Synthomer (SYNT) investor relations material

Executive summary

• Delivered improved margins and robust trading in 2025 despite lower end-market demand and global tariff changes, supported by cost discipline, positive free cash flow, and strategic focus on specialty products and portfolio simplification.

• Refinanced bank facilities, extending maturities to 2029 and resetting covenants, ensuring financial stability.

• Divestment program broadened, with William Blythe divested and four additional processes underway to accelerate deleveraging and focus on core specialty businesses.

• Q1 2026 trading showed improving momentum, with robust volume and margin outlook for Q2 and upside risks to full-year expectations.

• Strategic transformation towards specialty chemicals continues, with operational leverage and resilience.

Financial highlights

• FY25 revenue for continuing business down 10.0% year-over-year to GBP 1.74 billion; volume down 7.2%.

• EBITDA reduced by 4.6% to GBP 136.5 million, but margin expanded by 40 bps to 7.8% due to cost efficiencies; gross margin up 200 bps.

• Underlying operating profit at GBP 37.6 million, down 21% year-over-year; underlying EPS fell to (37.2)p, mainly due to one-time tax adjustments.

• Net debt at GBP 575 million, GBP 22 million lower than FY 2024; leverage at 4.7x, within covenant.

• GBP 30 million in cost and self-help benefits delivered in FY25.

Outlook and guidance

• Expect robust improvement in volumes and margins in Q2 2026 and potentially beyond, with upside risks to current guidance.

• Full-year 2026 free cash flow expected to be broadly neutral after adjusting for one-time receivables unwind.

• CapEx for 2026 targeted at GBP 15–50 million below prior year, with continued focus on selective growth investments.

• Dividend remains suspended until leverage falls below 2.5x; medium-term target leverage is 1x–2x.

• Wage inflation and bonus accrual normalization expected to partially offset gains.