SYNT Synthomer Plc

Synthomer plc
Spring 2024 trading statement

Synthomer plc ('Synthomer' or the 'Group') today issues a scheduled update on trading for the first quarter of 2024, ahead of today's Annual General Meeting (AGM). Results of voting at the AGM will be announced later today.

Trading in Q1 2024 was in line with our expectations at the start of the year. Continuing Group volumes were at their highest levels since Q2 2022. Whilst this partially reflects some short-term customer restocking - and there is still no evidence of a sustained improvement in underlying end-market demand - we are seeing improving activity levels in some of the segments of the Group that were previously more challenged.

Q1 2024 Continuing Group EBITDA was higher than the prior year period, benefitting from continued robust pricing particularly in our speciality businesses, ongoing cost reduction activities and lower energy costs. Q1 2024 Continuing Group revenue was lower than the prior year period due to lower raw materials prices.

We have made further progress in delivering our speciality solutions strategy, alongside maintaining our focus on  generating cash flow and reducing leverage. In April, we successfully tendered for €370m of our bonds due 2025, reducing gross debt and extending maturities by issuing €350m of bonds due 2029. Our next significant debt maturity is in 2027. In May, we completed the divestment of the Compounds business, increasing our focus on core end markets and further reducing site complexity. Over the last 18 months, we have reduced our manufacturing footprint by 10 sites to 33, through a combination of non-core divestments and rationalisation activity, with further actions underway.

As previously indicated, we expect to make some earnings progress (on a comparable basis adjusting for the divested Compounds business) and be Free Cash Flow positive in 2024, even if macroeconomic demand conditions do not improve.

Commenting, Synthomer CEO Michael Willome said:

"We are cautiously encouraged by trading since the start of the year: while there are signs of improvement in some of our end markets, visibility of a sustained recovery remains elusive at this stage. We therefore continue to strengthen Synthomer's position for the future, by delivering our specialisation strategy, optimising our portfolio and cost position, and demonstrating the cash generative nature of our business."

Further information:

Notes

Synthomer plans to report interim results for the six months to 30 June 2024 on 13 August 2024.

Legal Entity Identifier (LEI): 213800EHT3TI1KPQQJ56. Classification as per DTR 6 Annex 1R: 3.1.

Synthomer plc is a leading supplier of high-performance, highly specialised polymers and ingredients that play vital roles in key sectors such as coatings, construction, adhesives, and health and protection - growing markets that serve billions of end users worldwide. Headquartered in London, UK and listed there since 1971, we employ c.4,200 employees across our 4 innovation centres of excellence and more than 30 manufacturing sites across Europe, North America and Asia. With more than 6,000 blue-chip customers and £2.0bn in continuing revenue in 2023, our business is built around three divisions, serving customers in attractive end markets where demand is driven by global megatrends including urbanisation, demographic change, climate change and sustainability, and shifting economic power. In Coatings & Construction Solutions, our specialist polymers enhance the sustainability and performance of a wide range of coatings and construction products. We serve customers in applications including architectural and masonry coatings, mortar modification, waterproofing and flooring, fibre bonding, and energy solutions. In Adhesive Solutions our products help our customers bond, modify and compatibilise surfaces and components for applications including tapes and labels, packaging, hygiene, tyres and plastic modification, improving permeability, strength, elasticity, damping, dispersion and grip. In Health & Protection and Performance Materials we are a world-leading supplier of water-based polymers for medical gloves, and a major European manufacturer of high-performance binders, foams and other products serving customers in a range of end markets. Our purpose is creating innovative and sustainable solutions for the benefit of customers and society. Around 20% of our sales volumes are from new and patent protected products. At our innovation centres of excellence in the UK, Germany, Malaysia and Ohio, USA we collaborate closely with our customers to develop new products and enhance existing ones tailored to their needs, with an increasing range of sustainability benefits. Our 2030 decarbonisation targets have been approved by the Science Based Targets initiative as being in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement, and since 2021 we have held the London Stock Exchange Green Economy Mark, which recognises green technology businesses making a significant contribution to a more sustainable, low-carbon economy. Find us at www.synthomer.com or search for Synthomer on LinkedIn.