Business
Response to open letter from Franklin Templeton
Response to open letter from Franklin Templeton.
About this update from Elementis Plc
[{"type":"text","content":"\n\nLondon, 20 September 2023\nElementis plc\nResponse to open letter from Franklin Templeton\nThe Board of Elementis plc (the \"Company\" or \"Elementis\") notes the open letter from Franklin Mutual Advisers (\"Franklin\"), published today, in which Franklin requests the Board to initiate an immediate sale of the Company.\nThe Board engages with and welcomes feedback from all shareholders and is focused on delivering value for stakeholders.\nThe Board has held a series of discussions with Franklin to understand their view and consider their request. After careful consideration, with the support of its advisors, the Board does not consider an immediate sale of the Company to be in the best interests of its shareholders and is issuing this announcement to clarify its response.\nThe Board agrees with Franklin's comments on Elementis' attractive assets\nThe Board notes and agrees with Franklin's comments about Elementis' attractive assets. In particular, the comments about our healthy market positions, strong gross margins that demonstrate the premium nature of our products and potential for upside in a cyclical recovery alongside substantial operational improvement initiatives.\nPure specialty chemicals business on track to achieve full potential\nFollowing the successful divestment of the Chromium business which completed in January 2023, Elementis is a pure play specialty chemicals business focused on adding value by making our customers' formulations look, feel, and perform better. Elementis is now a higher growth, higher margin, less cyclical and less carbon intensive business.\nThis focus on advantaged, high value products will enable us to deliver higher quality earnings and margins, with lower volatility, and generate significant shareholder value.\nWe continue to make progress towards our medium-term goal of 17% adjusted operating margin. As a cash generative business, combined with the sale of our Chromium business, we continue to make progress towards our target of below 1.5x net debt / EBITDA.\nInterim results demonstrate resilient performance alongside ongoing execution of the strategy\nIn our 2023 interims we delivered resilient results in challenging macro-economic conditions that have seen many other specialty chemicals companies downgrade expectations for 2023. Alongside this resilient performance Elementis continu...