Last checked at 17 Jan 2024 07:00
ESSENTRA PLC
PRE-CLOSE TRADING UPDATE
A resilient Q4 performance, FY23 expectations unchanged
Essentra plc ("Essentra", the "Group", or the "Company"), a leading global provider of essential components and solutions, today provides a trading update for the thirteen weeks ended 31 December 2023 ("Q4").
The Group's FY23 expectations remain unchanged. The Group expects to deliver adjusted operating profit for the full year in line with previous guidance. The business continues to demonstrate operational and financial resilience, remaining well positioned to continue to progress towards its medium-term targets.
Trading update
In Q4, the Group saw a sequential improvement in performance compared to the previous quarter. Group revenue on a like-for-like1 ("LFL") and trading day adjusted basis declined -3.6% in Q4 2023, compared to the same period in the prior year, an improvement on the -7.1% decline reported in Q3 2023, as comparatives continued to ease after a strong H1 2022 performance.
EMEA saw an improvement in new order momentum in Q4, whilst continuing to experience market softening as previously guided, in line with changes to the macro-environment. The AMERS region saw trading stability quarter on quarter, and remains focused on the improvement in destocking trends within distributor end-market channels. The APAC business has continued to demonstrate a gradual recovery.
Through a combination of disciplined and proactive initiatives taken through 2023, including effective sales pricing offsetting inflation, Group adjusted operating margins remain strong. Central corporate costs, that were re-sized in H1 2023, continue to be well managed, and remain in line with previous guidance of approximately £13m.
The BMP TAPPI acquisition, completed on 26 October 2023 is performing in line with management expectations, early integration plans are on track.
Outlook
With a robust and differentiated business model, underpinned by its breadth of customers, end market categories and geographical diversification, Essentra is well positioned, and continues to demonstrate through-cycle financial resilience. The Group's balance sheet and cash generation remain strong, providing optionality for investment in organic growth initiatives and earnings enhancing M&A.
Through operational leverage, acquisition synergies and the compounding benefit of cost actions taken by management in 2023, the Group remains confident in delivering progress towards its medium-term targets.
Commenting on today's announcement, Scott Fawcett, Chief Executive Officer, said:
"I'm pleased with Essentra's performance in its first full year as a standalone components business. This year, we have been operationally successful whilst navigating the macro-economic backdrop, with the execution of M&A, the expansion of our footprint and right-sizing of our central cost base. We are on track to deliver adjusted operating profit in line with previously shared guidance, and continue to progress towards our medium-term targets".
Notice of results
Essentra will release its preliminary results for the twelve months ended 31 December 2023 on 19 March 2024. Further details regarding the Company's presentation to analysts and investors will be provided nearer the time.
1. The term "like-for-like" describes the performance of the continuing business on a comparable basis, adjusting for the impact of acquisitions, disposals and foreign exchange. 2023 LFL sales performance is adjusted for the acquisition of the Wixroyd Group ("Wixroyd") on 1 December 2022 and BMP s.r.l ("BMP TAPPI") on 26 October 2023.
Enquiries
Essentra plc | FTI Consulting |
Jack Clarke, Chief Financial Officer | Richard Mountain |
Claire Goodman, Investor Relations Manager Emma Reid, Company Secretary | Ariadna Peretz FTI_essentra@fticonsulting.com |
Tel: +44 (0)1908 359100 | Tel: +44 (0)20 3727 1340 |
Notes to Editors
About Essentra plc
Essentra plc is a FTSE 250 company and a leading global provider of essential components and solutions, focusing on the manufacture and distribution of plastic injection moulded, vinyl dip moulded and metal items.
Headquartered in the United Kingdom, Essentra's global network extends to 28 countries worldwide and includes over 3,000 employees, 13 manufacturing facilities, 24 distribution centres and 33 sales & service centres serving c.74,000 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, medical and renewable energy.
For further information, please visit www.essentraplc.com