REG - Essentra plc - HY 2022 Pre-Close Trading Update

EssentraAnnouncement

07/07/2022 07:17

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RNS Number : 5827R  Essentra plc  07 July 2022

ESSENTRA PLC

("Essentra" or "the Company")

A leading global provider of essential components and solutions

 

HY 2022 PRE-CLOSE TRADING UPDATE

 

·     Sale of Packaging to Mayr-Melnhof Group announced for £312m

·     Strategic review of the Filters division progressing in line with
expectations

·     Strong performance in H1 2022, revenue increased 14.0% on a
like-for-like(1,2) ("LFL") basis (9.0% LFL growth in Q2) for the continuing
business

·     Continued to mitigate inflationary headwinds in Components and
Filters

·     Components continues to deliver with H1 revenue up 12.1% on LFL
trading day adjusted(3) basis

·     Filters' strong momentum continued, with LFL revenue growth of
15.4% in H1

·     FY 2022 adjusted operating profit is expected to be in line with
the Board's expectations

 

On a continuing operations basis, the Group has experienced a strong start to
2022 with the first half delivering LFL(1,2) revenue growth of 14.0% compared
to the same period in the prior year, supported by pricing initiatives and
volume growth. Q2 trading continued to show good growth momentum albeit
against tougher comparatives as expected, with LFL growth of 9.0% compared
with Q2 2021.

 

Trading Commentary

The Components division delivered 12.1% LFL growth in H1, with LFL Q2 2022
working day adjusted(3) revenue growth up 9.3% against a tougher comparative.
The business has continued to deliver whilst actively managing supply chain
headwinds and the impact of COVID lockdowns in China. We have passed through
inflationary cost pressures in Q2 and will continue to review price increases
in H2.

The Filters division had LFL growth of 15.4% in H1, with LFL Q2 2022 revenue
growth of 14.9%. This strong performance has been supported by price and
volume growth, and continues to be driven by outsourcing contracts which are
delivering in line with expectations. The China JV continues to grow
production volumes, despite recently being impacted by temporary COVID
restrictions. Business Continuity Plan ("BCP") volumes with multi-national
companies ("MNCs") have continued through Q2 and our range of proprietary
eco-products(4) continue to generate interest, as we support our customers
with commercial launches.

 

Packaging

On 24(th) June 2022, the Company announced the sale of the Packaging division
and we expect the transaction to close in Q4 2022. For our half year results
ending 30(th) June 2022, Packaging will be accounted for as a discontinued
operation.

The division saw H1 LFL revenue growth of 9.6% (Q2 LFL 8.2% growth) as
pharmaceutical markets continued to recover. Inflationary cost pressure
remains a significant headwind due to raw materials supply challenges.

 

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

"I am pleased with the strong start to the year that we have delivered. The
strategic reviews remain on track and the recent announcement of the sale of
Packaging is the first step to reposition Essentra as a leading manufacturer
and distributor of components.

Whilst we remain mindful of the current economic environment including ongoing
cost inflation, the business remains on track to deliver adjusted operating
profit in line with the Board's expectations"

 

 

Half year results

The next scheduled update will be the publication of half year results on 17
August 2022.

 

Notes

(1) The term "like-for-like" describes the performance of the continuing
business, excluding Packaging, adjusting for the impact of acquisitions and
foreign exchange

(2) IAS29 'Financial Reporting in Hyperinflationary Economies' has been
adopted in Turkey within the Components division

(3) Adjusting for four less trading days during Q2 2022

(4) A higher degradability and non-plastic Filter option. ECO Flute, ECO
Active, ECO Sensation, ECO Cavitec and ECO Cavitec Sensation

 

Enquiries

 Essentra plc                                       Tulchan Communications LLP

 Jack Clarke, Chief Financial Officer               Olivia Peters

 Claire Goodman, Group Investor Relations Manager   Martin Robinson

 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 8,327 employees, 47 principal manufacturing facilities,
28 sales & distribution operations and two 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, 13 manufacturing facilities and 23 sales &
distribution centres serve more than 79,000 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 12 sites across nine
countries, including two 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, e-commerce, food and beverage and specialist packaging sectors.

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