28th April 2022
Synthomer plc
Q1 2022 trading update
Encouraging start to the year with full year outlook unchanged
Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the quarter ended 31st March 2022.
Q1 Trading
The Group has had an encouraging start to the year. All businesses were ahead or in line with strong Q1 2021 results excluding Performance Elastomers where NBR continues to normalise relative to an exceptional 2021 performance.
Functional Solutions
Functional Solutions has continued to see very positive trading in the first quarter of 2022. Our consumer facing and industrial end markets have remained strong with raw material and cost inflation successfully passed through to customers. Volumes and unit margins were ahead of the comparative period supported by the ongoing revenue synergies from OMNOVA and the full utilisation of low cost capacity in Europe and the US.
Performance Elastomers
NBR margins and volumes continue to stabilise in line with our expectations following high inventory levels of medical gloves and reduced demand due to the easing of the COVID 19 pandemic. Consistent with previous guidance, we expect trading conditions in NBR to normalise by the end of H1 with market growth returning to 2019 levels in H2 2022.
Conditions in our SBR business remain robust with better capacity utilisation following the closure of our Oulu site during Q1 2021 as a part of our European SBR network rationalisation programme. We have also seen firmer margins across all significant end markets relative to the comparative period.
Industrial Specialities
Industrial Specialities has had a good start to the year relative to a strong comparative with volumes and unit margins ahead in most segments including industrial and consumer facing markets.
Acrylate Monomers
Acrylate Monomers continues to benefit from the extended period of strong demand and industry supply issues leading to an uplift in unit margins and higher profitability relative to Q1 2021.
Adhesive Technologies
Synthomer completed the $1bn acquisition of Eastman's Adhesive Resins business on 1st April. The business has a leading position in the global adhesives market which is exposed to attractive end-markets with resilient growth fundamentals. Its portfolio takes Synthomer into more specialised, more global and higher growth segments.
Proforma Leverage
Proforma net debt:EBITDA leverage as at 1st April 2022 was 1.9x. This reflects the consideration paid for Adhesive Technologies, the expected seasonal investment in working capital and higher raw material prices.
FY expectations unchanged
Whilst macroeconomic conditions remain uncertain, we are encouraged by the underlying trading conditions and a strong Q1 performance with continued margin growth reflecting our ability to successfully manage the inflationary environment.
Accordingly, our full year outlook is unchanged. The Board remains confident that the benefits of recent acquisitions, continued investment in new capacity and our proven growth strategy will underpin sustainable profit growth in the coming years.
- ENDS -
Enquiries
Tim Hughes, President, Corporate Development Tel: +44 1279 436211
Charles Armitstead, Teneo Tel: +44 7703 330 269
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