Kingspan Group plc (KRX) Earnings Call Transcript & Summary

Good morning, and welcome, everybody, to the 2020 Kingspan AGM, which today is taking place at the ICon here in Kingsport. It's our new global innovation center that we opened a number of months ago. I'm Gene Murtagh, CEO of Kingspan, and I'm joined this morning by fellow Director and CFO, Geoff Doherty, here; and on the other side by Lorcan Dowd, the Company Secretary. The Chairman is going to be cocooning himself at the moment, but his live events is here as are all of the other Directors of the Board. I shall chair the meeting in accordance with the Articles of Association of the company. We have a quorum and I declare the meeting open. As a consequence of the unusual circumstances, we ask that shareholders exercise their rights by voting in advance to the appointment of proxies and that they submit questions in advance. We also invite the shareholders to follow the proceedings by joining this conference call, and we can see many of you are in attendance. Before we commence the formal business of the day, we would like to refer you to the trading statement that we issued yesterday, which no doubt many of you will already have seen. In summary, the first quarter, for the most part, reflected solid activity globally, both in terms of sales activity and order intake. Group sales were just ahead of EUR 1 billion for the 3-month period to the 31st of March, which represented a negative 3% over the prior year or minus 7% pre-acquisitions. The trading context, however, has changed manifestly since the middle of March, with an enforced cessation of activity in many markets occurring at a pace without precedent. Global sensitivity in April decreased by almost 35% compared to the same period last year, reflecting full or partial closure of various construction markets worldwide. The Americas has been robust so far, as is Germany and parts of Central Europe. France and Southern Europe have been particularly weak. And activity in Ireland has been down over 80% versus prior year, a clear standout by comparison to any other market we operate in. The U.K. is less than half of what it was in April last year. As a consequence, we currently expect to record a result close to breakeven overall for the month of April, a month of significant profitability in a normal year. This fading runway is expected to persist through the coming weeks at the very least. Now we will proceed to the resolutions contained in the notice convening AGM. The notice, together with explanatory notes, was posted to shareholders on the 12th of March. I propose, therefore, that the notice to the meeting should be taken as read. This year, given the restrictions on shareholder attendance of the meeting and in accordance with the Articles of the Association of the company, voting will be conducted by way of a poll and written votes on each of the resolutions put to the meeting. This allows all shareholders the opportunity to participate in the decision-making of the company and have their votes recorded in proportion to the number of shares they hold. We've appointed Computershare, the company's registrars to act as scrutineers. For convenience, I will direct that poll on all of the resolutions, which will be held at the end of this meeting. The total number of proxy votes received in respect of all the resolutions to be voted upon was 146,262,018, representing 80% of the total share capital of the company. Plus the formal call will be conducted at the end of the meeting, the total percentage of proxy votes lodged with the company, reached those resolutions will be announced by the company secretary and will also be displayed on the conference screen. The first resolution of ordinary business deals with the adoption of the company's financial statements and the reports of the directors and auditors for the year ended 31st December 2019. Kingspan's annual report has been made available to shareholders and is accessible online, so I propose that is taken as read. I will now hand you over to Geoff to deal with the auditors' opinion.

Thank you, Gene. I'm pleased to confirm that the company's auditors, KPMG, have provided a clean and a unqualified opinion on the financial statement of the group -- of the company and of the consolidated financial statements of the group for the year ended 31 December 2019. I would also like to note that KPMG, who have been Kingspan's auditors since 2011, will be retiring as auditors following the conclusion of this AGM. During that period, KPMG has very ably and efficiently provided the highest level of auditing and assurance service to the group, and I would like to take this opportunity to thank KPMG, and in particular, the several lead audit partners over the years, Roger Gillespie, David Moran and Conall O'Halloran. We thank them sincerely for their advice and their service to Kingspan over the years. I'm also pleased to announce that following a full and comprehensive audit tender process conducted by the Audit Committee, Kingspan has appointed EY as its new auditors with effect from the current financial year ending 2020. I look forward to working with the new EY team and I'm sure it will deliver an equally robust audit in the coming years.

Thank you, Geoff. Resolution #1. I now propose that the meeting receive and adopt the company's financial statements and the reports of the directors and auditors for the year ended 31st December 2019. In relation to resolution #1, the total percentage of proxies received in favor of the resolution was 100% and the percentage against was almost 0. Resolution #2, as previously announced, the Board has decided to withdraw this resolution, i.e., to declare a final dividend and so, with the meeting's consent, we move on to resolution #3. I propose that Eugene Murtagh be reelected as a Director of the company.

In relation to resolution #3(a), the total percentage of proxies received in favor of the resolution was 88.4% and the percentage against was 11.6%.

Resolution #3(b), I propose that Gene Murtagh be reelected as director of the company.

In relation to resolution #3(b), the total percentage of proxies received in favor of the resolution was 92.4%, and the percentage against was 7.6%.

Resolution #3(c), I propose that Geoff Doherty be reelected as a director of the company.

And in relation to resolution #3(c), the total percentage of proxies received in favor of the resolution was 94.7% and the percentage against was 5.3%.

Resolution #3(d), I propose that Russell Shiels be reelected as a director of the company.

In relation to resolution #3(d) the total percentage of proxies received in favor of the resolution was 94.6%, and the percentage against was 5.4%.

Resolution #3(e), I propose that Peter Wilson be reelected as a Director the company.

In relation to resolution #3(e), the total percentage of proxies received in favor of the resolution was 94.5% and the percentage against was 5.5%.

Resolution #3(f), I propose that Gilbert McCarthy be reelected as a director of the company.

In relation to this resolution, #3(f), the total percentage of proxies received in favor of the resolution was 94.8%, and the percentage against was 5.2%.

Resolution #3(g), I propose that Linda Hickey be reelected as director of the company.

In relation to resolution #3(g), the total percentage of proxies received in favor of the resolution was 96.7% and the percentage against was 3.3%.

Resolution #3(h), I propose that Michael Cawley, be reelected as a director of the company.

In relation to resolution #3(h), the total percentage of proxies received in favor of the resolution was 84.6%, and the percentage against was 15.4%.

Resolution #3(i), I propose that John Cronin be reelected as a director of the company.

In relation to resolution 3(i), the total percentage of proxies received in favor of the resolution was 91.2%. And the percentage against was 8.8%.

Resolution #3(j), I propose that Bruce McLennan be reelected as a director of the company.

In relation to Resolution 3(j), the total percentage of proxies received in favor of the resolution was 96.8%, and the percentage against was 3.2%.

Resolution #3(k), I propose that Jost Massenberg be reelected as a director of the company.

In relation to resolution #3(k), the total percentage of proxies received in favor of the resolution was 97.6%, and the percentage against was 2.4%.

Resolution #3(l), I propose that Anne Heraty be elected as Director of the company.

In relation to resolution #3(k), the total percentage of proxies received in favor of the resolution was 99.9%, and the percentage against was 0.1%.

That's it. Resolution #4. I propose that the meeting authorize the directors to fix the remuneration of the auditors for the year ended 31st December 2020.

In relation to resolution 4, the total percentage of proxies received in favor of the resolution was 96.3% and percentage against was 3.7%.

Now we move on to the special business. Resolution #5. I propose that the reports on directors' remuneration for the year ended 31st December 2019 be approved.

In relation to this resolution #5, the total percentage of proxies received in favor of the resolution was 93.6%, and the percentage against was 6.4%.

Resolution #6, I propose that the meeting authorize the directors to allot relevant securities as fully detailed in resolution #6 of the notice convening the meeting.

In relation to resolution #6, the total percentage of proxies received in favor of the resolution was 98.90%. The percentage against was 1.1%.

Resolution #7. I propose that the meeting authorize that disapplication of pre-emption rights as fully detailed in resolution #7 of the notice convening the meeting.

In relation to resolution #7, the total percentage of proxies received in favor of the resolution was 99.4%, and the percentage against was 0.6%.

Resolution #8, I propose that the meeting authorize the further disapplication of preemption rights for the purpose of an acquisition or other capital investment as fully detailed in Resolution #8 of the notice convening the meeting.

In relation to resolution #8, the total percentage of proxies received in favor of the resolution was 99.2%, and the percentage against was 0.8%.

Resolution #9, I propose that the meeting authorize the company to purchase up to 10% of the company's own shares as fully detailed in resolution #9 of the notice convening the meeting.

In relation to resolution #9, the total percentage of proxies received in favor of the resolution was 98% and the percentage against was 2%.

Resolution #10, I propose that the meeting authorize the company to reissue any treasury shares purchased by it as fully detailed in the Resolution #10 of the notice convening the meeting.

In relation to resolution #10, the total percentage of proxies received in favor of the resolution was 99.9%, and the percentage against was 0.1%.

Resolution #11, I propose that the meeting authorize the company to convene an EGM on 14 days' notice as fully detailed in Resolution #11 of the notice convening the meeting.

In relation to resolution #11, the total percentage of proxies received in favor of this resolution was 93.9%, and the percentage against was 6.1%.

I now direct that a poll be taken on each of the resolutions which has been brought to the meeting. Let me explain the procedure for conducting the vote. Votes may be given by the registered holders of ordinary shares present here in person or by proxy and entitled to vote. Every such holder has one vote for every ordinary share held. I will also vote on behalf of those holders who extend the proxy instruction to the company appointing me to vote on their behalf. After the call has been conducted, the votes cast will be verified under the scrutiny of Computershare by reference to the register of members and the list of authenticated proxies received by the company. Due to the shareholder report, the totals of the votes cast and against the resolutions and the number of withheld votes. The poll will take some time to be conducted, therefore, following the close of the meeting, the results of the poll on all resolutions will be announced in the company's website. Now before we finish, let us deal with any correspondence submitted by shareholders.

Thanks, Gene. In fact, we didn't receive any questions from shareholders in advance of the meeting. We did, however, receive one e-mail from a longtime shareholder Henry Irvine who wished to convey his thanks and support to all of the management and employees in Kingspan and to wish them safety in their daily lives at this time. And we also received a similar message from another shareholder, Philip [ Fantone ].

Thank you, Lorcan. On that note, ladies and gentlemen, and subject to the poll results, that concludes the business of the meeting. Thank you all for participating.