Q3 2024 Trading Update

Essentra plc, a leading global provider and manufacturer of essential components and solutions, today provides a third quarter trading update for the thirteen weeks ended 28 September 2024 ("Q3" or the "period").

FY24 adjusted operating profit1 guidance is unchanged from the trading update released on 17 September 2024, and is aligned with market expectations2.

Trading update

Group revenue in Q3 reduced by 2.3% at constant currency, compared to the prior year period on a working day adjusted basis. Like-for-like3 ("LFL") revenue reduced by 5.8%, offset by a positive contribution to revenue of 3.5% from the acquisition of BMP s.r.l ("BMP TAPPI"), which completed in October 2023.

LFL revenue performance in Q3 was reflective of the weak manufacturing PMI metrics widely reported. EMEA (including Turkey) saw softening trading conditions whilst Americas reported slower than originally anticipated levels of recovery, although distributor volumes remained stable for another consecutive quarter. The APAC region delivered modest levels of growth, driven by a number of commercial business wins in faster growing end-markets from our China export business to the rest of Asia and Middle East.

Gross margins across all three regions remain strong, supported by good levels of cost control, procurement actions and operational efficiencies. When combined with Essentra's continued focus on its hassle-free customer proposition, the actions that have been taken over the last 18 months to right-size the cost base and optimise the business mean that the Group is well-positioned to benefit from material levels of operational gearing when normalised levels of volume return.

The Group's financial position is robust. FY24 leverage guidance is unchanged and is expected to be within the target range of 0.5x - 1.5x, providing a solid foundation from which the Group can continue to execute operational and strategic value-enhancing growth initiatives.

FY24 outlook unchanged

The Board expects FY24 adjusted operating profit to be in line with current market expectations. Trading in October supports the Group's revised internal forecasts, and Management remains focussed on delivering operational efficiencies in the near-term, whilst selectively investing for growth.

The underlying Essentra business model remains fundamentally strong, operating in a highly fragmented market combining the breadth and depth of its product offering, end-market capabilities and geographic footprint. Management continues to be confident that Essentra's robust and differentiated business model will support further progress towards its medium-term targets.

Notes

• Company compiled market expectations for 2024 adjusted operating profit is a range of £40.0m to £41.7m
• The term "like-for-like" describes the performance of the continuing business on a comparable basis, adjusting for the impact of acquisitions, disposals and foreign exchange. 2024 LFL sales performance is adjusted for the acquisition of BMP s.r.l. ("BMP TAPPI") in October 2023

Cautionary forward-looking statement