REG - Elementis PLC - Half-year Report
01/08/2024 07:00
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RNS Number : 6805Y Elementis PLC 01 August 2024
Elementis plc
Interim results for the six months ended 30 June 2024
Strong H1 delivery underpins upgrade to full-year guidance
Elementis plc ("Elementis" or the "Group"), today announces its results for
the six months ("the first half" or "the period") ended 30 June 2024.
Strong financial performance
· Revenue up 5% to $383 million, driven by improved volumes and mix.
· Adjusted operating profit up 24% to $65 million with strong Personal
Care and Coatings performance.
· Statutory operating loss was $11 million, reflecting $66 million
impairment of assets in Talc.
· Adjusted operating margin of 17.0%, up from 14.4%, benefiting from
improved mix and cost management actions as well as some restocking by
customers in the period.
· Net debt of $196 million reduced 3% since 31 December 2023. Net
debt(1) to EBITDA of 1.3x.
· Interim dividend of 1.1 cents per share, in line with dividend policy.
Strategic progress and Talc strategic review
· Good progress against target of $90 million above market revenue
growth by end 2026. Expecting to deliver $20-25 million in 2024.
· Nine products launched in the first half, and $29 million of new
business delivered.
· Efficiency programmes ahead of schedule, with $7 million cost savings
delivered in H1.
· Announcing a strategic review of the Talc business.
Outlook: confidence in achieving 2026 targets
· Following a strong first half performance, we expect the full year
performance to be slightly above the top end of the current range of market
expectations(2).
· Annual cost savings of $15 million expected in 2024 (was $12 million),
with further $15 million in 2025.
· Continued confidence in delivery of 2026 financial targets:
o Adjusted operating profit margin of 19%+
o Three-year average operating cash conversion above 90%
o ROCE (excluding goodwill) above 20%
Financial Summary
Six months ended 30 June Adjusted results(4) Statutory results (IFRS)
2024 2023 Change Change constant currency 2024 2023 Change
Revenue ($m) 383 364 5% 5% 383 364 5%
Operating profit/(loss) ($m) 65 53 24% 24% (11) 44 n/m
Diluted earnings/(loss) per share (c) 6.1 5.6 9% (6.3) 4.3 n/m
Net debt(1) ($m) 196 255 (23)%
Net debt(1) to EBITDA(3) 1.3x 2.0x
Ordinary dividend per share (c) 1.1 - n/m 1.1 - n/m
( )
Commenting on the results, Paul Waterman, CEO, said:
"Elementis delivered a strong first half performance, reflecting both
continued strategic progress and the benefits of self-help actions. We
delivered a much-improved operating margin of 17%, which takes us
significantly closer to our 2026 target of 19%+ and demonstrates the progress
we are making as a high quality, high value specialty additives business.
Personal Care delivered a record first half performance, a result of
innovative product launches and new business success. Coatings delivered a
strong performance, helping to offset the challenges in the Talc business.
Today we are announcing the strategic review of Talc to establish whether the
full potential of Talc can best be delivered as part of Elementis, or via a
divestment.
In the first half we have made good progress against our 2026 targets. Our
efficiency programmes are ahead of plan and we now expect to deliver $15
million savings this year and an additional $15 million of savings in 2025. We
remain on track to deliver $90 million of above market revenue growth by 2026,
with $20-$25 million to come this year.
Following a strong performance in the first half, we are upgrading our profit
expectations for the full year and remain confident in delivering our 2026
targets."
Further information
A presentation for investors and analysts will be held at 09.00 am GMT on 1
August 2024 via a live webcast and can be accessed via a link:
https://www.investis-live.com/elementis_H1_2024
(https://www.investis-live.com/elementis_H1_2024) .
Conference call dial in details:
UK: +44 (0) 20 3936 2999 Other: Global Dial-In Numbers
Participant access code: 202482
UK (toll-free): +44 800 358 1035
Enquiries
Investors: Eva Hatfield, Elementis plc
Tel: +44 (0) 7553 340380
Press: Martin Robinson/Olivia Peters, Teneo
Tel: +44 (0) 20 7353 4200
Notes:
1. Net debt stated as at the end of period. Pre IFRS 16 basis, refer to
unaudited information on page 34 for further information.
2. Based on company compiled consensus dated 30 July 2024, adjusted operating
profit of $118 million (range $115-120 million) and adjusted operating
margin of 15.8% for the financial year 2024.
3. Earnings before interest, tax, depreciation and amortisation, refer to
unaudited information on page 34 for further information.
4. Adjusted figures exclude the adjusting items set out in Note 5.
Chief Executive Officer's overview
Financial performance
Elementis delivered a strong financial performance in the first half, with
revenue of $383 million, up 5% on the prior period (H1 2023: $364 million).
Adjusted operating profit increased 24% to $65 million (H1 2023: $53 million)
and adjusted operating margin improved by 260bps to 17.0% (H1 2023: 14.4%).
Growth in profit was largely driven by self-help actions including improved
product mix, lower costs and some improvement in volumes. Statutory operating
loss was $11 million (H1 2023: profit of $44 million), due to $66 million of
Talc assets impairment in the period.
Personal Care
Personal Care saw a record first half performance, with profit growth of 22%
on constant currency basis to $34 million (H1 2023: $27 million). Asia
cosmetics remains a strong growth driver, with sales up over 30% in the
period. We saw strong growth in China as well as other Asian markets, driven
by new product launches as well as route to market changes, direct
relationships with fast growing local companies and Chinese exporters. In Skin
Care, we launched our new Bentone Hydroluxe(TM) 360, an all-in-one hectorite
based solution for suspension and stability challenges in natural
formulations. We are confident this launch will allow us to further expand our
share in the fast-growing natural rheology market. We also saw good
performance in AP Actives, which benefited from the ramp up of the plant in
India. We launched a recycled aluminium active product, with improved
sustainability profile, and have a patent pending on a new deodorant active,
which will allow us to enter a new market segment.
The adjusted operating profit margin improved to 29% (H1 2023: 25%), driven by
$10 million of higher value new business and self-help actions. Our strong
margin demonstrates the quality of this business, which today represents
around 45% of Elementis profit (pre central costs).
Performance Specialties
Performance Specialties revenues and adjusted operating profit increased in
the first half, largely driven by Coatings. Adjusted operating profit margin
improved to 16% (H1 2023: 14%).
Coatings
Coatings performance, which represents approximately half of Elementis
revenues, continued to improve sequentially, supported by growth platforms and
modest restocking in the first half.
All regions saw revenue growth in the first half, with Asia up 25% on constant
currency basis, driven by higher volumes, while Americas and EMEA revenues
increased 8% and 7% respectively on a constant currency basis. We have seen
benefits from recent investments into our NiSAT (non-ionic synthetic
associative thickener) capacity expansion (Livingston capacity doubled in
2023), which increased further in the first half when we expanded our
production in Songjiang, China. Elementis is now the only specialty chemical
company with a global production of NiSATs on three continents.
The higher operating profit margin of 19% (H1 2023: 14%), reflects self-help
actions and better product mix.
Talc
Talc experienced challenged conditions in the first half, driven by weak, but
improving demand in European end markets, further impacted by a nationwide
strike across Finland, which closed all ports in the country for a month. As a
result, we incurred additional logistics costs in fulfilling customer orders.
We estimate the adverse profit impact of the strike at c.$3 million. As a
result, operating margin declined to 5% (H1 2023: 13%). Looking ahead, we
continue to see attractive growth opportunities in higher value talc
applications.
We are announcing a strategic review of Talc business, to establish whether
the full potential of Talc can best be delivered as part of Elementis, or via
a divestment.
Balance Sheet
We maintained a strong balance sheet, with net debt reducing to $196 million
(31 December 2023: $202 million). As a result, the net debt to EBITDA ratio
reduced to 1.3x (31 December 2023: 1.4x). The Board declared an interim
dividend of 1.1 cents.
Strategic progress
We have made good progress on our three-pillar strategy of Innovation, Growth
and Efficiency, positioning Elementis as a higher quality specialty chemical
company.
We are recognised as a global leader in developing performance driven
additives that help address our customers' most challenging needs. We do this
by focusing on creating solutions for our customers that deliver product
performance improvements and efficiency gains, while also offering improved
sustainability benefits. In the first half, we have launched nine products and
delivered $29 million of higher quality new business supporting the strong
growth in the period.
At the November 2023 CMD, we communicated the growth and efficiency
initiatives that will underpin our performance through 2026. The growth
programme focuses on seven growth platforms across Personal Care and
Performance Specialties, targeting $90 million of above market revenue growth
by 2026. We are six months into the 3-year programme and are making good
progress, expecting to deliver $20-25 million of above market revenue growth
in 2024.
$90 million of above market revenue growth by 2026
Personal Care growth platform progress
Progress in the period has been driven by innovative products including
Bentone Hydroluxe(TM) 360, which is a hectorite-based solution for suspension
and stability challenges in skin care natural formulations. Launched in April,
this product captured the highest interest at in-cosmetics Global in Paris. We
are already working on the second product of the Hydroluxe series which will
help us grow market share in a fast-growing natural rheology market.
In Colour Cosmetics, we saw continued strong growth in Asia, with revenues up
over 30% in the first half. This was supported by expansion of sales,
marketing and technical capabilities in this region. In addition, we benefited
from stock building by our distributors in the period. We saw strong recovery
in China, especially across the bigger local players and distributors. We have
also made changes to our route to market setup and now serve more of our
customers on a direct basis. We will continue to invest in this region to
support further growth.
In AP Actives, we saw 16% revenue growth across our high-efficacy
antiperspirant actives, which allow 72 to 96-hour sweat protection claims. In
addition, we launched our first active using waste aluminium. This product has
an improved sustainability profile, leading to sustainability benefits for our
customers, and ourselves. We also have a patent pending on a new deodorant
active, which will provide odour and sweat reduction benefits, and will
provide access to a new market for deodorant actives, estimated at c.$80
million.
Performance Specialties growth platform progress
In the first half, we completed the expansion of our existing facility in
Songjiang (China), significantly expanding our production of architectural
coatings' NiSAT technology in Asia. With our unique global footprint, we are
well positioned to penetrate the Asia premium architectural market and capture
demand for sustainable ingredients in this region.
Across industrial coatings, we continue to focus on leveraging the unique
benefits of hectorite in the fast-growing powder coatings market. Hectorite
provides sustainability and durability benefits, while offering desired
effects for our customers, allowing it to substitute commonly used per- and
polyfluoroalkyl substances ("PFAS"). PFAS are increasingly detected as
environmental pollutants, with some linked to negative effects on human
health. We are already working with over 30 new customers, looking to expand
our capabilities in Portugal and China, to support our growth in this market.
Adhesives, sealants and construction additives represent a relatively new area
for Elementis. We have identified attractive growth opportunities in this
market. Recent growth has been supported by the success of our Thixatrol range
- natural, castor-based rheology additives. We believe these products are also
an excellent alternative to fumed silica, providing material sustainability
and efficiency benefits. Going forward we will continue to invest in expanding
our capabilities globally to grow our share in this attractive market.
In Talc, we continue to focus on higher-margin applications that require talc
of high and consistent quality. These include, for example, long-life plastics
and technical ceramics. In the first half, we launched a new Finntalc K line
product, aimed at automotive plastic lightweighting. In technical ceramics,
highly engineered grade of talc is required to get the right efficiency. We
have demonstrated the quality, purity, and consistency needed in this market,
and built a solid base, and we have the opportunity to grow further.
$30 million of annual cost savings by 2025
In November 2023, we announced efficiency programmes that will deliver $30
million of cost savings over 2024 and 2025. These are progressing faster - we
now expect to deliver $15 million of cost savings in 2024 and another $15
million next year. This compares to $12 million in 2024 and $18 million in
2025, which we announced in November.
Fit for the future organisational restructuring
The main efficiency programme is the Fit for the future restructuring, which
will deliver $20 million of cost savings across the two years. This is ahead
of plan. We have seen 40% of the planned redundancies completed.
We are building a new R&D and support centre in Porto. Recruitment is now
around 90% complete. We are also on track in moving around 20 transactional
finance roles to an outsourcer in India. During this change, we continue to
focus on, and monitor our "implementation health metrics" (voluntary
attrition, employee engagement, knowledge transfer and gender diversity) which
continue to be positive.
Global Supply Chain and Procurement
A further $10 million annual savings across 2024 and 2025 are coming from
supply chain optimisation and procurement savings. In March, we announced the
closure of one of our AP Actives plants in the US, consolidating our
manufacturing footprint. The Middletown plant closed in June, as expected. The
closure underpins a large part of the expected cost savings and will directly
benefit the AP Actives business. Our dedicated continuous improvement team
identified over 90 projects, generating over $1 million of cost savings in the
first half.
Across procurement, we implemented global category management strategies,
focusing on direct and indirect spend. We are currently implementing a new
digital vendor management system, which is expected to go live in Q3 24,
leading to better transparency and reduced administration costs.
Progress on financial targets
In November, we set out new 2026 financial targets, and I am pleased to report
that Elementis delivered good progress against those in the first half. The
adjusted operating margin increased to 17% (H1 2023: 14%). Three-year average
operating cash conversion was 81% (H1 2023: 97%) and return on capital
employed ("ROCE") excluding goodwill increased to 18% (H1 2023: 13%). ROCE
including goodwill was 10% (H1 2023: 8%).
The strong first half performance gives us confidence in delivery of our 2026
financial targets:
- Adjusted operating profit margin of 19%+
- Three-year average operating cash conversion above 90%
- ROCE (excluding goodwill) above 20%.
Outlook
We delivered a strong first half, driven by self-help actions and more
normalised volumes post destocking. We also benefited from some restocking by
customers in the period, which is not expected to recur in the second half. We
assume a stable macroeconomic environment for the remainder of the 2024
financial year, and no acceleration in demand.
Our growth and efficiency programmes are progressing well. We expect to
deliver $15 million of cost savings in 2024, with a further $15 million in
2025.
Following a strong first half performance, we expect the full year performance
to be slightly above the top end of the current range of market expectations
($115-120 million). We remain confident in delivering our 2026 financial
targets.
Finance report
Revenue
Six months ended 30 June ($m) 2024 Effect of Increase/ 2023
exchange
rates (decrease) 2024
Coatings 199.5 (0.2) 18.7 181.0
Talc 68.5 0.4 (2.9) 71.0
Performance Specialties 268.0 0.2 15.8 252.0
Personal Care 114.6 0.5 2.3 111.8
Revenue 382.6 0.7 18.1 363.8
Operating profit
Six months ended 30 June ($m) 2024 Adjusting 2024 2023 Operating profit/(loss) Adjusting items 2023 Adjusted operating profit/(loss)(1)
items
Adjusted operating profit/(loss) (1)
Operating (loss)/profit
Coatings 35.3 3.2 38.5 24.9 0.5 25.4
Talc (65.7) 68.8 3.1 6.3 2.7 9.0
Performance Specialties (30.4) 72.0 41.6 31.2 3.2 34.4
Personal Care 28.7 4.9 33.6 23.1 4.3 27.4
Central costs (9.5) (0.5) (10.0) (10.5) 1.2 (9.3)
Operating (loss)/profit (11.2) 76.4 65.2 43.8 8.7 52.5
1. After adjusting items - see Note 5.
Adjusted operating profit
Six months ended 30 June ($m) Operating Effect of Increase/ Operating
profit
exchange
profit/(loss)
2024(1)
rates (decrease)
2023(1)
2024
Coatings 38.5 (0.1) 13.2 25.4
Talc 3.1 (0.2) (5.7) 9.0
Performance Specialties 41.6 (0.3) 7.5 34.4
Personal Care 33.6 0.2 6.0 27.4
Central costs (10.0) - (0.7) (9.3)
Adjusted operating profit 65.2 (0.1) 12.8 52.5
1. After adjusting items - see Note 5.
Group results
Revenue increased 5% (on both reported and constant currency basis) to $382.6
million (H1 2023: $363.8 million) due to higher volumes and improved mix.
Adjusted operating profit increased 24% on a constant currency basis and 24%
on a reported basis, to $65.2 million (H1 2023: $52.5 million), driven by cost
savings, improvement in product and customer mix and higher volumes. Statutory
operating loss was $11.2 million (H1 2023: profit of $43.8 million), driven by
impairment of assets. The reported loss after tax from continuing operations
for the half year was $37.2 million (H1 2023: profit of $25.7 million).
Business performance overview
Personal Care
Personal Care revenue increased 3% (or 2% on constant currency basis) to
$114.6 million (H1 2023: $111.8 million), reflecting continued growth in
Cosmetics.
Adjusted operating profit increased 23% (or 22% on constant currency basis) to
$33.6 million (H1 2023: $27.4 million), benefiting from self-help cost and
price management and route to market optimization as well as restocking
activity by some customers in the first half. In addition, we delivered $10
million of higher value new business in the period. As a result, the adjusted
operating margin increased to 29.3% (H1 2023: 24.5%).
Performance Specialties
Performance Specialties revenue increased 6% (on both reported and constant
currency basis) to $268.0 million (H1 2023: $252.0 million), largely driven by
volume and mix benefits in Coatings, offsetting weaker revenues in Talc.
Adjusted operating profit increased by 21% (or 22% on constant currency basis)
to $41.6 million (H1 2023: $34.4 million) and adjusted operating margin
improved to 15.5% (H1 2024: 13.7%).
Coatings
Overall revenue increased 10% (on both reported and constant currency basis)
to $199.5 million (H1 2023: $181.0 million), supported by growth platforms and
modest restocking.
Adjusted operating profit increased 52% (on both reported and constant
currency basis) to $38.5 million (H1 2023: $25.4 million), reflecting improved
mix and cost management. Adjusted operating margin improved to 19.3% (H1 2023:
14.0%), supported by self-help actions and new business contribution.
Coatings also includes our Energy business, which accounts for around 10% of
total Coatings sales.
Talc
Talc revenue reduced 4% (on both reported and constant currency basis) to
$68.5 million (H1 2023: $71.0 million) reflecting continued weak demand as
well as the impact of a Finnish transport workers' union strike, which closed
ports and stopped railway freight traffic for four weeks. The strike also
resulted in higher logistics costs in the first half, contributing to a 66%
reduction (or 65% on constant currency basis) in adjusted operating profit to
$3.1 million (H1 2023: $9.0 million). The adjusted operating margin reduced to
4.5% (H1 2023: 12.7%).
Central costs
Central costs are those costs that are not identifiable as expenses of a
particular business segment and comprise expenditures of the Board of
Directors and corporate head office. Adjusted central costs increased to $10.0
million (H1 2023: $9.3 million), largely driven by higher variable
remuneration due to improved performance.
Adjusting items
In addition to the statutory results, the Group uses alternative performance
measures, such as adjusted operating profit and adjusted diluted earnings per
share, to provide additional useful analysis of the performance of the Group.
The Board considers these non-GAAP measures as an alternative way to measure
the Group's performance. Adjusting items in the six months ended 30 June 2024
resulted in a charge of $76.1 million before tax (H1 2023: $10.2 million). The
key categories of adjusting items are summarised below. For more information
on adjusting items and the Group's policy for adjusting items, please see Note
5.
Six months ended 30 June 2024 ($m) Coatings Talc Performance Specialties Personal Care Central costs Total
Credit/(charge)
Business transformation (0.3) - (0.3) (0.8) (0.9) (2.0)
Environmental provisions - - - - 1.4 1.4
Impairment of assets - (66.1) (66.1) - - (66.1)
Settlement of Brazil customs matter (2.9) - (2.9) - - (2.9)
Amortisation of intangibles arising on acquisitions - (2.7) (2.7) (4.1) - (6.8)
Total charge to operating loss (3.2) (68.8) (72.0) (4.9) 0.5 (76.4)
Unwind of discount on restructuring provision - - - - (0.3) (0.3)
Interest on EU state aid receivables - - - - 0.6 0.6
Total (3.2) (68.8) (72.0) (4.9) 0.8 76.1
Charges of $76.4 million (H1 2023: $8.7 million) to operating profit were
classified as adjusting items, principally driven by an impairment of assets.
Business transformation
Business transformation costs of $2.0 million (H1 2023: $1.2 million)
primarily included a charge of $0.8 million recognised in respect of the
closure of the Middletown plant, which was announced in March 2024. In
addition, charges of $0.2 million were incurred in relation to the sale of the
Eaglescliffe site, announced in March 2024, and charges of $0.3 million were
recognised for the closure of the Charleston plant, announced in November
2020. A charge of $0.3 million in relation to the Fit for the future
restructuring programme was also included. See Note 5 for further detail.
Environmental provisions
The Group's environmental provision is calculated on a discounted cash flow
basis and reflects the time period over which spending is estimated to take
place. A credit of $1.4 million (H1 2023: charge of $0.4 million) to the
environmental provision reflects the impact of changes in discount rates (H1
2023: credit of $0.8 million). There was no additional remediation work
identified (H1 2023: charge of $1.2 million).
Impairment of assets
Talc performance was adversely impacted by continued weak end market demand
and strike action in Finland. Accordingly, a new business plan was prepared
for the Talc segment which resulted in an impairment of assets. Of the total
impairment of $66.1 million, $25.0 million was recorded against intangible
assets and $41.1 million was recorded against property, plant and equipment.
See Note 5 for further detail.
Settlement of the Brazil customs matter
The Group agreed a settlement with the Brazilian tax authorities in relation
to a customs matter, of which $2.9 million (H1 2023: nil) has been recognised
as an adjusting item. See Note 30 in 2023 Annual Report and Accounts for
further detail.
Amortisation of intangibles arising on acquisitions
Amortisation of $6.8 million (2023: $7.1 million) represents the charge in
respect of the Group's acquired intangible assets.
Interest on EU state aid receivable
Finance income of $0.6 million has been recognised in respect of interest due
if the EU state aid case settles in favour of the Group. See Note 14 for
further details on the tax recoverable asset.
An explanation of other adjusting items relating to the previous period can be
found within the Finance Report of the 2023 Annual Report and Accounts.
Hedging
The Group uses cash flow hedges to manage exposure to interest rate and
commodity price risks, particularly those associated with US dollar and euro
interest payments and aluminium and nickel pricing. In H1 2024 interest rate
and commodity price movements resulted in a net gain from hedge transactions
of $4.8 million (H1 2023: $2.7 million) recycled to the income statement.
Other expenses
Other expenses are administration costs incurred and paid by the Group's
pension schemes that largely relate to former employees of legacy businesses.
These costs were $1.0 million in the first half of 2024 (H1 2023: $0.5
million).
Net finance costs
Six months ended 30 June ($m) 2024 2023
Finance income 0.1 0.4
Finance cost of borrowings (12.9) (7.5)
(12.8) (7.1)
Net pension finance income 0.5 -
Discount unwind on provisions (1.2) (0.5)
Fair value movement on derivatives - (0.1)
Interest on EU state aid receivable 0.6 -
Interest on lease liabilities (0.7) (0.7)
Net finance costs (13.6) (8.4)
Net finance costs increased to $13.6 million (H1 2023: $8.4 million). This was
largely due to higher net interest costs of $12.8 million compared with the
prior period (H1 2023: $7.1 million), which benefited from more favourable
hedging arrangements. Net pension finance income was $0.5 million (H1 2023:
$nil). The unwind of discount on provisions of $1.2 million (H1 2023: $0.5
million) was higher as a result of additional provisions for restructuring and
rehabilitation which were recorded in H2 2023. The interest on lease
liabilities of $0.7 million remained in line with the prior period.
Taxation
Six months ended 30 June $m 2024 Effective rate $m 2023 Effective
%
rate
%
Reported tax charge/(credit) 11.4 (44.2) 9.2 26.4
Adjusting items tax credit (2.1) - (2.6) -
Adjusted tax charge 13.5 26.8 11.8 26.2
The Group incurred a tax charge of $13.5 million (H1 2023: $11.8 million) on
adjusted profit before tax, resulting in an effective tax rate of 26.8% (H1
2023: 26.2%). The higher effective tax rate was largely due to the increase in
the UK corporation tax rate to 25% from April 2023.
Tax on adjusting items largely relates to the amortisation of intangible
assets and the Fit for the future restructuring programme.
The medium-term expectation for the Group's adjusted effective tax rate
remains around 26%.
Earnings per share
To aid comparability of the underlying performance of the Group, earnings per
share ("EPS") reported under IFRS is adjusted for items classified as
adjusting.
Six months ended 30 June 2024 2023
(Loss)/profit after tax ($m) (37.2) 25.7
Adjusting items net of tax ($m) 74.0 7.6
Adjusted profit after tax ($m) 36.8 33.3
Weighted average number of shares for the purposes of basic EPS (m) 587.9 585.1
Effect of dilutive shares options (m) 12.3 10.6
Weighted average number of shares for the purposes of diluted EPS (m) 600.2 595.7
Basic EPS before adjusting items (cents) (6.3) 4.4
Diluted EPS before adjusting items (cents) (6.3) 4.3
Adjusted basic EPS (cents) 6.3 5.7
Adjusted diluted EPS (cents) 6.1 5.6
Adjusted diluted EPS increased 9% to 6.1 cents (H1 2023: 5.6 cents), primarily
due to a higher adjusted profit after tax. Basic loss per share before
adjusting items of 6.3 cents (H1 2023: earnings of 4.4 cents) resulted from a
current period loss.
Note 7 provides disclosure of EPS calculations, both including and excluding
the effects of adjusting items, and the potential dilutive effects of
outstanding and exercisable options.
Dividend
The Board has considered the strength of the balance sheet and the outlook for
the remainder of the year. In line with the Group's dividend policy, the Board
has declared an interim dividend of 1.1 cents per share, which will be paid in
pounds sterling. A dividend of 0.86 pence per share has been determined by
converting the 1.1 cents into pounds sterling using the forward rate of
£1.00:$1.2855 as determined on 30 July 2024. The interim dividend will be
paid on 27 September 2024 to shareholders included on the share register on 16
September 2024.
Cash flow
As per the statutory cash flow statement, net cash inflow from operating
activities rose to $35.1 million (H1 2023: outflow of $9.1 million). A net
working capital outflow of $20.9 million was lower compared to the prior
period (H1 2023: $46.2 million), due to a lower working capital outflow for
creditors.
Net cash outflow in relation to investing activities was $16.6 million (H1
2023: inflow of $127.8 million), significantly below the prior period, which
included $139.2 million from the sale of the Chromium business.
Net cash outflow in relation to financing activities was $15.4 million (H1
2023: $106.5 million), lower than the prior period which included a repayment
of borrowings following the sale of the Chromium business. H1 2024 includes
$12.1 million payment of dividends declared in H2 2023.
The adjusted cash flow, which excludes the effect of adjusting items from
operating cash flow and is therefore distinct from the statutory cash flow
referenced above, is summarised below. A reconciliation between statutory
operating profit and EBITDA is shown in the alternative performance measures
("APM") section (page 33).
Adjusted cash flow
Six months ended 30 June ($m) 2024 2023
EBITDA(1) 85.1 74.0
Change in working capital (20.9) (46.2)
Capital expenditure (16.7) (13.8)
Adjusted operating cash flow 47.5 14.0
Pension payments 0.5 (0.9)
Interest (14.5) (10.8)
Tax (8.2) (10.7)
Adjusting items (12.2) (0.9)
Other(2) 2.4 (2.3)
Free cash flow 15.5 (11.6)
Dividends paid (12.1) -
Acquisitions and disposals - 139.2
Discontinued operations - (12.0)
Currency fluctuations 2.2 (4.3)
Movement in net debt 5.6 111.3
Net debt at start of period (202.0) (366.8)
Net debt at end of period (196.4) (255.5)
1. ( )Earnings before interest, tax, adjusting items, depreciation
and amortisation.
2. Other includes share-based payments, movement in provisions, movement in
derivatives and payment of lease liabilities.
Adjusted operating cash flow increased to $47.5 million (H1 2023: $14.0
million), principally driven by a smaller working capital outflow of $20.9
million compared to an outflow of $46.2 million in H1 2023.
Free cash flow increased to $15.5 million (H1 2023: outflow of $11.6 million),
primarily driven by improved operating cashflow, partly offset by increased
adjusting items, net interest paid, and cash payments in respect of adjusting
items.
Net debt decreased to $196.4 million (H1 2023: $255.5 million), a reduction of
$59.1 million on a pre-IFRS 16 basis. The net debt to adjusted EBITDA ratio
decreased to 1.3x on a pre-IFRS 16 basis (H1 2023: 2.0x).
Working capital
Working capital days 30 June 31 December
2024 2023
Inventory 120 123
Debtors 44 38
Creditors 70 73
Average working capital to sales (%) 23.4 25.1
Total working capital increased to $167.2 million (31 December 2023: $147.2
million), driven by higher debtors and lower creditors. Debtor days increased
to 44 (31 December 2023: 38 days), primarily driven by higher debtors.
Inventory days and creditor days remained largely consistent.
Balance sheet
$m 30 June 31 December
2024 2023
Property, plant and equipment 372.4 423.6
Other net assets 609.2 625.7
Net debt (196.4) (202.0)
Equity 785.2 847.3
Property, plant and equipment decreased to $372.4 million (31 December 2023:
$423.6 million), largely due to the impairment of assets of $41.1 million,
depreciation of $20.0 million offset by net capital expenditure of $16.7
million and the impact of currency translation. Other net assets decreased by
$16.5 million mainly due to the impairment of intangible assets of $25.0
million offset by higher working capital.
Equity decreased to $785.2 million (31 December 2023: $847.3 million),
primarily as a result of the statutory loss in the period of $37.2 million,
net foreign exchange losses of $7.4 million and dividends paid of $12.1
million. The remainder of the movement relates principally to share-based
payments and actuarial losses on pensions, net of the deferred tax impact.
Adjusted ROCE (excluding goodwill) increased to 18% (H1 2023: 13%), with
higher adjusted operating profit and decreased total operating capital
employed. Please refer to the APM section for further detail.
Provisions
The Group records a provision in the balance sheet when it has a present
obligation as a result of past events, which is expected to result in an
outflow of economic benefits in order to settle the obligation and the amount
can be reliably estimated. The Group calculates provisions on a discounted
basis. At 30 June 2024, the Group held provisions of $49.5 million (31
December 2023: $81.9 million) consisting of environmental provisions of $34.6
million (31 December 2023: $60.5 million), self-insurance provisions of $0.4
million (31 December 2023: $0.5 million), restructuring provisions of $13.9
million (31 December 2023: $20.1 million) and other provisions of $0.6 million
(31 December 2023: $0.8 million).
The decrease in environmental provisions was largely driven by the
classification of the provision for the Eaglescliffe site of $20.8 million as
held for sale at 30 June 2024 (refer to Note 16 for further details), $3.0
million from the impact of change in discount rates (of which $1.6 million has
been capitalised to PPE), $1.7 million of utilisation of provisions in the
first half and $1.0 million of foreign currency impacts.
The restructuring provision reflects the adjustments to head count and other
costs of restructuring where a need to do so has been identified by
management. The restructuring provision includes a provision for Fit for the
future of $13.2 million (31 December 2023: $20.1 million) and a provision for
the closure of the Middletown plant of $0.7 million (31 December 2023: nil).
These provisions are expected to be utilised by 30 June 2025.
Pensions and other post retirement plans
UK plan
The largest of the Group's retirement plans is the UK defined benefit pension
scheme ("UK Scheme"), which at 30 June 2024 had a surplus, under IAS 19, of
$27.4 million (31 December 2023: $38.7 million). The UK Scheme is relatively
mature, with approximately two thirds of its gross liabilities represented by
pensions in payment and is closed to new members. The reduction in net surplus
was largely driven by losses on plan assets of $27.5 million which were offset
by liability adjustments, primarily due to lower discount rates, of $16.6
million. Company contributions were $ nil.
US plan
In the US, the Group reports two post retirement plans under IAS 19: a defined
benefit pension plan with a net surplus at 30 June 2024 of $4.5 million (31
December 2023: $3.4 million), and a post retirement medical plan with a
liability of $2.9 million (31 December 2023: $3.4 million). The US pension
plans are smaller than the UK plan and at 30 June 2024 the overall surplus on
the US plans increased by $1.6 million, as a result of net actuarial gains of
$2.0 million, offset by current service costs of $0.4 million.
Other plans
Other pension plans amounted to a liability of $5.7 million (31 December 2023:
$5.6 million) and relate to pension arrangements for a relatively small number
of employees in Germany, certain UK legacy benefits and one pension scheme
acquired as part of the SummitReheis transaction in 2017.
Foreign currency
The financial information is presented in US dollars, the Group's reporting
currency. The main dollar exchange rates relevant to the Group are set out
below.
30 June 2024 2024 30 June 2023 2023
average
average
Pounds sterling 0.79 0.79 0.79 0.82
Euro 0.93 0.92 0.92 0.93
Related party transactions
There were no material related party transactions entered into and there have
been no material changes to the related party transactions disclosed in the
Group's 2023 Annual Report and Accounts on page 180.
Directors' responsibility statement
A full list of the Directors can be found on the Elementis corporate website
at: www.elementis.com (http://www.elementis.com) .
The Directors confirm that to the best of their knowledge:
· The condensed set of financial statements set out in this Half-yearly
financial report has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the United Kingdom.
· The condensed set of consolidated financial statements, which has been
prepared in accordance with the applicable set of accounting standards, gives
a true and fair view of the assets, liabilities, financial position and profit
or loss of the issuer, or the undertakings included in the consolidation as a
whole as required by DTR 4.2.4R; and
· The interim management report contained in this Half-yearly financial
report includes a fair review of the information required by:
o DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of the important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year.
o DTR 4.2.8R of the Transparency Rules, being related party transactions
that have taken place in the first six months of the current financial year
and that have materially affected the financial position or performance of the
entity during that period; and any changes in related party transactions
described in the 2023 Annual Report and Accounts that could have a material
effect on the financial position or performance of the entity during the first
six months of the current financial year.
Approved by the Board on 31 July 2024 and signed on its behalf by:
Paul Waterman Ralph Hewins
CEO
CFO
31 July 2024
31 July 2024
INDEPENDENT REVIEW REPORT TO ELEMENTIS PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2024 which comprises the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated cashflow statement, the
condensed consolidated statement of changes in equity, and related notes 1 to
17.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Cambridge, United Kingdom
31/7/2024
Condensed consolidated income statement
for the six months ended 30 June 2024
$m 2024 2023
(unaudited) (unaudited)
Revenue 382.6 363.8
Cost of sales (215.9) (219.4)
Gross profit 166.7 144.4
Distribution costs (63.1) (58.7)
Administrative expenses (114.8) (41.9)
Operating (loss)/profit (11.2) 43.8
Other expenses(1) (1.0) (0.5)
Finance income 1.2 1.8
Finance costs (14.8) (10.2)
(Loss)/profit before income tax (25.8) 34.9
Tax (11.4) (9.2)
(Loss)/profit from continuing operations (37.2) 25.7
Profit from discontinued operations - 1.8
(Loss)/profit for the year (37.2) 27.5
Attributable to:
Equity holders of the parent (37.2) 27.5
Earnings per share
From continuing operations
Basic (loss)/earnings (cents) (6.3) 4.4
Diluted (loss)/earnings (cents) (6.3) 4.3
From continuing and discontinued operations
Basic (loss)/earnings (cents) (6.3) 4.7
Diluted (loss)/earnings (cents) (6.3) 4.6
1. Other expenses comprise administration expenses for the Group's pension
schemes.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2024
$m 2024 2023
(unaudited) (unaudited)
(Loss)/profit for the year (37.2) 27.5
Other comprehensive income:
Items that will not be reclassified subsequently to profit and loss:
Remeasurements of retirement benefit obligations (9.2) (1.1)
Deferred tax associated with retirement benefit obligations 2.4 0.4
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations (9.9) (4.2)
Effective portion of change in fair value of net investment hedge 2.6 12.6
Recycling of deferred foreign exchange gains on disposal - 9.3
Effective portion of changes in fair value of cash flow hedges 2.6 10.5
Fair value of cash flow hedges transferred to income statement (4.8) (2.7)
Exchange differences on translation of share options reserves (0.1) 0.3
Other comprehensive (loss)/income (16.4) 25.1
Total comprehensive (loss)/income for the year (53.6) 52.6
Attributable to:
Equity holders of the parent (53.6) 52.6
( )
Condensed consolidated balance sheet
as at 30 June 2024
$m 30 June 2024 31 December 2023
(unaudited) (audited)
Non-current assets
Goodwill and other intangible assets 615.2 650.6
Property, plant, and equipment 372.4 423.6
Tax recoverable 20.6 20.0
Financial assets 4.9 6.0
Deferred tax assets 19.6 19.6
Net retirement benefit surplus 31.9 42.1
Total non-current assets 1,064.6 1,161.9
Current assets
Inventories 159.4 163.3
Trade and other receivables 118.6 101.8
Financial assets 3.2 7.4
Current tax assets 11.2 11.2
Cash and cash equivalents 59.3 65.8
Total current assets 351.7 349.5
Assets classified as held for sale 8.2 -
Total assets 1,424.5 1,511.4
Current liabilities
Trade and other payables (110.8) (117.9)
Current tax liabilities (17.5) (13.6)
Lease liabilities (6.1) (5.9)
Provisions (20.9) (21.5)
Total current liabilities (155.3) (158.9)
Non-current liabilities
Loans and borrowings (260.5) (264.7)
Retirement benefit obligations (8.6) (9.0)
Deferred tax liabilities (133.9) (138.7)
Lease liabilities (30.6) (30.3)
Provisions (28.6) (60.4)
Financial liabilities (0.5) (2.1)
Total non-current liabilities (462.7) (505.2)
Liabilities classified as held for sale (21.3) -
Total liabilities (639.3) (664.1)
Net assets 785.2 847.3
Equity
Share capital 52.7 52.5
Share premium 239.2 239.2
Other reserves 61.2 70.1
Retained earnings 432.1 485.5
Total equity attributable to equity holders of the parent 785.2 847.3
Total equity 785.2 847.3
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
$m Share Share Translation reserve Hedging Other Retained Total
capital
premium
reserve
reserves
earnings
equity
Balance at 1 January 2023 52.3 238.7 (122.4) (1.0) 165.5 450.8 783.9
Comprehensive income:
Profit for the year - - - - - 26.5 26.5
Other comprehensive income:
Exchange differences - - 9.7 - 0.2 - 9.9
Fair value of cash flow hedges transferred to the - - - (6.3) - - (6.3)
income statement
Effective portion of changes in fair value - - - 12.7 - - 12.7
of cash flow hedges
Tax associated with changes in cashflow hedges - - - - - (0.6) (0.6)
Tax associated with change in fair value of net - - - - - (0.1) (0.1)
investment hedge
Remeasurements of retirement benefit obligations - - - - - 12.3 12.3
Deferred tax adjustment on pension scheme deficit - - - - - (2.8) (2.8)
Recycling of deferred foreign exchange losses on disposal - - 9.3 - - - 9.3
Transfer - - - - (2.3) 2.3 -
Total other comprehensive income/(loss) - - 19.0 6.4 (2.1) 11.1 34.4
Total comprehensive income/(loss) - - 19.0 6.4 (2.1) 37.6 60.9
Transactions with owners:
Issue of shares by the Company 0.2 0.5 - - - - 0.7
Purchase of shares by Employee Share Options Trust - - - - - (1.6) (1.6)
Deferred tax on share-based payments recognised within equity - - - - - (1.3) (1.3)
Share-based payments - - - - 4.2 - 4.2
Fair value of cash flow hedges transferred to net assets - - - 0.5 - - 0.5
Total transactions with owners 0.2 0.5 - 0.5 4.2 (2.9) 2.5
Balance at 31 December 2023 52.5 239.2 (103.4) 5.9 167.6 485.5 847.3
Comprehensive income:
Loss for the period - - - - - (37.2) (37.2)
Other comprehensive income:
Exchange differences - - (7.3) - (0.1) - (7.4)
Fair value of cash flow hedges transferred to the - - - (4.8) - - (4.8)
income statement
Effective portion of changes in fair value - - - 2.6 - - 2.6
of cash flow hedges
Remeasurements of retirement benefit obligations - - - - - (9.2) (9.2)
Deferred tax adjustment on pension scheme deficit - - - - - 2.4 2.4
Transfer - - - - (2.7) 2.7 -
Total other comprehensive loss - - (7.3) (2.2) (2.8) (4.1) (16.4)
Total comprehensive loss - - (7.3) (2.2) (2.8) (41.3) (53.6)
Transactions with owners:
Issue of shares by the Company 0.2 - - - - - 0.2
Dividends paid - - - - - (12.1) (12.1)
Share-based payments - - - - 3.5 - 3.5
Fair value of cash flow hedges transferred to net assets - - - (0.1) - - (0.1)
Total transactions with owners 0.2 - - (0.1) 3.5 (12.1) (8.5)
Balance at 30 June 2024 52.7 239.2 (110.7) 3.6 168.3 432.1 785.2
Condensed consolidated cash flow statement
for the six months ended 30 June 2024
$m 2024 2023
(unaudited) (unaudited)
Operating activities:
(Loss)/profit from continuing operations (37.2) 25.7
Adjustments for:
Other expenses 1.1 0.6
Finance income (1.2) (1.8)
Finance costs 14.8 10.2
Tax charge 11.4 9.2
Depreciation and amortisation 26.9 28.8
Impairment loss on property, plant, and equipment 66.1 -
Decrease in provisions and derivatives (7.0) (2.9)
Pension payments net of current service cost 0.4 (0.9)
Share-based payments expense 3.4 2.0
Operating cash flow before movement in working capital 78.7 70.9
Decrease in inventories 1.2 9.6
Increase in trade and other receivables (21.4) (22.0)
Decrease in trade and other payables (0.7) (33.8)
Cash generated by operations 57.8 24.7
Income taxes paid (8.2) (10.7)
Interest paid (14.5) (11.2)
Net cash flow used in operating activities from discontinued operations - (11.9)
Net cash flow from/(used in) operating activities 35.1 (9.1)
Investing activities:
Interest received 0.1 0.4
Disposal of property, plant and equipment - 1.9
Purchase of property, plant and equipment (16.7) (13.4)
Disposal of business - 139.2
Net cash flow used in investing activities from discontinued operations - (0.3)
Net cash flow (used in)/ from investing activities (16.6) 127.8
Financing activities:
Dividends paid (12.1) -
Net movement on existing debt - (103.4)
Payment of lease liabilities (3.3) (3.1)
Net cash used in financing activities (15.4) (106.5)
Net increase in cash and cash equivalents 3.1 12.2
Cash and cash equivalents at 1 January 65.8 54.9
Foreign exchange on cash and cash equivalents (1.4) 0.2
Less: cash and cash equivalents classified as held for sale (8.2) -
Cash and cash equivalents at 30 June 59.3 67.3
Notes to the interim financial statements for the six months ended 30 June
2024
1. General Information
Elementis plc (the 'Company') and its subsidiaries (together, the 'Group')
manufacture specialty chemicals. The Group has operations in the US, UK,
Brazil, Germany, Portugal, Finland, The Netherlands, China, Taiwan, Malaysia
and India. The Company is a limited liability company incorporated and
domiciled in England and is listed on the London Stock Exchange.
2. Accounting policies
Basis of preparation
The annual financial statements of Elementis plc will be prepared in
accordance with United Kingdom adopted International Financial Reporting
Standards. This condensed set of financial statements (also referred to as
'interim financial statements' in this announcement) has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the United
Kingdom.
As required by the Disclosure and Transparency Rules of the Financial Conduct
Authority, the condensed set of financial statements has been prepared
applying the same accounting policies and presentation that were applied in
the preparation of the Company's published consolidated financial statements
for the year ended 31 December 2023. The Group has not early adopted any
standard, interpretation or amendment that has been issued but is not yet
effective.
Key judgements and sources of estimation uncertainty remain unchanged from
those as set out in the Annual Report and Accounts at 31 December 2023. The
information for the year ended 31 December 2023 does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A copy of the
statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
Reporting currency
As a consequence of the majority of the Group's sales and earnings originating
in US dollars or US dollar linked currencies, the Group has chosen the US
dollar as its presentational currency. This aligns the Group's external
reporting with the profile of the Group, as well as with internal management
reporting.
3. Going concern
Given the continuing uncertainties resulting from the macro-economic
environment in which the Group operates, the directors have placed a
particular focus on the appropriateness of adopting the going concern basis in
preparing the condensed consolidated financial statements for the six months
ended 30 June 2024.
The Group's going concern assessment covers the period of at least 12 months
from the date of authorisation of these consolidated half year financial
statements (the 'going concern period'), and takes into account its
substantial liquidity, committed expenditure, and likely ongoing levels of
costs.
In preparing the assessment, alongside the most likely 'base case' forecast,
the Board has considered both a 'reverse stress test case' which flexes sales
and costs to determine what circumstances would be required to breach banking
covenants, and a 'plausible downside case'. This assessment shows the Group
has sufficient liquidity to discharge its liabilities as they fall due
throughout the going concern period under the base case, assuming continued
access to our revolving credit facilities. Access to these credit facilities
is dependent on the Group operating within its financial covenants.
The Group successfully refinanced its multi-currency Revolving Credit Facility
('RCF'), effective 29 May 2024, for a period of four years with a one-year
extension option. The new facility is therefore due to mature in May 2028,
assuming that the one-year extension option is not exercised. The size of the
facility was reduced from $375m to $250m, reflecting the improved leverage
position of the Group.
Testing up to 30 June 2024 confirmed that the Group operated within these
covenants and under the base case the Group is expected to remain within its
financial covenants throughout the going concern period and the conditions
necessary for the reverse stress scenario to be applicable were deemed remote.
The directors also considered factors likely to affect future performance and
development, the Group's financial position, current excess liquidity
position, high level of cash conversion and the principal risks and
uncertainties facing the Group, including the Group's exposure to credit,
liquidity and market risk and the mechanisms for dealing with these risks.
In conclusion, after reviewing the base case and considering the remote
likelihood of the scenario in the reverse stress test case occurring as well
as having considered the uncertainty relating to the macro-economic
environment and the mitigating actions available, the directors have formed
the judgement that, at the time of approving the consolidated financial
statements, there are no material uncertainties that cast doubt on the Group's
going concern status and that it is appropriate to prepare the consolidated
accounts on the going concern basis.
4. Segment reporting
The Group's reporting segments are:
Performance Specialties which consists of:
• Coatings - production of rheological modifiers and additives for
decorative and industrial coatings
• Talc - production and supply of talc for use in plastics, coatings,
technical ceramics and paper sectors
Personal Care - production of rheological modifiers and compounded products,
including active ingredients for anti-perspirant deodorants, for supply to
Personal Care manufacturers
Six months ended 30 June ($m) 2024 2023
Coatings 199.5 181.0
Talc 68.5 71.0
Performance Specialties 268.0 252.0
Personal Care 114.6 111.8
Revenue 382.6 363.8
All revenues are external and relate to the sale of goods. Revenue and
operating profit in Coatings (Decorative Paints) and Personal Care (AP
Actives) are marginally impacted by seasonal influences. Revenue and operating
profit tend to be higher in the first half of the year as our customers ramp
up production ready to meet end-customer demand in the summer months, when
weather conditions are favourable for painting and when anti-perspirants are
in greater demand.
Six months ended 30 June 2024 ($m) Coatings Talc Performance Specialties totals Personal Care Segment totals Central Total
costs
Reported operating profit/(loss) 35.3 (65.7) (30.4) 28.7 (1.7) (9.5) (11.2)
Adjusting Items
Business transformation 0.3 - 0.3 0.8 1.1 0.9 2.0
Increase in environmental provisions due to additional remediation work - - - - - - -
identified
Decrease in environmental provisions due to change in discount rate - - - - - (1.4) (1.4)
Impairment of assets - 66.1 66.1 - 66.1 - 66.1
Settlement of Brazil customs case 2.9 - 2.9 - 2.9 - 2.9
Amortisation of intangibles arising on acquisition - 2.7 2.7 4.1 6.8 - 6.8
Adjusted operating profit /(loss) 38.5 3.1 41.6 33.6 75.2 (10.0) 65.2
Six months ended 30 June 2023 ($m) Talc Performance Specialties Personal Care Segment totals Central Total
costs
Coatings totals
Reported operating profit/(loss) 24.9 6.3 31.2 23.1 54.3 (10.5) 43.8
Adjusting Items
Business transformation 0.3 - 0.3 0.1 0.4 0.8 1.2
Increase in environmental provisions due to additional remediation work - - - - - 1.2 1.2
identified
Decrease in environmental provisions due to change in discount rate - - - - - (0.8) (0.8)
Amortisation of intangibles arising on acquisition 0.2 2.7 2.9 4.2 7.1 - 7.1
Adjusted operating profit /(loss) 25.4 9.0 34.4 27.4 61.8 (9.3) 52.5
5. Adjusting items and alternative performance measures
Six months ended 30 June ($m) 2024 2023
Business transformation 2.0 1.2
Environmental provisions
Increase in provisions due to additional remediation work identified - 1.2
Decrease in provisions due to change in discount rate (1.4) (0.8)
Impairment of assets 66.1 -
Settlement of Brazil customs matter 2.9 -
Amortisation of intangibles arising on acquisition 6.8 7.1
76.4 8.7
Unrealised mark to market of derivative financial instruments - 1.5
Unwind of discount on restructuring provision 0.3 -
Interest on EU state aid receivable (0.6) -
Tax credit in relation to adjusting items (2.1) (2.6)
74.0 7.6
A number of items have been recorded under adjusting items by virtue of their
size and/or one time nature in order to provide additional useful analysis of
the Group's results. The Group considers the adjusted results to be an
important measure used to monitor how the businesses are performing as they
achieve consistency and comparability between reporting periods. The net
impact of these items on the Group profit before tax for the year is a debit
of $76.1 million (2023: $10.2 million). The items fall into a number of
categories, as summarised below:
Business transformation - In March 2024, the Group announced the closure of
its Middletown plant. Costs of $0.8 million associated with the closure of the
site were classified as an adjusting item, including charges of $0.7 million
relating to a restructuring provision and $0.1 million of other costs. The
plant is expected to close by 31 December 2024.
In March 2024, the Group announce the sale of the Eaglescliffe site. Costs of
$0.2 million associated with disposal activities were classified as an
adjusting item. The transaction is conditional on regulatory approval.
In September 2023, the Group announced the Fit for the future organisational
restructuring programme, for which charges of $0.3 million were recognised in
the first half, reflecting $1.6 million of additional charges and a credit of
$1.3 million in relation to the revaluation of the restructuring provision at
the end of June 2024. In addition, a charge of $0.3 million has been
recognised within finance costs in relation to the unwind of discount for this
provision. Total estimated costs for the programme are $30.0 million, of which
$12.4 million has been utilised since September 2023. The programme is
expected to complete in 2025.
In November 2020, the Group announced the closure of its Charleston plant.
Costs of $0.3 million (H1 2023: $0.3 million) associated with the closure of
the site are classified as an adjusting item and the site is planned to be
disposed of in the future. Since November 2020 $23.7 million has been incurred
in relation to the closure of the site.
Environmental provisions - The Group's environmental provision is calculated
on a discounted cash flow basis, reflecting the time period over which
spending is estimated to take place. The movement in the provision relates to
a change in discount rates, which have decreased the liability by $1.4 million
(H1 2023: $0.8 million). There were no additional remediation works identified
in the period (H1 2023: $1.2 million). As these costs relate to
non-operational facilities they are classified as adjusting items.
Impairment of assets - The performance of the Talc segment was adversely
impacted by lower demand and strike action in Finland in the period. As a
result of these factors, a new business plan was prepared for the Talc segment
which resulted in an impairment of assets. Of the total impairment of $66.1
million, $25.0 million was recorded against intangible assets and $41.1
million was recorded against property, plant and equipment.
The impairment was determined by comparing the carrying value of the Talc
segment to its recoverable amount. The recoverable amount of the Talc segment
was calculated using forecasted cash flows based the new business plan for
2024 through to 2029. A pre-tax discount rate of 10.8% and a long-term growth
rate of 3.0% was determined reflecting market conditions at the date of the
impairment.
Settlement of the Brazil customs matter - The Group agreed a settlement with
the Brazilian tax authorities in relation to a customs matter, of which $2.9
million has been recognised as an adjusting item. Refer to Note 30 of the 2023
Annual Reports and Accounts for further detail.
Amortisation of intangibles arising on acquisition - Amortisation of $6.8
million (H1 2023: $7.1 million) represents the charge in respect of the
Group's acquired intangible assets. As in previous years, these are included
in adjusting items as they are a non-cash charge arising from historical
investment activities.
Unrealised mark to market of derivatives - The unrealised movements in the
mark to market valuation of financial instruments that are not in hedging
relationships are treated as adjusting items as they are unrealised non-cash
fair value adjustments that will not affect the cash flows of the Group.
Interest on EU state aid receivable - Finance income of $0.6 million has been
recognised in respect of interest due to the Group if the EU state aid case
settles in favour of the Group. Refer to Note 14 for further details on the
tax recoverable asset.
Tax on adjusting items - this is the net impact of tax relating to the
adjusting items listed above.
To support comparability with the financial statements as presented, a
reconciliation to the adjusted consolidated income statement is shown below.
Six months ended 30 June ($m) 2024 2023
$m Profit and loss Adjusting items Profit and loss after adjusting items Profit and loss Adjusting items Profit and loss after adjusting items
Revenue 382.6 - 382.6 363.8 - 363.8
Cost of sales (215.9) - (215.9) (219.4) - (219.4)
Gross profit 166.7 - 166.7 144.4 - 144.4
Distribution costs (63.1) - (63.1) (58.7) - (58.7)
Administrative expenses (114.8) 76.4 (38.4) (41.9) 8.7 (33.2)
Operating (loss)/profit (11.2) 76.4 65.2 43.8 8.7 52.5
Other expenses (1.0) - (1.0) (0.5) - (0.5)
Finance income 1.2 (0.6) 0.6 1.8 - 1.8
Finance costs (14.8) 0.3 (14.5) (10.2) 1.5 (8.7)
(Loss)/profit before income tax (25.8) 76.1 50.3 34.9 10.2 45.1
Tax (11.4) (2.1) (13.5) (9.2) (2.6) (11.8)
(Loss)/profit from continuing operations (37.2) 74.0 36.8 25.7 7.6 33.3
Earnings per share
From continuing operations
Basic (loss)/earnings (cents) (6.3) 12.6 6.3 4.4 1.3 5.7
Diluted (loss)/earnings (cents) (6.3) 12.4 6.1 4.3 1.3 5.6
6. Finance income
Six months ended 30 June ($m) 2024 2023
Interest on bank deposits 0.1 0.4
Pension and other post retirement liabilities 0.5 -
Fair value movement on derivatives - 1.4
Interest on EU state aid receivable 0.6 -
1.2 1.8
7. Finance costs
Six months ended 30 June ($m) 2024 2023
Interest on bank loans 12.9 7.5
Unwind of discount on provisions 1.2 0.5
Interest on lease liabilities 0.7 0.7
Fair value movements on derivatives - 1.5
14.8 10.2
8. Income tax expense
The charge for tax on profits of $11.4 million gives rise to an effective tax
rate of 44.2% (H1 2023: $9.2 million, or 26.4%) and is based on the probable
tax charge in those jurisdictions where profits arise. Within this figure is a
tax credit of $2.1 million (H1 2023: $2.6 million) in respect of adjusting
items.
9. Earnings per share
The calculation of the basic and diluted earnings per share attributable to
the ordinary equity holders of the parent is based on the following:
Six months ended 30 June ($m) 2024 2023
Earnings:
Adjusted earnings 36.8 33.3
Adjusting items net of tax (74.0) (7.6)
(Loss)/earnings for the purpose of basic earnings per share (37.2) 25.7
Earnings from discontinued operations - 1.8
(Loss)/earnings from continuing and discontinued operations (37.2) 27.5
Six months ended 30 June (m) 2024 2023
Number of shares:
Weighted average number of shares for the purposes of basic earnings per share 587.9 585.1
Effect of dilutive share options 12.3 10.6
Weighted average number of shares for the purposes of diluted earnings per 600.2 595.7
share
The dilutive (loss)/earnings per share calculation for 2024 in the table below
does not include the impact of the 12.3 million dilutive share options, as the
inclusion of these potential shares would have an anti-dilutive impact on the
diluted loss per share; it would decrease the diluted loss per share.
Six months ended 30 June (cents) 2024 2023
Earnings per share from continuing operations:
Basic (loss)/earnings (6.3) 4.4
Diluted (loss)/earnings (6.3) 4.3
Basic after adjusting items 6.3 5.7
Diluted after adjusting items 6.1 5.6
Earnings per share from discontinued operations:
Basic (loss)/earnings - 0.3
Diluted (loss)/earnings - 0.3
Earnings per share from continuing and discontinued operations:
Basic (loss)/earnings (6.3) 4.7
Diluted (loss)/earnings (6.3) 4.6
10. Dividends
The following dividends were declared and paid by the Group:
Six months ended 30 June ($m) 2024 2023
Dividends paid on ordinary shares 12.1 -
11. Pension
Valuations for IAS 19 purposes were conducted as of 30 June 2024. At this date
the Group is reporting a surplus on its UK scheme of $27.4 million (31
December 2023: surplus of $38.7 million), a surplus on one of its US scheme of
$4.5 million (31 December 2023: $3.4 million) and a deficit on all other
schemes of $8.6 million (31 December 2023: deficit of $9.0 million).
Additional commentary is included in the Finance Report.
A triennial valuation for the UK scheme commenced in September 2023 and will
reflect revised demographic assumptions, including mortality base tables. The
triennial valuation is expected to be finalised during H2 2024.
The Group is aware of a case involving Virgin Media and NTL Pension Trustee
and the decision on 24 July 2024, upholding the High Court's ruling in the
Virgin Media v NTL Pension Trustees II court case relating to section 37 and
contracted-out defined benefit scheme amendments. Whilst this could
potentially lead to additional liabilities for some pension schemes and
sponsors, including Elementis, at present we are not aware of any impact on
the scheme or company.
12. Movement in net debt
Six months ended 30 June ($m) 2024 2023
Change in net debt resulting from cash flows:
Decrease in cash and cash equivalents 3.1 12.2
Increase in bank overdraft and loans - (52.3)
Decrease in borrowings - 155.7
3.1 115.6
Currency translation differences 2.5 (4.3)
Decrease in net debt 5.6 111.3
Net debt at the beginning of period (202.0) (366.8)
Net debt at end of period (196.4) (255.5)
13. Financial risk management
The Group has exposure to the following financial risks:
• credit risk;
• liquidity risk; and
• market risk.
The Board of Directors has overall responsibility for the establishment and
oversight of the Group's risk management framework. The Group's risk
management policies are established to identify and analyse the risks faced by
the Group, to set appropriate risk limits and controls, and to monitor risks
and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Group's activities.
The Group's Audit Committee, assisted by Internal Audit, oversees how
management monitors compliance with the Group's risk management policies and
procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group. These interim financial statements
do not include all the financial risk management information and disclosures
that are required in the Annual Report and Accounts and should be read in
conjunction with the financial statements for the year ended 31 December 2023.
The Group's risk management policies have not changed since the year end.
The Group measures fair values in respect of financial instruments in
accordance with IFRS 13, using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements:
• Level 1: Quoted market price (unadjusted) in an active market for an
identical instrument.
• Level 2: Valuation techniques based on observable inputs, either directly
or indirectly.
• Level 3: Valuation techniques using significant unobservable inputs.
Derivatives are held at fair value and are categorised within Level 2. All
other financial instruments are held at amortised cost, which is assumed to
approximate their fair values. All the fair values of financial assets and
liabilities carried at amortised cost are considered to be Level 2 valuations
which are determined using directly or indirectly observable inputs other than
unadjusted quoted prices.
14. Contingent liabilities
As is the case with other chemical companies, the Group occasionally receives
notice of litigation relating to regulatory and legal matters. A provision is
recognised when the Group believes it has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Where it is
deemed that an obligation is merely possible and that the probability of a
material outflow is not remote, the Group would disclose a contingent
liability.
The Group has not received any notice of litigation relating to events arising
prior to the balance sheet date that is expected to lead to a material
exposure.
In 2013 the UK Government (through HMRC) introduced the UK Finance Company
Exemption ('FCE') regime. Elementis entered into the FCE regime during 2014.
In October 2017 the European Commission opened a State Aid investigation into
the regime. In April 2019 the European Commission concluded that the FCE
regime constituted State Aid in circumstances where Groups had accessed the
regime using a financing company with UK significant people functions; the
European Commission therefore instructed the UK Government to collect any
relevant State Aid amounts. The UK government and other UK-based international
companies, including Elementis, appealed to the General Court of the European
Union against the decision in 2019.
In Spring 2020 HMRC requested that affected Groups submit their UK significant
people function analysis. The deadline for submission of these analyses was
delayed due to the impact of COVID-19 and Elementis submitted its analysis to
HMRC in July 2020. In December 2020 the UK government introduced legislation
to commence collection proceedings.
Elementis received a charging notice from HMRC on 5 February 2021 which
assessed for the maximum exposure of $19 million (excluding interest). This
was paid to HMRC on 5 March 2021. A charging notice for associated interest of
$1 million was received on 24 June 2021 and paid on 7 July 2021. Whilst
Elementis lodged an appeal against the charging notices that did not defer the
payment of the tax assessed.
The UK Government's appeal against the European Commission's decision was
heard by the General Court of the European Union during October 2021 and on 8
June 2022 the General Court of the European Union ruled against the UK
Government. The UK Government lodged a further appeal to the European Court of
Justice during Q3 2022 and the case was heard during January 2024. Following
the hearing, in April 2024, the EU Advocate General issued their opinion
stating that they did not believe the FCE regime constituted State Aid. The
matter was referred to the ECJ for final judgement, which is expected during
H2 2024. As Elementis continues to consider that the appeal process will
ultimately be successful, at 30 June 2024 an asset has been recorded within
non-current assets in the expectation that the charge will be repaid in due
course.
During 2022 the Group terminated a distribution agreement with one of its
distributors. The distributor has brought a claim for compensation as a result
of the termination. This matter has now proceeded to arbitration and
management have concluded at this stage that the obligation cannot be measured
with sufficient reliability.
During Q4 2023 an environmental incident occurred at the Eaglescliffe site,
which following investigation during H1 2024, is likely to require additional
remediation work at the site and could result in a fine from the relevant
supervisory body. Under the terms of the sale and purchase agreement with
Flacks Group, signed in March 2024, Flacks Group are responsible for the cost
of any remediation and associated fine. As the transaction has not yet
completed Elementis have disclosed the event. Management have concluded at
this stage that the obligation cannot be measured with sufficient reliability.
15. Related party transactions
The Company is a guarantor to the UK pension scheme under which it guarantees
all current and future obligations of UK subsidiaries currently participating
in the pension scheme to make payments to the scheme, up to a specified
maximum amount. The maximum amount of the guarantee is that which is needed
(at the time the guarantee is called on) to bring the scheme's funding level
up to 105 per cent of its liabilities, calculated in accordance with section
179 of the Pensions Act 2004. This is also sometimes known as a Pension
Protection Fund (PPF) guarantee, as having such a guarantee in place reduces
the annual PPF levy on the scheme.
16. Eaglescliffe held for sale
On 6 March 2024, Elementis entered into an agreement to sell its former
Chromium manufacturing site at Eaglescliffe to Flacks Group for negative
purchase consideration of £11.5 million ($14.5 million). Completion of the
transaction is conditional on regulatory approval. Whilst the transaction is
still awaiting regulatory approval, Elementis and the Flacks Group are
committed to the sale and therefore the site has been classified as held for
sale as of 30 June 2024.
17. Events after the balance sheet date
There were no significant events after the balance sheet date.
Principal risks and uncertainties
The Group has policies, processes and systems in place to help identify,
evaluate and manage risks throughout the organisation that may have a material
effect on its business operations and the delivery of its strategic
objectives, including its business model, future performance, solvency,
liquidity and / or reputation. The Board continues to take a proactive
approach to recognising and mitigating risk with the aim of protecting its
employees and safeguarding the interests of the Group, its shareholders,
employees, customers, suppliers and all other stakeholders.
The principal risks and uncertainties facing the Group are set out in the
Annual Report and Accounts for the 12 months ended 31 December 2023 (pages 67
to 71). The Group has reviewed these risks and concluded that they will remain
relevant for the second half of the financial year. The potential impact of
these risks, together with details of specific mitigating actions are set out
in the 2023 Annual Report and Accounts.
All risks are subject to executive oversight and assessment and management
will continue to review the effectiveness and efficiency of existing controls
over those risks and to identify further actions where appropriate in order to
manage the Group's exposure.
Alternative performance measures and unaudited information
Alternative performance measures
A reconciliation from reported profit for the year to earnings before
interest, tax, depreciation and amortisation ("EBITDA") is provided to support
understanding of the summarised cash flow included within the Finance report.
Six months ended 30 June ($m) 2024 2023
Profit/(loss) for the year (37.2) 25.7
Adjustments for
Finance income after adjusting items (1.2) (1.8)
Finance costs and other expenses after adjusting items 15.9 9.2
Tax charge 11.4 9.2
Depreciation and amortisation 26.9 28.8
Excluding intangibles arising on acquisition (6.8) (7.1)
Adjusting items before finance costs and depreciation 76.1 10.0
Adjusted EBITDA 85.1 74.0
There are also a number of key performance indicators used in this report. The
reconciliations to these are given below.
Adjusted operating cash flow
Adjusted operating cash flow is defined as the net cash flow from operating
activities less net capital expenditure but excluding, income taxes paid or
received, interest paid or received, movement in provisions and derivatives,
pension contributions net of current service cost, share-based payment expense
and adjusting items.
Six months ended 30 June ($m) 2024 2023
Net cash flow from operating activities 35.1 (9.1)
Add/(deduct):
Net cash flow used in operating activities from discontinued operations - 11.9
Capital expenditure (16.7) (13.4)
Add/(deduct):
Income tax paid or received 8.2 10.7
Interest paid or received 14.5 11.2
Decrease in provisions and derivatives (7.0) (2.9)
Pension contributions net of current service cost (0.4) 0.9
Share-based payments expense 3.4 2.0
Adjusting items - non cash (1.8) 1.8
Adjusting items - cash 12.2 0.9
Adjusted operating cash flow 47.5 14.0
Adjusted operating cash conversion
Adjusted operating cash conversion is defined as adjusted operating cash flow
divided by adjusted operating profit.
Six months ended 30 June ($m) 2024 2023
Adjusted operating profit 65.2 52.5
Adjusted operating cash flow 47.5 14.0
Adjusted operating cash flow conversion 73% 27%
Free cash flow
Free cash flow is defined as adjusted operating cash flow (as defined above),
less pension contributions net of current service cost, net interest paid,
income tax paid, cash flow relating to adjusting items and other, which
includes share-based payments, movement in provisions and derivatives and
payment of lease liabilities.
Contribution margin
The Group's contribution margin, which is defined as sales less all variable
costs, divided by sales and expressed as a percentage.
Six months ended 30 June ($m) 2024 2023
Revenue 382.6 363.8
Variable costs (190.9) (185.9)
Non variable costs (25.0) (33.5)
Cost of sales (215.9) (219.4)
Contribution margin 50.1% 48.9%
Adjusted Group profit before tax
Adjusted Group profit before tax is defined as the Group profit before tax
after adjusting items, excluding adjusting items relating to tax.
Adjusted return on operating capital employed
The adjusted return on operating capital employed ("ROCE") is defined as
operating profit from total operations after adjusting items divided by
operating capital employed, expressed as a percentage. Operating capital
employed comprises fixed assets (excluding goodwill), working capital and
operating provisions. Operating provisions include self-insurance and
environmental provisions but exclude retirement benefit obligations.
Six months ended 30 June, unless stated otherwise ($m) 2024 2023
Adjusted operating profit for last 12 months to 30 June 116.6 94.8
Fixed assets excluding goodwill 527.0 576.8
Working capital 167.2 192.2
Operating provisions (49.5) (29.2)
Operating capital employed 644.7 739.8
Adjusted return on capital employed 18% 13%
Average trade working capital to sales ratio
The trade working capital to sales ratio is defined as the 12 month average
trade working capital divided by sales, expressed as a percentage. Trade
working capital comprises inventories, trade receivables (net of provisions)
and trade payables. It specifically excludes repayments, capital or interest
related receivables or payables, changes due to currency movements and items
classified as other receivables and other payables.
Adjusted operating profit/operating margin
Adjusted operating profit is the profit derived from the normal operations of
the business. Adjusted operating margin is the ratio of operating profit,
after adjusting items, to sales.
Net debt
Net debt is defined as borrowings less cash and cash equivalents, including
any restricted or held for sale cash and cash equivalents. Pre IFRS 16 Net
debt does not include lease liabilities.
Unaudited information
To support a full understanding of the performance of the Group, the
information below provides the calculation of net debt/EBITDA.
Pre IFRS 16 Net debt/EBITDA:
Six months ended 30 June ($m) 2024 2023
Revenue 382.6 363.8
Adjusted operating profit 65.2 52.5
Adjusted operating margin 17.0% 14.4%
Adjusted EBITDA for the last 12 months to 30 June 156.9 137.6
IFRS 16 adjustment for the last 12 months to 30 June (6.6) (5.9)
Adjusted EBITDA pre-IFRS 16 for the last 12 months to 30 June 150.3 131.7
Net debt(1) 196.4 255.5
Net debt/EBITDA(2) 1.3x 2.0x
1 Net debt excludes lease liabilities.
2 Net Debt/EBITDA, where EBITDA is the adjusted EBITDA on continuing
operations of the Group on a pre IFRS16 basis.
Post IFRS 16 Net debt/EBITDA:
Six months ended 30 June ($m) 2024 2023
Revenue 382.6 363.8
Adjusted operating profit 65.2 52.5
Adjusted operating margin 17.0% 14.4%
Adjusted EBITDA for the last 12 months to 30 June 156.9 137.6
Net debt(1) 196.4 255.5
IFRS 16 liabilities 36.6 36.5
Adjusted net debt post IFRS 16 233.0 292.0
Net debt/EBITDA(2) 1.5x 2.1x
1 Net debt includes lease liabilities.
2 Net Debt/EBITDA, where EBITDA is the adjusted EBITDA on continuing
operations of the Group on a post IFRS16 basis.
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