by a strong performance in the US. Solid activity in Mainland Europe. Daylighting centre of excellence under construction in Ireland.
Water & Energy sales growth of 3% with progress in the Nordics, a difficult UK environment and more subdued rainwater harvesting activity in Australia.
Data & Flooring sales growth of 13% reflecting strong datacentre activity and geographic expansion in Europe.

ENERGY

Maintain our Net Zero Energy status
Increase our direct use of renewable energy to 60% by 2030
Increase our on-site generation of renewable energy to 20% by 2030
Install solar PV systems on all wholly owned facilities by 2030

CARBON

Net zero carbon manufacturing by 2030
50% reduction in product CO₂ intensity from our primary supply partners by 2030
100% zero emission company funded cars by 2025

CIRCULARITY

1 billion PET bottles upcycled into our manufacturing processes per annum from 2025
All QuadCore™ insulation to utilise upcycled PET by 2025
Zero company waste to landfill by 2030

WATER

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

Net Debt and EBITDA both pre-IFRS 16

Earnings before finance costs, income taxes, depreciation, amortisation and the impact of IFRS 16

5 active ocean clean-up projects by 2025
100 million litres of rainwater harvested by 2030

21 - 20


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INSULATED PANELS

QuadCore™ penetration reached 9% globally, with sales up 36% over prior year. In Mainland Europe, the trading picture was quite mixed overall although most regions started the year ahead of 2018. France and Spain performed particularly well throughout the year as the Kingspan model has become more embedded in these markets in recent years. In the Benelux, revenue was marginally ahead although the Netherlands weakened in the last quarter owing to environmental legislation that affected progress on many building sites. This headwind is expected to ease somewhat in 2020. The German market has been key for us in recent years although it stagnated during 2019. We have taken steps to ensure our competitiveness is enhanced, including significant focus on QuadCore™. Poland and the broader Central European markets were steady as was our activity in the Nordics.

Significant progress was achieved across all markets in the Americas over the year. Penetration in the USA and Canada has continued to

Australia

Perth Stadium Train Station

Insulated Panels:

Kingspan KingZip® Roof Panel System

grow as modern and more efficient methods of construction become increasingly adopted and Kingspan's solutions become the basis of specification in many applications which historically would have used more traditional materials. The roll- out of QuadCore™ is also gaining momentum and this will be further enabled with the new production line in Modesto, California, that

is nearing completion. In Latin America, progress has also been encouraging with a gradual gain in position in Mexico and continuing our momentum in Brazil where we opened a new facility in Cambui late last year. We have also broken ground on a fifth plant in the region which will be in southern Brazil. Other regions in Latin America are now also under developmental review.

At the outset of 2019 the UK backlog and general activity was healthy, showing no signs of the weakness that ensued in the second half of the year. As the political uncertainty grew through the year more building projects were postponed which, when combined with accelerating

deflation in the latter part of the year, resulted in a disappointing outturn overall. QuadCore™, however, continued to grow in share. With the momentum in QuadCore™ continuing through early 2020, together with a more stable political backdrop, we should see activity improve from the evident weakness of the first quarter.

Activity for Insulated Panels in Australia was solid over the year while in New Zealand the business advanced significantly over 2018. Although relatively embryonic in Southeast Asia, revenue has grown year-on-year and we continue to build a base level of demand in the region which should necessitate local manufacturing in the not too distant future. Our Indian business delivered its plan for the year, while the Middle East remains a challenge for the Panels business.

Volume growth in Ireland was healthy for most of the year but weakened towards year-end, pointing towards a slow start to 2020.

2	2	2
Turnover	Trading Profit	Trading Margin
€3,031.9m	€316.1m	10.4%
+7%(1)	+12%	+40bps
2018: €2,823.1m	2018: €281.8m	2018: 10.0%

(1) Comprising underlying +1%, currency +1% and acquisitions +5%. Like-for-like volume +4%.

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2019 Statementsplc Group FinancialKingspan& Report Annual -

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INSULATION BOARDS

On the whole, the Insulation Boards business performed well across Continental Europe. 2018 was marred by heavy raw material inflation followed by rapid deflation through 2019. This led to a challenge in maintaining price, and of course margins. Despite this, volumes grew substantially in the Benelux and Southern Europe and improved in Germany and the Nordics. A new Kooltherm® plant will come on stream later this year in Sweden

to support continued conversion from legacy mineral fibre insulation. Kooltherm® volumes grew by 15% in the year.

In the UK, volumes were strong in the early part of the period followed by weakness in the latter half of the year, largely owing to the uncertain political backdrop which was very pronounced at that point.

Progress continued in North America where our presence to date has been limited to a single XPS facility in the North East. We expect to build and commission a new PIR/QuadCore™ board facility during 2021/2022 which will be the first plant of our phased roll-out in the US, and will sit alongside a new Insulated Panel facility currently under development in Pennsylvania.

Our business in the Middle East delivered another year of solid growth largely in the Industrial Insulation sphere. Strong recovery was evident in the Australasia market as Kooltherm® grew its presence against local legacy mineral fibre and other insulation materials. In Ireland, the business had a solid outcome for the year across both the Insulation Board and structural residential Timberframe business units.

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

2	2	2
Turnover	Trading Profit	Trading Margin
€876.9m	€117.1m	13.4%
+2%(1)	+11%	+120bps
2018: €864.1m	2018: €105.1m	2018: 12.2%

(1) Comprising underlying -1%, currency +1% and acquisitions +2%. Like-for-like volume +8%.

Netherlands

De Woldring Locatie

Insulation Boards:

Kingspan Unidek SIPS

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Turnover

€327.7m

+12%(1)

2018: €291.8m

Trading Profit

€25.2m

+17%

2018: €21.5m

LIGHT & AIR

Revenue grew by 12% in 2019 and trading profit by 17% aided by improving synergies and efficiencies as this relatively embryonic business segment evolves. The story was somewhat mixed however with activity in Germany weakening notably through the second half and the Benelux performing similarly. In contrast to this, France and Southern Europe generally experienced attractive growth supported by the recently commissioned new facility in Lyon from which we anticipate continued momentum through

the current year.

North America delivered a stand- out performance across both the standard and architecturally bespoke offerings. The UniQuad® wall-light, produced near Chicago, has also been launched across Europe where we anticipate penetration growth in the coming years.

Work has commenced on a significant plant expansion in Ireland to extrude polycarbonate daylighting for both roof and wall applications and we anticipate production to commence mid-2021.

Report Strategic & Business

FinancialKingspan& Report Annual -

Trading Margin

7.7%

+30bps

2018: 7.4%

Comprising underlying +9%, currency +1% and
acquisitions +2%.

Left:

Singapore

Jewel Changi Airport

Light & Air: Kingspan Lumera ventilation windows

Right:

Ireland

Center Parcs Longford Forest Subtropical Swimming Paradise

Water & Energy: Klargester Pump stations for surface water and waste drainage

Klargester Fuel and Oil separator for treating surface water drainage

WATER & ENERGY

2019 was a year of stability for the Water & Energy business segment with profit in line with prior year. The UK and Ireland were both broadly flat on prior year, Mainland Europe grew and in Australia sales weakened as housing starts in New South Wales came under pressure. This pattern can be expected to continue into the current year and longer

term we would expect to grow large scale water storage applications in more rural and afforested parts of Australia. The focus of this wider unit will increasingly revolve around water applications with a plan to establish a more global footprint beyond the European and Australian presence we currently have.

2	2019 Statementsplc Group
Turnover
€208.1m
+3%(1)
2018: €202.9m
-
Trading Profit
€14.2m
-
2018: €14.2m
™
Trading Margin
6.8%
-20bps
2018:7.0%	26

(1) Comprising underlying	-
-3% and acquisitions +6%
	27


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DATA & FLOORING

2019 was a positive year for our global Data & Flooring business segment largely driven by an increased product offering into the data sector and our growing geographic presence in Europe.

The UK was predictably weak however as office construction faltered particularly in the greater London area. We anticipate this trend to remain a drag through 2020, compensated somewhat by growth in Germany and the Benelux. Whilst the data opportunity remains front and central to the division's future, the projects can be large and lumpy with respect to the timing, resulting in an inconsistent pattern of revenue. 2020 is expected to be no different in that regard.

Turnover

€214.5m +13%(1)

2018: €190.6m

Trading Profit

€24.5m +8%

2018: €22.6m

™

Trading Margin

11.4%

-50bps

2018: 11.9%

(1) Comprising underlying +4%,

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

currency +3% and acquisitions +6%

Canada

Central Library, Calgary

Data & Flooring:

ConCore® 1250 and

1500 Two-piece porcelain

Credit: Klassen Photography

Innovation

During the year we completed and opened our Global Innovation Centre, IKON, which sits alongside our headquarters in Kingscourt, Ireland.

The primary near-term focus is to soft launch PowerPanel® 2.0, and the fibre-free A1 AlphaCore™ before the end of 2020. Both will offer Kingspan a significantly broadened specification opportunity and will no doubt be followed by more advanced iterations over the coming years. QuadCore™

2.0 and the next generation of Kooltherm® are also at the early

stages of development as part of our ongoing innovation agenda.

Looking Ahead

As flagged in our most recent trading update underlying sales in the early part of 2020 are behind prior year. Despite the poor start we have experienced some element of recovery in order placement in recent weeks and our backlog globally is in reasonable shape. This could point towards an improved second quarter.

Our acquisitions pipeline is healthy with a number of projects currently

under consideration. Furthermore, the understandable ratcheting in recent months of the climate debate chimes fully with the advanced energy efficiency solutions provided by Kingspan and our Planet Passionate agenda. This, combined with the global footprint of our business and the strength of the Group's balance sheet, positions Kingspan well for the years ahead.

Gene M. Murtagh

Chief Executive Officer

21 February 2020

29 - 28

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Chief Executive's Review

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FINANCIAL REVIEW

The Financial Review provides an overview of the Group's financial performance for the year ended

31 December 2019 and of the Group's financial position at that date.

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

The Box Museum, Plymouth

Insulated Panels:

QuadCore™ Karrier Hook-On Cassette

Overview of results

Group revenue increased by 7% to €4.7bn (2018: €4.4bn) and trading profit increased by 12% to €497.1m (2018: €445.2m) with an increase of 50 basis points in the Group's trading profit margin to 10.7% (2018: 10.2%). Basic EPS for the year was 204.6 cent (2018: 184.0 cent), representing an increase of 11%.

The Group's underlying sales and trading profit growth by division are set out to the right:

Sales	Underlying	Currency	Acquisition	Total
Insulated Panels	+1%	+1%	+5%	+7%

Insulation Boards	-1%	+1%	+2%	+2%

Light & Air	+9%	+1%	+2%	+12%

Water & Energy	-3%	-	+6%	+3%

Data & Flooring	+4%	+3%	+6%	+13%

Group	+1%	+1%	+5%	+7%

The Group's trading profit measure is earnings before interest, tax and amortisation of intangibles:

Trading Profit	Underlying	Currency	Acquisition	Total

Insulated Panels	+7%	+1%	+4%	+12%
Insulation Boards	+6%	+2%	+3%	+11%
Light & Air	+11%	+2%	+4%	+17%
Water & Energy	-2%	-	+2%	-
Data & Flooring	-	+3%	+5%	+8%
Group	+6%	+2%	+4%	+12%

The key drivers of sales and trading profit performance in each division are set out in the Business Review.

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IFRS 16 Leases

A new accounting standard, IFRS

16 Leases, was adopted with effect from 1 January 2019. The standard requires leases which were previously treated as operating leases to be recognised as a lease liability with the associated asset capitalised and treated as a right of use asset. On 1 January 2019, €127.9m of leases were recognised as liabilities on adoption of the standard and €128.8m capitalised as right of use assets. During 2019 depreciation on the right of use assets was €30.0m and the associated lease rental charge decreased by €31.8m leading to an increase in operating profit of €1.8m. The interest charge on the associated leases was €3.8m and the aggregate impact of IFRS 16 on profit before tax was a decrease of €2.0m.

Finance costs (net)

Finance costs for the year increased by €2.7m to €20.8m (2018: €18.1m). A net non-cash charge of €0.1m (2018: credit of €0.6m) was recorded in respect of swaps on the Group's USD private placement notes. The Group's net interest expense on borrowings (bank and loan notes) was €16.7m (2018: €18.0m). This decrease reflects lower average gross and net debt levels in 2019. The interest expense is driven extensively by gross debt balances with low cash yields in the current environment. An amount of €3.8m (2018: €nil) was recorded as interest on leases capitalised in accordance with IFRS 16 which was adopted with effect from 1 January 2019.

Taxation

Dividends

The Board has proposed a final dividend of 33.5 cent per ordinary share payable on 7 May 2020 to shareholders registered on the record date of 27 March 2020. When combined with the interim dividend of 13.0 cent per share, the total dividend for the year increased to

46.5 cent (2018: 42.0 cent), an increase of 10.7%.

Retirement benefits

The primary method of pension provision for current employees is by way of defined contribution arrangements. The Group has two 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 €15.1m (2018: €13.1m) as at 31 December 2019.

Intangible assets and goodwill Intangible assets and goodwill increased during the year by €98.0m to €1,600.1m (2018: €1,502.1m). Intangible assets and goodwill of €95.2m were recorded in the year relating to acquisitions completed by the Group. An increase of €24.7m arose due to year end exchange rates used to translate intangible assets and goodwill other than those denominated in euro, offset by annual amortisation of €21.9m (2018: €22.2m).

Financial key performance indicators

The Group has a set of financial key

Basic EPS growth. The growth in EPS is accounted for primarily by a 12% increase in trading profit. The minority interest amount increased year on year due to
a strong performance at the Group's operations which have minority stakeholders, leading to a basic EPS increase of 11%.
Sales growth of 7% (2018: 19%) was driven by a 5% contribution from acquisitions, a 1% increase in underlying sales and a 1% increase due to the effect of currency translation. Whilst underlying sales growth overall was a modest 1%, volume growth exceeded this in many markets although was partially offset
by price deflation due to raw material price reductions.
Trading margin by division is set out below:

	2019	2018

Insulated Panels	10.4%	10.0%
Insulation Boards	13.4%	12.2%
Light & Air	7.7%	7.4%
Water & Energy	6.8%	7.0%
Data & Flooring	11.4%	11.9%

The Insulated Panels division trading margin advanced year on year reflecting ongoing progress in sales of QuadCore™ and the market mix of sales. The trading margin improvement in the Insulation Boards division reflects a positive Kooltherm® mix, operating leverage as a

Free cashflow is an important indicator and it reflects the amount of internally generated capital available for re- investment in the business or for distribution to shareholders.

Free cashflow	2019	2018

	€m	€m
EBITDA1	579.8	521.2
Movement in	5.6	2.3
working capital2
Movement in	1.7	(5.8)
provisions
Net capital	(154.3)	(131.3)
expenditure
Net interest paid	(16.7)	(15.6)
Income taxes paid	(87.2)	(75.0)
Other including	8.2	12.6
non-cash items
Free cashflow	337.1	308.4

Earnings before finance costs, income taxes, depreciation, amortisation and the impact of IFRS 16

Excludes working capital on acquisition but includes working capital movements since that point

Working capital at year-end was €582.8m (2018: €543.9m) and represents 11.9% (2018: 11.5%) of annualised turnover based on fourth quarter sales. This metric is closely managed and monitored throughout the year and is subject to a certain amount of seasonal variability associated with trading patterns and the timing of significant purchases of steel and chemicals. The movement year on year reflects a 40 basis points

Net debt to EBITDA measures the ratio of net debt to earnings and at 1.1x (2018: 1.4x) is comfortably less than the Group's banking covenant of 3.5x in both 2019 and 2018. The calculation is pre-IFRS 16 which is consistent with the Group's banking covenant.

Acquisitions and capital expenditure

During the period the Group made the following acquisitions for a total upfront cash consideration of €142.2m.

On 6 November 2019, the purchase of 85% of Group Bacacier SAS for an initial cash amount of €122.0m.

The Group also made a number of smaller acquisitions during the year for a combined cash consideration of €22.2m:

the purchase of 100% of the share capital of WeGo Floortec GmbH, a German manufacturer of access floors;
the purchase of 100% of the share capital of Epur SA, a French water treatment business; and
the purchase of the assets of SkyCo, a US Light & Air business.

The deferred consideration paid during the period of €59.7m (2018: €3.1m) represents €30m relating to the Synthesia business which was acquired in 2018 and €29.7m relating to the Isoeste business which was acquired in 2017.

Capital structure and

Group financing

The Group funds itself through a combination of equity and debt. Debt is funded through syndicated and bilateral bank facilities and private placement loan notes. The primary bank debt facility is

€451m revolving credit facility, which was undrawn at year end and which matures in June 2022. In June 2019 an additional 3 year bank facility of €300m was arranged, which was undrawn at year end. As at 31 December 2019, the Group also had private placement loan note funding net of related derivatives totalling €814m. The weighted average maturity of the notes is 4.5 years. Subsequent to the year end the Group arranged a bilateral 'Green Loan' of €50m to fund the Group's Planet Passionate initiatives.

The Group had significant available undrawn facilities and cash balances which, in aggregate, were €942m at 31 December 2019. This, together with the Green Loan of €50m provides appropriate headroom for ongoing operational requirements and development funding.

Net debt

Net debt decreased by €95.1m during 2019 to €633.2m (2018: €728.3m).

This is analysed in the table below:

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2019 Statementsplc Group FinancialKingspan& Report Annual -

The tax charge for the year was €76.6m (2018: €69.1m) which represents an effective tax rate

of 16.9% (2018: 17.1%). The decrease in the effective rate reflects, primarily, the change in the geographical mix of earnings year on year and reductions in certain territorial tax rates.

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 are used to track ongoing progress and also in achieving medium and long term targets to maximise shareholder return.

consequence of volume growth and a positive lag effect on raw material price reductions. The increased trading margin in Light & Air reflects improved efficiencies overall and the market mix of sales. The Water

& Energy trading margin was

broadly stable year on year.

The decrease in trading margin

in Data & Flooring reflects the

geographic market and product

increase in underlying working capital levels primarily due to higher inventory levels in recently acquired businesses.

(e) Return on capital employed,

calculated as operating profit

divided by total equity plus net

debt, was 17.3% in 2019 (2018:

16.8%) or 17.7% including

the annualised impact of

Movement in net debt	2019	2018

	€m	€m
Free cashflow	337.1	308.4

Acquisitions	(142.2)	(469.2)

Deferred consideration paid	(59.7)	(3.1)

Share issues	0.1	0.1

Repurchase of treasury shares	(0.6)	-

Dividends paid	(77.6)	(68.3)

Key performance indicators	2019	2018

Basic EPS growth	11%	16%
Sales growth	7%	19%
Trading margin	10.7%	10.2%
Free cashflow (€m)	337.1	308.4
Return on capital employed	17.3%	16.8%
Net debt/EBITDA	1.1x	1.4x

mix of sales year on year.

acquisitions. The creation of

shareholder value through the

delivery of long term returns well

in excess of the Group's cost

of capital is a core principle of

Kingspan's financial strategy. The

increase in profitability together

with the deployment of further

capital has enhanced returns on

capital during the year.

Dividends paid to non-controlling interests	(0.4)	(0.1)
Cashflow movement	56.7	(232.2)

Exchange movements on translation	8.4	(2.2)

Deferred consideration	30.0	(30.0)
Movement in net debt	95.1	(264.4)

Net debt at start of year	(728.3)	(463.9)

Net debt at end of year	(633.2)	(728.3)

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Key financial covenants

The majority of Group borrowings are subject to primary financial covenants calculated in accordance with lenders' facility agreements which exclude the impact of IFRS 16:

A maximum net debt to EBITDA ratio of 3.5 times; and
A minimum EBITDA to net interest coverage of 4 times.

The performance against these covenants in the current and comparative year is set out below:

		2019	2018
	Covenant	Times	Times
Net	Maximum	1.1	1.4
debt/	3.5
EBITDA
EBITDA/	Minimum	34.1	28.8
Net	4.0
interest

Investor relations Kingspan is committed to interacting with the international financial community to ensure a full understanding of the Group's strategic plans and its performance against these plans. During the year, the executive management and investor team presented at nine capital market conferences and conducted 351 institutional one- on-oneand group meetings.

Share price and market capitalisation

The Company's shares traded in the range of €35.70 to €55.25 during the year. The share price at 31 December 2019 was €54.45 (31 December 2018: €37.38) giving a market capitalisation at that date of €9.9bn (2018: €6.7bn). Total shareholder return for 2019 was 47.2%.

Financial risk management The Group operates a centralised treasury function governed by a treasury policy approved by the Group Board. This policy primarily covers foreign exchange risk, credit risk, liquidity risk and interest rate risk. The principal objective of the policy is to minimise financial risk at reasonable cost. Adherence to the policy is monitored by the CFO and the Internal Audit function. The Group does not engage in speculative trading of derivatives or related financial instruments.

Geoff Doherty

Chief Financial Officer

21 February 2020

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2019 Statementsplc Group FinancialKingspan& Report Annual -

USA

Case Western Reserve University

Data & Flooring:

ConCore 1000 & Composite Board

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RISK & RISK MANAGEMENT

Chief Executive's Review

Financial Review Risk & Risk Management

Risk and impact

Actions to mitigate

Volatility in the macro environment

& Business

As a leading building supplies manufacturer in a highly competitive international environment, Kingspan is exposed to a variety of risks and uncertainties which are monitored and controlled by the Group's internal risk management framework.

Kingspan products are targeted at both the residential and non-residential (including retail, commercial, public sector and high-rise offices) construction sectors. As a result, demand is dependent on activity levels which may vary by geographic market and is subject to the usual drivers of construction activity, (i.e. general economic conditions and volatility, Brexit, political uncertainty

in some regions, interest rates, business /consumer confidence levels, unemployment, population growth).

While construction markets are inherently cyclical, changing building and environmental regulations continue to act as an underlying positive structural trend for demand for many of the Group's products.

The exposure to the cyclicality of any one construction market is partially mitigated by the Group's diversification, both geographically and by product.

As set out in the Business Model & Strategy, the Group has mitigated this risk through diversification as follows:

Significant globalisation strategy with a presence in over 70 markets;
Launch of new innovative products and an approach of continuous improvement to existing product lines; and
Acquisitions made during the year extend the geographic reach of the Group.

The full details of these diversifications are set out in the Business Model & Strategy report contained in this Annual Report.

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& Report Annual -

Overall responsibility for risk management lies with the Board

present. The risks and trends are the focus of each division's monthly

Kingspan's strategic pillars that may be impacted by these risks

Failure to innovate

FinancialKingspan

who ensures that risk awareness is set at an appropriate level. To ensure that risk awareness is set at an appropriate level, the Audit Committee assists the Board by taking delegated responsibility for the risk identification and assessment, in addition to reviewing the Group's risk management

and internal control systems and making recommendations to the Board thereon.

The chairman of the Audit Committee reports to the Board at each Board meeting on its activities, both in regard to audit matters and risk management. The activities of the Audit Committee are set out in detail in the Report of the Audit Committee contained in this Annual Report.

The Board monitors the Group's risk management systems through this consultation with the Audit Committee but also through

the Group's divisional monthly management meetings, where at least two executive directors are

management meeting, where their performance is also assessed against budget, forecast and prior year. Key performance indicators are used to benchmark operational performance for all manufacturing sites.

In addition to this ongoing assessment of risk within the divisions, the Audit Committee oversees an annual risk assessment for the Group whereby each divisional management team is formally asked to prepare a risk assessment for their business. This assessment involves evaluating group-wide risks, as put forward by the Board, and also presenting additional risks that are specific to their business.

While it is acknowledged that the Group faces a variety of risks, the Board, through the processes set out above, has identified the principal risks and uncertainties that could potentially impact upon the Group's short to medium term strategic goals and these are as set out in the following table.

and uncertainties are:

Innovation;

Global;

Penetration;

Planet Passionate.

Failing to successfully manage and compete with new product innovations, changing market trends and consumer tastes could have an adverse effect on Kingspan's market share, the future growth of the business and the margins achieved on the existing product line.

Product failure

A key risk to Kingspan's business is the potential for functional failure of our product which could lead to health, safety and security issues for both our people and our customers.

The Kingspan brand is well established and is a key element of the Group's overall marketing and positioning strategy.

In the event of a product failure, the Kingspan brand and/or reputation could be damaged and if so, this could lead to a loss of market share.

Innovation is one of Kingspan's four pillars to increasing shareholder value and therefore plays a key role within the Group.

There is a continual review of each division's product portfolios at both the executive and local management level to ensure that they target current and future opportunities for profitable growth.

This risk is further mitigated by continuing innovation and compelling marketing programmes. The launch of IKON in 2019 has served to enhance the capabilities of the Group to innovate. Kingspan also has a deep understanding of changing consumer and industry dynamics in its key markets and continues to refine its omnichannel customer centric approach, enabling management to respond appropriately to issues which may impact business performance.

Dedicated structures and processes are in place to manage and monitor product quality controls throughout the business:

The majority of new products go through a certification process which is undertaken by a recognised and reputable authority (for example, in the UK it is the Building Research Establishment, BRE) before it is brought to market.
Our businesses employ quality control specialists and operate strict policies to ensure consistently high standards
are maintained in relation to the sourcing and handling of raw materials.
The construction of a dedicated Kingspan fire engineering research centre, using Kingspan products, allows for more expedient and in-depth testing to take place.
Quality audits are undertaken at our manufacturing sites. Over 70 of our facilities are ISO 9001 certified.
Effective training is delivered to our staff.
We proactively monitor the regulatory and legislative environment.

2019 Statementsplc Group

- 36


Business & Strategic Report	Sustainability Report	Directors' Report	Financial Statements	Other Information
Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

Risk and impact

Actions to mitigate

Business interruption (including IT continuity and climate change)

Risk and impact	Actions to mitigate

Employee development and retention

& Business

Kingspan's performance is dependent on the availability and quality of its physical infrastructure, its proprietary technology, its

raw material supply chain and its information technology. The safe and continued operation of such systems and assets is threatened by natural and man-made perils and is affected by the level of investment available to improve them.

Kingspan insists on industry leading operational processes and procedures to ensure effective management of each facility. The Group invests significantly in a rigorous programme of preventative maintenance on all key manufacturing lines to mitigate the risk of production line stoppages.

The impact of production line stoppages is also mitigated by having business continuity plans in place to allow for the transfer of significant volume from any one of our 95 plants in the Insulated Panels division or 27 plants in the Insulation Boards

The success of Kingspan is built upon effective management teams committed to achieving a superior performance in each division. Failure to attract, retain or develop these teams could have an impact on business performance.

Fraud and cybercrime

Kingspan is committed to ensuring that the necessary procedures are in place to attract, develop and retain the skill levels needed to achieve the Group's strategic goals. These procedures include strong recruitment processes, succession planning, remuneration reviews, including both long and short term incentive plans, and targeted career development programmes.

Report Strategic

The building industry as a whole is going through some significant change with respect to building regulations and codes. The risks associated with misunderstanding some of the potential changes and the nature of our product set is one that is more prevalent today.

division to another in the event of a shutdown.

In addition, and as part of our consequential loss insurance, Kingspan is subject to regular reviews of all manufacturing sites by external risk management experts, with these reviews being aimed at enhancing Kingspan's risk profile.

Climate related risks are managed through significant investment in product development which help mitigate climate change along with our ambitious commitments to reduce our

Kingspan is potentially exposed to	The security and processes around the Group's IT and banking
fraudulent activity, with particular	systems are subject to review by divisional management and
focus on the Group's online banking	internal audit. These systems are continually reviewed with
systems, online payment procedures	updates and improvements implemented as required. Robust IT
and unauthorised access to internal	and security policy documents and related alerts are circulated
systems.	by Group management to all divisions to ensure a consistent and
	effective approach is taken across the Group.

Acquisition and integration of new businesses

& Report Annual -

Embedded within Climate Change risks are energy regulations, change in customer preferences and global supply.

Any significant or prolonged restriction to its physical infrastructure, the necessary raw materials or its IT systems and infrastructure could have an adverse effect on Kingspan's business performance.

own environmental footprint.

Kingspan is focused on developing, enhancing and protecting its IP portfolio. As a global leader in building envelope solutions, Kingspan considers its IP security to be paramount. In addition to trade secret policies and procedures, Kingspan has developed appropriate IP strategies to protect and defend against infringements.

In an effort to reduce Kingspan's exposure to raw material supply chain issues, Kingspan retains strong relationships with a wide range of raw material suppliers to limit the reliance on any one supplier or even a small number of suppliers.

Acquisitive growth is an important element of Kingspan's development strategy. A failure to execute and properly integrate significant acquisitions and capitalise on the potential synergies they bring may adversely affect the Group.

Health and safety

All potential acquisitions are rigorously assessed and evaluated, both internally and by external advisors, to ensure any potential acquisition meets Kingspan's strategic and financial criteria.

This process is underpinned by extensive integration procedures and the close monitoring of performance post acquisition by both divisional and Group management.

Kingspan also has a strong track record of successfully integrating acquisitions and therefore management have extensive knowledge in this area which it utilises for each acquisition.

2019 Statementsplc Group FinancialKingspan

Credit risks and credit control

Kingspan continues to inform all stakeholders of the characteristics of our product offerings, their appropriate application and benefits to limit the risk of misunderstanding within the building industry.

Kingspan's IT infrastructure is constantly reviewed and updated to meet the needs of the Group. Procedures have been established for the protection of this infrastructure and all other IT related assets. These include the development of IT specific business continuity plans, IT disaster recovery plans and back-up delivery systems, to reduce business disruption in the event of a major technology failure.

The nature of Kingspan's operations can expose its contractors, customers, suppliers and other individuals to potential health and safety risks.

Health and safety incidents can lead to loss of life or severe injuries.

Laws and regulations

A robust health and safety framework is in place throughout the Group's operations requiring all employees to complete formal health and safety training on a regular basis.

The Group monitors the performance of its health and safety framework, and takes immediate and decisive action where non-adherence is identified.

The development of a strong safety culture is driven by management and employees at every level and is a core part of doing business with integrity.

As part of the overall service package, Kingspan provides credit to customers and as a result there is an associated risk that the customer may not be able to pay outstanding balances.

At the year-end, the Group was carrying a receivables book of €716.3m expressed net of provision for default in payment. This represents a net risk of 15% of sales. Of these net receivables, approximately 67% were covered by credit insurance or other forms of collateral such as letter of credit and bank guarantees.

Each business unit has rigorous, established procedures and credit control functions around managing its receivables and takes action when necessary.

Trade receivables are primarily managed through strong credit control functions supplemented by credit insurance to the extent that it is available. All major outstanding and overdue balances together with significant potential exposures are reviewed regularly and concerns are discussed at monthly meetings at which the Group's executive directors are present.

Control systems are in place to ensure that credit authorisation requests are supported with appropriate and sufficient documentation and are approved at appropriate levels in the organisation.

Kingspan is subject to a broad range of existing and evolving governance requirements, environmental, health and safety and other laws, regulations and standards which affect the way the Group operates. Non- compliance can lead to potential legal liabilities and curtail the development of the Group.

Kingspan's in-house legal team is responsible for monitoring changes to laws and regulations that affect the business and is supported by external advisors.

A comprehensive framework of policies are in place that set out the way employees and suppliers are expected to conduct themselves.

Training is provided through a variety of mediums in key areas of legal and regulatory compliance, including a suite of mandatory training for those that join Kingspan.

A robust whistleblowing process is in place that allows the anonymous reporting through an independent hotline of any suspected wrongdoing or unethical behaviour, including reporting instances of non-compliance with laws and regulations. All reported cases are investigated.

- 38


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Chairman's Statement	Business Model & Strategy	Chief Executive's Review	Financial Review	Risk & Risk Management

Product		Kooltherm® K20 Concrete
	@	Sandwich Board


Energy/		Using a combination of Cross-Laminated
Carbon		Timber (CLT) and Kooltherm®, Haus
Saving	@	Gables achieved
		an R-Value of 20.5 with only 2 inches
		of insulation.

Space/	Kooltherm® halved the insulation
Dimensions	thickness required versus traditional
@	materials. This was a key consideration
	for Haus Gables with a breadth of just
	18ft, equivalent to a mobile home.

Health &	The Kooltherm® used on Haus Gables
Wellbeing	was manufactured with a blowing
@	agent that has zero Ozone Depletion
	Potential, Low Global Warming
	potential, HCFC and CFC free.

Speed/	Through the innovative use of CLT
Ease of build	and Kooltherm®, Haus Gables was
@	erected in just over two weeks,
	drastically reducing labour time on
	site and therefore labour costs.

Aesthetics	Haus Gables has been featured in
	multiple influential architecture and

design magazines globally for its innovative use of materials and its striking design.

Planet		The Kooltherm® used on Haus
Passionate/		Gables was manufactured using
Sustainability	@	renewable energy.
Awards/		Architectural League Prize for
Certifications		Young Architects + Designers,
	@	Jennifer Bonner, Winner.

Haus Gables

Atlanta, USA

The whole thing looked like an architectural model being assembled in place. If you squint your eyes, watching the panels being installed at that scale, one could imagine, 'This is the way we cut up materials-chipboard, foam core, and whatever else is on our desks-and make models'.

Jennifer Bonner, Director MALL and Assistant Professor at Harvard University Graduate School of Design

Click here to see more

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

41 - 40

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SUSTAINABILITY REPORT

Kingspan's Mission

To accelerate a net zero emissions future with the wellbeing of people and planet at its heart. We do

PRODUCT

PASSIONATE

Today, the construction and operation of buildings together account for 36% of global energy use and 39% of energy- related CO₂ emissions when upstream power generation is included. The energy efficiency of buildings is therefore fundamental to combating climate change.

The largest influence Kingspan has on the SDGs is through our solutions in use. As demonstrated throughout this report our advanced building envelope solutions help building owners to reduce energy emissions. The total energy saved over the lifetime of the Kingspan insulation systems, sold worldwide in 2019, is an estimated 751 million MWh of energy or 172 million tonnes of CO₂e.
Our solutions also help to enhance occupant health and wellbeing through improved thermal comfort, natural daylighting, ventilation, and increased space. Our advanced insulation is also free from health concerns associated with airborne fibres.
Our Water & Energy business helps building owners to sustainably manage water as a resource and can help to protect local communities through reducing flood risk and the risk of polluted run-off to waterways.

Report Strategic & Business

Annual -

this through enabling high-performance buildings that can save more energy, carbon and water.

PLANET PASSIONATE

@ Energy: In 2019 we achieved 90% of our Net Zero Energy goal

throughout our operations and are firmly on track to achieve

& Report

We recognise the vital importance of achieving this while: enhancing the safety and wellbeing of people in buildings; enabling the circular economy; and always delivering more performance and value. We believe the answers lie in challenging building industry traditions with innovation in advanced materials and digital technologies. What defines us is our relentless pursuit for better building performance whilst being Planet Passionate in everything we do.

Our commitment to sustainability is instilled at every level of Kingspan and at every step in the manufacturing process.

In developing our approach to

sustainability we have built on materiality assessments conducted at a divisional level as well as incorporating guidelines from recognised associations such as the Sustainable Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD), of which Kingspan is a signatory. Kingspan recognises that it has a responsibility as a business leader to contribute towards the achievement of the United Nation's Sustainable Development Goals (SDGs). With the case studies in this report we demonstrate how we are making

a difference through our solutions and through our operations.

Through Planet Passionate we are playing our part to tackle climate change by increasing our use of renewable energy, reducing carbon in our business operations and value chain, increasing our recycling of rainwater and waste and by accelerating our participation in the circular economy.

PEOPLE

PASSIONATE

Despite our size, we retain our heritage and culture as a family business, with very high value placed on people, relationships and communities which are at the very heart of how we do business.

100% by 2020. We generated 5.3% of our energy on Kingspan

sites and 22% of wholly owned sites have deployed rooftop Solar

PV systems.

@ Carbon: We achieved a 92% reduction in energy carbon

intensity in 8 years and began to implement our zero-emissions

car strategy. In November 2019 we held our annual supplier

day forum with specific focus given to our new sustainability

programme. Productive discussions and workshops were held

throughout the day with a range of suppliers resulting in some

collaborative projects that will support the delivery of our supply

chain targets.

@ Circularity: We upcycled 385 million PET bottles into our

manufacturing processes and through our new Planet Passionate

program we are aiming to achieve zero waste to landfill

throughout our business by 2030.

@ Water: We harvested 21.5 million litres of rainwater across our

manufacturing operations and entered into a partnership with

The Ecoalf Foundation, a venture which collects waste in the

Mediterranean Sea for recycling or repurposing where possible.

@ Kingspan takes the welfare of our employees very seriously.

We are deeply saddened to report that there was a workplace

fatality in the business in 2019. We will do our utmost to learn

from this tragedy and to continually improve processes and

training to achieve our target of zero fatalities across our

business in the future.

@ In 2019, Kingspan has invested over €2m on projects to enhance

health and safety processes and culture across our business.

Our Lost Time Incident rate fell by almost 7% in 2019, or by

more than 12% over the past 2 years.

@ We continue to champion diversity across the business. The

percentage of females in Kingspan increased again in 2019 to

almost 19%. Additionally, the percentage of females on the

executive management team grew to 27%.

@ Over 90 additional high-potential candidates had the opportunity

to broaden their business and leadership skills on development

programmes in 2019.

@ Kingspan supports local community projects at a global level.

For 2019, we highlight a number of projects we supported which

championed the development and protection of children.

See more on pages 54 - 55.

2019 Statementsplc Group FinancialKingspan

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Other Information

PRODUCT PASSIONATE

PLANET PASSIONATE

PEOPLE PASSIONATE

Kingspan is driven by a belief that advanced materials and methods of construction hold the answer to some of the great challenges that our planet and society face. From products that insulate better while creating more internal space, to those that harness more natural daylight, we are dedicated to pushing the boundaries of high- performance envelope design with a core focus on energy efficiency.

Fire Testing and Research Kingspan is committed to delivering high-performance,innovative building solutions that are underpinned by extensive fire testing, including large-scalesystem testing. We have carried out over 2,000 fire tests to national, international and insurance industry standards, across our full range of insulated panel, rainscreen facade and insulation board products and systems. As part of our ongoing commitment to fire safety and product development, we are investing €5m in a global state-of-the-artfacility dedicated to fire engineering research. Offering a comprehensive resource of fire a comprehensive fire science resource, its mission to advance knowledge and understanding of how building materials, products and complete systems perform when subjected

Fire resistance is the measure of how building elements can effectively withstand and contain fire whilst continuing to perform their

given function.

These tests are typically performed by testing with large scale furnaces with minimum dimensions of 3 metres by 3 metres. Test results can include integrity, insulation, heat radiation and load bearing capacity. Test methods employed to assess the fire resistance capabilities of our products and systems include EN 1364, EN 1365, EN 1366 and ASTM E119.

Compliance with regulatory and insurance industry requirements. QuadCore™ Technology is an advanced high-performance closed-cellrigid insulation solution offering a unique combination of

Kingspan has a comprehensive	& Business
range of building facade systems
incorporating QuadCore™ technology
and Kooltherm® boards that have
successfully passed large scale facade	Strategic
tests around the globe including,
but not limited to, NFPA 285 (North
America), LEPIR II (France), SP Fire
Report
105 (Nordics), AS 5113 (Australia),
ISO 13785-2 (Czech Republic), MSZ
14800-6 (Hungary) and met the
requirements of BR135 when tested
to BS 8414 (UK).
Please refer to product literature
and datasheets for details of
configurations	and requirements to	-
meet specific	performance levels.
Annual
Performance in real fire situations
Testing and certification to regulatory	&Report
and insurance industry requirements,
with particular emphasis on

Since the beginning, Kingspan has been committed to innovation so we can make building better. It's something we demonstrate daily across our business. We believe we must challenge building industry traditions through innovating in advanced materials and digital technologies to achieve a net zero carbon emissions future. Kingspan's products and systems therefore enable higher lifetime energy and carbon savings, and enhance and protect the value of assets.

This culture of innovation is why Kingspan has created IKON, our Global Innovation Centre.

The building itself is a showcase for high-performance envelope design using 18 Kingspan products and systems. Both a place of research and a living research project, IKON asks the big questions that will lead us to a more sustainable and healthy future while delivering enhanced value, convenience and efficiencies to our customers.

Our aim is to continue to deliver breakthrough products such as QuadCore™ and Kooltherm® and to do this while progressing sustainability practices within our operations.

In 2019, 90% of our operational energy use was matched by renewable energy, on target to be 100% by 2020. We also upcycled the equivalent of

385 million PET bottles bottles into our manufacturing processes. Learn more about our commitments to the environment in our Planet Passionate section of this Sustainability Report.

In 2019 we launched a QuadCore™ Roof Board, advanced progress on the PV solar integrated PowerPanel®

2.0 and the fibre-free A1 classified

AlphaCore®. QuadCore™ 2.0 and the next generation of Kooltherm® are also in development.

Kingspan's insulation systems, sold in 2019, will save an estimated 751 million MWh of energy or 172 million tonnes of CO₂e over their lifetime. Over 62% of our products contribute directly towards delivering the UN SDGs.

to fire. Based in North Wales, the centre will be open to visitors from April 2020 and will welcome research partnerships and collaboration from across industry and academia.

In addition, our new IKON Global Innovation Centre is focused on the digitalisation of construction and is developing new technologies and tools to enable end-to-end digital traceability from test to site and beyond to the full life cycle of a building.

Extensive Reaction to Fire and Fire Resistance Testing Reaction to fire relates to the combustibility and ignitability of building materials and can be used to determine how much energy they contribute to the growth of a fire.

fire performance certification when used as a core in our insulated panel systems.

Panel systems incorporating QuadCore™ Technology achieve excellent performance in a range of fire tests for regulatory compliance, are approved to insurance industry standards and achieve high levels of fire resistance.

The Kooltherm® range of Insulation Boards and KoolDuct® pre-insulated ductwork are manufactured

with a phenolic insulation core, which has been proven through a rigorous programme of testing to offer superior fire and smoke performance to other commonly used rigid thermoset insulants.

large scale system testing, is the	FinancialKingspan
cornerstone of Kingspan's strategy
to demonstrate the fire safety of
our products and systems. However,	Statementsplc Group
we believe that it's important to
know how our products and systems
perform in real fire situations.
	2019

Across the world, we have examples of independently researched real fire case studies which have proven the performance of insurer approved insulated panel systems and a Therma roof board system. Over the years we have built up a library of real fire case studies. Case studies include building occupancytypes such as retail, healthcare,education, food processing and storage, manufacturing, logistics and distribution, car showrooms and car parks.

The total projected energy savings* over the lifetime of the Kingspan insulation systems, sold worldwide in 2019, is equivalent to:

441m	259
Over four hundred	The annual output
and forty-one million	of 259 gas-fired
barrels of oil	power stations

These tests can range from small scale product tests, sometimes involving just a few grams of product, to large scale system tests involving products incorporated into structures up to 9 metres high and enclosures up to 10 metres in length. Large scale system testing is the most reliable way of assessing the performance of products and systems irrespective of material classifications. Large scale reaction to fire system tests performed on

18.1

Up to 18.1 times the the annual electricity consumption of Greater London

79m

Taking seventy-nine million cars off the road annually

our products and systems include BS 8414; AS 5113; LPS 1181 and 1208; FM 4470, 4471, 4880, 4881, 4882 and 4924; IS0 13784; LEPIR II; NFPA 285 and 286; and SP Fire 105.

45 - 44

*figures are based on savings of insulation systems in use for 60 years.

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PRODUCT PASSIONATE

CASE STUDIES

SUSTAINABLE

CITIES

Marrickville Library

Australia

Kingspan Water & Energy: Kingspan Made to Measure Rainwater Harvesting and

Report Strategic & Business

SUSTAINABLE

BUILDINGS

Alaska Airlines Hangar

USA

Kingspan Insulated Panels:

Kingspan KS Micro-Rib Wall Panels

Energy efficiency was a key challenge with this project because of the harsh Alaskan conditions and the large opening created by the hangar doors. Insulated panels enabled the architect to meet Anchorage's code for continuous insulation, despite these challenges.

The construction season is incredibly short in Alaska so speed of build was another key factor in

the design stage. Insulated panels reduced the time on site and negated the need for temporary enclosure, which would have needed to be heated.

Kingspan's single product solution contributed to the sustainability goals of the project by significantly reducing the waste versus what would have been generated with a built-up system.

Stormwater Tanks

The rainwater and stormwater tanks installed at Marrickville library have a capacity of 57,000 litres. These will supply over 100,000 waste flushes annually and provide irrigation for the trees and green spaces.

A very important role of rainwater harvesting is to reduce peak flows and total volume of stormwater.

This can improve the water quality and waterway health by reducing polluted run-off to local waterways.

The tanks have been installed in the children's garden and will be used as an environmental education tool.

Inner West Council (Marrickville Council) is part of The Strategy for a Water Sensitive Community which aims to move current urban water management in Marrickville to a more sustainable and flexible approach that promotes liveable, productive, resilient and sustainable communities. At Kingspan, we have set ourselves the ambitious goal to harvest 100 million litres of our own water needs by 2030.

2019 Statementsplc Group FinancialKingspan& Report Annual -

Important factors in choosing metal panels

for this project were schedule, speed, durability, efficiency and the one-shot envelope. Having one product delivered on site and then installed and finished is a huge benefit to a project in terms of schedule and managing construction costs - particularly in terms of labour.

Jason Gamache, Principal Architect, MCG Architecture

SUSTAINABLE

BUILDINGS

Two Southbank Place

Kingspan Data & Flooring:

Kingspan RMG 600 Simploc

Southbank Place is a hive of activity, featuring world-class arts venues, globally recognised landmarks, and attractions ranging from ferry tours of the River Thames, to boutique shops and fine dining. To cater for the growing interest in the location, a £1.5 billion mixed-use site has been developed. Southbank Place comprises seven new buildings, including luxury apartments, retail units, restaurants and commercial spaces, all clustered around the iconic

Shell Tower. Two Southbank Place provides 15 floors of premium office space and a winter garden.

The build programme had to work around design challenges such as a London Underground line running beneath the building's footprint and the creation of a new ticket hall. So, with a tight deadline to meet, the specified products and materials needed to be quick and straightforward to install. The

construction team also made use of available Kingspan BIM objects to aid project planning and clash detection.

Kingspan's flooring solution helped to futureproof the building as a suitable environment for co-working.

Our access floor's chain of custody certification and environmental certification contributed to Two Southbank Place achieving BREEAM 'Excellent' certification.

47 - 46

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PRODUCT PASSIONATE

PLANET PASSIONATE

PEOPLE PASSIONATE

Kingspan is at the forefront of driving the agenda toward a more sustainable future. We launched our Net Zero Energy agenda in 2011 and are on target to match 100% of our operational energy use with renewable energy in 2020. Building upon the last decade of progress, we have now embarked on our next ambitious 10-year journey to radically advance Kingspan across the four key themes

of Energy, Carbon, Circularity and Water.

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			2020	2025	2030	Business


			&

						Strategic
ENERGY	- Maintain our Net Zero Energy status	•	•	•
		- Increase our direct use of renewable energy to 60% by 2030	-	-	•
		- Increase our on-site generation of renewable energy to 20% by 2030	-	-	•
		- Install solar PV systems on all wholly owned facilities by 2030	-	-	•
		Report

CARBON	- Net zero carbon manufacturing by 2030	-	-	•
- 50% reduction in product CO₂ intensity from our primary	-	-	•

		supply partners by 2030	-
		- Zero emission company cars by 2025	•	•

CIRCULARITY	- 1 billion PET bottles upcycled into our manufacturing processes by 2025	-	•	•
		- All QuadCore™ insulation to utilise upcycled PET by 2025	-	•	•
		- Zero company waste to landfill by 2030	-	-	•	-

WATER	- 5 active ocean clean-up projects by 2025	-	•	•
Annual
		- 100 million litres of rainwater harvested by 2030	-	-	•
PARTNERSHIPS
				FinancialKingspan& Report


						Group

Through Planet Passionate we aim to make a significant reduction in our environmental footprint, enhance the environmental performance of our products and make a meaningful contribution towards the achievement of the UN Sustainable Development Goals.

Our Planet Passionate committee is a global team consisting of 17 dedicated and passionate people representing all business units and all geographies. This team collaborates and shares best practice in order to deliver our ambitious 2030 targets. Our Global Head of Sustainability reports Planet Passionate developments directly to the CEO, Gene Murtagh.

ENERGY	A key part of the "Save More"	Statementsplc
strategy has been employee
Net Zero Energy*	awareness and training.	2019
In 2019 we made significant progress	Implementation of Energy

towards our Net Zero Energy goal of	Management Standard ISO 50001
matching 100% of our operational	in several of our manufacturing sites
energy use with renewable energy -	has also been effective in driving
achieving 90% NZE up from 75% in	energy efficiency improvements
2018. This was achieved through the	and increased use of sub-metering
implementation of our three step	has facilitated accurate targeting
strategy: Save More, Generate More	of energy saving opportunities.
and Buy More.	Our efforts to make further
Save More	improvements will continue in 2020
and beyond. In 2019 we implemented
Improving the energy efficiency of	multiple energy efficiency projects
our operations remains the highest	across the Group which will deliver
priority across Kingspan. A wide	approximately 7710 t/C02e of
range of projects were implemented	carbon savings per annum.
on many sites during 2019 including	Generate More
the following;

Climate change is the single most important issue facing the world today and our most urgent priority. At Kingspan, we are committed to driving a more sustainable approach to our business in response to these issues. Through Planet Passionate we will reduce carbon and energy in both our manufacturing processes and products and continue our relentless pursuit of low-carbon buildings that deliver more performance and value, with clear targets to strive for by 2030.

Gene M Murtagh, CEO

	→ Insulation to reduce heat loss;	A key foundation of our "Generate
	More" strategy has been investing in
	→	LED lighting installations
	on-site generation. In 2019 5.3% of
		including daylight dimming
		our total energy use was generated
		and occupancy sensing;
		from renewable sources on our
	→	Optimised daylighting solutions
	own manufacturing sites, we have
		including roof and wall lights;
		ambitious targets to grow this. The
	→	Heat recovery systems;
	technologies presently in use include:
* Net Zero Energy: We aim to	→	Compressed air system

	improvements;	→	Solar PV;
achieve net zero energy by the	→
end of 2020. We have defined net	Destratification fans to improve	→	Solar thermal;
zero energy as meaning: the non-		heat distribution;	→	Biomass heat;
renewable energy use associated	→	Low energy process equipment	→	Biomass CHP (electricity);
with our manufacturing sites will be	48
	installation;	→	Wind;
minimised through a combination of	→
energy efficiency measures, on-site	Transitioned forklifts from	→	Anaerobic digestion.
renewable energy generation and		LPG to renewable energy;			-
the purchase of certified renewable	→	Optimised the use of lower gauge
energy from the grid. Our remaining		steel in access floor panels,
non-renewable energy use will be				49
	saving wielding energy;
offset by the purchase renewable
energy certificates.	→	Power factor correction systems.

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ENERGY: OUR JOURNEY TO DATE

Net Zero Energy	69%		75%														90%
2017													2018										2019




Energy Costs					Energy Intensity					Energy Carbon Intensity
Light and heat costs as a % of turnover		kWh per € turnover		CO₂ tonnes per €'000 of turnover


2019						0.84		2019							0.14	2019								0.004

2018						0.82		2018							0.14	2018								0.009

2017						0.79		2017							0.13	2017								0.012

2016						0.88		2016							0.14	2016								0.014

2015						0.99		2015							0.14	2015								0.034

2014								1.11		2014							0.16	2014								0.040

2013								1.14		2013							0.18	2013								0.049

2012										1.29		2012									0.19	2012							0.053


Renewable Energy Usage					On-site Energy Generation						Renewable Electricity Usage
Renewable energy used (GWh)	Renewable energy generated		Renewable electricity used (GWh)


														on-site (GWh)

2019									576		2019							34.0	2019								237.9

2018								459		2018								36.2		2018								214.4

2017							328		2017							34.5		2017								176.2

2016						243		2016							32.2		2016								164.4

2015						126		2015							24.1		2015								102.3

2014						88			2014							17.3		2014								80.3

2013						60			2013							14.5		2013								58.0

2012						27			2012							6.6		2012								27.4

CIRCULARITY

Waste

In 2019 Kingspan recycled 65% of its waste, down from 68% in 2018. The decrease is primarily as a result of the impact of acquired businesses. We aim to bring those businesses on our waste reduction journey and through our new Planet Passionate program, implement our zero waste to landfill throughout the Group by 2030. We aim to share learnings from our more mature facilities, for example: our UK Data & Flooring Technology achieved zero waste to landfill in 2019.

PET upcycling

Kingspan upcycled 385 million PET bottles into its manufacturing processes in 2019 and committed to a target of upcycling one billion PET plastic bottles per annum by 2025. In addition, Kingspan entered into a three-year partnership with the ECOALF Foundation to support and expand their project which removes 150 tonnes of plastic waste from the Mediterranean Sea each year, about 10% of which is PET. Ocean PET recovered from the ECOALF project is added to the upcycled PET bottles and used to make Kingspan's insulation. Through Planet Passionate, Kingspan now plans to support four further ocean clean-up projects by 2025.

WATER

Although water is a small proportion of inputs into our operations, we aim to manage this precious resource in the most responsible manner possible. In general, water is mainly used for sanitation purposes and Kingspan continues to aim to maximise water conservation through the use of rainwater harvesting and other water saving initiatives such as sensoring systems and water flow regulators. Through Planet Passionate we aim

PARTNERSHIPS

→ World Green Building Council:

Kingspan has signed on to be

the primary sponsor of this

programme for the next two

years. We have also signed up to

the Net Zero Carbon Buildings

Commitment, aiming for our

entire building portfolio to

achieve net zero operational

carbon by 2030.

→ Science-Based Target

Initiative: Kingspan has

committed to and verified its

science-based targets.

→ RE100: Kingspan is a gold

member of the RE100. RE100

is a collaborative, global

initiative of influential businesses

committed to 100% renewable

electricity, working to increase

demand for, and delivery of

renewable electricity.

→ EP100: Kingspan is a member

of the EP100. EP100 brings

together a growing group

of energy-smart companies

committed to improving their

energy productivity and doing

more with less.

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2019 Statementsplc Group FinancialKingspan& Report Annual -

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The purchase of renewable energy from the grid is an important part of our strategy. Our preferred option is to purchase certified renewable energy (both electricity and gas) direct from our suppliers but where this is not possible, we have made purchases of Guarantees of Origin (GOs) in Europe, Renewable Energy Certificates (RECs) in North America and International Renewable Energy Certificates (iRECs) in other regions as necessary.

Further to our Net Zero Energy target, through Planet Passionate we aim to increase our direct use of renewable energy to 60% of total energy use, increase on-site generated energy to a minimum of 20% and deploy rooftop solar PV systems on all wholly owned Kingspan sites by 2030.

Kingspan continues to respond to the CDP Climate Change questionnaire. Out of the thousands of companies which responded, Kingspan was recognised among the top 2% that earned a spot on the prestigious CDP Climate A list.

Through Planet Passionate we aim to achieve Net Zero Carbon manufacturing and a 50% reduction in product CO₂ intensity from primary supply partners by 2030. We are also targeting 100% zero emission company funded cars by 2025. In November 2019 we held our annual Supplier Forum with specific focus given to our new sustainability programme. Productive discussions and workshops were held throughout the day with a range of suppliers resulting in some collaborative projects that will support the delivery of our supply chain targets. We

Through Planet Passionate we aim to increase our direct use of renewable energy to 60% of total

Kingspan

has committed to send zero waste to landfill by 2030.

to increase our harvested rainwater use to 100 million litres by 2030 (2019: 21.5 million litres).

Our Data & Flooring Technology manufacturing site in Red Lion US is one of the largest consumers od water in the Group and in 2019 the conservation of water amounted to

8.9 million litres (which is 63.8 % of total usage) through water recycling.

→ CE100: Kingspan is a member

of the CE100 network and the

Built Environment working group

which aims to accelerate the

circular economy across the

global construction sector.

→ ECOALF Foundation: 3-year

partnership with the ECOALF

Foundation aiming to support

their Upcycling the Oceans

projects.

→ Born Free: 3-year partnership

to support the conservation

and education work to help

protect the lion population in

Meru, Kenya.

CARBON

Our progress towards our Net Zero Energy goal to date has enable use to reduce our energy related carbon intensity per €'000 turnover by 92% in just 8 years.

will continue to build our supplier relationships and engagement strategy moving forward.

energy use.

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Other Information

PRODUCT PASSIONATE

PLANET PASSIONATE

PEOPLE PASSIONATE

What has been achieved at Kingspan would not be possible without the people that work hard every day to drive the company forward. A dynamic and motivated workforce is key to delivering against the future growth strategy of the business. For this reason, talent is at the heart of future planning at Kingspan.

International participants on the 2019 programme represented 14 diverse locations, including Brazil, USA and Europe, with female participants representing 24% (up from 11% in the first cohort).

A new Enterprise Leadership Programme is being launched in 2020 along the lines of the previous global development programme in 2017 - 2018. To-date, over 60% of our executives who attended this programme have been promoted to the next level or have taken on increased responsibilities.

We are also launching a coaching skills programme in 2020 for managers and business leaders, initially in Ireland and the UK, with a view to a wider global roll-out. This is part of a long-term strategy to build an internal cadre of coaches who are

one of our Belgian facilities tragically resulted in a workplace fatality. Together with the local authorities and independent specialists retained by the company, we are fully examining the circumstances of this incident. We will use the learnings from this tragedy to continually improve processes and training to achieve our target of zero fatalities across all of our businesses in

the future.

In 2019 we invested over €4m on improving processes and H&S culture. Over 60 of our manufacturing facilities are certified to ISO 18001

or equivalent standard. Over the past three years, all of our sites have been audited by internal H&S teams. Sites which are certified to ISO 18001 standards are externally audited annually.

Hazard Identification Processes include (but are not limited to):

All near misses are assessed and processes are updated.
Employees are encouraged to make suggestions for process improvements.
Safety walks by responsible persons.
Periodic workplace inspections.
Risk assessment on new machines at installation.

Health and Safety Investments in 2019 include:

- Roof replacements in two of

Report Strategic & Business

& Report Annual -

Kingspan's leadership team holds an annual Talent Forum in September to review succession plans, metrics on key positions hired throughout the year and to forecast future talent gaps as part of our human capital risk assessment.

Attract

We have a number of initiatives at Kingspan to attract top talent. One of the key, group wide, initiatives is the graduate programme which saw graduates in 2019 up over

26% on prior year. One third of the participants were female, significantly above the company average. The highlight of the programme was the Graduate Projects Showcase which was hosted for the first time in IKON, our new Global Innovation Centre, where five teams presented strategic projects to senior executives from across Kingspan.

setting, but there is also the opportunity to join a network of people across the company to drive real change through innovation and through engagement with our Planet Passionate initiatives.

Our employees are already reaching out to play a role in our Planet Passionate initiatives - such as car-pooling, organising local beach clean-ups and increasing recycling in our offices. We are building

a network of Planet Passionate Champions to help scale local action at our sites across the globe.

The network will convene once a quarter to share ideas and to progress initiatives identified across the business which will contribute to achieving our Planet Passionate goals.

Develop

Gender balance

19%81%

2019

18%		82%
2018

17%		83%
2017

	Female		Male

Injury Frequency Rate

p/100k hours
2019
p/100k hours
2018
p/100k hours
2017

Fatalities

skilled in developing not only their own teams but can also contribute to the development of global talent.

Protect

Kingspan takes the safety of our employees incredibly seriously. All accidents, as well as near misses, are recorded and reviewed. Health and Safety (H&S) is under on-going review at a facility and divisional level and a Group H&S Committee sits at least twice a year. It is an opportunity for all divisions and geographies to share best practice and discuss operational experiences that will improve the welfare of all our employees.

We are deeply saddened to report that during the year, an accident at

Equal opportunities, employee rights and diversity

Kingspan is committed to providing equal opportunities from recruitment and appointment, training and development to appraisal and promotion opportunities for a

wide range of people, free from discrimination or harassment and in which all decisions are based on work criteria and individual performance. We see diversity and inclusiveness as an essential part of our productivity, creativity and innovation. Diversity is widely promoted within Kingspan, over one third of recruits on our graduate programme are female, and 24% of the participants on our PEAK programme are female, both well above the Kingspan average (19%).

our facilities to improve working

conditions and reduce slippage

risk from leaks.

- Employment of external

consultants to update and

improve training and to upgrade

processes and procedures, where

necessary.

- Improvements in mechanisms

for assisting employees when

lifting panels, such as cranes with

vacuum lifters and lift tables.

- General safety upgrades to

machines where opportunities

for improvement have been

identified.

- General and emergency lighting

upgrades.

2019 Statementsplc Group FinancialKingspan

Kingspan became a corporate partner of UNITECH from January 2020. This is an international body that represents the most prestigious engineering schools in the top nine universities in Ireland, the UK and Europe. This will give Kingspan an extensive platform to attract talent from all engineering disciplines who can go on to build their careers in our global business.

Retain

At Kingspan we use multiple tools to drive talent retention. These include traditional motivational tools such as reviews and objective

PEAK was launched in 2018 and is targeted at developing high- potential managers for future senior leadership roles. The core objective of the programme is to deepen Kingspan's leadership bench- strength to match the increasing scale and global nature of the business. Since its launch in April 2018, 56 managers have participated in this six-month programme which has strengthened cross divisional relationships as well as furthering integration of executive talent from recent acquisitions. Another aim is to increase leadership diversity by deepening and widening the pool of future senior leaders.

2019	1

2018	0

2017	0

Right:

IKON, Kingscourt, Ireland.

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Other Information

OUR COMMUNITIES

Kingspan grew out of a family business and those family values continue to shape how we engage with our communities today. Decades on, Kingspan remains deeply rooted in the community of Kingscourt, Ireland, where the business was founded. Being engaged in our local communities is a core element of the culture of Kingspan.

Our policies

Aims

Comply with all local laws in the countries we operate in.
Ensure supply chain accountability.

Modern slavery

Slavery and human trafficking are abhorrent crimes and we all have a responsibility to ensure that they do not continue. At Kingspan we pride ourselves on conducting our business ethically and responsibly. The Modern Slavery Act 2015 became UK legislation and

Supply chain engagement Kingspan has developed an ethical and procurement strategy for procuring materials and services in a sustainable way, and we seek to build and maintain long term relationships with key suppliers and contractors to ensure that they are aligned to the same standards. Many of our suppliers are accredited to ISO 9001, ISO 14001 and OHSAS 18001, which cover quality, environmental and health and safety management systems. In November 2019 we held our annual Supplier Forum with specific focus given to our new

→ Deliver a memorable customer

experience.

→ Develop the employee

experience, so our teams never

want to work for anyone else.

→ Measure what our customers

actually experience. Kingspan is

currently in its first phase of a

Group wide customer experience

programme. We have had over

10,000 responses and have

very ambitious targets for this

programme in the short to

medium term. We look forward

to updating you as we go

through the process.

Report Strategic & Business

It is important that our businesses have the flexibility to support initiatives which are relevant to the local workforce and to the communities in which they operate. In 2019 we are proud to have supported a wide range of initiatives, including: runs against cancer, stimulating the local environment through beekeeping, community tidy-towns initiatives, festive family box donations and multiple sponsorship and fundraising events.

World Water Day

In 2019 Kingspan went blue for World Water Day. Our Water & Energy division launched a campaign to raise awareness about water as a resource, and to raise funds for the "Just a drop" foundation.

The children are our future Children led a climate revolution in 2019, urging those in power to take action. Nearly 8 million people reportedly took part in protests across the globe in March and September. In this year's report we want to highlight a number

of projects in which Kingspan supported the development and protection of children across the globe in 2019:

In Ireland we have supported Junior Achievement Ireland (JAI) for over 16 years. JAI encourages young people to stay in education and helps them to develop the skills they need to succeed in
a changing world. Kingspan volunteers have presented to students on the value of STEM subjects and we have been inspiring students through tours of our newly opened Global Innovation Centre, IKON.

In Poland, Kingspan supported a local children's home in Sienno which provides shelter to 40 children between the ages of 4 and 16. Our employees donated toys and sports equipment for Children's Day and donated funds to support the summer camp.
For the past 5 years, Kingspan has supported Gena Heraty's project in Haiti which provides shelter and care for over 70 orphans, 30 of which have special needs. Gena was named the Irish Red Cross Humanitarian of the Year in 2019.

required all large UK companies and businesses who supply goods or services in the UK to publish a slavery and human trafficking statement each financial year on their website. Kingspan is fully committed to ensuring that modern slavery is not taking place in our business or any of our supply chains. We adopted and published our policy statement at the end of 2016 and all our businesses are responsible for ensuring supplier compliance with the legislation.

Photo captions:

Children participating in JAI's 'Futurewize' programme

First Day at School, NPH, Haiti

Kingspan Water & Energy employees enjoying World Water Day

Children from the Sienno Children's Home on summer camp

sustainability programme. Productive discussions and workshops were held throughout the day with a range of suppliers resulting in some collaborative projects that will support the delivery of our goal for a 50% reduction in product CO₂ intensity from our primary supply partners by 2030.

Customer experience programme Everything that our customers experience with Kingspan matters to us. Whether it's the performance of our product solutions, the responsiveness of our service teams or the efficiency of our deliveries, we strive to provide a positive experience to all our customers.

To help us achieve our strategic goals we have introduced four key commitment areas into our businesses on which we are focusing as part of our customer excellence programme:

→ Continue to innovate.

Kingspan Water

Energy launch World Water Day campaign.

2019 Statementsplc Group FinancialKingspan& Report Annual -

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	BusinessBusiness& Stra& trategicReportReport	SustainainabilityReportReport	Directors'ReportReport FinanancialStatemStatements	OtherOtherInformation
					Report of the Audit Committee
The Board	Chairman's Introduction	Report of the Nomination & Governance Committee		Report of the Remuneration Committee

Report of the Directors

Product		Kingspan Insulated Panels
	@	BENCHMARK Hook-on Cassettes


Energy/		The Karrier panels provided over double
Carbon		the thermal values specified for the
Saving	@	project, directly impacting the HVAC
		systems' output, operating costs and
		maintenance requirements.

Space/	With such a large cantilever over the
Dimensions	existing heritage building, weight was a
@	crucial consideration and a key reason
	in switching from pre-cast concrete to a
	light-weight panel solution.

Health &	Air leakage rates achieved on the
Wellbeing	project are excellent, critical for

protecting the museum's important artefacts and very difficult to achieve using traditional methods of construction.

Speed/	The pre-modularisation of the panels
Ease of build	and the roof liner panel enabled a fast
@	enclosure of the building envelope and
	an earlier start on internal works versus
	traditional methods of construction.

Aesthetics	The panel's metallic finishes echo the
	vast landscapes of Western Australia

and reflect the State's mineral heritage and the origins of the WA Museum.

Planet		Local material sourcing was a key focus
Passionate/		for this project. Given Kingspan's global
Sustainability	@	manufacturing capacity, it contributed
		to the achievement of 80% of
		materials being locally sourced.
Awards/		The new Museum for Western Australia
Certifications		is among six national finalists for
	@	the 2020 Australian Construction
		Achievement Award.
	@	-
	@
	@
	@
	@

Western Australia Museum

Perth, Australia

Kingspan's BENCHMARK Hook-On Cassette's were chosen for the project due to their efficiency in speed of construction, airtightness, thermal performance, and aesthetic potential, all encompassed by a through wall 25 year performance warranty as

an added benefit.

Alex Dennis, National Business Development Manager

Kingspan Insulated Panels, Australia

DIRECTORS' REPORT

Report Strategic & Business

2019 Statementsplc Group FinancialKingspan& Report Annual -

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The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

THE BOARD

The Board provides entrepreneurial leadership and sets the governance framework for the Group.

Chairman

Eugene Murtagh	Eugene Murtagh is the non-executive Chairman of the Group.
(Age 77)	Key skills & experience: Eugene founded the Kingspan business in 1965 and, as CEO until 2005, he
Ireland
led its growth and development to become an international market leader. As Chairman, he sets
	the tone at the top, developing and embedding values. He has an unrivalled understanding of the
	Group, its business and its ethos, and demonstrates outstanding leadership and governance skills.
Chief Executive Officer

Gene M. Murtagh	Gene Murtagh is the Group Chief Executive Officer. He was appointed to the Board in November
(Age 48)	1999.
Ireland	Key skills & experience: Gene joined the Group in 1993 and was appointed CEO in 2005. He was
	previously the Chief Operating Officer from 2003 to 2005, and prior to that he was managing
	director of the Group's Insulated Panel business and of the Water & Energy business. He leads the
	development of the Group's strategy and has a deep knowledge of all of the Group's businesses
	and the wider construction materials industry.
Executive directors

Geoff Doherty	Geoff Doherty is the Group Chief Financial Officer. He joined the Group, and was appointed to the
(Age 48)	Board, in January 2011.
Ireland	Key skills & experience: Prior to joining Kingspan Geoff was the Chief Financial Officer of
	Greencore Group plc and Chief Executive of its property and agribusiness activities. He is a qualified
	chartered accountant, with extensive experience of capital markets and financial management in
	an international manufacturing environment.

Russell Shiels	Russell Shiels is President of Kingspan's Insulated Panels business in the Americas as well as
(Age 58)	Kingspan's global Data & Flooring business. He joined the Board in December 1996.
United States	Key skills & experience: Russell has experience in many of the Group's key businesses, and was
of America
previously Managing Director of the Group's Building Components and Data & Flooring businesses
	in the UK. He brings to the Board his particular knowledge of the building envelope market in the
	Americas, as well as his understanding of the office and datacentre market globally.

Peter Wilson	Peter Wilson is Managing Director of the Group's global Insulation Boards business. He was
(Age 63)	appointed to the Board in February 2003.
United Kingdom	Key skills & experience: Peter has been with the Group since 1981, and has led the Insulation
	Boards division since 2001. He has unrivalled knowledge and experience of the global insulation
	industry, gained over almost 40 years' in the business.

Gilbert McCarthy	Gilbert McCarthy is Managing Director of the Group's Insulated Panels businesses in the UK, Ireland,
(Age 48)	Western Europe, Middle East and Australasia. He was appointed to the Board in September 2011.
Ireland	Key skills & experience: Gilbert joined the Group in 1998, and has held a number of senior
	management positions including managing director of the Off-site division and general manager
	of the Insulation Boards business. He brings to the Board his extensive knowledge of the building
	envelope industry, in particular in Western Europe and Australasia.

Report of the Remuneration Committee

Report of the Audit Committee

Report of the Directors

Non-executive directors			Directors'


Linda Hickey	Linda Hickey was appointed to the Board in June 2013, and is appointed as the Senior Independent
(Age 58)	Director.			Report
Ireland	Key skills & experience: Linda is a registered stockbroker and was formerly the Head of Corporate
Independent	Broking at Goodbody Capital Markets where she worked closely with multi-national corporates
	and the investor community. Previous experience includes working at NCB Stockbrokers and Merrill
	Lynch. Her considerable knowledge and experience of capital markets and corporate governance
	provide important insights to the Board.
	Qualifications: B.B.S.
	External appointments: Chair of the board of the Irish Blood Transfusion Service, and non-executive
	director of Cairn Homes plc.

Michael Cawley	Michael Cawley was appointed to the Board in May 2014.
(Age 65)	Key skills & experience: Michael is a chartered accountant, and was formerly Chief Operating Officer
Ireland	& Deputy Chief Executive of Ryanair. His extensive international financial and business experience as	-
Independent
well as his role on other audit committees are an asset to the Board and to the Audit Committee.
Annual

	Qualifications: B. Comm., F.C.A.

	External appointments: Chairman of Hostelworld Group plc, and non-executive director of Flutter	Report
	Entertainment plc and Ryanair Holdings plc.

		FinancialKingspan&
John Cronin	John Cronin was appointed to the Board in May 2014.
(Age 60)	Key skills & experience: John is a qualified solicitor, and partner and former chairman of McCann
Ireland	FitzGerald. He has more than 30 years' experience in corporate, banking, structured finance
Independent
and capital markets matters. He is a member of the International Bar Association, and is a past	StatementsplcGroup
	Qualifications: B.A. (Mod) Legal Science, Solicitor in Ireland and England & Wales.
	President of the British Irish Chamber of Commerce. His valuable legal, corporate governance and
	capital markets experience brings a unique perspective to the Board.
	External appointments: Non-executive director of The Dublin Theatre Festival.	2019


Bruce	Bruce McLennan was appointed to the Board in June 2015.
McLennan	Key skills & experience: Bruce is Managing Director and Co-Head of Advisory at Gresham Advisory
(Age 55)
Partners Limited. He is also a Member of the Australian Institute of Company Directors, Australian
Australia
Society of Certified Practising Accountants, and a Fellow of the Financial Services Institute of
Independent
Australia. He brings to the Board over 30 years' experience in investment banking, and a broad
	knowledge of international capital markets and strategic and corporate planning.
	Qualifications: B.Bus, M. Comm.
	External appointments: Member of the Australian Government Takeovers Panel.

Dr Jost	Jost Massenberg was appointed to the Board in February 2018.
Massenberg	Key skills & experience: Jost was Chief Executive Officer of Benteler Distribution International
(Age 63)
GmbH, and was formerly the Chief Sales Officer and a member of the executive board of
Germany
ThyssenKrupp Steel Europe AG. His more than 30 years' industry experience in European steel and
Independent
major manufacturing businesses are of enormous benefit to the Board.

	Qualifications: PhD Business Admin.
	External appointments: Chairman of VTG Aktiengesellschaft, and a non-executive director in a
	number of large private companies.

Anne Heraty	Anne Heraty was appointed to the Board in August 2019.
(Age 59)	Key skills & experience: Anne is the founder and Chief Executive Officer of Cpl Resources plc.
Ireland	She has over 20 years' experience running an international recruitment and outsourcing business
Independent
and is currently on the Board of IBEC, having previously held a number of other non-executive
	directorships, and brings this broad business and entrepreneurial experience to the Board.
	Qualifications: B.A. in Mathematics & Economics.
	External appointments: Chief Executive Officer of Cpl Resources plc.
Company Secretary			58

Lorcan Dowd	Lorcan Dowd was appointed Head of Legal and Group Company Secretary in July 2005.

(Age 51)	Key skills & experience: Lorcan qualified as a solicitor in 1992. Before joining Kingspan he was Director	-
Ireland	of Corporate Legal Services in PwC in Belfast, having previously worked as a solicitor in private practice.
	59

Board Committees:	Audit	Nomination & Governance	Remuneration

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The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

Report of the Remuneration Committee

Report of the Audit Committee

Report of the Directors

CHAIRMAN'S INTRODUCTION

At Kingspan, the Board sets this strategy and oversees the values and behaviours that shape our high-performance culture. A sound understanding of how performance is generated over time has been key in steering strategies toward the level of sustainable value creation we have delivered. I fundamentally believe we have an effective and entrepreneurial Board in place which has unlocked significant value for our stakeholders and wider society.

USA

Seattle Opera Centre

Insulated Panels:

Kingspan Karrier Panel

The Financial Reporting Council's ('FRC') 2018 U.K. Corporate Governance Code (the 'New Code') came into effect for Kingspan from 1 January 2019. In publishing the Code, the FRC has aimed to emphasise the importance of good corporate governance to long-term sustainable success.

Throughout 2019 the Board took a number of steps to refine its approach to reflect the altered focus of the New Code, relating to:

Board Leadership and Company Purpose
Division of Responsibilities
Composition, Succession and Evaluation
Audit, Risk and Internal Control
Remuneration

The New Code aims to return to a principle based approach to governance, as opposed to risking an overly prescriptive regime. A cornerstone of safeguarding our long-term ambitions has been a commitment to high standards of corporate governance, as well as a Board with a depth of experience and expertise. In making and implementing actions, the Board aims to maintain a balance between short-term pressures for change and the long-term impacts of decisions.

As a Board, we hope you find our reporting to be meaningful in detailing how we have applied the revised principles under the New Code. In areas where we have deviated from any provisions of the New Code, we aim to provide clarity as to how we continue to meet the Principles of the Code and demonstrate why our approach represents less governance risk based on our strategy, business and outlook.

During the past year, the Board was pleased to engage with major shareholders on a number of occasions. In addition to the many investor and executive management meetings held throughout the year, the Chair of the Remuneration Committee has engaged with a host of our major shareholders to discuss the outcome of the 2019 AGM, as well as changes to our remuneration policy in light of updates to the

UK Code. Further details of these discussions are detailed in the Report of the Remuneration Committee contained in this Annual Report.

On behalf of the Board, I would like to thank those shareholders who provided their views on governance and strategy during the past year.

Eugene Murtagh

Chairman

Report Directors'

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The Board

Chairman's Introduction Report of the Nomination & Governance Committee

REPORT OF THE NOMINATION & GOVERNANCE COMMITTEE

This statement outlines how Kingspan has applied the principles and complied with the provisions set out in the UK Corporate Governance Code (July 2018) ('the Code').

Report of the Remuneration Committee

Report of the Audit Committee

Report of the Directors

USA	Directors'
Broadwater Office
Insulated Panels:	Report
Kingspan Dri-Design

& Report Annual -

The full text of the Code and

of the Irish Corporate Governance Annex can be obtained from

the following websites respectively: www.frc.org.uk www.euronext.com

Statement of compliance The directors confirm that the Company has throughout the accounting period ended 31 December 2019 complied with the provisions of the UK Corporate

Board committees

The Board has established the following committees: Audit, Nomination & Governance, and Remuneration committees. All committees of the Board have written terms of reference setting out their authorities and duties and these terms are available on the Group's website www.kingspan.com.

The Members of each committee as at the date hereof, and the date of their first appointment to the committee, are set out below. The details of each committee's activities during the year are detailed in their respective reports as set out in this Annual Report.

2019 Statementsplc Group FinancialKingspan

Governance Code (July 2018) in the manner hereinafter detailed.

Stakeholder views

The Board is cognisant of the principle underpinning Provision 5 of the New Code, which asks Boards to have regard for engagement mechanisms with stakeholders. The Board is fully aware of its responsibilities in this regard and other sections in this Annual Report set out clearly the long-lasting partnerships we have developed with customers, suppliers and communities. We are also aware of the importance of engagement with the workforce to the development of strategy as well as uncovering of risk and promoting new opportunities. The Board is pleased to confirm that Linda Hickey has been appointed

as the director responsible for workforce engagement to facilitate the channelling of employee views to Board discussions. This process of engagement will also allow the Board to consistently assess and monitor the evolution of the company's corporate culture, while promoting the ability of the workforce to raise concerns.

Audit Committee

Michael Cawley (Chair)	Appointed 2014	Independent
Anne Heraty	Appointed 2019	Independent
Bruce McLennan	Appointed 2020	Independent

Nomination & Governance Committee

Eugene Murtagh (Chair)	Appointed 1998
Gene M. Murtagh	Appointed 2007
John Cronin	Appointed 2014	Independent
Bruce McLennan	Appointed 2017	Independent
Jost Massenberg	Appointed 2019	Independent

Remuneration Committee

Linda Hickey (Chair)	Appointed 2015	Independent
Michael Cawley	Appointed 2014	Independent
Bruce McLennan	Appointed 2017	Independent

Attendance at Board and Committeee meetings during the year ended 31 December 2019

	Board		Audit		Nominations	Remuneration
	A	B	A	B	A	B	A	B

Eugene Murtagh	7	7			1	1

Gene M. Murtagh	7	7			1	1

Geoff Doherty	7	7

Russell Shiels	7	7

Peter Wilson	7	7

Gilbert McCarthy	7	7

Helen Kirkpatrick	1	1			1	1	1	1

Linda Hickey	7	7	1	1			4	4

Michael Cawley	7	7	5	5			4	4

John Cronin	7	7	5	5	1	1

Bruce McLennan	7	7			1	1	4	4	62

Jost Massenberg	7	7


Anne Heraty	3	3	3	3						-
Column A - indicates the number of meetings held during the period the director was a member of the Board and/or Committee
	63
Column B - indicates the number of meetings attended during the period the director was a member of the Board and/or Committee


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Report of the Directors

Board composition and responsibilities

There is a clear division of responsibilities within the Group between the Board and executive management, with the Board retaining control of strategic and other major decisions. The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company. One of the key roles for the Chairman in doing so is promoting a culture of objectivity, openness and debate. In addition, the Chairman facilitates constructive board relations and the effective contribution of all non-executive directors, and ensures that directors receive accurate, timely and clear information.

The balance of skills, background and diversity of the Board contributes

to the effective leadership of the business and the development of strategy. The Board's composition is central to ensuring all directors contribute to discussions.

Belgium

Gova Meubelen

Insulated Panels:

Kingspan Dri-Design,

QuadCore™ Karrier

The main features of the Group's internal control and risk management systems that relate specifically to the Group's financial reporting processes are:

→ Budgets and Strategic Plans

are approved annually by the

Board and compared to actual

performance and forecasts on a

monthly basis;

→ Sufficiently sized finance

teams with appropriate level of

experience and qualifications

throughout the Group;

→ Formal Group Accounting Manual

in place which clearly sets out

the Group financial policies in

addition to the formal controls;

→ Formal IT and Treasury policies

and controls in place;

→ Centralised Tax and Treasury

functions;

→ Sales are submitted and reviewed

on a weekly basis whilst full

reporting packs are submitted

and reviewed on a monthly basis;

The validation of consolidation journals as part of the management review process and as an integral component of the year-end audit process;
The review and analysis of results by the Chief Financial Officer and the auditors with the management of each division;
Consideration by the Audit Committee of the outcomes from the annual risk assessment of the business;
The review of internal and external audit management letters by the Chief Financial Officer, Head of Internal Audit and the Audit Committee; and the follow up of any critical management letter points to ensure issues highlighted are addressed.

Further information on the risks faced by the Group and how they are managed are set out in the Risks

Risk Management section of this Annual Report.

Effectiveness and independence The committee has reviewed the size and performance of the Board during the year and this process occurs annually. The Board continues to ensure that each of the non-executive directors, excluding the Chairman, remain impartial and independent in order to meet the challenges of the role.

Throughout the year, more than half of the Board, excluding the Chairman, comprised independent non-executive directors. Linda Hickey is the senior independent director on the Board. The senior independent director provides a sounding board for the Chairman and serves as an intermediary for the other directors and shareholders when necessary. The directors consider that there is strong independent representation on the Board.

The Board has had due regard to various matters which might affect, or appear to affect, the

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Group FinancialKingspan& Report Annual -

As a means to foster challenge and director engagement, led by the senior independent director, the non- executive directors meet without the Chairman present at least annually. Likewise, the Chairman holds meetings with the non-executive directors without the executives present. In each of these settings, there is a collegiate atmosphere that also lends itself to a level of scrutiny, discussion and challenge.

All directors have access to the advice and services of the Company Secretary. The Company has procedures whereby directors (including non-executive directors) receive formal induction and familiarisation with Kingspan's business operations and systems on appointment, including trips to manufacturing sites with in-depth explanations of the processes involved at the site.

The ordinary business of an AGM is to receive and consider the Company's Annual Report and statutory financial statements, to review the affairs of the Group, to elect directors, to declare dividends, to appoint or reappoint auditors and to fix the remuneration of auditors and directors.

The Chairman of the Board of Directors shall preside as chairman of every general meeting and in his absence, one of the directors present will act in the capacity of chairman. The quorum for a general meeting shall be not less than three members present in person or by proxy and entitled to vote. At any general meeting, a resolution put to the vote of the meeting shall be decided by a show of hands unless a poll is duly demanded. All ordinary shares rank pari passu and carry equal voting rights. Every member present in

Internal control and risk management systems

The Board confirms that there is an ongoing process for identifying, evaluating and managing any significant risks faced by the Group. This process has been in place for the year under review and up to the date of approval of the financial statements and it is regularly reviewed by the Board in compliance with 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting' issued by the Financial Reporting Council.

The Board has delegated responsibility to the Audit Committee to monitor and review the Group's risk management and internal control processes, including the financial, operational and compliance controls, through detailed discussions with management and the executive

and

→ Internal audit function review

financial controls and report

results/findings on a quarterly

basis to the Audit Committee.

In addition, the main features of the Group's internal control and risk management systems that relate specifically to the Group's consolidation process are:

The review of reporting packages for each entity as part of the year-end audit process;
The reconciliation of reporting packages to monthly management packs as part of the audit process and as part of management review;

Leadership

The Nomination and Governance Committee (the 'committee'), leads the process for appointments while ensuring plans are in place for orderly succession to both the Board and senior management positions. A fundamental aspect of overseeing appointments to senior management remains the development of a diverse pipeline. In terms of non-executive directors, the committee remains guided by the principle that all appointments will be made on merit, but having regard, where possible to diversity of gender, age and nationality.

The non-executive directors on the Board currently have the following mix of skills and experience as set out in the table below:

independence of certain of the directors. The Board considers that each of the non-executive directors (excluding the Chairman of the Board) are independent.

In determining the independence of John Cronin, both at the time of his appointment and subsequently as part of annual reviews of the Board's composition, the committee had particular regard for his position as a partner of McCann FitzGerald, one of the Company's legal advisors. The committee concluded that Mr Cronin was fully independent, taking into account the following material factors:

He has no role in the selection or retention of legal advisors to the Company;

2019 Statementsplc

Shareholders' meetings and rights The Company operates under the Irish Companies Act 2014 (the 'Act'). This Act provides for two types of shareholder meetings: the Annual General Meeting ('AGM') with all other meetings being called Extraordinary General Meetings ('EGM').

The Company must hold an AGM each year in addition to any other shareholder meeting in that year.

person or by proxy shall upon a show of hands have one vote, and every member present in person or by proxy shall upon a poll have one vote for each share of which they are the holder. In the case of an equality of votes the Chairman shall, both on a show of hands and at a poll, have a casting vote.

Further details of shareholders rights with regards the General Meetings are set out in the Shareholder Information section of this Annual Report.

directors, the review and approval of the internal audit reports, which focus on the areas of greatest risk to the Group, and the external audit reports, as part of both the year- end audit and the half year review process, all of which are designed to highlight the key areas of control weakness in the Group. Further details of the work conducted by the Audit Committee in this regard is detailed in the Report of the Audit Committee contained in this Annual Report.

Name	Nationality	International	Financial	Governance	Leadership	Industry	Legal

Eugene Murtagh	Irish	•	•	•	•	•
Linda Hickey	Irish	•	•	•	•
Michael Cawley	Irish	•	•	•	•	•
John Cronin	Irish	•	•	•	•		•
Bruce McLennan	Australian	•	•		•
Jost Massenberg	German	•	•	•	•	•
Anne Heraty	Irish	•	•	•	•	•

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Report of the Directors

All work undertaken by McCann FitzGerald for the Company is managed by other employees within the firm, and there are formal arrangements in place, both at McCann FitzGerald and Kingspan, to ensure there are no conflicts of interests;
Mr Cronin is an experienced and accomplished corporate lawyer who adds important legal and regulatory experience to the Board;
Since his appointment to the Board, Mr. Cronin has not had any involvement in advising the Company on any legal matters;
The total fees paid to McCann FitzGerald during the year were €125,947 (2018: €114,533) and account for substantially less than 1% of McCann FitzGerald's annual revenues.

In these circumstances the Board concluded that there was no material relationship, financial or otherwise, which might either directly or indirectly influence his judgement.

In addition to these considerations, given the potential for a perceived conflict of interests, at the time of Mr Cronin's appointment, we engaged with ISS to discuss the steps we had taken to avoid any conflicts developing during his tenure in order to alleviate any potential shareholder concerns. Both parties were satisfied at the time that the relationship was not likely to impact Mr Cronin's independence as a director, and the Company agreed to disclose annually the fees paid to McCann FitzGerald as a related party transaction.

In assessing the independence of Linda Hickey, the Board had due regard to her previous position as a senior executive at Goodbody Stockbrokers, one of the Company's corporate brokers. Ms Hickey retired from her role at Goodbody Stockbrokers in 2019. Moreover, the annual level of fees and expenses paid to Goodbody Stockbrokers were normally in the region of €50,000 for corporate broking services during her tenure there. In assessing Ms. Hickey's independence annually, the Committee also took into account her invaluable experience in working for two of the largest Irish stockbroking firms. In Ireland, she has unrivalled experience in capital markets and particularly Irish public companies, which is hugely valuable to the Company and our shareholders.

The Board concluded that neither Ms Hickey's nor Mr Cronin's independence was affected and considers that between them they bring valuable financial, capital markets, governance and legal risk experience to the Board.

Conflict of Interests Acknowledging the importance of independent representation to the effective functioning of the Board, as well as the scrutiny and, when necessary, the challenging of management, as part of the evolution of our governance framework, the Committee developed and approved a conflicts of interest policy which will guide all decisions of the Board when actual or potential conflicts of interest arise.

The policy stipulates that directors are required to avoid situations

a director have grown considerably in the past decade. The committee reviewed Mr Cawley's attendance and contribution as a non-executive director, as well as his other mandates. It was noted that since his appointment as a non-executive director, Mr Cawley has attended 100% of the Audit Committee meetings and has only missed

one out of a total of 82 Board and committee meetings. The committee has engaged with Mr Cawley and noted his assurances that he will continue to devote sufficient time to the Board. The committee will continue to keep under review

the external commitments of all Directors.

Performance evaluation Kingspan has in place formal procedures for the evaluation of its Board, committees and

new non-executive to the Board, the committee considered whether or not to engage a firm of consultants to assist in the process, but decided that in order to ensure best fit with the Company, it would use

its internal knowledge and existing pool of candidates, before selecting and recommending Ms Heraty's appointment to the Board.

Succession Planning

One of the primary remits of the committee is to ensure that robust succession plans are in place for the directors and senior management, taking into consideration planned and unplanned departures, as well as the strategic evolution of the business. Aligning succession planning to our strategy is a cornerstone of strong committee and Board governance, and will continue to be a focus of

Report Directors'

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ResidencyIndependence

68%	8%	50%
Ireland	Australia		Independent
	8%
	Germany
	8%
	USA
	8%			50
	UK			Non-
			Independent

Gender			Tenure

83%	17%	33%	17%
Male	Female		Over 9 years	Less than
				3 years

25%

Between 3 and 6 years

Netherlands	25%
Grote Boel	Between 6
Insulated Panels:	and 9 years

Kingspan Dri-Design

where they have, or could have, a direct or indirect interest that conflicts, or may conflict, with the Company's interests. Directors are required to give notice of

any potential situational and/ or transactional conflicts, which are considered at the following Board meeting and, if appropriate, situational conflicts are authorised. Directors are not allowed to participate in such considerations or to vote regarding their own conflicts.

External commitments Non-executivedirectors, including the Chairman, may serve on other boards provided they continue to demonstrate the requisite commitment to discharge their duties effectively. The Committee reviews the extent of the directors' other interests on an ongoing basis throughout the year. The Committee is satisfied that each of the directors commits sufficient time to their duties in relation to the Company. The Chairman and each of the directors have also confirmed they have sufficient time to fulfil their obligations to the Company.

In assessing the time commitments of Board members, the Committee had particular regard for the external commitments of Michael Cawley, who is also a non-executive director of Ryanair Holdings plc, and Flutter Entertainment plc, as well as Chairman of Hostelworld Group plc. The Committee recognises the views expressed by shareholders in this area, as the demands of being

individual directors. The purpose of this formal evaluation is to ensure that the Board of Directors (on

a collective and individual basis) is performing effectively and to ensure stakeholder confidence in the Board. The Chairman reviews annually the performance of the Board of Directors, the conduct of Board meetings and committee meetings, and the general corporate governance of the Group.

An externally facilitated review of the Board's performance was carried out during 2018 by Better Boards. We will conduct another external evaluation within three years in line with best practice.

Board changes

During the past year, we continued to deliberately refresh the Board. As a Board, we are fully aware of the benefits of balancing longer serving and newly appointed Directors, which is central to the generation of new business strategies.

In May 2019, having served for almost 12 years, Helen Kirkpatrick stepped down from the Board. Ms Kirkpatrick's input was hugely valuable to the Board, as well as to all the key committees she sat on. Later in the year, Anne Heraty was appointed as a non-executive Director. With over two decades experience as the CEO of a public company, Ms Heraty deepens the diversity of background and expertise to our Board significantly. In considering the appointment of a

the committee in the coming period. One specific update to the New Code is that, generally, chairs should not remain in place for over nine years, although there is an exception to this rule to facilitate succession planning, and the committee, much like the New Code, recognises that governance is not always best served by rigid guidance, particularly for a position as important as that of the Chairman.

As the founder of the business in 1965, Eugene Murtagh has led its growth and development as both Chairman and CEO until his retirement as CEO in 2005. As Chairman, Mr Murtagh has been instrumental in setting the tone at the top, developing and embedding values as well as encouraging performance and ensuring that management have the necessary support and controls in place to deliver on its strategy. Mr Murtagh has now indicated to the Board that it is his intention to retire

as Chairman and non-executive director within the next 18 months. The committee believes that this is an appropriate timeline which balances the need for stability and continuity whilst ensuring an orderly transition takes place between him and his successor during what will be a significant change in the leadership of the Board. In line with best practice, Mr Murtagh will not Chair the committee when his successor is being selected.

2019 Statementsplc Group FinancialKingspan

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Report of the Directors

Product		Kooltherm® Pipe Insulation
	@
Energy/		Studley Castle's refurbishment was
Carbon		designed to exceed current energy
Saving	@	performance requirements.

Space/	Kooltherm® Pipe Insulation enabled
Dimensions	a reduction in the insulation thickness
@	by 25-30%, a significant benefit in	a
	space constrained application.

Health &

Over 15,000 linear metres of pipework

Wellbeing

supply the hotel's 200 guest rooms.

With low VOC emissions, Kooltherm®

Pipe Insulation helped to achieve

excellent indoor air quality.

Speed/

Thinner insulation helped to increase

Ease of build

clearances, making the installation

easier and more efficient.

Aesthetics

Planet

Kooltherm® Pipe Insulation holds

Passionate/

a highest possible BRE Green Guide

Sustainability

rating of A+ and is manufactured to

a BS EN ISO 14001, qualifying for the

Responsible Sourcing credit.

Awards/

Kooltherm® Pipe Insulation qualifies

Certifications

for the highest possible BRE Green

Guide rating of A/A+ and is

manufactured to a BS EN 14001

Environmental Management System.

Studley Castle Hotel

Studley, United Kingdom

We recommended Kingspan for the Studley Castle Hotel as our client wanted to ensure a thermally efficient build to minimise costs and maximise benefits. Given

our experience working with its products, we were confident we could deliver this. In addition, we could also accomplish excellent indoor air quality as there are no fibres emitted from the insulation.

Samuel Hitch, Managing Director, Chase Insulations Ltd.

Click here to see more

Report Directors'

2019 Statementsplc Group FinancialKingspan& Report Annual -

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The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

Report of the Remuneration CommitteeReport of the Audit Committee

Report of the Directors

REPORT OF THE REMUNERATION COMMITTEE

On behalf of the Remuneration Committee (the "committee") and the Board, I am pleased to present my first Report on Directors' Remuneration, having been appointed as Chair of the committee in May 2019.

Corporate governance developments

As an Irish listed company, Kingspan reports against the provisions of the UK Corporate Governance Code (July 2018). This latest iteration

of the Code has broadened the role of the committee, as well as introducing additional practices concerning director pay, all of which have been carefully considered by the committee during the year and extensively discussed with shareholders.

As noted in last year's Remuneration Report, the EU Shareholders' Rights Directive, which includes a focus on directors' remuneration disclosures and shareholder approval of the directors' remuneration policy,

has yet to be transposed into Irish law and it is not yet clear how

Shareholder consultation At the 2019 AGM, 23% of shareholders opposed the resolution relating to our remuneration policy. When engaging with shareholders around the AGM, we developed a clear understanding of the concerns of those who voted against the remuneration policy, as well as those who supported the resolution while noting minor concerns. During engagement with shareholders, the most common areas of discussion related to pension contribution levels; post-cessationshareholding guidelines; and the adoption of post- vesting holding for PSP Awards. In the period since the 2019 AGM, we wrote to shareholders representing more than half of our issued share capital and again engaged with a number of our major shareholders.

The inclusion of a two-year post- vesting holding period under the PSP;
A reduction in pension contributions for all future executive directors, which will be aligned with the rate applicable to the workforce in the relevant local market; and
The introduction of a post- cessation shareholding guideline for all new executive directors, with the current shareholding guidelines applying for two years after an executive's departure.

Following confirmation of the proposed changes, we again engaged with shareholders to detail the background to the changes and to foster mutual understanding of the steps we have taken to meet the evolution of market best-practice in

Report Directors'

& Report Annual -

Prior to my appointment as Chair, I had served on the committee for four years and have developed a fundamental understanding of the company's incentive framework, its link to the Group's strategy, and the strong alignment between Kingspan's performance and our executive directors' remuneration.

Our remuneration philosophy Central to our approach to remuneration are the principles of simplicity, pay for performance and transparency. Variable remuneration is only paid for strong performance and maximum payouts will only

be realised for truly exceptional performance. A significant portion of remuneration is delivered through equity, ensuring strong levels of alignment between the interests of management and shareholders. In contrast to many of our peers

Business performance and pay outcomes

2019 was another year of strong performance for the Group across a number of measures. In the face of some mixed markets and a relatively weaker second half, Group revenue increased 7% to €4.7bn, and Trading Profit was up 12% to €497.1m, reflecting both volume growth and a healthy focus on margin management.

Earnings Per Share ('EPS') rose 11% to 204.6 cent and Total Shareholder Return ('TSR') for the year was 47.2%, which are two of the key performance measures used to determine the executives' performance-related pay. This has resulted in varying levels of bonus being achieved, with 71% of the Group EPS targets achieved, and between 82% - 100% of the divisional

Fixed pay v Variable pay

38%

Fixed

62%

Variable

Variable pay

Short Term v Long Term

this will be finally implemented in Ireland. Nevertheless, in advance of that transposition taking place, Kingspan proposed an advisory vote on its remuneration policy at its 2019 Annual General Meeting, and we were pleased that this was supported by more than three quarters of shareholders.

USA

San Francisco Consolidated

Administration Campus

Insulated Panels:

Kingspan BENCHMARK

Designwall 2000

While it is not always possible to reach a consensus of views, particularly when discussing remuneration, we believe we have addressed the common themes emerging from the programme of shareholder engagement.

Consequently, the committee has implemented the following changes to our incentive framework:

the UK & Ireland. On behalf of the committee, I want to thank all those shareholders who took the time to engage with us. We are pleased that shareholders were supportive of the changes we have made. The input of our shareholders is key to our aim of consistently improving transparency and we have used certain aspects of the feedback

to enhance our disclosure.

2019 Statementsplc Group FinancialKingspan

in the UK & Ireland, our incentive framework is based on straightforward metrics. The EPS measure we employ under both the annual bonus and Performance Share Plan (PSP) is identical to that which we report in the income statement and is not subject to any adjustments. This approach cascades through the organisation and promotes transparency and simplicity for participants and our shareholders. Our relentless focus on simplicity and a high-performance culture has been instrumental in driving the growth of the business and significant value creation for stakeholders.

profit targets having been met.

The strength of the Group's performance has also been reflected in the achievement of top quartile TSR performance among the peer group for the ninth cycle in a row which, together with strong long- term EPS growth, resulted in the 2017 PSP Awards vesting at 100% of maximum. Further details on outcomes under our incentive plans are set out later in this report.

Linda Hickey

Chair of the Remuneration

Committee

49%

Short Term

51%

Long Term

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Pensions

Over the past 12 months, the issue of pensions, and specifically any disparity between contribution levels for executives and the wider workforce, has become an area of focus for a number of investors. We have reflected on the range of viewpoints expressed to the committee on this, resulting in the amendment to our policy to limit all pensions for future executives to those available to the workforce

→ For both the CEO and CFO,

contributions are determined by

reference to their salary, being

c. 18% and 24% respectively. In

relation to the Divisional MD's,

Gilbert McCarthy's contributions

are at 20% of base salary,

whereas in the case of both Peter

Wilson and Russell Shiels, there

are specific legacy contractual

arrangements in place.

→ Peter Wilson, who has been

2019 Remuneration at a glance This section provides a snapshot of remuneration received by executive directors during 2019.

Salary

As flagged in last year's Annual Report, the CEO received a base salary increase of 5% in 2019. Peter Wilson, managing director of the Group's global Insulation Board received an increase of 10% in 2019, with other executives receiving an

Performance Share Plan

The Performance Share Plan ('PSP') awards vesting in May 2020, relate to awards granted in 2017.

These awards were subject to EPS growth and relative TSR performance targets measured over the period from the start of 2017 to the end of 2019. Target and actual outturns are

set out in the table below. 100% of awards granted will vest in May 2020.

Summary of Remuneration Policy

Set out below is a summary of the remuneration policy approved by shareholders at the 2019 AGM (as updated following shareholder consultation).

The policy is guided by the following overarching principles:

Simplicity
Transparency
High-performance

Report Directors'

in the relevant local market. While there are a number of investors that expect pensions to be similarly reduced for incumbent directors, there was also a clear recognition in our discussions with shareholders that addressing this issue for new hires is more achievable than seeking to change the contracts for incumbent executive directors. By reducing pensions for all future executives to those levels available to the general workforce, the committee has taken steps to align the current remuneration policy with the revised provisions of the UK Code.

To provide greater clarity, and in

employed with Kingspan for

almost 40 years, receives a base

pension contribution of 21%. In

2010 the committee negotiated

a revised contract with him

which included an increase in his

pension contribution by £75,000

per annum until retirement, and

in 2016, as part of its strategic

planning, the Company agreed

to extend his retirement age by

five years to 65.

→ Similarly, the contract of Russell

Shiels, who joined the Group in

1996, was renegotiated in 2013,

and his pension contributions

were increased by $100,000 per

annum until retirement. In 2018,

as part of its strategic planning,

increase of 3% in line with those awarded to the general workforce. Further details of the directors' salaries and total remuneration are set out in the Remuneration Table on page 74.

Annual bonus

The maximum annual bonus potential of 150% of basic salary for the CEO and CFO was based on achievement of Group EPS performance targets. For Divisional MDs, bonuses were based on a combination of stretching profit targets for their respective divisions, plus an element of Group EPS targets. The final outturns of the annual performance bonuses are

	Weighting	Targets	Performance	Payout
	(% of max.)


EPS	50%	CPI + 5%-10% compound p.a.	CPI + 12.2%	100%

TSR	50%	Median-Upper Quartile	87th percentile	100%

	How it Operates	Maximum Opportunity

Base salary	Base salaries are reviewed annually by the Remuneration	No prescribed
	Committee in the last quarter of each year. Increases	maximum

will generally be in line with increases across the Group, but may be higher or lower in certain circumstances to reflect performance, changes in remit, roles and responsibilities, or to allow newly appointed executives to move progressively towards market norms.

2019 Statementsplc Group FinancialKingspan& Report Annual -

response to the feedback received from shareholders, we set out in more detail below how the pension contributions for the incumbent executive directors are calculated. As outlined in our Remuneration Policy, the Group operates a defined contribution pension scheme for executive directors,

the Company agreed with Mr

Shiels to extend his retirement

age by five years to 65.

In line with good practice, the Committee will keep under review pension contributions for the current executives, noting however that these are legacy contractual

detailed in full below:

The CEO and CFO achieved 71% of maximum target, which is the equivalent of 106% of salary for each executive. Payouts for the divisional MDs ranged from 95% to 106% of salary, with Russell Shiels and Peter Wilson each having exceeded 100%

Pensions The Group operates a defined contribution pension scheme for executive directors. Pension contributions are calculated on base salary only. Contributions are determined on an individual basis and take into account a number of factors including age, length of service, and number of years to retirement. The committee may alternatively pay a cash amount subject to all applicable employee and employer payroll taxes and social security.

No current maximum for incumbent executives. For all future appointments, pensions will be capped at the rate applicable to the workforce in the relevant local market.

and contributions are determined on an individual basis and take into account a number of factors including age, length of service, and number of years to retirement.

arrangements that were put in place many years ago. The committee has taken appropriate measures to ensure contributions for future executives are fully aligned with those of the relevant local workforce. We consider the steps we have taken have ensured our alignment with evolving best- practice without causing disruption at a critical juncture in the Group's strategic development.

of their divisional profit target and Gilbert McCarthy having achieved 82% of his target.

Benefits	Executive directors' benefits include but are not limited	No prescribed maximum
	to life and health insurance, the use by the executive
	directors of company cars (or a taxable car allowance),
	and relocation or similar allowances on recruitment,
	each in line with typical market practice.

Annual	Executive directors receive annual performance related	150% of base salary
bonus	bonus based on the attainment of financial targets	Part deferred
	set prior to the start of each year by the committee.
	Bonuses are paid on a sliding scale if the targets are
	met. Maximum bonus is only achieved if ambitious
	incremental growth targets are achieved. No more than
	100% of salary may be delivered in cash through the
	bonus plan. Any performance related bonus achieved in
	excess of the amount payable in cash is satisfied by the

	Measure	Targets	Performance achieved	% Salary
	payout


CEO & CFO	EPS	95% - 120% of prior year	111%	71%

Divisional	Divisional profit targets	10% divisional profit growth	107% to 127% of prior year	95% to 106%
MDs
EPS	95% - 120% of prior year	111%

	grant of share awards, which are deferred for two years.

PSP	Executive directors are entitled to participate in the	200% of salary
	Group's Performance Share Plan (PSP). Under the terms	25% threshold vesting
	of the PSP, performance shares are awarded to the
	executive directors and the senior management team.
	The performance shares will vest after three years only
	if the Company's underlying performance has improved
	during the 3-year performance period, and if certain

performance criteria are achieved over the performance period. The awards are subject to a two-year post- vesting holding period.

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Chairman's Introduction

Report of the Nomination & Governance Committee

Directors'ReportReport FinanancialStatemStatements	OtherOtherInformation	2	2
			Report of the Audit Committee	Report of the Directors
	Report of the Remuneration Committee

In addition to the framework outlined, the following are key structural aspects of the remuneration policy.

Executive director shareholding guidelines

The committee recognises that share ownership is important in aligning the interests of management with those of shareholders. Shareholding guidelines

are in place whereby all executive directors are required to acquire a holding of shares in the Company equal to 200% of salary. The executive directors in practice hold significantly in excess of this requirement, and details of these shareholdings are provided in the Report of the Directors contained in this Annual Report. With effect from 2020, newly appointed

executive directors will also be subject to a post-employment shareholding policy equal to 200% of salary. The committee concluded that it was not necessary to implement post- employment guidelines for the current executive directors, having regard

to their long-standing high levels of shareholdings and their existing contractual arrangements.

Clawback

The committee recognises that there could potentially be circumstances in which performance related pay (either annual performance related bonuses and/or PSP Awards)

is paid out and where certain circumstances later arise which bring the committee to conclude that the payment should not have been made in full or in part. The

The committee may adjust the bonus and PSP that is payable if it considers the formulaic outcome is not representative of the underlying performance of the Company, investor experience or employee reward outcome.

The remuneration policy approved at the 2019 AGM is set out in full in the 2018 Annual Report and on our

maximum bonus being payable on the achievement of 10% divisional profit growth. A further 60% of the Divisional MDs' total bonus opportunity was payable on the achievement of the same Group EPS targets as for the CEO and CFO, ensuring a healthy balance between incentivising divisional and Group growth.

Report Directors'

Directors' Remuneration for year ended 31 December 2019

Executive Directors	Gene	Geoff	Russell	Peter		Gilbert	Total
	Murtagh	Doherty	Shiels(1)	Wilson(2)	McCarthy
	EUR'000	EUR'000	EUR'000	EUR'000	EUR'000	EUR'000
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018

Fixed Pay

- Salary and Fees	870	828	562	546	522	481	477	425	520	505	2,951	2,785

- Pension Contributions(3)	158	150	137	133	174	163	186	174	104	101	759	721

- Benefits(4)	36	34	34	33	55	55	20	19	37	33	182	174


Performance Pay(5)

- Cash element	870	828	562	546	522	481	477	211	495	493	2,926	2,559

- Deferred share awards	52	158	34	104	31	92	29	81	-	96	146	531


Total executive pay	1,986	1,998	1,329	1,362	1,304	1,272	1,189	910	1,156	1,228	6,964	6,770

Charge to Consolidated Income Statement for share options and awards(6)					3,241	2,807

clawback of performance related pay, and malus provisions (where awards are reduced to nil before they have vested) would apply in certain circumstances including:

a material misstatement of the Company's financial results;
a material breach of an executive's contract of employment;
error in calculation;
failure of risk management;
corporate failure;
any wilful misconduct, recklessness, and/or fraud resulting in serious damage to the financial condition or business reputation of the Company.

website at the following address: www.kingspan.com.

Performance related bonus

In 2019 all executive directors were eligible for a maximum performance related bonus opportunity of up to 150% of base salary. The CEO and CFO's annual performance related bonuses were based on Group EPS growth targets over prior year, with the maximum annual performance related bonus being payable on the achievement of 20% Group EPS growth over prior year. The committee considers this to be a truly stretching target.

For each of the Divisional MDs, up to 40% of their total bonus opportunity was based on achieving stretching divisional profit targets, with

While the Group delivered another year of record results, with trading profit up 12% and EPS up 11%, no participant received maximum payouts. The top-end Group EPS target was not achieved, and the varying divisional performances resulted in different levels of bonus payouts being earned. This underpins the committee's philosophy that truly stretching performance is needed for executives to receive maximum payouts. A proportion of the payouts have been deferred into shares for two years.

The table below sets out the performance against targets for each of the executive directors in respect of the year ended

31 December 2019.

2019 Statementsplc Group FinancialKingspan& Report Annual -

Non Executive Directors(7)
Eugene Murtagh	191	191

Helen Kirkpatrick(8)	35	85

Linda Hickey	82	75

Michael Cawley	85	85

John Cronin	75	75

Bruce McLennan	75	75

Jost Massenberg	75	64

Anne Heraty(9)	31	-

Total non-executive pay	649	650


Total Directors' remuneration	10,854	10,227

Russell Shiels' remuneration is denominated in USD, and has been converted to Euro at the following average rates USD: 1.120 (2018: 1.181).
Peter Wilson's remuneration was denominated in GBP in 2018, and has been converted to Euro at the following average rate GBP: 0.885.
The Group operates a defined contribution pension scheme for executive directors. Certain executives have elected to receive part of their prospective pension entitlement as a non-pensionable cash allowance in lieu of the pension benefit foregone, subject to all applicable employee and employer payroll taxes.
Benefits principally relate to health insurance premiums and company cars/car allowances. In the case of Russell Shiels the cost of life insurance and permanent health benefit is also included.
Performance pay is earned for meeting clearly defined EPS growth and divisional profit targets. Details of the bonus plan and targets are set out on page 75 of the Remuneration Report.
The charge to the Consolidated Income Statement represents the current year cost of the unvested PSP Awards granted to the Executive Directors. Details of the valuation methodology are set out in Note 3 to the Financial Statements.
Non-executivedirectors receive a base fee of €75,000 per annum, plus an additional fee of between €7,500 and €10,000 for chairmanship of Board committees. They do not receive any pension benefit, or any performance or share based remuneration.
Helen Kirkpatrick retired as a non-executive director on 03/05/2019.
Anne Heraty was appointed as a non-executive director on 01/08/2019.

	Max.	Performance	Threshold	Target for	Performance	Bonus
	opportunity	measures and	target	maximum	achieved	outcome
	as % salary	% weighting					as % salary
Chief Executive	150%		EPS	174.8c		220.8c	204.6c	106%

Chief Financial Officer	150%		EPS	174.8c		220.8c	204.6c	106%

Russell Shiels			Divisional	10% profit	growth	27% profit
	150%		profit (40%)	growth	106%


			EPS (60%)	174.8c		220.8c	204.6c

Peter Wilson			Divisional	10% profit	growth	13% profit
	150%		profit (40%)	growth	106%


			EPS (60%)	174.8c		220.8c	204.6c

Gilbert McCarthy			Divisional	10% profit	growth	7% profit
	150%		profit(40%)	growth	95%


			EPS (60%)	174.8c		220.8c	204.6c

We do not disclose the specific targets for the Divisional MDs, and
performance against them, as these are commercially sensitive
figures. While the committee is fully aware of the expectation that
all bonus targets are disclosed in the year of payment, the specific			74
targets for the Divisional MDs would provide information that would
not otherwise be available to competitors.
									-
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Report of the Directors

Performance Share Plan

The committee reviewed the extent to which the vesting targets in respect of the PSP Awards granted in 2017 had been met by reference to EPS and TSR targets over the three-year performance period to 31 December 2019. In 2017, the committee granted PSP Awards that were 50% based on EPS growth targets and 50% based on TSR targets:

Weighting	Measure	Threshold	Maximum	Performance	%
					Vesting

50%	EPS	CPI + 5%	CPI + 10%	CPI + 12.2%	100%

50%	TSR	Median	Upper	87th	100%
			quartile	percentile

The peer group against which TSR performance was measured was as follows:

Armstrong	Owens Corning
World
Industries Inc.

Boral Ltd.	Rockwool Intl. A/S

CRH plc	SIG plc

Geberit AG	Sika

Grafton	Travis
Group plc	Perkins plc

Lafarge	USG Corporation
Holcim

NCI Building	Wienerberger AG
Systems Inc.

Deferred Share Awards

Director		At	Granted	Vested &	At	Earliest
		31 Dec	during	transferred	31 Dec	vesting/
		2018	year	during year	2019	transfer date
Gene M. Murtagh	Unvested	11,899	4,009	(11,899)	4,009	31/03/21

Geoff Doherty	Unvested	8,765	2,644	(8,765)	2,644	31/03/21

Russell Shiels	Unvested	8,349	2,424	(8,349)	2,424	31/03/21

Peter Wilson	Unvested	6,839	2,090	(6,839)	2,090	31/03/21

Gilbert McCarthy	Unvested	7,939	2,445	(7,939)	2,445	31/03/21

Report Directors'

Report Annual -

Performance Share Plan

Director	At	Granted	Vested	Exercised	At	Option	Earliest	Latest
		31 Dec	during	during	or lapsed	31 Dec	price	exercise	expiry
		2018	year	year	during	2019	€	date	date
					year
Gene M. Murtagh
	Unvested	129,498	38,642	(40,882)	(4,908)¹	122,350	0.13	05/05/20	25/02/26
	Vested	97,490		40,882	(55,121)²	83,251	0.13	24/02/18	23/02/23
		226,988	38,642	-	(60,029)	205,601	0.13
Geoff Doherty
	Unvested	75,363	21,396	(24,090)	(2,892)¹	69,777	0.13	05/05/20	25/02/26
	Vested	-		24,090	(24,089)³	1	0.13	23/02/19	23/02/23
		75,363	21,396	-	(26,981)	69,778	0.13
Russell Shiels
	Unvested	68,698	19,797	(22,524)	(2,705)¹	63,266	0.13	05/05/20	25 /02/26
	Vested	-		22,524	(22,524)⁴	-	0.13	-	-
		68,698	19,797	-	(25,229)	63,266	0.13
Peter Wilson
	Unvested	64,626	19,797	(20,912)	(2,511)¹	61,000	0.13	05/05/20	25/02/26
	Vested	-		20,912	(20,912)⁵	-	0.13	-	-
		64,626	19,797	-	(23,423)	61,000	0.13
Gilbert McCarthy
	Unvested	68,697	19,797	(21,819)	(2,620)¹	64,055	0.13	05/05/20	25/02/26
	Vested	95,854		21,819	(45,000)⁶	72,673	0.13	25/02/17	23/02/23
		164,551	19,797	-	(47,620)	136,728	0.13
Company Secretary
Lorcan Dowd
	Unvested	13,332	4,378	(3,958)		13,752	0.13	05/05/20	25/02/26
	Vested	21,780		3,958	(10,300)⁷	15,438	0.13	25/02/17	23 /02/23
		35,112	4,378	-	(10,300)	29,190	0.13

Lapsed on 23/02/2019, because TSR performance targets were not fully met.
2 Exercised on 03/05/2019. Market value on day of exercise €46.04. 3 Exercised on 08/05/2019. Market value on day of exercise €45.80. 4 Exercised on 04/06/2019. Market value on day of exercise €47.00. 5 Exercised on 17/06/2019. Market value on day of exercise €46.54. 6 Exercised on 11/12/2019. Market value on day of exercise €50.50.
7 Exercised on 12/12/2019. Market value on day of exercise €51.05.

In addition, the committee reviewed the vesting outcomes to ensure they reflected overall group performance, individual contribution as well as shareholder and the wider workforce experience throughout the performance period. In light of the strong performance, including three-year revenue growth of 50%, three-year trading profit growth of 46% and absolute TSR growth of

Finland

Aanekosken Fire Station

Insulated Panels: Kingspan Evolution featuring PIR

111% over the performance period, the committee concluded that the PSP vesting conditions had been satisfied in full and were an accurate reflection of the Group's performance.

Non-executive directors

The non-executive directors each receive fees which are approved by the Board as a whole. The

Chairman's fee is €191,000. The basic non-executive director fee is €75,000. An additional fee of €7,500 is paid for chairing the Remuneration Committee, and a fee of €10,000 for chairmanship of the Audit Committee and for the Senior Independent Director, to reflect the additional role and responsibilities (only one additional fee is paid if a director has dual roles).

2019 Statementsplc Group FinancialKingspan&

77 - 76

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The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

Directors'ReportReport FinanancialStatemStatements	OtherOtherInformation	2	2
			Report of the Audit Committee	Report of the Directors
	Report of the Remuneration Committee

Committee Governance The Remuneration Committee comprises three independent non-executivedirectors, Linda Hickey (Chair), Michael Cawley and Bruce McLennan. The Company Secretary acts as the secretary to the committee. The Chief Executive does not normally attend meetings but provides input where relevant, to the committee Chair prior to the meeting. No individual is present at a meeting when the terms of his own remuneration are discussed. The terms of reference are available on the Company's website: www.kingspan.com

External advisors

The Remuneration Committee obtained advice during the year from independent remuneration consultants Korn Ferry. Korn Ferry is a member of the Remuneration Consultants Group and a signatory to its Code of Conduct, and all advice is provided in accordance with this code. Korn Ferry did not provide any other services to Kingspan Group during the year. Accordingly, the committee is satisfied that the advice obtained was

meeting was attended by all the members of the committee, and an overview of the workings of the committee is set out below.

Implementation of Remuneration Policy for 2020 The core principles of our remuneration philosophy as outlined earlier, frame our approach to 2020, namely simplicity, reward for high- performance, and transparency.

Base salary and pension

As detailed in our 2018 Annual Report, the committee carried out a review of each of the divisional directors' roles. While recognising stakeholder concerns about any increases in pay, it was clear from the review that Peter Wilson's role as Managing Director of the global Insulation business had increased over several years in terms of size and complexity, but at the same time his salary was misaligned to levels in the rest of the business. While this discrepancy was reduced somewhat in 2019, Mr Wilson will receive a salary increase of 7.5% in 2020. Following this increase, the committee is satisfied that it has

other executive directors for 2020 have been increased by 2% in line with increases in the rest of the workforce.

As outlined previously, the committee has made a significant change to the company's policy on pensions, with the pension contributions of new executive directors limited to the levels applicable to the wider workforce in the market in which they work. While there are no changes to previously agreed contractual entitlements

for incumbent executive directors, the Committee is aware of rapidly evolving expectations in this area and will continue to keep this aspect of executive remuneration under review.

Annual Bonus

The maximum bonus opportunity for all the executive directors is 150% of salary (unchanged from 2019) with up to 100% of salary earned through the bonus plan delivered in cash and up to 50% of salary being deferred into shares in the Company for two years. For 2020, the committee has determined that the performance measures will remain unchanged from 2019. For the CEO and CFO,

achievement of divisional profit growth targets, and 60% of their total bonus opportunity is based on the achievement of Group EPS growth targets over prior year.

The committee has carefully considered alternative financial measures for the annual bonus and remains of the view that EPS provides the strongest alignment to the business strategy as well as being a critical key performance indicator. Targets are set using unadjusted audited EPS, as reported in our annual accounts, which creates a strong alignment with shareholders' experience and promotes simplicity and transparency. EPS targets will be disclosed with performance against them in the 2020 Remuneration Report. The committee is also keenly monitoring the Net Promoter Score (NPS) programme launched by Kingspan across the Group in 2019. NPS measures the customer experience across a range of aspects in the business, and as such it closely aligns our strategy with the experience of one of our most important stakeholders,

Performance share awards

For 2020, the CEO will receive an award over shares with a market value of 175% of base salary. The other executive directors will receive awards over shares with a market value of approximately 150% of base salary (subject to adjustment to ensure internal parity and to manage exchange rate fluctuations between the divisional directors). The committee will keep this approach under review and ensure that it does not breach the overall limits contained in the PSP rules.

Following a review of the performance framework, the committee has selected the same performance measures as employed for the 2019 PSP Awards. Half of the award will be based on EPS growth targets and the other half on relative TSR against the same peer group as the 2019 awards.

Annually, the committee conducts a rigorous test to ensure targets remain stretching yet realistic and are appropriately aligned with our risk appetite as well as internal and external forecasts. The committee set the following targets which, given the market and business outlook from which these targets will be measured, it considers to be demanding.

The clarity and simplicity of the performance measures are a cornerstone of our approach to remuneration and have served the Company and our shareholders well since the introduction of the PSP.

Non-executive director fees

There is no change to the non- executive director fees for 2020.

Performance graph

The graph below shows the Company's TSR performance against the performance of the ISEQ and FTSE 250 indices over the 10 year period to 31 December 2019.

Report Directors'

Statementsplc Group FinancialKingspan& Report Annual -

objective and independent.

The Remuneration Committee met four times during the year. Each

Remuneration Committee activities

Salary and fees

largely addressed the findings of the review and is comfortable that Mr Wilson's salary is now set at an appropriate level. Salaries for the

bonuses will continue to be based on Group EPS growth targets. For Divisional MDs, 40% of their total bonus opportunity is based on the

FEB JUN OCT DEC

our customers. The committee is reviewing the implementation of the NPS programme and is considering bringing it in as an additional performance measure in the annual bonus plan in the period ahead.

Performance	Weighting	Percentage	Threshold	Maximum
Measures		vesting at	vesting	vesting
		threshold	target	target*
EPS	50%	25%	6%	12%

TSR	50%	25%	Median	Upper quartile

* Straight line vesting between threshold and maximum vesting

2019

Engage independent consultants		•

Review of overall remuneration policy		•	•

Review executives' salary, role and responsibilities for 2020			•

Review non-executives' fees for 2020			•

Approve Executive's pension arrangements			•
Performance pay

Assess Group and individual performance against targets for 2018	•

Confirm percentage of performance bonus achieved for 2018	•

Confirm vesting of 2017 Deferred Share Awards	•

Agree Group and individual performance targets for 2020			•	•
PSP Awards

Assess performance of 2016/2018 PSP Awards against targets	•

Determine percentage of 2016/2018 PSP Awards which vest	•

Review performance measures for PSP Awards for 2019	•

Agree targets and level for grants of PSPs Awards for 2019	•
Governance

Review and approve Remuneration Report for Annual Report 2018	•

Update on governance and remuneration trends generally	•	•	•

Consult with shareholders and consider feedback on new Remuneration Policy	•	•	•	•

Consider shareholder votes and feedback from AGM 2019		•

Review of consultants' performance and independence			•

Total Shareholder Returns

1,200	Kingspan
	ISEQ
1,000	FTSE 250

800
600
400
200										78

										-
2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
										79


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Report of the Directors

Product		Kingspan Topdek KS1000TD
		Roof Panel
	@	Kingspan KS1000 Microrib Architectural
		Wall Panels
		Kingspan KS1000 Optimo

Energy/		Kingspan panels enabled the
Carbon		considerable gain needed in thermal
Saving	@	performance to offset the large glass
		content in the building envelope.

Space/		Utilising insulated panels enabled
Dimensions	@	a thinner insulation versus
	traditional materials thereby

		increasing useable space.
Health &		Employee health and wellbeing was
Wellbeing		a key consideration for the project.

The building was designed to provide a comfortable, yet stimulating, environment to work in.

Speed/	Insulated panels helped to reduce
Ease of build	labour time and number of trades

and the option to specify a complete range of roof, gutter and wall panels simplified the project coordination.

Aesthetics

Longspan wall panels reduce vertical

joints, maximising the aesthetic

properties of the panels. The vast

array of colours and finishes enabled

the architect to achieve their brief.

Planet

The QuadCore™ used on the

Passionate/

Aico building was made using

Sustainability

renewable energy and contains

20-25% recycled steel.

Awards/

It is intended that the Aico building

Certifications

will be entered for multiple awards,

with both design and sustainability

as key considerations.

Aico Headquarters

Oswestry, UK

We worked with Kingspan on the Aico building because of the great technical knowledge and back up from Kingspan employees at site and office level, and the ability to specify products that meet the brief in terms of aesthetics and technical standards. We also valued the opportunity to specify a suite of products from the same source that will seamlessly integrate with each other.

Barry Prince MCIAT, Director DGA Architects

Report Directors'

2019 Statementsplc Group FinancialKingspan& Report Annual -

81 - 80

Credit: ©Richard Stonehouse

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The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

REPORT OF THE AUDIT COMMITTEE

As chairman of the Audit Committee I am pleased to present the report of the committee for the year ended 31 December 2019.

Report of the Remuneration Committee Report of the Audit CommitteeReport of the Directors

Role and Responsibilities	1.	Financial reporting and related	The biographies of each can be	Directors'
The Board has established an Audit		primary areas of judgement;	found in the Board section of this
Committee to monitor the integrity of	2.	The external audit process;	annual report.
the Company's financial statements	3.	The Group's internal audit
	Report
and the effectiveness of the Group's		function;	The Board considers that the
internal financial controls. The	4.	Risk management and	committee as a whole has an
committee's role and responsibilities		internal controls; and	appropriate and experienced blend

are set out in the committee's Terms	5.	Whistleblowing procedures.	of commercial, financial and industry
of Reference which are available from	Committee membership	expertise to enable it to fulfil its
the Company and are displayed on	duties, and that the committee
the Group's website (www.kingspan.	As at 31 December 2019, the Audit	chairman, Michael Cawley B.COMM.,
com). The Terms of Reference are	Committee comprised of three	F.C.A., has appropriate recent and
reviewed annually and amended	independent non-executive directors	relevant financial experience.
where appropriate. During the year	who are Michael Cawley (Chairman),	Meetings
the committee worked with the	Anne Heraty and John Cronin.
external auditors, internal audit, and			The committee met four times
members of the senior management	Anne Heraty joined the committee	during the year ended 31 December	-
team in fulfilling these responsibilities.	on 1 August 2019. Linda Hickey	2019 and attendance at the
Annual
The Audit Committee report deals	and John Cronin retired from the	meetings is noted below. Activities
committee in May 2019 and February	of the Audit Committee in each

This report details how the Audit Committee has met its responsibilities under its Terms of Reference, the Irish Companies Act 2014 and under the UK Corporate Governance Code (July 2018) in the last twelve months.

The Audit Committee focused particularly on the appropriateness of the Group's financial statements. The committee has satisfied itself, and has advised the Board accordingly, that the 2019 Annual Report and financial statements are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

The significant issues that the

International Convention Centre Wales

Insulated Panels:

QuadCore™ Karrier Panel;

Dri-Design Flat Cassettes,

Evolution Axis

committee considered in relation to the financial statements and how these issues were addressed are set out in this report.

The Audit Committee note the requirements under section 225 of the Irish Companies Act 2014 to present a Directors' Compliance Statement, and has ensured that the directors are aware of their responsibilities and comply fully with this provision.

One of the Audit Committee's key responsibilities is to review the Group's risk management and internal controls systems, including in particular internal financial controls. During the year, the committee carried out a robust

assessment of the principal risks facing the company and monitored the risk management and internal control system on an on-going basis. Further details in regard to these matters are also set out in the Risk

Risk Management section of this Annual Report

The committee also reviewed the effectiveness of both the external audit process and the internal audit function as part of the continuous improvement of financial reporting and risk management across

the Group.

Michael Cawley

Chairman, Audit Committee

with the key areas in which the	2020 respectively, and Bruce		meeting is noted below.				Report
Audit Committee plays an active	McLennan was also appointed to
role and has responsibility. These	the committee in February 2020.
							FinancialKingspan&
areas are as follows:

Committee Member	Attended	Eligible		Appointment Date
			Statementsplc Group

Michael Cawley (Chairman)		5		5		2014
Anne Heraty		3		3		2019
Linda Hickey (retired)		1		1		2013			2019
John Cronin (retired)		5		5		2015

Bruce McLennon		-		-		2020

Audit Committee activities			FEB	JUN	AUG OCT	NOV
Financial reporting
Review and approve preliminary & half-year results		•		•
Consider key audit and accounting issues and judgements		•		•
Approve going concern and viability statements		•
Consider accounting policies and the impact of new accounting standards		•		•
Review management letter from auditors			•
Review of any related party matters and intended disclosures		•
Review Annual Report, and confirm if fair, balanced and understandable		•
External auditors
Plan for year-end audit & half-year review				•		•
Approval of audit engagement letter and audit fees					•
Confirm auditor independence, materiality of fees and non-audit services		•		•
Assessment and selection of external auditor for 2020			•	•
Internal audit and risk management controls
Review of internal audit reports and monitor progress on open actions		•	•	•	•
Approve internal audit plan and resources, taking account of risk management	•	•	•	•
Review of financial, IT and general controls		•	•	•	•
Monitor Group whistleblowing procedures			•	•	•	•
Assessment of the principal risks and effectiveness of internal control systems					•
Governance
Accounting standards update					•		82
Corporate governance update						•
Evaluation of external and internal audit function			•					-
Directors' Compliance Statement policy and procedures					•
IT governance and risk management				•					83
General Data Protection Regulation legislation		•	•


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Report of the Directors

Each committee meeting was attended by the Group Chief Financial Officer and the Head of Internal Audit. The external auditors also attended these meetings as required. The Company Secretary is the secretary of the Audit Committee. Other directors can attend the meetings as required.

The chairman of the Audit Committee also met with both the Head of Internal Audit and the external audit lead partner outside of committee meetings as required throughout the year.

Committee Evaluation

As outlined in the Report of the Nomination and Governance Committee contained in this Annual Report, the performance of the Board also includes a review of the committees. Any recommendations

Science and Technology Facilities Council

Light & Air:

Kingspan Day-Lite Klick

Primary areas of	Committee activity
judgement
Consideration	The committee considered the annual impairment assessment of goodwill prepared
of impairment	by management for each Cash Generating Unit ("CGU") using a discounted cash flow
of goodwill	analysis based on the strategic plans approved by the Board, including a sensitivity analysis
	on key assumptions. The primary judgement areas were the achievability of the long
	term business plans and the key macroeconomic and business specific assumptions. In
	considering the matter, the committee discussed with management the judgements made
	and the sensitivities performed. Further detail of the methodology is set out in Note 9 to
	the financial statements.
	KPMG also provided the committee with their evaluation of the impairment review process.
	Kingspan completed 4 acquisitions during the financial year. The allocation of goodwill to
	CGUs is not yet complete for all acquisitions but the methodology of the assessments of such
	items of goodwill was presented to the committee and the results were deemed appropriate.

Adequacy of	The committee reviewed the judgements applied by management in assessing both specific
warranty provisions	and risk based warranty provisions at 31 December 2019. The committee reviewed and
	discussed with management the monthly reports presented to the Board which set out,
	for each of the Group's divisions, warranty provisions and warranty costs and analyse these
	costs as a percentage of divisional sales. A retrospective review of warranty provisions at
	31 December 2018 was also carried out in order to note any indication of management

Report Directors'

& Report Annual -

raised in relation to the Audit Committee are acted upon in a formal and structured manner. No issues were identified for the year ending 31 December 2019.

Financial Reporting

The committee is responsible for monitoring the integrity of the Group's financial statements and reviewing the financial reporting judgements contained therein. The financial statements are prepared by a finance team with the appropriate qualifications and expertise.

The Committee confirmed to

the Board that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

In respect of the year to 31 December 2019, the committee reviewed:

the Group's Trading Updates issued in May and November 2019;
the Group' s Interim Report for the six months to 30 June 2019; and
the Preliminary Announcement and Annual Report to
31 December 2019.

In carrying out these reviews, the committee:

reviewed the appropriateness of Group accounting policies and monitored changes to and compliance with accounting standards on an on-going basis;
discussed with management and the external auditors the critical accounting policies and judgements that had been applied;
compared the results with management accounts and budgets, and reviewed reconciliations between these and the final results;
discussed a report from the external auditors at that meeting identifying the significant accounting and judgemental issues that arose in the course of the audit;
considered the management representation letter requested by the auditors for any non- standard issues and monitored action taken by management as a result of any recommendations;
discussed with management future accounting developments which are likely to affect the financial statements;
reviewed the budgets and strategic plans of the Group in order to ensure that all forward looking statements made within the Annual Report reflect the actual position of the Group; and

considered key areas in which estimates and judgement had been applied in preparation of the financial statements including, but not limited
to, a review of fair values on acquisition, the carrying amount of goodwill, intangible assets and property, plant and equipment, litigation and warranty provisions, recoverability of trade receivables, valuation of inventory, hedge accounting treatments, and treasury and tax matters.

The primary areas of judgement considered by the committee in relation to the Group's 2019 financial statements, and how they were addressed by the committee are set out overleaf.

Each of these areas received particular focus from the external auditor, who provided detailed analysis and assessment of the matter in their report to the committee.

In addition, the Internal Audit team review the businesses covered in their annual Internal Audit Plan, as agreed by the committee, and report their findings to the Audit Committee throughout the year. These internal audit reviews are focused on areas of judgement such as warranty provisions, trade receivables and inventory and provide the committee information on the adequacy and appropriateness of provisions in these areas.

	bias within the provisions and none was noted. The committee was satisfied that such
	judgements were appropriate and the risk had been adequately addressed.

Recoverability	The committee reviewed the judgements applied by management in determining the
of trade receivables	bad debts provision at 31 December 2019. The committee reviewed and discussed with
and adequacy	management the monthly board report which sets out aged analysis of gross debtor
of receivables	balances and associated bad debt provisions and reviewed security (including credit
provision	insurance) that is in place. A retrospective review of bad debt provisions at 31 December 2018
	was also carried out in order to note any indication of management bias within the provisions
	and none was noted. The committee was satisfied that such judgements were appropriate
	and the risk had been adequately addressed.

Valuation of	The committee reviewed the valuation and provisioning for inventory at 31 December 2019.
inventory and	The main area of judgement was the level of provisioning required for slow moving and
adequacy of	obsolete inventory. The committee reviewed and discussed with management the monthly
inventory	board report which sets out, for each of the Group's divisions, gross inventory balances and
provision	associated obsolescence provision including an analysis by inventory, category and ageing.
	A retrospective review of inventory provisions at 31 December 2018 was also carried out in
	order to note any indication of management bias within the provisions and none was noted.
	The committee was satisfied that such judgements were appropriate and the risk had been
	adequately addressed.

Taxation	Provisioning for potential current tax liabilities and the level of deferred tax asset recognition
	in relation to accumulated tax losses are underpinned by a range of judgements. The
	committee addresses these issues through a range of reporting from senior management
	and a process of challenging the appropriateness of management's views including the
	degree to which these are supported by professional advice from external legal and other
	advisory firms. This assessment was conducted in line with the provisions of IFRIC 23.
	The Group's accounting manual sets out detailed policies that prescribe the methodology to
	be used by management in calculating the above provisions. Each division formally confirms
	compliance with these policies on an annual basis.
	The committee was satisfied that such judgements were appropriate and the risk had been
	adequately addressed.

Accounting	Total acquisition consideration in 2019 amounted to €144m. The committee discussed
for acquisitions	with management and the external auditors the accounting treatment for newly acquired
	businesses, and the related judgements made by management, and were satisfied that the
	treatment in the Group's financial statements was appropriate.

2019 Statementsplc Group FinancialKingspan

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					Report of the Audit Committee
The Board	Chairman's Introduction	Report of the Nomination & Governance Committee		Report of the Remuneration Committee

Report of the Directors

External auditor

The Audit Committee has responsibility for overseeing the Group's relationship with the external auditor including reviewing the quality and effectiveness of their performance, their external audit plan and process, their independence from the Group, their appointment and their audit fee proposals.

Performance and audit plan Following the completion of the 2018 year-endaudit, the committee carried out a review of the effectiveness of the external auditor and the audit process. This review involved discussions with both group management and internal audit and feedback provided by divisional management. The committee continues to monitor the performance and objectivity of the external auditors and takes this into consideration when making

its recommendations to the Board on the remuneration, the terms of engagement and the re-appointment, or otherwise, of the external auditors.

Prior to commencement of the

2019 year-end audit and half-year review, the committee approved the external auditors' work plan and resources and agreed with the auditor's various key areas of focus, including accounting for acquisitions, impairments, warranty provisions, as well as a particular focus on certain higher risk jurisdictions.

During the year, the committee met with the external auditors without management being present. This meeting provided the opportunity for direct dialogue and feedback between the committee and the auditor, where they discussed inter alia some of the key audit management letter points.

EU Audit Reform

The regulatory framework for the Group's statutory audit is governed

ten years (following rotation, the statutory audit firm cannot be reappointed for four years);

a requirement that certain procedures are followed for the selection of the new statutory auditor; and
restrictions on the entitlement of the statutory auditing firm to provide certain non-audit services.

Kingspan Group plc has fully complied with such EU Audit Reform from the period commencing 1 January 2017. With regards audit firm rotation, EY has been selected as the external auditor for the financial year commencing 1 January 2020. The selection process is outlined in more detail below.

Independence and objectivity The committee is responsible for ensuring that the external auditor is objective and independent. KPMG has been the Group's auditor since 2011, following a formal tender process in which a number of leading global firms submitted written tenders and presentations. The lead audit partner is rotated every five years.

The committee received confirmation from the auditors that they are independent of the Group under the requirements of the Financial Reporting Council's Ethical Standards for auditors. The auditors also confirmed that they were not aware of any relationships between the Group and the firm or between the firm and any persons in financial reporting oversight roles in the Group that may affect its independence.

Non-audit services

In order to further ensure independence, the committee has a policy on the provision of non-audit services by the external auditors that seeks to ensure that the services provided by the external auditors are not, or are not perceived to be, in

conflict with auditor independence. By obtaining an account of all relationships between the external auditors and the Group, and by reviewing the economic importance of the Group to the external auditors by monitoring the audit fees as a percentage of total income generated from the relationship with the Group, the committee ensured that the independence of the external audit was not compromised. An analysis of fees paid to the external auditor, including the non-audit fees, is set out in Note 5 and below.

Audit tender & rotation of auditors A competitive audit tender process was launched in 2019. The committee was responsible for the design and operation of the tender process. The objectives were for the process to be efficient, fair and transparent and to submit two firms to the Board for appointment, with a reasoned preference for a single firm.

Following the issuance of a Request for Proposal, a number of measures took place including visits to key manufacturing sites, numerous meetings with senior management and assurance that each of the firms would be suitably independent should they be appointed. The principal assessment criteria included:

Audit quality;
Experience; and
Cultural fit

Subsequent to an evaluation of proposals and interactions, it was decided to take two firms to make final presentations to the committee and Group Chief Financial Officer. Following these final presentations, the committee recommended to the Board that EY be appointed

to succeed KPMG as the Group's external auditor. The committee believes that the strength and experience of the EY team best met

Norway

Kingspan Water & Energy:

Klargester BioDisc

the predefined criteria set as part of the selection process.

As a result of this process, the Company's auditors, KPMG Chartered Accountants, will continue in office and will retire following the conclusion of the audit for the 2019 financial year, with the Board then appointing EY as Group external auditor with effect from financial year commencing 1 January 2020.

On behalf of the committee, I would like to thank each of the firms who participated in the tender process, along with KPMG who provided the highest level of audit and assurance services during their tenure.

Internal audit

The committee reviewed and agreed the annual internal audit plan, which the committee believes is appropriate to the scope and nature of the Group. The internal audit plan is risk based, with all divisions audited every year, and all new businesses audited within 12 months of acquisition.

The committee reviewed reports from the Head of Internal Audit at its quarterly meetings. These reports enable the committee to monitor the

internal audit is working effectively, improves risk management throughout the Group and that the internal audit team is sufficiently resourced in addition to having the adequate level of experience and expertise.

Risk Management and

Internal controls

The Audit Committee has been delegated, from the Board, the responsibility for monitoring the effectiveness of the Group's system of risk management and internal control.

The Audit Committee monitors the Group's risk management and internal control processes through detailed discussions with management and executive directors, the review and approval of the internal audit reports, which focus on the areas of greatest risk to the Group, and the external audit reports, as part of both the year- end audit and the half year review process, all of which highlight the key areas of control weakness in the Group. All weaknesses identified by either internal or external audit are discussed by the committee with Group management and an implementation plan for the targeted improvements to these systems is put

Risk Management section of this Annual Report.

These processes, which are used by the Audit Committee to monitor the effectiveness of the Group's system of risk management and internal control, are in place throughout the accounting period and remain in place up to the date of approval of this Annual Report.

The main features of the Group's internal control and risk management systems that specifically relate to the Group's financial reporting and accounts consolidation process are set out in the Report of the Nomination and Governance Committee contained in this Annual Report.

Whistleblowing procedures

The Group has a Code of Conduct, full details of which are available on the Group's website (www.kingspan.com).

Based on the standards set out in this Code of Conduct, the Group employs a comprehensive, confidential and independent whistleblowing phone service to allow all employees to raise their concerns about their working environment and business practices. This service then allows management and employees to work together to address any instances of fraud, abuse and other misconduct in the workplace.

Any instances of fraud, abuse or misconduct reported on the whistleblowing phone service are reported to the Head of Internal Audit and the Company Secretary, who then evaluate each incident for onward communication to the committee. This onwards communication consists of the full details of the incident, key control failures, any financial loss and actions for improvement.

Report Directors'

2019 Statementsplc Group FinancialKingspan& Report Annual -

by EU legislation under Directive 2014/56/EU and Regulation EU No. 537/2014. EU Audit reform legislation is applicable in the Member States of the European Union, including Ireland. Under this legislation, Kingspan Group plc is considered a Public Interest Entity ("PIE"). Key developments falling from the implementation of this legislation are:

a requirement that the PIE changes its statutory auditor every

Audit V Non Audit Services Remuneration

2019	€2.6m				€0.9m
2018
€2.6m				€0.9m
2017					€0.7m
€2.0m

		Audit Services	Non-Audit Services

progress of the internal audit plan, to discuss key findings and the plan to address them in addition to status updates of previous key findings.

The committee is responsible for reviewing the effectiveness of the internal audit function and does so based upon discussion with Group management, the Group's external auditor and feedback provided by divisional management. The committee was satisfied that the

in place. The implementation plan is being overseen by the Group Chief Financial Officer and the committee is satisfied that this plan is being properly executed.

As part of its standing schedule of business, the committee carried out an annual risk assessment of the business to formally identify the key risks facing the Group. Full details of this risk assessment and the key risks identified are set out in the Risk

During the year, the committee reviewed the Group's whistleblowing process and were satisfied with the design and operating effectiveness of the process.

87 - 86

BusinessBusiness& Stra& trategicReportReport SustainainabilityReportReport Directors'ReportReport FinanancialStatemStatements OtherOtherInformation

The Board

Chairman's Introduction

Report of the Nomination & Governance Committee

Report of the Remuneration Committee

Report of the Audit Committee

Report of the Directors

REPORT

OF THE

DIRECTORS

The directors of Kingspan Group plc ("Kingspan") have pleasure in presenting their report with the audited financial statements for the year ended 31 December 2019.

An interim dividend of 13.0 cent per share was paid to shareholders on 4 October 2019 (2018: 12.0 cent). The directors are recommending a final dividend of 33.5 cent per share for the year ended 31 December 2019 (2018: 30.0 cent), giving a total dividend for the year of 46.5 cent (2018: 42.0 cent). The final dividend if approved at the Annual General Meeting will be paid on 7 May 2020 to shareholders on the register at close of business on 27 March 2020.

Business Review

The Business & Strategic Report contained in this Annual Report, including the Chief Executive's Review and the Financial Review, sets out management's review of the Group's business during 2019. The key points include:

→ Insulated Panels sales growth

of 7%. Strong performance in

the Americas, Mainland Europe

performed well overall with the

notable exception of Germany.

Difficult UK market particularly in

the second half. Further headway

in key markets on QuadCore™.

→ Insulation Boards sales growth

of 2%. Continuing progress on

Kooltherm® and share gain

from traditional materials.

→ Strong underlying volume

growth of 4% and 8% in

Insulated Panels and Insulation

Boards partially offset by the

pricing impact of raw material

deflation.

→ Light & Air sales growth of

12% buoyed by a strong

performance in the US.

Solid activity in Mainland

The Business and Strategic Report contained in this Annual Report sets out the "four pillars" of Kingspan's strategy, which are:

INNOVATION

Differentiation from competitors driven by superior innovation.

PENETRATION

Increased penetration of Kingspan's product suite underpinned

by efficiency gains from high- performance building envelopes, regulatory changes and an increasing awareness of the long- term environmental impact of inefficient building design.

GLOBAL

The continued evolution of Kingspan's geographic footprint as we build market leading

Report Directors'

Report Annual -

Principal Activities

Kingspan is the global leader in high- performance insulation and building envelope solutions. Kingspan Group plc is a holding company

for the Group's subsidiaries and other entities. The Group's principal activities comprise the manufacture and distribution of the following product suites as part of the complete "Building Envelope":

Insulated panels

Structural framing

Architectural facades Rigid insulation boards

Building services insulation

Engineered timber systems

Natural daylighting

Ventilation and smoke management solutions

Raised access floors

Datacentre storage solutions

Kingspan comprises five key business divisions which are Insulated Panels, Insulation Boards, Light & Air, Water & Energy and Data & Flooring. These divisions offer a suite of complementary building envelope solutions for both the new build and refurbishment markets.

Results and Dividends

Group turnover for the year ended

31 December 2019 was €4.7bn (2018: €4.4bn), trading profit was €497.1m (2018: €445.2m), and earnings per

Revenue up 7% to €4.7bn.
Trading profit up 12% to €497.1m.
Free cashflow up 9% to €337.1m.
Group trading margin of 10.7%.
Basic EPS up 11% to 204.6 cent.
Year-endnet debt1 of €633.2m (2018: €728.3m). Net debt to EBITDA2 of 1.1x (2018: 1.4x).
ROCE of 17.3% (2018: 16.8%).

Europe. Daylighting centre of

excellence under construction

in Ireland.

→ Water & Energy sales growth

of 3% with progress in

the Nordics, a difficult UK

environment and more

subdued rainwater harvesting

activity in Australia.

→ Data & Flooring sales growth

of 13% reflecting strong

datacentre activity and

geographic expansion in Europe.

positions globally.

PLANET PASSIONATE

In 2019, we launched our new Planet Passionate Programme across our entire group and to the industry. This is a critical first step in the next phase of our journey to proactively address the key sustainability challenges that face our planet. Through our Net Zero Energy Programme, we have already made great strides in powering our business on renewable energy, and with Planet Passionate we

2019 Statementsplc Group FinancialKingspan&

Energy storage solutions

Rainwater and wastewater solutions

Renewable energy systems

share were 204.6 cent (2018: 184.0 cent). The Consolidated Income Statement is set out later in this Annual Report and a detailed review of the Group's performance from a financial and operational perspective is contained within the Business

& Strategic Report.

Net Debt and EBITDA both pre-IFRS 16
2 Earnings before finance costs, income taxes, depreciation, amortisation and the impact of IFRS 16.

are setting ourselves even more challenging goals for the next 10 years. We are committing to hard targets in the areas of energy, carbon, circularity and water.

+7%	+12%	+11%
€4.7 €4.4	€497.1 €445.2	204.6 184.0

2019	2018	2019	2018	2019	2018
Revenue (€bn)	Trading Profit (€m)	EPS (cent)

France

Champagne Palmer & Co

Insulated Panels:

Kingspan BENCHMARK Evolution

89 - 88


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					Report of the Audit Committee
The Board	Chairman's Introduction	Report of the Nomination & Governance Committee		Report of the Remuneration Committee

Report of the Directors

Throughout 2019, Kingspan made significant progress in pursuit of this strategy with the result that Kingspan has continued to deliver year on year growth. This strategy will remain the focus of the execution of Kingspan's strategic plan for the foreseeable future.

Principal Risks and Uncertainties The principal risks and uncertainties facing the Group, and the actions taken by Kingspan to mitigate them are detailed in the Risk & Risk Management Report contained in this Annual Report. The principal risks are:

→ Volatility in the macro
	environment;
→	Failure to innovate;
→	Product failure;
→	Business interruption
	(including IT continuity and
	climate change);
→ Credit risks and credit control;
→	Employee development
	and retention;

The key performance indicators for Kingspan upon which particular emphasis is placed are listed below.

Innovation

Since the beginning, Kingspan has been committed to innovation so we can make building better. It's something we demonstrate daily across our business. We believe we have to challenge building industry traditions through innovation in advanced materials and digital technologies in order to achieve a net zero emissions future. Kingspan's products and systems therefore ensure longer lifetime energy and carbon savings.

In the year ended 31 December 2019, the Group's research and development expenditure amounted to €31.9m (2018: €30.5m) in addition to over €10 million of capital expenditure on IKON and our new fire research facility. Research and development expenditure is generally written off in the year

Digitalisation of the construction industry; and
Prismatic daylighting.

Corporate Governance

The directors are committed to achieving the highest standards of corporate governance. A statement describing how Kingspan has applied the principles of good governance set out in the UK Corporate Governance Code (July 2018) is included in the Report of the Nomination and Governance Committee contained in this Annual Report. The Corporate Governance Statement is treated as forming part of this Annual Report.

Code Of Conduct

Kingspan is committed to acting responsibly in its business and maintaining high standards of ethics and integrity in all of its dealings with its stakeholders, be they investors, customers, suppliers, its people or the community it operates in. Kingspan has a Code of Conduct

In 2011 we set ourselves an almost impossible challenge: by 2020, on an aggregated basis, we committed to matching 100% of our operational energy with renewable energy. Through this programme we

have reduced our energy carbon intensity 6-fold, introduced solar PV to 22% of our wholly owned sites, and instigated significant on-site generation projects. As we reach the successful conclusion of our 10 year Net Zero Energy Programme in 2020, we are launching a new 10 year Planet Passionate Programme, setting ourselves challenging targets in the areas of energy, carbon, circularity and water. Learn more at www.kingspan.com under 'Our Commitments' and in the Sustainability Report contained in this Annual Report.

Accounting Records

The directors are responsible for ensuring that accounting records, as outlined in Sections 281 to 285 of the Irish Companies Act 2014, are kept

Shareholding analysis as at 31 December 2019:

Shareholding	Number of	% of	Number of	% of
range	accounts	total	shares held	total
1 - 1000	2,816	57.28	1,182,818	0.65
1,001 - 10,000	1,398	28.44	4,557,657	2.49
10,001 - 100,000	501	10.19	16,543,832	9.05
100,001 - 1,000,000	169	3.44	49,453,089	27.06
Over 1,000,000	32	0.65	111,047,826	60.75
	4,916	100	182,785,222	100

Details of persons with a significant holding of securities in the Company are disclosed below:

Notification Date	Shareholder	Shares held	%

23/01/20	Eugene Murtagh	27,018,000	14.93%
24/09/19	Blackrock, Inc.	12,090,723	6.69%
11/07/19	Allianz Global Investors GmbH	8,966,284	4.96%
16/11/18	Bailie Gifford & Co.	9,010,740	5.00%
07/08/19	Ameriprise Financial Inc	7,228,355	4.00%
16/01/20	FMR LLC	7,244,493	4.00%

Report Directors'

Group FinancialKingspan& Report Annual -

→	Fraud and cybercrime;
→	Acquisition and integration
	of new businesses;
→	Health and safety;
→	Laws and regulations.

Key Performance Indicators

The directors are pleased to report on the very positive performance during 2019 against its key performance indicators. A detailed commentary incorporating key performance indicators is contained within the Financial Review and the Sustainability Report in this Annual Report. A number of the key

in which it is incurred. During the year, we opened IKON, our new Global Innovation Centre in Kingscourt, further demonstrating our commitment to innovation. Kingspan's continuing investment in research and development involves over 40 key projects. In 2019 we launched QuadCore™ Roof Board and continued to progress development on the following key projects:

→ PV solar-integrated
	PowerPanel® 2.0;
→	Fibre-free A1 classified
	AlphaCore® insulation;
→	QuadCore™ 2.0;

which sets the standard by which all employees across the Group are expected to conduct themselves. The Code sets out the fundamental principles which all directors, officers and employees of Kingspan are required to adhere to in meeting those standards.

Sustainability

Our mission is to accelerate a net zero emissions future with the wellbeing of people and planet at its heart.

We do this through enabling high- performance buildings that can save more energy, carbon and water. Aligned with our mission, we aim to

by the Group. The directors have provided appropriate systems and resources, including the appointment of suitably qualified accounting personnel, to maintain adequate accounting records throughout

the Group, in order to ensure that the requirements of Sections 281 to 285 are complied with. The accounting records of the Company are maintained at the principal executive offices located at Dublin Road, Kingscourt, Co. Cavan,

A82 XY31, Ireland.

The European Communities (Takeover Bids (Directive 2004/25/

Further information required by Regulation 21 of the above Regulations as at 31 December 2019 is set out in the Shareholder Information section of this Annual Report.

Directors and Secretary

The directors and secretary of the Company at the date of this report are as shown in this Annual Report on pages 58 and 59. Ms Helen Kirkpatrick retired as a non-executive director

following conclusion of the AGM on 3 May 2019, and Ms Anne Heraty was appointed as a non-executive director with effect from 1 August 2019.

Directors' & Secretary's Interests In Shares

The beneficial interests of the directors and secretary and their spouses and minor children in the shares of the Company at the end of the financial year are as follows:

31-Dec-1931-Dec-18

2019 Statementsplc

performance indicators have been included in more detail on page 148 'Alternative Performance Measures'.

→	Kooltherm® 200 series;
→	Unitised facade solutions;

make significant advances in the sustainability of both our business operations and our products.

EC)) Regulations 2006

Structure of the Company's share capital

Eugene Murtagh	27,018,000	28,018,000

Gene Murtagh	1,079,207	1,129,207

Geoff Doherty	251,495	238,326

KPIs	Basic EPS growth	204.6 cent (up 11%)	See page 32


Financial	Sales growth	€4.7bn (up 7%)	See page 32

Trading margin	10.7% (up 50 bps)	See page 32
	Free cash flow	€337.1m (up €28.7m)	See page 33

	Return on capital employed	17.3% (up 50 bps)	See page 33

	Net debt/EBITDA	1.1x (2018: 1.4x)	See page 33

KPIs	Net Zero Energy	90% (up 15%)	See page 49


Non-Financial	Health & Safety	1.4 per 100k hours	See page 52
	(down 7%)

	Gender balance	19% female (up 1%)	See page 52

	Waste recycling	65% (down 3%)	See page 51

At 31 December 2019, the Company had an authorised share capital comprised of 250,000,000 (2018: 250,000,000) ordinary shares of €0.13 each and the Company's total issued share capital comprised 182,785,222 (2018: 182,171,120) Ordinary Shares, of which the Company held 1,907,826 (2018: 1,969,143) Ordinary Shares in treasury.

Russell Shiels	200,000	300,000

Peter Wilson	389,376	389,376

Gilbert McCarthy	255,576	247,637

Linda Hickey	5,000	5,000

Michael Cawley	30,600	30,600

John Cronin	8,000	8,000

Bruce McLennan	10,000	10,000

Jost Massenberg	-	-

Anne Heraty*	-	-

Lorcan Dowd	2,919	2,603

	29,250,173	30,378,749

* Appointed as a Director on 1 August 2019.

91 - 90


	BusinessBusiness& Stra& trategicReportReport	SustainainabilityReportReport	Directors'ReportReport FinanancialStatemStatements	OtherOtherInformation
					Report of the Audit Committee
The Board	Chairman's Introduction	Report of the Nomination & Governance Committee		Report of the Remuneration Committee

Report of the Directors

Details of the directors' and secretary's share options at the end of the financial year are set out in the report of the Remuneration Committee contained in this Annual Report. As at 21 February 2020, there have been no changes in the directors' and secretary's interests in shares since 31 December 2019.

Conflicts Of Interest

None of the directors have any direct or indirect interest in any contract or arrangement subsisting at the date hereof which is significant in relation to the business of the Company

or any of its subsidiaries nor in the share capital of the Company or any of its subsidiaries.

Financial Instruments

Political Donations

Neither the Company nor any of its subsidiaries have made any political donations in the year which would be required to be disclosed under the Electoral Act 1997.

Subsidiary Companies

The Group operates from 159 manufacturing sites, and has operations in over 70 countries worldwide.

The Company's principal subsidiary undertakings at 31 December 2019, country of incorporation and nature of business are listed in the Principle Subsidiary Undertakings section of this Annual Report.

The Company does not have any branches outside of Ireland.

Outlook

The Board fully endorses the outlook "Looking Ahead" expressed in

the Chief Executive's Review in this Annual Report.

Significant Events Since Year-endThere have been no significant events since the year-end.

Going Concern

The directors have reviewed budgets and projected cash flows for a period of not less than 12 months

from the date of this Annual Report, and considered the Group's net debt position and capital commitments, available committed banking facilities and other relevant information, including the economic conditions currently affecting the building environment generally and the Group's Strategic Plan. On the basis of this review the directors have concluded that there are no material uncertainties that would cast significant doubt over the Company's and the Group's ability to continue as a going concern. For this reason, the directors consider it appropriate to adopt the going concern basis in preparing the financial statements.

Viability Statement

In accordance with Provision 31 of the 2018 UK Corporate Governance Code, the directors are required to assess the prospects of the Company, explain the period over which we have done so and state whether we have a reasonable expectation that the Company will be able to continue in operation and meet liabilities as they fall due over this period of assessment.

The directors have assessed the prospects of the Group over the three-year period to February 2023.

The directors concluded that three years was an appropriate period for the assessment, having had regard to:

the Group's rolling Strategic Plan which extends to 2023;
the Group's long-term funding commitments, some of which fall to be repaid during the period;
the inherent short-cycle nature of the construction market including the Group's order bank and project pipeline; and
the potential impact of macro- economic events and political uncertainty in some regions such as the UK and Middle East.

It is recognised that such future assessments are subject to a level of uncertainty that increases with time, and therefore future outcomes cannot be guaranteed or predicted with certainty.

The Group Strategic Plan is approved by the Board, building upon the divisional management plans

as well as the Group's strategic goals. It is based on a number of cautious assumptions concerning macro growth and stability in our key markets, and continued access to capital to support the Group's ongoing investments. The strategic plan is subject to stress testing which involves flexing a number of the main assumptions underlying the forecast in severe but reasonable scenarios. Such assumptions are rigorously tested by management and the directors. It is reviewed and updated annually and was considered and approved by the Board at its meeting in October 2019.

In making this assessment, the directors have considered the resilience of the Group, taking account of its current position and the principal risks facing the business as outlined in the Risk & Risk Management Report contained in this Annual Report, and the Group's ability to manage those risks. The risks have been identified using a top-down and bottom-

up approach, and their potential impact was assessed having regard to the effectiveness of controls

in place to manage each risk. In assessing the prospects of the Group such potential impacts have been considered as have the mitigating factors in place.

Based on this assessment the directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment.

Directors' Responsibility

Statement

Each of the directors whose names and functions are set out in the Board section of this Annual Report confirm their responsibility for preparing the Annual Report and the consolidated and company financial statements in accordance with applicable Irish law and regulations.

Company law in Ireland requires the directors to prepare financial statements for each financial year. Under that law the directors have to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU). The directors have elected to prepare

the company financial statements in accordance with IFRSs as adopted by the EU and as applied by the Irish Companies Act 2014. The financial statements are required by law to give a true and fair view of the assets, liabilities and financial position of the Group and company and of the profit or loss of the Group for that period. In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company, and the Group as a whole, will continue in business.

The directors are responsible for keeping accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Irish Companies Act 2014 and Article 4 of the IAS Regulation.

They are responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information on the Company's website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In accordance with Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Financial Regulator, the directors confirm that to the best of their knowledge:

the Group financial statements and the Company financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and Company; and
the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

They are also satisfied in compliance with Provision 27 of the 2018 UK Corporate Governance Code:

that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position, business model and strategy.

Directors' Compliance Statement The directors acknowledge that they are responsible for securing the Company's compliance with its relevant obligations in accordance with Section 225(2)(a) of the Irish Companies Act 2014 (the "Act") (described below as the "Relevant Obligations").

In accordance with Section 225 (2)

of the Act, the directors confirm that they have:

drawn up a Compliance Policy Statement setting out the Company's policies (that are, in the opinion of the directors, appropriate to the Company) in respect of the compliance by the Company with its Relevant Obligations;
put in place appropriate arrangements or structures that, in the opinion of the directors, provide a reasonable assurance of compliance in all material respects with the Company's Relevant Obligations; and

3. during the financial year to which this report relates, conducted

a review of the arrangements or structures that the directors have put in place to ensure material compliance with the Company's Relevant Obligations.

Audit Information

Each of the directors have taken all the steps that they should or ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Group's statutory auditors are aware of that information. So far as the directors are aware, there is no relevant information of which the Group's statutory auditors are unaware.

Auditor

During 2019, the Board carried out an audit tender process, details of which are more particularly set out in the Report of the Audit Committee contained in this Annual Report. As a result of this process, the Company's auditors, KPMG Chartered Accountants, will, in accordance with Section 383(2) of the Companies Act 2014, continue in office and will retire following the conclusion of the audit for the 2019 financial year, with the Board then appointing EY as Group external auditor with effect for the financial year ending 31 December 2020.

On Behalf Of The Board

Gene M. Murtagh,

Chief Executive Officer

Geoff Doherty,

Chief Financial Officer

21 February 2020

Report Directors'

2019 Statementsplc Group FinancialKingspan& Report Annual -

93 - 92

Business & Strategic Report

Sustainability Report

Directors' Report

Financial Statements

Other Information

Product		BENCHMARK Designwall 2000 and
		Designwall 4000 featuring QuadCore™
	@	technology.

Energy/		The Holiday Inn Panama City
Carbon		goes beyond code using a 2 inch
Saving	@	QuadCore™ Panel.

Space/	QuadCore(tm) reduced insulation
Dimensions	thickness by approximately 50% versus
@	traditional materials, adding over
	3,000 sq ft of indoor space.

Health &	QuadCore™ Panels are GREENGUARD
Wellbeing	Gold certified, and earn Material

Health Silver certification.

Speed/	The Holiday Inn was the first major
Ease of build	hotel to reopen in the area after the

devastation of Hurricane Michael, having been completely rebuilt in just nine months.

Aesthetics		The BENCHMARK Designwall panels
		are finished in Granitstone,
	@	a Kingspan speciality finish that
		has the look of stucco masonry.
Planet		Kingspan BENCHMARK insulated
Passionate/		panels contain up to 90% recycled
Sustainability	@	steel content.
Awards/		IHG Hotels and Resorts have an
Certifications		internal "Green Engage" system
	@	for driving sustainability.

@	-
@
@
@
@

Holiday Inn

Panama City, USA

Using QuadCore™ allowed us to use a two-inch panel and go beyond code, without adding any additional insulation.

We've used insulated panels before and we were confident that this would be fastest and most economical way to rebuild the hotel.

Joseph Sorci, Principal Architect and President, Florida Architects

Click here to see more

Report Directors'

2019 Statementsplc Group FinancialKingspan& Report Annual -

95 - 94

BusinessBusiness& Stra& trategicReportReport	SustainainabilityReportReport	Directors'ReportReport	FinaFinancialStatemements OtherOtherInformation	2	2

Independent Auditor's Report	Financial Statements	Notes to the Financial Statements

Australia

Mullum Mullum Stadium

Insulated Panels:

Rainscreen facade in Shingle and Evolution

FINANCIAL STATEMENTS

Independent Auditor's Report 98 Consolidated Income Statement 102

Consolidated Statement

of Comprehensive Income 102

Consolidated Statement of Financial Position 103 Consolidated Statement of Changes in Equity 104 Consolidated Statement of Cash Flows 106 Company Statement of Financial Position 107 Company Statement of Changes in Equity 108 Company Statement of Cash Flows 108

Notes to the Financial Statements

Statement of Accounting Policies 109
2 Segment Reporting 117
3 Employees 119
4 Finance Expense And Finance Income 120
5 Profit For The Year Before Income Tax 120
6 Directors' Remuneration 121
7 Income Tax Expense 121
8 Earnings Per Share 122
9 Goodwill 123
10 Other Intangible Assets 124
11 Property, Plant and Equipment 125
12 Investments in Subsidiaries 126
13 Inventories 126
14 Trade and Other Receivables 126
15 Trade and Other Payables 127
16 Leases 127
17 Interest Bearing Loans and Borrowings 128
18 Deferred Consideration 129
19 Financial Risk Management and Financial Instruments 130
20 Provisions for Liabilities 139
21 Deferred Tax Assets and Liabilities 139
22 Business Combinations 140
23 Share Capital 142
24 Share Premium 142
25 Treasury Shares 142
26 Retained Earnings 143
27 Dividends 143
28 Non-Controlling Interest 143
29 Reconciliation of Net Cash Flow to Movement in Net Debt 143
30 Guarantees and Other Financial Commitments 144
31 Pension Obligations 144
32 Related Party Transactions 147
33 Post Balance Sheet Events 147
34 Approval of Financial Statements 147

Other Information

Alternative Performance Measures 148

Shareholder Information 151

Principal Subsidiary Undertakings 153

5 Year Summary 156

2019 Statementsplc Group FinancialKingspan& Report Annual -

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Independent Auditor's Report	Financial Statements	Notes to the Financial Statements

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KINGSPAN GROUP PLC OPINION AND CONCLUSIONS ARISING FROM OUR AUDIT

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KINGSPAN GROUP PLC

OPINION AND CONCLUSIONS ARISING FROM OUR AUDIT

Financial

Opinion: our opinion on the financial statements is unmodified

We have audited the Group and Company financial statements of Kingspan Group plc ("the Company") for the year ended 31 December 2019, which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Company Statement of Financial Position, the Company Statement of Changes in Equity, the Company Statement of Cash Flows and the related notes, including the accounting policies in note 1. The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting Standards ("IFRS") as adopted by the European Union and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2014.

In our opinion:

>	the financial statements give a true
	and fair view of the assets, liabilities
	and financial position of the Group
	and Company as at 31 December 2019
	and of the Group's profit for the year
	then ended;
> the Group financial statements
	have been properly prepared in
	accordance with IFRS as adopted by
	the European Union;
>	the Company financial statements
	have been properly prepared in
	accordance with IFRS as adopted by
	the European Union, as applied in
	accordance with the provisions of the
	Companies Act 2014; and
> the Group and Company financial
	statements have been properly
	prepared in accordance with the
	requirements of the Companies
	Act 2014 and, as regards the Group
	financial statements, Article 4 of the

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) ("ISAs (Ireland)") and applicable law. Our responsibilities under those standards are further described in the Auditor's Responsibilities section of our report. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the Audit Committee.

We were appointed as auditor by the directors on 17 June 2011. The period of total uninterrupted engagement is the 9 financial years ended 31 December 2019. We have fulfilled our ethical responsibilities under, and we remained independent of the Group in accordance with, ethical requirements applicable in Ireland, including the Ethical Standard issued

by the Irish Auditing and Accounting Supervisory Authority ("IAASA") as applied to listed public interest entities. No non- audit services prohibited by that standard were provided.

Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We continue to perform procedures over acquisition accounting. However, given the number of significant acquisitions has reduced we have not assessed this as one of the most significant risks in our

Group audit matters

Warranty provisions €109.7 million (2018: €104.3 million)

Refer to page 85 (Report of the Audit Committee), page 114 (accounting policy) and Note 20 to the financial statements.

The key audit matter

The Group's business involves the sale of products under warranty, some of which use new technology and applications.

Accordingly, the Group has recorded significant warranty provisions which are inherently judgemental in nature. These provisions are required in order for the Group to record an appropriate estimate of the ultimate costs of repairing and replacing product that is ascertained to be faulty.

How the matter was addressed in our audit

Our audit procedures included, among others, assessing: management's approach to identifying, recording and monitoring potential claims; consideration of the nature and basis of the provision and the range of potential outcomes; correspondence in relation to specific claims; progress on individual significant claims; and relevant settlement history of claims and utilisation of related provisions. We considered the rollout of new technology and products and challenged the Group's assumptions in relation to potential failure rates, considering past failure rates and related settlements where necessary. We substantively tested material movements in the provision and considered the accounting for movements in the provision balances and the related disclosures for compliance with IAS 37.

Based on evidence obtained, we found that management's process for identifying and quantifying warranty provisions was appropriate and that the resulting provision is not materially misstated.

Goodwill €1,506.9 million (2018: €1,391.0 million)

Refer to page 85 (Report of the Audit Committee), page 111 (accounting policy) and Note 9 to the financial statements.

The key audit matter

There is a risk in respect of the recoverability of the Group's significant goodwill balance if future cash flows are not sufficient to recover the carrying value of the Group's goodwill; this could occur if demand is weak or due to the nature

of the cost base in certain markets. We focus on this area due to the inherent uncertainty involved in forecasting and discounting future cash flows, which rely on the management's assumptions and estimates of future trading performance, which are the basis of the assessment of recoverability.

How the matter was addressed in our audit

Our audit procedures in this area included, among others, assessing the Group's impairment models for each CGU and evaluating the assumptions used by

the Group in the model, specifically the cash flow projections, perpetuity rates and discount rates. We compared the Group's assumptions, where possible, to externally derived data and performed our own assessment in relation to key model inputs, such as projected economic growth, competition, cost inflation

and discount rates. We examined the sensitivity analysis performed by Group management and performed our own sensitivity analysis in relation to the key assumptions. We compared the sum of the discounted cash flows to the Group's market capitalisation. We also assessed whether the disclosures in relation to the key assumptions and in respect of the sensitivity of the outcome of the impairment assessment to changes in those key assumptions were appropriate.

The coverage we obtained was as follows:

Based on evidence obtained, we found that the key assumptions used by management were appropriate, and supported management's conclusion that no impairment of goodwill was required.

Company audit matter

Investment in subsidiaries €1,201.4 million (2018: €1,191.0 million)

Refer to page 111 (accounting policy) and Note 12 to the financial statements.

The key audit matter

The investments in subsidiary undertakings are carried in the Company's financial statements at cost less impairment. Impairments are determined by reference to the subsidiary undertakings' fair value.

How the matter was addressed in our audit

In this area our audit procedures included, among others, assessing the carrying value of subsidiaries for any objective indicators of impairment.

Based on the results of our testing, we found management's assessment that no impairment is required to be reasonable.

Our application of materiality and an overview of the scope of our audit

Materiality for the Group financial statements as a whole was set at €22.3 million (2018: €19.5 million).

This has been calculated using a benchmark of Group profit before taxation (of which it represents 5% (2018: 5%)), which we have determined, in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members of the Company in assessing financial performance.

Materiality for the Company financial statements as a whole was set at €13.2m (2018: €13.0m), determined with reference to a benchmark of Company's total assets of which it represents 1% (2018: 1%).

We report to the Audit Committee all corrected and uncorrected misstatements we identified through our audit in excess of €500,000 (2018: €500,000), in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

The structure of the Group's finance function is such that certain transactions and balances are accounted for by the central Group finance team, with the remainder accounted for in the Group's reporting components. We performed comprehensive audit procedures, including those in relation to the significant risks set out above, on those transactions and balances accounted for at Group. The Group audit team carried out the audit of the Company financial statements.

In respect of components, based on our assessment of the financial significance of each of the Group's 274 components, we determined that there were:

51 components 'full scope components' where audits of the financial information of those components were performed;
15 components 'specific scope components' where audit procedures over specified financial statement captions were performed, due to the risk of potential misstatement of the Group financial statements caused by errors in those captions; and
208 components where the audit procedures comprised analytical review procedures to ensure that our initial assessment that there were no significant risks of misstatement of the Group financial statements in those components was appropriate.

Statements

2019 Statementsplc Group FinancialKingspan& Report Annual -

IAS Regulation.

current year audit and, therefore, it is not separately identified in our report this year.

In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows:

	Full scope	Specific scope	Other
	components	components	components
	%	%	%
Profit before tax	78	12	10
Revenue	70	16	14
Total assets	82	13	5

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Independent Auditor's Report	Financial Statements	Notes to the Financial Statements

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KINGSPAN GROUP PLC OPINION AND CONCLUSIONS ARISING FROM OUR AUDIT

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KINGSPAN GROUP PLC

OPINION AND CONCLUSIONS ARISING FROM OUR AUDIT

Financial

The audits undertaken for Group reporting purposes at the key reporting components were all performed to component materiality levels. These component materiality levels were set individually

for each component and ranged from €10,000 to €7,350,000. Detailed audit instructions were sent to the component auditors in all of these identified locations. These instructions covered the significant audit areas to be covered by these audits (which included the relevant key audit matters detailed above) and set out the information required to be reported to the Group audit team.

Senior members of the Group audit team were directly responsible for the audit of 21 full scope components and 6 specific scope components. In respect of the other 30 full scope components and 9 specific scope components carried out by other component auditors (all KPMG member firms), senior members of the Group audit team:

participated in planning calls to ensure that the audit instructions were understood;
inspected the audit workpapers in respect of significant audit risk areas; and
participated in closing conference calls, during which the results of the audit were discussed by local management, the local audit team, Group management and the Group audit team.

Based on the above procedures, the Group audit team was satisfied with the coverage obtained and the audit work performed in respect of each component.

We have nothing to report on going concern

We are required to report to you if:

we have anything material to add or draw attention to in relation to the directors' statement in note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company's use of that basis for a period of at least twelve months from the date of approval of the financial statements; or
the related statement under the Listing Rules (Euronext Dublin and the London Stock Exchange) set out on page 92 is materially inconsistent with our audit knowledge.

We have nothing to report in these respects.

We have nothing to report on the other information in the Annual Report

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the directors' report, Business and Strategic Report and the Other Information Report.

The financial statements and our auditor's report thereon do not form part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Based solely on our work on the other information we report that, in those parts of the directors' report specified for our review:

we have not identified material misstatements in the directors' report or other accompanying information;
in our opinion, the information given in the directors' report is consistent with the financial statements;
in our opinion, the directors' report has been prepared in accordance with the Companies Act 2014.

Disclosures of principal risks and longer-term viability

Based on the knowledge we acquired during our financial statements audit, we have nothing material to add or draw attention to in relation to:

the directors' statement of risk and risk management on pages 36 to 39, concerning the disclosures of principal risks, describing these risks and explaining how they are being managed and mitigated;
the directors' confirmation within the report of the Audit Committee on page 82 that they have carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; and

the directors' explanation in the directors' report of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Other corporate governance disclosures

We are required to address the following items and report to you in the following circumstances:

Fair, balanced and understandable (set out on pages 92 to 93): if we have identified material inconsistencies between the knowledge we acquired during our financial statements audit and the directors' statement that they consider that the Annual Report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy;
Report of the Audit Committee (set out on pages 82 to 87): if the section of the Annual Report describing the work of the Audit Committee does not appropriately address matters communicated by us to the Audit Committee;
Statement of compliance with UK Corporate Governance Code (set out on page 90): if the directors' statement does not properly disclose a departure from provisions of the UK Corporate Governance Code specified by the Listing Rules of Euronext Dublin and the London Stock Exchange for our review.

We have nothing to report in these respects.

In addition, as required by the Companies Act 2014, we report, in relation to information given in the Corporate Governance Statement on pages 62 to 67, that:

based on the work undertaken for our audit, in our opinion, the description of the main features of internal control and risk management systems in relation to the financial reporting process for preparing the Group financial statements, and information relating to voting rights and other matters required by the European Communities (Takeover Bids (Directive 2004/EC) Regulations 2006 and specified for our consideration, are consistent with the financial statements and have been prepared in accordance with the Act; and
based on our knowledge and understanding of the Company and its environment obtained in the course of our audit, we have not identified any material misstatements in that information.
the Corporate Governance statement contains the information required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017.

We also report that, based on work undertaken for our audit, all of the other information required by the Act is contained in the Corporate Governance Statement.

Our opinions on other matters prescribed the Companies Act 2014 are unmodified

We have obtained all the information and explanations which we consider necessary for the purpose of our audit.

In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the Company's statement of financial position is in agreement with the accounting records.

We have nothing to report on other matters on which we are required to report by exception

The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions required by sections 305 to 312 of the Act are not made.

The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by section 5(2) to

of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year ended
31 December 2018 as required by the European Union (Disclosure of Non- Financial and Diversity Information by certain large undertakings and groups) (amendment) Regulations 2018.

The Listing Rules of the Euronext Dublin and the London Stock Exchange require us to review:

the directors' statement, set out on page 92, in relation to going concern and longer-term viability;
the part of the Corporate Governance Statement on page 90 relating to the Company's compliance with
the provisions of the UK Corporate Governance Code and the Irish Corporate Governance Annex specified for our review; and
certain elements of disclosures in the report to shareholders by the Board of Directors' remuneration committee.

Respective responsibilities

Directors' responsibilities

As explained more fully in their statement set out on page 92 to 93, the directors are responsible for: the preparation

of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when

it exists. Misstatements can arise from fraud, other irregularities or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. The risk of not detecting a material misstatement resulting from fraud or other irregularities is higher than for one resulting from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control and may involve any area of law and regulation not just those directly affecting the financial statements.

A fuller description of our responsibilities is provided on IAASA's website at https:// www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_ of_auditors_responsiblities_for_audit.pdf

The purpose of our audit work and to whom we owe our responsibilities

Our report is made solely to the Company's members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility

to anyone other than the Company and the Company's members, as a body, for our audit work, for our report, or for the opinions we have formed.

Conall O'Halloran

for and on behalf of KPMG Chartered Accountants, Statutory Audit Firm

1 Stokes Place

St. Stephen's Green Dublin 2

Ireland

21 February 2020

Statements

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Independent Auditor's Report

Financial Statements

Notes to the Financial Statements

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019

	Note	2019	2018
		€m	€m
REVENUE	2	4,659.1	4,372.5
Cost of sales		(3,304.3)	(3,158.0)
GROSS PROFIT		1,354.8	1,214.5
Operating costs, excluding intangible amortisation		(857.7)	(769.3)
TRADING PROFIT	2	497.1	445.2
Intangible amortisation		(21.9)	(22.2)
OPERATING PROFIT		475.2	423.0
Finance expense	4	(23.7)	(19.5)
Finance income	4	2.9	1.4
PROFIT FOR THE YEAR BEFORE INCOME TAX	5	454.4	404.9
Income tax expense	7	(76.6)	(69.1)
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS		377.8	335.8
Attributable to owners of Kingspan Group plc		369.4	330.9
Attributable to non-controlling interests	28	8.4	4.9
		377.8	335.8
EARNINGS PER SHARE FOR THE YEAR		204.6c
Basic	8	184.0c
Diluted	8	202.9c	182.3c

Gene M. Murtagh	Geoff Doherty	21 February 2020
Chief Executive Officer	Chief Financial Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019

	Note	2019	2018
		€m	€m
Profit for the year		377.8	335.8
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss		61.0
Exchange differences on translating foreign operations		4.0
Effective portion of changes in fair value of cash flow hedges		(0.2)	0.3
Items that will not be reclassified subsequently to profit or loss		(0.2)
Actuarial (losses)/gains on defined benefit pension schemes	31	0.9
Income taxes relating to actuarial (losses)/gains on defined benefit pension schemes	21	-	(0.2)
Total other comprehensive income		60.6	5.0
Total comprehensive income for the year		438.4	340.8
Attributable to owners of Kingspan Group plc		430.2	337.1
Attributable to non-controlling interests	28	8.2	3.7
		438.4	340.8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

	Note	2019	2018
		€m	€m
ASSETS
NON-CURRENT ASSETS		1,506.9
Goodwill	9	1,391.0
Other intangible assets	10	93.2	111.1
Financial asset		8.2	8.2
Property, plant and equipment	11	965.2	850.5
Right of use assets	16	121.6	-
Derivative financial instruments	19	27.3	27.4
Retirement benefit assets	31	9.2	7.4
Deferred tax assets	21	14.1	15.6
CURRENT ASSETS		2,745.7	2,411.2
	557.6
Inventories	13	524.9
Trade and other receivables	14	794.2	798.6
Derivative financial instruments	19	-	0.2
Cash and cash equivalents		190.9	294.5
TOTAL ASSETS		1,542.7	1,618.2
	4,288.4	4,029.4
LIABILITIES
CURRENT LIABILITIES		768.9
Trade and other payables	15	779.8
Provisions for liabilities	20	58.0	47.5
Lease liabilities	16	25.6	-
Derivative financial instruments	19	0.1	-
Deferred consideration (including contingent consideration)	18	-	59.5
Interest bearing loans and borrowings	17	3.1	53.2
Current income tax liabilities		72.9	78.8
NON-CURRENT LIABILITIES		928.6	1,018.8
	24.3
Retirement benefit obligations	31	20.5
Provisions for liabilities	20	51.7	56.8
Interest bearing loans and borrowings	17	848.3	967.0
Lease liabilities	16	96.7	-
Deferred tax liabilities	21	31.9	40.8
Deferred contingent consideration	18	186.5	136.6
		1,239.4	1,221.7
TOTAL LIABILITIES		2,168.0	2,240.5
NET ASSETS		2,120.4	1,788.9
EQUITY		23.8
Share capital	23	23.7
Share premium	24	95.6	95.6
Capital redemption reserve		0.7	0.7
Treasury shares	25	(11.8)	(12.7)
Other reserves		(259.6)	(273.2)
Retained earnings		2,221.6	1,916.2
EQUITY ATTRIBUTABLE TO OWNERS OF KINGSPAN GROUP PLC		2,070.3	1,750.3
NON-CONTROLLING INTEREST	28	50.1	38.6
TOTAL EQUITY		2,120.4	1,788.9

Gene M. Murtagh	Geoff Doherty	21 February 2020
Chief Executive Officer	Chief Financial Officer

Statements Financial

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103

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019

	Share	Share	Capital	Treasury	Translation	Cash	Share	Revaluation	Put	Retained	Total	Non-	Total
	Capital	Premium	Redemption	Shares	Reserve	Flow	Based	Reserve	Option	Earnings	Attributable	Controlling	Equity
			Reserve			Hedging	Payment		Liability		to Owners of	Interest
	€m	€m	€m	€m	€m	Reserve	Reserve	€m	Reserve	€m	the Parent	€m	€m
	€m	€m	€m	€m

Balance at 1 January 2019	23.7	95.6	0.7	(12.7)	(172.0)	0.5	36.9	0.7	(139.3)	1,916.2	1,750.3	38.6	1,788.9
Transactions with owners recognised directly in equity
Employee share based compensation	0.1	-	-	-	-	-	13.1	-	-	-	13.2	-	13.2
Tax on employee share based compensation	-	-	-	-	-	-	1.7	-	-	2.5	4.2	-	4.2
Exercise or lapsing of share options	-	-	-	1.5	-	-	(12.8)	-	-	11.3	-	-	-
Repurchase of shares	-	-	-	(0.6)	-	-	-	-	-	-	(0.6)	-	(0.6)
Dividends	-	-	-	-	-	-	-	-	-	(77.6)	(77.6)	(0.4)	(78.0)
Transactions with non-controlling interests:													(23.0)
Arising on acquisition	-	-	-	-	-	-	-	-	(26.7)	-	(26.7)	3.7
Fair value movement	-	-	-	-	-	-	-	-	(22.7)	-	(22.7)	-	(22.7)
Transactions with owners	0.1	-	-	0.9	-	-	2.0	-	(49.4)	(63.8)	(110.2)	3.3	(106.9)
Total comprehensive income for the year
												377.8
Profit for the year	-	-	-	-	-	-	-	-	-	369.4	369.4	8.4
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Cash flow hedging in equity													(0.2)
- current year	-	-	-	-	-	(0.2)	-	-	-	-	(0.2)	-
- tax impact	-	-	-	-	-	-	-	-	-	-	-	-	-
Exchange differences on translating foreign operations	-	-	-	-	61.2	-	-	-	-	-	61.2	(0.2)	61.0
Items that will not be reclassified subsequently to profit or loss													(0.2)
Actuarial losses on defined benefit pension scheme	-	-	-	-	-	-	-	-	-	(0.2)	(0.2)	-
Income taxes relating to actuarial losses on defined benefit													-
pension scheme	-	-	-	-	-	-	-	-	-	-	-	-
Total comprehensive income for the year	-	-	-	-	61.2	(0.2)	-	-	-	369.2	430.2	8.2	438.4
Balance at 31 December 2019	23.8	95.6	0.7	(11.8)	(110.8)	0.3	38.9	0.7	(188.7)	2,221.6	2,070.3	50.1	2,120.4

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018

Capital

Treasury

Translation

Cash

Revaluation

Put

Retained

Total

Non-

Total

Capital

Premium

Redemption

Reserve

Flow

Based

Reserve

Option

Earnings

Attributable

Controlling

Equity

Reserve

Hedging

Payment

Liability

to Owners of

Interest

Reserve

the Parent

€m

Independent	ReportReportrategictStra& Business& Business
Financial Report Auditor's	ReportReportinabilityaSustain
Notes Statements	ReportReportDirectors'
theto

Balance at 1 January 2018

Transactions with owners recognised directly in equity

Employee share based compensation

Tax on employee share based compensation

Exercise or lapsing of share options

Repurchase of shares

Dividends

Transactions with non-controlling interests:

Arising on acquisition

Fair value movement

Transactions with owners

Total comprehensive income for the year

Profit for the year

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss Cash flow hedging in equity

current year
tax impact

Exchange differences on translating foreign operations

Items that will not be reclassified subsequently to profit or loss Actuarial gains on defined benefit pension scheme

Income taxes relating to actuarial gains on defined benefit pension scheme

Total comprehensive income for the year

Balance at 31 December 2018

23.6	95.6	0.7	(14.0)	(177.2)	0.2	35.2	0.7	(79.4)	1,642.7	1,528.1	39.9	1,568.0
0.1	-	-	-	-	-	12.3	-	-	-	12.4	-	12.4
-	-	-	-	-	-	(2.0)	-	-	2.9	0.9	-	0.9
-	-	-	1.3	-	-	(8.6)	-	-	7.3	-	-	-
-	-	-	-	-	-	-	-	-	-	-	-	-
-	-	-	-	-	-	-	-	-	(68.3)	(68.3)	(0.1)	(68.4)
-	-	-	-	-	-	-	-	(24.5)	-	(24.5)	(4.9)	(29.4)
-	-	-	-	-	-	-	-	(35.4)	-	(35.4)	-	(35.4)
0.1	-	-	1.3	-	-	1.7	-	(59.9)	(58.1)	(114.9)	(5.0)	(119.9)

-	-	-	-	-	-	-	-	-	330.9	330.9	4.9	335.8

-	-	-	-	-	0.3	-	-	-	-	0.3	-	0.3
-	-	-	-	-	-	-	-	-	-	-	-	-
-	-	-	-	5.2	-	-	-	-	-	5.2	(1.2)	4.0
-	-	-	-	-	-	-	-	-	0.9	0.9	-	0.9
-	-	-	-	-	-	-	-	-	(0.2)	(0.2)	-	(0.2)
-	-	-	-	5.2	0.3	-	-	-	331.6	337.1	3.7	340.8
23.7	95.6	0.7	(12.7)	(172.0)	0.5	36.9	0.7	(139.3)	1,916.2	1,750.3	38.6	1,788.9

Statements Financial	mentseStatemFinaFinancial
	InformationOtherOther

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Independent Auditor's Report

Financial Statements

Notes to the Financial Statements

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019

	Note	2019	2018
		€m	€m
OPERATING ACTIVITIES		377.8
Profit for the year		335.8
Add back non-operating expenses:		76.6
Income tax expense	7	69.1
Depreciation of property, plant and equipment	5	114.5	76.0
Amortisation of intangible assets	10	21.9	22.2
Impairment of non-current assets	11	0.2	5.2
Employee equity-settled share options		13.1	12.3
Finance income	4	(2.9)	(1.4)
Finance expense	4	23.7	19.5
Profit on sale of property, plant and equipment	5	(3.3)	(4.9)
Movement of deferred consideration		(0.6)	0.8
Changes in working capital:		5.8
Inventories		4.7
Trade and other receivables		57.3	(33.0)
Trade and other payables		(57.5)	30.6
Other:		1.7
Change in provisions		(5.8)
Pension contributions	31	(1.2)	(0.8)
Cash generated from operations		627.1	530.3
Income tax paid		(87.2)	(75.0)
Interest paid		(19.5)	(17.0)
Net cash flow from operating activities		520.4	438.3
INVESTING ACTIVITIES		(161.0)
Additions to property, plant and equipment		(144.2)
Proceeds from disposals of property, plant and equipment		6.7	12.9
Purchase of subsidiary undertakings	22	(142.2)	(461.0)
Purchase of financial asset		-	(8.2)
Payment of deferred contingent consideration in respect of acquisitions	18	(59.7)	(3.1)
Interest received		2.8	1.4
Net cash flow from investing activities		(353.4)	(602.2)
FINANCING ACTIVITIES		7.8
Drawdown of loans	29	445.0
Repayment of loans and borrowings	29	(181.6)	(92.7)
Payment of lease liability	16	(31.8)	-
Proceeds from share issues		0.1	0.1
Repurchase of shares	25	(0.6)	-
Dividends paid to non-controlling interest	28	(0.4)	(0.1)
Dividends paid	27	(77.6)	(68.3)
Net cash flow from financing activities		(284.1)	284.0
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	29	(117.1)	120.1
Effect of movement in exchange rates on cash held		13.5	(2.2)
Cash and cash equivalents at the beginning of the year		294.5	176.6
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		190.9	294.5

COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

	Note	2019	2018
		€m	€m
ASSETS
NON-CURRENT ASSETS		1,201.4
Investments in subsidiaries	12	1,191.0
CURRENT ASSETS		128.7
Amounts owed by group undertakings	14	112.7
Cash and cash equivalents		0.1	0.1
TOTAL ASSETS		1,330.2	1,303.8
LIABILITIES
CURRENT LIABILITIES		61.3
Amounts owed to group undertakings	15	-
Payables	15	0.2	0.2
TOTAL LIABILITIES		61.5	0.2
NET ASSETS		1,268.7	1,303.6
EQUITY
Equity attributable to owners of Kingspan Group plc		23.8
Share capital	23	23.7
Share premium	24	95.6	95.6
Capital redemption reserve		0.7	0.7
Treasury shares	25	(11.8)	(12.7)
Retained earnings	26	1,160.4	1,196.3
TOTAL EQUITY		1,268.7	1,303.6

Gene M. Murtagh	Geoff Doherty	21 February 2020
Chief Executive Officer	Chief Financial Officer

Statements Financial

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Independent Auditor's Report	Financial Statements	Notes to the Financial Statements

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019

Share	Share	Capital	Treasury	Retained	Shareholders'
Capital	Premium	Redemption	Shares	Earnings	Equity
		Reserves

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

STATEMENT OF ACCOUNTING POLICIES

Financial

	€m	€m	€m	€m	€m	€m
Balance at 1 January 2019	23.7	95.6	0.7	(12.7)	1,196.3	1,303.6
Shares issued	0.1	-	-	-	-	0.1
Repurchase of shares	-	-	-	(0.6)	-	(0.6)
Employee share based compensation	-	-	-	1.5	13.1	14.6
Dividends paid	-	-	-	-	(77.6)	(77.6)
Transactions with owners	0.1	-	-	0.9	(64.5)	(63.5)
Profit for the year	-	-	-	-	28.6	28.6
Balance at 31 December 2019
23.8	95.6	0.7	(11.8)	1,160.4	1,268.7

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018

	Share	Share	Capital	Treasury	Retained	Shareholders'
	Capital	Premium	Redemption	Shares	Earnings	Equity
			Reserves
	€m	€m	€m	€m	€m	€m
Balance at 1 January 2018	23.6	95.6	0.7	(14.0)	1,242.6	1,348.5
Shares issued	0.1	-	-	-	-	0.1
Repurchase of shares	-	-	-	-	-	-
Employee share based compensation	-	-	-	1.3	12.3	13.6
Dividends paid	-	-	-	-	(68.3)	(68.3)
Transactions with owners	0.1	-	-	1.3	(56.0)	(54.6)
Profit for the year	-	-	-	-	9.7	9.7
Balance at 31 December 2018
23.7	95.6	0.7	(12.7)	1,196.3	1,303.6

COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019

	2019	2018
	€m	€m
OPERATING ACTIVITIES	28.6
Profit for the year after tax	9.7
Net cash flow from operating activities	28.6	9.7
FINANCING ACTIVITIES	(13.3)
Change in receivables	57.2
Change in payables	61.3	-
Repurchase of shares	(0.6)	-
Exercise or lapsing of share options	1.5	1.3
Proceeds from share issues	0.1	0.1
Dividends paid	(77.6)	(68.3)
Net cash flow from financing activities	(28.6)	(9.7)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	0.1	0.1
Net increase in cash and cash equivalents	-	-
CASH AND CASH EQUIVALENTS AT END OF YEAR
0.1	0.1

General information

Kingspan Group plc is a public limited company registered and domiciled in Ireland. Its registered number is 70576 and the address of its registered office is at Dublin Road, Kingscourt, Co Cavan.

The Group's principal activities comprise the manufacture of insulated panels, rigid insulation boards, architectural facades, data and flooring technology, daylighting and ventilation systems and water and energy solutions. The Group's Principal Subsidiary Undertakings are set out

on page 153 to 155.

Statement of compliance

The consolidated and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU and those parts of the Companies Acts 2014, applicable

to companies reporting under IFRS and Article 4 of the IAS Regulation.

The Company has availed of the exemption in Section 304 of the Companies Act 2014 and has not presented the Company Income Statement, which forms part of the Company's financial statements, to its members and the Registrar of Companies.

Basis of preparation

The financial statements have been prepared on a going concern basis, under the historical cost convention, as modified by:

measurement at fair value of share based payments at initial date of award;
certain derivative financial instruments and deferred contingent consideration recognised and measured at fair value; and
recognition of the defined benefit liability as plan assets less the present value of the defined benefit obligation.

The accounting policies set out below have been applied consistently to all years presented in these financial statements, unless otherwise stated.

These consolidated financial statements have been prepared in Euro. The Euro is the presentation currency of the Group and the functional and presentation currency of the Company.

The Group uses a number of Alternative Performance Measures (APMs) throughout these financial statements to give assistance to investors in evaluating the performance of the underlying business and to give a better understanding of howmanagement review and monitor the business on an ongoing basis.These APMs have been defined and explained in more detail on page 148 to 150.

Comparative information has been represented where necessary, to present the financial statements on a consistent basis.

Changes in Accounting Policies and Disclosures

New and amended standards and interpretations effective during 2019

IFRS 16 Leases

IFRS 16 is effective for accounting periods beginning on or after 1 January 2019, and the Group adopted IFRS 16 with effect from 1 January 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both the lessee and the lessor. For lessees, IFRS 16 eliminates the classification of leases as either operating leases or finance leases and introduces a single lessee accounting model whereby all leases are accounted for as finance leases, with some exemptions for short- term and low-value leases. It also includes an election which permits a lessee not

to separate non-lease components (e.g. maintenance) from lease components and instead capitalise both the lease cost and associated non-lease cost.

The standard primarily affects the accounting for the Group's operating leases. The application of IFRS 16 results in the recognition of additional assets and liabilities in the Consolidated Statement of Financial Position and in the Consolidated Income Statement it replaces the straight-line operating lease expense with a depreciation charge for the right of use asset and an interest expense on the lease liabilities.

The incremental borrowing rate is the rate of interest that the lessee would expect to incur on funds borrowed over a similar term and security to obtain a comparable value to the right of use asset in the relevant economic environment. The Group's weighted average incremental borrowing rate pertaining to these leases is 3%.

Definition of a lease

Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IFRIC 4 Determining Whether an Arrangement contains a Lease. The Group now assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.

On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied IFRS

16 only to contracts that were previously

identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019.

Transition

The Group adopted the new standard by applying the modified retrospective approach.

At transition, for leases classified as operating leases under IAS 17, lease liabilities were measured at the present value of the remaining lease payments, discounted at the applicable incremental borrowing rate as at 1 January 2019. All right of use assets were measured at the amount of the lease liability on adoption, adjusted by the amount of any prepaid or accrued interest payments.

Previously under IAS 17 operating lease rentals were charged to the Income Statement on a straight-line basis over the term of the lease.

The Group availed of the recognition exemption for short-term and low-value leases and used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. The Group also elected not to separate non- lease components from lease components and instead capitalise both the lease cost and associated non-lease cost.

The Group has also availed of the practical expedient which allows for a single discount rate to be applied to a portfolio of leases with reasonably similar characteristics.

The Group had a small number of finance leases under IAS 17. For these leases, the carrying amount of the asset and liability at 1 January 2019 were recognised at the equivalent carrying amount under IAS 17 immediately before that date.

On 1 January 2019 €127.9m of leases were recognised as liabilities on adoption of the standard and €128.8m capitalised as right of use assets. During 2019, depreciation on the right of use assets was €30.0m and associated lease rentals decreased by €31.8m leading to an increase in operating profit of €1.8m. The interest charge on the associated leases was €3.8m and the aggregate impact of IFRS 16 on profit before tax was a decrease of €2.0m. The adoption of IFRS 16 reduced the 2019 EPS by 1 cent. While IFRS 16 had no net impact on cash and cash equivalents at the end of 2019, it had an impact on the cashflow statement in respect of profit, depreciation and finance expense by amounts outlined above, offset by the payment of lease liabilities of €31.8m.

Further details outlining the impact on the financial statements on transition to IFRS 16 is outlined in note 16.

Statements

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Independent Auditor's Report

Financial Statements

Notes to the Financial Statements

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

Financial

Measurement

The Group recognises right of use assets representing its right to use the underlying assets and lease liabilities representing its obligation to make lease payments

at the lease commencement date. The right of use assets are initially measured at cost, and subsequently measured at cost less accumulated depreciation and impairment losses.

Lease liabilities are measured at the present value of the future lease payments, discounted at the Group's incremental borrowing rate. Subsequent to the initial measurement, the lease liabilities are increased by the interest cost and reduced by lease payments made.

The right of use assets and lease liabilities

are remeasured when there are changes in the assessment of whether an extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised or where there is a change in future lease payments as a result of a change in an index or rate.

The Group has applied judgement to determine the lease term of contracts that include termination and extension options. If the Group is reasonably certain to exercise such options, the relevant amount of right of use assets and lease liabilities are recognised. The Group has also applied judgement in determining the incremental borrowing rate, the basis of which is set out above.

IFRIC 23 Uncertainty over income tax treatment

IFRIC 23 is effective for accounting periods beginning on or after 1 January 2019, and the Group adopted IFRIC 23 with effect from 1 January 2019. IFRIC 23 sets out how to determine taxable profits and losses, tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments under IAS 12 Income Taxes. Where the Group considers it is probable that an uncertain tax treatment will not be accepted by a tax authority it

is measured using either the most likely amount method or the expected value method, as appropriate. The adoption and application of IFRIC 23 did not have a material impact on the Group.

The point of recognition arises when the Group satisfies a performance obligation by transferring control of a promised good or service to the customer, which could occur over time or at a point in time. Invoicing occurs at the point of final delivery of the product or performance obligation, at which point a right is established for unconditional consideration as control passes to the customer. Typically, payment terms are 30 days from the end of the month in which the invoice is raised.

Research and Development

Expenditure on research and development is recognised as an expense in the period in which it is incurred. An asset is recognised only when all the conditions set out in IAS 38 Intangible Assets are met.

Transaction costs are expensed to the Income Statement as incurred.

Put options held by non-controlling interest shares

Any contingent consideration is measured at fair value at the date of acquisition. Where a put option is held by a non-controlling interest ("NCI") in a subsidiary undertaking, whereby that party can require the Group to acquire the NCI's shareholding in the subsidiary at a future date, but the NCI retain present access to the results of the subsidiary, the Group applies the present access method of accounting to this arrangement. The Group recognises a contingent consideration liability at fair value, being the Group's estimate of the amount required to settle that liability

Goodwill is subject to impairment testing on an annual basis and at any time during the year if an indicator of impairment

is considered to exist. The goodwill impairment tests are undertaken at a consistent time each year. Impairment is determined by assessing the recoverable amount of the cash generating unit

to which the goodwill relates. Where the recoverable amount of the cash generating unit is less than the carrying amount, an impairment loss is recognised in the Income Statement. Impairment losses arising in respect of goodwill are not reversed following recognition.

On disposal of a subsidiary, the attributable amount of goodwill, not previously written off, is included in the calculation of the profit or loss on disposal.

Statements

Report Annual -

The new standards, amendments to standards and interpretations are as follows:

	Effective Date - periods
	beginning on or after
IFRS 16: Leases (13 January 2016)	1 January 2019
IFRIC 23: Uncertainty over income tax treatment (7 June 2017)	1 January 2019

The following amended standards and interpretations do not have a significant impact on the Group's consolidated financial statements:

	Effective Date - periods
	beginning on or after
Annual Improvements to IFRS Standards 2015-2017 Cycle - various standards	1 January 2019
Amendments to IAS 19: Plan amendment, curtailment or settlement	1 January 2019
Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures	1 January 2019
Amendments to IFRS 9: Prepayment Features with Negative Compensation	1 January 2019
Amendments to References to Conceptual Framework in IFRS Standards.	1 January 2020
Definition of Material (Amendments to IAS 1 and IAS 8)	1 January 2020
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)	1 January 2020

Business Combinations

Business combinations are accounted for using the acquisition method as at the date of acquisition.

In accordance with IFRS 3 Business Combinations, the fair value of consideration paid for a business combination is measured as the aggregate of the fair values at the date of exchange of assets given and liabilities incurred or assumed in exchange for control. The assets, liabilities and contingent liabilities of the acquired entity are measured at fair value as at the acquisition date. When the initial accounting for a business combination is determined, it is done so on a provisional basis with any adjustments

to these provisional values made within

12 months of the acquisition date and are effective as at the acquisition date.

To the extent that deferred consideration is payable as part of the acquisition cost

and a corresponding reserve in equity. Any subsequent remeasurements required due to changes in fair value of the put liability estimation are recognised in the Put Option Reserve in equity.

Goodwill

Goodwill arises on business combinations and represents the difference between the fair value of the consideration and the fair value of the Group's share of the identifiable net assets of a subsidiary at the date of acquisition.

The Group measures goodwill at the acquisition date as:

> the fair value of the consideration

transferred; plus

> the recognised amount of any

non-controlling interests in the

acquiree; plus

> if the business combination is

achieved in stages, the fair value of

Intangible Assets (other than goodwill)

Intangible assets separately acquired are capitalised at cost. Intangible assets acquired as part of a business combination are capitalised at fair value as at the date of acquisition.

Following initial recognition, intangible assets, which have finite useful lives, are carried at cost or initial fair value less accumulated amortisation and accumulated impairment losses.

The amortisation of intangible assets is calculated to write off the book value of intangible assets over their useful lives on a straight-line basis on the assumption of zero residual value. Amortisation charged on these assets is recognised in the Income Statement.

The carrying amount of intangible assets is reviewed for indicators of impairment

2019 Statementsplc Group FinancialKingspan&

Basis of consolidation

The Group consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries are included in the Group financial statements from the date on which control over the entity is obtained and cease to be consolidated from the date on which control is transferred out of the Group.

Transactions eliminated on consolidation

Intragroup transactions and balances, and any unrealised gains arising from such

transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same manner as unrealised gains, but only to the extent that there is no evidence

of impairment.

Segment reporting

The Group's accounting policy for identifying segments is based on internal management reporting information that is routinely reviewed by the Board of Directors, which is the Chief Operating Decision Maker (CODM) for the Group. The measurement policies used for the segment reporting under IFRS 8 are the same as those used in the consolidated financial statements. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, finance income and expenses and tax assets and liabilities.

The Group has determined that it has five operating segments: Insulated Panels,

Insulation Boards, Water & Energy, Data & Flooring and Light & Air.

Revenue recognition

The Group uses the five-step model as prescribed under IFRS 15 on the Group's revenue transactions. This includes the identification of the contract, identification of the performance obligations under same, determination of the transaction price, allocation of the transaction price to performance obligations and recognition of revenue.

Typically, individual performance obligations are specifically called out in the contract which allows for accurate recognition of revenue as and when performances are fulfilled.

and is payable after one year from the acquisition date, the deferred consideration is discounted at an appropriate interest rate and, accordingly, carried at net present value (amortised cost) in the Group Statement of Financial Position. The discount component is then unwound as an interest charge in the Consolidated Income Statement over the life of the obligation.

Where a business combination agreement provides for an adjustment to the cost of a business acquired contingent on future events, other than put options held by non-controlling interests, the Group accrues the fair value of the additional consideration payable as a liability at acquisition date. This amount is reassessed at each subsequent reporting date with any adjustments recognised in the Income Statement.

If the business combination is achieved in stages, the fair value of the acquirer's previously held equity interest in the acquiree is re-measured at the acquisition date through the Income Statement.

the pre-existing equity interest in the

acquiree; less

> the net recognised amount (generally

fair value) of the identifiable assets

acquired and liabilities assumed.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

As at the acquisition date, any goodwill acquired is allocated to each of the cash generating units expected to benefit from the combination's synergies. The cash generating units represent the lowest level within the Group which generate largely independent cash inflows and these units are not larger than the operating segments (before aggregation) determined in accordance with IFRS 8 Operating Segments.

Goodwill is tested for impairment at the same level as the goodwill is monitored by management for internal reporting purposes, which is at the individual cash generating unit level.

at each reporting date and is subject to impairment testing when events or changes of circumstances indicate that the carrying values may not be recoverable.

The estimated useful lives are as follows:

Customer relationships	2	- 6 years
Trademarks & Brands	2	- 12 years
Patents	8 years
Technological know how
and order backlogs	5 - 10 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted as necessary.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

Financial

Foreign currency

Functional and presentation currency

The individual financial statements of each Group company are measured and presented in the currency of the primary economic environment in which the company operates, the functional currency. The Group financial statements are presented in Euro, which is the Company's functional currency.

Transactions and balances

Transactions in foreign currencies are translated into the functional currency at the exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rates at the reporting date. All currency translation differences on monetary assets and liabilities are taken to the Income Statement, except when deferred in equity

as qualifying net investment hedges, which is recognised in the Statement of Comprehensive Income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity

are initially translated at the exchange rate at the date of acquisition and then subsequently these assets and liabilities are treated as part of a foreign entity and are translated at the closing rate.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.

Grants

Grants are initially recognised as deferred

Impairment losses are recognised in the Income Statement. Following the recognition of an impairment loss, the depreciation charge applicable to the asset or cash generating unit is adjusted to allocate the revised carrying amount, net of any residual value, over the remaining useful life.

Assets under construction are carried at cost less any recognised impairment loss. Depreciation of these assets commences when the assets are ready for their

Retirement benefit obligations

The Group operates defined contribution and defined benefit pensions schemes.

Defined contribution pension schemes

The costs arising on the Group's defined contribution schemes are recognised in the Income Statement in the period in which the related service is provided. The Group has no legal or constructive obligation to pay further contributions in the event that these plans do

Statements

Exchange rates of material currencies used were as follows:

	Average rate	Closing rate
	2019	2018	2019	2018
Euro =	0.877		0.852
Pound Sterling	0.885	0.898
US Dollar	1.120	1.181	1.121	1.144
Canadian Dollar	1.485	1.530	1.461	1.557
Australian Dollar	1.610	1.580	1.600	1.620
Czech Koruna	25.669	25.648	25.414	25.711
Polish Zloty	4.297	4.260	4.260	4.299
Hungarian Forint	325.31	318.78	330.52	321.02
Brazilian Real	4.415	4.307	4.512	4.435

Foreign operations	> Work in progress and finished goods	Deferred tax
The Income Statement, Statement	are carried at cost consisting of direct	Deferred tax is recognised on all
of Financial Position and Cash Flow	materials, direct labour and directly	temporary differences at the reporting
Statement of Group companies that have	attributable production overheads	date. Temporary differences are defined
a functional currency different from that	and other costs incurred in bringing	as the difference between the tax bases
of the Company are translated as follows:	them to their existing location	of assets and liabilities and their carrying
> Assets and liabilities at each reporting	and condition.	amounts in the consolidated financial
Net realisable value represents the	statements. Deferred tax assets and
date are translated at the closing rate
liabilities are not subject to discounting
at that reporting date.	estimated selling price less costs to
and are measured at the tax rates that
> Results and cash flows are translated	completion and appropriate marketing,
are expected to apply in the period in
at actual exchange rates for the year,	selling and distribution costs.
which the asset is realised or the liability
or an average rate where this is a	A provision is made, where necessary,
is settled based on tax rates and tax laws
reasonable approximation.
in all inventory categories for obsolete,	that have been enacted or substantively

All resulting exchange differences	slow-moving and defective items.	enacted at the reporting date.
are recognised in the Statement of	Income tax	Deferred tax liabilities are recognised for
Comprehensive Income and accumulated
Income tax in the Income Statement	all taxable temporary differences (i.e.
as a separate component of equity, the
differences that will result in taxable
Translation Reserve.	represents the sum of current income
amounts in future periods when the
	tax and deferred tax not recognised in
On disposal of a foreign operation, any	carrying amount of the asset or liability is
other comprehensive income or directly
such cumulative retranslation differences,	in equity.	recovered or settled).
previously recognised in equity, are		Deferred tax assets are recognised in
reclassified to the Income Statement as	Current tax
respect of all deductible temporary
part of gain or loss on disposal.	Current tax represents the expected tax
differences (i.e. differences that give
Inventories	payable or recoverable on the taxable	rise to amounts which are deductible in
profit for the year using tax rates and laws
Inventories are stated at the lower of cost	determining taxable profits in future periods
that have been enacted or substantively	when the carrying amount of the asset
and net realisable value.	enacted, at the reporting date and taking	or liability is recovered or settled), carry-
Cost is based on the first-in,first-out	into account any adjustments from	forward of unused tax credits and unused
principle and includes all expenditure	prior years. Liabilities for uncertain tax	tax losses to the extent that it is probable
incurred in acquiring the inventories and	treatments are recognised in accordance	that taxable profits will be available against
bringing them to their present location	with IFRIC 23 and are measured using	which to offset these items.
and condition.	either the most likely amount method or	The carrying amounts of deferred tax
	the expected value method - whichever
> Raw materials are valued at	assets are subject to review at each
better predicts the resolution of
the purchase price including	the uncertainty.	reporting date and reduced to the extent
transport, handling costs and net of		that future taxable profits are considered
trade discounts.		to be inadequate to allow all or part of
		any deferred tax asset to be utilised.

income at their fair value when there is a reasonable assurance that the grant will be received, and all relevant conditions have been complied with.

Capital grants received and receivable in respect of property, plant and equipment are treated as a reduction in the cost

of that asset and thereby amortised to the Income Statement in line with the underlying asset.

Revenue grants are recognised in the Income Statement to offset the related expenditure.

Property, Plant and Equipment

Property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is provided on a straight line basis at the rates stated below, which are estimated to reduce each item of property, plant and equipment to its residual value by the end of its useful life:

Freehold	2% to 2.5% on cost
buildings
Plant and	5% to 20% on cost
machinery
Fixtures and	10% to 20% on cost
fittings
Computer	12.5% to 33% on cost
equipment
Motor vehicles	10% to 25% on cost

Freehold land is stated at cost and is not depreciated.

The estimated useful lives and residual values of property, plant and equipment are determined by management at the time the assets are acquired and subsequently, re-assessed at each reporting date. These lives are based on historical experience with similar assets across the Group.

In accordance with IAS 36 Impairment of Assets, the carrying values of property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment.

An impairment loss is recognised whenever the carrying value of an asset or its cash generating unit exceeds its recoverable amount.

intended use.

Leases (Note 16)

Upon adoption of IFRS 16 the accounting policy for the year ended 31 December

2019 is as follows:

The Group recognises right of use assets representing its right to use the underlying assets and lease liabilities representing its obligation to make lease payments

at the lease commencement date. The right of use assets are initially measured at cost, and subsequently measured at cost less accumulated depreciation and impairment losses.

Depreciation is provided on a straight line basis over the period of the lease, or useful life if shorter.

Lease liabilities are measured at the present value of the future lease payments, discounted at the applicable incremental borrowing rate. Subsequent to the initial measurement, the lease liabilities are increased by the interest cost and reduced by lease payments made.

The right of use assets and lease liabilities are remeasured when there are changes in the assessment of whether an extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised or where there is a change in future lease payments as a result of a change in an index or rate. The Group applies judgement when determining the lease term where renewal and termination options are contained in the lease contract.

Prior to 1 January 2019 the policy was as follows:

Leases are classified as finance leases wherever substantially all of the risk and rewards of ownership of the asset have transferred to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are capitalised at the inception of the lease in the Statement of Financial Position at the lower of its fair value and the present value of the minimum lease payments and are depreciated over their useful lives with any impairment being recognised in the Income Statement.

not hold sufficient assets to provide retirement benefits.

Defined benefit pension schemes

The Group's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan.

Remeasurements of the net defined benefit liability or asset, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling,

are recognised immediately in other comprehensive income.

The Group determines the net interest expense on the net defined benefit liability or asset by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability or asset, taking into account any changes in the net defined benefit liability or asset during the period as a result of contributions and benefit payments.

Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

2019 Statementsplc Group FinancialKingspan& Report Annual -

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

STATEMENT OF ACCOUNTING POLICIES (continued)

Financial

Provisions

A provision is recognised in the Statement of Financial Position when the Group has a present constructive or legal obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligation and the amount of the obligation can be estimated reliably.

A specific provision is created when a claim has actually been made against the Group or where there is a known issue at a known customer's site, both relating to a product or service supplied in the past. In addition, a risk-based provision is created where future claims are considered incurred but not reported. The warranty provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Specific provisions will generally be aged as a current liability, reflecting the assessment that a current liability exists to replace or repair product sold on foot of an accepted valid warranty issue. Only where the liability is reasonably certain not to be settled within the next 12 months, will a specific provision be categorised as a long-term obligation. Risk-based provisions will generally be aged as a non-current liability, reflecting the fact that no warranty claim has yet been made by the customer.

Provisions which are not expected to give

Derivative financial instruments are recognised initially at fair value and thereafter are subsequently remeasured at their fair value. Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm's length transaction. The fair value of these instruments is the estimated amount that the Group would receive or pay to terminate the swap at the reporting date, taking into account current interest and currency exchange rates and the current creditworthiness of the swap counterparties.

The Group designates all of its derivatives in one or more of the following types

of relationships:

Fair value hedge: Hedges the exposure to movements in fair value of recognised assets or liabilities that are attributable to hedged risks.
Cash flow hedge: Hedges the Group's exposures to fluctuations in future cash flow derived from a particular risk associated with recognised assets or liabilities or forecast transactions.
Net investment hedge: Hedges the exchange rate fluctuations of a net investment in a foreign operation.

At inception of the transaction, the Group documents the relationship between the hedging instruments and hedged items, including the risk management objectives and strategy in undertaking

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of the hedged item is amortised on an effective interest basis to the Income Statement with the objective of achieving full amortisation by maturity of the hedged item.

Cash flow hedge

The effective part of any gain or loss on the derivative financial instrument is recognised in other comprehensive income and presented in the Cash Flow Hedge Reserve in equity with the ineffective portion being recognised within Finance Income or Finance Expense in the Income Statement. If a hedge of

a forecasted transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains and losses that were recognised directly in other comprehensive income are reclassified into profit or loss in the same period or periods during which the asset acquired or liability assumed affects profit or loss. For cash flow hedges, other than those covered by the preceding statements, the associated cumulative gain or loss is removed from other comprehensive income and recognised in the Income Statement in the same period or periods during which the hedged forecast transaction affects profit or loss. The ineffective part of any gain or loss is recognised immediately in the Income Statement.

Financial Assets

On initial recognition, a financial asset is classified as measured at amortised cost or fair value with any movement being reflected through other comprehensive income or the income statement.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment- by-investment basis.

The Group applies the simplified approach for expected credit losses (ECL) under IFRS 9 Financial Instruments, which requires expected lifetime losses to

be recognised from initial recognition of receivables. Trade receivables are considered for impairment on a case by case basis, when they are past due or when objective evidence is received that a specific counterparty may default. Trade receivables are written-off when there is no reasonable expectation of recovery. In the event recoveries are made, these are recognised in the Consolidated Income Statement.

Financial Liabilities

Financial liabilities held for trading are measured at fair value through the profit and loss, and all other financial liabilities are measured at amortised cost unless the fair value option is applied.

Borrowing costs

Borrowing costs directly attributable to qualifying assets, as defined in IAS 23 Borrowing costs, are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use. Other borrowing costs are expensed to the Income Statement in the period in which they are incurred.

Share Based Payment Transactions

The Group grants equity settled share based payments to employees through the Performance Share Plan and the Deferred Bonus Plan.

The fair value of these equity settled transactions is determined at grant date and is recognised as an employee expense in the Income Statement, with the corresponding increase in equity, on a straight line basis over the vesting period. The fair value at the grant date is determined using a combination of the Monte Carlo simulation technique and a Black Scholes model, excluding the impact of any non-market conditions. Non-market vesting conditions are included in the assumptions about the number of options that are expected to vest. At each reporting date, the Group revises its estimates of the number of options that are likely to vest as a result of non-market conditions. Any adjustment from this revision is recognised in the Income Statement with a corresponding adjustment to equity.

Non-controlling interest

Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the parent company and are presented separately in the Income Statement and within equity in the Statement of Financial Position, distinguished from shareholders' equity attributable to owners of the parent company.

Accounting Estimates

and Judgements

In the process of applying the Group's accounting policies, as set out on pages 108 to 116, management are required to make estimates and judgements that could materially affect the Group's reported results or net asset position.

Notwithstanding that the areas below represent estimation and judgement at the end of the reporting period, the directors are satisfied that none of these areas have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

The areas where key estimates and judgements were made by management and are material to the Group's reported results or net asset position, are

as following:

Impairment (Note 9)

The Group is required to review assets for objective evidence of impairment.

Statements

2019 Statementsplc Group FinancialKingspan& Report Annual -

rise to a cash outflow within 12 months of the reporting date are, where material, determined by discounting the expected future cash flows. The unwinding of the discount is recognised as a finance cost.

Dividends

Final dividends on ordinary shares are recognised as a liability in the financial statements only after they have been approved at the Annual General Meeting of the Company. Interim dividends on ordinary shares are recognised when they are paid.

Cash and cash equivalents

Cash and cash equivalents principally comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.

Derivative financial instruments

Derivative financial instruments, principally interest rate and currency swaps, are used to hedge the Group's foreign exchange and interest rate risk exposures.

the hedge transactions. The Group also documents its assessment, both at inception and on an ongoing basis, as to whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

Fair value hedge

Any gain or loss resulting from the remeasurement of the hedging instrument to fair value is reported in the Income Statement, together with any changes in the fair value of the hedged asset

or liability that are attributable to the hedged risk. The gains or losses of a hedging instrument that are in hedge relationships with borrowings are included within Finance Income or Finance Expense in the Income Statement. In the case

of the related hedged borrowings, any gain or loss on the hedged item which is attributable to the hedged risk is adjusted against the carrying amount of the hedged item and is also included within Finance Income or Finance Expense in the Income Statement.

Hedge accounting is discontinued when a hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. The cumulative gain or loss at that point remains in other comprehensive income and is recognised when the transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in other comprehensive income is transferred to the Income Statement in the period.

Net investment hedge

Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and presented in the Translation Reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in either Finance Income or Finance Expense in the Income Statement. Cumulative gains or losses remain in equity until disposal of the net investment in the foreign operation at which point the related differences are reclassified to the Income Statement as part of the overall gain or loss on sale.

Finance Income

Finance income comprises interest income on funds invested and any gains on hedging instruments that are recognised in the Income Statement. Interest income is recognised as it accrues using the effective interest rate method.

Finance Expense

Finance expense comprises interest payable on borrowings calculated using the effective interest rate method, fair value gains and losses on hedging instruments that are recognised in the Income Statement, the net finance cost of the Group's defined benefit pension scheme, lease interest and the discount component of the deferred consideration which is unwound as an interest charge in the Income Statement over the life of the obligation.

Where the share based payments give rise to the issue of new share capital, the proceeds received by the Company are credited to share capital (nominal value) and share premium (where applicable) when the share entitlements are exercised. Where the share based payments give rise to the re-issue of shares from treasury shares, the proceeds of issue are credited to share premium.

The Group does not operate any cash- settled share based payment schemes or share based payment transactions with cash alternatives as defined in IFRS 2.

Treasury Shares

Where the Company purchases its own equity share capital, the consideration paid is deducted from total shareholders' equity and classified as treasury shares until such shares are cancelled or reissued. Where such shares are subsequently sold or reissued, any consideration received

is included in share premium account. No gains or losses are recognised on the purchase, sale, cancellation or issue of treasury shares.

It does this on the basis of a review of the budget and rolling 5 year forecasts (4 year strategic plan, as approved by the Board, plus year 5 forecasted by management), which by their nature are based on a series of assumptions and estimates.

The Group has performed impairment tests on those cash generating units which contain goodwill, and on any assets where there are indicators of impairment. The key assumptions associated with these reviews are detailed in Note 9. This is an area of estimation and judgement.

Guarantees & warranties (Note 20)

Certain products carry formal guarantees of satisfactory functional and aesthetic performance of varying periods following their purchase. Local management evaluate the constructive or legal obligation arising from customer feedback and assess the requirement to provide for any probable outflow of economic benefit arising from a settlement. This is an area of estimation and judgement.

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STATEMENT OF ACCOUNTING POLICIES (continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

SEGMENT REPORTING

Financial

Recoverability of trade receivables (Note 14)

The Group provides credit to customers and as a result there is an associated risk that the customer may not be able to pay outstanding balances. Trade receivables are considered for impairment on a case by case basis, when they are past due

at the reporting date or when objective evidence is received that a specific counterparty may default.

Under IFRS 9 the Group uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables from customers. Loss rates are calculated using a "roll rate" method based on the probability

of a receivable progressing through successive chains of non-payment to write-off. The rates are calculated at a business unit level which reflects the risks associated with geographic region, age, mix of customer relationship and type of product purchased. This is an area

of estimation.

Valuation of inventory (Note 13)

Inventories are measured at the lower of cost and net realisable value. The Group's policy is to hold inventories at original cost and create an inventory provision where evidence exists that indicates net realisable value is below cost for a particular item of inventory. Damaged, slow-moving or obsolete inventory are typical examples of such evidence. This is an area of estimation.

Leases (Note 16)

Business Combinations (Note 22)

Business combinations are accounted for using the acquisition method which requires that the assets and liabilities assumed are recorded at their respective fair values at the date of acquisition. The application of this method requires certain estimates and assumptions relating, in particular, to the determination of the fair values of the acquired assets and liabilities assumed at the date of acquisition.

For intangible assets acquired, the Group bases valuations on expected future cash flows. This method employs a discounted cash flow analysis using the present value of the estimated cash flows expected to be generated from these intangible assets using appropriate discount rates and revenue forecasts. The period of expected cash flows is based on the expected useful life of the intangible asset acquired.

Measurement of deferred contingent consideration and put option liabilities related to business combinations require assumptions to be made regarding profit forecasts and discount rates used to arrive at the net present value of the potential obligations. The Group has considered all available information

in arriving at the estimate of liabilities associated with deferred contingent consideration obligations. This is an area of estimation and judgement.

Income taxes (Note 7)

The Group is subject to income tax in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions for which the ultimate tax determination is uncertain. The Group recognises liabilities based on estimates of whether additional taxes will be due. Once it has been concluded that a liability needs to be recognised, the liability is measured based on the tax laws that have been enacted or substantially enacted at the end of the reporting period. The amount shown for current taxation includes an estimate for uncertain tax treatments where the group considers it probable that uncertain tax treatments will not be accepted by tax authorities and the estimate is measured using either the most likely amount method or the expected value method as appropriate, prescribed by IFRIC 23. Where the final tax outcome of these matters is different from the amounts that were initially estimated, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. The Group estimates the most probable amount of future taxable profits, using assumptions consistent with those employed in impairment calculations, and taking into consideration applicable tax legislation in the relevant jurisdiction. These calculations also require the use of estimates.

Deferred Contingent Consideration (Note 18)

Measurement of put option liabilities require assumptions to be made regarding profit forecasts and discount rates used to arrive at the net present value of the potential obligations. The Group has considered all available information

in arriving at the estimate of liabilities associated with put option obligations. This is an area of estimation.

In identifying the Group's operating segments, management based its decision on the product supplied by each segment and the fact that each segment is managed and reported separately to the Chief Operating Decision Maker. These operating segments are monitored and strategic decisions are made on the basis of segment operating results.

Operating segments

The Group has the following five operating segments:

Insulated Panels	Manufacture of insulated panels, structural framing and metal facades.
Insulation Boards	Manufacture of rigid insulation boards, building services insulation and engineered timber systems.
Light & Air	Manufacture of daylighting, smoke management and ventilation systems.
Water & Energy	Manufacture of energy and water solutions and all related service activities.
Data & Flooring	Manufacture of data centre storage solutions and raised access floors.

Analysis by class of business

Segment revenue and disaggregation of revenue

	Insulated	Insulation	Light	Water &	Data &	Total
	Panels	Boards	& Air	Energy	Flooring
	€m	€m	€m	€m	€m	€m
Total revenue - 2019	3,031.9	876.9	327.7	208.1	214.5	4,659.1
Total revenue - 2018	2,823.1	864.1	291.8	202.9	190.6	4,372.5
Disaggregation of revenue 2019						4,455.4
Point of Time	3,025.2	834.4	202.3	207.4	186.1
Over Time & Contract	6.7	42.5	125.4	0.7	28.4	203.7
	3,031.9	876.9	327.7	208.1	214.5	4,659.1
Disaggregation of revenue 2018
Point of Time	2,816.8	831.8	190.4	201.6	166.2	4,206.8
Over Time & Contract	6.3	32.3	101.4	1.3	24.4	165.7
	2,823.1	864.1	291.8	202.9	190.6	4,372.5

The disaggregation of revenue by geography is set out in more detail on page 118. The segments specified above capture the major product lines relevant to the Group.

The combination of the disaggregation of revenue by product group, geography and the timing of revenue recognition capture the key categories of disclosure with respect to revenue. Typically, individual performance obligations are specifically called out in the contract which allow for accurate recognition of revenue as and when performances are fulfilled. Given the nature of the Group's product set, customer returns are not a significant feature of our business model. No further disclosures are required with respect to disaggregation of revenue other than what has been presented in this note.

Inter-segment transfers are carried out at arm's length prices and using an appropriate transfer pricing methodology. As inter- segment revenue is not material, it is not subject to separate disclosure in the above analysis. For the purposes of the segmental analysis, corporate overheads have been allocated to each division based on their respective revenue for the year.

Segment result (profit before net finance expense)

	Insulated	Insulation	Light	Water &	Data &	Total	Total
	Panels	Boards	& Air	Energy	Flooring	2019	2018
	€m	€m	€m	€m	€m	€m	€m
Trading profit - 2019	316.1	117.1	25.2	14.2	24.5	497.1
Intangible amortisation	(13.1)	(4.9)	(2.9)	(0.9)	(0.1)	(21.9)
Operating profit - 2019	303.0	112.2	22.3	13.3	24.4	475.2
Trading profit - 2018	281.8	105.1	21.5	14.2	22.6		445.2
Intangible amortisation	(12.2)	(4.4)	(4.4)	(1.2)	-		(22.2)
Operating profit - 2018	269.6	100.7	17.1	13.0	22.6	(20.8)	423.0
Net finance expense						(18.1)
Profit for the year before tax						454.4	404.9
Income tax expense						(76.6)	(69.1)
Net profit for the year						377.8	335.8

Statements

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

SEGMENT REPORTING (continued)

Segment assets

	Insulated	Insulation	Light	Water &	Data &	Total	Total
	Panels	Boards	& Air	Energy	Flooring	2019	2018
	€m	€m	€m	€m	€m	€m	€m
Assets - 2019	2,495.9	832.2	348.0	191.8	188.2	4,056.1
Assets - 2018	2,231.7	782.2	331.2	180.3	166.3		3,691.7
Derivative financial instruments						27.3	27.6
Cash and cash equivalents						190.9	294.5
Deferred tax asset						14.1	15.6
Total assets as reported in the Consolidated Statement of Financial Position
		4,288.4	4,029.4
Segment liabilities

	Insulated	Insulation	Light	Water &	Data &	Total	Total
	Panels	Boards	& Air	Energy	Flooring	2019	2018
	€m	€m	€m	€m	€m	€m	€m
Liabilities - 2019	(831.4)	(194.4)	(80.2)	(64.2)	(41.5)	(1,211.7)
Liabilities - 2018	(755.0)	(179.2)	(73.2)	(58.2)	(35.1)		(1,100.7)
Interest bearing loans and borrowings (current and non-current)				(851.4)	(1,020.2)
Derivative financial instruments (current and non-current)				(0.1)	-
Income tax liabilities (current and deferred)					(104.8)	(119.6)
Total liabilities as reported in the Consolidated Statement of Financial Position
		(2,168.0)	(2,240.5)
Other segment information

		Insulated	Insulation	Light	Water &	Data &	Total
		Panels	Boards	& Air	Energy	Flooring
		€m	€m	€m	€m	€m	€m
Capital investment - 2019 *		135.7	36.8	11.8	4.5	4.0	192.8
Capital investment - 2018 *		160.8	87.9	22.7	7.1	2.8	281.3
Depreciation included in segment result - 2019	(70.9)	(24.2)	(8.3)	(6.1)	(5.0)	(114.5)
Depreciation included in segment result - 2018	(49.8)	(15.9)	(4.8)	(2.4)	(3.1)	(76.0)
Non-cash items included in segment result - 2019	(7.6)	(2.7)	(0.7)	(0.8)	(1.3)	(13.1)
Non-cash items included in segment result - 2018	(7.4)	(2.5)	(0.5)	(0.8)	(1.1)	(12.3)

* Capital investment also includes fair value of property, plant and equipment and intangible assets acquired in business combinations.

Analysis of segmental data by geography

	Republic of	United	Rest of	Americas	Others	Total
	Ireland	Kingdom	Europe
	€m	€m	€m	€m	€m	€m
Income Statement Items						4,659.1
Revenue - 2019	176.0	891.8	2,286.7	990.9	313.7
Revenue - 2018	156.0	938.2	2,092.3	887.6	298.4	4,372.5
Statement of Financial Position Items					2,704.3
Non-current assets - 2019 *	64.0	411.4	1,415.8	605.4	207.7
Non-current assets - 2018 *	52.7	375.2	1,227.0	524.5	188.8	2,368.2
Other segmental information						192.8
Capital investment - 2019	15.2	18.2	106.3	49.1	4.0
Capital investment - 2018	6.0	23.9	204.8	27.8	18.8	281.3

* Total non-current assets excluding derivative financial instruments and deferred tax assets.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

SEGMENT REPORTING (continued)

The Group has a presence in over 90 countries worldwide. The revenues from external customers and non-current assets (as defined in IFRS 8) attributable to the country of domicile and all foreign countries or regions of operation are as set out above and specific regions are highlighted separately on the basis of materiality.

There are no material dependencies or concentrations on individual customers which would warrant disclosure under IFRS 8. The individual entities within the Group each have a large number of customers spread across various activities, end-uses and geographies.

3	EMPLOYEES
a)	Employee numbers
The average number of persons employed by the Group in the financial year was:

		2019	2018
		Number	Number
Production	9,046	8,235
Sales and distribution	2,895	2,623
Management and administration	2,588	2,611

		14,529	13,469
b) Employee costs, including executive directors

		2019	2018
		€m	€m
Wages and salaries	651.2	579.5
Social welfare costs	78.0	68.9
Pension costs - defined contribution (note 31)	20.1	15.5
Share based payments and awards	13.1	12.3
		762.4	676.2
Actuarial losses/(gains) recognised in other comprehensive income	0.2	(0.9)
		762.6	675.3

Employee share based compensation

The Group currently operates a number of equity settled share based payment schemes; two Performance Share Plans (PSP) and a Deferred Bonus Plan, which was introduced in 2015. The details of these schemes are provided in the Report of the Remuneration Committee.

Performance Share Plan (PSP)

	Number of PSP Options
	2019	2018
Outstanding at 1 January	2,149,827	2,498,209
Granted	539,988	552,325
Forfeited	(76,361)	(65,266)
Lapsed	(10,781)	(6,636)
Exercised	(649,562)	(828,805)
Outstanding at 31 December	1,953,111	2,149,827
Of which, exercisable	399,257	478,945

The Group recognised a PSP expense of €12.9m (2018: €11.7m) in the Income Statement during the year. All PSP options are exercisable at €0.13 per share. For PSP options that were exercised during the year the average share price at the date of exercise was €44.99 (2018: €38.96). The weighted average contractual life of share options outstanding at 31 December 2019 is 2.6 years (2018: 3.5 years). The weighted average exercise price during the period was €0.13 (2018: €0.13).

The fair values of options granted under the PSP scheme during the current and prior year were determined using the Black Scholes Model or the Monte Carlo Pricing Model as appropriate. The key assumptions used in the model were as follows:

Statements Financial

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

EMPLOYEES (continued)

	2019 Awards	2018 Awards
Share price at grant date	€38.80	€35.55
Exercise price per share	€0.13	€0.13
Expected volatility	30%	26%
Expected dividend yield	1.3%	1.2%
Risk-free rate	(0.07%)	0.08%
Expected life	3 years	3 years

The resulting weighted average fair value of options granted in the year was €29.67 (2018: €26.21).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)		Financial

5 PROFIT FOR THE YEAR BEFORE INCOME TAX (continued)
		Statements
Analysis of total auditor's remuneration for audit services


	2019	2018
	€m	€m
Audit of Group (KPMG Ireland)		0.8
0.8
Audit of other subsidiaries (other KPMG offices)	1.8	1.8
	2.6	2.6

Analysis of amounts paid to the auditor in respect of non-audit services

As set out in the Report of the Remuneration Committee, the number of options that will ultimately vest is contingent on market conditions such as Total Shareholder Return and non market conditions such as the Earnings Per Share of the Group. Market conditions were taken into account in determining the above fair value, and non market conditions were considered when estimating the number of shares that will eventually vest. Expected volatility was determined by calculating the historical volatility of the Group and peer company share prices over the previous 3 years. The Report of the Remuneration Committee sets out the current companies within the peer group.

Deferred Bonus Plan

As set out in the Report of the Remuneration Committee, the Deferred Bonus Plan (DBP) is intended to reward incremental performance over and above the growth targeted by the annual performance related bonus. Any DBP bonus earned for such incremental performance is satisfied by the payment of deferred share awards. These shares are held for the benefit of the individual participants for two years without any additional performance conditions. These shares vest after two years but are forfeited if the participant leaves the Group within that period.

During the year, 15,718 (2018: Nil) were granted under the DBP and 49,924 (2018: 50,607) awards were exercised. 15,718 awards

remain outstanding at 31 December 2019. A charge of €0.2m was recognised in the Income Statement for 2019 (2018: €0.6m).

FINANCE EXPENSE AND FINANCE INCOME

2019	2018
€m	€m

Tax compliance and advisory services (KPMG Ireland)

Tax compliance and advisory services (other KPMG offices)

DIRECTORS' REMUNERATION

Fees

Other emoluments

Pension costs

Performance Share Plan expense

2019	2018
€m	€m

0.10.3

2019	2018
€m	€m

0.60.7

6.36.0

0.80.7

7.77.4

3.22.8

10.9 10.2

2019 Statementsplc Group FinancialKingspan& Report Annual -

Finance expense	3.8
Lease interest	-
Deferred contingent consideration fair value movement	0.1	0.3
Bank loans	2.4	2.7
Private placement loan notes	17.2	16.7
Fair value movement on derivative financial instrument	2.6	(3.1)
Fair value movement on private placement debt	(2.5)	2.5
Other interest	0.1	0.4
Finance income	23.7	19.5
(2.9)
Interest earned	(1.4)
Net finance cost	20.8	18.1

No costs were reclassified from other comprehensive income to profit during the year (2018: €nil).

PROFIT FOR THE YEAR BEFORE INCOME TAX

	2019	2018
	€m	€m
The profit before tax for the year is stated after charging /(crediting):	224.6
Distribution expenses	202.1
Product development costs (total, including payroll)	31.9	30.5
Depreciation	114.5	76.0
Amortisation of intangible assets	21.9	22.2
Foreign exchange net gains	0.7	(1.7)
Profit on sale of property, plant and equipment	(3.3)	(4.9)

A detailed analysis of directors' remuneration is contained in the Report of the Remuneration Committee. Aggregate gains of €8.0m (2018: €7.8m) were realised with respect to share options exercised by directors during the financial year.

7 INCOME TAX EXPENSE

	2019	2018
	€m	€m
Tax recognised in the Consolidated Income Statement
Current taxation:	83.2
Current tax expense	72.2
Adjustment in respect of prior years	(0.2)	(5.4)
Deferred taxation:	83.0	66.8
(6.6)
Origination and reversal of temporary differences	1.5
Effect of rate change	0.2	0.8
	(6.4)	2.3
Income tax expense
76.6	69.1

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

INCOME TAX EXPENSE (continued)

The following table reconciles the applicable Republic of Ireland statutory tax rate to the effective tax rate (current and deferred) of the Group:

	2019	2018
	€m	€m
Profit for the year	454.4	404.9
Applicable notional tax charge (12.5%)	56.8	50.6
Expenses not deductible for tax purposes	9.0	5.1
Net effect of differing tax rates	15.3	16.3
Utilisation of unprovided deferred tax assets	(1.5)	(0.8)
Other items	(3.0)	(2.1)
Total income tax expense
76.6	69.1

The total tax charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates. No significant change is expected to the standard rate of corporation tax in the Republic of Ireland which is currently 12.5%.

The methodology used to determine the recognition and measurement of uncertain tax positions is set out in Note 1 'Statement of Accounting Policies'.

The total value of deductible temporary differences which have not been recognised is €29.7m (2018: €31.4m) consisting mainly of tax losses forward. €1.3m of the losses expire within 10 years while all other losses may be carried forward indefinitely.

No provision has been made for tax in respect of temporary differences arising from unremitted earnings of foreign operations as there is no commitment to remit such earnings and no current plans to do so. Deferred tax liabilities of €10.9m (2018: €8.9m) have not been recognised for withholding tax that would be payable on unremitted earnings of €219.6m (2018: €177.2m) in certain subsidiaries.

8	EARNINGS PER SHARE

		2019	2018
		€m	€m
The calculations of earnings per share are based on the following:	369.4
Profit	attributable to ordinary shareholders	330.9
		Number of	Number of
		shares ('000)	shares ('000)
		2019	2018
Weighted average number of ordinary shares for the calculation of basic earnings per share	180,586	179,840
Dilutive effect of share options	1,489	1,696
Weighted average number of ordinary shares for the calculation of diluted earnings per share	182,075	181,536
		2019	2018
		€ cent	€ cent
Basic earnings per share	204.6	184.0
Diluted earnings per share	202.9	182.3
Adjusted basic earnings per share	215.0	193.5
Adjusted diluted earnings per share	213.2	191.7

Adjusted basic earnings reflects the profit attributable to ordinary shareholders after eliminating the impact of the Group's intangible amortisation charge, net of tax.

Adjusted diluted earnings reflects the profit attributable to ordinary shareholders after eliminating the impact of the Group's intangible amortisation charge, net of tax and the dilutive effect of share options. Dilution is attributable to the weighted average number of share options outstanding at the end of the reporting period.

The number of options which are anti-dilutive and have therefore not been included in the above calculations is nil (2018: nil).

	NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)		Financial

	9 GOODWILL
					Statements

				2019	2018
				€m	€m
	At 1 January			1,391.0	1,095.7
	Additions relating to acquisitions (Note 22)			92.5	296.8
	Net exchange movement			23.4	(1.5)
	Carrying amount 31 December
		1,506.9	1,391.0
	At 31 December			1,574.6
	Cost			1,458.7
	Accumulated impairment losses			(67.7)	(67.7)
						-
	Carrying amount			1,506.9	1,391.0
			Annual
	Cash generating units
	Goodwill acquired through business combinations is allocated, at acquisition, to CGUs that are expected to benefit from	Report
	synergies in that combination. The CGUs are the lowest level within the Group at which the associated goodwill is monitored for
	internal management reporting purposes and are not larger than the operating segments determined in accordance with IFRS 8	FinancialKingspan&
	below. Assets and liabilities have been assigned to the CGUs on a reasonable and consistent basis.
	Operating Segments.
	A total of 11 (2018: 11) CGUs have been identified and these are analysed between the five business segments in the Group as set out
						StatementsplcGroup
		Cash generating units		Goodwill (€m)
		2019	2018	2019	2018
	Insulated Panels	6	6	918.3	827.2
Insulation Boards	1	1	235.7	232.5	2019
Light & Air	1	1	178.0	174.2
Water & Energy	1	1	83.8	78.7
Data & Flooring	2	2	91.1	78.4
Total
11	11	1,506.9	1,391.0

Significant goodwill amounts

Management has assessed that, in line with IAS 36 Impairment of Assets, there are 5 CGUs that are individually significant (greater than 10% of total goodwill) that require additional disclosure and are as follows:

	Panels		Panels	Panels		Insulation Boards	Light
	North America	Western Europe	Joris Ide				& Air
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Goodwill (€m)	181.1	173.4	225.5	146.0	415.6	410.8	235.7	232.5	178.0	174.2
Discount rate (%)	8.2	10.0	6.7	8.1	6.7	8.1	6.7	8.1	6.5	8.0
Excess*	722.0	335.7	1,976.4	1,655.1	576.2	489.5	1,812.1	854.0	279.1	132.8

* Excess of value-in-use over carrying amount (€m)

The goodwill allocated to these 5 CGUs accounts for 82% of the total carrying amount of €1,506.9m. The remaining goodwill balance of €271.0m (2018: €400.1m) is allocated across the other 6 CGUs (2018: 7 CGUs), none of which are individually significant.

None of the individually significant CGUs are included in the "Sensitivity analysis" section as it is not considered reasonably possible that there would be a change in the key assumptions such that the carrying amount would exceed value-in-use. Consequently, no further disclosures have been provided for these CGUs.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

GOODWILL (continued)

Impairment testing

Goodwill acquired through business combinations has been allocated to the above CGUs for the purpose of impairment testing. Impairment of goodwill occurs when the carrying value of the CGU is greater than the present value of the cash that it is expected to generate (i.e. the recoverable amount). The Group reviews the carrying value of each CGU at least annually or more frequently if there is an indication that a CGU may be impaired.

The recoverable amount of each CGU is determined from value-in-use calculations. The forecasts used in these calculations are based on a 4 year financial plan approved by the Board of Directors, plus year 5 as forecasted by management, and specifically excludes any future acquisition activity. They include assumptions regarding future organic growth with cash flows after year 5 assuming to continue in perpetuity at a general growth rate of 2% (Panels LATAM 4%), reflecting the relevant CGU inflation, but no other growth. The use of cash flows in perpetuity is considered appropriate in light of the Group's established history of earnings growth and cash flow generation, its strong financial position and the nature of the industry in which the Group operates.

The value in use calculation represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to each CGU. The real pre-tax discount rates used range from 6.5% to 10.2% (2018: 8.0% to 12.5%). These rates are based on the Group's estimated weighted average cost of capital, adjusted for risk, and are consistent with external sources of information.

The cash flows and the key assumptions used in the value in use calculations are determined based on the historical performance of the Group, its strong current financial position as well as management's knowledge and expectation of future trends in the industry. Expected future cash flows are, however, inherently uncertain and are therefore liable to material change over time. The key assumptions used in the value in use calculations are subjective and include projected EBITDA margins, net cash flows, discount rates used and the duration of the discounted cash flow model.

Sensitivity analysis

Sensitivity analysis was performed by adjusting cash flows, the discount rate and the average operating margin of each division by over 25% and by reducing the long-term growth rate to zero. Each test resulted in a positive recoverable amount for each CGU under each approach. Management believes, therefore, that any reasonable change in any of the key assumptions would not cause the carrying value of goodwill to exceed the recoverable amount, thereby giving rise to an impairment.

10 OTHER INTANGIBLE ASSETS

	Customer	Patents &	Other	Total
	Relationships	Brands	Intangibles
	€m	€m	€m	€m
Cost
At 1 January 2019	48.7	127.8	33.9	210.4
Acquisitions (Note 22)	1.4	0.1	1.2	2.7
Net exchange difference	0.2	2.1	0.5	2.8
At 31 December 2019	50.3	130.0	35.6	215.9
Accumulated amortisation
At 1 January 2019	23.4	54.0	21.9	99.3
Charge for the year	6.1	11.7	4.1	21.9
Net exchange difference	0.1	1.1	0.3	1.5
At 31 December 2019	29.6	66.8	26.3	122.7
Net Book Value as at 31 December 2019	20.7	63.2	9.3	93.2

	Customer	Patents &	Other	Total
	Relationships	Brands	Intangibles
	€m	€m	€m	€m
Cost
At 1 January 2018	27.7	109.2	30.0	166.9
Acquisitions (Note 22)	21.2	18.8	3.3	43.3
Net exchange difference	(0.2)	(0.2)	0.6	0.2
At 31 December 2018	48.7	127.8	33.9	210.4
Accumulated amortisation
At 1 January 2018	17.9	43.4	15.3	76.6
Charge for the year	5.4	10.5	6.3	22.2
Net exchange difference	0.1	0.1	0.3	0.5
At 31 December 2018	23.4	54.0	21.9	99.3
Net Book Value as at 31 December 2018	25.3	73.8	12.0	111.1

Other intangibles relate primarily to technological know how and order backlogs.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)		Financial

11 PROPERTY, PLANT AND EQUIPMENT
				Statements

	Land and	Plant	Motor	Total
	buildings	machinery	vehicles
		and other
		equipment
	€m	€m	€m	€m
As at 31 December 2019
Cost	634.1	1,386.2	42.8	2,063.1
Accumulated depreciation and impairment charges	(200.9)	(871.7)	(25.3)	(1,097.9)
Net carrying amount
433.2	514.5	17.5	965.2
At 1 January 2019, net carrying amount	401.0	436.2	13.3	850.5	-
Acquisitions through business combinations (Note 22)	12.4	13.1	-	25.5
Annual
Additions	29.9	125.2	9.5	164.6

Disposals	(1.1)	(1.9)	(0.4)	(3.4)
Reclassification	(0.1)	(0.1)	0.2	-	Report
Impairment charge for year	(0.1)	(0.1)	-	(0.2)
Depreciation charge for year	(14.4)	(64.8)	(5.3)	(84.5)
Effect of movement in exchange rates	5.6	6.9	0.2	12.7	FinancialKingspan&
At 31 December 2019, net carrying amount
433.2	514.5	17.5	965.2
					StatementsplcGroup
	Land and	Plant	Motor	Total
	buildings	machinery	vehicles
		and other
		equipment
	€m	€m	€m	€m	2019
As at 31 December 2018

Cost	583.7	1,245.4	36.3	1,865.4
Accumulated depreciation and impairment charges	(182.7)	(809.2)	(23.0)	(1,014.9)
Net carrying amount
401.0	436.2	13.3	850.5
At 1 January 2018, net carrying amount	337.5	355.3	10.5	703.3
Acquisitions through business combinations (Note 22)	47.8	44.9	1.0	93.7
Additions	34.9	102.8	6.6	144.3
Disposals	(4.6)	(2.8)	(0.6)	(8.0)
Reclassification	(0.7)	-	0.7	-
Depreciation charge for year	(12.7)	(58.5)	(4.8)	(76.0)
Impairment charge for year	(0.1)	(5.1)	-	(5.2)
Effect of movement in exchange rates	(1.1)	(0.4)	(0.1)	(1.6)
At 31 December 2018, net carrying amount	401.0	436.2	13.3	850.5

Included within the cost of land and buildings and plant, machinery and other equipment are assets in the course of construction to the value of €2.3m and €66.2m respectively (2018: €21.6m and €66.7m). These assets have not yet been depreciated.

The Group has no material investment properties and hence no property assets are held at fair value.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

12 INVESTMENTS IN SUBSIDIARIES

	2019	2018
	€m	€m
Company
At 1 January	1,191.0	1,180.7
Share options and awards	10.4	10.3
At 31 December
1,201.4	1,191.0

The share options and awards addition reflects the cost of share based payments attributable to employees of subsidiary undertakings, which are treated as capital contributions by the Company. The carrying value of investments is reviewed at each reporting date and there were no indicators of impairment.

13 INVENTORIES

	2019	2018
	€m	€m
Raw materials and consumables	433.2	415.1
Work in progress	20.3	19.6
Finished goods	169.6	149.2
Inventory impairment allowance	(65.5)	(59.0)
At 31 December
557.6	524.9

A total of €2.7bn (2018: €2.6bn) of inventories was included in the Income Statement as an expense. This includes a net income

statement charge of €4.4m (2018: €2.6m) arising on the inventory impairment allowance. Inventory impairment allowance levels are continuously reviewed by management and revised where appropriate, taking account of the latest available information on the recoverability of carrying amounts.

No inventories have been pledged as security for liabilities entered into by the Group.

14 TRADE AND OTHER RECEIVABLES

	2019	2018
	€m	€m
Amounts falling due within one year:	770.3
Trade receivables, gross	791.5
Expected credit loss allowance	(54.0)	(56.4)
Trade receivables, net	716.3	735.1
Other receivables	45.1	32.1
Prepayments	32.8	31.4

	794.2	798.6

The maximum exposure to credit risk for trade and other receivables at the reporting date is their carrying amount.

The Group uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables from customers. The simplified approach has been adopted and this gives rise to an ECL of €54.0m in 2019 (2018: €56.4m). This is presented in more detail

in Note 19.

	2019	2018
	€m	€m
Company
Amounts falling due within one year:	128.7
Amounts owed by group undertakings	112.7
	128.7	112.7

The amounts due from group undertakings are unsecured, interest free and are repayable on demand.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)			Financial

15 TRADE AND OTHER PAYABLES
						Statements

				2019	2018
				€m		€m
Current				404.9
Trade payables				397.5
Accruals				316.3	341.1
Deferred income				6.4	7.0
Income tax & social welfare				29.6	19.9
Value added tax				11.7	14.3

				768.9	779.8
The directors consider that the carrying amount of trade and other payables approximates to their fair value.			-

							Annual
				2019		2018
				€m		€m	Report
Company
						FinancialKingspan&
Current				61.3

Amounts owed to group undertakings					-
Payables				0.2		0.2
				61.5		0.2	StatementsplcGroup
The amounts due to group undertakings are unsecured, interest free and are repayable on demand.

16 LEASES							2019
A new accounting standard, IFRS 16 Leases, was adopted with effect from 1 January 2019. The standard requires leases which were

previously treated as operating leases to be recognised as a lease liability with the associated asset capitalised and treated as a right
of use asset. On 1 January 2019 €127.9m of leases were recognised as liabilities on adoption of the standard and €128.8m capitalised
as right of use assets. During 2019 depreciation on the right of use assets was €30.0m and associated lease rental charge decreased
by €31.8m leading to an increase in operating profit	of €1.8m. The interest charge on the associated leases was €3.8m and the
aggregate impact of IFRS 16 on profit before tax was a decrease of €2.0m.
Right of use asset

		Land and	Plant,	Motor		Total
		buildings	machinery	vehicles	2019
			and other
		€m	equipment	€m		€m
		€m
At 1 January 2019	102.1	12.7	14.0	128.8
Additions	4.8	1.1	8.2	14.1
Arising on acquisitions	6.0	0.2	0.1	6.3
Remeasurement	2.6	-	-	2.6
Terminations	(1.6)	(0.1)	(0.8)	(2.5)
Depreciation charge for the year	(17.4)	(4.8)	(7.8)	(30.0)
Effect of movement in exchange rates	2.0	0.1	0.2	2.3
At 31 December 2019
98.5	9.2	13.9	121.6

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16 LEASES (continued)

Lease liability

			2019
			€m
At 1 January 2019		127.9
Additions		14.0
Arising on acquisitions		6.2
Remeasurement		2.5
Terminations		(2.5)
Payments		(31.8)
Interest		3.8
Effect of movement in exchange rates		2.2
At 31 December 2019
	122.3
Split as follows:
Current liability
	25.6
Non-current liability		96.7
At 31 December 2019
	122.3
Reconciliation of IAS 17 operating lease commitments and IFRS 16 lease liability

			2019
			€m
Operating lease commitment at 31 December 2018 as disclosed in the Group's Annual Report		151.5
Impact of discounting		(19.9)
Recognition exemption for short term and low value assets		(1.0)
Adjustments as a result of alignment of extension and termination options with accounting policies		(2.7)
Lease liabilities recognised at 1 January 2019
	127.9
The €0.9m difference between the opening right of use asset and lease liability relates to lease prepayments.
17 INTEREST BEARING LOANS AND BORROWINGS

		2019	2018
		€m	€m
Current financial liabilities		2.8
Bank loans		52.8
Lease obligations per banking covenants		0.3	0.4

		3.1	53.2

		2019	2018
		€m	€m
Non-current financial liabilities		840.9
Private placements		835.9
Bank loans (unsecured)		5.1	127.3
Lease obligations per banking covenants		2.3	3.8

		848.3	967.0

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

17 INTEREST BEARING LOANS AND BORROWINGS (continued)

Analysis of Net Debt

	2019	2018
	€m	€m
Cash and cash equivalents	190.9	294.5
Derivative financial instruments	27.3	27.4
Current borrowings	(3.1)	(53.2)
Non-current borrowings	(848.3)	(967.0)
Deferred consideration	-	(30.0)
Total Net Debt
(633.2)	(728.3)

The Group's core funding is provided by five private placement loan notes; one USD private placement totalling $200m matures in August 2021, and four EUR private placements totalling €662.5m which will mature in tranches between March 2021 and January 2028. The notes have a weighted average maturity of 4.5 years.

The Group also has two revolving credit facilities. The €300m facility matures in June 2022 and the €451m facility also matures in June 2022. No amount was drawn on either of the facilities as at 31 December 2019. The Group had no committed bilateral bank facilities at year end, however, a green loan of €50m had been agreed but was undrawn.

More details of the Group's loans and borrowings are set out in Note 19.

Net debt, which is an Alternative Performance Measure, is stated net of interest rate and currency hedges which relate to hedges of debt. Foreign currency derivative assets of €nil (2018: €0.2m) and foreign currency derivative liabilities of €0.1m (2018: €nil) which are used for transactional hedging are not included in the definition of net debt. Lease liabilities recognised due to the implementation of IFRS 16 and deferred contingent consideration have also been excluded from the calculation of net debt.

18 DEFERRED CONSIDERATION

	2019	2018
	€m	€m
At 1 January	196.1	117.5
Deferred consideration arising on acquisitions (note 22)	-	30.0
Deferred contingent consideration arising on acquisitions (note 22)	2.0	1.4
Movement in deferred contingent consideration arising from fair value adjustment	(0.5)	1.1
Put liability arising on current year acquisitions (note 22)	26.7	24.5
Movement in put liability arising from fair value adjustment	22.7	35.4
Amounts paid	(59.7)	(3.1)
Effect of movement in exchange rates	(0.8)	(10.7)
At 31 December
186.5	196.1
Split as follows:	-
Current liabilities	59.5
Non-current liabilities	186.5	136.6

Analysed as follows:	186.5	196.1
-
Deferred consideration	30.0
Deferred contingent consideration	11.3	38.9
Put liability	175.2	127.2

	186.5	196.1

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18 DEFERRED CONSIDERATION (continued)

For each acquisition for which deferred contingent consideration has been provided, an annual review takes place to evaluate if the payment conditions are likely to be met.

During the year the Group paid €30m of deferred consideration relating to the Synthesia business which was acquired in 2018 (2018: €nil). In addition, the Group paid €29.7m of deferred contingent consideration relating to the Isoeste business which was acquired in 2017 (2018: €nil).

During the prior year the Group paid €3.1m of deferred contingent consideration relating to the PAL business which was acquired in 2014.

The deferred contingent consideration arising on current year acquisitions relates to Group Bacacier SAS.

The put liability arising on current year acquisitions is recognised with respect to the potential amounts payable to the 15% shareholders of Group Bacacier SAS.

The amount of the deferred contingent consideration and put liability that have been recognised are arrived at by the application of a range of outcomes and associated probabilities in order to determine the carrying amounts.

Liabilities in the range of €nil to €11.3m could arise with respect to potential deferred contingent consideration obligations and €nil to €182.1m with respect to potential put option obligations.

The put option in the shareholders' agreement with non-controlling shareholders of Isoeste is exercisable from 2023. The undiscounted expected cash outflow is estimated to be €118.6m (2018: €96m).

The put option in the shareholders' agreement with non-controlling shareholders of PanelMET is exercisable from 2022. The undiscounted expected cash outflow is estimated to be €9.1m (2018: €12.2m).

The put option in the shareholders' agreement with non-controlling shareholders of Kingspan Jindal is exercisable from 2022. The undiscounted expected cash outflow is estimated to be €26.8m (2018: €25.8m).

There are two put options in the shareholders' agreement with non-controlling shareholders of Group Bacacier SAS. The first option relating to 10% of shares is exercisable from 2021 and the related undiscounted expected cash flow is estimated to be €17.1m. The second option for the remaining 5% of shares is exercisable from 2022 and the related undiscounted expected cash outflow is estimated to be €10.5m.

For the purposes of the fair value assessments all of the put option liabilities are valued using the option price formula in the shareholders' agreement and the most recent financial projections. These are classified as unobservable inputs.

In the case of Isoeste, PanelMET, Kingspan Jindal and Group Bacacier SAS call options rest over the remaining shareholding held by non-controlling interests, which are exercisable by the Group in a very limited range of circumstances. No value has been attributed to these call options.

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Financial Risk Management

In the normal course of business, the Group has exposure to a variety of financial risks, including foreign currency risk, interest rate risk, liquidity risk and credit risk. The Group's focus is to understand these risks and to put in place policies that minimise the economic impact of an adverse event on the Group's performance. Meetings are held on a regular basis to review the result of the risk assessment, approve recommended risk management strategies and monitor the effectiveness of such policies.

The Group's risk management strategies include the usage of derivatives (other than for speculative transactions), principally forward exchange contracts, interest rate swaps, and cross currency interest rate swaps.

Liquidity risk

In addition to the high level of free cash flow, the Group operates a prudent approach to liquidity management using a mixture of long-term and short-term debt, cash and cash equivalents, to enable it to meet its liabilities when due.

The Group's core funding is provided by a number of private placement loan notes totalling €840.9m. The notes have a weighted average maturity of 4.5 years.

The primary bank debt facility is a €451m revolving credit facility, which was undrawn at year end and which matures in June 2022. In June 2019 an additional 3 year bank facility of €300m was arranged, which was undrawn at year end. Subsequent to the year end the Group arranged a bilateral 'Green Loan' of €50m to fund the Group's Planet Passionate initiatives.

Both the private placements and the revolving credit facility have an interest cover test (Net Interest: EBITDA must exceed 4 times)

and a net debt test (Net Debt: EBITDA must be less than 3.5 times). These covenant tests have been met for the covenant test period to 31 December 2019.

The Group also has in place a number of uncommitted bilateral working capital facilities to serve its working capital requirements. These facilities total €43m (2018: €44m) and are supported by a Group guarantee. Core funding arrangements arise from a wide and varied number of institutions and, as such, there is no significant concentration of liquidity risk.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

The following are the carrying amounts and contractual maturities of financial liabilities (including estimated interest payments):

	Carrying	Contractual	Within 1	Between	Between	Greater
	amount	cash flow	year	1 and 2	2 and 5	than 5
	2019			years	years	years
	€m	€m	€m	€m	€m	€m
Non derivative financial instruments
Bank loans	7.9	7.9	2.8	2.5	2.5	0.1
Private placement loan notes	840.9	919.0	20.4	237.3	329.7	331.6
Lease obligations per banking covenants	2.6	2.6	0.3	0.1	-	2.2
Lease liabilities	122.3	148.0	30.2	24.6	43.3	49.9
Trade and other payables	762.5	762.5	762.5	-	-	-
Deferred consideration	-	-	-	-	-	-
Deferred contingent consideration	186.5	193.4	-	28.4	155.9	9.1
Derivative financial liabilities / (assets)
Interest rate swaps used for hedging:
Carrying values	(0.7)	-	-	-	-	-
Net inflows	-	0.8	0.4	0.4	-	-
Cross currency interest rate swaps used for
hedging:
Carrying value	(26.6)	-	-	-	-	-
- outflow	-	93.4	(0.2)	93.6	-	-
- inflow	-	127.1	6.0	121.1	-	-
Foreign exchange forwards used for hedging:
Carrying value assets	-	-	-	-	-	-
Carrying value liabilities	0.1	-	-	-	-	-
- outflow	-	7.2	7.2	-	-	-
- inflow	-	7.0	7.0	-	-	-

	Carrying	Contractual	Within 1	Between	Between	Greater
	amount	cash flow	year	1 and 2	2 and 5	than 5
	2018			years	years	years
	€m	€m	€m	€m	€m	€m
Non derivative financial instruments
Bank loans	180.1	180.1	52.8	3.3	123.4	0.6
Private placement loan notes	835.9	930.5	20.0	20.0	357.1	533.4
Lease obligations per banking covenants	4.2	4.2	0.4	1.7	-	2.1
Lease liabilities	-	-	-	-	-	-
Trade and other payables	772.8	772.8	772.8	-	-	-
Deferred consideration	30.0	30.0	30.0	-	-	-
Deferred contingent consideration	166.1	173.1	29.6	-	131.3	12.2
Derivative financial liabilities / (assets)
Interest rate swaps used for hedging:
Carrying values	(0.3)	-	-	-	-	-
Net inflows	-	0.4	0.1	0.1	0.2	-
Cross currency interest rate swaps used for hedging:
Carrying value	(27.1)	-	-	-	-	-
- outflow	-	104.1	3.1	3.4	97.6	-
- inflow	-	136.0	6.2	6.2	123.6	-
Foreign exchange forwards used for hedging:
Carrying value assets	(0.2)	-	-	-	-	-
Carrying value liabilities	-	-	-	-	-	-
- outflow	-	4.7	4.7	-	-	-
- inflow	-	4.8	4.8	-	-	-

For provisions, the carrying amount represents the Group's best estimate of the expected future outflows. As it does not represent a contractual liability at the year end, no amount has been included as a contractual cash flow.

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19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

Deferred contingent consideration, which includes any put option liabilities, is valued using the relevant agreed multiple of the expected future EBITDA in each acquired business which is appropriately discounted using a risk-adjusted discount rate. The estimated fair value of contingent consideration would decrease if EBITDA was lower or if the risk adjusted discount rate was higher. The range of outcomes are set out in Note 18.

The actual future cash flows could be different from the amounts included in the tables above, if the associated obligations were to become repayable on demand as a result of non-compliance with covenants or other contractual terms. No such non-compliance is envisaged.

Market Risks

Foreign exchange risk

There are two types of foreign currency risk to which the Group is exposed, namely transaction risk and translation risk. The objective of the Group's foreign currency risk management strategy is to manage and control market risk exposures within acceptable parameters. As set out below the Group uses derivatives to manage foreign exchange risk. Transactions involving derivatives are carried out in accordance with the Treasury policy. The Group seeks to apply hedge accounting, where practicable, to manage volatility in profit or loss.

Transaction risk

Apart from transaction risk on debt, this arises where operating units have input costs or sales in currencies other than their functional currencies. These exposures are internally hedged as far as possible. Group policy is to hedge up to a maximum of 75% of a forecast exposure. Material exposures are hedged on a rolling 12 months basis. The Group's principal exposure relates to GBP and USD, with less significant exposures to certain central European currencies.

In addition, where operating entities carry monetary assets and liabilities at year end denominated other than in their functional currency, their translation at the year-end rates of exchange into their functional currency will give rise to foreign currency gains and losses. The Group seeks to manage these gains and losses to net to nil.

Based on current cash flow projections for the businesses to 31 December 2020, it is estimated that the Group is long GBP£61m (2018: long GBP£110m) and short US$25m (2018: short US$35m). At 31 December 2019 these amounts were unhedged.

Translation risk

This exists due to the fact that the Group has operations whose functional currency is not the Euro, the Group's presentational currency. Changes in the exchange rate between the reporting currencies of these operations and the Euro, have an impact on the Group's consolidated reported result. For 2019, the impact of changing currency rates versus Euro compared to the average 2018 rates was positive €61.0m (2018: positive €4.0m). The key drivers of the change year on year are the movements in GBP and USD. In common with many other international groups, the Group does not currently seek to externally hedge its translation exposure.

Sensitivity analysis for primary currency risk

A 10% volatility of the EUR against GBP and USD in respect of transaction risk in the reporting entities functional currency would impact reported after tax profit by €4.9m (2018: €14.5m) and equity by €4.9m (2018: €14.3m).

US Dollar Loan Notes

2011 Private Placement

In 2011, the Group issued a private placement of US$200m fixed interest 10 year bullet repayment loan notes maturing in August 2021. In order to align the Group's debt profile with its risk management strategy, the Group entered into a number of hedging transactions in order to mitigate the associated foreign exchange and interest rate exposures. The Group entered into US dollar fixed

GBP floating cross currency interest rate swaps for US$118.6m of the private placement. The benchmark interest rate and credit spread have been separately identified and designated for hedge accounting purposes. The Group also entered into US dollar interest rate swaps for US$40m of the private placement. The fixed rate and maturity date on the swaps match the fixed rate on the private placement for all instruments. The instruments were designated as hedging instruments at inception and continued to qualify as effective hedges under IAS 39 at 31 December 2019.

Interest rate risk

The Group has an exposure to movements in interest rates on its debt portfolio, and on its cash and cash equivalent balances and derivatives. The Group policy is to ensure that at least 40% of its debt is fixed rate.

In respect of interest bearing loans and borrowings, the following table indicates the effective average interest rates at the year-end and the periods over which they mature. Interest on interest bearing loans and borrowings classified as floating rate is repriced at intervals of less than one year. The table further analyses interest bearing loans and borrowings by currency and fixed/floating mix and has been prepared both before and after the impact of derivatives.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)			Financial

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)
	Statements
Before the impact of hedging transactions


As at 31 December 2019	Weighted average	Total	At fixed	At floating	Under 5	Over
	effective interest rate		interest rate	interest rate	years	5 years
		€m	€m	€m	€m	€m
Bank loans	2.0%	7.9	7.9	-	7.8	0.1
Loan notes	2.4%	840.9	840.9	-	522.4	318.5

		848.8	848.8	-	530.2	318.6

		Total	At fixed	At floating
			interest rate	interest rate			-
		€m	€m	€m
				Annual
EUR		666.3	666.3	-

USD		178.3	178.3	-			Report
Other		4.2	4.2	-

		848.8	848.8	-
As at 31 December 2019	Weighted average	Total	At fixed	At floating	Under 5	Over	FinancialKingspan&
After the impact of hedging transactions
	effective interest rate		interest rate	interest rate	years	5 years	StatementsplcGroup
		€m	€m	€m	€m	€m

Bank loans	2.0%	7.9	7.9	-	7.8	0.1
Loan notes	2.1%	840.9	699.4	141.5	522.4	318.5	2019

		848.8	707.3	141.5	530.2	318.6

		Total	At fixed	At floating
			interest rate	interest rate
		€m	€m	€m
EUR		691.3	691.3	-
GBP		105.1	-	105.1
USD		48.2	11.8	36.4
Other		4.2	4.2	-
		848.8	707.3	141.5

The weighted average maturity of debt is 4.5 years as at 31 December 2019 (2018: 5.0 years).

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19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

Before the impact of hedging transactions

As at 31 December 2018	Weighted average	Total	At fixed	At floating	Under 5	Over
	effective interest rate		interest rate	interest rate	years	5 years
		€m	€m	€m	€m	€m
Bank loans	0.9%	180.1	180.1	-	179.5	0.6
Loan notes	2.4%	837.3	837.3	-	325.8	511.5

		1,017.4	1,017.4	-	505.3	512.1

		Total	At fixed interest	At floating
		€m	rate	interest rate
			€m	€m
EUR		838.8	838.8	-
USD		174.8	174.8
Other		3.8	3.8	-
		1,017.4	1,017.4	-
After the impact of hedging transactions

As at 31 December 2018	Weighted average	Total	At fixed	At floating	Under 5	Over
	effective interest rate		interest rate	interest rate	years	5 years
		€m	€m	€m	€m	€m
Bank loans	0.9%	180.1	180.1	-	179.5	0.6
Loan notes	2.1%	835.9	698.7	137.2	324.4	511.5

		1,016.0	878.8	137.2	503.9	512.1

		Total	At fixed	At floating
			interest rate	interest rate
		€m	€m	€m
EUR		863.3	863.3	-
GBP		102.0	-	102.0
USD		46.9	11.7	35.2
Other		3.8	3.8	-
		1,016.0	878.8	137.2

An increase or decrease of 100 basis points in each of the applicable rates and interest rate curves would impact reported after tax profit by €1.4m (2018: €1.4m) and equity by €1.4m (2018: €1.4m).

Credit risk

Credit risk encompasses the risk of financial loss to the Group of counterparty default in relation to any of its financial assets. The Group's maximum exposure to credit risk is represented by the carrying value of each financial asset:

	2019	2018
	€m	€m
Cash & cash equivalents	190.9	294.5
Trade receivables	770.3	791.5
Derivative financial assets	27.3	27.6
Financial asset	8.2	8.2

Trade receivables arise from a wide and varied customer base spread across various activities, end users and geographies, and as such there is no significant concentration of credit risk. The Group's credit risk management policy in relation to trade receivables involves periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored and a significant element of credit risk is covered by credit insurance or other forms of collateral such as letters of credit or bank guarantees.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

At 31 December, the exposure to credit risk for trade receivables by geographic region was as follows:

	2019	2018
	€m	€m
Rest of Europe	322.9	340.8
ROI & UK	236.9	244.8
Americas	149.8	152.7
Others	60.7	53.2
	770.3	791.5
At 31 December, the exposure to credit risk for trade receivables by customer type was as follows:

	2019	2018
	€m	€m
Insulated Panels customers	493.6	496.4
Insulation Boards customers	151.8	153.2
Other	124.9	141.9
	770.3	791.5

The Group uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables from customers. The ECL simplified approach has been adopted.

Loss rates are calculated using a roll rate method based on the probability of a receivable progressing through successive chains of non-payment to write-off. The rates are calculated at a business unit level which reflects the risks associated with geographic region, age, mix of customer relationship and type of product purchased. The identifiable loss pertaining to cash positions is immaterial.

The following table provides the information about the exposure to credit risk and ECL's for trade receivables as at 31 December 2019.

	Weighted	Gross	Loss
	average loss	carrying	allowance
	rate	amount
	%	€m	€m
Current (not past due)	1%	512.4	5.7
1-30 days past due	2%	146.4	3.4
31-60 days past due	6%	41.0	2.6
61-90 days past due	16%	12.2	1.9
More than 90 days past due	69%	58.3	40.4
		770.3	54.0

The following table provides the information about the exposure to credit risk and ECL's for trade receivables as at 31 December 2018.

	Weighted	Gross	Loss
	average loss	carrying	allowance
	rate	amount
	%	€m	€m
Current (not past due)	1%	538.7	6.1
1-30 days past due	2%	148.2	3.3
31-60 days past due	7%	39.0	2.8
61-90 days past due	15%	13.0	2.0
More than 90 days past due	80%	52.6	42.2
		791.5	56.4

Loss rates are based on actual credit loss experience over an appropriate diverse sample of trading periods. Trade receivables are written off when there is no reasonable expectation of recovery.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

Movements in the allowance for impairment in respect of trade receivables

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

	2019	2018
	€m	€m
Balance at 1 January	56.4	51.1
Arising on acquisition	1.1	10.8
Written off during the year	(7.3)	(9.5)
Net remeasurement of loss allowance	2.9	4.3
Effect of movement in exchange rates	0.9	(0.3)
At 31 December
54.0	56.4

There are no material trade receivables written off during 2019 (2018: €nil) which are still subject to enforcement activity.

The decrease in the expected credit loss allowance during 2019 reflects the reduction in the gross carrying amount of trade receivables.

Cash & cash equivalents

On the Group's cash and cash equivalents and derivatives, counterparty risk is managed by dealing with banks that have a minimum credit rating and by spreading business across a portfolio of 9 relationship banks.

Financial instruments by category

The carrying amount of financial assets presented in the Statement of Financial Position relate to the following measurement categories as defined in IAS 39:

2019	Financial	Loans and	Derivatives	Total
	asset	receivables	designated
			as hedging
			instruments
	€m	€m	€m	€m
Current:				716.3
Trade receivables	-	716.3	-
Other receivables	-	45.1	-	45.1
Cash and cash equivalents	-	190.9	-	190.9
Derivative financial instruments	-	-	-	-
	-	952.3	-	952.3
Non Current:				27.3
Derivative financial instruments	-	-	27.3
Financial asset	8.2	-	-	8.2
	8.2	-	27.3	35.5

2018	Financial	Loans and	Derivatives	Total
	asset	receivables	designated
			as hedging
			instruments
	€m	€m	€m	€m
Current:
Trade receivables	-	735.1	-	735.1
Other receivables	-	32.1	-	32.1
Cash and cash equivalents	-	294.5	-	294.5
Derivative financial instruments	-	-	0.2	0.2
	-	1,061.7	0.2	1,061.9
Non Current:
Derivative financial instruments	-	-	27.4	27.4
Financial asset	8.2	-	-	8.2
	8.2	-	27.4	35.6

It is considered that the carrying amounts of the above financial assets approximate their fair values.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

The carrying amounts of financial liabilities presented in the Statement of Financial Position relate to the following measurement categories as defined in IFRS 9:

	Financial	Financial	Financial	Derivatives	Total
	liabilities	liabilities	liabilities	designated
	in fair value	measured	measured at	as hedging
	hedge	at fair value	amortised cost	instruments
	€m	€m	€m	€m	€m
2019
Current:
Borrowings	-	-	3.1	-	3.1
Leases liabilities	-	-	25.6	-	25.6
Trade payables	-	-	404.9	-	404.9
Accruals	-	-	316.3	-	316.3
Derivative financial instruments	-	-	-	0.1	0.1
Deferred consideration	-	-	-	-	-
Deferred contingent consideration	-	-	-	-	-
	-	-	749.9	0.1	750.0
Non current:
Borrowings	36.3	-	812.0	-	848.3
Lease liabilities	-	-	96.7	-	96.7
Deferred contingent consideration	-	186.5	-	-	186.5
	36.3	186.5	908.7	-	1,131.5
2018
Current:
Borrowings	-	-	53.2	-	53.2
Lease liabilities	-	-	-	-	-
Trade payables	-	-	397.5	-	397.5
Accruals	-	-	341.1	-	341.1
Deferred consideration	-	30.0	-	-	30.0
Deferred contingent consideration	-	29.5	-	-	29.5
	-	59.5	791.8	-	851.3
Non current:
Borrowings	35.2	-	931.8	-	967.0
Lease liabilities	-	-	-	-	-
Deferred contingent consideration	-	136.6	-	-	136.6
	35.2	136.6	931.8	-	1,103.6

Fair value hierarchy

Financial assets and liabilities recognised at fair value are analysed between those based on quoted prices in active markets for identical assets or liabilities (Level 1), those involving inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (Level 3) as set out in note 18.

Normally, the derivatives entered into by the Group are not traded in active markets. The fair values of these contracts are estimated using a valuation technique that maximises the use of observable market inputs, e.g. market exchange and interest rates (Level 2). All derivatives entered into by the Group are included in Level 2 and consist of foreign currency forward contracts, interest rate swaps and cross currency interest rate swaps.

	As at 31 December 2019	As at 31 December 2018
	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
	€m	€m	€m	€m	€m	€m
Financial Assets
Interest rate swaps	-	27.3	-	-	27.4	-
Foreign exchange contracts for hedging	-	-	-	-	0.2	-
Financial Liabilities
Deferred contingent consideration	-	-	11.3	-	-	38.9
Deferred consideration	-	-	-	30.0	-	-
Put option	-	-	175.2	-	-	127.2
Foreign exchange contracts for hedging	-	0.1	-	-	-	-

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

19 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

The principal movements in Level 3 liabilities in 2019 are set out in the table below:

	Balance	Settlement	Fair value	Arising on	Translation	Balance
	01 Jan		movement	acquisition	adjustment	31 Dec
	2019					2019
	€m	€m	€m	€m	€m	€m
Deferred contingent consideration	38.9	(29.7)	(0.5)	2.0	0.6	11.3
Put option liabilities	127.2	-	22.7	26.7	(1.4)	175.2
	166.1	(29.7)	22.2	28.7	(0.8)	186.5

The principal movements in Level 3 liabilities in 2018 are set out in the table below:

	Balance	Settlement	Fair value	Arising on	Translation	Balance
	1 Jan		movement	acquisition	adjustment	31 Dec
	2018					2018
	€m	€m	€m	€m	€m	€m
Deferred contingent consideration	43.0	(3.1)	1.1	1.4	(3.5)	38.9
Put option liabilities	74.5	-	35.4	24.5	(7.2)	127.2
	117.5	(3.1)	36.5	25.9	(10.7)	166.1

During the year ended 31 December 2019, the put liabilities were reassessed based on the most recently available financial information. There were no significant changes in the business or economic circumstances that affect the fair value of financial assets and liabilities, no reclassifications and no transfers between levels of the fair value hierarchy used in measuring the fair value of the financial instruments.

Except as detailed below, it is considered that the carrying amounts of financial assets and financial liabilities recognised at amortised cost approximate their fair values.

	As at 31 December 2019		As at 31 December 2018
	Carrying	Fair		Carrying	Fair
	amount	Value		amount	Value
	€m	€m	Level	€m	€m	Level
Private placement loan notes	840.9	902.3	2	835.9	889.0	2

Capital Management Policies and Procedures

The Group employs a combination of debt and equity to fund its operations. As at 31 December the total capital employed in the Group was as follows:

	2019	2018
	€m	€m
Net Debt	633.2	728.3
Equity	2,120.4	1,788.9
Total Capital Employed
2,753.6	2,517.2

The Board's objective when managing capital is to maintain a strong capital base so as to maintain the confidence of investors, creditors and the market. The Board monitors the return on capital (defined as total shareholders' equity plus net debt), and targets a return in excess of 20% together with a dividend level that is compatible with industry norms, but which also reflects any exceptional market conditions.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Group actively manages foreign currency and interest rate exposure, as well as actively managing the net asset position, in order to create bottom line value. This necessitates the development of a methodology to optimise the allocation of financial resources on the one hand and the return on capital on the other.

The Board closely monitors externally imposed capital restrictions which are present due to covenants within the Group's core banking facilities.

There were no changes to the Group's approach to capital management during the year.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

20 PROVISIONS FOR LIABILITIES

	2019	2018
	€m	€m
Guarantees and warranties	104.3
At 1 January	101.0
Arising on acquisitions (Note 22)	1.8	9.4
Provided during year	54.4	38.2
Claims paid	(29.5)	(27.4)
Provisions released	(23.3)	(16.7)
Effect of movement in exchange rates	2.0	(0.2)
At 31 December	109.7	104.3
Current liability	58.0	47.5
Non-current liability	51.7	56.8
	109.7	104.3

The Group manufactures a wide range of insulation and related products for use primarily in the construction sector. Some products carry formal guarantees of satisfactory performance of varying periods following their purchase by customers and a provision is carried in respect of the expected costs of settling warranty and guarantee claims which arise. Both the number of claims and

the cost of settling the claim are sensitive to change but not to such an extent as would cause a material change in the provision. Provisions are reviewed by management on a regular basis, and adjusted to reflect the current best estimate of the economic outflow. If it is no longer probable that an outflow of economic benefits will be required, the related provision is reversed.

For the non-current element of the provision, the Group anticipates that these will be utilised within three years of the reporting date. Discounting of the non-current element has not been applied because the discount would be immaterial.

The Group is not engaged in any material litigation.

21 DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities arising from temporary differences and unused tax losses after offset are as follows:

	2019	2018
	€m	€m
Deferred tax assets	14.1	15.6
Deferred tax liabilities	(31.9)	(40.8)
Net Position
(17.8)	(25.2)

Deferred tax arises from differences in the carrying value of items such as property, plant and equipment, intangibles, pension obligations, and other temporary differences in the financial statements and the tax base established by the tax authorities.

The movement in the net deferred tax position for 2019 is as follows:

	Balance	Recognised	Recognised	Recognised	Translation	Arising on	Balance
	1 Jan	in profit	in equity	in other	adjustment	acquisitions	31 Dec
	2019	or loss		comprehensive			2019
	€m	€m	€m	income	€m	€m	€m
	€m
Property, plant and							(41.4)
equipment	(45.8)	5.0	-	-	(0.6)	-
Intangibles	(29.4)	3.0	-	-	(0.2)	(0.2)	(26.8)
Other temporary differences	40.8	(0.2)	1.7	-	0.1	0.1	42.5
Pension obligations	0.8	0.3	-	-	(0.1)	(0.1)	0.9
Unused tax losses	8.4	(1.7)	-	-	0.3	-	7.0
	(25.2)	6.4	1.7	-	(0.5)	(0.2)	(17.8)

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

21 DEFERRED TAX ASSETS AND LIABILITIES (continued)

The movement in the net deferred tax position for 2018 is as follows:

	Balance	Recognised	Recognised	Recognised	Translation	Arising on	Balance
	1 Jan	in profit	in equity	in other	adjustment	acquisitions	31 Dec
	2018	or loss		comprehensive			2018
	€m	€m	€m	income	€m	€m	€m
	€m
Property, plant and
equipment	(40.6)	(4.2)	-	-	-	(1.0)	(45.8)
Intangibles	(24.9)	6.1	-	-	(0.1)	(10.5)	(29.4)
Other temporary differences	35.8	(5.9)	0.9	-	0.5	9.5	40.8
Pension obligations	0.9	-	-	(0.2)	0.1	-	0.8
Unused tax losses	6.6	1.8	-	-	-	-	8.4
	(22.2)	(2.2)	0.9	(0.2)	0.5	(2.0)	(25.2)

22 BUSINESS COMBINATIONS

A key strategy of the Group is to create and sustain market leading positions through acquisitions in markets it currently operates in, together with extending the Group's footprint in new geographic markets. In line with this strategy, the principal acquisitions completed during the year were as follows:

In November 2019, the Group acquired 85% of the share capital of Group Bacacier SAS a French integrated profiling and insulated panel distributor. The total consideration, including debt acquired amounted to €122.0m, representing the maximum amount of identifiable consideration, comprising of €120.0m paid in cash on completion and €2.0m in deferred contingent consideration. Put options are also in place over the remaining 15% of the business, the details of which are set out in note 18.

The Group also made a number of smaller acquisitions during the year for a combined cash consideration of €22.2m:

the purchase of 100% of the share capital of WeGo Floortec GmbH, a German manufacturer of access floors;
the purchase of 100% of the share capital of Epur SA, a French water treatment business; and
the purchase of the assets of SkyCo, a US Light & Air business.

The table below reflects the fair value of the identifiable net assets acquired in respect of the acquisitions completed during the year. Any amendments to fair values will be made within the twelve month period from the date of acquisition, as permitted by IFRS 3, Business Combinations.

	Bacacier	Other*	Total
	€m	€m	€m
Non-current assets			2.7
Intangible assets	1.9	0.8
Property, plant and equipment (including Right of Use assets)	25.2	6.6	31.8
Deferred tax asset	-	-	-
Current assets			31.3
Inventories	29.2	2.1
Trade and other receivables	33.7	5.8	39.5
Current liabilities			(42.9)
Trade and other payables	(36.6)	(6.3)
Provisions for liabilities	(0.3)	(1.5)	(1.8)
Non-current liabilities			(5.0)
Trade and other payables	(3.6)	(1.4)
Deferred tax liabilities	-	(0.2)	(0.2)
	49.5	5.9	55.4
Total identifiable assets
Non-controlling interest arising on acquisition (Note 28)	(3.7)	-	(3.7)
Goodwill	76.2	16.3	92.5
Total consideration	122.0	22.2	144.2
Satisfied by:			142.2
Cash (net of cash acquired)	120.0	22.2
Deferred contingent consideration	2.0	-	2.0
	122.0	22.2	144.2

*Included in Other are certain immaterial remeasurements of prior year accounting estimates.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

22 BUSINESS COMBINATIONS (continued)

The acquired goodwill is attributable principally to the profit generating potential of the businesses, together with cross- selling opportunities and other synergies expected to be achieved from integrating the acquired businesses into the Group's existing business.

In the post-acquisition period to 31 December 2019, the businesses acquired during the current year contributed revenue of €38.7m and trading profit of €2.0m to the Group's results.

The full year revenue and trading profit had the acquisitions taken place at the start of the year, would have been €4,834.9m and €509.5m respectively.

The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to €40.6m. The fair value of these receivables is €39.5m, all of which is recoverable, and is inclusive of an aggregate impairment provision of €1.1m.

There is €2.7m of goodwill (2018: €nil) which is expected to be deductible for tax purposes.

The Group incurred acquisition related costs of €2.4m (2018: €3.3m) relating to external legal fees and due diligence costs. These costs have been included in operating costs in the Consolidated Income Statement.

The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in respect of Group Bacacier SAS due to the relative size of the acquisition and the timing of the transaction. Any amendments to these fair values within the twelve-month timeframe from the date of acquisition will be disclosable in the 2020 Annual Report, as stipulated by IFRS 3.

Prior year acquisitions

In the prior year, the Group acquired 100% of the share capital of Synthesia Group ("Synthesia"), 100% of the share capital of Balex Metal sp. z.o.o. ("Balex"), 100% of the share capital of Vestfold Plastindustri AS and Vestfold Plastindustri Eiendom AS, 51% of the share capital of Jindal Mectec Private Limited, the assets of H2Enviro, an Australian water tanks business and two smaller bolt-on European businesses.

The fair values as recognised at 31 December 2018 of the acquired assets and liabilities at acquisition are set out below:

	Synthesia	Balex	Other	Total
	€m	€m	€m	€m
Non-current assets				43.3
Intangible assets	31.5	7.9	3.9
Property, plant and equipment	42.8	42.3	8.6	93.7
Deferred tax asset	3.3	0.7	2.8	6.8
Current assets				83.9
Inventories	49.1	30.0	4.8
Trade and other receivables	70.4	18.1	4.2	92.7
Current liabilities				(111.5)
Trade and other payables	(59.6)	(23.4)	(28.5)
Provisions for liabilities	(5.6)	(0.9)	(2.9)	(9.4)
Non-current liabilities				-
Retirement benefit obligation	-	-	-
Deferred tax liabilities	(7.9)	(1.8)	0.9	(8.8)
	124.0	72.9	(6.2)	190.7
Total identifiable assets
Non-controlling interest arising on acquisition (Note 28)	-	-	4.9	4.9
Goodwill	119.4	124.7	52.7	296.8
Total consideration	243.4	197.6	51.4	492.4
Satisfied by:				461.0
Cash (net of cash acquired)	213.4	197.6	50.0
Deferred contingent consideration	30.0	-	1.4	31.4
	243.4	197.6	51.4	492.4

In the post-acquisition period to 31 December 2018, the acquired businesses contributed revenue of €416.3m and trading profit of €35.0m to the Group's results.

The full year revenue and trading profit had the acquisitions taken place at the start of the year, would have been €4,522.7m and €449.5m.

The Group incurred acquisition related costs of €3.3m (2018: €3.6m) relating to external legal fees and due diligence costs. These costs have been included in operating costs in the Income Statement.

Statements Financial

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

23 SHARE CAPITAL

						2019		2018
						€m		€m
Authorised
250,000,000 Ordinary shares of €0.13 each						32.5
(2018: 250,000,000 Ordinary shares of €0.13 each)						32.5
Issued and fully paid
Ordinary shares of €0.13 each						23.7
Opening balance - 182,171,120 (2018: 181,342,315) shares						23.6
Shares allotted - 614,102 (2018: 828,805) shares						0.1		0.1
Closing balance - 182,785,222 (2018: 182,171,120) shares
				23.8		23.7
There were no adjustments to the authorised share capital during the year (2018: nil).
Details of share options exercised are set out in Note 3 to the financial statements.
24 SHARE PREMIUM

						2019		2018
						€m		€m
At 1 January						95.6		95.6
At 31 December
					95.6		95.6
25 TREASURY SHARES
Consideration paid

		2019				2018
	No. of	Consideration	Total	No. of	Consideration	Total
	shares	paid		shares	paid
		€	€m				€	€m
At 1 January	1,969,143	6.40	12.7	2,019,750	6.89	14.0
Repurchase of shares	15,718	40.50	0.6	-	-	-
Shares issued	(77,035)	(18.63)	(1.5)	(50,607)	25.10	(1.3)
At 31 December
1,907,826	6.21	11.8	1,969,143	6.40	12.7
Nominal value

		2019				2018
	No. of	Nominal	Total	No. of	Nominal	Total
	shares	value		shares	value
		€	€				€	€
At 1 January	1,969,143	0.13	255,988	2,019,750	0.13	262,567
Repurchase of shares	15,718	0.13	2,043	-	-	-
Shares issued	(77,035)	0.13	(10,015)	(50,607)	0.13	(6,579)
At 31 December
1,907,826	0.13	248,016	1,969,143	0.13	255,988

During the year, the Company issued 77,035 treasury shares in satisfaction of obligations falling under share schemes. The Company holds 1.0% (2018: 1.1%) of the issued ordinary share capital as treasury shares.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

26 RETAINED EARNINGS

In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual Income Statement to the Annual General Meeting and from filing it with the Registrar of Companies. The Company's profit for the financial year was €28.6m (2018: €9.7m).

27 DIVIDENDS

		2019	2018
		€m	€m
Equity dividends on ordinary shares:	23.6
2019	Interim dividend 13.0 cent (2018: 12.0 cent) per share	21.7
2018	Final dividend 30.0 cent (2017: 26.0 cent) per share	54.0	46.6

Proposed for approval at AGM	77.6	68.3
60.6
Final dividend of 33.5 cent (2018: 30.0 cent) per share	54.1

This proposed dividend for 2019 is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in the Statement of Financial Position of the Group as at 31 December 2019 in accordance with IAS 10 Events after the Reporting Period. The proposed final dividend for the year ended 31 December 2019 will be payable on 7 May 2020 to shareholders on the Register of Members at close of business on 27 March 2020.

28 NON-CONTROLLING INTEREST

	2019	2018
	€m	€m
At 1 January	38.6	39.9
Profit for the year attributable to non-controlling interest	8.4	4.9
Arising on acquisition (Note 22)	3.7	(4.9)
Dividends paid to minorities	(0.4)	(0.1)
Share of foreign operations' translation movement	(0.2)	(1.2)
At 31 December
50.1	38.6

During the current year, the Group acquired 85% of the ordinary share capital of Group Bacacier SAS, a French Insulated Panels business. As part of the acquisition, the Group recognised the 15% non-controlling interest of €3.7m.

Further details are provided in Note 22.

29 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

	2019	2018
	€m	€m
Movement in cash and bank overdrafts	(117.1)	120.1
Drawdown of loans	(7.8)	(445.0)
Repayment of loans and borrowings	181.6	92.7
Decrease /(increase) in deferred consideration	30.0	(30.0)
Change in net debt resulting from cash flows	86.7	(262.2)
Translation movement - relating to US dollar loan	(5.0)	(5.5)
Translation movement - other	13.5	(1.9)
Derivative financial instruments movement	(0.1)	5.2
Net movement	95.1	(264.4)
Net debt at start of the year	(728.3)	(463.9)
Net debt at end of the year	(633.2)	(728.3)
Lease liabilities of €122.3m are excluded from net debt.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

29 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (continued)

A reconciliation of liabilities arising from financing activities is set out below.

	Balance	Repayments	Deferred	Drawdowns /	Non cash	Balance
	1 Jan		Consideration	Receipts	movements	31 Dec
	2019					2019
	€m	€m	€m	€m	€m	€m
Bank loans and borrowings	184.3	(181.6)	-	7.8	-	10.5
Loan notes	835.9	-	-	-	5.0	840.9
Derivatives	(27.4)	-	-	-	0.1	(27.3)
Deferred Consideration	30.0	-	(30.0)	-	-	-

	1,022.8	(181.6)	(30.0)	7.8	5.1	824.1
A reconciliation of liabilities arising from financing	activities in 2018 is set out below.

	Balance	Repayments	Deferred	Drawdowns /	Non cash	Balance
	1 Jan		Consideration	Receipts	movements	31 Dec
	2018					2018
	€m	€m	€m	€m	€m	€m
Bank loans and borrowings	7.3	(92.7)	-	270.0	(0.3)	184.3
Loan notes	655.4	-	-	175.0	5.5	835.9
Derivatives	(22.2)	-	-	-	(5.2)	(27.4)
Deferred Consideration	-	-	30.0	-	-	30.0

	640.5	(92.7)	30.0	445.0	-	1,022.8

30 GUARANTEES AND OTHER FINANCIAL COMMITMENTS

(i) Guarantees and contingencies

The Group's principal debt facilities are secured by means of cross guarantees provided by Kingspan Group plc. These include drawn private placement notes of US$200m and €662.5m and undrawn banking facilities of €751m.

(ii) Future capital expenditure

Capital expenditure in subsidiary entities, approved by the directors but not provided in the financial statements, is as follows:

	2019	2018
	€m	€m
Contracted for	24.7	49.7
Not contracted for	48.2	20.9

	72.9	70.6

31 PENSION OBLIGATIONS

The Group operates defined contribution schemes in each of its main operating locations. The Group also has a number of defined benefit schemes in the UK and mainland Europe.

Defined contribution schemes

The total cost charged to profit or loss of €20.1m (2018: €15.5m) represents employer contributions payable to these schemes in

accordance with the rules of each plan. An amount of €3.1m (2018: €4.3m) was included at year end in accruals in respect of defined contribution pension accruals.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

31 PENSION OBLIGATIONS (continued)

The pension costs relating to all of the above defined benefit obligations are assessed in accordance with the advice of qualified actuaries. In the case of the two UK legacy schemes, the most recent actuarial valuations were performed as of 31 December 2019. In general, actuarial valuations are not available for public inspection; however, the results of valuations are advised to members of the various schemes.

The extent of the Group's obligation under these schemes is sensitive to judgemental actuarial assumptions, of which the principal ones are set out below. It is not considered that any reasonable sensitivity analysis on these assumptions would materially alter the scheme obligations.

	2019		2018
Life expectancies	21.6
Life expectancy for someone aged 65 - Males		21.9
Life expectancy for someone aged 65 - Females	23.3		23.8
Life expectancy at age 65 for someone aged 45 - Males	22.9		23.3
Life expectancy at age 65 for someone aged 45 - Females	24.8		25.4
Rate of increase in salaries	0% - 2.75%	0% - 2.75%
Rate of increase of pensions in payment	0% -1.9%	0%	- 2.1%
Rate of increase for deferred pensioners	1.9%	2%	- 2.2%
Discount rate	0.7% - 2.0%	1.2%	- 2.8%
Inflation rate	1.5% - 2.65%	1.5%	- 3.2%

Movements in net liability recognised in the Statement of Financial Position

	2019	2018
	€m	€m
Net liability in schemes at 1 January	(13.1)	(13.6)
Acquired	(2.7)	-
Employer contributions	1.2	0.8
Recognised in income statement	(0.7)	(1.1)
Recognised in statement of comprehensive income	(0.2)	0.9
Foreign exchange movement	0.4	(0.1)
Net liability in schemes at 31 December
(15.1)	(13.1)

Defined benefit pension income/expense recognised in the Income Statement

	2019	2018
	€m	€m
Current service cost	(0.4)	(1.3)
Settlements of scheme obligations	(0.3)	(0.1)
Transfer	-	0.3
Total, included in operating costs
(0.7)	(1.1)
Movement on scheme obligations	(2.0)	(1.8)
Interest on scheme assets	2.0	1.8
Net interest expense, included in finance expense (Note 4)
-	-

Statements Financial

2019 Statementsplc Group FinancialKingspan& Report Annual -

Defined benefit schemes / obligations

The Group has two legacy defined benefit schemes in the UK, both of which are closed to new members and to future accrual. The total pension contributions to these schemes for the year amounted to €nil (2018: €0.1m) and the expected contributions for 2020 are €nil.

The Group also has pension obligations in mainland Europe which are accounted for as defined benefit obligations. These obligations have been accounted for in line with the Group's existing pension obligations whereby companies are not required to fund independent schemes for post employment benefit obligations. Instead, commencing from the date the employee becomes eligible to receive the income stream, this obligation is satisfied from available cash resources of the relevant employing company. A provision has been made for the unfunded liability. €0.9m of pension entitlements have been paid to retired former employees during the year (2018: €0.8m).

145 - 144

BusinessBusiness& Stra& trategicReportReport SustainainabilityReportReport Directors'ReportReport FinaFinancialStatemements OtherOtherInformation

Independent Auditor's Report

Financial Statements

Notes to the Financial Statements

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)

31 PENSION OBLIGATIONS (continued)

Analysis of amount included in other comprehensive income

		2019	2018
		€m	€m
Actual return less interest on scheme assets		6.1	(4.2)
Experience gain arising on scheme liabilities		0.1	-
Actuarial gain arising from changes in demographic assumptions		1.6	0.4
Actuarial (loss)/gain arising from changes in financial assumptions		(8.0)	4.7
(Loss)/gain recognised in other comprehensive income
	(0.2)	0.9
The cumulative actuarial loss recognised in other comprehensive income to date is €18.5m (2018: €18.3m).
In 2019, the actual return on plan assets was a gain of €8.1m (2018: loss of €2.4m).
Asset Classes and Expected Rate of Return
The assets in the scheme at each year end were as follows:

		2019	2018
Asset Classes as % of Total Scheme Assets		41.2%
Equities		53.0%
Bonds (Corporates)		0.4%	0.3%
Cash		0.4%	0.2%
Liability Driven Investment (LDI)		58.0%	46.5%

		100%	100%
The net pension liability is analysed as follows:

		2019	2018
		€m	€m
Equities		33.4	37.5
Bonds (Corporates)		0.3	0.2
Cash		0.4	0.2
Property		7.1	-
Liability Driven Investment (LDI)		39.8	33.2
Fair market value of plan assets		81.0	71.1
Present value of obligation		(96.1)	(84.2)
Deficit
	(15.1)	(13.1)
Analysed between:		9.2
Funded schemes' surplus		7.4
Unfunded obligations		(24.3)	(20.5)

		(15.1)	(13.1)
Related deferred tax (asset)		(0.9)	(0.8)

		2019	2018
		€m	€m
Changes in present value of defined benefit obligations		84.2
At 1 January		90.5
Acquired through business combination		2.7	-
Current service cost		0.4	1.3
Interest cost		2.0	1.8
Benefits paid		(3.2)	(2.4)
Settlement		0.1	(0.1)
Actuarial losses/(gains)		6.3	(5.1)
Effect of movement in exchange rates		3.6	(0.7)
Transfer		-	(1.1)
At 31 December
	96.1	84.2

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (continued)		Financial

31 PENSION OBLIGATIONS (continued)
			Statements

	2019		2018
	€m		€m
Changes in present value of scheme assets during year	71.1
At 1 January		76.9
Acquired through business combination	-		-
Interest on scheme assets	2.0		1.8
Employer contributions	0.1		0.1
Benefits paid	(2.1)		(1.7)
Settlement	(0.2)		(0.2)
Actual return less interest	6.1		(4.2)
Effect of movement in exchange rates	4.0		(0.8)
Transfer	-		(0.8)	-

At 31 December				Annual
81.0		71.1
32 RELATED PARTY TRANSACTIONS				Report
The principal related party relationships requiring disclosure under IAS 24 Related Party Disclosures relate to (i) transactions between
FinancialKingspan&
group companies, (ii) compensation of key management personnel and (iii) goods and services purchased from directors.
(i) Transactions between subsidiaries and associates are carried out on an arm's length basis.

The Company received dividends of €20.0m from subsidiaries (2018: €nil), and there was a net decrease in the intercompany	StatementsplcGroup
balance of €45.3m (2018: €55.2m decrease).

Transactions with the Group's non-wholly owned subsidiaries primarily comprise trading sales and capital funding, carried out on
an arm's length basis. These transactions are not considered to be material.
(ii) For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the term "key management personnel"		2019
(i.e. those persons having the authority and responsibility for planning, directing and controlling the activities of the Company),

comprise the board of directors who manage the business and affairs of the Company. As identified in the Report of the Remuneration Committee, the directors, other than the non-executive directors, serve as executive officers of the Group.

Key management personnel compensation is set out in Note 6.

Mr Eugene Murtagh received dividends of €11.9m during the year from the Group (2018: €10.9m). Dividends of €0.98m were paid

to other key management personnel (2018: €0.92m).

(iii) The Group purchased legal services in the sum of €125,947 (2018: €114,533) from McCann FitzGerald Solicitors, a firm in which Mr John Cronin is a partner.

33 POST BALANCE SHEET EVENTS

There have been no material events subsequent to 31 December 2019 which would require adjustment to or disclosure in this report.

34 APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the directors on 21 February 2020.

147 - 146


BusinessBusiness& Stra& trategicReportReport	SustainainabilityReportReport	Directors'ReportReport	FinanancialStatemStatements	OtherOtherInformation
Alternative Performance MeasuresShareholder Information
Principal Subsidiary Undertakings	Group Five Year Summary

OTHER INFORMATION

ALTERNATIVE PERFORMANCE MEASURES

The Group uses a number of metrics, which are non-IFRS measures, to monitor the performance of its operations.

The Group believes that these metrics assist investors in evaluating the performance of the underlying business. Given that these metrics are regularly used by management, they also give the investor an insight into how Group management review and monitor the business on an ongoing basis.

The principal APMs used by the Group are defined as follows:

Trading profit

This comprises the operating profit as reported in the Income Statement before intangible asset amortisation and non trading items. This equates to the Earnings Before Interest, Tax and Amortisation ("EBITA") of the Group. Trading profit is used by management as it excludes items which may hinder year on year comparisons.

		2019	2018
	Financial Statements Reference	€m	€m
Trading profit	Note 2	497.1	445.2

Trading margin

Measures the trading profit as a percentage of revenue.

		2019	2018
	Financial Statements Reference	€m	€m
Trading Profit	Note 2	497.1	445.2
Total Group Revenue	Note 2	4,659.1	4,372.5
Trading margin		10.7%	10.2%

Net interest

The Group defines net interest as the net total of finance expense and finance income as presented in the Income Statement. The impact of IFRS 16 is excluded from the calculation which is consistent with the terms and conditions of the covenants as set out in the Group's external borrowing arrangements.

		2019	2018
	Financial Statements Reference	€m	€m
Finance Expense	Note 4	23.7	19.5
Finance Income	Note 4	(2.9)	(1.4)
Less lease interest (IFRS 16)	Note 4	(3.8)	-
Net Interest		17.0	18.1

Adjusted earnings per share

The Group defines adjusted earnings per share as basic earnings per share adjusted for the impact, net of tax, of intangible amortisation.

The Group defines adjusted diluted earnings per share as basic earnings per share adjusted for the impact, net of tax, of intangible amortisation and the dilutive effect of share options.

Dilution is attributable to the weighted average number of share options outstanding at the end of the reporting period.

		2019	2018
	Financial Statements Reference	€m	€m
Profit attributable to ordinary shareholders	Note 8	369.4	330.9
Intangible amortisation	Note 2	21.9	22.2
Intangible amortisation tax impact	Note 21	(3.0)	(5.1)
		388.3	348.0
Weighted average number of shares ('000)	Note 8	180,586	179,840
Adjusted earnings per share		215.0 cent	193.5 cent
Weighted average number of shares for dilutive		182,075
calculation ('000)	Note 8	181,536
Adjusted diluted earnings per share		213.2 cent	191.7 cent

Free cash flow

Free cash flow is the cash generated from operations after net capital expenditure, interest paid, income taxes paid and lease payments and reflects the amount of internally generated capital available for re-investment in the business or for distribution to shareholders.

		2019	2018
	Financial Statements Reference	€m	€m
Net cash flow from operating activities	Consolidated Statement of Cash Flows	520.4	438.3
Additions to property, plant, equipment and		(161.0)
intangibles	Consolidated Statement of Cash Flows	(144.2)
Proceeds from disposals of property, plant and		6.7
equipment	Consolidated Statement of Cash Flows	12.9
Interest received	Consolidated Statement of Cash Flows	2.8	1.4
Lease payments	Consolidated Statement of Cash Flows	(31.8)	-
Free cash flow
	337.1	308.4

Return on capital employed (ROCE)

ROCE is the operating profit before interest and tax expressed as a percentage of the net assets employed. The net assets employed reflect the net assets, excluding net debt, at the end of each reporting period.

		2019	2018
	Financial Statements Reference	€m	€m
Net Assets	Consolidated Statement of Financial Position	2,120.4	1,788.9
Net Debt	Note 17	633.2	728.3
		2,753.6	2,517.2
Operating profit before interest and tax	Consolidated Income Statement	475.2	423.0
Return on capital employed		17.3%	16.8%

Statements Financial

2019 Statementsplc Group FinancialKingspan& Report Annual -

- 148

149


BusinessBusiness& Stra& trategicReportReport	SustainainabilityReportReport	Directors'ReportReport	FinanancialStatemStatements	OtherOtherInformation
	Shareholder Information
Alternative Performance Measures	Principal Subsidiary Undertakings	Group Five Year Summary

Net debt

Net debt represents the net total of current and non-current borrowings, current and non-current derivative financial instruments, (excluding foreign currency derivatives which are used for transactional hedging), and cash and cash equivalents as presented

in the Statement of Financial Position. Lease liabilities recognised due to the implementation of IFRS 16 and deferred contingent consideration have also been excluded from the calculation of net debt. Consistent with the 2018 APMs, this definition is in accordance with the terms and conditions of the covenants as set out in the Group's external borrowing arrangements.

		2019	2018
	Financial Statements Reference	€m	€m
Net Debt	Note 17	633.2	728.3

EBITDA

SHAREHOLDER INFORMATION

Statements Financial

The Group defines EBITDA as earnings before finance costs, income taxes, depreciation, amortisation and the impact of IFRS 16.

		2019	2018
	Financial Statements Reference	€m	€m
Trading profit	Condensed Consolidated Income Statement	497.1	445.2
Depreciation	Consolidated Statement of Cash Flows	114.5	76.0
Lease liability payments	Consolidated Statement of Cash Flows	(31.8)	-
EBITDA
	579.8	521.2

Net debt: EBITDA

Net debt as a ratio to 12 month EBITDA. EBITDA is solely adjusted for the impact of IFRS 16 Leases which is in accordance with the terms and conditions of the covenants as set out in the Group's external borrowing arrangements.

		2019	2018
	Financial Statements Reference	€m	€m
Net Debt	Note 17	633.2	728.3
EBITDA		579.8	521.2
Net Debt: EBITDA times
	1.09	1.40

Working capital

Working capital represents the net total of inventories, trade and other receivables and trade and other payables, net of transactional foreign currency derivative excluded from net debt.

		2019	2018
	Financial Statements Reference	€m	€m
Trade and other receivables	Note 14	794.2	798.6
Inventories	Note 13	557.6	524.9
Trade and other payables	Note 15	(768.9)	(779.8)
Foreign currency derivatives excluded from		(0.1)
net debt	Note 19	0.2
Working capital
	582.8	543.9

Working capital ratio

Measures working capital as a percentage of October to December turnover annualised. The annulations on turnover reflects the current profile of the Group rather than a partial reflection of any acquisitions completed during the period.

	2019	2018
Financial Statements Reference	€m	€m
Working capital	582.8	543.9
October - December turnover annualised	4,877.0	4,711.6
Working Capital ratio	11.9%	11.5%

The Annual General Meeting

The Annual General Meeting of the Company will be held at the InterContinental Hotel, Ballsbridge, Dublin 4 on Friday 1 May 2020 at 10.00 a.m.

Notice of the 2020 AGM will be made available to view online at www.kingspan.com/agm2020

You may submit your votes electronically by accessing Computershare's website: http://www.eproxyappointment.com/

You will be asked for your Shareholder Reference Number (SRN), Control Number, and PIN, all of which will have been sent to shareholders in advance of the meeting. To be valid, your proxy vote must be received by Computershare no later than 10.00 am on Wednesday 29 April 2020 (48 hours before the meeting).

Amalgamation of

Shareholding Accounts

Shareholders who receive duplicate sets of Company mailings due to multiple accounts in their name should write to the Company's Registrar to have their accounts amalgamated.

Warning to Shareholders

Many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based "brokers" who target shareholders offering to

sell them what often turn out to be worthless or high-risk shares in US or UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports.

Please note that it is very unlikely that either the Company or the Company's Registrar, Computershare, would make unsolicited telephone calls to shareholders and that any such calls would relate only to official documentation already circulated to shareholders and never in respect of investment "advice".

If you are in any doubt about the veracity of an unsolicited phone call, please

call either the Company Secretary or the Registrar.

Real-time Irish S.E. Other stock markets 09:14:33 2024-04-24 am EDT			5-day change	1st Jan Change
83.35 ^EUR	+0.06%		+3.03%	+6.31%

Apr. 17	Kepler Cheuvreux Upgrades Kingspan Group to Buy from Hold, Lifts Raises	MT
Apr. 17	BofA cuts Ashmore; JPMorgan lifts Fresnillo	AN

Kingspan Group plc

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Kingspan : Annual Report 2019 (Interactive)

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Company Profile

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Ratings for Kingspan Group plc

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Quarterly earnings - Rate of surprise

Sector Flooring & Interior Tile Manufacturers

Preliminary results announced:	21 February 2020
Annual General Meeting:	1 May 2020
Payment date for 2019 final dividend:	7 May 2020
Ex dividend date:	26 March 2020
Record date:	27 March 2020
Half-yearly financial report:	21 August 2020
Trading update:	16 November 2020

Bank of America Merrill Lynch	HSBC Bank plc
ING Bank NV	BNP Paribas
Commerzbank AG	Danske Bank AS
KBC Bank NV	Ulster Bank Ireland DAC
Bank of Ireland

McCann FitzGerald,	Allen & Overy LLP,
Riverside One,	One Bishops Square,
Sir John Rogerson's Quay,	London,
Dublin 2,	E1 6AD,
Ireland.	England.

Goodbody,	Bank of America Merrill Lynch,
Ballsbridge Park,	2 King Edward St,
Ballsbridge,	Farringdon,
Dublin 4,	London,
Ireland.	EC1A 1HQ,
	England.

% Shareholding	Nature of Business
IRELAND

Aerobord Limited	100	Manufacturing

Kingscourt Trustee	100	Trustee Company
Company Limited

Kingspan Century Limited	100	Manufacturing

Kingspan ESB Designated	50	Sales & Marketing
Activity Company

Kingspan Holdings	100	Management &
(Irl) Limited		Procurement

Kingspan Holdings (North	100	Holding Company
America) Limited

Kingspan Holdings	100	Holding Company
(Overseas) Limited

Kingspan Holdings Limited	100	Holding Company

Kingspan Insulation Limited	100	Manufacturing

Kingspan International	100	Finance Company
Finance Unlimited
Company

Kingspan Light &	100	Sales & Marketing
Air Limited

Kingspan Limited	100	Manufacturing

Kingspan RE Limited	100	Property Company

Kingspan Securities	100	Finance Company
2016 Designated
Activity Company

Kingspan Securities	100	Finance Company
2017 Designated
Activity Company

Kingspan Securities Limited	100	Finance Company

Kingspan Securities	100	Finance Company
No. 2 Limited

Kingspan Tate Limited	100	Sales & Marketing

KSP Property Limited	100	Property Company

Tel: +353 42 969 8000
Email: admin@kingspan.com
www.kingspan.com	Design: www.reddog.ie

	1st Jan change	Capi.
KINGSPAN GROUP PLC	+6.31%	16.32B
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RESPONSIVE INDUSTRIES LIMITED	-4.65%	922M
INTERNACIONAL DE CERÁMICA, S.A.B. DE C.V.	-1.54%	796M
TARKETT	-2.58%	630M
MONALISA GROUP CO.,LTD	-28.14%	549M
BIEN YAPI URUNLERI SANAYI TURIZM VE TICARET	+1.99%	473M
DYNASTY CERAMIC	+23.78%	437M
EVERJOY HEALTH GROUP CO., LTD.	-20.75%	435M