Elementis (ELM) Investor Update summary

Strategic review, sale, and transaction overview

• Sold Talc business to IMI FABI for $121 million, with net cash proceeds of $55 million after costs and liabilities transfer.

• All assets, liabilities, and employees transferred to IMI FABI, including $40 million in rehabilitation and closure costs.

• Simultaneous signing and completion ensured a clean exit and eliminated interim risk.

• Strategic review began in August 2024, culminating in this sale as the best outcome for stakeholders.

• Rothschild & Co and Allen Overy Shearman Sterling LLP advised on the transaction.

Financial impact and capital allocation

• Adjusted operating profit margin rises by 240 basis points to 19.8%, and return on capital employed increases to over 20% (excluding goodwill).

• Pro-forma 2024 sales decrease from $738 million to $604 million, with net debt reduced from $157 million to $102 million and leverage ratio improving to 0.8x.

• Capital expenditure intensity drops from 5% to 3-4% of sales.

• $50 million share buyback program to be executed largely by year-end, funded by sale proceeds.

• Progressive dividend policy remains unchanged, supported by strong cash generation and a robust balance sheet.

Strategic repositioning and growth outlook

• Company now positioned as a pure-play specialty chemicals leader, focusing on high-margin Coatings and Personal Care markets.

• Accelerated delivery of 2026 targets: operating margin above 19%, return on capital over 20%, and operating cash conversion above 90%.

• Growth to be driven primarily by organic investment, with selective bolt-on technology acquisitions considered.

• Management emphasizes significant organic growth opportunities and a cautious approach to M&A.

• New CEO to communicate future strategic priorities and objectives.