Morgan Advanced Materials’ Revenue Essentially Flat in 2017
On an organic constant-currency basis, revenue in 2017 increased by 1.4% compared to the prior year.
Morgan Advanced Materials recently reported group revenue of approximately £1 billion (approximately $1.4 billion) in 2017, compared to £989.2 million ((~ $1.37 billion) in 2016, an increase of 3.3% on a reported basis. Improvements in the underlying business and benefits from the decline in the value of sterling against other currencies, with much of the group’s business being denominated in non-sterling currencies, reportedly more than offset the impacts of disposals. On an organic constant-currency basis, revenue increased by 1.4%.
Group headline operating profit was £119.7 million (~ $166.3 million) in 2017, compared to £116.9 million (~ $162.3 million) the prior year. Headline operating profit margin was 11.7%, compared to 11.8% for 2016.
“I am pleased to see the return to organic growth in the year as a result of the early benefits of our strategy implementation and improving market conditions,” said Pete Raby, CEO. “Strategy implementation is progressing well with further investment in research and development and sales completed in the year, and capability development ongoing across the group. We are on track to meet our goal of growing in line with our markets in 2019, and expect to grow at closer to our market rates in 2018.”
The Thermal Products segment saw revenue for the year reach £473.1 million (~ $657.4 million), an increase of 3.6% over 2016. On an organic constant-currency basis, year-on-year revenue decreased by 1.4%.
Revenue for Thermal Ceramics in 2017 was £426.2 million (~ $592.1 million), increasing 3.1% compared to the prior year. On an organic constant-currency basis, year-on-year revenue decreased by 1.6%. Both North America and Europe declined organically, reflecting the late-cycle nature of the business. Growth in Asia was primarily driven by China and India.
2017 revenue for Molten Metals Systems was £46.9 million (~ $65.1 million), representing an increase of 7.8% over 2016. On an organic constant-currency basis, year-on-year revenue increased by 0.9%, with growth driven by performance in fire assay equipment and consumables resulting from the strength in the global precious metals (gold) market.
Revenue for the Carbon and Technical Ceramics Division for the year was £527.4 million (~ $732.8 million), up 5.1% compared to the prior year. On an organic constant-currency basis, year-on-year revenue increased 6.2%.
Revenue for Electrical Carbon for the year was £157.1 million (~ $218.3 million), representing an increase of 0.6% compared to 2016. On an organic constant-currency basis, year-on-year revenue increased by 3.1% as the rail, wind, mining, and industrial segments all reflected year-on-year growth. Regionally, growth was primarily seen in Asia from strong sales of specialty graphite products, in particular due to sales of machined graphite in Korea supporting the semiconductor industry and carbon fiber felt materials in China for solar energy applications, and also the European markets. The North American market remained flat overall.
Revenue for Seals and Bearings for the year was £113.2 million (~ $157.3 million), an increase of 15.9% over 2016. On an organic constant-currency basis, year-on-year revenue increased by 10.9%. Organic growth was driven by the water market and chemical and process industry pump seal and bearing demand. The business also experienced a stronger year for ceramic armor material in North America, with armor sales reflecting an increase of £3.6 million (~ $5 million) from 2016. The growth in these markets offset a decline in the Korean automotive market during the year.
Revenue for the Technical Ceramics global business unit was £257.1 million (~ $357.2 million), up 3.6% compared to the prior year. On an organic constant-currency basis, year-on-year revenue increased by 6.1%, primarily driven by demand for ceramic cores in the aerospace market and supply of ceramic parts into the semiconductor market. This demand offset some of the slowdown in the demand for ceramic cores for the industrial gas turbine market in the last quarter.
Revenue for Composites and Defence Systems for the year was £21.0 million (~ $29.2 million), representing a decrease of 30.9% compared to 2016, on a reported basis. The decline was driven primarily by a reduction in activity with the UK MoD and the completion of a Danish vehicle program.
For more information, visit www.morganadvancedmaterials.com.