Elementis PLC Trading update (6200L)
14 January 2021 - 6:00PM
UK Regulatory
TIDMELM
RNS Number : 6200L
Elementis PLC
14 January 2021
Elementis plc
Trading Update
Sequential revenue improvement, FY 20 adjusted operating profit
$81-83m
Significant reduction in net debt, anticipated to be under
$415m
Elementis plc ("Elementis" or the "Group"), a global specialty
chemicals company, today issues a trading update for the three
months ended 31 December 2020.
Fourth quarter business performance
Fourth quarter revenue is expected to be ahead of the third
quarter driven by improved volumes and largely stable pricing.
Overall performance in the quarter is anticipated to be in line
with management expectations, helped by tight cost management and
supply chain efficiencies. As a result, adjusted operating profit
for 2020 is expected to be $81-83m.
-- Coatings has continued to perform well in Q4, albeit at lower
levels than the prior year period, and remains on track to deliver
improved operating margins versus the prior year.
-- Personal Care s ales remain materially lower than the prior
year period in both Cosmetics and AP Actives, due to the
continuation of COVID-19 related social and travel restrictions
that have reduced consumption. Q4 performance is anticipated to be
in line with Q3 levels.
-- Talc volumes continued to recover, driven by improved
long-life plastic demand for automotive applications and resilience
in coatings. As a result, Q4 revenue is expected to be ahead of the
prior year period.
-- Chromium demand has sequentially improved, driven by
increased demand for industrial applications such as leather
tanning and metal plating. As a result, Q4 revenue is anticipated
to be broadly in line with the prior year period.
-- Energy continues to experience very weak market conditions
with rig counts and activity levels remaining subdued.
In the fourth quarter we have continued to deliver against our
Innovation, Growth and Efficiency strategy. For full year 2020 we
launched 12 new products, captured over $30m of new business and
delivered $15m of in year cost savings.
For 2021, whilst our new business and innovation pipelines are
encouraging, we continue to face temporary demand challenges from
COVID-19, particularly in Personal Care where we expect performance
will recover when social and travel restrictions are lifted. As a
result of the recently announced closure of our plant in
Charleston, West Virginia, we have made further progress
underpinning $10m of supply chain cost efficiencies, and our new AP
Actives plant in India remains on track for mid-2021 start up.
Liquidity and balance sheet
As result of tight working capital management and disciplined
capital expenditure, net debt* at the end of 2020 is anticipated to
be under $415m, representing a significant reduction from $454m at
the start of the year.
Elementis has a proven cash generative business model, with
average operating cash conversion above 90% over the last 3 years,
and the Group continues to operate with ample liquidity, with over
$300m immediately available through committed lending
facilities.
Enquiries
Elementis plc
James Curran, Investor Relations Tel: 020 7067 2994
Tulchan
Martin Robinson Tel: 020 7353 4200
David Allchurch
* Excluding IFRS 16 impact
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END
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