REG - Essentra plc - FY2024 Pre-close Trading Update

EssentraAnnouncement

21/01/2025 07:00

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RNS Number : 0297U  Essentra plc  21 January 2025

ESSENTRA PLC

("Essentra", the "Group" or the "Company")

PRE-CLOSE FULL YEAR TRADING UPDATE

FY24 expectations unchanged

 

Essentra plc, a leading global provider and manufacturer of essential
components and solutions, today provides a trading update for the financial
year ended 31 December 2024 ("FY24"), ahead of the announcement of its full
year results on 19 March 2025.

The Group expects to deliver FY24 adjusted(1) operating profit in line with
previous guidance and current analyst expectations(2).

Trading performance

Group revenue for the full year is expected to grow by 0.3% on a constant
currency basis. Revenue growth from the acquisition of BMP s.r.l ("BMP TAPPI")
increased revenue by c.3.0% year-on-year, offset by a c.2.7% reduction in
like-for-like(3) ("LFL") revenue, reflecting mixed end-market conditions,
including a softening in EMEA end-markets in the latter part of the year, as
previously reported. FX impacted Group revenue by c.5%, with reported Group
revenue expected to be 4.4% below the prior year.

As anticipated, the Group continued to experience differences in trading
conditions across its three regions in the fourth quarter. In Q4 (the "period"
or "quarter"), Group revenue reduced by 2.9% at constant currency, compared to
the prior year period on a working day adjusted basis. LFL revenue reduced by
3.7% year-on-year, offset by a positive contribution to revenue of 0.8% from
the acquisition of BMP TAPPI.

EMEA (including Turkey) saw a softening in trading conditions in the quarter,
with performance remaining closely correlated to manufacturing PMI metrics
across the region, particularly in West Europe. Encouragingly, the Americas
region saw conditions stabilise in Q4. Distributor volume trends remain
unchanged, with no clear indications of further destocking or re-stocking. The
APAC region delivered a steady improvement, with a further consecutive quarter
of year-on-year growth. The China export business, including access hardware
products, continues to drive commercial business wins in faster growing
end-markets across the rest of Asia and the Middle East.

 

Regional gross margins remain stable compared to the prior year. The Company's
manufacturing and distribution facilities continue to adjust capacity to
reflect demand, demonstrating the strength and agility of our differentiated
business model. The Group retains its disciplined approach to cost control
while ongoing procurement actions and selective investments in capital are
driving efficiencies, mitigating the effect of volume decline.

 

The Group's financial position is robust and operational cashflow conversion
continues to be strong. FY24 pre-IFRS 16 net debt leverage guidance is
unchanged, and is expected to close within the targeted leverage range of
<1.5x. The Group retains headroom into 2025 to execute operational and
strategic value-enhancing growth initiatives.

 

Scott Fawcett, Chief Executive Officer, commented:

"Essentra expects to deliver FY24 adjusted operating profit in line with
previous guidance. While end-market conditions throughout the year have been
mixed, Essentra's global manufacturing and distribution footprint, and
operational flexibility have supported the delivery of regional gross margin
stability.

We remain committed to our hassle-free customer proposition and I am pleased
that both the 2024 employee engagement and Net Promoter Scores have improved
year-on-year despite a challenging market backdrop, as Essentra retains its
strong market positions.

Whilst we are taking a cautious view on the timing of any material improvement
in end-market conditions, we remain focused on continuing to deliver on the
elements that remain within our control. We will drive operational excellence
to ensure customers receive enhanced levels of service; we will optimise our
efficiency to support operating leverage and margins; and we will continue to
invest selectively with returns discipline for growth. This approach, in
combination with our differentiated business model, supports our confidence in
our ability to deliver progress on our strategic objectives, and benefit from
material levels of operational gearing as market conditions improve."

 

(1.      )(On a continuing operations basis, before amortisation of
acquired intangible assets and adjusting items)

(2.      Company compiled market expectations for 2024 adjusted operating
profit is a range of £39.8m to £40.3m)

(3.    )(The term "like-for-like" describes the performance of the
continuing business on a comparable basis, adjusting for the impact of
acquisitions, disposals and foreign exchange. 2024 LFL sales performance is
adjusted for the acquisition of BMP s.r.l. ("BMP TAPPI"))

( )

( )

 

Enquiries

 Essentra plc                                 FTI Consulting

 Rowan Baker, Chief Financial Officer         Richard Mountain

 Claire Goodman, Head of Investor Relations   Ariadna Peretz

 Emma Reid, Company Secretary

                                              FTI_essentra@fticonsulting.com (mailto:FTI_essentra@fticonsulting.com)

 Tel: +44 (0)1908 359100                      Tel: +44 (0)20 3727 1340

Notes to Editors

Essentra plc is a FTSE 250 company and a leading global provider of essential
components and solutions, focusing on the manufacture and distribution of
plastic injection moulded, vinyl dip moulded and metal items.

Headquartered in the United Kingdom, Essentra's global network extends to 28
countries worldwide and includes c.3,000 employees, 14 manufacturing
facilities, 24 distribution centres and 33 sales & service centres serving
c.69,000 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, medical and renewable energy. For
further information, please visit www.essentraplc.com
(http://www.essentraplc.com)

LEI: 5493007MOZNA03BVNE96

Cautionary forward-looking statement

These results contain forward-looking statements based on current expectations
and assumptions. Various known and unknown risks, uncertainties and other
factors may cause actual results to differ from future results or developments
expressed or implied from the forward-looking statements. Each forward-looking
statement speaks only as of the date of this document. The Company accepts no
obligation to revise or update these forward-looking statements publicly or
adjust them to future events of developments, whether as a result of new
information, future events or otherwise, except to the extent legally
required.

 

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