TIDMESNT
RNS Number : 2152Z
Essentra plc
20 May 2021
ESSENTRA PLC
A leading global provider of essential components and
solutions
AGM 2021 - TRADING UPDATE
At Essentra plc's ("Essentra" or "the Company") Annual General
Meeting ("AGM") to be held later today, Paul Lester, Chairman, will
make the following statement.
Update on COVID-19 ("the pandemic")
Our four priorities remain; employee physical and emotional
wellbeing, continued high levels of customer support, cash
conservation, and building for our future.
The Company continues to proactively monitor the pandemic
situation on a country by country basis, and is taking steps to
ensure the safety of our people. In particular in our Indian
facilities, we are carrying out proactive testing, providing
assistance to employees and their families in isolation, as well as
arranging medical and emotional support to those infected. In
addition, the Company is also assisting customers with BCP
solutions to ensure the continuous supply of essential products
that they require for their production needs.
Current trading
As previously reported in our Q1 2021 trading statement, the
Company had an encouraging start to the year, with revenue growth
of 1.4% on a like-for-like (LFL) (1) basis. This trend of positive
momentum has continued with LFL growth for the four months to April
of 6.0%, albeit the more recent growth rate is inevitably skewed
due to the impact of the pandemic taking its full grip in April
last year. Compared to April 2019, the month of April 2021 is
broadly flat on a LFL basis.
The growth in April has principally come from our Components
division, where end markets continue to improve and our commercial
initiatives continue to deliver benefits, and the Filters division,
where performance has mainly been driven by outsourcing contracts
delivering strong volumes. Packaging remains down year over year
owing to the continued impact from a reduction in the level of
prescriptions and elective surgeries through lockdown periods,
combined with the fact that the prior year comparative benefitted
from a boost to 'over the counter' trade due to the pandemic.
Commercial Progress
Within Components, following on from successful implementation
in Europe and North America, the roll out of our new digital
platform has moved into Asia - with the first Asian sites expected
to go-live later this month. We are continuing to invest in our
Business Process Redesign (BPR) programme, and are planning to
go-live with our first site (Spain) very soon.
In Packaging, the integration of 3C! continues to progress well
and is in line with our expectations. Cost actions continue to
support margin improvement, paving the way of our journey to reach
a 2021 margin exit rate in line with the industry average of 8-10%
(barring any major unforeseen macro-economic events).
In Filters, as previously reported, we have recently launched
three proprietary Eco-Filter products(2) , which are intended to
meet the EU's Single Use Plastics Directive initiatives for
plastic-free and biodegradable products. In addition, the division
has also actively been helping customers with developing and
commercialising other sustainable products into market. Although it
is still early stages, we are pleased to confirm that we are
partnering with a large customer who is going to trial these
products in Europe in Q3 2021. In addition, there are plans to
launch Eco-Filters with another MNC customer in early 2022. The
China JV remains on track to commence production towards the end of
Q2 2021.
M&A update
As we recently announced, the Company has signed an agreement to
purchase the business of Jiangxi Hengzhu Electrical Cabinet Lock
Co., Ltd ("Hengzhu"), which is an access hardware manufacturer and
distributor. The acquisition of Hengzhu strengthens our position in
China, enabling us to expand our access hardware range. This
acquisition is earnings accretive and will deliver sustainable
value to Essentra over the long-term.
The strength of our balance sheet, liquidity position and
capital structure mean we are well positioned to pursue attractive
bolt-on acquisition opportunities.
Outlook
Recent order book trends continue to improve across the Group,
and we expect this positive momentum to continue.
Although the pandemic continues to contribute to an uncertain
macro-economic environment, the diverse nature of the Company's end
markets provides a degree of resilience against the macro
uncertainty caused by the pandemic.
Notes
(1) Excludes the impact of acquisitions, disposals and foreign
exchange
(2) ECO Sensation, ECO Cavitec and ECO Cavitec Sensation
Enquiries
Essentra plc Tulchan Communications LLP
Aamir Mohiuddin, Investor Relations Martin Robinson
Director Olivia Peters
Lucy Yank, Group Communications Tel: +44 (0)20 7353 4200
Director
Tel: +44 (0)1908 359100
Notes to Editors
About Essentra plc
Essentra plc is a FTSE 250 company and a leading global provider
of essential components and solutions. Organised into three global
divisions, Essentra focuses on the light manufacture and
distribution of high volume, enabling components which serve
customers in a wide variety of end-markets and geographies.
Headquartered in the United Kingdom, Essentra's global network
extends to 34 countries and includes 7,065 employees, 50 principal
manufacturing facilities, 32 sales & distribution operations
and 3 research & development centres. For further information,
please visit www.essentraplc.com .
Essentra Components
Essentra Components is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded and
metal items. Operating in 25 countries worldwide, 15 manufacturing
facilities and 25 sales & distribution centres serve more than
82,000 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 and
construction. The division also includes the Reid Supply business,
which provides a wide range of branded hardware supplies to a broad
base of industrial customers, largely located in the US
Mid-West.
Essentra Packaging
Essentra Packaging is one of only two multicontinental suppliers
of a full secondary packaging range to the health and personal care
sectors, with 25 facilities across three geographic regions. The
division's innovative products include cartons, leaflets,
self-adhesive labels and printed foils used in blister packs, which
help customers to meet the rapidly-changing requirements of these
end-markets and can also be combined with Essentra's authentication
solutions to help the fight against counterfeiting.
Essentra Filters
Essentra Filters is the only global independent cigarette filter
supplier. The twelve sites across nine countries, including three
R&D centres, provide a flexible infrastructure strategically
positioned to serve the tobacco sector. The business supplies a
wide range of value-adding high quality innovative filters,
packaging solutions to the roll your own segment and analytical
laboratory services for ingredient measurement to the industry:
Essentra's offering also includes Heat Not Burn and e-cigarette
solutions to the rapidly evolving market for Next Generation
Products. The division also includes the Tear Tapes business, which
is globally recognised as the leading manufacturer and supplier of
pressure-sensitive tear tapes, that are largely used in the
tobacco, food and drink and specialist packaging.
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END
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