Elementis Regulatory News (ELM)

ELEMENTIS PLC - AGM / Interim Management Statement

PR Newswire

London, April 26

27 April 2016

AGM / Interim Management Statement

Elementis plc (ELM.L, the “Company" or the “Group"), the Global Specialty Chemicals Company, today issues its Interim Management Statement for the three months ended 31 March 2016.

Commenting on the Company’s performance Group Chief Executive, Paul Waterman, said: “During my first two months at Elementis I have been impressed by the quality of our people and the resilience of our business model. This is best exemplified by the sustained level of contribution margins in Specialty Products, the relative stability of the Chromium business in North America and the Group’s strong cash generation. Although some markets continue to be challenging and we are cycling against a stronger first quarter in 2015, we are proactively managing our margins and cost base to ensure that our performance for the year remains in line with management expectations.”

In Specialty Products, sales performance in coatings and personal care was satisfactory, while currency and lower oilfield sales resulted in total sales being 7 per cent below the same period last year. The following comments by division refer to constant currency sales:

In coatings additives, sales in North America were similar to the previous year as sales of decorative products from the New Martinsville plant continued to make good progress, while industrial sales remained subdued due to the impact of the stronger dollar on consumer exports, as previously reported. Sales in Europe were 1 per cent higher, while sales in Asia Pacific were 1 per cent lower, following the destocking and adjustment that took place in the Chinese economy in the second quarter of 2015. Sales to Latin America represent 5 per cent of total coatings sales and were 9 per cent lower than the previous year due to economic weakness in that region, particularly in Brazil.

In personal care, sales were 4 per cent higher than the previous period, as the business continued to benefit from geographic expansion and new product sales.

Sales in oilfield drilling were broadly in line with the quarterly sales run rate experienced in the second half of 2015, following the sharp downturn in North American demand that took place in the early part of 2015. Consequently, sales for the current quarter were 37 per cent below the same quarter last year.

As anticipated, Chromium sales for the first quarter were 11 per cent lower than the previous year, as market conditions outside of North America continued to be challenging. Although sales in North America were lower by 5 per cent, this is largely due to order timing and sales for the first six months of the year are expected to be in line with the same period last year. Sales outside of North America were 19 per cent lower than the previous year, with volumes lower by 6 per cent and pricing lower by 13 per cent.

The Group’s balance sheet remains strong and is again expected to be in a net cash position at the end of the year which, under our dividend policy, will continue to provide shareholders with attractive returns.

ENDS

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