Victrex Plc · LSE:VCT
Victrex — FY2010 Earnings Presentation
29 slides from Victrex's earnings presentation, Dec 2, 2010
Slide 1: Victrex plc Annual Results 2010
4 AA victrex’ Victrex plc Annual Results 2010
Slide 2: Highlights
Highlights Record financial performance • Group revenue up 82% to £189.5m (2009: £103.8m) – Underlying revenue up 47% • Earnings per share up 200% to 65.1p (2009: 21.7p) – Underlying EPS up 53% • Cash of £77.3m at 30 September 2010 and no debt • Full year dividend per share up 30% to 25.0p (2009: 19
Slide 3: Group Income Statement
Group Income Statement Operating leverage on strong sales growth drives PBT Underlying Underlying Year ended 30 September 2010 2009 Growth 2009 * growth * £m £m £m Revenue 189.5 103.8 82% 129.0 47% Gross profit 120.6 64.5 87% 88.7 36% Gross margin % 63.6% 62.1% 1.5% pts 68.8% (5.2)% pts Overheads (4
Slide 4: Group Average Selling Price & Gross Margin
Group Average Selling Price & Gross Margin H2 2010 gross margin % above H1 2009 £ASP GM% £ASP £80 £76.2 £73.5 70% • Favourable currency impact in £72.9 H1 2010 (Euro and US Dollar) £70 60% £61.3 • Divisional mix impact £60 £54.5 £52.9 50% £50 40% GM% £40 66.9% 67.9% 64.9% 64.9% 58.2% 58.8% 30% • H1
Slide 5: Currency Exposure
Currency Exposure 2010 Currency benefit of £12.7m Average exchange rates Exchange rate 2009 2010 2011 sensitivity # $/£ 1.85 1.58 1.55 £3.1m €/£ 1.31 1.15 1.17 £2.9m ¥/£ 181 153 134 £0.6m 2009 excludes adverse impact from buy out of surplus forward exchange contracts of £11.3m 2011 estimates based o
Slide 6: Group Cash Flow Statement
Group Cash Flow Statement Recovery drives increased cash from operations Year ended 30 September 2010 2009 £m £m Cash generated from operations 90.9 26.8 Tax paid (13.7) (11.1) Capital expenditure (4.5) (7.5) Dividends paid (16.9) (15.1) Other financing activities 2.6 - Net increase/(decrease) in ca
Slide 7: Group Balance Sheet
Group Balance Sheet Strong balance sheet including £77.3m cash and no debt 30 September 2010 2009 £m £m PPE and intangible assets 135.4 139.7 • Capex below depreciation Inventories 34.5 37.2 • Lower stock cost per tonne Cash 77.3 18.6 • Cash generated from operations Trade receivables and other asse
Slide 8: Victrex Polymer Solutions
Victrex Polymer Solutions YEAR ENDED 30 SEPTEMBER 2010 8
Slide 9: VPS Highlights
VPS Highlights Strong recovery from 2009 • Recovery in volume • Security of supply for our customers • Gross margin strengthened to 55.7% • Increase in underlying operating profit by 86% • Development pipeline up 16% on 2009 YEAR ENDED 30 SEPTEMBER 2010 9
Slide 10: VPS Income Statement
VPS Income Statement Robust recovery in end markets and growth from new business Underlying Underlying Year ended 30 September 2010 2009 Growth 2009 * growth * £m £m £m Revenue 145.3 69.6 109% 90.5 61% Gross profit 80.9 34.4 135% 54.3 49% Gross margin % 55.7% 49.5% 6.2% pts 60.0% (4.3)% pts Overhead
Slide 11: Group End Markets
Group End Markets Growth across all geographies and market segments Geographical Segments Market Segments Medical Asia-Pacific +68% +60% 275 t 2010: 2,535 tonnes 428 t 11% 17% EMEA Electronics 558 t +64% +96% +79% 22% 1,028 t Industrial 1,354 t 41% +53% 753 t 53% 30% 674 t 26% Transport Americas +59
Slide 12: VPS Market Highlights - Industrial
VPS Market Highlights - Industrial Tonnes • Volume up 53% on 2009 • Recovered to similar levels to 2008 (1,036 tonnes) • Strong recovery across all sub markets • Industrial machinery: 1,028 – Strong growth due to Asia end use demand 673 • Oil and gas: – Investment up due to higher oil and gas demand
Slide 13: VPS Market Highlights - Transport
VPS Market Highlights - Transport Tonnes • Volume up 59% on 2009 • Remains 7% below 2008 high (723 tonnes) • Automotive: – Recovery in vehicle production and sales globally – Higher proportion of luxury cars – New business driven by fuel efficiency and emissions 674 • Aerospace: 425 – Higher aircraf
Slide 14: VPS Market Highlights - Electronics
VPS Market Highlights - Electronics Tonnes • Volume up 96% on 2009 • Remains 11% below 2008 high (625 tonnes) • Consumer electronics: – Innovation and new product launches continue to drive production 558 • Semiconductor: 285 – Investment activity recovering – Forecasts for the industry improving 20
Slide 15: VPS - Development Pipeline
VPS - Development Pipeline Strong pipeline of applications 308 tonnes MAV commercialised Medical Electronics 2% 800 723 22% 700 634 Sept 2010: Transport 600 533 2,271 tonnes 50% 487 500 Industrial 400 314 26% 308 300 200 Medical 2% Electronics 100 24% 0 Sept 2009: Transport 2008 2009 2010 47% 1,966
Slide 16: VPS - The Future: Technical leadership
VPS - The Future Technical leadership • Capability and reach • Customer support and education • Product enhancement YEAR ENDED 30 SEPTEMBER 2010 16
Slide 17: VPS - The Future: Capacity and infrastructure
VPS - The Future Capacity and infrastructure • Security of supply • Optimisation of assets • Capacity planning YEAR ENDED 30 SEPTEMBER 2010 17
Slide 18: VPS - The Future: Investment for growth
VPS - The Future Investment for growth • Continue to strengthen customer relationships • Extend global reach • Focused market development • Target growth areas YEAR ENDED 30 SEPTEMBER 2010 18
Slide 19: Invibio Biomaterial Solutions
Invibio Biomaterial Solutions YEAR ENDED 30 SEPTEMBER 2010 19
Slide 20: Invibio Highlights
Invibio® Highlights Record year and continued growth • Record revenue of £44.2m (up 29% on 2009) • 53 additional PEEK-OPTIMA® polymer long-term agreements in Americas (18), EMEA (19) and Asia-Pacific (16) • 350 long-term agreements in total • Continued growth in key applications (spinal fusion and a
Slide 21: Invibio Income Statement
Invibio Income Statement Strong financial performance Underlying Underlying Year ended 30 September 2010 2009 Growth 2009 * growth * £m £m £m Revenue 44.2 34.2 29% 38.5 15% Gross profit 39.7 30.1 32% 34.4 15% Gross margin % 89.7% 88.0% 1.7% pts 89.3% 0.4% pts Overheads (11.6) (10.1) 15% (10.1) 15% O
Slide 22: Invibio - Key Markets
Invibio - Key Markets Growth in Developing Markets and new regions Geographical Segments Market Segments Asia-Pacific Spinal non-fusion +36% -15% Arthroscopy 2010: £44.2m £2.2m +97% £1.9m 5% 5% £4.6m +29% Target markets 10% £4.6m £13.0m +43% 10% Spinal fusion 29% £33.1m £29.0m 75% +25% EMEA 66% Amer
Slide 23: Invibio Market Highlights - Spine
Invibio Market Highlights - Spine Spine revenue £35.0m (up 22% on 2009) Revenue (£m) • PEEK-OPTIMA market share growing – High market penetration in lumbar (lower) applications – Opportunities for further growth in cervical (upper) applications • Focus on innovation and new product introductions in
Slide 24: Invibio Market Highlights - Arthroscopy
Invibio Market Highlights - Arthroscopy Arthroscopy revenue £4.6m (up 97% on 2009) Revenue (£m) • PEEK-OPTIMA market share growing • Vast majority of the major arthroscopy device companies are already committed to long-term supply agreements • Increasingly active aging population will drive increase
Slide 25: Invibio Market Highlights - Target Markets
Invibio Market Highlights - Target Markets Target markets revenue £4.6m (up 42% on 2009) Revenue (£m) • Existing use of PEEK-OPTIMA in applications such as CMF, Bariatric (weight management) and Orthopaedics • US approval for ENDOLIGN® trauma nail (fracture repair) via the shorter term 510(k) approv
Slide 26: Invibio - Market Environment
Invibio - Market Environment US uncertainty; stability and growth elsewhere US Europe Asia Regulatory Uncertain Stable Stable Reimbursement Transition Stable Stable Procedural Coverage Transition Stable Growing • FDA currently reviewing 510(k) process. 10% year on year reduction in medical device ap
Slide 27: Invibio - The Future: Maintain and grow
Invibio - The Future Maintain and grow • Continued focus in Spine – market share growth and innovation • Increase the number of customers using PEEK-OPTIMA in established applications in Developing Markets • Continue focus on emerging geographies Spine Innovation Arthroscopy Growth YEAR ENDED 30 SEP
Slide 28: Invibio - The Future: More than materials
Invibio - The Future More than materials Better understand clinical need and Demonstrate pre-clinical potential by grow existing surgeon interaction investing in device specific testing Partner with customers to Accelerate device development and overcome regulatory challenges increase value via adva
Slide 29: Group Outlook
Group Outlook The growth story continues • Competition • Current trading • The future YEAR ENDED 30 SEPTEMBER 2010 30