Trading Statement
Cookson Group PLC
24 May 2007
AGM TRADING STATEMENT
Cookson Group plc, a leading materials science company, releases the following
statement regarding current trading ahead of today's Annual General Meeting.
Ceramics
Global steel production - the key end-market for our Ceramics division - has
been growing faster in 2007 than our earlier expectations.
The investment and restructuring initiatives announced in 2006, which include
additional production facilities in China, Poland and Mexico and the closure of
facilities in the UK and the US, are proceeding in line with expectations
although, as anticipated, the full benefits arising from a number of these
initiatives will not be realised until 2008.
Overall, underlying trading for the Ceramics division year to date has been
encouraging and significantly ahead of the prior year.
Electronics
End-market growth in our electronics markets in the year to date is in line with
our earlier expectations, with growth in 2007 marginally lower than that in 2006
but still ahead of global GDP. The market penetration of lead-free solder has
remained constant compared to the end of 2006, where we had expected a
continuing (albeit slowing) increase in penetration levels. We believe this is
due to recent significant increases in the price of tin and silver, which are
passed through to our customers and result in lead-free solder being much more
expensive than traditional, leaded solder. This has also boosted demand for our
less expensive, SACX(TM), low silver, lead-free products.
Overall, underlying profitability for the Electronics division in the year to
date has been in line with expectations and ahead of the prior year.
Precious Metals
In the US, retail demand for jewellery has been somewhat subdued in the year to
date. In Europe, retail demand for jewellery remains weak but in line with our
earlier expectations. As a consequence of the weaker US market, profitability
for the division in the year to date has been slightly weaker than the
equivalent period in the prior year (on a constant currency basis) but with all
operations trading profitably.
Currency
In our preliminary results announcement, we highlighted that the recent
weakening of the US dollar, through its translation impact on our sterling
results, would reduce our reported growth if it were to continue. Since that
announcement, the US dollar has continued to weaken such that the average US
dollar exchange rate for the first four months of 2007 was US$1.96. The
equivalent average US dollar exchange rate for the first half of 2006 and full
year 2006 was US$1.79 and US$1.84 respectively. Approximately 80% of the
Group's profit after tax arises in either the US dollar or other currencies
which 'track' the US dollar, reflecting in particular the Group's well
established presence in the fastest-growing and most profitable markets of
Asia-Pacific.
Outlook
Based on general market conditions and our trading results for the first four
months of the current year, we continue to expect a significant improvement in
the performance of our continuing operations overall in 2007 on a constant
currency basis. However, the recent weakening of the US dollar, through its
translation impact on our sterling results, will reduce the rate of revenue and
earnings growth on an as-reported basis.
Further announcements
A pre-close period trading statement will be issued at the end of June, with
Interim results for the six months ending 30 June 2007 expected to be announced
on 2 August 2007.
For further information please contact:
Shareholder/analyst enquiries:
Nick Salmon, Chief Executive Cookson Group plc
Mike Butterworth, Group Finance Director Tel: +44 (0)20 7822 0000
Anna Hartropp, Investor Relations Manager
Media enquiries:
John Olsen Hogarth Partnership
Tel: +44 (0)20 7357 9477
About Cookson Group plc
Cookson Group plc is a leading materials science company operating on a
worldwide basis in Ceramics, Electronics and Precious Metals markets.
The Ceramics division is the world leader in the supply of advanced flow control
refractory products and systems to the global steel industry and a leading
supplier of specialist ceramic products to the glass and foundry industries. It
is also the regional leader in the US, UK and Australia in the supply and
installation of monolithic refractory linings.
The Electronics division is a leading supplier of advanced surface treatment and
plating chemicals and assembly materials to the automotive, construction and
electronics markets.
The Precious Metals division is the leading supplier of fabricated precious
metals (gold, silver, platinum, etc.) to the jewellery industry in the US, the
UK, France and Spain. Products include alloy materials, semi-finished jewellery
components and finished jewellery.
Forward Looking Statements
This announcement contains certain forward-looking statements which may include
reference to one or more of the following: the Group's financial condition,
results of operations, cash flows, dividends, financing plans, business
strategies, operating efficiencies or synergies, budgets, capital and other
expenditures, competitive positions, growth opportunities for existing products,
plans and objectives of management and other matters.
Statements in this document that are not historical facts are hereby identified
as 'forward-looking statements'. Such forward-looking statements, including,
without limitation, those relating to the future business prospects, revenues,
working capital, liquidity, capital needs, interest costs and income, in each
case relating to Cookson, wherever they occur in this document, are necessarily
based on assumptions reflecting the views of Cookson and involve a number of
known and unknown risks, uncertainties and other factors that could cause actual
results, performance or achievements to differ materially from those expressed
or implied by the forward-looking statements. Such forward-looking statements
should, therefore, be considered in light of various important factors.
Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements include
without limitation: economic and business cycles; the terms and conditions of
Cookson's financing arrangements; foreign currency rate fluctuations;
competition in Cookson's principal markets; acquisitions or disposals of
businesses or assets; and trends in Cookson's principal industries.
The foregoing list of important factors is not exhaustive. When relying on
forward-looking statements, careful consideration should be given to the
foregoing factors and other uncertainties and events, as well as factors
described in documents the Company files with the UK regulator from time to time
including its annual reports and accounts.
Such forward-looking statements speak only as of the date on which they are
made. Except as required by the Rules of the UK Listing Authority and the London
Stock Exchange and applicable law, Cookson undertakes no obligation to update
publicly or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this announcement might
not occur.
Cookson Group plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 251977
www.cooksongroup.co.uk
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