Resilient operating performance in Europe and North America (ENA):
- EBIT at £73.3m stable relative to 2014 (2014: £85.7m) before adverse currency impact of £6.0m and higher group wide employee bonuses of £6.9m.
- Cost savings programme delivered annualised savings of €7m; on track to achieve annualised savings of €13m by the end of 2016.
Asia and Rest of the World (ARW) very strong:
- EBIT up 128% to £40.5m (2014: £17.8m) mainly driven by Malaysian nitrile butadiene rubber business; up 176% before adverse currency of £4.3m and bonuses of £4.3m.
- Construction and coatings had a good year in all geographical areas: Malaysia, Middle East and Africa.
R&D driving innovation: products launched in last 5 years representing 18% of sales (2014: 16%).
Significant cash generation: Cash flow before financing grew significantly to £84.4m (2014: £49.6m).
Strong operational progress: Strengthened executive management team; operational head office re-located to London with executive team in one place.
Earnings per share: Underlying earnings per share for the year rose 10% to 21.5p (2014: 19.5p)
Dividend: Full year dividend increased by 10% to 8.6p per share in line with dividend policy (2014: 7.8p per share).
Commenting on the results, Neil Johnson, Chairman, said:
"It has been an excellent year for Synthomer with the Group reporting record underlying profit before tax. This result reflects favourable market conditions in our nitrile business in Asia and our ongoing strategic initiatives to invest in future growth through innovation, increased capacity and tight cost control. We have also benefitted from the stability and resilience of our businesses in Europe and North America.
Looking forward, we remain confident that the Group is well placed to perform given the strategy that we have put in place. Our outlook for the ENA businesses remains cautious with overall volumes and unit margins continuing at similar levels through 2016. For ARW, which is heavily influenced by our Asian nitrile business, we are aware that a number of nitrile producers, including Synthomer, have announced plans to increase capacity during the latter part of 2016 and early 2017. Whilst we are confident of continued strong growth in demand from the nitrile glove manufacturers during 2016 and beyond, we expect this planned capacity increase to impact the supply/demand balance during the second half of 2016 leading to similar volumes and margins to 2015 for the year as a whole."