24th May 2007 07:03
Cookson Group PLC24 May 2007 AGM TRADING STATEMENT Cookson Group plc, a leading materials science company, releases the followingstatement regarding current trading ahead of today's Annual General Meeting. Ceramics Global steel production - the key end-market for our Ceramics division - hasbeen growing faster in 2007 than our earlier expectations. The investment and restructuring initiatives announced in 2006, which includeadditional production facilities in China, Poland and Mexico and the closure offacilities in the UK and the US, are proceeding in line with expectationsalthough, as anticipated, the full benefits arising from a number of theseinitiatives will not be realised until 2008. Overall, underlying trading for the Ceramics division year to date has beenencouraging and significantly ahead of the prior year. Electronics End-market growth in our electronics markets in the year to date is in line withour earlier expectations, with growth in 2007 marginally lower than that in 2006but still ahead of global GDP. The market penetration of lead-free solder hasremained constant compared to the end of 2006, where we had expected acontinuing (albeit slowing) increase in penetration levels. We believe this isdue to recent significant increases in the price of tin and silver, which arepassed through to our customers and result in lead-free solder being much moreexpensive than traditional, leaded solder. This has also boosted demand for ourless expensive, SACX(TM), low silver, lead-free products. Overall, underlying profitability for the Electronics division in the year todate has been in line with expectations and ahead of the prior year. Precious Metals In the US, retail demand for jewellery has been somewhat subdued in the year todate. In Europe, retail demand for jewellery remains weak but in line with ourearlier expectations. As a consequence of the weaker US market, profitabilityfor the division in the year to date has been slightly weaker than theequivalent period in the prior year (on a constant currency basis) but with alloperations trading profitably. Currency In our preliminary results announcement, we highlighted that the recentweakening of the US dollar, through its translation impact on our sterlingresults, would reduce our reported growth if it were to continue. Since thatannouncement, the US dollar has continued to weaken such that the average USdollar exchange rate for the first four months of 2007 was US$1.96. Theequivalent average US dollar exchange rate for the first half of 2006 and fullyear 2006 was US$1.79 and US$1.84 respectively. Approximately 80% of theGroup's profit after tax arises in either the US dollar or other currencieswhich 'track' the US dollar, reflecting in particular the Group's wellestablished presence in the fastest-growing and most profitable markets ofAsia-Pacific. Outlook Based on general market conditions and our trading results for the first fourmonths of the current year, we continue to expect a significant improvement inthe performance of our continuing operations overall in 2007 on a constantcurrency basis. However, the recent weakening of the US dollar, through itstranslation impact on our sterling results, will reduce the rate of revenue andearnings growth on an as-reported basis. Further announcements A pre-close period trading statement will be issued at the end of June, withInterim results for the six months ending 30 June 2007 expected to be announcedon 2 August 2007. For further information please contact:Shareholder/analyst enquiries:Nick Salmon, Chief Executive Cookson Group plcMike Butterworth, Group Finance Director Tel: +44 (0)20 7822 0000Anna Hartropp, Investor Relations ManagerMedia enquiries:John Olsen Hogarth Partnership Tel: +44 (0)20 7357 9477 About Cookson Group plc Cookson Group plc is a leading materials science company operating on aworldwide basis in Ceramics, Electronics and Precious Metals markets. The Ceramics division is the world leader in the supply of advanced flow controlrefractory products and systems to the global steel industry and a leadingsupplier of specialist ceramic products to the glass and foundry industries. Itis also the regional leader in the US, UK and Australia in the supply andinstallation of monolithic refractory linings. The Electronics division is a leading supplier of advanced surface treatment andplating chemicals and assembly materials to the automotive, construction andelectronics markets. The Precious Metals division is the leading supplier of fabricated preciousmetals (gold, silver, platinum, etc.) to the jewellery industry in the US, theUK, France and Spain. Products include alloy materials, semi-finished jewellerycomponents and finished jewellery. Forward Looking Statements This announcement contains certain forward-looking statements which may includereference to one or more of the following: the Group's financial condition,results of operations, cash flows, dividends, financing plans, businessstrategies, operating efficiencies or synergies, budgets, capital and otherexpenditures, competitive positions, growth opportunities for existing products,plans and objectives of management and other matters. Statements in this document that are not historical facts are hereby identifiedas "forward-looking statements". Such forward-looking statements, including,without limitation, those relating to the future business prospects, revenues,working capital, liquidity, capital needs, interest costs and income, in eachcase relating to Cookson, wherever they occur in this document, are necessarilybased on assumptions reflecting the views of Cookson and involve a number ofknown and unknown risks, uncertainties and other factors that could cause actualresults, performance or achievements to differ materially from those expressedor implied by the forward-looking statements. Such forward-looking statementsshould, therefore, be considered in light of various important factors.Important factors that could cause actual results to differ materially fromestimates or projections contained in the forward-looking statements includewithout limitation: economic and business cycles; the terms and conditions ofCookson's financing arrangements; foreign currency rate fluctuations;competition in Cookson's principal markets; acquisitions or disposals ofbusinesses or assets; and trends in Cookson's principal industries. The foregoing list of important factors is not exhaustive. When relying onforward-looking statements, careful consideration should be given to theforegoing factors and other uncertainties and events, as well as factorsdescribed in documents the Company files with the UK regulator from time to timeincluding its annual reports and accounts. Such forward-looking statements speak only as of the date on which they aremade. Except as required by the Rules of the UK Listing Authority and the LondonStock Exchange and applicable law, Cookson undertakes no obligation to updatepublicly or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. In light of these risks, uncertaintiesand assumptions, the forward-looking events discussed in this announcement mightnot occur. Cookson Group plc, 165 Fleet Street, London EC4A 2AERegistered in England and Wales No. 251977www.cooksongroup.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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