Q3 Trading UpdateSource: RNS
26 October 2022.
Q3 Trading Update
Trading in line with expectations - outlook unchanged
Elementis plc ("Elementis" or the "Group"), a global specialty chemicals company, today issues a trading update for the three months ended 30 September 2022.
Third quarter business performance
The Group delivered a good performance in the third quarter, with double-digit revenue growth on an underlying basis, driven by further strong performances in Personal Care and Coatings, where the focus on innovation, new product development and new business opportunities, underpinned by strong key account relationships and supply resiliency, continued to deliver sales growth. The Chromium business also performed well in the quarter whilst the Talc business continued to be impacted by weakness in European markets.
Overall the Group saw strong performances in the Americas, with lower demand in Europe and continuing market weakness in China. The full year outlook for the Group remains unchanged.
· Coatings delivered a solid third quarter performance. Pricing actions continued to offset raw material and energy cost increases and protect margins. Sales growth was driven by new business wins at key accounts and market share gains, with new products gaining further traction The business remains on track to deliver full year performance significantly ahead of last year.
· Personal Care continued to perform strongly in the third quarter, with market demand and pricing actions in both Cosmetics and AP Actives driving strong sales growth and margin expansion versus the prior year period. Whilst normal seasonality and some moderation of demand is expected in the fourth quarter, the business is expected to deliver full year performance substantially ahead of last year.
· Talc performance in the third quarter was impacted by continuing weaker demand in European end markets, in particular automotive, reduced ceramics demand in China, and the loss of sales into Russia and neighbouring countries. Higher energy and logistics costs, as well as adverse currency movements, were offset by new business wins and price increases which will continue to be implemented through the rest of the year.
· Chromium sales in the third quarter were ahead of the prior year period, reflecting solid demand and price increases. Global industry utilization remains high, with improved pricing and lower chrome ore prices offsetting higher energy and logistics costs. An update on the strategic review of the Chromium business is expected around the calendar year end, as previously indicated.
The full year outlook for the Group remains unchanged, with Group leverage lower.
Despite weakening underlying macro-economic conditions creating further headwinds, particularly in Europe, the Group's continued focus on innovation and new business opportunities, along with further pricing actions and operating efficiencies, is expected to deliver full year financial performance in line with our expectations.
Commenting on the third quarter performance, CEO, Paul Waterman said,
"We delivered a good third quarter performance, with our focus on product innovation, customer relationships, value pricing and operating efficiency continuing to create real momentum in our business. This is enabling us to weather the macroeconomic headwinds affecting a number of our markets, and deliver sales growth and margin expansion in line with our expectations.
We expect the market environment to remain challenging, but are confident that by continuing to execute effectively on our strategy we will make further progress towards achieving our medium-term goals."
David Boyd, Investor Relations Tel: 0207 067 2994
David.email@example.com Mob:+44 7764 905135
Martin Robinson Tel: 020 7353 4200