Essentra (ESNT) H1 2024 earnings summary

Executive summary

• Revenue reached £159.7m in H1 2024, up 1.5% at constant currency, with sequential improvement and a return to like-for-like growth in Q2 despite challenging market conditions.

• Adjusted operating profit was £21.8m, up 7.6% at constant currency, with a margin of 13.7%; gross margin expanded to 46.4%.

• Strategic focus on sustainability, commercial execution, and operational efficiency is yielding commercial wins and margin expansion.

• Integration of BMP TAPPI is on track, unlocking cross-sell opportunities and contributing to revenue growth.

• Interim dividend increased 4% to 1.25p per share; share buyback programme 45% complete.

Financial highlights

• Revenue up 1.5% in constant currency year-over-year to £159.7m; Q2 returned to like-for-like growth.

• Adjusted operating profit £21.8m, up 7.6% constant currency; adjusted operating margin 13.7%.

• Gross margin reached 46.4%, supported by procurement and cost savings.

• Adjusted EPS was 4.6p; cash conversion at 80.3%; free cash flow £12.5m.

• Net debt to EBITDA at 1.1x (pre-IFRS16); post-IFRS16 net debt was £89.1m.

Outlook and guidance

• FY 2024 adjusted operating profit expectations remain unchanged and aligned with market consensus (£48.5m–£50.6m).

• Further modest recovery anticipated in H2, with underlying volumes and new business wins trending up.

• The business is positioned to deliver operating leverage as market growth returns, with a right-sized cost base and robust operations.