Slide 1: Elementis plc Interim Results
Elementis plc Interim Results Six months ended 30 June 2013
Slide 2: Interim Results
Interim Results $ millions 2013 2012* Revenue 388.2 401.3 Operating profit 72.8 80.7 Operating margin 18.8% 20.1% Profit before tax 67.5 75.1 Diluted EPS 11.3c 11.5c Net (debt)/cash (8.5) 29.9 Basic EPS 11.5c 11.7c *Restated for revised IAS 19 2
Slide 3: Highlights
Highlights Specialty Products • Sales improved by 5% in challenging markets • Continuing investment in growth Chromium • Impacted by planned Q1 maintenance shutdown • Q2 results in line with strategy Strong cash flow • Operating cash flow up 8% • Expect balance sheet net cash position by year end 3
Slide 4: Chromium
Chromium $ millions H1 2013 H1 2012 Sales 103.4 125.8 Operating profit 25.3 33.4 Operating margin 24.5% 26.6% Selling prices lower by 6% in line with lower raw material and energy costs Volumes lower by 13%, impacted by planned maintenance shutdown General market trends • Robust demand from auto cus
Slide 5: Chromium
Chromium Operating Margin Sales Volumes 30% Maintenance shutdowns 28% 3 YR Qtrly Average 26% 24% 22% 20% 18% 16% 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2012 Q4 2013 Q1 2013 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 • Short term margin impact during • Planned Q1 shutdown caused maintenance shutdown
Slide 6: Chromium – Stable Earnings and Cash Flow
Chromium – Stable Earnings and Cash Flow H1 2013 Sales Markets Geography • Diverse markets Leather ROW • Globally cost competitive Other 7% 7% operating model 14% Timber Catalysts. 5% Treatment 14% Asia Pacific • Highly valued North 20% American supply chain Pigments/ N America Ceramics 15% 59% • Wo
Slide 7: Surfactants
Surfactants $ millions H1 2013 H1 2012 Sales 33.8 36.9 Operating profit 2.9 2.4 Operating margin 8.6% 6.5% • Surfactant volumes reduced and Sales volume Margin 25 9% margins improved as product mix and pricing is optimised 20 8% • Successfully transitioning Delden facilty 15 7% to higher value coati
Slide 8: Specialty Products
Specialty Products $ millions H1 2013 H1 2012 Sales 257.7 246.6 Operating profit 51.6 52.0 Operating margin 20.0% 21.1% Sales up 5% • Personal Care up 23% • Asia Pacific coatings up 7% • Rebound in oilfield – Q2 sales up 4% Continuing investment in growth • US and Brazil acquisitions • US Acrylic th
Slide 9: Specialty Products – Building a Global Coatings Powerhouse
Specialty Products – Building a Global Coatings Powerhouse Innovation Watercryl (acquired Sept 2012) • 75% of new products IP protected • Integration activities well under way including: NA Acrylic thickener facility • Commercial resources added • Phase 1 of construction completed • Latin America di
Slide 10: Oilfield Drilling
Oilfield Drilling Sales $m • Strong rebound in sales from second 50 half of 2012 H1 H2 • Excess inventory levels consumed • Drilling returned to more normal levels • Deep water drilling in the Gulf of Mexico resumed • Innovative systems approach driving 25 growth • Hi-Mar defoamers proving to be a v
Slide 11: Specialty Products – Personal Care
Specialty Products – Personal Care Geographic expansion • Added resources in Latin America and Asia Pacific • Progress in South Korea and Japan Leveraging unique Delden manufacturing technologies • LanAquaSol range of high-spec lanolin products Transferring coatings know how and technology Paris cos
Slide 12: Interim Results
Interim Results $ millions 2013 2012* Revenue 388.2 401.3 Operating profit 72.8 80.7 Operating margin 18.8% 20.1% Profit before tax 67.5 75.1 Diluted EPS 11.3c 11.5c Net (debt)/cash (8.5) 29.9 Basic EPS 11.5c 11.7c *Restated for revised IAS 19 12
Slide 13: Tax Charge
Tax Charge $ millions H1 2013 H1 2012* Underlying tax charge 14.1 21.0 Deferred tax adjustment 1.2 1.5 Net tax charge 15.3 22.5 Tax rate 22.7% 30.0% Cash tax rate 11.7% 8.3% H1 includes deferred tax adjustment due to reduction in UK corporate tax rate Overall rate for H1 2013 is therefore 22.7% Esti
Slide 14: Capital Spending
Capital Spending $ millions H1 2013 H1 2012 • New plant spending in Specialty Products – US New plants 5.8 3.8 oilfield and decorative US technical facility - 7.0 coatings Maintenance & productivity 2.9 2.8 • Additional spending in Total Specialty Products 8.7 13.6 Chromium due to maintenance shutdo
Slide 15: Retirement Plans
Retirement Plans $ millions H1 2013 H1 2012* FY 2012* FY 13 Est. Net deficit 93.5 112.8 137.4 Deficit contributions UK plan 9.2 9.5 20.3 20.5 US/other 1.8 2.0 7.6 5.5 11.0 11.5 27.9 26.0 Deficit lower due to positive investment returns and Group contributions UK contributions are in line with curren
Slide 16: Operating Cash Flow
Operating Cash Flow $ millions H1 2013 H1 2012 EBITDA 84.3 91.3 • Operating cash flow up 8% Working capital (20.2) (29.3) • Working capital outflows Capital expenditure (16.7) (18.1) lower due to trading patterns Other 1.2 1.3 in early part of 2012 and investment in chrome ore Operating cash flow 48
Slide 17: Cash Flow
Cash Flow $ millions H1 2013 H1 2012 Operating cash flow 48.6 45.2 Pensions (11.0) (11.5) Interest, tax, other (9.4) (8.3) Small net debt position will 28.2 25.4 reverse in second half of Free cash flow 2013 due to positive Dividend - Final (24.3) (21.1) working capital, timing of - Special (22.0) -
Slide 18: Dividend
Dividend 2013 Interim 2012 Interim Per share 2.57c 2.45c Interim dividend increased by 5% Dividend policy remains unchanged • Full year ordinary dividend of approximately one third of 2013 eps • Special dividend payment based on 50% of net cash position at end of 2013 18
Slide 19: Global Trends will Benefit Elementis
Global Trends will Benefit Elementis North America trend towards energy independence • Participation in drilling and pipeline activities • Formulating sophisticated coatings additives for infrastructure • Chromium benefiting from low cost energy Emerging economies • Benefiting from inherently higher
Slide 20: Summary
Summary Chromium – maintenance impacted Q1 volumes Specialty Products • Strong performance in AP coatings and personal care • Rebound in oilfield drilling • Investing in growth Strong cash flow generation – net cash by year end Outlook Progress in line with expectations 20
Slide 21: Thank you
ELEMENTIS A global specialty chemicals company Thank you etn