REG - Synthomer PLC - Trading Statement - Spring 2024

SynthomerAnnouncement

09/05/2024 07:00

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RNS Number : 6938N  Synthomer PLC  09 May 2024

 

Synthomer plc

Spring 2024 trading statement

 

Synthomer plc ('Synthomer' or the 'Group') today issues a scheduled update on
trading for the first quarter of 2024, ahead of today's Annual General Meeting
(AGM). Results of voting at the AGM will be announced later today.

 

Trading in Q1 2024 was in line with our expectations at the start of the year.
Continuing Group volumes were at their highest levels since Q2 2022. Whilst
this partially reflects some short-term customer restocking - and there is
still no evidence of a sustained improvement in underlying end-market demand -
we are seeing improving activity levels in some of the segments of the Group
that were previously more challenged.

 

Q1 2024 Continuing Group EBITDA was higher than the prior year period,
benefitting from continued robust pricing particularly in our speciality
businesses, ongoing cost reduction activities and lower energy costs. Q1 2024
Continuing Group revenue was lower than the prior year period due to lower raw
materials prices.

 

We have made further progress in delivering our speciality solutions strategy,
alongside maintaining our focus on  generating cash flow and reducing
leverage. In April, we successfully tendered for €370m of our bonds due
2025, reducing gross debt and extending maturities by issuing €350m of bonds
due 2029. Our next significant debt maturity is in 2027. In May, we completed
the divestment of the Compounds business, increasing our focus on core end
markets and further reducing site complexity. Over the last 18 months, we have
reduced our manufacturing footprint by 10 sites to 33, through a combination
of non-core divestments and rationalisation activity, with further actions
underway.

 

As previously indicated, we expect to make some earnings progress (on a
comparable basis adjusting for the divested Compounds business) and be Free
Cash Flow positive in 2024, even if macroeconomic demand conditions do not
improve.

 

Commenting, Synthomer CEO Michael Willome said:

"We are cautiously encouraged by trading since the start of the year: while
there are signs of improvement in some of our end markets, visibility of a
sustained recovery remains elusive at this stage. We therefore continue to
strengthen Synthomer's position for the future, by delivering our
specialisation strategy, optimising our portfolio and cost position, and
demonstrating the cash generative nature of our business."

 

 

Further information:

 Investors: Faisal Tabbah, Vice President Investor Relations  Tel: +44 (0) 1279 775 306
 Media: Charles Armitstead, Teneo                             Tel: +44 (0) 7703 330 269

 

Notes

Synthomer plans to report interim results for the six months to 30 June 2024
on 13 August 2024.

 

Legal Entity Identifier (LEI): 213800EHT3TI1KPQQJ56. Classification as per DTR
6 Annex 1R: 3.1.

 

Synthomer plc is a leading supplier of high-performance, highly specialised
polymers and ingredients that play vital roles in key sectors such as
coatings, construction, adhesives, and health and protection - growing markets
that serve billions of end users worldwide. Headquartered in London, UK and
listed there since 1971, we employ c.4,200 employees across our 4 innovation
centres of excellence and more than 30 manufacturing sites across Europe,
North America and Asia. With more than 6,000 blue-chip customers and £2.0bn
in continuing revenue in 2023, our business is built around three divisions,
serving customers in attractive end markets where demand is driven by global
megatrends including urbanisation, demographic change, climate change and
sustainability, and shifting economic power. In Coatings & Construction
Solutions, our specialist polymers enhance the sustainability and performance
of a wide range of coatings and construction products. We serve customers in
applications including architectural and masonry coatings, mortar
modification, waterproofing and flooring, fibre bonding, and energy solutions.
In Adhesive Solutions our products help our customers bond, modify and
compatibilise surfaces and components for applications including tapes and
labels, packaging, hygiene, tyres and plastic modification, improving
permeability, strength, elasticity, damping, dispersion and grip. In Health
& Protection and Performance Materials we are a world-leading supplier of
water-based polymers for medical gloves, and a major European manufacturer of
high-performance binders, foams and other products serving customers in a
range of end markets. Our purpose is creating innovative and sustainable
solutions for the benefit of customers and society. Around 20% of our sales
volumes are from new and patent protected products. At our innovation centres
of excellence in the UK, Germany, Malaysia and Ohio, USA we collaborate
closely with our customers to develop new products and enhance existing ones
tailored to their needs, with an increasing range of sustainability benefits.
Our 2030 decarbonisation targets have been approved by the Science Based
Targets initiative as being in line with what the latest climate science says
is necessary to meet the goals of the Paris Agreement, and since 2021 we have
held the London Stock Exchange Green Economy Mark, which recognises green
technology businesses making a significant contribution to a more sustainable,
low-carbon economy. Find us at www.synthomer.com (http://www.synthomer.com) or
search for Synthomer on LinkedIn.

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