REG - Elementis PLC - Third Quarter Trading Update

ElementisAnnouncement

29/10/2024 07:00

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RNS Number : 9381J  Elementis PLC  29 October 2024

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 19(th) 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 million(1).

 

Talc strategic review

The strategic review of Talc, announced on 1(st) 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 1B(2).
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 expectations(3). 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 expectations(3)."

 

 

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.

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