|
Underlying results* |
Statutory results |
|||
|
|
2017 |
2016 |
2017 |
2016 |
|
|
Unaudited |
|
Unaudited |
|
|
Revenue |
£256.9m |
£241.1m |
£256.9m |
£241.1m |
|
EBITDA |
£64.1m |
£58.8m |
|
|
|
Operating profit |
£38.1m |
£38.1m |
£33.0m |
£15.4m |
|
Profit before tax |
£26.7m |
£28.9m |
£21.6m |
£6.2m |
|
Basic earnings per share |
12.5p |
13.3p |
9.3p |
1.3p |
|
Total dividend per share |
8.8p |
8.8p |
|
|
|
Net debt |
£134.9m |
£153.6m |
|
|
|
Covenant net debt* / EBITDA |
2.1 times |
2.7 times |
|
|
* Underlying figures are stated before exceptional items; Covenant net debt is defined as net debt including derivative financial liabilities (see Alternative Performance Measures section of the Financial Review for definitions, explanations and reconciliations to equivalent statutory measures)
Highlights
|
• Devro 100 programme progressing well; accelerated revenue growth with significant cost savings • Return to volume growth with revenue increasing 7% year on year o Increased volumes (+7%) and favourable exchange rates (+4%), offset price/mix** (-4%) o Volume growth strongest in China, South East Asia and Russia o Strong H2 growth in Europe o As expected, volume decline in Latin America, impacted by 2016 transition in supply • Underlying EBITDA ahead of 2016 by 9% o Volume growth, cost savings and exchange rate benefits, partially offset by price/mix and full costs for new plants started up in 2016 o Devro 100 cost reduction target exceeded with £7 million savings in manufacturing • Statutory operating profit ahead of 2016 due to lower exceptional items in 2017 • Strong cash flow reduced net debt, achieving covenant ratio*** of 2.1 times (2016: 2.7 times) • Rutger Helbing to succeed Peter Page as Chief Executive from 28 February 2018 |
** Price/mix is defined as the movement in average selling price, calculated using prior year average exchange rates for both current and prior year average selling price
*** Covenant ratio is defined as covenant net debt / underlying EBITDA (see Alternative Performance Measures section of the Financial Review for definitions, explanation and reconciliation to equivalent statutory measures)
Peter Page, Chief Executive of Devro, commented
“Our priorities at the start of 2017 included sales growth to regain market share and cost reduction in operations. We made strong progress on both objectives, with 8% growth in sales volumes of edible collagen casings and a £7 million reduction in the manufacturing cost base, supporting a significant reduction in net debt.
“Over the past 10 years Devro has successfully moved from operating as a series of regional subsidiaries to an efficiently managed single global organisation. Revenue from edible collagen has doubled, due to a combination of pricing and volume growth in an increasing variety of markets and applications. Numerous excellent and dedicated colleagues have contributed to the development of the business in many ways, for which I am sincerely grateful.
“Growth in demand will continue as the global population increases, consumer spending progresses and tastes become more varied. The business is well positioned for the future.”
Rutger Helbing, Group Finance Director of Devro, commented
“I am delighted to succeed Peter as Chief Executive.
“Our strategy is unchanged. In 2018, we will continue to focus on maintaining the momentum of the Devro 100 programme to deliver revenue growth and further cost savings across our global operations. The total forecast benefits, associated exceptional costs and capital expenditure over the three year period remain unchanged, although given the accelerated cost savings achieved in 2017, the phasing will differ slightly from our original expectations.
“We expect further volume growth in 2018, supported by the introduction of the new Fine Ultra product platform, and continued manufacturing efficiency improvements, in particular at our US plant. We will continue to reducenet debt, building on the good progress made in 2017.
“Whilst mindful of ongoing pressures from input cost inflation and exchange rate volatility, at this early stage of the year the Board believes that Devro is well placed to make good progress in 2018.”
OUTLOOK
Our strategy is unchanged. In 2018, we will focus on maintaining the momentum of the Devro 100 programme to deliver revenue growth and further cost savings across our global operations. The total forecast benefits, associated exceptional costs and capital expenditure over the three year period remain unchanged, although given the accelerated cost savings achieved in 2017, the phasing will differ slightly from our original expectations.
We expect further volume growth in 2018, supported by the introduction of the new Fine Ultra product platform, and continued manufacturing efficiency improvements, in particular at our US plant. We will continue to reducenet debt, building on the good progress made in 2017.
Whilst mindful of ongoing pressures from input cost inflation and exchange rate volatility, at this early stage of the year the Board believes that Devro is well placed to make good progress in 2018.
Gerard Hoetmer
Chairman