21st April 2021
Q1 Trading Update
Stronger underlying trading across all divisions and continued exceptional Nitrile Latex performance
Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the quarter ended 31st March 2021.
Strong trading momentum across all businesses
Performance Elastomers has continued to perform strongly. The positive trends experienced in our Nitrile Latex business during 2020 have continued through the first quarter of 2021 with overall performance ahead of expectations. Both volumes and unit margins were significantly ahead of prior year driven by exceptional demand as a consequence of the COVID-19 pandemic.
Conditions in our SBR latex business also continued to improve, with all segments except paper trading ahead of the comparative period in 2020. Following the strategic review of the European SBR network we completed the consultation in Marl (Germany) and the planned closure of the Oulu (Finland) site at the end of Q1.
Functional Solutions has seen a sustained improvement in the first quarter of 2021. Our consumer facing and industrial end markets have remained robust with our Oil and Gas business improving month on month. Volumes and unit margins were ahead of the comparative period supported by the acquisition of and synergies from OMNOVA and the introduction of low cost capacity in Europe and the US to drive organic growth in differentiated applications.
Industrial Specialities and Acrylate Monomers
Industrial Specialities also had a good start to the year with activity levels and unit margins significantly ahead of prior year in all major segments including automotive and consumer facing markets. Acrylate Monomers likewise benefitted from improved demand and industry supply issues resulting in a significant uplift in profitability.
The strong trading performance and cash generation has resulted in a further reduction in proforma net debt:EBITDA to 1.2x at 31st March 2021 with anticipated leverage of less than 1.0x expected by 30th June 2021 (31st December 2020: 1.8x).
Positive outlook: strong trading increases FY EBITDA expectations
Whilst macroeconomic conditions remain uncertain given the ongoing COVID-19 pandemic, we are encouraged by a further strengthening of underlying trading conditions and the strong performances across all our divisions during Q1.
Accordingly, the Board now expects 2021 EBITDA to be in excess of £450m reflecting a further rise in the one off profitability of our Nitrile Latex business and the strengthening of the underlying trading conditions. Our expectation that the Nitrile Latex business will return to more normalised levels in 2022 remains unchanged.
The company will hold a conference call for investors and analysts at 0800 BST today:
Dial in number:
UK (Toll free) 0800 640 6441
UK (Local) 020 3936 2999
United States (Local) 1 646 664 1960
All other locations +44 20 3936 2999
Access code: 921802
Calum MacLean, Chief Executive Officer
Steve Bennett, Chief Financial Officer Tel: +44 1279 436211
Tim Hughes, President, Corporate Development
Charles Armitstead/ Matt Denham, Teneo Tel: +44 7703 330 269/ +44 7825 735596