REG - Essentra plc - Q3 2024 Trading Update

EssentraAnnouncement

24/10/2024 07:00

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RNS Number : 3649J  Essentra plc  24 October 2024

ESSENTRA PLC

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

Q3 TRADING UPDATE

FY24 expectations in line with revised guidance

 

Essentra plc, a leading global provider and manufacturer of essential
components and solutions, today provides a third quarter trading update for
the thirteen weeks ended 28 September 2024 ("Q3" or the "period").

FY24 adjusted operating profit(1) guidance is unchanged from the trading
update released on 17 September 2024, and is aligned with market
expectations(2).

 

Trading update

Group revenue in Q3 reduced by 2.3% at constant currency, compared to the
prior year period on a working day adjusted basis. Like-for-like(3) ("LFL")
revenue reduced by 5.8%, offset by a positive contribution to revenue of 3.5%
from the acquisition of BMP s.r.l ("BMP TAPPI"), which completed in October
2023.

 

LFL revenue performance in Q3 was reflective of the weak manufacturing PMI
metrics widely reported. EMEA (including Turkey) saw softening trading
conditions whilst Americas reported slower than originally anticipated levels
of recovery, although distributor volumes remained stable for another
consecutive quarter. The APAC region delivered modest levels of growth, driven
by a number of commercial business wins in faster growing end-markets from our
China export business to the rest of Asia and Middle East.

 

Gross margins across all three regions remain strong, supported by good levels
of cost control, procurement actions and operational efficiencies. When
combined with Essentra's continued focus on its hassle-free customer
proposition, the actions that have been taken over the last 18 months to
right-size the cost base and optimise the business mean that the Group is
well-positioned to benefit from material levels of operational gearing when
normalised levels of volume return.

 

The Group's financial position is robust. FY24 leverage guidance is unchanged
and is expected to be within the target range of 0.5x - 1.5x, providing a
solid foundation from which the Group can continue to execute operational and
strategic value-enhancing growth initiatives.

 

FY24 outlook unchanged

The Board expects FY24 adjusted operating profit to be in line with current
market expectations. Trading in October supports the Group's revised internal
forecasts, and Management remains focussed on delivering operational
efficiencies in the near-term, whilst selectively investing for growth.

The underlying Essentra business model remains fundamentally strong, operating
in a highly fragmented market combining the breadth and depth of its product
offering, end-market capabilities and geographic footprint. Management
continues to be confident that Essentra's robust and differentiated business
model will support further progress towards its medium-term targets.

 

(Notes)

(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 £40.0m to £41.7m)

(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") in October 2023)

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Enquiries

 Essentra plc                                 FTI Consulting

 Jack Clarke, 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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