29 October 2024
Elementis
plc
Third
Quarter Trading Update
Continued
resilient performance, full year guidance unchanged.
Elementis plc ("Elementis" or the
"Group"), a global specialty chemicals company, today issues its
scheduled trading update for the three months ended 30 September
2024 ("the quarter").
Business performance
The Group delivered improved
performance in the quarter, with revenue up 2% (up 3% on a constant
currency basis) year-on-year. Revenue was higher across both
business segments and adjusted operating margin was in line with
the H1 2024 margin of 17%.
Personal Care sales in the quarter were up on the prior year period in both
Cosmetics and AP actives, whilst reflecting normal
seasonality.
Performance Specialties
delivered a good third quarter performance as
positive pricing and mix benefits offset continued overall market
related volume weakness.
· Coatings sales were slightly up on the
prior year period, with price and mix benefits supporting revenue
growth in Americas and EMEA and offsetting lower volumes in
Asia.
· Talc sales were broadly flat compared
with the prior year period and we remain focused on higher value
applications.
We continue to successfully deliver
our Innovation, Growth and Efficiency strategy, launching seven new
products, executing on self-help actions to include closing new
business opportunities and are on track to deliver at least $15
million of annual cost savings in 2024. The Fit for the Future
restructuring programme is progressing as expected, with role
eliminations on track, the transfer of transactional services to an
outsource provider complete and the set-up of our new Porto centre
advancing at pace.
EU state aid case
settlement
On 19th September, the
Court of Justice of the European Union ("CJEU") annulled the
General Court's decision that the exemption for certain financing
income within chapter 9 of the UK's controlled foreign company
rules, resulted in selective tax advantages contrary to EU state
aid rules. The announcement by CJEU confirmed that the sums paid to
HMRC will be returned to affected taxpayers, including Elementis.
We are awaiting the confirmation of the repayment of c.£15
million1.
Talc strategic review
The strategic review of Talc,
announced on 1st August, is progressing, and a further
update will be made in due course.
In September, the Risk Assessment
Committee ("RAC") of the European Chemicals Agency recommended that
that talc be reclassified as STOT RE 1 and Carc
1B2. A final decision by the
European Commission is expected by Q1 2026, following consultation
with stakeholders, and, if approved, would be effective no sooner
than 18 months after the final decision is published. Elementis and
EUROTALC (the European industry body for talc-related regulatory
and scientific matters) disagree with the RAC's opinion and
together will seek to demonstrate that the proposed classification
for carcinogenicity is not appropriate.
Outlook
The Group is well positioned to
deliver full-year financial performance in line with
expectations3. Our leverage reduction remains on
track, we are making progress on our growth
platforms and are confident to deliver at least $15 million of
annual cost savings in 2024.
Paul Waterman, CEO of Elementis,
said:
"I
am pleased to report a resilient third quarter performance for
Elementis, despite the continued challenging demand environment. We
remain focused on executing our Innovation, Growth and Efficiency
strategy and are on track to deliver our Capital Markets Day
commitments by 2026. Our strategy is based on self-help, not
relying on an improvement in market conditions, which is why we are
confident that we will deliver full-year financial performance in
line with market expectations3."
Enquiries
Investors: Eva Hatfield,
Elementis
plc
Tel: +44 7553 340380
Press: Martin
Robinson/Olivia Peters, Teneo Tel:
+44 (0) 20 7353 4200
Notes:
1. Refer to Note 30 to
the Elementis plc Annual Report and Accounts 2023 for further
detail.
2. STOT RE 1 defined as
"specific target organ toxicity - repeated exposure, category 1".
Carcinogenicity category 1B defined as "presumed to have
carcinogenic potential for humans".
3. Based on company
compiled consensus dated 15 October 2024, adjusted operating profit
of $123 million (range $121-125 million) and adjusted operating
margin of 16.4% for the financial year 2024.