Slide 1: 2023 Full Year results
Unique chemistry, sustainable solutions 2023 Full Year results 7 March 2024 Unique chemistry, sustainable solutions 1
Slide 2: Cautionary statement
Cautionary statement This presentation, the presentation materials and discussion may contain certain forecasts, projections and forward-looking statements – that is, statements related to future, not past events – in relation to, or in respect of the financial condition, operations or businesses of
Slide 3: Agenda
Agenda Introduction and highlights Paul Waterman Segmental performance Paul Waterman Group financials Ralph Hewins Strategic priorities and outlook Paul Waterman Unique chemistry, sustainable solutions Q&A Paul Waterman and Ralph Hewins Unique chemistry, sustainable solutions 3
Slide 4: Introduction and highlights
Unique chemistry, sustainable solutions Introduction and highlights Paul Waterman 4
Slide 5: Key messages
Key messages 2026 targets Resilient business Personal Performance Continued financial performance Care Specialties progress operating 19%+ profit margin Pricing and cost Performance driven Coatings volumes Operating margin 14.6% reduction offset weak by new business and impacted by destocking operat
Slide 6: Strong safety focus
Strong safety focus Safety performance Injuries Recordable injuries Elementis TRIR TRIR 2023 highlights 9 2 Performance • 50% injury reduction 8 7 • 90% of sites had no injuries 1.5 6 • 40%+ sites >5 years without injuries 5 1 4 Safety initiatives 3 • Process Safety Management improvement plan on tr
Slide 7: Resilient performance
Resilient performance $m (unless stated otherwise) 2022 2023 Change Revenue 736 713 (3)% Adjusted operating profit 101 104 3% Adjusted operating margin 13.6% 14.6% 100bps Adjusted profit before tax 81 84 4% Adjusted diluted EPS (cents) 10.9 10.8 (1)% Net debt 367 202 (45)% Unique chemistry, sustaina
Slide 8: Strategic progress
Strategic progress 12 14% 28 Innovation new products revenues from joint development launched innovation sales projects $51m 10% $363m Growth new business Personal Care Asia won new business pipeline revenue growth – highest ever Efficiency $10m Fit for future One cost savings global restructuring J
Slide 9: Sustainability progress
Sustainability progress Environment Our people Responsible business • Scope 1 and 2 emissions1 reduced 7%, • Gender diversity across senior • Aligned supply chain standards to new Scope 3 emissions verified leadership2 increased to 37% Business Partner Code of Conduct • 2030 water and GHG Scope 1 an
Slide 10: Segmental performance
Unique chemistry, sustainable solutions Segmental performance Paul Waterman 10
Slide 11: Personal Care performance
Personal Care performance Resilient sales and operating performance $m 2022 2023 Change (constant currency) • Volumes impacted by destocking in H2 Revenue 212 209 (2)% • Improved mix/price and cost management driving higher margin Operating profit1 49 50 0% • $15m of new business Operating margin1 2
Slide 12: Personal Care performance: Strategic progress
Personal Care performance Strategic progress Colour Cosmetics Asia • 15% revenue growth • 10% revenue growth • Indie brands and • >80% increase in emerging markets NBO pipeline • New product momentum: • Six countries, delivering Bentone® Plus Glow double-digit revenue growth Skin Care AP Actives • 4
Slide 13: Continued innovation driving sales and new business pipeline
Personal Care performance Continued innovation driving sales and new business pipeline Growing Record new business pipeline innovation sales driven by growth platforms New products1 as a % of sales. New business pipeline2 in $m. 13% 11% >$70m 10% 9% 75 8% 60 8% 45 5% 4% 30 3% 15 0% 0 2020 2021 2022
Slide 14: 2023 new products
Personal Care 2023 new products Bentone Hydroclay 700: BENTONE® PLUS GLOW: Versatility through synergy Radiance unleashed! • Combination of high-purity hectorite • In Cosmetics Asia 2023 Bronze award winner and xanthan gum offers ultimate stability and sensory benefits • Based on patent pending hect
Slide 15: Performance Specialties
Performance Specialties Talc recovery and NBO offset Coatings de-stocking $m 2022 2023 Change (constant currency) • Improved Talc financial performance Revenue 525 504 (4)% • $36m of new business Operating profit1 70 70 0% • Self help actions driving margin improvement Operating margin1 13.3% 13.9%
Slide 16: Coatings performance
Coatings performance Margins resilient in continued weak demand environment $m 2022 2023 Change (constant currency) Revenue 389 368 (5)% • Destocking continued throughout 2023 • Price and cost management offset Operating profit 1 70 56 (20)% negative operating leverage • Strong new business performa
Slide 17: Weak demand and destocking across all markets and regions
Coatings performance Weak demand and destocking across all markets and regions Demand environment Sector sales performance 2 5% 25% Deco -6% -5% -14% 20% Industrial 15% -15% 10% Mixed performance across the regions 2 5% AMERICAS ASIA EUROPE 0% -5% -14% +2% -9% Global key accounts -10% revenue declin
Slide 18: Coatings performance: Strategic progress
Coatings performance Strategic progress Innovative products… …driving new business momentum Five new products launched Rheolate® PHX 7025 Benaqua® 5000 Dapro® BIO 9910 $33m • Safer and more • Launched in Q1 2023, • 96% biobased defoamer new business generated environmentally-friendly hectorite-based
Slide 19: Talc performance
Talc performance Financial recovery driven by self help $m 2022 2023 Change (constant currency) • Ongoing weak demand Revenue 136 136 (2)% • Profit recovery driven by price Operating profit1 (0.4) 14 n/m / mix and cost management • Prioritising value over volume Operating margin1 n/m 10.3% Note: 1.
Slide 20: Volume decline across key markets
Talc performance Volume decline across key markets EU real GDP European light European graphic European growth YoY vehicle production paper demand industrial coatings (units) (tonnes) (litres) Post-Covid rebound has lost its momentum 6% -25% -63% -9% 4% reduction in LV decline in graphic Reduction i
Slide 21: Further progress expected in 2024
Talc performance Further progress expected in 2024 Focus on high value segments Actions in progress Vehicle Technical Additional Barrier coatings • Execute further efficiencies lightweighting ceramics Coatings revenue applications under announced cost share gains synergies programmes Launched the Fi
Slide 22: Group financials
Unique chemistry, sustainable solutions Group financials Ralph Hewins, CFO 22
Slide 23: Group revenue ($m)
Group revenue ($m) Volume weakness partly offset by improved price/mix Personal Care Coatings Talc 736 3 739 24 13 713 (63) Unique chemistry, sustainable solutions Introduction Segmental Group Strategic Unique chemistry, sustainable solutions Outlook 23 and highlights performance financials prioriti
Slide 24: Group operating profit ($m)
Group operating profit ($m) Profit resilient, supported by self-help actions 1 102 3 104 101 29 (29) Unique chemistry, sustainable solutions Note: Totals may not cast due to rounding. Introduction Segmental Group Strategic Unique chemistry, sustainable solutions Outlook 24 and highlights performance
Slide 25: Continued focus on efficiency
Continued focus on efficiency • $4m Chromium stranded costs removed $10m cost • $1m Talc / Coatings synergies savings in 2023 • $5m of continuous improvement, procurement, cost management • $20m Fit for the Future organisational restructuring ― Portugal R&D/support centre on track Additional ― Finan
Slide 26: Cash flow
Cash flow Strong second half working capital performance $m 2022 2023 EBITDA 142 146 Change in working capital (43) 2 Working capital inflow $49m in H2 Capital expenditure (33) (38) 2023, reflecting normal seasonality Operating Cash Flow 66 110 and improved inventory levels Pensions (1) (3) Interest
Slide 27: Material improvement in financial leverage
Material improvement in financial leverage Net debt to EBITDA evolution ($m)1 2021 2022 2023 (202) (367) (401) Unique chemistry, sustainable solutions LEVERAGE 2.6x 2.2x 1.4x Note: 1. Excluding finance leases on a pre IFRS 16 basis. Introduction Segmental Group Strategic Unique chemistry, sustainabl
Slide 28: Disciplined capital allocation
Disciplined capital allocation Priorities for sustainable growth and shareholder returns Organic growth Capex c.$40m p.a. focusing on growth and productivity Progressive dividend Dividend reinstated - 2023 final dividend of 2.1 cents Additional returns Potential for additional shareholder returns Un
Slide 29: Return on capital employed
Return on capital employed Targeting >20%, driven by capital discipline and earnings growth Disciplined capital allocation Improving return on capital employed >20% Future focus 15% Goodwill 14% No material M&A 13% Working capital Optimisation Fixed assets1 Capex broadly in line with depreciation Un
Slide 30: Strategic priorities and outlook
Unique chemistry, sustainable solutions Strategic priorities and outlook Paul Waterman 30
Slide 31: 2026 financial targets
2026 financial targets 2023 2026 Adjusted operating profit margin 15% 19%+ Operating cash conversion1 77% >90% Return on capital employed2 15% >20% Unique chemistry, sustainable solutions (excluding goodwill) Notes: 1. Operating cash conversion is calculated as a three-year average. Annual cash conv
Slide 32: $90m above market revenue growth
$90m above market revenue growth Growth platforms Opportunity Progress and actions Skincare Natural solutions to replace synthetic ingredients 9 15+ $45m Colour cosmetics Skinification, individualisation, speed-to-market joint new products new Personal Care development launched by business1 Antipers
Slide 33: Efficiency: $30m cost savings by 2025
Efficiency: $30m cost savings by 2025 Fit for the future organisational restructuring $20m $7m in 2024 $13m in 2025 annual savings Global Supply Chain and Procurement programmes $10m $5m in 2024 $5m in 2025 Unique chemistry, sustainable solutions annual savings Introduction Segmental Group Strategic
Slide 34: Outlook
Outlook Good start to the Growth underpinned Continued self-help Efficiency Focused on year, demand by $360m of NBO - pricing actions to programme on CMD objectives environment pipeline and 15 new defend margins track, $12m of cost delivery remains uncertain products in 2024 savings in 2024 Unique c
Slide 35: Q&A
Unique chemistry, sustainable solutions Q&A 35
Slide 36: Appendices
Appendices Business model and differentiators FY 2023 technical guidance Adjusting items Net debt: IFRS 16 reconciliation Unique chemistry, sustainable solutions Unique chemistry, sustainable solutions 36
Slide 37: Business model and differentiators
Business model and differentiators Business model Differentiators • Two focused businesses • Integrated model • Customer centric and Formulation expertise Rheology Hectorite innovation focus Holistic optimisation of Critical to end product Natural white clay formulation to achieve performance - make
Slide 38: Tax charge and 2024 technical guidance
Tax charge and 2024 technical guidance Tax charge 2024 technical guidance $m 2022 2023 P&L items • Depreciation of c.$40-45m (of which c.$5.0m is Adjusted tax charge 16.1 19.9 IFRS 16 related) • Amortisation of c.$15m (of which majority is amortisation of acquired intangibles) Tax charge: adjusting
Slide 39: Adjusting items
Adjusting items $m Expense/(Income) 2022 2023 Amortisation of intangibles arising on 15 13 acquisition 2023 cash component of adjusting items of c.$6m (2022: $5m) Environmental provisions (4) 6 Business transformation/other 5 26 Environmental provisions increase offset by discount rates Impairment (
Slide 40: Net debt IFRS reconciliation
Net debt IFRS 16 reconciliation 2023 Pre-IFRS 16 Basis Post-IFRS 16 Basis Bank loans and overdraft (268) (268) Lease liabilities - (36) Cash and cash equivalents 66 66 Net Debt (202) (238) Adjusted operating profit on total operations 104 104 Add: Depreciation and amortisation on total operations 56