REG - Victrex PLC - Victrex plc - Q3 Interim Management Statement

VictrexAnnouncement

06/07/2023 07:00

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RNS Number : 1185F  Victrex PLC  06 July 2023

 

 

6 July 2023

Victrex plc - Q3 Interim Management Statement

Volumes lower on macro-economic weakness; further price improvement

Victrex plc is an innovative world leader in high performance polymer
solutions, delivering sustainable products which support CO2 reduction and
bring environmental and societal benefit in multiple end-markets. Today's
Interim Management Statement for Q3 covers the period 1 April 2023 to 30 June
2023.

Performance summary - Q3 in line with guidance

As previously communicated in our trading update of 14 June 2023 and at our
interim results, compared to a record prior year period, the Group is seeing
ongoing macro-economic weakness and destocking across several end markets.

The Group continues to be well positioned for a macro-economic recovery.

Q3 saw further improvement in average selling prices (ASP), taking
year-to-date ASP to £85/kg, supported by price increases, sales mix and
currency. We now anticipate that full year ASP will be above £84/kg. This in
turn, together with easing energy costs, means we are seeing gross margin
improvement during the second half, compared to the prior year, but it will be
slightly held back by lower asset utilisation.

Further progress in mega-programmes; E-mobility exceeding expectations

Further progress was seen in commercial milestones within our 'mega-programme'
growth pipeline, particularly in E-mobility and Trauma. We now anticipate
annual revenues in our E-mobility mega-programme will exceed our original
expectations, reaching £5m in FY 2023. In Trauma, we are making good progress
with our PEEK composite Trauma plates, serving growing demand in the US and
Asia. Run-rates are building towards £1m revenue and further growth in both
E-mobility and Trauma is expected in FY 2024.

Q3 performance:

·      Q3 Group revenue down 23% to £72.2m (Q3 2022: £93.4m)

·      Q3 Group volume down 38% to 818 tonnes (Q3 2022: 1,323 tonnes)

·      Year to date Group revenue of £234.4m is 8% down on the prior
year (2022 YTD: £253.5m), with YTD Group volume of 2,759 tonnes being 23%
down on the prior year (2022 YTD: 3,586 tonnes)

·      Q3 weakness driven by Electronics, Energy & Industrial and
Value Added Resellers

·      Aerospace seeing good growth; Automotive stable YTD

·      Medical performing strongly; YTD revenue continues to track up
double-digit

 

 

 

Financial position

Victrex retains a highly cash generative business model, which supports growth
investment and shareholder returns.  Capital expenditure this year is focused
on our China manufacturing investments, with our new PEEK polymer facility
having delivered first polymer ahead of commercial start up by the end of
2023.  Total cash on 30 June 2023 was £27m, which includes £3.5m cash
ringfenced in China investments. Capital expenditure will start to step down
from FY 2024, supporting improving cashflows.

 

Outlook unchanged

Jakob Sigurdsson, Chief Executive of Victrex, said: "In line with our recent
trading update, we continue to be impacted by ongoing macro-economic weakness
and destocking in several end markets. Compared to a record prior year period,
lower Q3 volumes were driven by Electronics, Energy & Industrial and Value
Added Resellers. Aerospace and Medical continue to perform strongly, whilst
Automotive is stable year-to-date.

 

"Overall, our Outlook is unchanged from what we recently communicated, with
full-year adjusted (pre-exceptional) PBT expected to be in the range of
£80m-£85m. As we move into the final quarter, strong average selling prices,
mix, energy costs and cost discipline remain supportive, and we continue to be
well-placed for when the macro-economic environment improves.

 

"On a medium to long term basis, we have a strong and diverse core business,
growing commercialisation in our mega-programmes, capital investment which is
set to reduce and support improving cash flows, and strong ESG credentials."

 

Victrex will report its Preliminary Results for 2023 on Tuesday 4 December
2023.

 

Analyst & investor call:

A call for analysts & investors will be held today, Thursday 6 July, at
08.30am UK time. To register for the call please follow this link:

https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=3197336&linkSecurityString=82f3181b0
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fservices.choruscall.za.com%2FDiamondPassRegistration%2Fregister%3FconfirmationNumber%3D3197336%26linkSecurityString%3D82f3181b0&data=05%7C01%7Cahanson%40victrex.com%7C12415231606540f1ce0308db7889e239%7C8b5cc50fa14944bd9ddc9d27ea6d720e%7C0%7C0%7C638236305915134272%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=9bTXehLWrZKqnJd7jZdAojUexh%2BJbCOG87Y5iO5UdLg%3D&reserved=0)

 

 

Enquiries:

Victrex plc:

 Andrew Hanson, Director of Investor Relations, Corporate Communications &      +44 (0) 7809 595831
 ESG
 Jakob Sigurdsson, Chief Executive                                              +44 (0) 1253 897700
 Ian Melling, Chief Financial Officer                                           +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 oil & gas 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, provide environmental and societal benefit for
customers and drive value for our shareholders. Find out more at
www.victrexplc.com (http://www.victrexplc.com)

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