Victrex PLC - Victrex plc Full Year Trading Statement
Victrex plc: Full year trading update
'End markets remain subdued into FY 2021'
Victrex plc, an innovative world leader in high performance polymer solutions, today releases a trading update following the end of its 2020 financial year on
At the close of the Group's FY 2020 financial year, trading overall remains subdued, although some end markets have slightly improved from trough levels. Aerospace and Energy volumes have remained in line with the lows seen during Q3, with some limited incremental improvement in Automotive and Medical monthly run rates, although Value Added Resellers - which saw growth during Q3 - was softer during the fourth and final quarter.
Q4 and FY 2020 performance
Overall, Q4 Group sales volume was down 26% to 695 tonnes (Q4 2019: 940 tonnes), with Group revenue down 27% to
For FY 2020 as a whole, Group sales volume of 3,492 tonnes was down 7% compared to the prior year (FY 2019: 3,751 tonnes), with Group revenue of
Whilst top-line performance for FY 2020 was slightly ahead of consensus expectations, our high fixed cost base and the under-absorption of fixed costs due to lower production volumes will mean an impact on margin, as previously communicated. During Q4 we announced a cost saving plan that will partially mitigate this, but notwithstanding this, the effect of lower production versus sales volumes will continue through FY 2021 as volumes remain low due to end market demand, inventory is gradually unwound after Brexit and reflecting the planned debottlenecking programme, with a proportion of capacity taken offline.
Through its Polymer & Parts strategy, Victrex continues to focus on delivering further milestones in its growth pipeline, as well as exploring options to drive growth within the PAEK family of polymers or related technologies.
Despite the current challenges in Aerospace, our TxV composite parts facility in the US has secured repeat commercial orders which reflect the benefit of our technology in being able to efficiently manufacture strong and light-weight composite parts for a range of applications. In Magma, work is progressing with TechnipFMC, as part of the qualification programme in
In Medical, with the Knee clinical trial in
Financial position and cost management
Our net cash position at
As previously communicated, Victrex has been reviewing additional cost actions and efficiencies to support profitability in a lower production environment. As part of this programme, we commenced consultation in Q4 which would reduce our employee base by up to 100 roles, primarily through voluntary severance. The majority of these roles are within
The capital requirements for our
At the start of FY 2021, trading overall remains subdued, although some end markets have slightly improved from trough levels. Whilst COVID-19 headwinds continue to impact trading, our focus continues to be on the safety, health and well-being of our employees, delivering good customer service and managing our costs.
In the immediate short term, we anticipate our end markets will remain around the levels seen in Q4 and we will also see the continuing effects on margin from lower production as inventories are gradually unwound through FY 2021. H1 2021 is also likely to see a tough comparative against the solid performance in H1 2020. There is also the possibility of uncertainty from the Brexit outcome, although our contingency plans with additional warehousing and high inventories keep us in a good position to continue to support our customers.
Overall, with sustainable products, our range of medium to long term growth opportunities remain strong, our financial position is robust and our cash generation capabilities offer the opportunity of good medium term returns to shareholders.
Victrex will release its FY 2020 Preliminary results on Wednesday
Victrex is an innovative world leader in high performance polymer solutions, focused on the strategic markets of automotive, aerospace, energy (including manufacturing & engineering), electronics and medical. Every day, millions of people use sustainable products and applications, which contain our materials - from smart phones, aeroplanes and cars to oil and gas operations and medical devices. With over 40 years' experience, we develop world leading solutions in PEEK and PAEK based polymers, semi-finished and finished parts which shape future performance for our customers and our markets, support environmental and societal benefits and drive value for our shareholders. Find out more at www.victrexplc.com
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