Elementis (ELM) H2 2024 earnings summary

Executive summary

• Achieved strong 2024 performance with revenue and earnings growth in coatings and personal care, driven by self-help actions, $18 million in annual cost savings, and innovation.

• Delivered $18 million in annual cost savings, exceeding expectations, and reduced net debt to $157 million, with a net debt-to-EBITDA ratio of 1.0x.

• Final dividend increased 38% year-over-year to $0.04 per share, with the board considering additional shareholder returns.

• Strategic review of the talc business is ongoing, with a $126 million impairment recorded and regulatory uncertainty persisting.

• Advanced sustainability initiatives, including science-based emission targets and achieving EcoVadis Gold rating for the fourth consecutive year.

Financial highlights

• Revenue increased 3% to $738 million, with adjusted operating profit up 24% to $129 million.

• Adjusted operating margin improved by 280 basis points to 17.4%.

• Adjusted EPS rose 23% to $0.133; net debt reduced by $45 million to $157 million.

• Operating cash conversion averaged 88%; free cash flow improved to $56 million.

• Return on capital employed (excluding goodwill) reached 23%.

Outlook and guidance

• 2025 outlook remains cautious with no expected improvement in demand; performance to be driven by self-help, new product launches, and efficiency gains.

• $12 million in additional efficiency savings targeted for 2025; confidence in achieving 2026 targets, including 19%+ operating margin and $75 million above-market revenue growth.

• 2025 technical guidance: depreciation $40-45 million, amortisation $15 million, net finance costs $24 million, capex ~$40 million, adjusted tax rate ~26%.