Victrex Plc · LSE:VCT
Victrex — Investor Day (September 2024)
26 slides from Victrex's investor day presentation, September 2024
Slide 1: Enabling Environmental & Societal Benefits
ENABLING ENVIRONMENTAL & SOCIETAL BENEFITS VICTREX PLC GROUP INVESTOR VISIT TO HILLHOUSE UK, SEPTEMBER 2024 BRINGING TRANSFORMATIONAL & SUSTAINABLE SOLUTIONS THAT ADDRESS WORLD MATERIAL CHALLENGES EVERY DAY
Slide 2: Agenda
AGENDA 1030 – 1045 Introductions 1045 – 1115 Spaghetti lecture We Bring Transformational & Sustainable Solutions That Address World Material Challenges Every Day 1115 – 1245 Site tour 1245 – 1400 Lunch & Q&A with management CONFIDENTIAL
Slide 3: Investment Case
STRONG MEGATRENDS SUPPORT Targeting core LONG-TERM GROWTH RUNWAY 1100+ revenue CAGR employees 5-7% by 2028 #1 PEEK polymer experts – 5 key end-markets serving over 40 (upside to 8-10% as mega- programmes commercialise) countries Innovative growth pipeline – increasing commercialisation Cash generati
Slide 4: Our Strategy: Further Grow the Market for PEEK Polymer
PARTS PRODUCT FORMS OUR STRATEGY POLYMER POLYMER Compounds Gears & PARTS Differentiation and Pipe Aerospace Composites Composites value PEEK creation…. & PAEK Magma pipe Polymers UD Tape APTIV Film Trauma plates Coatings & Fibres Knee 3 4 CONFIDENTIAL FURTHER GROW THE MARKET FOR PEEK POLYMER & CAPTU
Slide 5: Delivering the Untapped Potential of PEEK Polymer
CURRENT LANDSCAPE MACRO-DRIVER FUTURE POTENTIAL CO2 reduction & Over 5 tonnes/plane Up to 500kg/plane faster processing DELIVERING CO2 reduction & >200g of PEEK in THE UNTAPPED 10g/car average higher performance an EV* POTENTIAL OF PEEK POLYMER < 5000 Medical parts sold Metal alternatives, >100,000
Slide 6: Spaghetti Lecture
SPAGHETTI LECTURE We Bring Transformational & Sustainable Solutions That Address World Material Challenges Every Day Dr John Grasmeder Chief Scientist CONFIDENTIAL
Slide 7: Victrex PEEK Polymers: A Unique Combination of Properties
VICTREX PEEK POLYMERS Extreme Temperature A unique combination of properties Wear Chemical Property Resistance Mechanical Hydrolysis Strengths VICTREX PEEK HIGH PERFORMANCE PBI PI LCP POLYMERS A UNIQUE COMBINATION OF PROPERTIES PAI PPS PEI PPA PTFE PES PSU Easy High Purity Processing PA POM PC PPE P
Slide 8: What's PEEK? What's a PAEK?
VICTREX CONFIDENTIAL WHAT’S PEEK? WHAT’S A PAEK? PEEK is one of over 300 known thermoplastic polyaryletherketone polymers ~80% of all known PAEKs are amorphous VICTREXTM Semi-crystalline PAEKs of industrial interest PEEK • Wear resistance AETM250 • Fatigue performance VICTREX HTTM • Chemical resista
Slide 9: Differentiation
VICTREX CONFIDENTIAL DIFFERENTIATION Victrex makes Type 1, Type 2 and an intermediate type of PEEK Competitor-type Victrex PEEK recipe Victrex PEEK recipe PEEK recipe Victrex BDF Other BDF Other BDF Victrex Victrex Competitor-type polymerisation polymerisation polymerisation process process process
Slide 10: Further Differentiation: From Polymer to Forms and Parts
VICTREX CONFIDENTIAL FURTHER DIFFERENTIATION From Polymer to Forms and Parts BDF Monomer KEY: Polymer PAEK Polymer Powder Grinding Fine Powder Laser Process Compounding Melt Filtration Sintering Parts Dispersion Forms Compounds Compounding Granules Parts Extrusion Injection Moulding Coatings Film Fi
Slide 11: Major Investment Phase Concluding: Underpins Future Growth
MAJOR INVESTMENT New PEEK Fine powder Manufacturing (UK) (China) PHASE CONCLUDING: Knee (Clinical trial in progress) UNDERPINS FUTURE ~8,000t* GROWTH Fibres & Filament 3D Printing (NL) 2024 Aerospace Composites 4,250t (US) MAGMA Composite (UD) tape (UK) 2020 2,800t Trauma Monomer VICTREX PIPES Gears
Slide 12: Q&A with CEO/CFO/IR
Q&A WITH CEO/CFO/IR We Bring Transformational & Sustainable Solutions That Address World Material Challenges Every Day CONFIDENTIAL
Slide 13: State of the Nation (September 2024)
STATE OF THE NATION (September 2024) • TRADING: SOME ENCOURAGING SIGNS OF TOP-LINE IMPROVEMENT: • Sustainable Solutions: Electronics & VAR, alongside Aero • Auto in growth YTD but softer H2 • Medical: destocking continuing, as noted by peers • Focused on sequential flat / slightly ahead (vols/revenu
Slide 14: Potential from Game-Changing Mega-Programmes
POTENTIAL FROM GAME-CHANGING MAGMA • FY23 revenue >£1m MEGA-PROGRAMMES* • Ongoing technical & commercial collaboration (with TechnipFMC & Petrobras) • c8 tonnes of PEEK/km of pipe • TechnipFMC investing in infrastructure *mega-programmes offer at least £50m revenue pa in peak sales year TRAUMA E-MOB
Slide 15: Medical Goals
Broadening our Medical portfolio: the growth of non-Spine revenues MEDICAL GOALS Non- 35% 46% Spine 54% Spine 65% FY 2018 FY 2023 1. DOUBLE MEDICAL REVENUES IN 5 YEARS SPINE ARTHROSCOPY CMF Maintain and 2. >30% OF GROUP REVENUES FROM grow core 1 MEDICAL BY 2032 applications CARDIO DRUG DELIVERY ACTI
Slide 16: Our Products Enable Environmental & Societal Benefits
OUR PRODUCTS ENABLE ENVIRONMENTAL & SOCIETAL BENEFITS 55% OF REVENUE FROM SUSTAINABLE PRODUCTS# AEROSPACE AUTOMOTIVE ELECTRONICS MEDICAL ENERGY & INDUSTRIAL CO2 savings 80,000 tonnes 100,000 rpm 25% improved Up to 80% brain function … each year, our sales to … annual CO2 saving in Europe Supporting
Slide 17: Mid-Term Growth Targets
MID-TERM GROWTH TARGETS: MACRO-DRIVERS, DIFFERENTIATED PRODUCTS & MEGA-PROGRAMMES GROUP CORE GROWTH INC MEGA- MEGA-PROGRAMME BUSINESS GROWTH PROGRAMMES PORTFOLIO 5-7% CAGR 8-10% CAGR >£25m of Group (revenue 5-year period – (revenue 5-year period – PBT ahead of revenue growth with PBT ahead of revenu
Slide 18: Capital Allocation Priorities
CAPITAL ALLOCATION SPECIAL DIVIDENDS PRIORITIES • Optionality to return cash if no additional investment opportunities • 50p/share minimum EXCESS CAPITAL CAPEX M&A / INVESTMENT REGULAR DIVIDENDS DISTRIBUTION OPTIONS • Normalised capex • Investment to support • Progressive dividend c8-10% of sales me
Slide 19: Appendix
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Slide 20: End-Markets & Applications
END-MARKETS MEDICAL INDUSTRIAL AND VAR & APPLICATIONS Every 30 seconds a patient is treated using Invibio PEEK OPTIMA solutions 100+ million AEROSPACE 15 million+ machines using Victrex solutions implanted devices 20,000+ aircraft have VICTREX solutions on-board ELECTRONICS Over 4 billion ENERGY mob
Slide 21: China
CHINA Investment to underpin future growth • NEW CHINA MANUFACTURING FACILITIES • 1,500 TONNE NAMEPLATE CAPACITY • PORTFOLIO EXTENSION • COMMERCIAL OPERATIONS RAMPING IN FY25 21 CONFIDENTIAL
Slide 22: Group End Markets
GROUP END MARKETS FY 2023: 3,598 tonnes (-24% vs FY 2022) FY 2022: 4,727 tonnes (+8% vs FY 2021) Volume by Region Volume by Industry Medical -4% Transport +4% 192t APAC -14% 5% 1,045t 950t 29% 27% 1,304t 1,903t VAR -39% 36% EMEA -25% 53% 513t Electronics -23% 650t 14% 18% Americas -32% 639t 18% Ener
Slide 23: Medical: Key Markets
MEDICAL: KEY MARKETS FY 2023: £65.2m (+12% vs FY 2022) FY 2022: £58.3m (+14% vs FY 2021) Revenue by Region Revenue by Market APAC +31% Non-spine +21% £18.8m 29% £29.7m £30.0m 46% 46% £35.5m 54% £16.4m Americas +4% EMEA +9% 25% Spine +3% 25 CONFIDENTIAL
Slide 24: Mega-Programmes
MEGA- PROGRAMMES The pathway to £10m revenue KEY Time to £10m revenue (indicative) £0m-£1m phase £1m-£10m phase £10m+phase 5 PRIORITISED MEGA-PROGRAMMES: POTENTIAL FOR EACH OF >£50m ANNUAL SALES IN PEAK YEAR 24 CONFIDENTIAL
Slide 25: Balance Sheet
BALANCE SHEET FY 2023 FY 2022 £m £m PPE and intangible assets 369.9 367.4 Investment in associated undertakings 9.1 10.4 Financial assets held at fair value through profit and loss 13.2 10.1 Financial assets held at amortised cost 0.6 0.0 Retirement benefit asset (net) 7.2 12.2 Inventories 134.5 86.
Slide 26: PEEK Information & Contacts
AEROSPACE PEEK INFORMATION & CONTACTS EXPERTS First to commercialise PEEK, with Andrew Hanson unmatched knowledge and experience Director of IR, AEROSPACE Corporate Communications & ESG DRIVE CORE BUSINESS ELECTRONICS +44 (0) 1253 898121 +44 (0) 7809 595831 MEDICAL [email protected] Delivering the key