Our Strategy
Our Polymer & Parts strategy and a focus on growth markets and long term sustainable opportunities remains strong. Our strategy involves differentiating against our competitors through being focused on existing and new applications in the PEEK and PAEK polymer space, through developing new polymer grades and product forms, including composites, and through building new markets in ‘parts’ alongside our core polymer offering.
As a sustainable business bringing transformational solutions which address the world’s material challenges, Victrex works across its markets and with customers to deliver solutions and performance benefits against incumbent materials, typically metal.
With over 800 employees, we focus solely on the high performance PEEK & PAEK polymer segment, where long-term megatrends such as lightweighting, CO2 reduction and more efficient manufacturing support the use of our materials. As the no.1 PEEK experts, Victrex is pioneering the market for the use of PEEK & PAEK polymers.
As an innovative and differentiated business, we remain well placed to deliver the significant growth opportunities that lie ahead. The lightweight, environmental and recycling credentials of our materials and alignment with global megatrends, for example helping to reduce CO2 in Transport markets, continue to support our ability to keep sustainability at the heart of our offering, bringing environmental and societal benefits to our customers, for example in Aerospace and Automotive, or supporting enhanced clinical benefit in the Medical industry.
Larry Pentz
Chairman
Drive core business
How we performed in FY 2020
- COVID-19 impact on end markets, FY 2020 volume -7%
- Driving growth in non-implantable Medical, ventilators and related COVID-19 applications
- Cost management actions to address margin
Focus for FY 2021
- Revenue growth during FY 2021
- Continued cost and capital management
- Sector leading returns
Primary link to risk
- Business growth
- Foreign currency risk
- Business continuity of supply chain
Key performance indicators
Revenue growth (reported) %
Revenue growth
-10%
Definition
The year on year percentage change in total sales for the Group, in live currency.
Why it’s important
Revenue growth is the measure chosen to reflect the structural growth opportunities for PEEK across our markets, with above-market growth being the medium-term focus.
Return on sales %
Return
on sales
28%
Definition
Profit before tax and exceptionals as a percentage of total sales
Why it’s important
Return on sales assesses the overall profitability of the Group. The measure reflects our discipline in seeking growth opportunities which maintain our sector leading returns.
Differentiate through innovation
How we performed in FY 2020
- Prototype 3D printed Spinal cages in development
- Progression of long-term development collaboration with Airbus for larger composite parts
- First ‘parts that fly’ for Aerospace composite parts
- c£2m revenue for PEEK-OPTIMA™ HA Enhanced product
Focus for FY 2021
- Grow new product sales above 5% of revenues
Primary link to risk
- Contracts, Ethics and Regulatory Compliance
- Strategy execution
Key performance indicators
R&D spend £m
R&D spend
16.7£m
Definition
The total Research & Development spend that the Group has incurred.
Why it’s important
Research & Development spend at 5%–6% of sales underpins our ability to innovate into new applications, supporting our future growth.
New products as a % of Group sales %
New
products
5%
as a % of Group sales %
Definition
Proportion of Group sales generated from mega-programmes, new differentiated polymers and other pipeline products that were not sold before FY 2014.
Why it’s important
New product sales (Vitality Index) is a measure of how successful we are in driving adoption of our new product pipeline.
Create & deliver future value
How we performed in FY 2020
- Magma qualification programme with TechnipFMC for Brazil
- PEEK Knee clinical trial in progress
- Investment in China manufacturing facility to underpin future growth
- Earnings per share down 42% (reported)
Focus for FY 2021
- Further develop electric vehicle (‘EV’) application opportunities for next generation vehicles
- Progress Magma programme towards greater commercialisation
- Grow Aerospace Loaded Brackets beyond £1m revenue
- Grow earnings per share
Primary link to risk
- Business continuity of supply chain
- Strategy execution
Key performance indicators
Pipeline mega-programmes
Pipeline
mega-programmes
7
Definition
Number of pipeline projects offering >£50m annual revenue potential in peak sales years as communicated from FY 2015 onwards.
Why it’s important
Our new product pipeline is key to differentiating our business, supporting new revenue and margin streams.
Reported earnings per share p
Earnings
per share
62.6p
Definition
Profit after tax divided by the basic weighted average number of shares. This includes the impact of exceptional items.
Why it’s important
Earnings per share measures the overall profitability of the Group and demonstrates how we convert our top-line revenue opportunities into profitable growth for our shareholders.
Underpin through safety, sustainability and capability
How we performed in FY 2020
- 1.30 OSHA recordable injury frequency rate
- Over 20% of revenues defined as ‘green’ by FTSE Russell and enhanced Sustainability agenda
- 85% of electricity sourced from renewables
Focus for FY 2021
- Zero incidents, zero accidents culture
- Progress towards carbon net zero by 2030
Primary link to risk
- Safety, health and environment
- Recruitment and retention of the right people
- Foreign currency risk
- Network and IT systems and security
- Product liability
- Contracts, Ethics and Regulatory Compliance
Key performance indicators
OSHA recordable injury rate
1.30
Definition
US OSHA (Occupational Health & Safety Administration) is the industry standard for recordable injuries. The injury rate is based on total number of recordable injuries x 200,000/total number of hours worked (employee and contractor). Victrex continues to be better than the industry standard after adopting this reporting for FY 2020.
Why it’s important
A safe and sustainable business is the highest priority for Victrex.
Hours worked in the community
Hours
2,570
worked in the community
Definition
Total number of hours that Victrex employees have volunteered in community activities.
Why it’s important
Our social responsibility strategy is key to giving something back to the communities where we operate, and to supporting our talent strategy in recruiting the employees of tomorrow.
Financial Highlights (£m)
| Title | 2020 | 2019 |
|---|---|---|
| Revenue growth (reported) % | -10 | -10 |
| Return on sales % | 28 | 36 |
| R&D spend £m | 16.7 | 18.0 |
| New products as a % of Group sales % | 5 | 4 |
| Pipeline mega-programmes | 7 | 7 |
| Earnings per share p | 62.6 | 107.2 |
| Hours worked in the community | 2,570+ | 1,000+ |