Slide 1: Elementis plc Interim Results
Elementis plc Interim Results Six months ended 30 June 2015
Slide 2: Interim Results
Interim Results $ millions H1 2015 H1 2014 Revenue 360.4 400.0 Operating profit 68.6 76.8 Operating margin 19% 19% Profit before tax 65.3 72.4 Diluted EPS 11.2c 12.7c Net cash 16.1 5.0 Interim dividend 2.70c 2.70c Basic EPS 11.3c 12.8c 2
Slide 3: Highlights – Results in line with recent trading update
Highlights – Results in line with recent trading update Specialty Products Chromium • New North American additives facility Generating consistent operating expansion complete profit in line with strategy • North American decorative coatings sales up 8% • European coatings sales up 4%* Group operatin
Slide 4: Chromium: Resilient financial performance
Chromium $ millions H1 2015 H1 2014 Sales 91.9 103.2 Operating profit 27.0 27.7 Operating margin 29% 27% Resilient financial performance • Operating margin improved due to lower raw material costs and operating efficiencies • Volumes and mix impacted by completion of 2014 customer refractory project
Slide 5: Chromium – Strategic diversity in products and markets
Chromium – Strategic diversity in products and markets Group sales H1 2015 Major Markets Major Uses Market Drivers Pigments • Roof tiles, asphalt shingles, • Construction floor tiles • OEM and military coatings Industrial Refractory • Redbrick, flat glass and • Construction Coatings fibreglass kilns
Slide 6: Surfactants
Surfactants $ millions H1 2015 H1 2014 Sales 29.7 34.2 Operating profit 2.4 3.2 Operating margin 8% 9% Successfully transitioning Delden facility % Delden Sales for Specialty Products to higher value coatings additives 56 54 As a Euro based business, currency 52 reduced sales by $6.4m and operating
Slide 7: Specialty Products
Specialty Products $ millions H1 2015 H1 2014 Sales 244.1 268.5 Operating profit 44.8 52.6 Operating margin 18% 20% Currency reduced sales by $16.3m and operating profit by $3.4m Contribution margin improved - operating margin impacted by lower oilfield volumes and investments Sales • North American
Slide 8: Specialty Products – Platform for growth
Specialty Products – Platform for growth H1 2015 sales Markets Geography Oilfield ROW 9% 11% Personal North Care America 13% 30% Industrial Asia Pacific Coatings 31% Decorative 55% Coatings 23% Europe 28% 8
Slide 9: Investing for the future
Investing for the future New Martinsville, WV decorative additives facility Contribution Fixed costs 2013 2014 2015 2016 2017 Achieves positive operating profit in 2015 Customer orders significantly ahead of schedule Innovative technology validated by global majors 9
Slide 10: Asia Pacific investment
Asia Pacific investment Castor wax additives • Global castor wax market growing at 3% – 5% pa • High margin differentiated product • Complements our existing product portfolio and customer base • Represents the first step of our global castor wax manufacturing and growth strategy Hsinchu, Taiwan Fac
Slide 11: Innovation
Innovation New products as % of sales Utilisation of new assets 14% in North America and Asia 12% Target 12% Target 10% Majority of products protected by IP 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 11
Slide 12: Oilfield
Oilfield Significant drop in US crude oil rig count activity in 2015 Market share and Baker Hughes US Rig Count contribution margins stable Some indications that project activity is stabilising Broadening portfolio with innovative products Positioned to benefit from Source: Baker Hughes China shale
Slide 13: Personal Care
Personal Care H1 results impacted by competitive H1 sales* dynamics of Latin America currency $m weakness 35 17% growth Reviewing local manufacturing 30 23% growth options in Brazil 25 Investment in resources drove strong 20 growth in Asia Pacific 15 Innovation model continues 10 to expand product p
Slide 14: Interim Results
Interim Results $ millions H1 2015 H1 2014 Revenue 360.4 400.0 Operating profit 68.6 76.8 Operating margin 19% 19% Profit before tax 65.3 72.4 Diluted EPS 11.2c 12.7c Net cash 16.1 5.0 Interim dividend 2.70c 2.70c Basic EPS 11.3c 12.8c 14
Slide 15: H1 Currency
H1 Currency Currency impact on: $ millions Sales Operating profit % Specialty Products -16.3 -3.4 -6% Chromium 0.2 Surfactants -6.4 -0.6 -19% Central costs 1.7 Group -22.7 -2.1 -3% Currency impact on sales greater than on operating profit Group sales reduced by 6% and operating profit by 3% Operatin
Slide 16: Tax Charge
Tax Charge $ millions H1 2015 H1 2014 Tax charge 13.2 13.5 Tax rate 20.2% 18.7% Cash tax rate 13.5% 10.2% Tax rate increased due to recognition of UK tax assets in 2014 and geographic mix Estimated tax rate for full year 2015 is 20% - 22% Cash tax rate still relatively low, but increasing 16
Slide 17: Capital Spending
Capital Spending $ millions H1 2015 H1 2014 Specialty Products 7.1 10.1 Chromium 6.2 6.1 Other 2.7 1.5 Group total 16.0 17.7 Depreciation 13.4 12.5 Capex spend in Specialty Products lower due to completion of US decorative and China castor wax facilities Growth projects planned for H2 Full year cape
Slide 18: Retirement Plans
Retirement Plans Net deficit ($m) at 30 June $ millions H1 2015 H1 2014 Deficit contributions 112.8 UK plan 12.2 28.0 93.5 US/other 0.2 2.6 78.0 12.4 30.6 18.3 2012 2013 2014 2015 IAS 19 deficits continue to come down UK triennial valuation as of 30 Sept 2014 – lower deficit than anticipated Contrib
Slide 19: Cash Flow
Cash Flow $ millions H1 2015 H1 2014 EBITDA 82.0 89.3 Working capital (30.9) (25.9) Capital expenditure (16.0) (17.7) Pensions (12.4) (30.6) Dividends (58.7) (52.4) Other (12.1) (11.8) Net cash flow (48.1) (49.1) Net balance sheet cash 16.1 5.0 Net cash flow similar to previous year Net balance shee
Slide 20: Dividend
Dividend 2015 Interim 2014 Interim Per share 2.70c 2.70c Interim dividend maintained at 2.70c • H1 earnings below previous year Anticipate special dividend based on year end net cash position 20
Slide 21: Summary
Summary Chromium • Delivered earnings and cash flow in line with strategy Specialty Products • Macro issues impacted H1 performance • Confident that strategy will continue to deliver attractive margins and market share gains Cash generative business model • Anticipate year end net cash position 21
Slide 22: Thank you
ELEMENTIS Thank you eto