Information regarding forward-looking statements This Interim Report on Form 10-Q contains certain statements, statistics and projections that are, or may be, forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Interim Report, as well as: •general economic conditions, or conditions affecting demand for the services offered by us in the markets in which we operate, both domestically and internationally, being less favorable than expected; •worldwide economic and business conditions and conditions in the industries in which we operate; •ongoing impact of COVID-19 and future pandemics; •fluctuations in the cost of raw materials and utilities; •availability of essential inputs, including but not limited to, raw materials, transport, energy and labor; •currency fluctuations and other financial risks; •our ability to protect our intellectual property; •the amount of indebtedness we have incurred and may incur, and the obligations to service such indebtedness and to comply with the covenants contained therein; •relationships with our customers and suppliers; •increased competition from other companies in the industries in which we operate; •changing technology; •our ability to execute and integrate new acquisitions; •claims for personal injury, death or property damage arising from the use of products produced by us; •the occurrence of accidents or other interruptions to our production processes; •changes in our business strategy or development plans, and our expected level of capital expenditure; •our ability to attract and retain qualified personnel; •restrictions on the ability ofLuxfer Holdings PLC to receive dividends or loans from certain of its subsidiaries; •regulatory, environmental, legislative and judicial developments; and •our intention to pay dividends. Please read the sections "Business" and "Risk factors" included within the 2020 Annual Report on Form 10-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk factors" of this Interim Report on Form 10-Q for a more complete discussion of the factors that could affect our performance and the industries in which we operate, as well as those discussed in other documents we file or furnish with theSEC . 22
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About Luxfer
Luxfer is a global manufacturer of highly-engineered industrial materials, which
focuses on value creation by using its broad array of technical know-how and
proprietary technologies.
The global COVID-19 outbreak characterized by increased business uncertainty and broad based market weakness, had an adverse impact on our financial results during 2020 impacting demand across most of our end markets. We took a variety of actions during 2020 to help mitigate the financial impact, including executing additional cost savings measures, reducing our capital spending, initiating restructuring actions and proactively managing our working capital. Activity in most of the end markets we serve has improved throughout 2021 year-to-date, although like-for-like sales are still tracking at around 10% below the pre-pandemic 2019 level. The recovery in demand has had business impacts, including increased material cost inflation on key inputs (including magnesium, aluminum and carbon fiber), labor availability issues and energy and transport cost increases. Currently our expectation is that the impact of material and energy cost inflation and labor and transport constraints will continue at least into the fourth quarter of 2021, with continuing uncertainty around the outlook for 2022.
Operating objectives and trends In 2021, we expect the following operating objectives and trends to impact our business: •Continuing proactive response to the COVID-19 pandemic, including the health and well-being actions highlighted above, in addition to initiatives to stimulate demand for products, ensure continuity of supply and focus on cost saving programs; •Divestiture of non-strategic aluminum businesses (identified as discontinued operations) in the Gas Cylinders segment; •Refocus on productivity acceleration and growth recovery post COVID-19 as we capitalize on lean manufacturing initiatives and pursue faster product innovation; •Continued focus on developing global talent and implementing a high-performance culture; and •Continued focus on improved operating cash generation with lower restructuring activity and maintaining strong working capital performance. 23
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