REG - Essentra plc - FY 2021 Pre-close trading update

EssentraAnnouncement

07/01/2022 07:00

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RNS Number : 7067X  Essentra plc  07 January 2022

ESSENTRA PLC

A leading global provider of essential components and solutions

FY 2021 PRE-CLOSE TRADING UPDATE

 

·    Strategic reviews of Filters and Packaging divisions are progressing
as planned following the Board's decision to become a pure play Components
business

·    As previously guided, both reviews are likely to conclude in Q2 2022
earliest

·    Overall, a strong Q4 performance, revenue increased +12.7% on prior
year on a like-for-like (LFL(1)) basis and +11.1% vs. Q4 2019

·    Components - another positive performance, LFL trading days adjusted
revenue +c.18.5% in Q4 2021

·    Packaging - an improving trend with the division returning to LFL
growth of +1.1% in Q4 2021

·    Filters - a strong performance led by higher volumes of outsourcing,
+22.3% in Q4 2021.

·    The Company expects to deliver FY 2021 operating profit in the range
of analysts' forecasts2

 

Essentra plc ('the Company') today provides a pre-close trading update for the
year ending 31 December 2021.

Strategic Reviews Progressing

The Board has commenced strategic reviews of both the Filters and Packaging
divisions, in line with its strategic goal to become a pure play Components
business. These reviews are currently running in parallel and progressing as
planned. The Board remains focused on maximising shareholder value and it is
anticipated that both reviews are likely to conclude in Q2 2022 at the
earliest.

Trading performance

Overall, the Group has delivered a strong performance for the year and Q4
2021. Trading is in line with expectations. Thanks to the maintained strength
of performance in Components and Filters, albeit against tougher comparatives
and against a backdrop of continued global supply chain disruptions, LFL
revenue grew 12.7% in Q4 2021 (+11.1% vs. Q4 2019). Order book trends remain
strong across the Group and as a result, despite the continuous challenges of
the pandemic, the Company is expecting to deliver a total FY 2021 operating
profit in the range of analysts' forecasts2.

The Components division had another positive quarter. Q4 2021 LFL trading days
adjusted revenue grew by c.18.5% compared to Q4 2020 despite a tougher
comparative, and is c.14.7% ahead of trading days adjusted 2019 Q4 levels.
This performance builds upon the trend of positive momentum delivered
throughout the year, as demand remains strong in our end markets and our
commercial initiatives support growth. We continue to manage global supply
chain disruptions and price increases implemented in H2 have helped offset
input cost inflation.

The Packaging division has continued to show improvement throughout the year,
with Q4 LFL revenue growth of 1.1% (reported growth 2.1%). In comparison to
2019, Q4 shows a LFL decline of -1.9% (reported growth vs. Q4 2019 10.4%).
Performance has been supported by the positive impact from the pricing actions
taken in Q3 2021 as well as a pick-up of activity in healthcare markets. The
labour availability and retention situation in the US is stabilising, and
whilst global supply chain challenges are impacting the availability of raw
materials, we maintain our guidance that the Q4 2021 margin will be slightly
below 8%.

The Filters division has delivered a strong performance despite tougher
comparatives, with LFL Q4 2021 revenue up 22.3% and is 20.5% ahead of Q4 2019
levels. The division continues to benefit from higher volumes from outsourcing
contracts and a strong performance in Europe. Further progress has been made
in the delivery of its 'game changers' with the China JV continuing to gain
momentum after successful commencement in June. Our range of proprietary eco
and THP products continue to attract increased interest. The number of
projects underway continue to grow significantly.

 

Commenting on today's results Paul Forman, Chief Executive, said:

"We have delivered a strong Q4 performance with all three businesses
delivering growth and having encouraging order books as we start the year. We
continue to monitor COVID-19 challenges and take actions to offset the impact
of global supply chain challenges which should better position our market
leading global businesses for growth in their respective markets.

The Board is making good progress with the strategic reviews of both the
Filters and Packaging divisions and remains committed to finding the right
outcome for each of our three strong businesses to thrive independently and to
maximise shareholder value in the relatively short term."

Notes

(1) Excludes the impact of acquisitions, disposals and foreign exchange

(2) Analyst operating profit (adjusted to exclude intangible amortisation on
acquired assets and exceptional operating items) forecasts for FY21 range
from £80.7m - 84.3m

 

Enquiries

 Essentra plc                                       Tulchan Communications LLP

 Lily Liu, Chief Financial Officer                  Olivia Peters

 Lucy Yank, Group Communications Director           Martin Robinson

 Claire Goodman, Group Investor Relations Manager

 Tel: +44 (0)1908 359100                            Tel: +44 (0)20 7353 4200

 

 

Notes to Editors

About Essentra plc

Essentra plc is a FTSE 250 company and a leading global provider of essential
components and solutions.  Organised into three global divisions, Essentra
focuses on the light manufacture and distribution of high volume, enabling
components which serve customers in a wide variety of end-markets and
geographies.

Headquartered in the United Kingdom, Essentra's global network extends to 34
countries and includes 7,430 employees, 48 principal manufacturing facilities,
30 sales & distribution operations and 3 research & development
centres. For further information, please visit www.essentraplc.com.

 

Essentra Components

Essentra Components is a global market leading manufacturer and distributor of
plastic injection moulded, vinyl dip moulded and metal items. Operating in 25
countries worldwide, 14 manufacturing facilities and 23 sales &
distribution centres serve more than 82,000 customers with a rapid supply of
low cost but essential products for a variety of applications in industries
such as equipment manufacturing, automotive, fabrication, electronics and
construction. The division also includes the Reid Supply business, which
provides a wide range of branded hardware supplies to a broad base of
industrial customers, largely located in the US Mid-West.

Essentra Packaging

Essentra Packaging is one of only two multicontinental suppliers of a full
secondary packaging range to the health and personal care sectors, with 23
facilities across three geographic regions. The division's innovative products
include cartons, leaflets, self-adhesive labels and printed foils used in
blister packs, which help customers to meet the rapidly-changing requirements
of these end-markets and can also be combined with Essentra's authentication
solutions to help the fight against counterfeiting.

Essentra Filters

Essentra Filters is the only global independent cigarette filter supplier.
Currently headquartered in Singapore, the division has thirteen sites across
nine countries, including three innovation centres, providing a flexible
infrastructure strategically positioned to serve the tobacco sector. The
business supplies a wide range of value-adding high quality innovative
filters, packaging solutions to the roll your own segment and analytical
laboratory services for ingredient measurement to the industry: Essentra's
offering also includes Heat Not Burn and e-cigarette solutions to the rapidly
evolving market for Next Generation Products. The division also includes the
Tear Tapes business, which is globally recognised as the leading manufacturer
and supplier of pressure-sensitive tear tapes, that are largely used in the
tobacco, food and drink and specialist packaging sectors.

 

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