Morgan Advanced Materials Sees “Good Progress” in 2018
On an organic constant-currency basis, revenue for Morgan Advanced Materials increased by 7.4% in 2018.
Morgan Advanced Materials recently announced its financial results for 2018. Total group revenue topped £1 billion (approximately $1.3 billion), an increase of 3.2% on a reported basis compared with 2017, driven by improvements in the underlying business more than offsetting the impacts of prior-year disposals and foreign exchange headwinds. On an organic constant-currency basis, revenue increased by 7.4%.
Revenue in 2018 for the Thermal Products division grew 1.6% compared to the prior year, reaching £482.2 million (~ $636 million). On an organic constant-currency basis, year-on-year revenue increased by 5.5%.
Revenue for the Thermal Ceramics business in 2018 was £433.6 million (~ $571.9 million), representing an increase of 1.5% compared with 2017. On an organic constant-currency basis, year-on-year revenue increased by 5.3%. Strong growth in Asia was led by China and India. North America experienced lower demand, while Europe was slightly ahead of the prior year. Growth was primarily in insulation projects for the petrochemical industry, and in the metals and industrial market segments.
Revenue reached £48.6 million (~ $64.1 million) for the Molten Metals Systems business in 2018, an increase of 3.2% compared to the prior year. On an organic constant-currency basis, year-on-year revenue increased by 7.3%. Growth was driven primarily by the Asia and North America regions. The core crucibles business grew year-on-year, primarily driven by strong performance in India. Industrial equipment sales increased, as well as consumable sales into the strengthening precious metal fire assay markets.
Morgan’s Carbon and Technical Ceramics division generated £551.7 million (~ $727.7 million) in revenue in 2018, growing by 4.7% over 2017. On an organic constant-currency basis, year-on-year revenue increased 7.1%.
Revenue for the Electrical Carbon business was £166.8 million (~ $220 million) in 2018, an increase of 6.3% compared to 2017. On an organic constant-currency basis, year-on-year revenue increased by 12.6%. The strong year-on-year growth was driven primarily by the rail, industrial and semiconductor market segments. The rail segment benefitted from good market conditions, primarily from sales of carbon collector strip products for electrified rail applications.
On a regional basis, growth in Asia was driven by sales of specialty graphite products, accompanied by good growth in the industrial and rail sectors. Double-digit growth was also seen in North America across all sectors, supported by the strong economy. Europe saw good growth in the wind power and rail segments, offsetting a slight decline in the industrial market.
The Seals and Bearings business delivered £132.7 million (~ $175 million) in revenues in 2018, a jump of 17.1% over 2017. On an organic constant-currency basis, year-on-year revenue increased by 18.9%. The business saw strong growth in most key markets, offsetting continued weakness in the Korean automotive market. In a continuation of the contracts awarded in 2017, sales of ceramic armor increased significantly from £6.6 million (~ $8.7 million) in 2017 to £24 million (~ $31.7 million) in 2018. Excluding armor, organic revenue growth on the core business was 3.3%. The business saw organic revenue growth in the water, petrochemical, medical and aerospace markets.
Revenue for the Technical Ceramics business in 2018 dipped to £252.2 million (~ $332.7 million), a decrease of 1.8% compared to the prior year. On an organic constant-currency basis, year-on-year revenue increased by 2.8%, primarily driven by demand increases for ceramic cores in the aerospace market and supply of ceramic parts into the semiconductor and medical markets. This demand growth was partially offset by the sharp slowdown in the industrial gas turbine (IGT) market.
“The group has made good progress during the year with the implementation of our strategy going well and accelerating growth,” said Pete Raby, CEO. “We have delivered organic revenue growth of 7.4% and organic headline operating profit growth of 9.4% while investing in R&D, sales and wider business infrastructure. We are now investing £10 million [~ $13.2 million] per year more in R&D than we were three years ago, a vital investment in the technical differentiation of the group.
“Looking forward to 2019, we are likely to see slower growth in the key industrial economies in which we participate, and there are several macro-economic and geopolitical uncertainties which could have a significant impact. However, based on our current assessment of business trends and orders, we expect to deliver modest revenue growth in 2019, with efficiency savings delivering benefits to group headline operating profit.”
Additional details are available at www.morganadvancedmaterials.com.