Our Strategy
Our innovative culture and our strategy of Polymer & Parts – with a core polymer business, complemented by our parts business to either prove new opportunities or sell into medical applications – puts us in a good position for the years ahead.
We have a strong and diverse portfolio of growth opportunities; the key will be how we accelerate delivery, particularly in end markets such as Medical. Recognising this, we are investing to increase the proportion of revenues from high value Medical applications, supporting earnings stability. Alongside this, we will continue to develop our core business to generate revenue growth. Most of our parts-based ‘mega-programmes’ are at an early or developing stage of commercialisation, but offer significant potential going forward. Our Polymer & Parts strategy and a focus on growth markets and long term sustainable opportunities remains strong. Our strategy involves differentiating against our competitors through being focused on existing and new applications in the PEEK and PAEK polymer space, through developing new polymer grades and product forms, including composites, and through building new markets in ‘parts’ alongside our core polymer offering.
As a sustainable business bringing transformational & sustainable solutions which address the world’s material challenges, Victrex works across its markets and with customers to deliver solutions and performance benefits against incumbent materials, typically metal.
With over 1100 employees, we focus on the high performance polymer segment, where long-term megatrends such as lightweighting, CO2 reduction and more efficient manufacturing support the use of our materials. As the no.1 PEEK experts, Victrex is pioneering the market for the use of high performance PEEK & PAEK polymers.
Dame Vivienne Cox
Chair
Drive core business
How we performed in FY 2024
- Sales volumes up 4%
- Revenue growth down 5% reflecting Medical destocking impact
- Improved underlying operating cash conversion of 114%
- New China facility operational
Focus for FY 2025
- Return to growth (revenue & PBT)
- Ready for upturn and global recovery
- Ramp-up of new China PEEK facilities
- Improved gross margin supported by better asset utilisation
Primary link to risk
- Supply chain
- Strategy execution
- Geo-political and macro-economic environment
Key performance indicators
Revenue growth (reported) %
Revenue growth
-5%
Definition
The year on year percentage change in total sales for the Group, in reported currency.
Why it’s important
Revenue growth is the measure chosen to reflect the structural growth opportunities for PEEK across our markets, with above-market growth being the medium-term focus.
Underlying operating cash conversion %
Underlying
operating
cash conversion
114%
Definition
Underlying operating cash conversion is underlying operating cash flow as a percentage of underlying operating profit. Underlying operating cash flow is underlying operating profit before depreciation, amortisation and loss on disposal, less capital expenditure, adjusted for working capital movements.
Why it’s important
Used to assess the business’ ability to convert operating profit into cash effectively. From FY 2025 underlying operating cash conversion is a metric which partly determines bonus outcomes.
Differentiate through innovation
How we performed in FY 2024
- Strong R&D investment at 6% of revenue
- Regulatory submission for PEEK Knee (India), supporting commercial pathway
Focus for FY 2025
- Key milestones towards mega-programme commercialisation
- Support US clinical trial for PEEK Knee
- Prepare for TechnipFMC bid outcomes for Brazil (Magma programme) and commercialisation
Primary link to risk
- Legal and Regulatory Compliance Ethics and Contracts
- Strategy execution
Key performance indicators
R&D spend £m
R&D spend
17.5£m
Definition
The total Research & Development spend that the Group has incurred.
Why it’s important
Research & Development spend at 5%–6% of sales underpins our ability to innovate into new applications, supporting our future growth.
Mega-programme revenue £m
Mega-programme
revenue
10.2£m
Definition
Value of Group sales generated from our five mega-programmes.
Why it’s important
Mega-programme revenue is a measure of the adoption of our five mega-programmes, after a period of investment, development and initial market adoption / commercialisation.
Create & deliver future value
How we performed in FY 2024
- Advanced qualification for key Aerospace Composites programme
- Strong progress in Medical mega-programmes (Trauma and Knee)
- Earnings per share (reported) down 72%
Focus for FY 2025
- Further grow E-mobility revenues
- Broader customer and product base in Trauma; accelerate revenues
- Opportunity for first commercial PEEK Knee
- Grow earnings per share
Primary link to risk
- Strategy execution
- Geo-political and macro-economic environment
Key performance indicators
Return on invested capital %
Return on
invested capital
10%
Definition
ROIC is defined as profit after tax adjusted to exclude exceptional items net of tax, finance costs and finance income/average adjusted net assets. Adjusted net assets is total equity attributable to the shareholders at the year end excluding cash and cash equivalents, other financial assets, retirement benefit asset, retirement benefit obligations and borrowings.
Average adjusted net assets is adjusted net assets at the start of the year plus adjusted net assets at the end of the year, divided by two.
Why it’s important
Return on capital invested (‘ROIC’) measures the return generated on capital invested by the Group and provides a metric for long-term value creation. The five-year average ROIC is 16%.
Reported earnings per share p
Earnings
per share
19.8p
Definition
Profit after tax divided by the basic weighted average number of shares. This includes the impact of exceptional items.
Why it’s important
Earnings per share measures the overall profitability of the Group and demonstrates how we convert our top-line revenue opportunities into profitable growth for our shareholders.
Underpin through safety, sustainability and capability
How we performed in FY 2024
- Lower recordable injury frequency at 0.18 (lower than OSHA industry average of 1.3 and FY 2023 0.22)
- 100% of electricity sourced from renewables for all Victrex’s sites
- Validated decarbonisation targets (SBTi)
Focus for FY 2025
- Zero Accidents and Zero Incidents culture, building on existing progress
- Preferred options for SBTi decarbonisation plan across all scopes
- Continue to grow sustainable product revenues (target 70% by 2030 vs
52% in FY 2024)
Primary link to risk
- Safety, health and environment
- Recruitment and retention of the right people
- Network and IT systems & security
- Product liability
- Legal and regulatory compliance, ethics and contracts
Key Performance Indicators
OSHA recordable injury rate
OSHA recordable injury rate
0.18
Definition
The US Occupational Safety and Health Administration (‘OSHA’) is the industry standard for recordable injuries. This is based on total number of recordable injuries x 200,000/total number of hours worked (employee & contractor).
Why it’s important
A safe and sustainable business is the highest priority for Victrex. Victrex continues to be better than the industry standard after adopting OSHA reporting in FY 2019.
Hours worked in the community
Hours
4,423
worked in the community
Definition
Total number of hours that Victrex employees have volunteered in community activities.
Why it’s important
Our People pillar within our ESG strategy is key to supporting the communities where we operate (for example in Biodiversity activities), and supporting our talent strategy in recruiting the employees of tomorrow (for example through STEM activities).
Financial Highlights (£m)
| Title | 2024 | 2023 |
|---|---|---|
| Revenue growth (reported) % | -5 | -10 |
| Underlying operating cash conversion % | 114 | 18 |
| R&D spend £m | 17.5 | 18.6 |
| Mega-programme revenue £m | 10.2 | 11.1 |
| Return on invested capital % | 10 | 14 |
| Earnings per share p (reported) | 19.8 | 70.9 |
| Hours worked in the community | 4,423 | 3,895 |
