Elementis "well positioned" despite challenging demand environment

(Alliance News) - Elementis PLC on Tuesday backed annual guidance after a "resilient" performance in the third quarter saw a modest increase in sales.

The London-based speciality chemicals and personal care business said revenue rose 2% in the quarter to September 30, or 3% at constant currency, from a year prior.

Revenue was higher across both business segments and adjusted operating margin was in line with the first half margin of 17%.

Personal Care sales in the quarter were up on the prior year while Performance Specialties delivered a "good" third quarter performance as positive pricing and mix benefits offset continued market related volume weakness.

Coatings sales were slightly year-on-year, with price and mix benefits supporting revenue growth in Americas and Europe, Middle East & Africa and offsetting lower volumes in Asia.

Talc sales were broadly flat compared to a year ago, Elementis said.

In August, the firm announced a strategic review of the Talc business to establish whether its full potential can "best be delivered as part of Elementis, or via a divestment."

On Tuesday, Elementis said this review was "progressing".

Overall, the company said it was "well positioned" to deliver full-year results in line with expectations and deliver at least USD15 million of annual cost savings in 2024.

Based on company compiled consensus dated October 15 2024, adjusted operating profit of USD123 million is expected along with an adjusted operating margin of 16.4%.

In 2023, Elementis reported adjusted operating profit of USD103.9 million and an adjusted operating margin of 14.6%.

Chief Executive Paul Waterman 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."

Shares in Elementis rose 3.2% to 142.60 pence each in London on Tuesday morning.

By Jeremy Cutler, Alliance News reporter

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