SigmaRoc plc (LON:SRC), a leading European lime and minerals group, has provided an update on trading for the nine months ended 30 September 2024 (the ‘Period’).
Financial highlights
Strong trading in Q3 positions the Group for a robust full-year finish
· Revenue increased 67% YoY to £729m
· Underlying1 EBITDA increased 88% YoY to £165m, with margin improving to 22.6%
· On a proforma2 basis for the Period:
o volumes decreased 3% due to residential construction and environment sectors, mitigated by positive food, agriculture, mining and infrastructure sectors
o revenue decreased 4%, due to lower input cost pass through and softer volumes
o underlying EBITDA improved 2%, reflecting strong cost control and resilient pricing
· Leverage on track to close the year below 2.3x
· The Board remains confident in achieving FY24 consensus expectations3
Strategic update
Update on CRH acquisitions, integration and synergies
· Acquisition of Polish lime assets completed on 1 September 2024
· Integration of all CRH lime businesses acquired in 2024, including Poland, nearing completion
· Guidance on synergies to be delivered by 2027 increased to €35m from €30m at the interims, with benefits from the recent acquisition of the Polish assets still to come and upper end guidance remaining at €60m
Operations and trading
Q3 has seen robust trading in most markets, despite mixed demand in residential construction and the German power / auto sectors. With reduced pass-through effects, proforma revenues were down 4%, and volumes down 3% on the same basis.
Pricing remained robust, supported by tight cost control and the benefits of increased scale resulting in continued improvement in the EBITDA margin to 22.6% and driving proforma EBITDA up 2%.
Fundamental to another solid quarter was the diversified model and end market exposure, showing once again resilience as several markets outperformed expectations, particularly the North-East and North-West regions.
Outlook
The positive start to the second half continues with food, agriculture, mining and infrastructure sectors performing well, mitigating continued softness in residential construction and isolated pockets of other markets. We welcome expected interest rates reductions in Europe and the UK, which should boost general sentiment and support a recovery in residential construction in particular.
SigmaRoc’s unique position in the European lime market and its significant resource base differentiate the Group from other businesses lacking broad end market exposure, or access to high quality and strategically located mineral resources.
Our staff have delivered another Period of progress, nearing completion of the CRH lime assets integration, and our expectations from the synergy program continue to improve.
The Board’s outlook for FY24 remains unchanged, with EBTIDA in line with consensus expectations3.
Max Vermorken, CEO of SigmaRoc, commented:
“The Group has delivered excellent results for the Period despite the current mixed landscape and is well positioned to benefit from improving market sentiment. Whilst remaining mindful of conditions in some of the Group’s markets, the strong Q3 performance, combined with our diversified end market exposure and decentralised operating model, gives the Board confidence in maintaining full year expectations.“
Notes:
1 Underlying results are stated before acquisition related expenses, certain finance costs, redundancy and
reorganisation costs, impairments, amortisation of acquisition intangibles and share option expense. These measures are not defined by UK IAS and therefore may not be directly comparable to similar measures adopted by other companies.
2 Proforma calculation includes Deal 2 and Deal 3, plus all acquisitions made by SigmaRoc in 2023, for the entire Period on an underlying basis.
3 Consensus expectations for SigmaRoc, being the average of forecasts for the year ending 31 December 2024 provided by Analysts covering the Company, are revenue of £1,056.1m and underlying EBITDA of £221.0m.
