Synthomer (SYNT) investor relations material

Executive summary

• EBITDA grew 5.4% to £77.8m with margin up 110bps to 8.4%, despite an 8.8% revenue decline due to lower volumes and volatile demand from tariff changes.

• Strategic transformation advanced with divestment of William Blythe, further plant rationalisation, and a focus on specialty products and innovation.

• New £20–25m cost reduction programme launched, targeting £9m savings in H2 2025 and 250 position reductions.

• Net debt increased to £638.3m due to seasonal working capital, but liquidity remains strong with over £430m committed at period end.

• Outlook anticipates some earnings progress and broadly neutral free cash flow for 2025, with subdued demand expected to persist.

Financial highlights

• Revenue from continuing operations fell 8.8% year-over-year to £925.2m, mainly due to lower volumes and tariff-related demand volatility.

• EBITDA rose to £77.8m, margin up to 8.4% from 7.3% prior year.

• Underlying profit was £28.3m, flat year-over-year; underlying EPS loss of 3.6p (vs. 1.3p loss prior year).

• Net debt at 30 June 2025 was £638.3m (vs. £597m at year-end), leverage at 4.8x, within covenant.

• Free cash flow for H1 2025 was negative (£30.3m), but broadly neutral FCF expected for FY 2025.

Outlook and guidance

• Demand expected to remain subdued for the rest of 2025 due to trade tensions and geopolitical uncertainty.

• Further cost reduction programmes (£20–25m new, plus ongoing) to deliver savings in H2 and into 2026.

• CapEx to remain disciplined, with full-year spend slightly below prior year.

• Medium-term targets: mid-single-digit % revenue growth, EBITDA margin mid-teens, ROIC 15%+, leverage 1–2x net debt/EBITDA.

• Net financing costs guided at £60–65m for 2025; effective tax rate expected around 25%, but higher this year due to geographic mix and deferred tax adjustments.