Victrex (VCT) Q3 2024 TU earnings summary

Executive summary

• Achieved 20% year-over-year volume growth and 2% revenue growth in Q3 2024, marking the first period of such growth since Q4 2022.

• Sustainable Solutions segments, especially VAR, saw strong double-digit volume growth, while Medical remained weak due to ongoing industry-wide destocking.

• Year-to-date revenue is down 9% and volumes down 2% compared to the prior year, reflecting a softer first half and lower Medical revenues.

• Full-year volume growth guidance remains at low to mid-single digits, with a better second half expected, but Medical weakness may limit profit improvement.

Financial highlights

• Q3 group volume: 979 tons (up 20% year-over-year); Q3 group revenue: £74m (up 2% year-over-year).

• Q3 average selling price: £76/kg, down year-over-year due to sales mix and weaker Medical segment.

• Q3 revenue down 5% sequentially from Q2 2024, reflecting softer Medical and higher VAR mix.

• Year-to-date group revenue: £213.3m (down 9% year-over-year); year-to-date group volume: 2,716 tons (down 2%).

• Free cash flow in Q3 exceeded £20m; net debt at 30 June 2024 was £39.6m, £10m lower than at H1 end.

Outlook and guidance

• Full-year volume growth expected in low to mid-single digits; Medical headwinds persist.

• H2 profit before tax growth depends on improvement in Medical; current Medical performance is below expectations.

• FY 2025 outlook more encouraging with anticipated profit growth; detailed guidance to come in December.

• CapEx for FY 2024 expected around £35m, with lower spend in H2; inventory reduction on track.

• Cost discipline remains strong; adverse currency rates and low asset utilisation are headwinds.