Devro PLC -Half Year Results

*     Underlying figures are stated before exceptional items and net finance cost on pensions (see Alternative Performance Measures section of the Half Year Results Update for definition, explanation and reconciliation to equivalent statutory measures)

**    Underlying figures for HY 2017 have been restated to exclude net finance cost on pensions

Highlights

·    Good strategic progress, in particular North American plant performance continuing to improve; China average selling price increasing; Fine Ultra for Europe, Japan and SE Asia ready for commercial launch in H2.

·    Revenue of edible collagen casings increased 0.3% at constant currency***

o  Volumes maintained year on year, with strong growth in Continental Europe, Russia and Latin America offset by Asia and, in particular, China where Devro discontinued imports of legacy products.  Volumes excluding Asia up 3%.

o  Price/mix improvements across Europe and China, partially offset by the year-on-year impact of pricing agreements reached in 2017 to secure long-term relationships.

·    Underlying operating profit up 2%, due to stronger performance on manufacturing yields and savings from the Devro 100 programme, partially offset by energy and salary inflation and FX headwinds. Statutory operating profit up by 8% due to the same factors plus lower exceptional items.

·    Net debt of £147.3m (June 2017: £151.9m).

Rutger Helbing, Chief Executive Officer of Devro, commented:

“We are making good progress in a range of markets contributing towards our Devro 100 objectives of growing profitable revenue and market share, whilst reducing operating unit costs. In addition, we have significantly improved the North American plant performance, and increased the average selling price in China by 19% through migrating the customer mix towards those that value our differentiated products. Product development of the new Fine Ultra range remains a key focus and the product platform will enter commercial launch during H2 following completion of refinements to reflect local market preferences. The new product platform is an important building block of our growth ambitions, and will begin to be seen in H2 2018 and into 2019.

“We are focused on continuing to deliver Devro 100 and the Board's expectations for the full year remain unchanged.”