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 2023
- Results in-line (revised guidance) after challenging year
- Sales volume down 24%
- Record Medical revenues
- Strong average selling prices, up 18%
Focus for FY 2024
- Return to growth (revenue & PBT)
- Well placed for global recovery
- First revenues from new China PEEK facilities
- Focus on mid-term margin improvement
Primary link to risk
- Supply chain
- Strategy execution
- Geo-political and macro-economic environment
Key performance indicators
Revenue growth (reported) %
Revenue growth
-10%
Definition
The year on year percentage change in total sales for the Group, in live 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.
Return on sales %
Return
on sales
26%
Definition
Profit before tax and exceptionals as a percentage of total sales
Why it’s important
Return on sales assesses the overall profitability of the Group. The measure reflects our discipline in seeking growth opportunities which maintain our sector leading returns.
Differentiate through innovation
How we performed in FY 2023
- Continued investment in R&D at 6% of revenue
- New product sales at 7% of revenue
Focus for FY 2024
- Grow new product sales above 7% of revenues
- Progress PEEK Knee clinical trial towards commercialisation phase
- Collaboration with TechnipFMC in support of their new Brazil manufacturing facility
Primary link to risk
- Legal and Regulatory Compliance Ethics and Contracts
- Strategy execution
Key performance indicators
R&D spend £m
R&D spend
18.6£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.
New products as a % of Group sales %
New
products
7%
as a % of Group sales %
Definition
Proportion of Group sales generated from mega-programmes, new differentiated polymers and other pipeline products that were not sold before FY 2014.
Why it’s important
New product sales (Vitality Index) is a measure of how successful we are in driving adoption of our new product pipeline.
Create & deliver future value
How we performed in FY 2023
- Strong progress in E-mobility, revenues of £6m
- Aerospace structural composite parts in demonstrator models; multiple collaborations
- New China PEEK facilities ready to support first sales
- Earnings per share (reported) down 19%
Focus for FY 2024
- Further grow E-mobility revenues
- Progress Trauma revenues and broaden customer scale-up
- PEEK Knee collaborations across multiple customers
- Grow earnings per share
Primary link to risk
- Strategy execution
- Geo-political and macro-economic environment
Key performance indicators
Pipeline mega-programmes
Pipeline
mega-programmes
5
Definition
Number of pipeline projects offering >£50m annual revenue potential in peak sales years as communicated from FY 2015 onwards.
Why it’s important
Our new product pipeline is key to differentiating our business, supporting new revenue and margin streams.
Reported earnings per share p
Earnings
per share
70.9p
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 2023
- 0.2 OSHA recordable injury frequency rate (85% lower than OSHA industry average)
- Strong community and STEM agenda; new Biodiversity partnership
- 100% of electricity sourced from renewables for UK sites, 90% globally
Focus for FY 2024
- Zero accidents and zero incidents culture, further SHE improvement
- Start to execute our SBTi decarbonisation plan across all scopes
- Further grow sustainable product revenues (to 70% by 2030 vs 55% in FY 2023)
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
0.2
Definition
US OSHA (Occupational Health & Safety Administration) is the industry standard for recordable injuries. The injury rate is based on total number of recordable injuries x 200,000/total number of hours worked (employee and contractor). Victrex continues to be better than the industry standard after adopting this reporting for FY 2020.
Why it’s important
A safe and sustainable business is the highest priority for Victrex.
Hours worked in the community
Hours
3,895
worked in the community
Definition
Total number of hours that Victrex employees have volunteered in community activities.
Why it’s important
Our social responsibility strategy is key to giving something back to the communities where we operate, and to supporting our talent strategy in recruiting the employees of tomorrow.
Financial Highlights (£m)
| Title | 2023 | 2022 |
|---|---|---|
| Revenue growth (reported) % | -10 | +11 |
| Return on sales % | 26 | 28 |
| R&D spend £m | 18.6 | 15.7 |
| New products as a % of Group sales % | 7 | 6 |
| Pipeline mega-programmes | 5 | 7 |
| Earnings per share p (reported) | 70.9 | 87.6 |
| Hours worked in the community | 3,895 | 4,784 |
