Source - RNS
RNS Number : 6681Z
Elementis PLC
14 January 2020
 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

Elementis plc

14 January 2020

Trading Update

 

Elementis plc ("Elementis" or the "Group"), a global specialty chemicals company, today issues the following trading update in advance of its full year results for the 12 months to 31 December 2019, which are scheduled to be announced on 4 March 2020.

Business performance

Trading in the final quarter of the year has been somewhat subdued and as a result adjusted operating profit for 2019 is anticipated to be $122-124m.

·    Personal Care had a mixed end to the year with continued solid performance in cosmetics and ongoing competitive pressures in AP Actives.

 

·    In Coatings, demand conditions were in line with expectations and operating margins remained resilient supported by new business wins, cost savings delivery and price/mix improvements.

 

·    In Talc, performance was in line with expectations with solid industrial talc demand driven by good momentum in coatings and technical ceramics, more than offsetting continued demand weakness in long life plastics. Second half performance materially improved driven by new business, cost synergies and nickel sales phasing.

 

·   In Chromium, a weak demand environment and lower market prices resulted in weaker than expected performance. This was particularly acute in the rest of the world, whereas margins in North America have remained robust.

 

·    Energy performance was weaker than expected due to a further slowdown in North American drilling activity, with the Q4 rig count down approximately 25% on the prior year period.

 

 

Cash Conversion

In 2019, our operating cash conversion* is expected to be in line with our medium term performance objective of at least 90%. This has been driven by disciplined capital expenditure and sustainable working capital reduction. As a result, net debt for the year is anticipated to be approximately $465m, representing around 2.8x net debt to EBITDA**. 

Financial deleveraging remains a key focus. The execution of our medium term innovation, growth and efficiency priorities combined with strong cash generation will drive a clear deleveraging profile.

Paul Waterman, CEO, said,

"Our overall performance in 2019 has been negatively impacted by a challenging market backdrop as the more cyclically exposed parts of the portfolio like Chromium and Energy have deteriorated through H2. However, as outlined at the recent Capital Markets Day, our priorities going forward are clear. We remain committed to delivering our medium term Group performance objectives of a 17% operating profit margin, operating cash conversion of at least 90% per annum and financial leverage of under 1.5x EBITDA, with further reduction thereafter."

Enquiries

Elementis plc

James Curran, Investor Relations                                               Tel: 020 7067 2994

 

Tulchan           

Martin Robinson                                                                          Tel: 020 7353 4200

David Allchurch

 

Notes

*Defined as (Adjusted EBITDA - capex - working capital change) / adjusted operating profit

** Defined on a pre-IFRS16 basis


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