Half Year 2025 Morgan Advanced Materials PLC Earnings Call Transcript
Key Points
- Morgan Advanced Materials PLC (MCRUF) delivered resilient margins despite challenging market conditions, with a group adjusted operating margin of 11.1%, supported by pricing and continuous improvements.
- The company successfully completed the majority of its current self-help program, which contributed to mitigating the impact of volume decline.
- Morgan Advanced Materials PLC (MCRUF) is well-positioned in attractive markets, with significant opportunities driven by mega trends such as carbon reduction, advances in healthcare, and the ascent of power electronics.
- The simplification program is progressing as planned, with a reduction in site footprint expected to deliver full cost savings of GBP24 million in 2025 and GBP27 million in 2026 and beyond.
- The company has a strong decentralized model, allowing business leaders to act with agility and maintain close connections with customers, fostering customer loyalty.
- Revenues were down 5.8% year on year at constant currency, with a significant decline in Semiconductor sales, which were down 35% compared to the same period last year.
- The Semiconductor market remains challenging, with overstocking in the silicon carbide supply chain impacting demand and profitability.
- Free cash flow was only GBP1.2 million, indicating limited cash generation in the first half of 2025.
- The company faces foreign exchange headwinds, with a negative FX impact of GBP4.6 million in the first half, expected to be GBP8.4 million for the full year.
- Morgan Advanced Materials PLC (MCRUF) remains cautious about demand in several markets due to geopolitical and economic uncertainties, with no expectation of recovery in the second half of 2025.
This is a holding announcement for the Morgan Advanced Materials half year results 2025. The call will begin in approximately one minute.
Thank you for your patience. Good morning, or good afternoon all. Welcome to the Morgan Advanced Materials half year results 2025. My name is Adam, and I'll be your operator for today. (Operator Instructions)
I now hand the floor to Damien Caby to begin. So Damien, please go ahead when you're ready.
Thank you, Adam. Good morning, everyone. Welcome to our interim results call for the first half of 2025. I'm Damien Caby. I'm the Chief Executive of Morgan Advanced Materials.
I was appointed CEO on July 1 on the position of President of our Thermal Products Global business unit. And I'm delighted to be presenting to you today. I'm joined by Richard Armitage, our CFO, for this call.
I will start with a summary of the first half and the overall market environment. Richard will then take you
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