Half Year 2024 Synthomer PLC Earnings Call Transcript
Key Points
- Synthomer PLC (SYHMY) reported a 3.5% increase in group revenues for continuing businesses on a constant currency basis, reaching over GBP1 billion.
- The company achieved a 10.7% volume growth, primarily driven by the Adhesive Solutions and Health and Protection businesses.
- Synthomer PLC (SYHMY) saw an improvement in EBITDA margin to 7.2%, a 7.6% increase versus the comparable period on a constant currency basis.
- The company successfully reduced its manufacturing footprint from 43 to 32 sites in less than two years, enhancing operational efficiency.
- Synthomer PLC (SYHMY) continues to make strategic investments, such as the new innovation center in China and new production capabilities in the US, supporting future growth.
- Net debt increased to GBP561 million at the end of June, up from GBP500 million at the end of 2023, partly due to the payment of a European Commission fine.
- The company is facing higher operating costs, including wage inflation and increased bonus accruals, impacting overall profitability.
- The Health & Protection division's NBR business, despite volume growth, is still operating at margins substantially lower than pre-pandemic levels.
- Synthomer PLC (SYHMY) continues to face challenges in the Construction business within the CCS division due to market conditions.
- Dividends remain suspended until the company's leverage is reduced below 3 times, impacting shareholder returns.
Good morning, and welcome to our first half 2024 results presentation. As usual, I will be joined by Lily Liu, our CFO, to present our review of Synthomer's strategic operational and financial performance in the period. And then our Head of Investor Relations, Faisal Tabbah will join us as we look forward to answer your questions at the end. In terms of the agenda, I will start by providing an overview of our performance and the further steps that we have taken to transform the business in line with our strategy.
Lily will then walk through the numbers in more detail before I come back to show how we are making good and differentiated progress in each of the divisions and how we are positioning ourselves to succeed in delivering our medium-term ambitions.
Starting with trading. After a sustained period of extremely challenging market conditions, both for Synthomer and the wider industry, our markets were more stable overall in the first half, and our performance evolved broadly as we had anticipated at the start of the
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