Pre-Close Trading Update and Board Update
14th January 2021
Synthomer plc
Pre-Close Trading Update and Board Update
FY2020 EBITDA guidance raised c.10%; FY2020 proforma leverage expected to reduce further
Calum MacLean to stand down as Chief Executive by January 2022
Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the year ended 31st December 2020 ahead of announcing the Group's Full Year results on 4th March 2021. Synthomer also announces that following 6 successful years, Calum MacLean has informed the Board that he intends to stand down as Chief Executive by January 2022.
Strong trading momentum across the business
Performance Elastomers
Performance Elastomers has continued to perform strongly. The positive trends experienced in our Nitrile latex business during the year continued through the final quarter of 2020 with overall performance ahead of expectations. Similarly, the conditions in our SBR latex business also continued to strengthen, with all SBR segments except paper trading ahead of the comparative period in 2019.
Functional Solutions
Functional Solutions has seen a sustained improvement in the final quarter of 2020 with our consumer facing and industrial end markets remaining strong with exception of the Oil and Gas business unit. We have seen activity levels above normal seasonal levels with overall performance ahead of expectations.
Industrial Specialities
Industrial Specialities also had a strong finish to the year, with our laminates and films business, which serves the home improvement and recreational vehicles market, trading particularly well and the division performing ahead of the equivalent period in 2019.
FY 2020 EBITDA guidance raised and proforma leverage expected to reduce further
The combination of stronger trading across our three major divisions means that the Group now expects its 2020 EBITDA to be approximately £255m, some 10% ahead of the Company guidance of £232m provided in our trading statement of 14th October 2020.
The Group remains highly cash generative and now expects proforma leverage to reduce to circa 1.9x net debt to EBITDA as of 31st December 2020.
Outlook
Whilst the Group will continue to adapt its operations in response to the ongoing COVID-19 pandemic to ensure the safety of all employees, at this stage it expects no meaningful disruption to business. The Board is confident that the benefits of the OMNOVA acquisition, recent investment in new capacity, further efficiency measures, its proven growth strategy as well as continued strength in Performance Elastomers, will underpin strong EBITDA growth in 2021.
Board update
Having informed the Board that he would like to stand down as Chief Executive, Calum MacLean will leave the business by January 2022 when a successor is in place. During his 6 years as Chief Executive, Calum has driven significant change at Synthomer presiding over substantial investment and several acquisitions, notably Omnova in 2020. The process to find a new Chief Executive is underway and is expected to include both internal and external candidates. A further announcement will be made in due course.
Commenting Calum MacLean, Chief Executive, said:
"It has been a privilege to lead Synthomer for the last 6 years and I am proud of what we have achieved. With Omnova fully integrated, all core parts of the business growing and our financial outlook strong, now is the right time to hand over to someone else who can build on this exciting momentum. I look forward to welcoming my successor into the role when the time comes."
Commenting, Caroline Johnstone, Chair of Synthomer, said:
"In a very challenging year, Synthomer has delivered a strong performance, testament to the strategy that we have been consistently executing and the investments that we have made over the last five years. As we embark upon a new year and look further ahead to the future, the business is in a strong position.
On behalf of the Board, I would like to thank Calum for everything that he has done to take Synthomer forward since joining at the start of 2015. His leadership and vision have transformed the business into a truly diversified, differentiated and global company. The next chapter promises to be just as exciting and the Board looks forward to working with a new Chief Executive in due course."
-ENDS-
Further information:
Calum MacLean, Chief Executive Officer
Steve Bennett, Chief Financial Officer Tel: + 44 1279 436211
Tim Hughes, President, Corporate Development
Charles Armitstead/ Matt Denham, Teneo Tel: + 44 7703 330 269/ + 44 7825 735596
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