Last checked at 13 May 2021 07:00
Elementis plc
AGM Trading Statement
Strong first quarter performance, ahead of expectations
On track for improved financial performance and deleveraging
Elementis plc ("Elementis" or the "Group"), a global specialty chemicals company, today issues a trading update for the three months ended 31 March 2021 and an update on current trading.
First quarter business performance
In the first quarter of 2021 Group performance has been strong and ahead of expectations. Revenue increased approximately 6% on the prior year period, which was largely before the impact of COVID-19, with the successful execution of self help actions augmented by improved underlying demand, customer restocking and currency tailwinds.
· Coatings revenue increased significantly on the prior year period with strong volumes across all geographies driven by new business wins, improved industrial coatings demand and customer restocking. Margins were robust with pricing actions offsetting raw material cost inflation.
· Personal Care performance was as expected, slightly below the prior year period, with customer restocking offset by continued weak category demand for cosmetics and anti-perspirant deodorants due to COVID-19 related social and travel restrictions. Margins were resilient and the start-up of our new plant in India is expected to commence in the third quarter.
· Talc performance was broadly in line with the prior year period with strong industrial talc growth, driven by the continued rebound in automotive demand and robust coatings sales, offset by weaker sales to paper end markets.
· Chromium revenue was in line with the prior year period due to improved demand and restocking across key industrial end markets such as automotive and leather tanning. While unit pricing was sequentially stable, margins were below the prior year period due to lower pricing outside of North America.
Cash generation in the first quarter was in line with expectations and the Group's business model remains highly cash generative.
Outlook
We have made a strong start to the year, with improved year on year profitability, driven by increased demand across industrial end markets. This positive momentum has continued into the second quarter and demand remains healthy. For the full year, we are confident that further steady demand improvement from H2 2020 levels coupled with our self help actions will drive improved financial performance, towards the top end of consensus expectations*, and a reduction in leverage.
Commenting on the performance, CEO, Paul Waterman said,
"We have made a good start to 2021 and are on track to deliver an improved financial performance and a reduction in leverage. We will continue to maintain our focus on self-help actions and in 2021 expect to deliver more than $30m of new business opportunities, over 20 new products and $10m of cost savings".
Enquiries
Elementis plc
James Curran, Investor Relations Tel: 020 7067 2994
Tulchan
Martin Robinson/David Allchurch Tel: 020 7353 4200
* Based on the company compiled consensus, the Board believes current market forecasts for 2021 adjusted operating profit to be in the range of $92m to $103m with an average of $97m.