Our Strategy
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 900 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.
Larry Pentz
Chairman
Drive core business
How we performed in FY 2019
- Good growth in Aerospace, Energy and Medical, offset by Automotive and Electronics
- Driving growth in emerging geographies, Medical revenue up 79% in Asia-Pacific
- Cost management and targeted operating investment to support growth
- Sector leading returns
Focus for FY 2020
- Revenue growth during FY 2020
- Stabilise and return to growth in Automotive and Electronics
- Cost management and targeted operating investment to support growth
- 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
36%
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 2019
- Further development of new grades including Victrex AE™ 250 composite grade for Aerospace
- Development of eco-system for 3D printing opportunities (investment in Bond 3D & collaborations with Airbus UK, Exeter University and other partners)
- PEEK Gears ‘on the road’ and more than ten development programmes in progress
- First commercial order for Aerospace composite parts
- Growth in PEEK-OPTIMA™ HA Enhanced product
Focus for FY 2020
- Continued R&D investment to support mega-programme delivery
- Commercialise 3D printing grades and manufacturing process
- Grow new product sales above 4% of revenues
- Commercial revenues from Aerospace composites
Primary link to risk
- Ethics and regulatory compliance
- Strategy execution
Key performance indicators
R&D spend £m
R&D spend
18.0£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
4
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 2019
- 59% growth in PEEK-OPTIMA™ HA Enhanced in Medical
- Multiple PEEK Gear development programmes
- Knee clinical trial underway and patient recruitment
- US composite parts facility operational in Aerospace
- Earnings per share down 17%
Focus for FY 2020
- Translate Gears development programmes into commercial revenues
- Further develop electric vehicle (‘EV’) application opportunities
- First knee implanted
- 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.
Earnings per share p
Earnings
per share
107.2p
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 2019
- 0.9 million employee hours worked with no injuries
- Over 20% of revenues defined as ‘green’ by FTSE Russell
- 85% of electricity sourced from renewables
Focus for FY 2020
- Zero reportable injuries
- Progress towards carbon neutral (sales to Aerospace & Automotive since 2003 offsetting manufacturing footprint)
Primary link to risk
- Safety, health and environment
- Recruitment and retention of the right people
- Network and IT systems and security
- Product liability
- Ethics and regulatory compliance
Key performance indicators
Employee hours
0.9m
worked with no reportable injuries
Definition
Total number of hours worked in the year with no reportable injuries.
Why it’s important
A safe and sustainable business is the highest priority for Victrex.
Hours worked in the community
Hours
1000+
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 | 2019 | 2018 |
|---|---|---|
| Revenue growth (reported) % | -10 | 12 |
| Return on sales % | 36 | 39 |
| R&D spend £m | 18.0 | 17.4 |
| New products as a % of Group sales % | 4 | 4 |
| Pipeline mega-programmes | 7 | 6 |
| Earnings per share p | 107.2 | 128.8 |
| Hours worked in the community | 1,000+ | 1,600+ |