Elementis (ELM) H1 2025 earnings summary

Executive summary

• Delivered strong H1 2025 financial performance despite soft demand, with adjusted operating profit up 6–7% to $65m and margins improving to 21–21.2%, keeping full-year expectations on track.

• Completed the sale of the Talc business, streamlining the portfolio, accelerating CMD targets a year ahead, and enabling a $50m share buyback.

• Launched the Elevate Elementis strategy, focusing on specialty additives, sustainable growth, and new medium-term financial targets.

• Early delivery of 2026 CMD financial targets, including margin and cash conversion improvements.

• Net debt reduced by 36% to $125m, with net debt/EBITDA at 0.9x and a strong balance sheet.

Financial highlights

• H1 2025 revenue was $308m, down 1–2% year-over-year on a constant currency basis; adjusted operating profit rose 6–7% to $65m.

• Adjusted operating margin improved to 21–21.2%, up 160 bps year-over-year.

• Adjusted EPS increased 19% to 6.8 cents; interim dividend declared at 1.3 cents per share, up 18%.

• Free cash flow for H1 2025 was $16m, with $53m–$55m proceeds from the Talc disposal.

• Adjusted EBITDA for the last 12 months reached $145.3m; contribution margin improved to 52.8%.

Outlook and guidance

• On track to deliver full-year expectations, with resilient performance expected in coatings and continued growth in personal care.

• Full-year adjusted operating profit expected to be in line with market consensus ($126m, range $122–129m).

• Medium-term targets: mid-single-digit revenue growth, adjusted operating margin above 23%, cash conversion over 90%, and ROCE above 30%.

• Additional $10m in cost savings identified for the remainder of this year and next; on track to deliver $12m savings in 2025.

• 2025 guidance includes adjusted effective tax rate of ~26%, net finance costs of ~$25m, and capex at 3% of sales.