Slide 1: Continued strategic and operational progress
Continued strategic and operational progress Synthomer plc | 2024 interim results Tuesday 13 August 2024 Synthomer plc 2024 interim results 1
Slide 2: Important notice
Important notice This presentation is being provided to you in good faith and solely contained therein have been obtained from sources believed to profit forecast or estimate for any period. Recipients of these for your information purposes, speaking as of the date hereof, be reliable, but that ther
Slide 3: Agenda
AGENDA 01 Overview – Michael Willome 02 Financial review – Lily Liu 03 Strategic progress – Michael Willome 04 Outlook and summary – Michael Willome 05 Q&A Synthomer plc 2024 interim results 3
Slide 4: Continued strategic and operational progress
Continued strategic and operational progress H1 trading in line and no change in outlook Speciality strategy progressing well • Revenue, earnings and underlying EPS progress • China Innovation Centre and other disciplined organic growth investments • Activity levels incrementally improving • Compoun
Slide 5: Agenda
AGENDA 01 Overview – Michael Willome 02 Financial review – Lily Liu 03 Strategic progress – Michael Willome 04 Outlook and summary – Michael Willome 05 Q&A Synthomer plc 2024 interim results 5
Slide 6: Group financial summary
Group financial summary H1 trading in line with expectations, with revenue and underlying EPS progression • Revenue +3.5% to £1,051.1m Underlying Continuing business – Group volume +10.7%, mainly AS and H&P recovery from historic lows H1 % H1 % – Partially offset by pass-through of lower raw materia
Slide 7: Coatings & Construction Solutions (CCS)
Coatings & Construction Solutions (CCS) Stable markets and some operating leverage for our most speciality-focused division • H1 divisional trading Underlying – Revenue (2.1)%; higher volume from tactical restocking and coatings H1 % H1 % market share gains, offset by raw material pricing pass-throu
Slide 8: Adhesive Solutions (AS)
Adhesive Solutions (AS) Performance improvement programme enables regaining of some lost market share • H1 divisional trading Underlying – Revenue +2.2%, with volume improvement driven by tactical H1 % H1 % restocking and regaining market share £m H1 24 H1 23 change change CC – Speciality products (
Slide 9: Health & Protection and Performance Materials (HPPM)
Health & Protection and Performance Materials (HPPM) Signs of NBR market conditions improving from historically low levels • H1 divisional trading Underlying Continuing business* – Revenue +13.8%, reflecting +21.1% volume recovery from historically H1 % H1 % low levels, partially offset by pass-thro
Slide 10: Cash flow
Cash flow On track to be at least modestly positive Free Cash Flow in FY 24 • Self-help/cost savings Free cash flow and net debt – £13m of self-help benefits achieved in H1 24 £m H1 24 H2 23 H1 23 – Targeting £30-40m in annual cost benefits from procurement programme and Opening net debt (499.7) (79
Slide 11: Balance sheet and liquidity
Balance sheet and liquidity Debt maturities extended – increasingly robust foundations to deliver strategy • Bond refinancing Net debt (£m) – Tendered and cancelled €370m of 3.875% bonds due 2025; reduced gross Dec Jun Dec Jun debt and extended maturities by issuing €350m of 7.375% bonds due 2029 Ma
Slide 12: Agenda
AGENDA 01 Stronger foundations – Michael Willome 02 Financial review – Lily Liu 03 Strategic progress – Michael Willome 04 Outlook and summary – Michael Willome 05 Q&A Synthomer plc 2024 interim results 12
Slide 13: Synthomer's focus, strengthen, grow strategy
Synthomer’s focus, strengthen, grow strategy Becoming a more focused, more resilient, higher quality business Synthomer is a speciality solutions platform for Coatings & Construction, Adhesives and Health & Protection market segments 01 02 03 04 05 Organic growth in Rigorous and Operational and Diff
Slide 14: Strategic direction
Strategic direction Increasing our specialisation, global position and efficiency Synthomer 2022 Synthomer 2024 Future Synthomer Portfolio Increasing % revenue base Speciality Base Speciality Base Speciality Base speciality vs. speciality weighting ~50% ~50% ~55% ~45% ~70% ~30% Geography More balanc
Slide 15: Coatings & Construction Solutions
Coatings & Construction Solutions Delivering customer solutions through sustained alignment of people, capital and strategy Our strategic opportunity Strategic priorities: Leading positions with solutions to enhance energy • Further alignment with strategic end markets efficiency, waterproofing – Im
Slide 16: Adhesive Solutions
Adhesive Solutions Regaining market position supported by performance improvement plan Our strategic opportunity Evolving strategic priorities: Leading positions in EMEA and the Americas across all • Further improve cost competitiveness and reliability tackifier groups – Optimisation of supplier net
Slide 17: Health & Protection and Performance Materials
Health & Protection and Performance Materials Leveraging our strengths to optimise value creation Our strategic opportunity Strategic priorities: Market leader in £3bn NBR market – base chemicals • Strengthening overall cost competitiveness characteristics with high underlying structural growth – Mo
Slide 18: Operational excellence
Operational excellence Continuous improvement in how we run our business is a key pillar of the strategy SHE excellence Procurement Synthomer Excellence (SynEx) • Centrally-managed ‘business excellence’ function launched in Oct 2022 • 8 black / 60 green belts today • Target to increase trained popul
Slide 19: Driving innovation and sustainability
Driving innovation and sustainability Further progress in key initiatives underpinning future growth Continued focus on enhancing our innovation capability… • 5 global innovation centres of excellence including new centre in Shanghai (right) • 7 further regional technical centres • 380 R&D employees
Slide 20: Agenda
AGENDA 01 Overview – Michael Willome 02 Financial review – Lily Liu 03 Strategic progress – Michael Willome 04 Outlook and summary – Michael Willome 05 Q&A Synthomer plc 2024 interim results 20
Slide 21: Outlook reiterated
Outlook reiterated Current trading 2024 outlook • Cautiously encouraged that volumes • As previously indicated, expect some earnings progress (on a continuing Group continue to improve from historically low basis) and to be at least modestly Free Cash Flow positive in 2024, even absent levels broad-
Slide 22: Summary
Summary Continuing to deliver strategic and operational progress Ambition to more than double recent earnings over the medium term: • Trading in line, with revenue, earnings and EPS progression Near-term self-help actions • Activity levels incrementally improving, but no evidence of sustained + dema
Slide 23: Agenda
AGENDA 01 Overview – Michael Willome 02 Financial review – Lily Liu 03 Strategic progress – Michael Willome 04 Outlook and summary – Michael Willome 05 Q&A Synthomer plc 2024 interim results 23
Slide 24: Appendices
APPENDICES 01 Special items 02 Foreign exchange and pensions Synthomer plc 2024 interim results 24
Slide 25: H1 2024 special items
Appendix 1 H1 2024 special items Continuing operations • Amortisation of acquired intangibles reflects the amortisation on the £m H1 24 H2 23 H1 23 customer lists, patents, trademarks and trade secrets arising on Amortisation of acquired intangibles (22.8) (25.0) (24.3) acquisitions Restructuring an
Slide 26: Foreign exchange and pensions
Appendix 2 Foreign exchange and pensions FX translation exposure – EBITDA impact Pensions H1 24 translation • Net retirement obligation decreased by £14.0m to £50.7m at 30 June 2024, Currency Movement sensitivity primarily driven by cash contributions and actuarial gains EUR € 0.10 £3.9m • Closing b