Kingspan Group Aktie

Hello, and welcome, everyone, to the Kingspan Preliminary Results 2025. My name is Becky, and I will be the operator today. [Operator Instructions] I will now hand over to your host, Gene Murtagh, CEO, to begin. Please go ahead.

Excellent. Good morning. Thank you, and welcome, everybody. I'm joined here by Geoff and Dave to take you through our 2025 results. If you could please just go to Slide 3 in the results deck titled 25 in summary. And just in brief, we saw revenue growth to EUR 9.2 billion, which was pre-currency growth of 9%. On the EBITDA, we were just over EUR 1.2 billion, which similarly was 9% up. And trading profit was just over EUR 955 million. And again, like-for-like growth or pre-currency growth of 8% which brought our EPS to EUR 3.70.

And once again, on our continued emission reductions program right across the group, we've seen since 2020, a Scope 1 and 2 internal reductions of 70, 7-0 percent which is pretty extraordinary, and that continues to advance along the lines that we've discussed previously. Backing up those results clearly and exiting the year, the insulated panel order bank as part of the envelope was ahead 8%. And actually, the intake in the same product group is ahead 8% for the first 6 weeks of this year. And in the Advances business unit, the revenue was up 12% in the year, which obviously accelerated through the second half.

The backlog at the end of the year was ahead 24% in that whole product group. And the order intake in the Advances product set is double prior year in the first 6 weeks, and we expect that growth rate to actually accelerate from this point forward. So all in all, it was a strong year given the circumstances. We entered this year with, I would say, very encouraging backlogs and activity right across the business. And notwithstanding the weather hampered start to the year, which won't surprise anybody, we do expect to see significant growth in 2026.

So just for some more color on all that, I'd hand you over to Geoff now.

Thank you, Gene. I'm on Page 6, the financial highlights. Firstly, group revenue at EUR 9.2 billion, up 7% or 9% at constant exchange rates. The principal FX move year-on-year was U.S. dollar to euro. To be specific on that, the average translation rate from euro to U.S. dollar was 1.08 in 2024 versus 1.13 in 2025 in terms of our average translation rate.

Group EBITDA, EUR 1.22 billion, up 7%. Trading profit, EUR 955 million, up 5% or 8% at constant exchange rates. Earnings per share at EUR 3.70. Our total dividend for the year, EUR 0.555, a payout ratio of 15%, which is our policy guide. Strong free cash flow of EUR 429 million, and I'll come to the components of that shortly. Trading margin at a headline down 10 basis points to 10.4%. But actually underlying pre-acquisition, we were actually ahead by 20 basis points to 10.7% year-on-year.

Net debt, we ended the year at EUR 1.88 billion. And in terms of leverage, net debt-to-EBITDA of 1.65x. Turning to Page 7, just bridging revenue and trading profit year-on-year. Our 2024 revenues of EUR 8.6 billion. Clearly, the significant component of sales growth during the year was the EUR 707 million contributed by acquisitions year-over-year. And then we had the FX move of 2% or so, clipping sales by EUR 138 million. From a profit perspective, 2024 was EUR 906.7 million. Currency shaved EUR 21.4 million of that.

It's worth highlighting that of that EUR 21.4 million, EUR 19.6 million of that occurred in the second half of the year because that's really when the pronounced exchange rate move actually happened. Acquisitions contributed EUR 49.5 million in the year, initially dilutive, but will kick on from here in terms of trading margin and underlying profitability up by EUR 20 million.

The geographic profile of sales set out on Page 8, pretty consistent year-on-year. The Americas at 22% of the business. Rest of World, 8%. And Europe, all told across all territories, 70% of the business in both '24 and '25.

Turning to free cash flow on Page 9. Naturally, the strongest component of free cash is the EBITDA of EUR 1.22 billion. Working capital, an outflow of EUR 151 million. Our working capital to sales ratio was 11.9%, which on a 5-year view, is an efficient performance. It happened to be up by 50 basis points on the very low level of December '24. And about half that move reflects the timing of acquisitions versus year-end. CapEx, EUR 325 million. And we're guiding EUR 350 million for this current year. The other significant cash flow item, tax of EUR 132.8 million, in line with our income statement charge with an effective tax rate of 16% in 2025 and our guidance for 2026 is an effective tax rate of 16.5%.

So all of that combined to give us free cash flow of EUR 429 million. From a capital perspective, that's set out on Page 10 in terms of the reconciliation of opening and closing net debt. We reduced debt by the free cash. We deployed EUR 258 million in acquisitions and incurred EUR 168 million in deferred consideration. We also acquired 2.2 million shares during the year for a consideration of EUR 148.6 million. That's an average share price of EUR 67.58.

Dividends paid of EUR 99.5 million during the year. So net debt ended the year at EUR 1.88 billion. A feature of the business for a long period of time has been the strength of our balance sheet, some commentary around that on Page 11. The group has significant liquidity. The principal strands of that are our undrawn EUR 800 million green revolving credit facility, which is fully committed to May 2028. We have cash balances on hand of approximately EUR 600 million. Our total gross debt is about EUR 2.2 billion or so between private placement and public bank. And the weighted average maturity of all of our drawn debt is a little over 4 years, and we have no significant maturities in the current financial year.

So with that, I will hand back to Gene.

Thank you, Geoff. So just to look at the structural growth drivers of the business. Once again, a lot of you will be familiar with this. But just in summary, if we can go to Slide 14, which is titled multifaceted growth drivers for the insulated envelope. And again, we'll go through this in some more detail with Dave shortly, but the 3 primary strands here are growth and penetration, which continues even in European markets, not to mention North America, APAC and South America with very significant runway for us there into the long term.

The continued geographic rollout of the business continues. Again, I would stress, even in Europe and all of the other regions that we've just mentioned. And the product portfolio within the envelope is expanding way beyond what it was 5, 10 years ago. Obviously, huge growth in the QuadCore business, but expansion into other technologies like wood fiber and the acoustic insulation sector, stonewool, not to mention, obviously, the roofing expansion, which is going on worldwide and most significantly in North America, where we have very large ambitions for our business there.

And I'd say similarly on Slide 20, which is the growth drivers for Advances. And this clearly is quite extraordinary and won't come as a surprise to anybody. But the sector itself we're operating is demonstrating very strong double-digit growth in itself, which naturally we're in the middle of. The business is growing share as we go along as well. So just market share growth as we expand our product portfolio is a significant driver for us.

And then the share of wallet is just way beyond what it was even 5 years ago, where per megawatt we had exposure of about $100,000 per meg, and that is now 5x that and growing. As we've expanded the product portfolio, got into water cooling and now obviously into air handling, that continues to grow. And that spread of business and share of wallet, we expect to continue to expand significantly into the future.

Thanks, Gene. If I could take you all to Slide 16 now, please. I think just as we enter a period where the macro backdrop looks like it's a little more stable than it's been for some time, it's probably worth reflecting on the markets that we faced over the last 5 to 6 years. And what the slide is showing you is look at a very challenged backdrop, particularly across Europe compared to 2019 on a volume basis, which if you look at the total footprint of the Kingspan markets, it looks like volumes in our addressable market down between 4% and 5% globally when we compare that to 2019.

And over the same period, organically, insulated panel volumes have grown by nearly 14%. So it's been a very consistent 3% outperformance, which will become more evident as markets stabilize, with the conversion to more energy-efficient products has never been stronger.

If I can bring you on then to Slide 23. Look, you've seen our global expansion map before and really in taking advantage of all of the opportunities that Gene has outlined across the data business, the roofing opportunity that we have started in Europe and are embarking upon in North America, alongside the structural growth of the vast array of our products. You can see the investments we are making across the globe now and over the next 2 to 3 years to unlock all of that potential.

So we look to have projects in the pipeline that will require investment of about EUR 1.2 billion, which is nothing out of the ordinary in terms of capital allocation, but has the potential to unlock about EUR 2 billion of revenue over the fullness of time, which, again, if you flip on to Slide 24, will underpin that consistent long-term growth story that you've been familiar with Kingspan.

With that, I'll hand it over to Gene.

Thank you, Dave. So just on Slide 25, which is the outlook and how we're feeling about the near-term future. We've -- as we said earlier, we've entered the year with very strong backlogs right across the business. They have continued to grow significantly through the first 6 weeks, although clearly, dispatches and deliveries have been hampered somewhat by weather, but we expect that to recover pretty swiftly through March, April and beyond that. And really just when we step back, the business clearly has grown consistently over the last forever.

We reached our target for 2025. We expect growth of in or around 10% in earnings for the current year. And we would expect that rate of growth to accelerate beyond that into 2027 and '28. Difficult to be specific about that, but we're certainly seeing a pipe of longer-term activity and engagement that would give us a high degree of confidence to deliver what we've just expressed there now.

So with that, we would be delighted to take your questions.

[Operator Instructions] Our first question comes from Shane Carberry from Goodbody.

The first one, maybe just to follow up on that last point you were making, Gene, about the kind of level of growth over the kind of medium term or out to the end of the decade. Can you just give us a little bit more color on exactly what you mean in terms of that trading profit growth exceeding what we've seen over the last couple of years would be helpful. And then the second is just thinking about the product evolution from a data perspective and how you kind of keep a pace with all the change that's happening in the industry. And are you still confident in terms of achieving a kind of EUR 600 million EBITDA number kind of over the next 4 to 5 years?

Okay. So on the first point, so we really have multi-stranded growth across the business. And it's actually very, very exciting, very encouraging. But if you look at our envelope for a start, like we've clearly got the evidence through the backlog and order intake in the insulated panel product strand. And obviously, our entry into roofing, which has been both acquired and now increasingly organic, predominantly in North America, which just hasn't kicked in at all, and that's something for second half of this year and into 2027 and beyond. And that's going to be significant.

And as I say, clearly not evident just yet. We've got another dimension which is happening, and I think it's going to be significant and here to stay for some time, which is inflation. So there are all kinds of trade barriers coming up left, right and center. The result of that is that our big inputs like steel and chemicals are going to be subject to significant inflation in the current year, it's happening, and we see it happening consistently quarter-by-quarter into the future. And as odd as that sounds, that actually is a very positive dynamic for the group once you get past the lag phase. And that's going to be, I think, more and more materially evident as we go through even 2026.

And then beyond that, which affects both Advances and the Envelope business is just this truly seismic transition that's going on in the tech sector and in particular, around the move towards AI. Like as a group, we are positioned right at the core of all that, and that's both internal and external. And just when you just piece all that together, and you consider the level of tangible engagement we've got with our client base, which is now much more long term because of the nature of these projects. The pipeline we're looking at is actually just really extraordinary.

On the product evolution piece, we've obviously been able to keep at or above the pace of that moving from what was just a simple access floor, which was giving us exposure today to going back 20, 25 years, in fact, like now the product portfolio is just not comparable to that, and it continues to expand. So in terms of us being able to keep the pace of that, all I can say is the evidence of the past is that we have been able to do that.

We're able to pivot and move with whatever the technology and the solutions have been going all along. And I'd be extremely confident that we continue to be at the forefront of that with our clients. And confidence around the EUR 600 million EBITDA, yes, we'd be at least as confident on delivering that as when we kind of mentioned it 3 or 4 months ago. And that's obviously whatever kind of 4- or 5-year target. But the trajectory towards that is very, very evident.

Our next question comes from Cedar Ekblom from Morgan Stanley.

I've got 2 questions. One quite simple one. On your free cash flow, you had quite a big swing in working capital in 2025. I wonder if you could just give us a little bit of commentary around the working capital investment there. Is that simply associated with new plants? Or is there something else that we need to think about there? And then how we think about that sort of working capital development into 2026.

And then secondly, on your roofing portfolio, can you talk a little bit about your decision to invest beyond these 2 initial assets? I believe that recently, the commentary was around making a third investment in residential roofing. It would be good to just hear how you're thinking about that cadence. And then beyond maybe the next 2 years or so, can you talk to us about what your ambition is in the U.S. roofing space? You're a new entrant. There's a lot of concern around disruption to pricing, et cetera. And I'd just like to hear how you would like your business to be positioned towards the end of the decade?

Cedar, just to take the free cash flow question first. Over time, a highly efficient measure for us is a working capital to sales ratio less than 12%, and that's been the measure of efficiency over time. At the end of 2024, it was 11.4%, which was particularly low and particularly efficient for a number of reasons. It was 50 basis points higher at the end of December 2025 to 11.9%.

That's our assumption as we go into 2026 in terms of average working capital levels. It can be -- it can vary for a whole number of reasons to within 50 or 60 basis points, but 11.9% is what we see the profile of the business. The -- specifically, about half the move during 2025 was associated with the timing of acquisitions and the working capital move between the date of acquisition to year-end. So that will naturally normalize as we move through 2026.

And then Cedar, on the roofing side, we've got the first 2, as you mentioned, Oklahoma and Maryland, they're happening as planned. On the commercial roofing side, we will be moving to a third facility as well in the not-too-distant future, more than likely in Utah. So that's going to give us really an ability to service the market pretty much nationally. And as you mentioned there, our intended entry into the resi side, that's kind of always been on our radar. It won't surprise you to know that we've been looking at acquisition opportunities on that side as well. It's a huge market.

There are tens and tens of facilities around the country and us entering with one will hardly even be noticed. But obviously, we've got to step into it at some point. That clearly, just by the nature of the size of the project is more long term, probably more like a 3-year project. And as you know, that side of the roofing market is pretty challenged at the present time, but that's just a moment in time. So we just see it as part of the wider roofing portfolio longer term. How will be received or what our success rate will be, that's all TBC, but we haven't failed yet.

In terms of disruption, market pricing, it's not something I'd be particularly concerned about. It's a huge market. It's a growing market on the commercial side. We would expect that certainly in the earlier years that our capacity additions will be readily absorbed by the general pace of growth in the market. And our previously stated ambition of getting to a 15% share of the addressable side, bearing in mind, we don't want any presence in the EPDM market or the bitumen market. That remains our ambition, and we have every confidence of succeeding in getting there.

Our next question comes from the Florence O'Donoghue from Davy.

I have a couple of questions. I might just ask on Advances. First of all, just in terms of the order book, how much visibility that gives you when you talk about it being the intake levels doubling and just generally, the conversion of an order book, is there a long time lag, just the kind of dynamics of how that works. And then the second one I might ask is just -- you mentioned in the document about the boards business in Europe in terms of capacity management and actions you've been taking. Just a little bit more color on that would be very much appreciated.

Yes. So just on the Advances backlog floor, it's approximately 9 months, but it's actually becoming even longer. So it's getting larger and longer. And then we would have very solid engagement of work right through '27 and even into '28. Now that's obviously not -- they're not purchase orders. And so not entirely bankable. But on the basis of the type of engagement we've had with these end clients going back, we'd have a fair degree of comfort in that work coming through.

And none of that will come as a surprise when you look at the general scale of investment into AI. It's only a tiny little bit around the edge that we're after. And in terms of the board capacity, we have been -- it's obviously not a huge part of the group any longer. It's become overpopulated, to be frank, particularly in Europe, largely granted by Brussels, which is completely daft, but that's the situation we've got. So it's become unattractive in many markets. We have invested in the -- probably the finest plant in the world in Winterswijk in the Netherlands, huge capacity.

And what we're on course to do is to really kind of gear up on that facility and get out of lesser performing more niche manufacturing plants around. So Finland, we've exited. Sweden, we're in the process of. We have a facility in France that we're not starting up, and we're likely to take out of commission another facility somewhere in the middle of Europe. And like I say, really just gear up on one core plant in the Netherlands and just make that work hard.

But importantly, we're going to be repurposing this capacity. It's not going in the bin or going to be growing cobwebs. So at least 2 of those lines I've just mentioned are going to be -- one of them is brand new in Rian in France that like I said, we're just -- it's not wise to start it up. It's going to be going into the roofing sphere in the U.S. and one other of the European facilities is likely to be Utah destined as well. So we just see a better future for those assets in that market, and that's kind of what we're about doing.

Our next question comes from Arnaud Lehmann from Bank of America.

A couple of questions on my side. Firstly, on Advances, obviously, you decided not to IPO the business. Can you confirm that this is now a closed idea and that you're going to keep 100% of Advances and obviously keep the full consolidation of this high-growth business? And secondly, just a follow-up on U.S. roofing, as you know, there's been a decent amount of consolidation and M&A activity in the distribution side of it. Is that an opportunity for you in terms of the new owners of these assets are maybe more open-minded to take on your products? Or does that create new challenges.

Great. So Arnaud, yes, the Advances IPO idea is put to bed, that's it. We're retaining 100% and moving on. That is that. It was a fantastic exercise, very interesting for us as well. But that's where we've ended up. In terms of the U.S. roofing, yes, there's an awful lot of moving parts on the distribution side, which to be honest, it's neither positive nor negative for us because we're starting from 0.

So it's opportunity one way or the other is the way I would characterize that. Bearing in mind, by the way, that we're obviously through our Insulated Panel business a direct-to-market model. So our relationships are with specifiers, delivering direct to site and invoicing contractors is our primary presence in North America. So we're going to be multi-stranded in terms of how we approach the market, which we're already doing. So distribution, we see as a route as opposed to the route. And it will take us a while to find our feet, but we have a blank page and we're looking forward to it.

Our next question comes from Elodie Rall from JPMorgan.

My first question is actually going back on Q4. If you could get us maybe a bit more color on the organic growth for both businesses, price volume, that would be helpful. And my second question is going back on U.S. roofing on '26 guidance, what do you have with regard to that part of your business? And how should we model start-up costs as the plants are ramping up, please?

Thanks, Elodie. I'll take those questions. Firstly, as it relates to Q4, I mean, as we've said before, we're -- our business ought to be judged over a 12-month period, you get ebbs and flows through various months and quarters. We guided in November that we would do approximately EUR 950 million of trading profit, and we came in at EUR 955 million. I think it would be fair to say as well that our intake in Q4 was strong, both within Envelopes and Advances such that we ended the year on the panels dimension to envelopes with the backlog 8% ahead. So that did build through Q4.

And as we've highlighted previously, the intake in advances was strong as well, both in Q4 and beyond that. As regards to the components of the growth into this year and the 1050, since we gave the guidance of 1050 in November, the FX headwind has become steeper. Weather has been more acute in the early part of the year. Notwithstanding both of the factors, we're still -- we still have a lot of conviction around the 1050 given the momentum in the business. Specifically within that, there's about EUR 30 million of scope in terms of the run rate annually of acquisitions we've already made. So they're the constituents of that.

Our next question comes from Yassine Touahri from On Field Investment Research.

I think the main question I would have is that what kind of sequence of organic growth do you see throughout 2026. I think the organic growth was very slow in 2025 in H1 and H2. I understand that the first quarter will be a little bit slow as well. Do you see an acceleration for the rest of the year? And it would be great if you could give us a little bit of more color on the element of the growth in trading profit. What is scope, what is organic, what is FX.

Yes. Just to deal with the last part of your question first, the scope is about 20 -- sorry, EUR 13 million in terms of acquisitions that we've already made and annualizing that through 2026. FX at current spot rates, so we can only assume what's out there at the moment is broadly a EUR 17 million or EUR 18 million headwind for '26 versus '25. Much of that is in the first half because the euro-dollar rate really moved in a pronounced way from the second quarter.

So much of that is the first half. As we've highlighted, Q1 is likely to be soft enough for the early part due to weather. But we -- given the backlogs that we have, we see momentum picking up considerably from March onward. And it's always difficult for us to kind of trend things from quarter-to-quarter. But over the course of the year, we're absolutely poised for decent growth.

Our next question comes from Pujarini Ghosh from Bernstein.

So going back to the roofing in the U.S. So could you talk about the progress on the build-out of the plants? And you just highlighted that potentially the contribution to the P&L in 2026 is not that material, but then how should we expect that to progress in 2027? And also regarding your approach to commercial roofing going greenfield and then potentially considering M&A for residential roofing that you just talked about. What is the difference that you see in the market, which informs the difference in the way you're considering entering the market in these 2 sides of roofing. And my second question is a little bit broader. Could you talk about your exposure to OpenAI and any potential opportunities or headwinds you see in the medium to long term?

Pujarini, thanks for the questions. Just on Roofing first, to be clear, we're leading out with an organic investment. We've said we're keeping our options open with regard to potential M&A. But at the moment, the investments in Oklahoma and Maryland are organic investments. Similarly, on commercial, when we move towards the West Coast, that will be organic as well. And as we appraise and go after the shingles market, that's again an organic investment. None of that precludes M&A, but we are leading out organic for the time being.

Yes. And as regards to the broader question of exposure to OpenAI, I guess, AI, never mind OpenAI, just AI itself. It's -- like what's going on is -- there's no other word for it, except extraordinary. And yes, our exposure to it is extremely significant. And honestly, like we've had -- we've seen exciting times in the past and growth in Kingspan, obviously, over the years. But in terms of what we're looking at for the next number of years, like who can see way beyond. We're kind of looking at activity levels just way beyond growth levels that we've ever experienced in the past. So our exposure to it is, yes, very significant.

And the Roofing profit contribution in 2027, if you have any indication?

I mean, we should see sales activity from the end of this year in Roofing and will ramp up through 2027. Trading margins in Roofing will still be single digits in 2027, but building out to group average rates into '28 and beyond, and that's assumed in our forward guidance. At this stage, we would expect sales in the U.S. in Roofing to be somewhere in the region of $150 million to $200 million in 2027 and building out to $300 million to '28.

Our next question comes from Julian Radlinger from UBS.

Two from me. So first of all, the stronger or the very strong order intake in advances year-to-date, that's obviously similar to what we've seen from many other data center exposed players. I suppose why might that not lead to upside to the EBITDA guide for Advances for EUR 300 million that you gave a few months ago. Is that because you're basically sold out for 2026 already and that order intake translates more into 2027? Or what are the moving parts here?

And then second question on inflation. So you called this out explicitly. Is that more steel or MDI that you're seeing just because I'm looking at MDI prices, they were actually -- I think they're actually down year-to-date in the U.S. So is it more about steel here?

Okay, Julian. So yes, just on the Advances EBITDA, so like that's progressed. If you say -- if you go '24, '25, '26 and it's largely organic, it's kind of EUR 180 million, EUR 230 million, EUR 300 million. So that's obviously pretty lively. So I guess in all of that, we were indicating that it was going to grow significantly, and I think that's kind of -- that qualifies as significant. But we're not going to hold the business back. And the EUR 300 million number for this year would be a minimum, actually, to be honest. So let's see how that progresses.

And then in terms of the other point was inflation. So steel by far and away, like it's multiples of size and impact versus chemicals, not just MDI. So we do see it has been predominantly steel. It's largely as a result of protective measures all over the place, and it's starting to kind of jump ahead now. MDI, whatever MDI is doing in the U.S. just spot, I wouldn't be particularly -- like for a start, our consumption in the U.S. would be tiny by comparison to Europe. So -- and in Europe, it's definitely trending upwards. And if it's not, I'll just have to speak to the procurement guys because that's the message I've got.

Our next question comes from Chase Coughlan from Van Lanschot Kempen.

Just 2 quick ones. Firstly, could you provide a bit more color around your pricing strategy for this year? I mean you just discussed raw material changes, but also in the context of potentially wage inflation, what sort of pricing measures you're taking throughout the course of '26.

And then the second question going to Advances. Obviously, there was sort of somewhat of a rebrand over the last few months. I think it's likely to cause some more traction commercially. I'm just curious on what you're hearing from competitors, especially given the more modular solutions you're offering? I think Vertiv was quite bullish on this in their last results. So I'm just curious on what you're hearing there and how you're seeing that rebrand play out with customers.

Yes. So in terms of pricing, like our approach successfully at all times has been just to pass through. So whatever cost inflation we're seeing we have all always succeeded in getting it through to market. That's over decades. So we don't expect that to really be any different. From a wage inflation perspective, that's not a particular kind of dial mover for us. The materials would be much more significant and much more public and obvious in terms of our ability to actually pass it through as well. So that's kind of our approach to that.

In terms of the positivity that Vertiv have been propagating, we clearly would agree with that. We see it. We're growing into it. We're coming from opposite ends of the spectrum, if you like. We're literally coming from the floor up through the white space into gray. I'd say predominantly, Vertiv is at the higher tech end, very deep in gray and to some extent, kind of moving south into the white. So I think yes, there's certainly enough for all. But I think, yes, we'll be looking -- our Advances business will be increasingly looking more like it, I'd say, more so than the other way around.

Our next question comes from Priyal Woolf from Jefferies.

The first one, I guess, is just a clarification just on the U.S. residential roofing. I appreciate you talked about this being something that you're looking at more in the longer term. But in your usual slide on global expansion, you've talked about a plant in Georgia in 2028. So I just wanted to check, is that locked in? Or is that sort of still TBC?

And then the second question is just in terms of capital allocation. You've reiterated that you're looking at the EUR 650 million share buyback in tandem with other growth opportunities. Should we interpret that as you potentially don't fully reach that EUR 650 million level if you see bigger or more interesting organic and M&A opportunities. Or you think you'll get there regardless and it's more just about the timing, which is the uncertainty.

Okay, Priyal. So just on the first point, that remains our ambition and our plan. Like that clearly can flex. It's not going to come forward, but it could push out. And that will depend largely around timing of machinery, plant construction, all that kind of stuff as well as market conditions. We clearly want to -- at whatever point we enter that site, we want conditions to be as favorable as possible. And naturally, right now, it's about as bad as it's been in recent years. So thankfully, it's not right now that we're entering because they're all under an awful lot of pressure, as you know. But 3 years from now or whatever, that's some time out. And on the buyback...

Just on the buyback and capital allocation, generally, as we've said previously, we, at all times, compare opportunities that are external to Kingspan versus buying ourselves in terms of the relative valuation of both. We're fortunate that we have a healthy pipeline of development opportunities within the business, both organic and inorganic. And we'll continue to get that balance right and assessment right as we move through the year. We've done about 23% of the announced program, and we'll just see how that evolves through 2026. .

Our next question comes from Harry Goad from Berenberg.

Just a question on the Panels business, please. Can you give us a rough idea of what the annual increase in new capacity is? I appreciate you probably can't be too exact year-to-year, but in terms of the percentage number on average over the years, just to think about the sort of steady increase in contribution from that division.

I guess it's difficult to give a global answer to that in terms of capacity is pretty regional and localized. We're addressing different markets in different parts of the world. Naturally, we've seen very strong intake in a lot of the regions that we've entered over the last decade, in particular, like Latin America, APAC, all of those, we've put down a lot of capacity in recent years, but we're now seeing the fruits of that come through intake and orders. So as I say, it varies very significantly from one region to another and capacity is regional.

Rather than think about it as one lump sum, Harry, if you go back to that Slide 16, just think about the average construction cycle and the investments that we're making, that feeds the 3% outperformance very consistently.

We currently have no further questions. This concludes today's call. Thank you all for joining. You may now disconnect your lines.

Great. Thanks. Fantastic. Thank you all for joining, and we'll be in touch over the coming days.

Good morning, everyone. It's David O'Brien here, Head of Investor Relations. And thank you all for dialing in on reasonably short notice.

This morning, we're joined by Gene Murtagh, Group CEO; and Geoff Doherty, Group CFO. In a moment, I'll hand you over to Gene for an overview of this morning's announcement, and then we'll host some Q&A.

But before I do, just to note, this morning's statement has outlined what is a potential process that we're exploring. And while very exciting, there are obvious limitations on the amount of detail we can give this morning, so bear with us.

Also, I'll make the point, it's been 6 weeks since we released our interim results, and we're about 6 weeks from our Q3 trading update. So we will not be providing any comments on current trading. All told, we would expect to keep you a maximum of 30 minutes.

And with that, I'll hand over to Gene.

Excellent, Dave. Thank you very much, and welcome, everybody, to this morning's call. Thank you for joining. We'll get straight into it. You've got a presentation and no doubt you've all flicked through.

But just as a background to that, we've been operating in the data center market for over 20 years now in some form or another. And clearly, that's been growing a lot in recent years.

And a couple of months ago, we created two new segments within the group, one of which was Advanced Building Systems, which going forward will be known as Advnsys without the A in the middle. And the reason for this, as we explained at the time, is that we see these businesses coalescing progressively and rapidly, and we want to capitalize much more meaningfully on the tech sector opportunity in particular.

If you just step back from that, the -- about 40% of Advnsys' current earnings are derived from critical bespoke infrastructure into the tech sector and particularly into data. And we see that portion of this business growing to around 75% within a 3- or 4-year period. And clearly, we expect that 75% to be of a much larger absolute number also at that point.

Particularly, we've been strong in the white space to date in data, but we are rapidly getting into the gray space, which brings some more complexity, but an awful lot more opportunity and value for Kingspan as well into the future. The opportunity is really enormous, and it's been erupting before our eyes at a pace that's way beyond what we expected even actually a couple of months ago.

And just overnight, you'll have seen, just as it happens, the announcement from NVIDIA and OpenAI, which is just another of these gigantic announcements of $100 billion investment, particularly into the data market. And that's the type of thing we're really dealing with and referencing with regard to this particular announcement.

We have a global footprint already that indeed you'll know about, but we're in the process of entering India, Vietnam, Brazil in this business segment.

And I'd say, critically, we're moving ahead with a gigantic assembly site in Kentucky, U.S.A., which will produce hot aisle containment solutions, liquid cooling solutions and also air handling units, which is a sector that we've entered recently through the acquisition of Sandometal in Portugal and also to some extent, Q-nis in Ireland.

We see the AHU segment and the CDU areas being areas that will present very significant growth opportunity for Advnsys and indeed for Kingspan well into the future.

So this site in the U.S. is also on top of the already commissioned world-scale facilities in Virginia and more recently in Arkansas, all of which are filling up rapidly. And as we've referenced before, we're obviously building at a very significant pace, and that's to keep up with this burgeoning demand from all of our clients.

So in essence, we feel that the time is now to shine a greater light on this business and on this opportunity, both as a potential stand-alone public organization and through Kingspan as its long-term parent.

If you look at the crude numbers, and it's on Slide 7, I think, the past year -- the past 10-year EBITDA CAGR for the business has been around 21%. And we expect the 2026 EBITDA of the business to be in the region of EUR 300 million.

And we're also acutely cognizant of the fact that relevant sector peers, and these are not building sector peers, they're tech end peers, that are supplying the data center market, are trading at and above 20x EBITDA. And hence, clearly, the reason and the time for focusing on this potential IPO.

The aim is to fully explore going public in Amsterdam. Two global investment banks have already been appointed to jointly lead the process. And if successful, we expect to retain a shareholding of around 75% and continue, obviously, to consolidate Advnsys into Kingspan Group as an overall.

So that essentially captures in summary, the background and reasoning behind this, and we'd be delighted to take all of your questions.

[Operator Instructions] Our first question today comes from Shane Carberry from Goodbody.

Just two from me. I guess just with the figures that you've just given there, Gene, we're thinking about a business that could then be worth over EUR 6 billion, I suppose. With that in mind, could you give us a little bit more of a flavor, one, in terms of a bit of a reminder in terms of the complementary nature of kind of Data Solutions in the Light, Air + Water business?

And then two, when I think about future product evolution in this business generally, how should I be thinking about things going forward and other product categories you could potentially get into?

Okay, Shane, thank you for that. So in terms of the compatibility and the growing, let's say, the coalescence of the businesses, that's around a couple of areas. Obviously, as part of what was the Light, Air + Water, air is an area that's been obviously focusing on ventilation for some time.

So a very significant portion of that business is already in parts of ventilation. And both this and what was the Data Solutions business have effectively, as it happened, just ended up essentially chasing the same market to a large degree, some of which is for the data center opportunity and some of which, very important, is for non-data.

Because obviously, we need a business that services markets for the very long term that's not necessarily tech linked. So they've been growing progressively into the same area, number one.

I'd say secondly and very importantly, around 20% of what was the Light, Air business is actually in service. So annual maintenance of all types of systems. So that's in excess of EUR 200 million of business, mainly around Europe. So this is a very particular skill set that we see as playing a very important role in the maintenance of data center solutions as well into the future.

And as I've just said, that's a skill set that lies within that business, not what was previously our Data Solutions business. And it's an area which is high margin and critically important for the longer term. So they're kind of the two main areas where we see the businesses joining forces most prominently.

And then in terms of product evolution, we've -- like we've gone from -- and there's a slide on it, number David will point it out to you now. So we entered the data market via the access floors. Then it was direction layered through the floors. Then it was into the hack area, which was stick built to start with, then modularly built.

Now we're integrating water cooling through manifolds into the hack. So we're doing that retrospectively in existing data centers. We're also doing it in new data centers as a complete unit. And we see that -- for a start, we see that as being an area that we're pretty embryonic in and the opportunity is enormous.

And then, as I mentioned, the air handling space is one that we've more recently entered, and there, very significant opportunity, both retrospective and in terms of new build. Like I say, very early days. And to be honest, Shane, just between even those ones I've just mentioned at the latter end, the opportunity to capitalize on that globally is gigantic.

Our next question comes from Ephrem Ravi from Citigroup.

I appreciate it's early days, but again, to -- while doing the IPO, are you looking to raise new money to accelerate the growth in this business? Secondly, on the Kentucky plant, my understanding was that, that was more to do with roofing? Or is it kind of being transferred into Advnsys?

And then also on the future outlook in terms of the data centers, is there transferability of these product categories to other applications other than just data centers?

Yes, absolutely. So -- well, for a start, from a capital raise perspective, let's see how this all goes and what the potential valuation is. But the intention for now is to flow 25% of it, and that money clearly comes into Kingspan Group.

Like very broadly speaking, if that was successful, both Kingspan as the parent and Advnsys would end up essentially with zero debt and obviously, huge runway for both the businesses to take it from there. So at a crude level, that's kind of our thinking.

In terms of the Kentucky site, that was never for roofing [Audio Gap] Oklahoma [Audio Gap] on top of Virginia, more recently, Arkansas and then this site, and that's very specifically around the whole Advnsys opportunity and not to be mixed up with roofing.

And then the final question was transferability, absolutely very important. That's -- if you look at the data business and the light and air business, one essentially has been servicing what we call regular markets and the other has been very specifically the tech sector.

And we see a number of the solutions here as having application in the world outside of data as well. And we believe long term, that's actually critical for balancing the business as well.

Our next question comes from Flor O'Donoghue from Davy.

Just I think one for me really. Just wondering on the CapEx requirements for Advnsys in terms of maybe the kind of the more bigger projects that may be kind of further down the line and also just the kind of recurring level of CapEx that's needed to run the business.

Yes. All right. So we've been -- we've set very demanding hurdles and returns for all of our organic CapEx in the data side of the business. We've been getting and expect to get returns in literally a 2- to 3-year period. And that we expect to be the case into the future for all of the investments that are underway at present. So I don't see anything that's going to change that.

But beyond that, clearly, like Kingspan itself, there's a very significant development pipeline, specifically into the Advnsys opportunity as well. And that clearly is much more of a capital consumer than the organic CapEx. But again, if we end up with a clean slate in both the parent and in Advnsys, I think our ability to develop at a rapid pace will be significantly enhanced.

Our next question comes from Alexander Craeymeersch from Kepler Cheuvreux.

Alexander from Kepler. Just a small question. I was just wondering about -- certainly, there are going to be some intercompany sales. I was just wondering how will you ensure that how these transactions will kind of happen at arm's length.

Can you repeat that, Alexander?

Well, I assume that there's going to be some intercompany transactions. So I'm just wondering if you -- how will you ensure that this transaction will happen at arm's length?

Alexander, there won't be actually intercompany. So just like right now, the Advnsys businesses don't intertrade to any significant degree. I mean small millions between that and other parts of Kingspan, we wouldn't see that being any different.

Our next question comes from [indiscernible] from JPMorgan.

I think you mentioned helping the debt profile of both companies through the equity raise. Is this kind of in anticipation of any large-scale acquisitions for Kingspan Group or just more of you seeing good opportunities going forward?

Yes. I think it's actually only a byproduct rather than a reason to be honest. But as we've signaled before, there's always a bigger pipeline of opportunity than we have the ability to execute on. And that's more from financials than from a physical perspective. So that's not any different necessarily, but naturally, it will put us in a much stronger position for execution on all fronts.

[Operator Instructions] Our next question comes from Pujarini Ghosh from Bernstein.

So one question on the listing. So basically, why did you decide to list in Amsterdam? And do you have any expectations of the timing of the potential listing?

And the second question is on the medium-term outlook for Advnsys. So in the past 10 years, you've grown at 16% and EBITDA has grown at 20%. So what are your expectations going out to 2028 or 2030 in terms of top line growth and margin expansion?

Just on the first one, I would say that we would expect that growth rate to continue at least at that pace.

And just on the listing choice, at this early stage, we've done an assessment of the various alternatives that would be available to Advnsys, including the U.S. And our strong preference is Amsterdam based on that. It's a highly liquid market.

There's over 300 companies trading on the exchange. It has IFRS from an accounting perspective, which makes it a very straightforward process. There's no stamp duty in that market as well, which makes it an easier environment for investors from a transaction perspective.

So for all those reasons, it would be a very natural home for Advnsys. From a timing perspective, we're looking at Q1 2026, which is another benefit of Amsterdam as well as a listing location that will accommodate an earlier timetable than perhaps other markets.

Our next question comes from Glynis Johnson from Jefferies.

Two, if I may, and forgive me, they might be quite basic. I wonder if you can just talk us through the geographical breakdown of the business that you're listing, just how much is U.S., Europe and so on.

And then if you can just talk about expected corporate costs. Obviously, there's cost of listing, how should we think about that for business you're listing, but also in terms of the business that will remain because I assume there will be some duplication that's required? So yes, if you can help us with that, please.

Yes, absolutely. So in broad terms, around 45% of the current Advnsys business is in the U.S. the rest being Europe and rest of world, which is particularly Southeast Asia, Australia at the moment.

And it's probably reasonable to expect that 45% U.S. to actually increase significantly because it's there that we see the gigantic wave of investment. Obviously, it's happening elsewhere, but in the U.S., it's really other level. So we probably see that going well beyond the 50% over the next 3 to 5 years.

As regards to corporate costs, I mean, we would expect Advnsys to have limited incremental corporate costs, bearing in mind all of the operating and administrative infrastructure is already within those businesses. So it ought to be limited in quantum.

Thank you very much. So -- and over a short notice, I really appreciate you all joining, and I'm sure we'll have opportunity to catch up with you at a later point. But bear in mind, really, this is the beginning of the process, and we need probably the next 4 months or so to fully explore and see it through. Thank you.

Thanks, everybody.

Thank you, everyone.

Hello, and welcome, everyone, to the Kingspan Half Year Results 2025. My name is Becky, and I'll be your operator today. [Operator Instructions]

I will now hand over to your host, Gene Murtagh, Group CEO, to begin. Please go ahead.

Thank you, Becky, and good morning, everybody, and welcome to our H1 results call. Lots to get through today.

So we'll take you first of all to Slide #3, please, titled H1 '25 in Summary. So just on that, our revenue came in 8% ahead of prior year, EUR 4.5 billion; trading profit, up 5%; EPS of EUR 1.72 is up 4% on a pure basis. And as always, on our greenhouse gas emissions, a tremendous progress, down 63% in real terms versus 2020.

In terms of just picking out some of the kind of key points of the first half, I think it's important to point out that it has been and continues to be a pretty unforgiving environment. And I think in the context of that, our catch-up in the second quarter really reflected quite a resilient performance versus what was a very slow start to the year.

Our reported margin is down slightly to 9.8%. But in fact, that masked what is an underlying increase in the margin by 20 bps. The dilution relates in the large part to Nordic Waterproofing, which is a heavily second half business. That was pretty predictable, and we would expect it to deliver much more strongly, obviously, in the second half. But we have to bear that in mind for next year as well. It's a big business, and it's highly seasonal. So that's really the issue around the margin reduction.

We've introduced 2 new segments to replace what was 5. This really is to reflect increasingly how the business is being run and the closeness of what were those older segments in terms of how that's going to function going forward.

In summary there, the Insulated Building Envelopes business revenue increased by 8%, which was largely around acquisitions, including Nordic. And the Advanced Building Systems business grew strongly, largely around the continued progress in the data segment. So revenue there grew by 12%, and that was largely organic.

We've announced this morning as well as share buyback of up to EUR 650 million over the next 18 or 24 months. That doesn't interfere, in any way, to be clear, with the development agenda that we've been pursuing forever, basically. And our pipeline on that front continues to be as full and healthy as it's ever been.

In terms of investments made in the first half, EUR 400 million was the total in both acquisitions and organic CapEx. And on the acquisitions side, the chunkier part of that really was the continued purchase of Steico shares and the earnout and also just finishing off on the acquisition of Nordic Waterproofing. And then ongoing bolt-ons, some of which we've even announced since the period closed.

So that's it in a nutshell, and now I'll hand you over to Geoff.

Thank you, Gene. I'm moving to Slide 13, financial highlights. So group revenues, a little over EUR 4.5 billion in the first half, up 8% at a headline level or, at constant exchange rates, up 9%. Trading profits of a little under EUR 443 million, up 5% or up 6% at constant exchange rates. Earnings per share progressed by 4%. The interim dividend is in line with the first half of last year. I'll come to the constituents of cash flow shortly, with a modest free cash outflow in the first half of the year.

The group's trading margin on a reported basis is down 30 basis points. But actually, the like-for-like trading margin, as Gene outlined, is up by 20 basis points, with the reported margin solely being down due to the initial consolidation of Nordic Waterproofing in the first half of 2025.

Our net debt at the end of June stood at a little over EUR 1.9 billion, and I'll come to the debt movements in a second. And our net debt to EBITDA, 1.74x, so comfortably in investment-grade territory.

Moving to Slide 14, just to bridge sales and profits in the first half. Currency was a modest headwind in the first half. That will be a steeper headwind which is baked into our guidance, but it's a steeper headwind into the second half given the exchange rate movements since the beginning of the year.

Acquisitions contributed EUR 358 million of revenues half year-on-half year. And you'll note from the right-hand side of the page, net, they delivered a little under EUR 17 million of profits in the first half. So initially dilutive. Clearly, over time, they'll progress. And it also reflects a strong element of seasonality, particularly in the Nordic Waterproofing business, which is the significant component of the acquisition sales.

So underlying sales, modestly ahead in the first half. And from a profit perspective, you'll see the currency was a headwind of about EUR 3.5 million. We would estimate that will be closer to EUR 20 million on a full year basis for FX in 2025 versus '24, and that's factored into the approximate EUR 950 million that we've guided. The underlying profitability, up slightly year-on-year, contributed about EUR 8 million additionally to profitability.

From a geography perspective, that's set out on Page 15, no significant change in the geographic profile of the group, first half '25 versus first half '24. You will note that Central and Northern Europe was up by 15%, and that largely reflects the consolidation of Nordic Waterproofing.

And I'd also draw your attention to the difference between the absolute change and the constant currency change in the Americas. So at a headline level, we were ahead by 13%, but on a reported basis, ahead by 9%, and that's reflective of exchange rate movements in the period.

Turning to free cash flow on Page 16. I would say a free cash outflow in total for the first half. It's worth highlighting that cash generation of Kingspan is typically very second half weighted. Our working capital position is higher in June than it is in December.

Our working capital outflow was EUR 288 million in the first half of this year. The working capital-to-sales ratio, up 13.1%, was 120 basis points higher than the June position of 2024. We fully expect that to unwind in the second half. So there will be a reduction of -- or an inflow of EUR 150 million on the working capital line in the second half associated with that. It's just a point in time.

Our net CapEx organically was EUR 152 million in the first half. And our CapEx guidance for the full year is EUR 320 million. And tax was an outflow of EUR 69 million in the first half, which was EUR 40 million lower than in the first half of last year.

Reconciling net debt on Page 17. The combination of acquisitions and deferred consideration was EUR 246 million. That, as Gene outlined, was the -- taking the full ownership stake of Nordic Waterproofing, buying an additional 10% of Steico as well as completing the earnouts in respect to Steico dividends, EUR 52 million. And net debt ending the period of EUR 1.915 billion. Ignoring development, our plan is that we would have a net debt figure predevelopment and prebuyback of EUR 1.5 billion by year-end. So we expect to generate significant cash into the second half of the year.

The strength of our balance sheet is highlighted on Page 18. Net debt to EBITDA, 1.74x. We have an EUR 800 million green revolving credit facility with a syndicate of global banks. That's fully undrawn and committed to May 2028, with outstanding private placement loan notes of EUR 1.477 billion and our debut public bond of EUR 750 million. The weighted average maturity of all of our outstanding debt is a little over 4.5 years. And our total available liquidity between cash balances on hand and committed undrawn lines is about EUR 1.4 billion. So that gives us plenty of development headroom.

The long-term value creation of Kingspan is set out on Page 19, which plots the growth in revenues, profitability and earnings from 2014 through to the end of last year. It is worth emphasizing that the guidance that we've issued for the first time this year, this is the first time we've actually prescriptively given guidance for 2025. If we deliver that, it will be another record year for the business, notwithstanding difficult end markets that we're currently dealing with and continue to grow profitability through.

So with that, I hand back to Gene.

Excellent, Geoff. Thank you. We're moving now to Slide 22, which is titled Outlook. So essentially, things have firmed up, as we highlighted earlier, from a very slow start. It's far from exciting, we'd have to add. It's -- as we said, it's still a relatively tough trading environment.

But we expect the Insulated Building Envelopes business to continue to benefit from structural growth as methods of construction move towards more energy-efficient systems. That's been clearly evident over many years, and it's continuing.

The Advanced Building Systems is probably going to accelerate in terms of its growth and opportunity, in particular, capitalizing on the tech sector as it seeks out really the best-of-breed solutions for hyperscalers worldwide. We're tone -- we're very well connected into that whole segment, as you know, and in fact, right across the product offering.

And I think very importantly, the backlog across the major businesses is ahead of the same point last year, which naturally does point towards a stronger second half. And the second half will be stronger than prior year as well.

The exchange rate environment is very difficult to judge. It's up and down by the week. So far, that's worked against us. Let's see how that pans out for the remainder of the year. But our best assessment of the outcome for this year as a whole is an operating -- or a trading profit of in or around EUR 950 million, which, if we get there, is about a 5% improvement over 2024.

And so that's it in summary, essentially. And now we're open to whatever questions you may have. Becky?

[Operator Instructions] Our first question comes from Shane Carberry from Goodbody.

The first question, just if you could expand a little bit on what you mentioned a moment ago, Gene, just in terms of the Advanced Building Solutions opportunity. And could you just talk about how kind of the product set has been evolving there and how we should think about the product set evolving into the future?

And then the second is just, I guess, we haven't caught up since you kind of made the decision to enter into the kind of shingles market in the U.S. Could you give us a little bit more color around kind of the rationale for that, how we should think about the competitive dynamics in that market as well? Would be really helpful.

Sure, Shane. So just on the Advanced Building Systems, the -- obviously, it's a very wide product portfolio, which is increasingly becoming exposed or exposing itself to the tech sector, which is obviously accelerating at a hell of a pace. And as that accelerates, essentially, the demand for energy conservation or management of heat becomes intensified, largely around AI, which creates basically multiples rather than percentages higher of the heat. And as a result of that, the solutions have to obviously be able to deal with that.

We've gone -- we're increasingly involved in air management within data centers. So we went from floors into stick-built HACs into modular HACs, now significantly into air movement around data centers. We're going to increase our exposure there pretty radically over the coming years. And then in terms of liquid cooling around this, you've got liquid cooling of the HACs, and you've got liquid cooling direct to the racks themselves, which we're at the very early stages of entering.

And all of that really presents a very, very significant opportunity for the group. And essentially, that's the direction of travel on that whole side of things.

On the shingles market, it's basically part of our whole roofing approach to North America. We've -- I think we've been pretty clear about what we're doing on the commercial side, which, by the way, is advancing very well, the plant in Oklahoma and in Maryland. And we're becoming increasingly encouraged by interaction from the market and the appetite for Kingspan into the business there.

And then shingles, as you know, is really around the residential opportunity. It's a highly consolidated, dense market, and we see an opportunity to basically enter by building. And then clearly down the line, that may lead to some activity beyond the build itself. But it's a very resilient market. It's probably 80-plus percent for the refurb. So it's got clear traction. And therefore, we're going to have a go at entering it.

Our next question comes from Cedar Ekblom from Morgan Stanley.

Can you talk a little bit about the largest business within the group, which is the panels offering? Maybe you can give us a little bit of detail on how you've seen your pricing, order intake developed in that product segment, maybe a bit of color across the regions, Europe versus U.S.

And then if we look at the key raw material inputs for that product category, we're not really seeing much inflation. I know that there's been some ambition to increase steel prices in Europe, but those don't seem to have stuck in the last couple of weeks. Can you give us a little bit of visibility on how we should think about the pricing and volume trends for that product category into the second half and then also how we should think about margins?

Yes. So just, like broadly on the intake side, we're up 5% or 6%. That's on a like-for-like worldwide. So all of that actually, given the fact that absolute construction is clearly negative in most markets, is pretty encouraging. And our order bank, as I said, is up encouragingly for the second half of the year as well.

Now it's obviously a different story and a radically different story by markets and by country. So probably we're seeing the U.S. has had strong activity, strong order bank, but it's not as urgent in terms of delivery requirements as we'd like to see it. Latin America is powering ahead, and much of Europe is reasonably encouraging, actually, probably outside of the U.K.

From a pricing perspective, I think stable is pretty much as we find it. You're right, there have been attempts to push steel ahead in Europe that are definitely faltering. So we don't expect steel going up in the near term. We've obviously got the whole chemical side of things as well, which varies a lot by geography, too. But from a pricing perspective, there is and is going to be more cost and, as a result, price inflation in North America. And that's happening for obvious reasons. And as always, we expect to be able to push that through and hold our margins pretty much around where they are now.

Our next question comes from Allison Sun from Bank of America.

I have 2 questions. So first, this EUR 950 million guidance for the full year '25, how should we think about the margin implied by this one?

And number two is on the share buyback. I wonder if there's any, I don't know, like pace you guys are expecting. Should we think it's a steady share buyback or maybe there's some acceleration? Yes.

Thank you, Allison. Firstly, on margin, what the approximately EUR 950 million trading profit implies is a group trading margin north of 10%, in the region of 10.2%, 10.3%. Very hard to be specific beyond that. We expect Insulated Building Envelopes to nudge a little over 10%, and Advanced Building Systems ought to be at or around 11%, just given the growth in that business that you'll have seen in the first half, which will continue into the second half. So we might reach the 10.5% that we had at a group level for 2024, but we'll be north of 10%.

And on the buyback, it's very difficult to predict. We judge that as we go along. It may be steady, it may be lumpy depending on what's -- how the stock is trading and what lumps are out there. It's -- just to be clear about this, it doesn't interfere whatsoever with the development agenda that we've had for a long time and we will continue to have, obviously, outside of anything very significant.

And our thinking around it all is essentially, we're buying and continue to buy assets in or around the rating that the group is at. And obviously, we know Kingspan better than we know anything else. And we're the best asset in the sector worldwide, and that's essentially our interest in doing it. So before anybody goes there, have we run out of ideas? Absolutely far from it. We've tons of ideas beyond this.

Our next question comes from Elodie Rall from JPMorgan.

A follow-up on the buyback, first of all. I was wondering what drove the rationale for the decision. I mean you seem confident about the growth pipeline. But is this really as -- do you see as much growth as you saw in the past? Maybe you can elaborate a little bit on what you see in the pipeline going forward versus what you've done.

And you've said that net debt to EBITDA is expected at 1.5x by the end of this year predevelopment, prebuyback. So where would you be comfortable to bring that leverage ratio to adding acquisition and buyback? So that's my first question.

And second, just on housekeeping. Could you give us the scope for the full year that you expect, the scope impact? And maybe, well, I'll stop here.

Thanks, Elodie. Well, firstly, on buyback. The -- deliberately, it is over an 18- to 24-month period. We have, as Gene has outlined, a very healthy and full development pipeline. So I'd highlight that we invested EUR 400 million in development in the first half of this year alone between earnouts and organic CapEx and acquisitions. So that pipeline remains healthy.

From a balance sheet perspective, predevelopment and prebuyback, we expect our net debt to be about EUR 1.5 billion at year-end, which actually is leverage of somewhere between 1.2 and 1.3x. So that gives us significant balance sheet headroom to be able to develop the business and indeed progress the buyback extensively.

We're strongly committed to our investment-grade credit rating. We're highly cash generative. We have a pretty low dividend payout ratio as well. So the lion's share of our cash flow is going to be invested in continuing to develop the business. So I think all of that is highly relevant in the context of how we progress both as we go forward.

From a scope perspective, we expect the M&A scope to deliver somewhere between EUR 35 million and EUR 40 million of profitability in 2025.

Our next question comes from the Flor O'Donoghue from Davy.

My 2 questions are as follows. First one is, I might just ask on the data side, on capacity, is there a risk of being capacity constrained? Just your latest update on capacity expansion projects, et cetera.

And then the second one is, I might just ask on U.S. roofing, just the initial feedback you've been getting from distribution partners or potential partners and maybe how you feel about the product and how you're going to differentiate the offering at this time next year once you're fully up and running with the new plants.

Okay, Flor. On the data capacity, we -- like, I suppose, a great problem we're having is that we were constrained, if you want to call it that way, by the speed at which we can actually build capacity. So that's really a superb problem. It's worldwide, but I'd say it's largely around North America in terms of just the intensity of the constraint. So we've -- the plant that we opened in the Northeast last year is literally full to the rafters 24/7 already.

We started production in Arkansas, which is running on a full single shift now, and actually demand is there to fill that completely 24/7 as fast as we possibly can. And we're now scoping out another location in the U.S. And that clearly -- like beyond that, we've acquired the RXL business in California which, product-wise, brings us into a new segment as well as giving additional capacity. And the same is happening in terms of expansion across Europe and Asia, where we expect to start production very shortly in Vietnam. That's to complement everything we're doing in Australia. So it's really very exciting. And as I say, we can -- as fast as we can build, we can sell. That's not an issue at all.

From the U.S. roofing perspective, first of all, the feedback is -- gets more encouraging by the week. We're having engagement clearly with specifiers, with roofing and main contractors and, obviously, with the distribution base, which in itself is actually going through a period of disruption. And I think that will become more and more disruptive as time goes on. So that whole environment kind of works for us. And as I said, the feedback has been extremely encouraging.

In terms of differentiation, we have kind of product and offering differentiation. Our focus is going to be on TPO and polyiso board as well as some other insulation types and then, after that, PVC membrane. We're staying away entirely from EPDM, which is a declining part of us. And obviously, bitumen isn't of interest to us in the U.S.

We're going to be introducing a QuadCore-based board as well beyond the PIR. That would be fundamentally differentiated from thermal fire circularity from all the existing products that exist in the market. That's probably 18 months away before we get at that, but very clearly on our agenda, and we would expect it to become a very sizable portion of the business the same way that it has the insulated panel offering.

And more widely than that, Flor, there's the opportunity to -- like America likes warranty systems. So roof packages is typically how things are approached. It's sold as a full warranty system. And we see the same on the insulated panel and basically on wall and façade applications. So we will very quickly be moving towards a combined offering of roof and wall and essentially offering the building owner a complete warranty on the envelope. And that in itself will be wholly differentiated from anybody else in the market and, frankly, the biggest opportunity we see in the U.S.

Our next question comes from Alexander Craeymeersch from Kepler.

So the first one would be that you mentioned some -- Western Europe as being short-term attractive, but yet you don't really see a significant growth in the first half of the year, year-on-year. What gives you the confidence to make that statement? Is that like the order book? Is this just a general perception?

And then the second question would be on the cautiousness of North America, where you say basically on the short term, it's optimistic but not flagged as such. So I'm wondering why there is that cautiousness embedded in that outlook. Is that only related to the FX headwinds? Or do you also see a change in order book?

So in terms of the Western European markets, Alexander, it's very mixed. Like we've -- like Germany and France, we'd be quite encouraged by an improvement, as we've highlighted in Central Europe. The U.K. is, not surprisingly, in an increasingly negative place, I would say. And then in Iberia where we've got a very strong and growing position, that's actually going very much in the right direction. So it's kind of a -- it's very mixed, but on the whole, we wouldn't feel too bad about Europe in general. That's what I was getting into the nitty-gritty of all the different product areas.

And in the U.S., like the issue in the U.S. is you've got tech-related segments which is utterly detached from the realities of normal regular markets. So it's just firing ahead, I would say, at a totally unbridled pace. And then you've got the regular business, which is very shaky in general, never mind in Kingspan. And that's -- I think that's clear from all the indicators and reports that you would see. And essentially, that just comes down to the level of uncertainty that there is in the market. And that's all we're seeing basically.

Our next question comes from Pujarini Ghosh from Bernstein.

Can you hear me?

We can.

So going back to the U.S. roofing market, I mean, you've just -- I mean you're expanding greenfield, and you'll have some components of the entire roofing system as they call it. So what are your plans of kind of trying to get all of the elements that are required for the system selling? Do you plan to, over time, kind of build up all of these elements on a greenfield basis as you're doing now? Or potentially down the road, do you think there could be opportunities of acquisitions as well, I mean, which is obviously something that you've done very well in the past in other parts of the business?

So in terms of the offering, it's kind of like we highlighted before. It's around membrane, insulation, vapor barriers and the accessories that go along with all of that. And it's focused on TPO and PVC membrane as the outer layer. So we're brownfielding these in Maryland and Oklahoma and likely in Georgia next.

And in terms of the opportunity for acquisitions, yes, those exist. Some of them reasonably large scale, but plenty of bolt-on opportunity around the edges to enhance the overall offering that we will be bringing to market. So I think it's going to be a combination of. And as you rightly point out, we've been successful in bolting on acquisitions into the business, and we expect to do the very same in this sector in the U.S.

[Operator Instructions] Our next question comes from Yassine Touahri from On Field Investment Research.

First, on your roofing expansion in the U.S., I understand that you're starting one plant in early 2026. You've got a target of $0.5 billion. Do you have any view of how much you can generate of this $0.5 billion in 2026? Is a couple of hundred million dollars realistic?

And the situation, I also understand that you're talking about QuadCore. Is QuadCore something that will be attached to a membrane? Or are you really targeting the world market and to try to replace traditional insulation with fiberglass in the U.S. with boards?

Maybe a follow-up question on the end markets. So I understand that the data center market is doing extremely well. Is there any way you can quantify your exposure of the group? And then if you can give a bit more color on the other market like warehousing, I understand in -- was under pressure and maybe stabilizing, distribution, logistics. It would be great to get a bit of a feel about where could we see a recovery after the uncertainties on trade abates.

So on the -- yes, so about $0.5 billion, but by the way, that's just -- that's the first 2 facilities. That doesn't include the shingles plant. That's -- we're making very good progress on scoping that out actually right now, like literally right down to site selection. So -- but on the industrial roofing side, yes, we will get going early '26. In fact, we'll be making products late '25. But that has to go through commissioning and testing and all the rest. Like $200 million is absolutely achievable in year 1.

And the QuadCore offering, as you highlight, that's really coming -- that's going to be a 2027. We're going to produce polyiso boards straight away. In fact, we'll be producing it before membrane. And then the QuadCore offering comes thereafter, and it's very specifically around an upgraded conversion from polyiso insulation in the flat roof. So we're not targeting QuadCore in an insulation board against fiberglass and walls. That's not what it's about. It's about upgrading the flat roof offering. And then...

On your question around the data center category, clearly, it's a very strong category globally, but it's still -- at a group level, it's still a single-digit percentage of our group sales.

But growing very, very rapidly.

And the other end markets, do you see -- I think a lot of investors are trying to understand when -- what could be the trigger for people that are holding on their decision to invest in, I don't know, warehousing, cold storage. What could we -- what should we watch? And what could be the trigger of the recovery? And what would be the timing?

Like stability. It's geopolitical stability. Some certainty around what's happening in Ukraine, in particular, around how that's affecting Europe, they are the things that will trigger decision-making and activity. And frankly, outside of that, I wouldn't expect anything to change.

We can only influence what we can influence. We'll continue to develop and grow the business as we've outlined. I suppose the other point just worth highlighting before we wrap is on PowerPanel. It's pleasing for us to note that we've 30 million meg of project specified.

30 meg.

Sorry, 30 meg.

30 million meg, we're a little bit away from that. That's the plan.

30 meg specified. So very early and encouraging progress on that front, and that's just in 2 markets.

[Operator Instructions] We currently have no further questions, so I'll hand back to the management team for closing remarks.

That's excellent, Becky. Thank you all for joining, and we'll be speaking, no doubt, to you all individually over the coming days and weeks. Take care.

Thanks, everybody.

This concludes today's call. Thank you for joining. You may now disconnect your lines.