TIDMESNT
RNS Number : 5827R
Essentra plc
07 July 2022
ESSENTRA PLC
("Essentra" or "the Company")
A leading global provider of essential components and
solutions
HY 2022 PRE-CLOSE TRADING UPDATE
-- Sale of Packaging to Mayr-Melnhof Group announced for GBP312m
-- Strategic review of the Filters division progressing in line with expectations
-- Strong performance in H1 2022, revenue increased 14.0% on a
like-for-like(1,2) ("LFL") basis (9.0% LFL growth in Q2) for the
continuing business
-- Continued to mitigate inflationary headwinds in Components and Filters
-- Components continues to deliver with H1 revenue up 12.1% on
LFL trading day adjusted(3) basis
-- Filters' strong momentum continued, with LFL revenue growth of 15.4% in H1
-- FY 2022 adjusted operating profit is expected to be in line with the Board's expectations
On a continuing operations basis, the Group has experienced a
strong start to 2022 with the first half delivering LFL(1,2)
revenue growth of 14.0% compared to the same period in the prior
year, supported by pricing initiatives and volume growth. Q2
trading continued to show good growth momentum albeit against
tougher comparatives as expected, with LFL growth of 9.0% compared
with Q2 2021.
Trading Commentary
The Components division delivered 12.1% LFL growth in H1, with
LFL Q2 2022 working day adjusted(3) revenue growth up 9.3% against
a tougher comparative. The business has continued to deliver whilst
actively managing supply chain headwinds and the impact of COVID
lockdowns in China. We have passed through inflationary cost
pressures in Q2 and will continue to review price increases in
H2.
The Filters division had LFL growth of 15.4% in H1, with LFL Q2
2022 revenue growth of 14.9%. This strong performance has been
supported by price and volume growth, and continues to be driven by
outsourcing contracts which are delivering in line with
expectations. The China JV continues to grow production volumes,
despite recently being impacted by temporary COVID restrictions.
Business Continuity Plan ("BCP") volumes with multi-national
companies ("MNCs") have continued through Q2 and our range of
proprietary eco-products(4) continue to generate interest, as we
support our customers with commercial launches.
Packaging
On 24(th) June 2022, the Company announced the sale of the
Packaging division and we expect the transaction to close in Q4
2022. For our half year results ending 30(th) June 2022, Packaging
will be accounted for as a discontinued operation.
The division saw H1 LFL revenue growth of 9.6% (Q2 LFL 8.2%
growth) as pharmaceutical markets continued to recover.
Inflationary cost pressure remains a significant headwind due to
raw materials supply challenges.
Commenting on today's results, Paul Forman, Chief Executive,
said:
"I am pleased with the strong start to the year that we have
delivered. The strategic reviews remain on track and the recent
announcement of the sale of Packaging is the first step to
reposition Essentra as a leading manufacturer and distributor of
components.
Whilst we remain mindful of the current economic environment
including ongoing cost inflation, the business remains on track to
deliver adjusted operating profit in line with the Board's
expectations"
Half year results
The next scheduled update will be the publication of half year
results on 17 August 2022.
Notes
(1) The term "like-for-like" describes the performance of the
continuing business, excluding Packaging, adjusting for the impact
of acquisitions and foreign exchange
(2) IAS29 'Financial Reporting in Hyperinflationary Economies'
has been adopted in Turkey within the Components division
(3) Adjusting for four less trading days during Q2 2022
(4) A higher degradability and non-plastic Filter option. ECO
Flute, ECO Active, ECO Sensation, ECO Cavitec and ECO Cavitec
Sensation
Enquiries
Essentra plc Tulchan Communications LLP
Jack Clarke, Chief Financial Officer Olivia Peters
Claire Goodman, Group Investor Relations Martin Robinson
Manager Tel: +44 (0)20 7353 4200
Tel: +44 (0)1908 359100
Notes to Editors
About Essentra plc
Essentra plc is a FTSE 250 company and a leading global provider
of essential components and solutions. Organised into three global
divisions, 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.
Headquartered in the United Kingdom, Essentra's global network
extends to 34 countries and includes 8,327 employees, 47 principal
manufacturing facilities, 28 sales & distribution operations
and two research & development centres. For further
information, please visit www.essentraplc.com.
Essentra Components
Essentra Components is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded and
metal items. Operating in 25 countries worldwide, 13 manufacturing
facilities and 23 sales & distribution centres serve more than
79,000 customers with a rapid supply of low cost but essential
products for a variety of applications in industries such as
equipment manufacturing, automotive, fabrication, electronics and
construction. The division also includes the Reid Supply business,
which provides a wide range of branded hardware supplies to a broad
base of industrial customers, largely located in the US
Mid-West.
Essentra Packaging
Essentra Packaging is one of only two multicontinental suppliers
of a full secondary packaging range to the health and personal care
sectors, with 23 facilities across three geographic regions. The
division's innovative products include cartons, leaflets,
self-adhesive labels and printed foils used in blister packs, which
help customers to meet the rapidly-changing requirements of these
end-markets and can also be combined with Essentra's authentication
solutions to help the fight against counterfeiting.
Essentra Filters
Essentra Filters is the only global independent cigarette filter
supplier. Currently headquartered in Singapore, the division has 12
sites across nine countries, including two innovation centres,
providing a flexible infrastructure strategically positioned to
serve the tobacco sector. 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: Essentra's offering also
includes Heat Not Burn and e-cigarette solutions to the rapidly
evolving market for Next Generation Products. The division also
includes the Tear Tapes business, which is globally recognised as
the leading manufacturer and supplier of pressure-sensitive tear
tapes, that are largely used in the tobacco, e-commerce, food and
beverage and specialist packaging sectors.
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END
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