REG - Elementis PLC - Response to open letter from Franklin Templeton

ElementisAnnouncement

20/09/2023 12:15

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RNS Number : 0945N  Elementis PLC  20 September 2023

London, 20 September 2023

Elementis plc

Response to open letter from Franklin Templeton

The Board of Elementis plc (the "Company" or "Elementis") notes the open
letter from Franklin Mutual Advisers ("Franklin"), published today, in which
Franklin requests the Board to initiate an immediate sale of the Company.

The Board engages with and welcomes feedback from all shareholders and is
focused on delivering value for stakeholders.

The Board has held a series of discussions with Franklin to understand their
view and consider their request. After careful consideration, with the support
of its advisors, the Board does not consider an immediate sale of the Company
to be in the best interests of its shareholders and is issuing this
announcement to clarify its response.

The Board agrees with Franklin's comments on Elementis' attractive assets

The Board notes and agrees with Franklin's comments about Elementis'
attractive assets. In particular, the comments about our healthy market
positions, strong gross margins that demonstrate the premium nature of our
products and potential for upside in a cyclical recovery alongside substantial
operational improvement initiatives.

Pure specialty chemicals business on track to achieve full potential

Following the successful divestment of the Chromium business which completed
in January 2023, Elementis is a pure play specialty chemicals business focused
on adding value by making our customers' formulations look, feel, and perform
better. Elementis is now a higher growth, higher margin, less cyclical and
less carbon intensive business.

This focus on advantaged, high value products will enable us to deliver higher
quality earnings and margins, with lower volatility, and generate significant
shareholder value.

We continue to make progress towards our medium-term goal of 17% adjusted
operating margin. As a cash generative business, combined with the sale of our
Chromium business, we continue to make progress towards our target of below
1.5x net debt / EBITDA.

Interim results demonstrate resilient performance alongside ongoing execution
of the strategy

In our 2023 interims we delivered resilient results in challenging
macro-economic conditions that have seen many other specialty chemicals
companies downgrade expectations for 2023. Alongside this resilient
performance Elementis continues to execute against its strategy which is built
around the three pillars of Innovation, Growth and Efficiency.

Board focus on driving value for shareholders

The Board regularly views the Company's strategic alternatives with its
financial advisors. Our Board does not believe that Franklin's request to
initiate an immediate sale of the Company is currently in the best interests
of its shareholders given the substantial value still be to be realised.

We look forward to updating shareholders on our strategic progress, including
the next wave of growth and efficiency initiatives, at our upcoming Capital
Markets Day on 14 November 2023.

 

Enquiries

Elementis plc

Paul Waterman, Chief Executive
Officer

Ralph Hewins, Chief Financial Officer

Eva Hatfield, Head of Investor
Relations
Tel: +44 7553 340 380

 

 

Teneo

Martin
Robinson
 
Tel: +44 (0) 20 7353 4200

Olivia
Peters
Email: elementis@teneo.com

 

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