Victrex Plc - Interim Management Statement
Victrex plc: Interim Management Statement
'Aero, Energy & Medical growth offset by continued Auto & Electronics weakness'
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 2019.
Against very strong comparatives in the Industrial division, the Group saw good growth in Aerospace and Energy, whilst in Medical, we continued to see steady growth. In line with macro-indicators and reflecting wider market performance, Automotive, Electronics and Value-Added-Resellers saw some deterioration during Q3.
Q3 also saw the final quarterly comparative from the large Consumer Electronics order, with no volumes sold during Q3 2019.
Overall, Q3 Group sales volume was down 21% to 912 tonnes (Q3 2018: 1,161 tonnes), with Group revenue down 14% to £72.0m (Q3 2018: £84.0m). Excluding the large Consumer Electronics order, Q3 Group volume was down 18% and Q3 Group revenue was down 12%. Year to date (to the end of Q3) Group sales volume of 2,811 tonnes is 18% down on the prior year (2018 YTD: 3,417 tonnes), with year to date Group revenue (to the end of Q3) of £217.8m down 13% (2018 YTD: £250.6m).
As part of its Polymer & Parts strategy, Victrex continues to focus on delivering further milestones in its growth pipeline and mega-programmes.
The Group has now successfully secured the contract from a major US Automotive manufacturer for a supply of PEEK Gears commencing in FY 2020, building on the existing supply to a major European Automotive manufacturer, with over 10 other development programmes also in place.
In Aerospace, following completion of the US manufacturing facility which will support our Loaded Brackets and composite parts, the first prototype parts have now been supplied and we also received our first commercial volume order. In Medical, sales of our PEEK-OPTIMA™ HA Enhanced product continue to track above last year, whilst patient recruitment for the PEEK Knee clinical trial has started, with potential for the first implant before the end of our financial year.
Financial position and currency
Victrex has seen no material change to its financial position since 31 March 2019. Currency remains broadly neutral for the second half year, with a small tailwind for FY 2020 based on current rates and with nearly 50% of currency hedges in place.
With continued weakness in Automotive and Electronics, we remain cautious on these markets, in line with the latest macro-indicators. Whilst we do not expect a recovery in these markets during the final quarter, our own sales and innovation activity, together with slightly better comparatives, offers the opportunity to deliver a more stable performance for the remainder of our financial year.
Victrex remains in a good position for the medium to longer term. Through our Polymer & Parts strategy we have the opportunity to drive growth in our core business, further increase our differentiation through our strong pipeline of new products and deliver attractive returns to shareholders.