Q3 Trading update

RNS Number : 4119G

Synthomer PLC

06 November 2018

 

November 6^th 2018                                                                                           

Synthomer plc

Q3 Trading update

Solid Q3 performance; Full Year 2018 outlook unchanged

Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the third quarter ('Q3') ended September 30^th 2018.

Trading

Europe and North America:

Europe and North America reported a solid quarter's results. Excluding sales volumes associated with Pischelsdorf, which was acquired in February 2018, volumes were slightly lower than the comparative Q3 period. Unit margins, excluding Pischelsdorf, were slightly above Q3 2017, with all segments apart from Paper showing a positive movement reflecting the benefits of further investment and increased efficiencies across the business.

Asia and Rest of World:

Asia and Rest of World continued to grow in line with our expectations. Nitrile Latex volumes were slightly ahead of a strong comparative period in Q3 2017. Nitrile Latex unit margins were also higher than the comparative period and in line with unit margins in H1 2018.

The expansion of our Pasir Gudang Nitrile Latex plant was successfully commissioned on time during September 2018. The plant will produce saleable products for customers and make a small contribution to the Group in Q4. Demand for Nitrile Latex remains robust and we have initiated our preliminary work for a further 60kt expansion at Pasir Gudang during 2020.

Financial Position

At September 30^th, the Group had net debt of £256m (Q3 2017: £232m), with the increase since June 30^th reflecting the planned step up in capital expenditure in H2 2018 (£20m), further investment in working capital (£40m) and the 2017 final dividend (£29m). Going forward, working capital is expected to remain at circa 10% of sales.

FY 2018 Outlook Unchanged

Synthomer's product and geographic diversity means that we are well positioned to withstand the challenging macroeconomic and political environment and, along with the good performance in the first 9 months of the year, the Board's expectations for Full Year 2018 remain unchanged.

Organisational Structure Change

In order to accelerate sales growth, sharpen our commercial focus and drive operational efficiencies, the Group will be reorganised from January 2019. Three new business groups will be created: Performance Elastomers (Styrene Butadiene Rubber and Nitrile Butadiene Latex), Functional Solutions (Dispersions) and Specialities.

The new structure will enable Synthomer to better leverage its global product portfolio and customer relationships, better exploit its R&D capability within chemistries, and bring greater operational focus to production sites.

The new structure combines sales, marketing, research and production by business group into dedicated global teams whilst retaining very strong regional strength and local focus. The Group will report FY 2018 numbers under the existing geographic reporting structure and at the same time publish certain segmental information under the new structure, which will then be adopted on a permanent basis going forward.

ENDS

Enquiries:

Calum MacLean, Chief Executive Officer	[phone]
Stephen Bennett, Chief Financial Officer
Charles Armitstead, Teneo	[phone]

The Company will hold a conference call for investors and analysts at 0800 GMT today.

Please dial [phone] entering conference ID: 31828488# to gain access to the call.

 

END

 

 

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