Morgan Advanced Materials

We have released our 2023 Annual Report

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Our purpose, our strategy and our people differentiate us at Morgan Advanced Materials, altogether driving superior value for our stakeholders. We are experts in materials science with a track record of delivering for our customers, drawing on our 168 years of innovation.

Our investment proposition

We are well positioned in large and fast-growing markets driven by global mega trends.

The demand for renewable energy is growing rapidly as the world seeks to decarbonise. Ongoing urbanisation drives the need for clean energy and transportation solutions. Our growing and ageing population places more and more complex demands on healthcare. Digitisation brings huge benefits in efficiency and increases in capability, and with that we see ever increasing demand for more and faster processing.

This all translates into a robust growth outlook for our business. Revenues from our faster growing segments, semiconductors, healthcare, clean energy and clean transportation, are expected to grow between 7% and 12% per year (through the cycle). Revenue from our core business is expected to grow 2% to 4% per year.

We have leading differentiated positions, and this all starts with our strategy.

Our development of strategic capabilities supports the positions we have in each of our markets. We have deep expertise in carbon and ceramic materials. We spend around £30 million in research and development each year to maintain and strengthen our technical leadership.

We have 440 scientists and engineers across the Group, representing 17% of our white-collar workforce. They work in four Centres of Excellence, and within the businesses, sustaining our current materials portfolio, and developing new materials and products. Each business unit has a clear strategy and has technology roadmaps that flow from this to inform the prioritisation of development resources.

Our application engineers are the bridge between our materials expertise and the specifics of our customers’ markets and applications. Our application engineers work with customers every day to take their technical challenge and marry it up to a material, and then a manufacturing process. Through the execution of our strategy, we are strengthening our market positions and steadily building closer relationships with our customers.

We play a crucial role in helping the world become more sustainable.

We do this through the products we make, and the way that we make them. Our products help our customers to be more efficient – to use less energy in their manufacturing process or in their product, and to generate less CO2.

We are also working hard to decarbonise our own operations – to produce our products more efficiently and to reduce our own CO2 emissions and manage our water usage more sustainably.

We have a solid plan for the coming years and are making excellent progress so far. At this point our absolute scope 1 and scope 2 CO2 emissions are around 54% down on our 2015 starting point, whilst our water usage is 26% down on our 2015 starting point.

We are resilient, delivering attractive through-cycle returns.

This resilience comes from the robustness of our strategy and market positions, and from the diversity in our portfolio. We operate in a diverse set of markets. Some are global, some are regional, but across these markets we have early and later cycle, and counter cyclical exposures.

We have a widely spread customer base. Our largest customer accounts for only 1.7% of our revenues. Our top 10 equate to around 10.4% of revenues, meaning a loss of one customer has limited impact on the Group.

We largely make products where we sell them, with a localised supply chain, and this gives us resilience against local shocks. You can see this resilience in our financial performance over the last seven years. Despite the impact of the cyber security incident in January 2023 impacting the full year results, our operating margins in the second half of 2023 returned to 12.5%.

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