AGM Trading StatementSource: RNS
AGM Trading Statement
Robust first quarter trading performance
Chromium strategic review
Elementis plc ("Elementis" or the "Group"), a global specialty chemicals company, today issues a trading update for the three months ended 31 March 2022 and announces a strategic review of Chromium.
First Quarter Business Performance
Trading for the three months ended 31 March 2022 has been positive. Revenue increased approximately 7% on an underlying basis* against the prior year period, driven by pricing actions, new business wins and continued demand recovery in Personal Care.
· Coatings revenue and margins increased on the prior year period. Successful pricing actions and an improved mix more than offset lower volumes linked to supply chain disruptions and weaker industrial activity in China, as well as rising raw material, energy and logistics cost inflation.
· Personal Care performance improved materially as social restrictions eased further and our growth initiatives continued to gain momentum. Margins were strong due to successful pricing actions. The ramp-up of our new plant in India continues to progress at pace.
· In Talc, while successful pricing actions more than offset cost inflation, performance declined on the prior year period due to weaker European automotive production and a strike throughout the first quarter at our main paper customer in Finland.
· Chromium performance declined as an unexpected temporary plant outage impacted volumes. Pricing continued to show positive momentum, more than offsetting increased costs.
Cash generation in the first quarter was in line with expectations and the Group's business model remains highly cash generative.
The Group today announces it has initiated a strategic review of its Chromium business. The review will establish whether the full potential of Chromium can best be delivered as part of Elementis, or, via a full or partial divestment. It will consider the practicality of all options, whilst prioritising the best interests of all stakeholders, including employees, customers and shareholders.
The year has started well with improved profitability, driven by self-help actions, positive momentum in Personal Care and underlying strength in Coatings. For the full year, we are confident that further strategic progress will drive improved financial performance and a reduction in leverage, in line with expectations.
Commenting on today's announcement, CEO, Paul Waterman said,
"We have made a good start to the year and will continue to maintain our focus on self-help actions and effectively managing the challenging external supply chain environment, demand uncertainties and rising inflation. We remain on-track to deliver $50m of new business opportunities, over 20 new products and progress towards $10m of additional efficiency savings by 2023.
In line with our Innovation, Growth and Efficiency strategy, we have focused Elementis on high quality Personal Care, Coatings and Talc performance additive businesses which hold enduring positions of strength in growing markets, and today represent approximately 90% of Group profits. In this context we will execute a strategic review of our Chromium business to determine whether Elementis remains the best owner."
James Curran, Investor Relations 020 7067 2994
Martin Robinson 020 7353 4200
Notes: Adjusted for constant currency impact