Synthomer PLC

LSE:SYNT

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, welcome to the Synthomer Q1 trading update. My name is Charlie, and I'll be coordinating the call today. [Operator Instructions]I will now hand over to your host, Calum MacLean, CEO, to begin. Calum, please go ahead.

[Calum G. MacLean]

Thank you, Charlie, and good morning, everybody. Welcome to our Q1 trading update. I'm joined today on the call by Stephen Bennett, company CFO; and Tim Hughes, Head of Investor Relations.A couple of takeaways for you today. One is -- on this update. One is that all businesses are very much trading well ahead of last year, and that's across all 3 divisions, plus our Acrylate Monomers, and I'll dive into that a little bit in just a second. So that's the first takeaway.The second takeaway is that following our update of 6 to 8 weeks ago, when we promised to give you regular updates on the sort of supply-demand balance of the nitrile area, we are confirming today that, that tightness has continued and demand remains very strong within our Nitriles business. As a result of that, we are upgrading today our 2021 expectations to greater than GBP 450 million, which is versus your current consensus, is about GBP 70 million higher than where we were 8 weeks ago.Around GBP 50 million of that comes directly from our extended view that the strength of nitriles will remain strong certainly till the end of the year, and we'll update you again further in the middle year. So around GBP 50 million of the GBP 70 million is associated with that. And the remaining GBP 25 million order of magnitude is just a recognition of the underlying business continuing to perform well coming out of COVID and in a strong quarter 1.I did mention at the 8-week period that although the business is performing extremely well at greater than GBP 450 million, that the underlying sustainable EBITDA, excluding the premium or the one-off premium that we're currently achieving on the back of nitriles, was around GBP 300 million to GBP 325 million. I think we're upgrading that today on the basis of the improved results to GBP 350 million. So that would be about GBP 350 million the underlying sustainable result at the end of 2021, which includes the normalized nitrile volumes that will come after our JOB 6 extension.Just a couple of words now before I sort of hand over to questions on the individual businesses. I've mentioned nitriles already. As I mentioned earlier, the nitrile strength has remained, demand remains strong, and we are today currently in a sold-out position. And our margins and volumes for quarter 1 of 2021 are significantly higher than they were for quarter 1 2020.Likewise, in our Performance Elastomers division, we've had a much improved performance in our SBR division. So the restructuring is ongoing. So Oulu closed, which is our Finland site, at the end of quarter 1. We finished all the consultation and have started the transferring of volumes as well in Marl in Germany. And as a result of that, the volumes likewise are improved on our other assets and our underlying margins have recovered somewhat. So our underlying SBR business forecast for 2021 is a material improvement on where we were in 2020.In Functional Solutions, all businesses continue to benefit from the uplift following COVID. Markedly, our Oil & Gas business has come back, and we indicated 6 to 8 weeks ago when we spoke to you that we hope to see this improve during the course of 2021. Well, it has improved. It's improved month-on-month. I think you'll see that in many of the commentaries around other companies associated with oil and gas. And therefore, that is not yet returned to full pre-COVID levels, but certainly a big improvement on where it was in the second half of 2020.We continue to see strong sales and strong demand in our other application areas. So I talk about here in Coatings & Construction, in adhesives and in many of our other industrial markets that Functional Solutions is benefiting from strong markets there. And we're happy to say that, that's a strong performing business at this stage.Industrial Specialities, again, a similar story. There's a bit more exposure here into automotive industry, and the automotive industry is currently strong. I mean, there may potentially be some restocking within automotive. So we are cautious that, that demand and that high demand will continue throughout the year. But at this moment in time, there's no sign that it seems to be dropping off.Elsewhere in the 7 businesses that are part of the Industrial Specialties division, all businesses are ahead of last year same time and are ahead of budget. The Acrylate Monomers, likewise, which had a challenging year in 2020 on the back of COVID, has also recovered strong with demands increasing and also a number of other one-off events around the industry. American weather but also some force majeures has meant that the performance of the division in the first quarter has uplifted reasonably materially from its performance in 2020.If I then move to leverage. As a result of the improved performance, our leverage is now reduced to 1.2x at the end of March 2021, and our expectation is that, that will be below 1x at the half year. Just reconfirming our Q1 indication on the call today is greater than GBP 450 million EBITDA for 2021.And at that point, I think that sort of summarizes our press release. I'll pass it over to Q&A. So Charlie, if you could take the Q&A, we'll -- between the 3 of us, we'll pick up those questions. Thank you very much.

[Operator]

[Operator Instructions] Our first question comes from Sebastian Bray of Berenberg.

[Sebastian Christian Bray, Analyst]

Congratulations on the upgrade. I would have 2 questions. I'll ask them separately. My first one is on the language in the press release referring to expectations for a normalization in Nitrile Latex margins in 2022. Is this a partial or a complete normalization that is expected? Or do you not know yet?

[Calum G. MacLean]

Yes, thank you, Sebastian. And I know you had a long conversation on that matter with Tim prior to our last call. What we're currently saying at the moment is that we will update you with whatever information we can. What we clearly see today, and it's not just our own internal demand, but it's also market commentary as well, is that demand and growth for Nitrile Latex continues to be very strong. In fact, Nitrile Latex today as an industry is sold out. So in many ways, the shortage is being filled by other products, whether that's natural rubber, PVC type products. And as new capacity comes online, we would expect then for Nitrile Latex to continue to take more share from those other areas. So we think that the growth rate of Nitrile Latex will continue certainly beyond the pandemic as the demand has increased and isn't expected to go away.The slightly less predictable side of this supply-demand curve is around what capacity will come on and when. And there clearly has been some announcements in China. There's been some announcements also with the existing producers as well. And there's some element of speculation really as to exactly when that capacity will come online, the quality of that capacity, if it's some materials in China. But at this stage, we are being particularly cautious in terms of when that capacity will come on and it will more normalize the margins. And I think in today's announcement, what we're saying is, and that's a sort of upgrade from where we were 6 to 8 weeks ago, that we absolutely expect this tightness to remain there for the rest of 2021, and that we will update you again when we come out next at our half year results in terms of what we see and what progress has been made on that supply-demand.So in order for us not to get too carried away about 2022, we are just suggesting caution at the moment until we see how that plays out, and we'll give you more information here at the time.

[Sebastian Christian Bray, Analyst]

That is helpful. My second question is on SBR. Could you frame the current margins or unit margins for this business relative to where they were in 2017, 2018? Are we at -- approximately now back at a level? Is there potentially some room for them still to rise when paper recovers? How have -- how are the margins in this area looking?

[Calum G. MacLean]

I think the first thing to say, Sebastian, is we've done quite a bit of what we would call self-help within the SBR business. So you know we've done this consolidation where we have closed down one asset at the end of quarter 1, and we've used the volumes in that asset to load up the assets into our other businesses, into our other assets. And that means we've got better utilization, lower cost per tonne, and therefore, we've improved our margins. And we've done that, and we are continuing to do that with the work that we're doing in Germany as well.So there's a lot of self-help there, and at the same time, we've looked at the cost base of that business and tried to reduce it. So margins that are increasing at the moment are effectively as a result of the self-help. Volumes in all areas are reasonably strong with the exception of paper, which still is under pressure, as you know, but sort of stabilized now down at the newer levels.In terms of, therefore, the underlying average margins in quarter 1 and the forecast for the rest of 2021 is, the margins have certainly recovered, and they are getting closer to where they were in '18, 2018, but are still not back at that level yet.

[Operator]

[Operator Instructions] Our next question comes from Jolyon Wellington of Peel Hunt.

[Jolyon Sinclaire Wellington, Analyst]

Just a first quick question, just on the upgrade. So it looks like around GBP 70 million to GBP 80 million ahead of consensus for FY '21. Just wondered if you could say roughly how much of that upgrade is due to nitrile and how much is due to the sort of better performance of the underlying businesses? And also, are you able to sort of comment on what you expect the sort of split for EBITDA across the divisions to sort of -- to look like for FY '21?

[Calum G. MacLean]

I'll let Stephen talk about the split. But just to give you a top-down view on the upgrade, so you're right, Jolyon, GBP 70 million to GBP 80 million. And I think what we sort of are indicating here is that around GBP 50 million of that is coming from the Performance Elastomers or primarily -- primarily but not only, the nitriles. And that comes from the extension that we are seeing here to the continued tightness.Now it may be that 6 to 8 weeks ago, we were being a little bit cautious in terms of waiting to see how this supply-demand balance rolled out, that's along the lines of the question of Sebastian earlier on. But now sort of 2 months later, we're sort of clearly seeing that demand is remaining strong and that the capacity is tight.So we've sort of revised our forecast a little bit, let's say, certainly towards the end of the year, if those stronger margins will continue. So GBP 50 million, I would say, approximately of the GBP 70 million, GBP 80 million is in the nitriles. The balance, so that's between GBP 25 million, GBP 30 million order of magnitude, is in the underlying performance of the rest of the business, which is a more sustainable return to profitability coming out of COVID.And we've highlighted for you there that that's an improvement across the board, really, of all of these products, let's say, oil and gas has come back, which was one of the areas that were underperforming. And I'd also say that the heritage OMNOVA business, which is one that we acquired a business with just over $70 million of EBITDA, we delivered $30 million of synergies by the end of 2020. And that business is performing above now, significantly or above, let's call it, the combination of those synergies plus the EBITDA we acquired.So we're very pleased with the way that's bounced back and that we're seeing a strong performance. And of course, some of that is related to the oil and gas upturn. So all around, the business is doing -- has recovered quite strongly.Stephen, do you want to pick up a bit about, broadly speaking, the split? I know we don't give a guidance really.

[Stephen G. Bennett, CFO & Executive Director]

Yes. A bit of guidance, guys, although clearly not going to go into an enormous amount of detail. But if you looked at the results last year, the GBP 260 million, there was about GBP 150 million in Performance Elastomers. And from what Calum said, he said the -- we talked at March about GBP 50 million to GBP 100 million improvement as a result of nitrile. It went up GBP 50 million on the consensus, and going out to March, we talk about another GBP 50 million of that, at least GBP 100 million from Performance Elastomers.But again, as we've said, Performance Elastomers isn't just about nitrile. It's about our SBR business. And Calum has said that, that has improved during the course of 2021 relative to '20. So GBP 100 million plus, you should expect to see in Performance Elastomers, I think, is fair to say.And then if you look at Functional Solutions and Industrial Specialties, that's benefited from -- will benefit from a full year of OMNOVA. Most of it went into Functional Solutions, but also laminates and films and coated fabric was Industrial Specialties. So you expect to see another GBP 20 million or so in each of those plus the synergies. So your GBP 95 million will go up there for over 12 months to December '20 and the GBP 40-odd million for Industrial Specialties, about GBP 10 million or GBP 20 million each of those divisions, more so in Functional Solutions and Industrial Specialties. But Acrylate Monomers is a small business, but -- that we have that supplies much of its products into the other divisions, has seen an improvement this year and will not be loss-making. And I think that's probably what I would say as a guide, so you can sort of bridge from your our GBP 260 million to at least...

[Jolyon Sinclaire Wellington, Analyst]

Yes, that's really clear. And if I can just ask one more, just in terms of the strong cash flow you're seeing. And obviously, you talked about the leverage going down to sort of 1x at the half year stage. I mean, what does this sort of update mean for your M&A? Because clearly, the balance sheet is sort of ahead of where it was likely to be.

[Calum G. MacLean]

I think the answer to that question is we're clearly back in play. Over the last sort of several years, you've seen that the underlying strategy of Synthomer has been to invest in both inorganic and organic growth. And all the nitrile upside, it's not just about the fact that the demand is high. It's about the fact that we've invested and put a lot of capacity on the ground. And same with our Functional Solutions, that we put capacity on the ground in Germany, capacity on the ground in the U.S., and therefore, we're benefiting today because we've got the inorganic growth and the investments that we've made.So we will continue to be looking at a further organic growth through investing into our assets, and we're particularly talking about nitriles because we've made quite a lot in the other areas. But then on top of that, it also brings us back into the market for M&A and acquisitions. And equally, probably on a 50-50 basis, the benefit of the uplift we've seen today, so we've taken Synthomer from GBP 100 million EBITDA to GBP 400-plus million EBITDA in 6 years, and we're still with leverage at less than 1. And some of that benefit -- half of that benefit has come through a inorganic M&A as well, where we've done 4 acquisitions.So the Board has been very clear that they want to continue that strategy, and having accelerated the deleveraging following OMNOVA, it puts us back in play. And there are quite some opportunities around. And we are today exploring those opportunities, and we'll see what happens over the course of the next 12 months.

[Operator]

[Operator Instructions] Our next question comes from Navina Rajan of Morgan Stanley.

[Navina Rajan, Equity Analyst]

Just a couple for me. Maybe on your last point, Calum, on sort of the M&A piece and how that fits into the incoming CEO. Can you just sort of give us an update of where the company is at in terms of finding a successor? And if that M&A is post new CEO or if it's something that will be on the table being looked at from now on?On the NBR piece, just the phasing of that, I just wanted to clarify. When you say you expect the tightness to remain in 2021, are you saying first half, second half, you're expecting the sort of margins and the spreads that we've seen in the first half to be sustained through 2021 even in the second half, and therefore, normalization only in 2022?And then just on 2022 as well, I understand you don't want to sort of give official guidance, of course. But generally, in terms of repeat of the tightness, can you just sort of give clarity if there's any structural impact? You guys have seen several pandemics, I'm sure. And if I look at sort of just the glove capacity additions that are being added, and even taking into account the nitrile capacity additions coming online from some of your peers, the utilization rates still look quite high.So can you just give us some color in terms of 2022 in terms of the underlying demand within end markets and what you think in terms of that?

[Calum G. MacLean]

Yes. Okay. Navina, thank you for that, some good questions there. On the CEO search and how that relates to M&A, the company and the Nomination Committee of Synthomer are advanced in their search. And they have it down now to a shortlist of candidates, internal and external, and progress is good. So we would hope to hear some news on that over the course of the next 1 to 2 months in terms of, hopefully, some sort of appointment. And then thereafter, it will depend on how quickly that person can get in.How that relates to M&A, I think, ideally, we are pushing ahead on M&A now. It would be good if that CEO is around for them to endorse a larger acquisition, if there was such one. And I'm sure that will fit well with that timing. And also on the smaller bolt-on type transactions, I mean, these are led by the businesses anyway, and they're normally consolidation plays. So anything that we're doing in that area, we would simply get on with because they are led by the individual businesses. So I don't see the CEO search -- in fact, it's going well, there's some very high-caliber candidates at the table. And I don't see that slowing down in any way, and it certainly doesn't take away from the commitment of the company to continue to grow both organically and inorganically.Your second question, around NBR, I think what we're saying today is that we see that the tightness in demand continuing throughout first half, second half of 2021. So therefore, margins are relatively stabilized today in terms of where they are, and we'd expect them to remain pretty flat now or stable anyway for the rest of 2021. And that's what we're indicating, and that's why we upgraded today somewhat the margins to -- and it was mainly adding margin into the back end, but it affects our overall performance for the whole year.In terms of '22, I think that's where we've just asked you to be a little bit cautious because as I mentioned then, I think it was Sebastian's question earlier on, there is still some element of challenge around when extra capacity will come online, how strong the demand will continue and what market share nitrile will continue to take from other products in the market. But I think we're not saying that 2022 will not continue with some strong demand and maybe even some premium margins. But what we are saying is that we would ask you to just sit tight on that one at the moment. And when we come back to you in August, we'll give you a much better update at that time in terms of the progress that some of the announcements have been made.But as you quite rightfully point out, the demand is strong. There is new capacity for glove manufacturing coming on around the world. In the U.S., in Europe as well as primarily in Asia. And the capacity of Nitrile Latex is chasing that, if you like. So therefore, whilst it continues to chase, then obviously, the demand -- the supply-demand balance remains tight.Now that could well continue into 2022. And again, Sebastian asked the question, is it a partial normalization? Or is it a full normalization in '22? Well, inevitably, it will be partial at some stage. But when that happens, we'll have to wait and see.My last point, of course, Navina, was that if you assume the normalization of the Nitrile Latex business, then that's when I take you back to our sustainable EBITDA of around GBP 340 million, GBP 350 million, which we've upgraded slightly today from where we were because of the recovery of the business. So we're still in a very good place in terms of the profile of how Synthomer has grown over the last 4 to 5 years and will continue to grow because lots of good things going on in Functional Solutions, Industrial Specialities, improvement of the underlying SBR business. And indeed, even in a normalized state, the NBR business continues to move forward because we're introducing new capacity, lower cost and increasing volumes.

[Operator]

[Operator Instructions] Our next question comes from Alan Custis of Lazard Investment Management.

[Alan Custis, MD, Portfolio Manager & Analyst]

It was just a very quick question, and I think one of the previous points or questions was asked around. It was around natural rubber, because, obviously, there's been quite a movement in terms of NBR versus natural rubber. Do we suspect that there is a risk that NBR starts to lose some share versus alternative products?

[Calum G. MacLean]

Alan, good to speak to you. I think my personal view, and there was an interesting note came out just overnight, actually for MARGMA, who are the glove manufacturers out in Malaysia, so you should try and reference that. And I think it sort of summarized it quite well, actually, to say that perhaps at this moment in time, when Nitrile Latex is a constraint by the volumes that can be produced, natural rubber is taking more volume as the demand for -- total glove demand is higher than the Nitrile Latex can actually satisfy.But I think the pressure towards moving towards the preferred glove manufacturer, which is the Nitrile Latex, and the sensitivity and the allergies and these sort of things, if anything, is driving it the other way, which means that as and when more Nitrile Latex does come back, any market share that sort of PVC, or even indeed, [indiscernible] would quickly be reversed. And it's taken on the basis of it's filling a gap, really, which is still there today.I think secondly, what I would say to that, and you and I had a long conversation on this one-on-one, but the new products coming through today, particularly from Synthomer, who are one of the sort of innovators, if you like, within the glove market, are surfactant-free, additive-free, which are making them even more attractive in terms of this sensitivity, as it was, today versus the other products like the natural rubber and potentially the PVCs with additives in it. So I think the trend is still very much in favor of Nitrile Latex as the product of preference.

[Operator]

[Operator Instructions] Our next question comes from Kevin Fogarty of Numis Securities.

[Kevin Christopher Fogarty, Analyst]

Really, a question around reflecting the strength of the balance sheet and how that has accelerated. I just wondered, is it physically possible for you guys to pull forward JOB 6?And then secondly, you previously outlined that part of the CapEx plans are as part of a placeholder for the next site. And I just wondered if there's any thinking in pulling that -- those plans for that site forward given the market dynamics and the strength of the balance sheet.

[Calum G. MacLean]

Thanks, Kevin. JOB 6, we are already -- the answer is JOB 6, we're already fast-tracking that as much as we possibly can. So therefore, it's due to come online at the end of the year. So we were on calls yesterday talking about it, and we expect to have commissioning being going on during quarter 4, and therefore, capacity potentially available for early -- or let's say, the beginning of 2022. And I'll just remind everyone, that was an additional 60,000 tonnes of NBR. So certainly, we are already fast-tracking it, and that's the sort of -- the earliest it will come online.In terms of where our next major investment will come from because clearly, the market is growing, and we are looking at citing locations, and we are discussing that and we've got various debates going on. And again, we are trying to accelerate that as quickly as possible, but there's clearly quite a lot of stuff behind that before you finally make that announcement. And we'd expect to be able to formally announce that in the second half of 2021. And that would mean because of the build time, that any new plant or, let's call it, brownfield plant capacity would probably be not online before the end of '23, early '24. But that's typically how long it takes to bring on a new plant from the point at which you announced that capacity and where it's coming. But to be clear, we are working on that in a fast-track way, and we will make the announcement as soon as we're ready.

[Operator]

[Operator Instructions] And our next question comes from Maggie Schooley of Stifel.

[Margaret Rose Schooley, Research Analyst]

Just one quick question from me. Given the high demand on customers' willingness to take very similar grades, can you give us some indication over the last quarter how much you are producing above nameplate capacity, given you haven't done -- or you probably wouldn't have had to have done changes to the line and things of that nature? Is there some indication that we can understand?

[Calum G. MacLean]

Yes. Thanks, Maggie. It depends really on which businesses. I mean, I think, first thing I would say is demand is strong across all our businesses, but different assets are operating at different utilizations. So you know, if I run through them quite quickly...

[Margaret Rose Schooley, Research Analyst]

Sorry, I was specifically referring to NBR, excuse me.

[Calum G. MacLean]

Okay. So on NBR, the asset is running at 100% utilization. So whilst it's available, it is running. So therefore, anything we make, we can sell and our inventories are quite low. So we're making it just in time, sending it to our customers, which are contracted. So if you effectively look at the assets, it's running as hard as we can possibly run it. So that's, broadly speaking, in the 90s utilization.

[Margaret Rose Schooley, Research Analyst]

Okay. Okay. Okay that's helpful.

[Calum G. MacLean]

I mean, it's a good point. I know I'm not answering the question, but extending that a little bit, the other assets are somewhat different. Demand has increased or recovered, in some cases, increased in other areas. But generally, across our portfolio, because we have invested in Functional Solutions assets, we acquired the assets from OMNOVA, there was capacity there. So whilst the market grows and the demands there, we're able to utilize that capacity, which is good news in terms of -- with your cost base not going up, but your demand going up. And you've got capacity there, it's clearly the best way to add extra value into the business, which is what we're seeing. So those incremental tonnes can be particularly profitable.

[Margaret Rose Schooley, Research Analyst]

Yes. No, that makes sense. I was just trying to have a feel for what the -- how many tonnes of supernormal profit was driven by that. I get that.

[Calum G. MacLean]

Thanks, Maggie.

[Operator]

[Operator Instructions] Our next question comes from Martin Evans of HSBC.

[Martin John Evans, Analyst of Global Chemicals]

Just a very quick sort of big picture question back on M&A, really, given your strong balance sheet. Calum, have you seen in the last sort of few months a change in expectations from potential sellers, given that stock market valuations and bid activity has been quite buoyant? Or do you still think, for the right business, there is a right price out there?

[Calum G. MacLean]

Case-by-case, Martin, really. There's a lot of private equity activity along -- around at the moment, and private equity tend to be talking up the prices somewhat. So I would genuinely say to you a quality good business that's on the market today will typically maybe get 1 turn of EBITDA more than it would have got 6, 9 months ago. So there's a lot of appetite for good quality businesses because particularly private equity looking to put money to work.That being said, there are increasing numbers of good businesses coming to market. And case by case, there are some -- still some high-quality deals that a company like Synthomer can do. If you look at a year ago, we bought OMNOVA just under 10x EBITDA. I mean, that's been a great acquisition for us because, of course, we've added the synergies. And as I earlier indicated, we've exceeded even the EBITDA plus the synergies in terms of the current run rate. So a very good deal for us. But there are deals of that nature still around. I suspect, on average, probably that a business like that might be 1 turn of EBITDA higher today than it was a year ago. That would be my gut feeling. But it is case by case.

[Martin John Evans, Analyst of Global Chemicals]

And just a quick observation. I mean, there have been a few sort of planned deals in the chemical industry, which didn't -- haven't gone ahead. AXO walking away from [ Ciccarillo ], and if we believe the press, [ Inspec ] walking away from Elementis. Does that tell us that the chemical industry generally is a little bit more disciplined than maybe it would have been 20 years ago when prices would have just been matched to expectations and you would get more hostile approaches? Or do you think those are sort of one-offs and it's very much a case-by-case basis?

[Calum G. MacLean]

I mean, I think there is a bit of opportunistic buying around at the moment, where businesses have had difficult 2020, and therefore -- and prices, some of the prices were deflated and people have come in and trying to be opportunistically buy businesses. And it's -- and when you get approaches coming into you, then you really have to look at the value of your own business. And if you've got a strong recovery coming in, then it's not always attractive to sell. And I think in the case of the examples that you've mentioned, is it wasn't because the appetite wasn't there from the buyers side, I think it was more that the aspirations of the sellers were the business was worth more than they were offering. So -- and quite rightfully so as well if they can see a strong recovery coming in the following 1 to 2 years.So case by case, really. I wouldn't use those as 2 of the best examples because, as you say, there are a number of other businesses, a number of other deals going on at the moment and being talked about. But generally, where those deals get done, then you're not looking at a typical multiple of 2020 EBITDA because that's quite often a deflated number compared to what the sustainable number might be.

[Operator]

[Operator Instructions]

[Calum G. MacLean]

I get the sense, Charlie, you've run out the questions?

[Operator]

Yes.

[Calum G. MacLean]

Right. Okay. Yes, I kind of got that sense with the pause there. Can I just wrap it up there then and say thank you to everyone for coming at short notice. Clearly, at Synthomer, we're very happy with the way trading is going. I think what's really important here is to show the strength and the diversity of the business, how well it's come -- it's traded through, but it's also rebounded from the sort of very difficult economic conditions that we saw in 2020 and how well it's rebounded across all the businesses, whilst it continues to benefit from the really strong demand in the Nitrile Latex, which is an element there of one-off premium for 2021, and as discussed, potentially a bit in '22. But let's just wait and be cautious on that for the moment.But the good news is the underlying business is performing well. All the investments that were made over the last 2 to 3 years of doing what -- whether they were inorganic or organic investments, are actually performing on or above our expectations. So we're in a good place and I look forward to some strong trading in '21. And I look forward to meeting and talking with you hopefully in person at the half-year results in August.So thank you for your time again.

[Operator]

Ladies and gentlemen, this concludes today's call. You may now disconnect.