Synthomer CEO “cautiously encouraged” by pick-up in trading

London – Synthomer plc has seen first-quarter volumes across the group’s continuing businesses reach their highest levels since the second quarter of 2022.

The recovery reflects “improving activity levels in some of the segments of the group that were previously more challenged,” said its trading update for the first three months of 2024.

However, Synthomer cautioned that “this partially reflects some short-term customer restocking" and that it has yet to see sustained improvement in market demand.

First quarter ‘continuing group earnings (EBITDA) was higher than the prior-year period, helped by “robust pricing particularly in our speciality businesses, ongoing cost-reductions and lower energy costs.”

However, ‘continuing group’ revenue declined due to lower raw materials prices, the London-based producer of rubber latex-based materials & products and other specialities noted.

Though “cautiously encouraged,” Synthomer CEO Michael Willome said: “While there are signs of improvement in some of our end markets, visibility of a sustained recovery remains elusive at this stage.”

“We, therefore, continue to strengthen Synthomer's position for the future, by delivering our specialisation strategy, optimising our portfolio and cost position," added Willome.

The group went on to report progress with its business strategy, including a successful tender for €370 million of bonds due 2025 in April which improved its debt-position.

In May, Synthomer completed the divestment of its ‘compounds’ business, “increasing our focus on core end markets and further reducing site complexity.”

Over the last 18 months, the group has reduced its manufacturing footprint by 10 sites to 33, through “a combination of non-core divestments and rationalisation activity, with further actions underway.”

In November 2023, Synthomer completed a reorganisation of its styrene butadiene rubber (SBR) latex operations in Europe, as part of a move to streamline operations globally.

With the reorganisation, the London group started a process to divest its European paper and carpet operations, following its exit from “loss-making” paper and carpet operations in the US.