Victrex: Q3 Expectations: Volumes Recovering but Supply-Demand Risky

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Victrex: Q3 Expectations: Volumes Recovering but Supply-Demand Risky

Barclays | Victrex

2025, and even medical trends are showing some tentative signs of improvement. Following our

conversations with the company and a look at German IFO end market inventories, aerospace

continues on a positive trajectory, and the semiconductors recovery is supporting electronics

demand, while automotive looks more stable but not yet clearly growing year-on-year.

That said, we think pricing is likely to emerge as a clearer drag in Q3, as the full impact of

April contract renewals comes through. While group-level pricing pressure may remain

modest overall (we estimate -3% YoY in Q3 to £64-65/kg), we believe there are likely to be more

pronounced declines in VARs and industrial (low- to mid-single digit) due to the full extent of the

annual renegotiation dynamics that were described at the recent results coming through. This

may be partly offset by more resilient pricing in aerospace and relatively stable trends in

electronics and parts of medical, but overall we think ASPs are likely to be lower sequentially in

line with the trends in Q3 2025. However, we expect mix to become more supportive in Q4 as

VARs and Industrial end markets are generally weaker; historical results imply a £1-2/kg

recovery in the final quarter.

On margins, we continue to expect some improvement in H2, supported by improving

operational leverage and the early impact of cost actions. Headcount reductions (~100 by

end-June) should begin to contribute from July, although we think the near-term benefit is

likely modest (~£1–2m weighted towards the end of H2), with a larger contribution weighted to

FY27 of £8-9m. As a result, any Q3 profit improvement is likely to be volume-driven rather than

margin-led.