REG - Victrex PLC - Victrex Q3 Interim Management Statement

VictrexAnnouncement

07/07/2022 07:17

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RNS Number : 5987R  Victrex PLC  07 July 2022

7 July 2022

Victrex plc - Q3 Interim Management Statement

Continuing strong growth, revenue up 16% & volume up 10% with improved
pricing

A record quarter - on track for full year expectations

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 2022 to 30 June
2022.

Overall, the Group is seeing continuing strong growth across the majority of
its end markets, including a record quarterly volume during Q3 to reflect a
healthy core business, and good progress on milestones within its
'mega-programme' growth pipeline:

·      Q3 Group revenue was up 16% to £93.4m (Q3 2021: £80.7m)

·      Q3 Group volume was up 10% to 1,323 tonnes (Q3 2021: 1,202
tonnes)

·      Year to date Group revenue of £253.5m is 9% ahead of the prior
year (2021 YTD: £231.6m), with YTD Group volume of 3,586 tonnes being 9%
ahead of the prior year (2021 YTD: 3,289 tonnes)

·      Q3 benefiting from price increases, with improved average selling
prices (ASP), to help offset unprecedented energy and raw material costs -
mindful of ongoing inflationary environment

·      Strong progress on PEEK Knee clinical trial, with 22 patient
implants and 6 patients passing the 12-month stage with no intervention.
Closing in on a partner agreement with a top 5 Knee company

·      510k regulatory approval in the US for a Trauma plate based on
our PEEK composite materials, as part of our partnership with In2Bones

·      Advanced discussions for partnership in Trauma, to support
further scale up and commercialisation

·      Partnering with Jaguar Land Rover (JLR), industry players and
academia on Project Virbius (E-mobility) to build on recent new business wins

 

End market performance

Across our end-markets, Value Added Resellers (VAR), Electronics and Energy
& Industrial continue to be the main growth drivers, with double-digit
improvement.  Growth was held back by Automotive, where performance continues
to be variable, reflecting the ongoing semiconductor chip shortages in this
industry. In Aerospace, build rate increases from the major manufacturers
towards the end of 2022 should support continued recovery.

 

In Medical, despite a temporary headwind from COVID-19 lockdowns in China
during the earlier part of Q3, we saw solid growth, with performance being
broad based across Asia-Pacific and the US. We also secured our first
regulatory clearance in China for PEEK-OPTIMA™ HA Enhanced (Spine) to
support commercialisation.

 

Inflation recovery & pricing

Pricing improved across end markets compared to Q2, with the blended average
selling price (ASP) also being ahead of the previous quarter and the prior
year.

 

Financial position

Victrex retains a highly cash generative business model, with our cash
position supporting the elevated capital expenditure this year, principally in
our China manufacturing investments, with our new PEEK polymer facility set to
start commissioning during the final quarter.  Cash on 30 June 2022 was
£50m, which excludes £3.6m cash ringfenced in China investments. Capital
expenditure for the year is now expected to be slightly lower than our prior
guidance, at approximately £50m, reflecting some expenditure phased into FY
2023.

 

Outlook

Jakob Sigurdsson, Chief Executive of Victrex, said: "This is another strong
performance by Victrex, with a healthy core business, good growth in new
applications and further milestones in our mega-programmes, particularly in
Medical as we look for this business to become a larger part of our long-term
revenues. Despite our sales mix, where VAR, Electronics and Energy &
Industrial drove most of the volume growth, we are starting to see the benefit
of price increases to help recover the unprecedented increase in energy and
raw material costs.

 

"Although historic run-rates typically see a slight step down during our final
quarter, our order book is robust and, overall, this is expected to be a year
of record volumes for Victrex. Whilst we are mindful of uncertainty in the
global economic outlook, we remain on track for delivering full year
expectations.

"With sustainable products bringing environmental and societal benefits, a
balanced portfolio of end markets in our core business, a strong pipeline of
growth opportunities, and a highly cash generative business model, our Polymer
& Parts strategy keeps us well positioned for the medium to long-term."

Victrex will report its Preliminary Results for 2022 on Tuesday 6(th) December
2022.

Analyst & investor conference call

A conference call with management will take place this morning, Thursday 7(th)
July, at 0830am BST, which can be accessed by registering at the following
link:

https://cossprereg.btci.com/prereg/key.process?key=PNRVEG6YA
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcossprereg.btci.com%2Fprereg%2Fkey.process%3Fkey%3DPNRVEG6YA&data=05%7C01%7Cahanson%40victrex.com%7Cba9ab3a9fd6f41ecf8f308da5f4d4240%7C8b5cc50fa14944bd9ddc9d27ea6d720e%7C0%7C0%7C637927082846870463%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=b8ELchFaQ8T3RjVrK0F5qeyGcOuJT5dhXYCKpGyyKQI%3D&reserved=0)

 

Enquiries:

Victrex plc:

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

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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