Yahoo Finance

• Revenue: GBP302 million, a 0.3% constant currency increase.

• Adjusted Operating Profit: GBP40.1 million, a 2.3% constant currency increase.

• Adjusted Operating Margin: 13.3%.

• Adjusted Operating Cash Conversion: 91%, ahead of the target of 85%.

• Net Debt to Adjusted EBITDA: 1.3 times, ahead of the target of 1.5 times.

• Return on Invested Capital: 11.1%.

• Adjusted Earnings Per Share (EPS): 8.5p.

• Dividend Per Share: 2.8p, based on a three times cover for dividend.

• Net Finance Expense: GBP8.9 million, increased from GBP2.5 million in the prior year.

• Effective Tax Rate: Improved due to recognition of a deferred tax asset in the UK.

• Like-for-Like Revenue Decline: 2.7%.

• Regional Revenue Performance: EMEA and Americas down ~4%, APAC up 7%.

• Free Cash Flow: GBP22.5 million.

• Net CapEx: 4% of CapEx to sales.

• Net Debt: GBP68.2 million.

• Employee Engagement: 85%.

• Net Promoter Score (NPS): Up 3 points, improved in all three regions.

• Gross Margin: Expanded in all regions.

• ERP Deployment: Eight sites launched last year.

• Access Hardware Growth: Strong performance, especially in Asia.

• Sustainability Initiatives: 6,500 products from sustainable materials, 49% reduction in direct emissions since 2019.

• Warning! GuruFocus has detected 2 Warning Sign with FLRAF.

Release Date: March 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Essentra PLC (FLRAF) demonstrated resilience with stable and expanding gross margins across all regions despite challenging market conditions.

• The company achieved a strong cash flow and high customer satisfaction, with a Net Promoter Score (NPS) increase in all regions.

• Employee engagement is notably high at 85%, contributing to the company's ability to navigate market challenges effectively.

• Essentra PLC (FLRAF) is well-positioned for future market recovery with a robust balance sheet and significant operating leverage opportunities.

• The company has successfully implemented ERP systems across multiple sites, enhancing operational efficiency and planning capabilities.

Negative Points

• Essentra PLC (FLRAF) experienced a like-for-like revenue decline of 2.7%, with mixed regional performance, particularly in EMEA and Americas.

• Net finance expenses increased significantly due to the absence of prior interest income, impacting overall financial performance.

• The company faces ongoing challenges with working capital management, with no explicit guidance provided for 2025.

• Geopolitical uncertainties, such as tariffs and political unrest in Turkey, pose potential risks to operations and market performance.

• The company's return on invested capital decreased to 11.1%, influenced by lower adjusted operating profit.