Elementis (ELM) Status update summary

Innovation strategy and performance

• Innovation is expected to drive ~1/3 of growth; innovation sales were 16% in 2025, with a 20% medium-term target.

• H1 2026 delivery: revenue growth 4.7%, adjusted operating margin 23.0%, cash conversion 95.1% and ROCE excluding goodwill 29.4%.

• Medium-term ambitions include mid-single-digit sustainable revenue growth and adjusted operating margin of 23%+.

• Hectorite-based revenue rose from 21% of sales in 2020 to 29% in 2025; Hectorite is positioned as a higher-margin, faster-growing asset.

Investment in innovation

• R&D spend to increase by $6m, from ~2% to 3% of sales; $15m planned lab capex during 2026–2028.

• AI-enabled innovation processes target 25% more output; idea validation shortened to under one month versus three months, with 80% of tasks eliminated or automated.

• More than 30 new ideas generated in 2026; over 40% of technology scientists hold PhDs, with hundreds of customer projects annually.

• Porto lab set as a global hub for Personal Care, Coatings and New Markets; Ascot lab expands Personal Care rheology and formulation capability; Shanghai lab capacity doubled.

Markets and pipeline opportunities

• Total addressable market cited at $9.5bn; markets include Personal Care, Coatings and New Markets, with stated CAGRs of 4%, 3% and 4–5%, respectively.

• Pipeline teams allocated 50% to Personal Care and Formulated Solutions, 30% to Coatings and 20% to New Markets development; sustainability built into each stage.

• New hectorite applications target $4bn in markets including plastics, Home Care and water treatment; geothermal energy opportunity cited at $30m, with a water-based drilling product launched.

• Portfolio extensions include a patent-pending sun-care film former with first orders received and an addressable market increase of $300m; pipeline also exceeds $30m for new natural and performance platforms.

• Greater formulation share targets easier-to-use blends; Bentone Luxe XO seeks to expand accessible formulation share from 1% to 10%, with 10 new concepts in progress.