# SigmaRoc reports strong Q3 with further margin growth in trading update

- Link: https://www.directorstalkinterviews.com/sigmaroc-reports-strong-q3-with-further-margin-growth-in-trading-update/4121175447
- Published: 2024-10-28T07:33:11+00:00
- Author: Amilia Stone

**SigmaRoc plc** (LON:SRC), a leading European lime and minerals group, has provided
an update on trading for the nine months ended 30 September 2024 (the ‘Period’).

**Financial highlights**

**Strong trading in Q3 positions the Group for a robust full-year finish**

·      Revenue increased 67% YoY to £729m

·      Underlying^(1) EBITDA increased 88% YoY to £165m, with margin improving to
22.6%

·      On a proforma^(2) basis for the Period:

o  volumes decreased 3% due to residential construction and environment sectors,
mitigated by positive food, agriculture, mining and infrastructure sectors

o  revenue decreased 4%, due to lower input cost pass through and softer volumes

o  underlying EBITDA improved 2%, reflecting strong cost control and resilient pricing

·      Leverage on track to close the year below 2.3x

·      The Board remains confident in achieving FY24 consensus expectations^(3)

**Strategic update**

**Update on CRH acquisitions, integration and synergies**

·      Acquisition of Polish lime assets completed on 1 September 2024

·      Integration of all CRH lime businesses acquired in 2024, including Poland,
nearing completion

·      Guidance on synergies to be delivered by 2027 increased to €35m from €30m
at the interims, with benefits from the recent acquisition of the Polish assets 
still to come and upper end guidance remaining at €60m

**Operations and trading**

Q3 has seen robust trading in most markets, despite mixed demand in residential 
construction and the German power / auto sectors. With reduced pass-through effects,
proforma revenues were down 4%, and volumes down 3% on the same basis.

Pricing remained robust, supported by tight cost control and the benefits of increased
scale resulting in continued improvement in the EBITDA margin to 22.6% and driving
proforma EBITDA up 2%.

Fundamental to another solid quarter was the diversified model and end market exposure,
showing once again resilience as several markets outperformed expectations, particularly
the North-East and North-West regions.

**Outlook**

The positive start to the second half continues with food, agriculture, mining and
infrastructure sectors performing well, mitigating continued softness in residential
construction and isolated pockets of other markets. We welcome expected interest
rates reductions in Europe and the UK, which should boost general sentiment and 
support a recovery in residential construction in particular.

SigmaRoc’s unique position in the European lime market and its significant resource
base differentiate the Group from other businesses lacking broad end market exposure,
or access to high quality and strategically located mineral resources.

Our staff have delivered another Period of progress, nearing completion of the CRH
lime assets integration, and our expectations from the synergy program continue 
to improve.

The Board’s outlook for FY24 remains unchanged, with EBTIDA in line with consensus
expectations^(3).

> **Max Vermorken, CEO of SigmaRoc, commented:**
> “The Group has delivered excellent results for the Period despite the current 
> mixed landscape and is well positioned to benefit from improving market sentiment.
> Whilst remaining mindful of conditions in some of the Group’s markets, the strong
> Q3 performance, combined with our diversified end market exposure and decentralised
> operating model, gives the Board confidence in maintaining full year expectations._“_

Notes:

_^(1)_ _Underlying results are stated before acquisition related expenses, certain
finance costs, redundancy and_

_reorganisation costs, impairments, amortisation of acquisition intangibles and 
share option expense. These measures are not defined by UK IAS and therefore may
not be directly comparable to similar measures adopted by other companies._

_^(2)_ _Proforma calculation includes Deal 2 and Deal 3, plus all acquisitions made
by SigmaRoc in 2023, for the entire Period on an underlying basis._

_^(3)_ _Consensus expectations for SigmaRoc, being the average of forecasts for 
the year ending 31 December 2024 provided by Analysts covering the Company, are 
revenue of £1,056.1m and underlying EBITDA of £221.0m._

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