Trading Statement

RNS Number : 9436L

Victrex PLC

25 July 2017

 

 

                                               

25 July 2017

Victrex plc: Interim Management Statement

 'Continued growth; well-placed for FY17'

Victrex plc, an innovative world leader in high performance polymer solutions, today releases its Interim Management Statement for the third quarter (Q3) covering the period 1 April to 30 June 2017.

The Group has performed well since the end of the first half and cash generation has continued to be strong.

Although the second half sees a tougher volume comparative, particularly for Q4, our core business has remained in good growth, with Automotive, Electronics (ex-Consumer) and Value Added Resellers being notably strong.  As expected, whilst we saw some Consumer Electronics volumes during Q3, these were lower than the prior year.

In Medical, the mature US Spine market continues to be a challenge to short term-growth although Q3 performance was slightly ahead of the prior year in constant currency. Pleasingly, our differentiated and innovative PEEK-OPTIMA^TM HA Enhanced product, a premium and next generation offering which promotes bone-on growth, has now secured first meaningful revenues of over £1m and adoption rates are progressing.

Overall, Q3 Group revenue* was up 26% to £76.3m (Q3 2016: £60.6m), with Group sales volume up 6% to 1,022 tonnes (Q3 2016: 966 tonnes).  Year to date Group sales volume of 2,881 tonnes is 5% up on the prior year (2016 YTD: 2,736 tonnes), with year to date Group revenue of £207.3m up 17% (2016 YTD: £177.6m).

Currency continues to support top-line revenues, with hedges placed at more favourable currency rates benefiting us during the second half year.  The anticipated currency benefit for our 2017 financial year is unchanged, and is expected to be weighted approximately one-third/two-thirds between the first and second half. For 2018, we are now over 60% covered for our currency hedging programme.

In our growth pipeline, as well as meaningful revenue for PEEK-OPTIMA^TM HA Enhanced, several 2017 milestones have now been delivered.  In Automotive, in addition to our agreement to supply PEEK Gears to a major European Automotive manufacturer from 2018, we now have several new market-wide development programmes with global manufacturers.  In Aerospace, construction of our US manufacturing facility is progressing for our TxV Aero Composites joint venture, following pre-qualification of our differentiated grades for loaded brackets last year. We are also developing some strategic alliances in the Aerospace supply chain, as part of our focus on composite parts, to complement this joint-venture. 

Outlook

For the remainder of 2017, Consumer Electronics volumes are now expected to be lower than our previous guidance, although market-wide engagement programmes are progressing, offering both volume and value opportunities for 2018, including for differentiated applications.  Overall, our strong core business performance is more than offsetting lower Consumer Electronics and may now offer a degree of upside potential for the full year.  Victrex remains well placed for 2017 and we continue to be comfortable with current expectations.

For the medium to longer term, Victrex remains in a good position, with a Polymer & Parts strategy to increase our differentiation, a strong pipeline of potentially game-changing projects, a focus on cost efficiency and a highly cash generative business model.

Notes:

*Q3 and YTD revenue for FY 2017 includes sales from the Zyex PEEK fibres acquisition (completed in April 2017).

Enquiries:

Victrex plc:

Andrew Hanson, Head of Investor Relations & Communications         [phone]

Louisa Burdett, Group Finance Director                                             [phone]

Teneo Blue Rubicon:

Charles Armitstead                                                                          [phone]

Analyst & investor conference call

A conference call for analysts & investors will be held today at 08.30 BST. Dial in details: [phone], pin 54398114#

About Victrex:

Victrex is an innovative world leader in high performance polymer solutions, focused on the strategic markets of automotive, aerospace, energy (including manufacturing & engineering), electronics and medical. Every day, millions of people use products and applications, which contain our materials - from smart phones, aeroplanes and cars to oil and gas operations and medical devices. With over 35 years' experience, we develop world leading solutions in PEEK and PAEK based polymers, semi-finished and finished parts which shape future performance for our customers and our markets, and drive value for our shareholders. Find out more at www.victrexplc.com

 

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