7 February 2025
Victrex
plc - AGM Statement &
Q1 Trading Update
'Solid
start; mixed trading conditions; full-year expectations
unchanged'
Victrex plc is an innovative world
leader in high performance polymer solutions, delivering
sustainable products which enable environmental and societal
benefit in multiple end-markets. Today's trading update covers the
first quarter of FY 2025, from 1 October 2024 to 31 December
2024.
Summary
The Group indicated at the FY 2024
preliminary results in December 2024 that we were seeing a solid
start to FY 2025.
Q1 saw good progress in both Group
volume and revenue, against a weak quarter in the prior year. Q2
has also started solidly, with January well ahead of the prior
year. Despite overall top-line progress, trading conditions remain
mixed, with Medical revenues continuing to be subdued on a
year-to-date basis, driven by ongoing industry destocking amongst
medical device customers.
Our Sustainable Solutions business
is seeing year-on-year improvement across Aerospace, Electronics,
Energy & Industrial and Value-Added Resellers. We are
benefiting from incremental business in Aerospace, whilst
Electronics is seeing an improvement in Semiconductor and in smart
devices. Automotive performance is currently lower than the prior
year, although we expect year-on-year improvement in E-mobility as
platform build for 800 volt motors supports increased
VictrexTM PEEK content per car.
In Medical, inventory correction
amongst major medical device customers continues, with limited
visibility on improvement at this early stage. We continue to
anticipate progress in Medical as we move through the year.
Q1 performance
· Q1
Group revenue up 9% at £66.6m (Q1 2024: £61.2m).
· Q1
Group volume up 20% at 898 tonnes (Q1 2024: 751 tonnes).
· Group
ASP broadly in line with guidance at £74/kg; reflecting currency
headwinds, sales mix and a softer Medical performance.
Mega-programmes
FY 2025 is expected to see a
significant step-up in our mega-programme revenues, with Aerospace
Composites, E-mobility and Trauma set to show progress. In
PEEK Knee, we are awaiting the outcome following the regulatory
submission in India, supporting the potential of a commercial PEEK
Knee in the market in 2025. Following good progress in clinical
trials across Europe and India, site recruitment for the US
clinical trial is moving forward.
Financial position & cost actions
Victrex's cash generative business
model is expected to show further cashflow improvement this year,
supporting optionality for growth investment and shareholder
returns.
Following our major investment phase
in assets and capability, capital expenditure will reduce closer to
8-10% of revenues (approximately £30m) and inventory is expected to
unwind towards our target level of approximately £100m. Despite our
final phase of inventory unwind in FY 2025, asset utilisation will
improve this year. As previously communicated, cost of manufacture
will also benefit from lower raw material costs.
We remain focused on tight cost
control, alongside our Project Vista self-help programme, which
will help underpin profitability through how we Go to Market and
serve our customers.
Outlook: full year expectations unchanged
Jakob Sigurdsson, Chief Executive of
Victrex, said:
"The Group has delivered a solid
start to the year and our full year expectations are unchanged.
Based on our momentum at this early stage, our guidance remains for
at least mid-single digit volume growth for FY 2025, with
underlying PBT growth ahead of volume growth.
"Cost control, self-help measures,
higher asset utilisation and lower raw material costs will help to
underpin profit improvement in FY 2025. However, we are mindful
that current trading conditions remain mixed, with continuing
softness in Medical. As a result, profit growth will be weighted to
the second half year. This reflects Medical and sales mix, the
impact of currency - which is a £7m-£8m headwind to PBT for the
year - being heavily weighted to H1 2025, and annualised costs from
our new China facility. All of these factors are expected to limit
our progress in the first half year, versus H1 2024.
"Victrex continues to have a strong
long-term investment proposition. We have a robust, diversified and
increasingly differentiated core business, growing
commercialisation in our mega-programmes, well invested assets, and
the prospect of further cashflow improvement. Overall, we are
well-placed for the medium to longer term."
Annual General Meeting
Victrex's Annual General Meeting
will be held today, starting at 11.00am GMT and taking place at JP
Morgan, 1 John Carpenter Street, London EC4Y 0JP, United
Kingdom.
Victrex plc:
Andrew Hanson, Director of Investor
Relations, Corporate Communications & ESG +44 (0) 7809
595831
Ian Melling, Chief Financial Officer
+44 (0) 1253 897700
Jakob Sigurdsson, Chief
Executive
+44 (0) 1253 897700
About Victrex:
Victrex is an innovative world
leader in high performance polymer solutions, focused on the
strategic markets of Automotive, Aerospace, Energy &
Industrial, Electronics and Medical. Every day, millions of people
rely on products or applications which contain our sustainable
materials, from smartphones, aeroplanes and cars to energy
operations and medical devices. With over 40 years' experience, we
are moving beyond the polymer into semi-finished and finished
products which shape future performance for our customers and our
markets, enable environmental and societal benefit for our
customers and drive value for our shareholders. Find out more
at www.victrexplc.com
