REG - Victrex PLC - AGM and Trading Update

VictrexAnnouncement

07/02/2025 07:00

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RNS Number : 2550W  Victrex PLC  07 February 2025

7 February 2025

Victrex plc - AGM Statement & Q1 Trading Update

'Solid start; mixed trading conditions; full-year expectations unchanged'

Victrex plc is an innovative world leader in high performance polymer
solutions, delivering sustainable products which enable environmental and
societal benefit in multiple end-markets. Today's trading update covers the
first quarter of FY 2025, from 1 October 2024 to 31 December 2024.

 

Summary

The Group indicated at the FY 2024 preliminary results in December 2024 that
we were seeing a solid start to FY 2025.

 

Q1 saw good progress in both Group volume and revenue, against a weak quarter
in the prior year. Q2 has also started solidly, with January well ahead of the
prior year. Despite overall top-line progress, trading conditions remain
mixed, with Medical revenues continuing to be subdued on a year-to-date basis,
driven by ongoing industry destocking amongst medical device customers.

 

Our Sustainable Solutions business is seeing year-on-year improvement across
Aerospace, Electronics, Energy & Industrial and Value-Added Resellers. We
are benefiting from incremental business in Aerospace, whilst Electronics is
seeing an improvement in Semiconductor and in smart devices. Automotive
performance is currently lower than the prior year, although we expect
year-on-year improvement in E-mobility as platform build for 800 volt motors
supports increased Victrex(TM) PEEK content per car.

In Medical, inventory correction amongst major medical device customers
continues, with limited visibility on improvement at this early stage. We
continue to anticipate progress in Medical as we move through the year.
 

Q1 performance

·      Q1 Group revenue up 9% at £66.6m (Q1 2024: £61.2m).

·      Q1 Group volume up 20% at 898 tonnes (Q1 2024: 751 tonnes).

·      Group ASP broadly in line with guidance at £74/kg; reflecting
currency headwinds, sales mix and a softer Medical performance.

 

Mega-programmes

FY 2025 is expected to see a significant step-up in our mega-programme
revenues, with Aerospace Composites, E-mobility and Trauma set to show
progress.  In PEEK Knee, we are awaiting the outcome following the regulatory
submission in India, supporting the potential of a commercial PEEK Knee in the
market in 2025. Following good progress in clinical trials across Europe and
India, site recruitment for the US clinical trial is moving forward.

 

Financial position & cost actions

Victrex's cash generative business model is expected to show further cashflow
improvement this year, supporting optionality for growth investment and
shareholder returns.

 

Following our major investment phase in assets and capability, capital
expenditure will reduce closer to 8-10% of revenues (approximately £30m) and
inventory is expected to unwind towards our target level of approximately
£100m. Despite our final phase of inventory unwind in FY 2025, asset
utilisation will improve this year. As previously communicated, cost of
manufacture will also benefit from lower raw material costs.

 

We remain focused on tight cost control, alongside our Project Vista self-help
programme, which will help underpin profitability through how we Go to Market
and serve our customers.

 

Outlook: full year expectations unchanged

Jakob Sigurdsson, Chief Executive of Victrex, said:

 

"The Group has delivered a solid start to the year and our full year
expectations are unchanged. Based on our momentum at this early stage, our
guidance remains for at least mid-single digit volume growth for FY 2025, with
underlying PBT growth ahead of volume growth.

 

"Cost control, self-help measures, higher asset utilisation and lower raw
material costs will help to underpin profit improvement in FY 2025. However,
we are mindful that current trading conditions remain mixed, with continuing
softness in Medical. As a result, profit growth will be weighted to the second
half year. This reflects Medical and sales mix, the impact of currency - which
is a £7m-£8m headwind to PBT for the year - being heavily weighted to H1
2025, and annualised costs from our new China facility. All of these factors
are expected to limit our progress in the first half year, versus H1 2024.

 

"Victrex continues to have a strong long-term investment proposition. We have
a robust, diversified and increasingly differentiated core business, growing
commercialisation in our mega-programmes, well invested assets, and the
prospect of further cashflow improvement. Overall, we are well-placed for the
medium to longer term."

 

 

Annual General Meeting

Victrex's Annual General Meeting will be held today, starting at 11.00am GMT
and taking place at JP Morgan, 1 John Carpenter Street, London EC4Y 0JP,
United Kingdom.

 

Victrex plc:

Andrew Hanson, Director of Investor Relations, Corporate Communications &
ESG  +44 (0) 7809 595831

Ian Melling, Chief Financial Officer
                                                  +44
(0) 1253 897700

Jakob Sigurdsson, Chief Executive
                                                  +44
(0) 1253 897700

 

About Victrex:

Victrex is an innovative world leader in high performance polymer solutions,
focused on the strategic markets of Automotive, Aerospace, Energy &
Industrial, Electronics and Medical. Every day, millions of people rely on
products or applications which contain our sustainable materials, from
smartphones, aeroplanes and cars to energy operations and medical devices.
With over 40 years' experience, we are moving beyond the polymer into
semi-finished and finished products which shape future performance for our
customers and our markets, enable environmental and societal benefit for our
customers and drive value for our shareholders. Find out more at
www.victrexplc.com (http://www.victrexplc.com)

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