REG - Essentra plc - Q3 2022 Trading Update

EssentraAnnouncement

21/10/2022 07:00

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RNS Number : 6891D  Essentra plc  21 October 2022

ESSENTRA PLC

("Essentra" or "the Company")

A leading global provider of essential components and solutions

Q3 TRADING UPDATE

·     On a continuing operations basis(1), the Group delivered Q3 revenue
growth of 10.9% compared to prior year, on a like-for-like ("LFL") basis(2)

·  Continued success in mitigating inflationary pressure through pricing,
driving revenue growth and protecting profitability

·  The sale of Filters was announced in October, and remains on track to
complete no later than 31 January 2023

·   Strong balance sheet to pursue value creating organic and inorganic
opportunities post completion of the Packaging and Filters transactions, and
shareholder return of approximately £150m

·    The FY 2022 adjusted operating profit remains in line with the Board's
expectations

Financial and strategic highlights

The continuing business has delivered a good performance in Q3 2022, alongside
a period of strong strategic and commercial progress.

In October 2022, the Company announced the sale of the Filters division to a
wholly owned subsidiary of Centaury Management Limited, the final major
milestone in realising the strategic goal of establishing a pure-play
Components business, and positioning Essentra as a leading manufacturer and
distributor of components. After completion of the Filters transaction and
shareholder return, it is the Board's intention for the Group to have a net
financial leverage of approximately 0x, providing the flexibility to pursue
value creating organic and inorganic opportunities, including future bolt-on
acquisitions.

The Components division delivered 10.9% LFL revenue growth compared to Q3 2021
(+4.7% growth after adjusting for four more trading days). The underlying
business operations remain robust amid toughening market headwinds in Q3 2022
and management remain confident in the strength and resilience of the business
model. New price increases have been implemented in the quarter, with further
benefit expected in Q4 2022 as the business continues to proactively monitor
inflation.

Investing in the business remains a focus, and in September Essentra opened a
new purpose built European distribution hub in Poland, expanding market
presence and enhancing service to our customers. The hub will service 20,000
product lines across Europe, laying foundations for future growth.

The Group remains mindful of the more challenging economic environment and
continues to monitor headwinds, taking proactive cost management actions where
appropriate. Whilst slower economic growth is expected in Q4, FY 2022 adjusted
operating profit remains in line with the Board's expectations. The Group's
resilience is supported by its breadth of customers, market categories and
geographies as well as a strong balance sheet.

Discontinued Operations

When reporting the FY22 results ending 31 December 2022, the Packaging and
Filters divisions will be accounted for as discontinued operations. Packaging
and Filters delivered Q3 growth of 30.4% and 34.7% respectively, compared to
the prior year versus relatively weak comparatives.

Notes

(1) Continuing operations excludes the Filters division and the Packaging
division, which will be reported under IFRS 5 as a discontinued operation at
the FY 2022 results

(2) The term "like-for-like" adjusts for the impact of acquisitions and
foreign exchange

 

Enquiries

 Essentra plc                                       Tulchan Communications LLP

 Jack Clarke, Chief Financial Officer               Olivia Peters

 Claire Goodman, Group Investor Relations Manager   Lisa Jarrett-Kerr

 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. As a result of the completion of the sale of
Packaging to the Mayr-Melnhof Group, the Group is now organised into two
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 32
countries and includes over 4,500 employees, 25 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 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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