Q3 2017 Interim Management Statement

RNS Number : 2986U

Essentra plc

23 October 2017

 

ESSENTRA PLC

Q3 2017 INTERIM MANAGEMENT STATEMENT

Essentra plc ("Essentra" or "the Company") today provides the following trading update with respect to the three months ended 30 September 2017 (Q3 2017).

Current trading

Trading in Q3 2017 showed modest like-for-like revenue growth for the overall Group - being the first such period since Q4 2015 - with improved trends in all three divisions compared to Half Year 2017 ("HY 2017").   

The increase in Component Solutions was driven by a continued strong result in both Components Europe and Asia as well as a return to growth of the Americas business, together with ongoing momentum in Pipe Protection Technologies.  In Filter Products, growth was boosted by continued success for innovative filters, including the Superslim variants in China launched in H2 2016.  In Health & Personal Care Packaging, key operational metrics with regard to delivery and quality continued to strengthen, and the rate of revenue decline in Q3 sequentially improved versus HY 2017 notwithstanding the impact of Hurricane Maria on the two sites in Puerto Rico; however, in combination, the ongoing decline in revenue and the cost of Maria-related business disruption (of which more below) impacted the adjusted operating profit margin during the period.

Update regarding recent hurricane activity in the Americas

Further to its announcement of 25 September 2017, the Company confirms that partial operations recommenced at Guaynabo and Manati, in Puerto Rico, on 2 October 2017.  While infrastructure and supply chain issues remain constraining factors to the resumption of normal output for the foreseeable future, the local team is successfully meeting the reduced level of demand to date from customers, who themselves are facing similar post-Hurricane Maria challenges.

For the 3 months ended September 2017, Essentra estimates the profit impact from Hurricane Maria to be in the range of £1.2 -1.5m before any recovery from insurance.  In addition - and as previously communicated - Essentra has also experienced some minor disruption from Hurricanes Harvey and Irma to its sites in Houston, Largo and Puerto Rico, further to which the Company reiterates the estimated profit impact to be in the range of £0.5 - 1.0m. 

Newport IP5 cartons facility

During the period, the Company confirmed its proposal of 27 July 2017 to cease the production of folding cartons for the consumer goods industry at Newport, UK and, as a consequence, to close its cartons facility ("IP5") by the end of 2017.

Full Year 2017 outlook

In light of trading through Q3 2017, the Company continues to anticipate that Component Solutions will generate a similarly strong result in H2 compared to the first half of the year, and that Filter Products will deliver an improved trend in both like-for-like revenue growth and adjusted operating margin.

In Health & Personal Care Packaging, while the deterioration in like-for-like revenue growth is expected to moderate modestly, the adjusted operating margin in the second half is now anticipated to be slightly lower than HY 2017, owing to the profit implications of Hurricane Maria on the Company's sites in Puerto Rico (with any recovery from insurance potentially to be in 2018) and the ongoing decline in volume.

Enquiries

Essentra plc Joanna Speed, Corporate Affairs Director Tel: [phone]

Ogilvy PR London Sarah Edwards Tel: [phone] E-mail: [e-mail]

Notes to Editors

About Essentra plc

Essentra plc is a FTSE 250 company and a leading global provider of essential components and solutions.  Essentra focuses on the light manufacture and distribution of high volume, enabling components which serve customers in a wide variety of end-markets and geographies.

Component Solutions

The Components business is a global market leading manufacturer and distributor of plastic injection moulded, vinyl dip moulded and metal items.  Operating units in 29 countries serve a very broad industrial base of customers with a rapid supply of products for a variety of applications in industries such as equipment manufacturing, automotive, fabrication, electronics and construction.

The Pipe Protection Technologies business specialises in the manufacture of high performance innovative products from commodity resins to engineering-grade thermoplastics and polymer alloys for use in a range of end-markets.  Locations in four countries, combined with a wide distributor network, serve customers around the world.

Essentra Extrusion is a leading custom profile extruder located in the Netherlands which offers a complete design and production service.  One of the first companies to extrude plastics in 1956, Essentra is now one of Europe's most advanced suppliers of co-extrusion and tri-extrusion to all branches of industry.

The Security business has access to a wide portfolio of products and services, including printers, software and consumables from leading manufacturers.

Health & Personal Care Packaging

A leading global provider of packaging and authentication solutions to a diversified blue-chip customer base in the pharmaceutical, health & personal care, consumer and specialist packaging sectors.  The business focuses on delivering value-adding innovation, quality and service through the provision of a wide range of printed products and solutions, including cartons, tapes, leaflets, foils, labels and authentication solutions. 

The Speciality Tapes business has expertise in coating multiple adhesive systems in numerous technologies.  With close to 3,000 adhesive products available for same-day shipping, Essentra's products can meet all high performance needs, from foam, magnetic, finger lift and acrylic high bond tapes to hook and loop and non-skid foam.

Filter Products

Essentra Filter Products is the only global independent cigarette filter supplier.  The nine worldwide locations, including a dedicated Technology Centre supported by three regional development facilities, provide a flexible infrastructure strategically positioned to serve the tobacco industry.  The business supplies a wide range of value-adding high quality innovative filters, packaging solutions to the roll your own segment and analytical laboratory services for ingredient measurement to the industry.

Headquartered in the United Kingdom, Essentra's global network extends to 33 countries and includes c. 8,000 employees, 48 principal manufacturing facilities, 64 sales & distribution operations and 4 research & development centres. For further information, please visit www.essentraplc.com.

 

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