TIDMELM
RNS Number : 3294H
Elementis PLC
27 July 2023
27 July 2023
ELEMENTIS plc
("Elementis" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2023
Resilient performance, results in line with expectations
-- Revenue down 6% (down 4% on an underlying basis*) to $364m,
with improved pricing and product mix partially offsetting lower
volumes.
-- Adjusted operating profit of $53m up against H2 2022 ($42m)
and down 10% (7% on an underlying basis*) against prior year period
($58m). Strong Personal Care and materially improved Talc
performance offset by weaker Coatings volumes.
-- Adjusted operating margin of 14.4% compared to 15.0% in the
prior year period as improved price/mix and proactive cost
management actions help to optimise performance.
-- Profit from continuing operations of $26m compared to $18m in
prior year period, with lower adjusting items(6) partially offset
by higher net interest costs and UK corporation tax.
-- Net debt of $255m down from $367m at the end of 2022 driven
by the successful disposal of Chromium. Net debt to EBITDA(5) down
from 2.2x (31 December 2022) to 2.0x, with further progress
expected at the year end.
Further strategic progress, well positioned for sustainable
growth and value creation
-- Completion of Chromium disposal for $170m with $139m of
proceeds - Elementis now a less cyclical, higher margin and lower
carbon intensive business.
-- New Performance Specialties business driving greater market
focus, enhanced growth opportunities and reduced costs - Talc
performance recovery on track with a combination of effective price
and cost management.
-- Delivered $25m of revenue from new business opportunities and
8 new product launches. On course for targeted $10m of annual cost
savings by the end of 2023.
-- Capital Markets Day on 14 November to update on continuing strategic progress.
Guidance unchanged - strength in a challenging demand
environment
-- Full year outlook unchanged, with the Group expected to
deliver an improved financial performance and reduction in
leverage, in line with expectations.
FINANCIAL SUMMARY
Six months Six months ended % Change Reported
ended 30 June 30 June 2022
2023
Revenue $364m $387m -6%
Profit for the period $26m $18m +44%
Basic earnings per share(2) 4.4c 3.1c +42%
Adjusted operating profit(1) $53m $58m -10%
Adjusted profit before tax(1) $45m $46m -3%
Adjusted diluted earnings
per share(2) 5.6c 6.1c -8%
Adjusted operating cash flow(3) $13m $13m +1%
Net debt(4) $255m $393m -35%
Ordinary dividend per share - - -
Commenting on the results, CEO, Paul Waterman said:
"The Group has performed well in a weak demand environment,
reflecting the strength of its business model and the benefits of
proactive self-help actions. Personal Care had a strong first half,
gaining from innovative new product launches and new business
success. Performance Specialties demonstrated its resilience as our
new streamlined operating structure enabled a material Talc
performance recovery and improved focus on higher value added
products in attractive growth markets. Whilst we are mindful of
continued macro-economic risks, the Group is well positioned to
manage these impacts and deliver against full year
expectations".
Notes:
* Adjusted for constant currency. See Finance Report.
1 - See note 5
2 - See note 9
3 - See Finance Report
4 - See note 12
5 - See unaudited pro forma information
6 - As detailed in note 5
Further information
A virtual presentation for investors and analysts will be held
at 09:00 BST on 27 July 2023. The presentation will be webcast on
www.elementis.com and a copy of this Interim Results announcement
can also be found on this website. Conference call dial in
details:
UK: 020 3936 2999 Other locations: +44 20 3936 2999
Participant access code: 779728
Enquiries
Elementis
James Curran, Investor Relations 07342 999 067
Teneo
Martin Robinson 020 7353 4200
Olivia Peters
-S -
Business review
CEO's report
Following the successful sale of Chromium in the first quarter
and the creation of our Performance Specialties segment, Elementis
is a more focused specialty chemicals business that brings a
distinctive combination of expertise, innovation and teamwork to
every formulation challenge. We create high-value specialty
additives that enhance the performance of our customers' products
and make a positive change in the world; unique chemistry,
sustainable solutions.
In the first six months of the year the Group delivered a
resilient financial performance despite weak demand conditions and
customer destocking in several key markets. This is testament to
the attractiveness of our business model and the ongoing
effectiveness of our proactive pricing and cost management.
Personal Care (now 44% of Group profit) performed well with strong
revenue and earnings growth, while Performance Specialties
displayed encouraging resilience as materially improved Talc
earnings partially offset weaker Coatings volumes. The Group's
performance, combined with continued strategic momentum as part of
our Innovation, Growth and Efficiency agenda, has put us in a good
position to deliver on expectations for 2023, and make further
progress towards our medium-term performance objectives. The next
update on our continuing strategic progress will be at our Capital
Markets Day on 14 November 2023.
Group performance
Following the disposal of the Chromium business in January 2023
all prior year Group figures have been restated to exclude Chromium
and allocate the $7m of annual stranded costs to the Personal Care
and Performance Specialties segments.
In the six months to 30 June 2023, revenue declined 4% on an
underlying basis* (down 6% on a reported basis) to $364m as pricing
and mix improvements partially offset weaker volumes in Performance
Specialties. Adjusted operating profit declined 10% on a reported
basis to $53m, with lower revenues partially offset by proactive
cost management across the organisation. As a result, continuing
margins declined from 15.0% to 14.4%. Reported operating profit
increased from $27m to $44m due to a $22m reduction in adjusting
items.
Personal Care
In the six months to 30 June 2023, Personal Care revenue
increased 7% on an underlying basis* to $112m (up 6% on a reported
basis) driven by improved price/mix and continued strategic
progress.
Sales into colour cosmetics applications was an area of
strength, up 16% on the prior year period driven by new product
launches such as Bentone(R) Plus Glow. Asia and skin care, two
strategic focus areas for the business also showed continued
positive momentum. Sales in Asia grew 5%, with notable progress in
Japan and South Korea as recent investments in sales and marketing
resources and new products more than offset a slow start to the
year in China. In skin care, our sales grew 7% against a strong
prior year comparative as recent new product launches such as
Bentone(TM) Luxe XO continued to gain traction with customers.
Adjusted operating profit for Personal Care increased 16% on an
underlying* basis (14% on a reported basis) to $27m, representing
an adjusted operating margin of 24.5% versus 22.7% in the prior
year period.
Performance Specialties
At the end of 2022, following the sale of Chromium, we
streamlined our business by combining the Talc and Coatings
segments into one operating division, Performance Specialties. This
step has enabled a stronger end market focus on growth
opportunities. We will continue to report Talc performance for
transparency.
In the period, Performance Specialties revenue declined 9% on an
underlying basis* to $252m (down 11% on a reported basis) with
volume weakness across both Coatings and Talc partially offset by
pricing benefits and improved mix. Adjusted operating profit
declined 21% on an underlying basis* (23% on a reported basis) to
$34m with a strong Talc performance recovery partially offsetting
the volume led decline in Coatings.
Coatings
In Coatings, revenue declined 12% on an underlying basis* (down
14% on a reported basis) against a very strong prior year
comparative to $181m. All regions experienced weaker performance as
a result of lower end market demand and significant destocking
throughout the value chain. In the Americas and EMEA sales declined
18% and 15% respectively due to weaker performance in both
decorative and industrial markets linked to lower manufacturing,
construction and residential activity, along with customer
destocking. In Asia, where approximately 80% of our sales are
linked to industrial end markets, revenue declined 13% due to weak
manufacturing activity in China post the lifting of COVID-19
related restrictions.
Adjusted operating profit declined 38% on an underlying basis*
(40% on a reported basis) from $42m to $25m with improved price/mix
offset by materially weaker volumes across all key end markets and
geographies. As a result, adjusted operating profit margins
decreased from a record high of 20.2% in the prior year period to
14.0%.
Talc
In Talc, revenue decreased 2% on a reported basis (flat on an
underlying basis*) from $73m to $71m with the benefit from price
actions, implemented in late 2022, and improved mix offsetting
weaker year on year volumes.
Revenue from industrial talc (representing over 85% of total
Talc revenue) was modestly down on an underlying basis* against the
prior year period, with successful price increases in response to
variable cost inflation offset by volume declines. While volumes
sequentially improved from the last quarter of the previous year,
they declined across all key end markets versus the prior year
period linked to weak manufacturing activity and customer
destocking. Sales to paper customers, which represent only 8% of
total Talc revenue, rose strongly against a prior year period that
was impacted by strike action at our main customers production
plant.
Adjusted operating profit increased materially from $3m to $9m,
with margins rising from 4% to 13%. The delivery of cost synergies
linked to the creation of the Performance Specialties business,
variable cost decreases and the benefits of pricing actions all
contributed to the performance improvement.
Balance sheet
At 30 June 2023 net debt was $255m compared to $367m at the end
of 2022, with weaker earnings and working capital outflows, in line
with our typical seasonality, offset by $139m of proceeds received
from the disposal of the Chromium business in Q1 2023. Leverage at
the end of the period was 2.0x net debt to adjusted EBITDA** (2.2x
at 31 December 2022). Further progress on debt and leverage
reduction is expected in the second half, driven by improved
underlying cashflow generation, in line with typical
seasonality.
Interim dividend
The Board recognises the importance of a dividend to our
shareholders. Given the continued macroeconomic uncertainty and the
desire to further reduce leverage, the Board has decided it is
prudent not to declare an interim dividend for 2023. The Board will
keep future dividends under review and will restart payments as
soon as it is appropriate to do so.
Strategic progress - Innovation, Growth & Efficiency
In recent years, we have made significant progress positioning
Elementis as a premium performance additives company, based on
unique assets, value chains, and with clear opportunities for
growth. Our strategic pillars of Innovation, Growth and Efficiency
are designed to leverage this differentiated portfolio and the
execution of our strategic priorities will deliver our medium term
performance objectives of:
- 17% adjusted operating profit margin: driven by Innovation, Growth and Efficiency
- 90%+ adjusted operating cash conversion: consistent with 5
year average historical performance
- Leverage under 1.5x net debt / EBITDA: consistent with debt reduction track record
Innovation
Innovation is a key pillar for the growth of Elementis. We are
recognised as a global leader in developing performance driven
additives that address unmet consumer and market needs. We continue
to focus on creating solutions for our customers that deliver
product performance improvements and efficiency gains, while always
focusing on how sustainability can be improved for our customers.
We leverage our strong customer relationships with industry
technology leaders and strive to become the innovation partner of
choice.
At present, 72% of our revenue is from products that are natural
or naturally derived . While this is a strong proportion, we are
focused on improving this further. In the first half of the year we
launched 8 new products, including two exciting new Personal Care
products. Bentone Hydroclay(TM) 700 is a 100% natural combination
of high purity hectorite clay and xanthan gum that allows the
creation of silky smooth and light skin products. Responding to the
up-and-coming "skin glow" trend, Bentone(R) Plus Glow is a new
hectorite gel technology that combines hectorite clay with
naturally derived active ingredients to combat signs of dull and
flaky skin. Customer feedback on both these products has been
extremely positive as they deliver excellent performance, reduce
product development times, increase the speed to market for fast
and agile brands, and are natural.
Growth
New products and new business will drive future growth. While
near term growth is challenged by macroeconomic headwinds and
customer destocking, we see long-term sustainable growth across all
of our Personal Care and Performance Specialties markets, with
attractive incremental revenue opportunities.
In Personal Care, Asia represents under 15% of our sales and the
medium term aim is to double our cosmetics sales in the region.
Despite headwinds in China, we achieved good growth in the first
half, benefiting from recent product launches (for instance our
JSQI gels) and investments in local sales and marketing resources.
Today our Asia business is nearly twice the size it was three years
ago, and with significant runway for further progress. In skin
care, which represents approximately $20m of annual sales, we
continue to make good progress leveraging the unique benefits of
hectorite clay into a new market and have already delivered on our
medium term ambition to add $10m of high margin sales since
2019.
In Performance Specialties, our high margin growth platforms in
Coatings have a track record of success, increasing from
approximately 30% of total revenue in 2019 to just under 40% today.
While near term growth has been challenged we remain well
positioned for further success. In the first half we expanded our
NiSAT series for premium decorative paints with Rheolate(R) PHX
7025. This product offers market leading performance attributes in
a 100% active powdered format that requires no biocides,
emulsifiers or surfactants, resulting in a volatile organic
compound free product with significantly lower transportation
emissions. Furthermore, the launch of Dapro(R) Bio 9910, a new 96%
bio based defoamer product, extends our waterborne industrial
additives portfolio and enhances the sustainability credentials of
our technology solutions.
Efficiency
In recent years our supply chain organisation has faced multiple
efficiency challenges including materials shortages and rapid cost
inflation. The start of this year has been characterised by low
demand. Again we have responded proactively, this time with
particular focus on costs. Hiring and travel spend has been
limited, and operations optimised to match the low demand
environment, including reduced production runs and optimised
maintenance plans. These activities have helped our first half
performance.
Our new AP Actives plant in India will create a cost advantaged
and resilient supply chain, generate material savings in 2024 and
being a closed water production facility, significantly lower our
environmental impact. Our global process engineers have delivered
continuous improvement gains from areas such as debottlenecked
spray drying capacity in Newberry, California and insourced raw
materials at our operations in Milwaukee. Combined with further
progress in procurement, leveraging our global scope and scale, we
achieved $3m of efficiency savings in the first half across these
two areas.
The macroeconomic environment in 2023 remains uncertain but we
are confident that through a mixture of targeted innovation, agile
supply chain management and continued efficiency focus, we can
defend and improve margins over time.
Outlook
While global economic risks persist, the Group has again
demonstrated resilience and the importance of its self-help agenda.
We will continue to maintain our focus on Innovation, Growth and
Efficiency and in 2023 expect to capture $50m of new business
opportunities, create 15 new products and deliver $10m of
additional efficiency savings.
For the rest of the year, we are confident that our first half
performance, combined with continued proactive cost management,
means we are well positioned to deliver an improved financial
performance in line with expectations and a further reduction in
leverage.
Notes:
Where we refer to adjusted performance measures (e.g. adjusted
operating profit), see Note 5
* Adjusted for FX (where constant currency reflects prior year
results translated at current year exchange rates). See Finance
Report for the constant currency impact at a business unit
level
** Excluding the impact of IFRS 16
Naturally derived products defined in accordance with IS0 16128
standard and explicitly excludes ingredients derived from fossil
fuels
Finance report
Effect
of Increase/
exchange (decrease)
Revenue 2022 rates 2023 2023
for the six months ended 30 June $m $m $m $m
---------------------------------- ----- ---------- ----------- -----
Coatings 209.3 (4.1) (24.2) 181.0
Talc 72.5 (1.4) (0.1) 71.0
Performance Specialties 281.8 (5.5) (24.3) 252.0
Personal Care 105.6 (1.2) 7.4 111.8
Revenue 387.4 (6.7) (16.9) 363.8
-------------------------------------- ----- ---------- ----------- -----
Effect
of Increase/
exchange (decrease)
Adjusted operating profit * 2022 rates 2023 2023
for the six months ended 30 June $m $m $m $m
---------------------------------- ------ ---------- ----------- -----
Coatings 42.2 (1.0) (15.8) 25.4
Talc 2.7 (0.1) 6.4 9.0
Performance Specialties 44.9 (1.1) (9.4) 34.4
Personal Care 24.0 (0.4) 3.8 27.4
Central Costs (10.7) - 1.4 (9.3)
Adjusted operating profit 58.2 (1.5) (4.2) 52.5
-------------------------------------- ------ ---------- ----------- -----
Note: All prior year numbers are restated to reflect the
allocation of Chromium stranded costs to the remaining business
units.
Adjusting 2023
Adjusted 2022 Adjusted
2023 Operating operating 2022 Operating Adjusting operating
Operating profit profit/(loss) items profit/(loss)(*) profit/(loss) items profit/(loss)*
for the six months ended
30 June $m $m $m $m $m $m
--------------------------- -------------- --------- ------------------ -------------- --------- ---------------
Coatings 24.9 0.5 25.4 41.0 1.2 42.2
Talc 6.3 2.7 9.0 ( 23.3) 26.0 2.7
Performance Specialties 31.2 3.2 34.4 17.7 27.2 44.9
Personal Care 23.1 4.3 27.4 19.8 4.2 24.0
Central Costs (10.5) 1.2 (9.3) (10.2) (0.5) (10.7)
--------------------------- -------------- --------- ------------------ -------------- --------- ---------------
Total operating profit 43.8 8.7 52.5 27.3 30.9 58.2
--------------------------- -------------- --------- ------------------ -------------- --------- ---------------
*See note 5
Group results
Group revenue for the first six months of 2023 was $363.8m
compared to $387.4m in the same period last year, a decrease of
$23.6m (6.1%). Excluding the impact of currency, Group revenue
declined by 4.4%, driven primarily by weak market demand and
customer destocking in Coatings, partially offset by strong
Personal Care.
Group adjusted operating profit was $52.5m compared to $58.2m in
the same period last year, a decrease of 9.8%, or 7.4% excluding
currency movements, representing an adjusted operating profit
margin of 14.4%, down from the prior year margin of 15.0%.
Operating profit increased from $27.3m in the prior year period to
$43.8m primarily driven by the impact of the adjusting items in
2022 (see Note 5 for further information).
Central costs
Central costs are costs that are not identifiable as expenses of
a particular business and comprise the global corporate offices in
the UK and US which include the Board of Directors, executive and
senior management. The decrease in the adjusted operating loss for
the first half of 2023 was primarily due to movements in adjusting
items, partially offset by underlying cost inflation.
Adjusting items
In addition to the statutory results, the Group uses alternative
performance measures, such as adjusted operating profit and
adjusted diluted earnings per share, to provide additional useful
analysis of the performance of the Group. The Board considers these
non-GAAP measures as an alternative way to measure the Group's
performance. Adjusting items in the 6 months ended June 2023
resulted in a charge of $10.2m before tax, a decrease of $13.0m
against the same period last year. The key categories of adjusting
items are summarised below. For more information on adjusting items
and the Group's policy for adjusting items, please see Note 5.
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Charge/(credit) $m $m $m
------------------------------------------------------- ----------- ----------- ------------
Adjusting items:
Business transformation 1.2 0.8 4.8
Environmental provisions 0.4 (0.5) (3.8)
Impairment of property, plant and equipment - 23.0 23.0
Impairment of goodwill - - 103.4
Amortisation of intangibles arising on acquisition 7.1 7.6 14.9
------------------------------------------------------- ----------- ----------- ------------
Total charge to operating profit 8.7 30.9 142.3
Mark to market of derivatives 1.5 (7.7) (6.6)
Tax credit in relation to adjusting items (2.6) (5.0) (8.3)
------------------------------------------------------- ----------- ----------- ------------
Total adjusting items 7.6 18.2 127.4
------------------------------------------------------- ----------- ----------- ------------
In the first half of 2023, $8.7m of charges to operating profit
were classified as adjusting items. Of these items, $7.1m relates
to the amortisation of intangibles arising on acquisitions.
Business transformation costs of $1.2m included costs incurred in
relation to the closure of the Charleston plant announced in
November 2020. A charge of $0.4m to the environmental provision is
comprised of a credit of $0.8m related to the impact of changes in
discount rates and a charge of $1.2m related to extra remediation
work identified.
The charge to finance costs of $1.5m represents movements in
mark to market valuation of financial instruments which are not in
hedging relationships.
An explanation of other adjusting items relating to the previous
period can be found within the Finance Report of the 2022 Annual
Report and Accounts.
Other expenses
Other expenses are administration costs incurred and paid by the
Group's pension schemes, which relate primarily to former employees
of legacy businesses and were $0.5m in the period compared to $0.6m
in the previous year.
Net finance costs
Net finance costs 2023 2022
for the six months ended 30 June $m $m
------------------------------------- ----- ------
Finance income 0.4 0.1
Finance cost of borrowings (7.5) (10.6)
------------------------------------- ----- ------
(7.1) (10.5)
Net pension finance income/(expense) - 0.3
Unwind of discount on provisions (0.5) (0.3)
Fair value movement on derivatives (0.1) 7.7
Interest on lease liabilities (0.7) (0.7)
------------------------------------- ----- ------
Net finance costs (8.4) (3.5)
------------------------------------- ----- ------
Net finance costs for the first six months of the year of $8.4m
were $4.9m higher than the same period last year. Within this
total, net interest costs were $3.4m lower at $7.1m due to a
reduced level of borrowings and an effective interest rate hedging
policy. Net pension finance costs were $nil in 2023 compared with a
$0.3m credit in 2022 due an higher discount rates. The unwind of
discount on provisions of $0.5m was $0.2m higher compared to 2022
as a result of higher discount rates. The interest on lease
liabilities in the period remained in line with the previous year.
The fair value movement on derivatives which are not in hedging
relationships was significantly lower than the prior year as a
result of foreign exchange fluctuations.
Tax
The Group reports an adjusted tax charge for the first half of
2023 of $11.8m (2022: $10.4m); giving rise to an adjusted effective
tax rate of 26.2% (2022: 22.4%). The adjusted effective tax rate is
higher than the prior year due the increase in UK corporation tax
rate from 19% to 25% effective from 1 April 2023.
Tax on adjusting items for the first half of 2023 amounts to a
credit of $2.6m (2022: credit of $5.0m); resulting in a total
statutory tax charge for the period of $9.2m (2022: $5.4m) and a
reported effective tax rate of 26.4% (2022: 23.3%).
For the full year 2023, we are currently forecasting an adjusted
effective tax rate of c.26%.
Earnings per share
Statutory basic earnings per share was 4.4 cents for the period
compared to basic earnings per share of 3.1 cents in the prior
period.
Basic adjusted and diluted adjusted earnings per share for the
first half of 2023, calculated on the adjusted earnings of $33.3m
(2022: $36.0m), was 5.7 cents and 5.6 cents compared to 6.2 cents
and 6.1 cents respectively for the same period last year.
Note 9 provides disclosure of earnings per share calculations
both including and excluding the effects of adjusting items and the
potential dilutive effects of outstanding and exercisable
options.
Adjusted cash flow
Cash flow is summarised below:
Adjusted cash flow 2023 2022
for the six months ended 30 June $m $m
----------------------------------------------------------- ------- -------
Profit before interest, tax, depreciation and amortisation
(Adjusted EBITDA)* 74.0 78.2
Change in working capital (46.2) (51.2)
Net capital expenditure (13.8) (15.1)
Other (1.1) 0.9
----------------------------------------------------------- ------- -------
Adjusted operating cash flow 12.9 12.8
Pension contribution net of current service cost (0.9) 0.4
Net interest paid (10.8) (11.1)
Tax (10.7) (9.1)
Adjusting items (0.9) (1.1)
Other (including payment of lease liabilities) (1.2) (3.7)
----------------------------------------------------------- ------- -------
Free cash flow (11.6) (11.8)
Acquisitions and disposals 139 .2 -
Discontinued operations (12.0) 6.0
Currency fluctuations (4.3) 13.4
----------------------------------------------------------- ------- -------
Decrease/(increase) in net debt 111.3 7.6
Net debt at start of period (366.8) (401.0)
----------------------------------------------------------- ------- -------
Net debt as at end of period (255.5) (393.4)
----------------------------------------------------------- ------- -------
* See alternative performance measures on page 30
Net debt as at 30 June 2023 of $255.5m is significantly down on
the 2022 year end position of $366.8m due to the disposal of the
Chromium business. Adjusted operating cash flow in the period of
$12.9m was slightly higher than the comparative 2022 period of
$12.8m, with lower net working capital outflow and lower net
capital expenditure partially offset by lower earnings.
Net capital expenditure in the period was $13.8m, $1.3m lower
than the previous year. Capital spending for the whole year is
expected to be c.$40m.
There were $1.3m of pension payments to the UK pension scheme in
the period (2022: nil). The next triennial review to set any future
contribution levels is due in September 2023.
Net tax payments in the period of $10.7m were slightly higher
than the prior period due to the phasing of tax instalment
payments.
Dividend payments were nil in the first six months of 2023
(2022: nil). The Board recognises the importance of a dividend to
our shareholders. However, given the continued macroeconomic
uncertainty and the desire to further reduce leverage, the Board
has decided it is prudent not to declare an interim dividend for
2023. The Board will keep future dividends under review and will
restart payments as soon as it is appropriate to do so.
Overall the Group had a net debt position at 30 June 2023 of
$255.5m, representing a net debt/EBITDA ratio of 2.0x on a pre-IFRS
16 basis (2.2x at December 2022). Further reduction in leverage is
expected by the year end, driven by improved trailing months
earnings and robust cash conversion.
Working capital
30 June 30 June 31 December
Working capital days 2023 2022 2022
------------------------------------- ------- ------- -----------
Inventory 128 116 129
Debtors 44 43 37
Creditors 60 72 82
Average working capital to sales (%) 25.3 19.4 22.5
------------------------------------- ------- ------- -----------
Total working capital for the Group of $192.2m was $50.7m higher
than at 31 December 2022, driven by increased debtors and lower
creditors. As a result, debtors days increased from 37 days (31
December 2022) to 44 days and creditor days decreased from 82 days
(31 December 2022) to 60 days. Inventory days have remained
reasonably stable and we are looking to reduce absolute inventory
levels in the second half.
Balance sheet
30 June 30 June
31 December
2023 2022 2022
$m $m $m
------------------------------ ------- ------- -----------
Property, plant and equipment 385.3 452.6 386.4
Other net assets 708.9 830.2 764.3
Net debt (255.5) (393.4) (366.8)
------------------------------ ------- ------- -----------
Equity 838.7 899.4 783.9
------------------------------ ------- ------- -----------
Property, plant and equipment decreased by $1.1m compared to the
value at 31 December 2022, primarily as a result of depreciation of
$18.2m for the 6 months offset by net capital expenditure of $13.4m
and currency translation. Other net assets decreased by $55.4m
primarily as a result of the disposal of the Chromium business
which was completed on 31 January 2023.
Equity increased by $54.8m compared to 31 December 2022,
primarily as a result of the statutory profit in the period of
$27.5m, net of $9.3m from the impact of the disposal of the impact
of the disposal of the Chromium business, foreign exchange gains of
$8.4m and gains from impact of accounting for cash flow hedges of
$7.8m. The remainder of the movement relates primarily to share
based payment provisions and actuarial losses on pensions, net of
the deferred tax impact.
The main dollar currency exchange rates as at 30 June 2023 and
average rates in the period were:
2023 2023 2022 2022
30 June Average 30 June Average
--------- --------- --------- --------- ---------
Sterling 0.79 0.82 0.82 0.77
Euro 0.92 0.93 0.96 0.91
--------- --------- --------- --------- ---------
Pensions and post retirement plans
UK US Other Total
$m $m $m $m
---------------------------------------------- ----- ----- ----- -----
Movement in net deficit
Net surplus/(deficit) in schemes at 1 January
2023 26.4 (3.5) (5.4) 17.5
Current service cost - (0.3) (0.2) (0.5)
Contributions 1.3 0.7 (0.1) 1.9
Administration costs (0.4) (0.1) - (0.5)
Net interest expense 0.7 (0.5) (0.2) -
Actuarial gain/(loss) (4.5) 3.6 (0.2) (1.1)
Currency translation difference 1.3 - 0.3 1.6
Net surplus/(deficit) in schemes at 30
June 2023 24.8 (0.1) (5.8) 18.9
---------------------------------------------- ----- ----- ----- -----
During the period the surplus, under IAS 19, on the Group's
pension and post-retirement medical plans increased by $1.4m to a
net surplus of $18.9m. During the first six months of 2023 the UK
scheme had an annualised loss on scheme assets of 5.1% (2022:
return of 35.8%), liabilities decreased by 5% (2022: decreased by
23%) and the net surplus decreased by $1.6m. This movement was
driven by actuarial changes due predominantly to an increase in the
discount rate which more than offset a decrease in scheme assets
over the period and the impact of higher inflation. Within the US
schemes the net deficit decreased by $3.4m mainly due to the net
return on plan assets. Contributions in the period totalled $0.7m
(2022: $0.5m), all to the US plans. There were net $1.3m pension
payments to the UK pension scheme in the period (2022: nil). The
next triennial review is due in September 2023.
Related party transactions
There were no material related party transactions entered into
during the first half of the year and there have been no material
changes to the related party transactions disclosed in the
Company's 2022 Annual Report and Accounts on
page 210.
Cautionary statement
The Elementis plc interim results announcement for the half year
ended 30 June 2023, which comprises the CEO's report, Finance
report and the Directors' responsibility statement (which taken
together constitute the Interim management report) and the interim
financial statements and accompanying notes (incorporating a
Condensed consolidated balance sheet at 30 June 2023, Condensed
consolidated income statement, Condensed consolidated statement of
comprehensive income, Condensed consolidated cash flow statement
and Condensed consolidated statement of changes in equity, each for
the six months ended 30 June 2023) (altogether 'Half-yearly
financial report'), contains information which viewers or readers
might consider to be forward looking statements relating to or in
respect of the financial condition, results, operations or
businesses of Elementis plc. Any such statements involve risk and
uncertainty because they relate to future events and circumstances.
There are many factors that could cause actual results or
developments to differ materially from those expressed or implied
by any such forward looking statements. Nothing in this Half-yearly
financial report should be construed as a profit forecast.
Directors' responsibility statement
A full list of the Directors can be found on the Elementis
corporate website at: www.elementis.com .
The Directors confirm that to the best of their knowledge:
-- The condensed set of financial statements set out in this
Half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the United
Kingdom.
-- The condensed set of consolidated financial statements, which
has been prepared in accordance with the applicable set of
accounting standards, gives a true and fair view of the assets,
liabilities, financial position and profit or loss of the issuer,
or the undertakings included in the consolidation as a whole as
required by DTR 4.2.4R; and
-- The interim management report contained in this Half-yearly
financial report includes a fair review of the information required
by:
- DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of the important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year.
- DTR 4.2.8R of the Transparency Rules, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the entity during that period;
and any changes in related party transactions described in the 2022
Annual Report and Accounts that could have a material effect on the
financial position or performance of the entity during the first
six months of the current financial year.
Approved by the Board on 26 July 2023 and signed on its behalf
by:
Paul Waterman Ralph Hewins
CEO CFO
26 July 2023 26 July 2023
INDEPENT REVIEW REPORT TO ELEMENTIS PLC
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2023 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cashflow statement, the condensed
consolidated statement of changes in equity, and related notes 1 to
17.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council for use in the
United Kingdom (ISRE (UK) 2410). A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with United Kingdom adopted
international financial reporting standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410, however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report. Our Conclusion, including our Conclusion Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
ISRE (UK) 2410. Our work has been undertaken so that we might state
to the company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed .
Deloitte LLP
Statutory Auditor
Cambridge, United Kingdom
26 July 2023
Condensed consolidated income statement
for the six months ended 30 June 2023
2023 2022(1) 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
Note (unaudited) (unaudited) (audited)
------------------------------------------------ ---- ------------ ------------ ------------
Revenue 4 363.8 387.4 736.4
Cost of sales (219.4) (224.5) (437.5)
------------------------------------------------ ---- ------------ ------------ ------------
Gross profit 144.4 162.9 298.9
Distribution costs (58.7) (64.0) (125.0)
Administrative expenses (41.9) (71.6) (215.7)
Operating profit/(loss) 4 43.8 27.3 (41.8)
Other expenses (0.5) (0.6) (1.3)
Finance income 6 1.8 7.8 9.9
Finance costs 7 (10.2) (11.3) (21.6)
------------------------------------------------ ---- ------------ ------------ ------------
Profit/(loss) before tax 4 34.9 23.2 (54.8)
Tax 8 (9.2) (5.4) (7.8)
------------------------------------------------ ---- ------------ ------------ ------------
Profit/(loss) from continuing operations 25.7 17.8 (62.6)
Profit from discontinued operations 1.8 3.0 11.5
------------------------------------------------ ---- ------------ ------------ ------------
Profit/(loss) for the period 27.5 20.8 (51.1)
------------------------------------------------ ---- ------------ ------------ ------------
Attributable to:
Equity holders of the parent 27.5 20.8 (51.1)
------------------------------------------------ ---- ------------ ------------ ------------
Earnings per share
From continuing operations
Basic earnings/(loss) (cents) 9 4.4 3.1 (10.7)
Diluted earnings/(loss) (cents) 9 4.3 3.0 (10.7)
------------------------------------------------ ---- ------------ ------------ ------------
From continuing and discontinued operations
Basic earnings/(loss) (cents) 9 4.7 3.6 (8.8)
Diluted earnings/(loss) (cents) 9 4.6 3.5 (8.8)
------------------------------------------------ ---- ------------ ------------ ------------
(1) 2022 has been represented following the classification of
the Chromium business as a discontinued operation, see Note 15 for
further details.
Condensed consolidated statement of comprehensive income for the
six months ended 30 June 2023
2023 2022(1) 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
(unaudited) (unaudited) (audited)
--------------------------------------------------------- ------------ ------------ ------------
Profit/(loss) for the period 27.5 20.8 (51.1)
--------------------------------------------------------- ------------ ------------ ------------
Other comprehensive income:
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of retirement benefit obligations (1.1) 9.8 (18.5)
Deferred tax associated with retirement benefit
obligations 0.4 (2.2) 5.3
Items relating to discontinued operations, net
of tax - - 0.3
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations (4.2) 0.3 (100.9)
Effective portion of change in fair value of net
investment hedge 12.6 (38.6) 46.2
Tax associated with change in fair value of net
investment hedge - - (2.8)
Tax associated with changes in cashflow hedges - - 0.8
Recycling of deferred foreign exchange losses
on disposal 9.3 - -
Effective portion of changes in fair value of
cash flow hedges 10.5 5.9 (2.6)
Fair value of cash flow hedges transferred to
income statement (2.7) 1.8 1.6
Exchange differences on translation of share options
reserves 0.3 (1.0) (0.9)
--------------------------------------------------------- ------------ ------------ ------------
Other comprehensive income/(loss), net of tax 25.1 (24.0) (71.5)
--------------------------------------------------------- ------------ ------------ ------------
Total comprehensive income/(loss) for the period 52.6 (3.2) (122.6)
--------------------------------------------------------- ------------ ------------ ------------
Attributable to:
Equity holders of the parent 52.6 (3.2) (122.6)
--------------------------------------------------------- ------------ ------------ ------------
Total comprehensive income/(loss) for the period 52.6 (3.2) (122.6)
--------------------------------------------------------- ------------ ------------ ------------
(1) 2022 has been represented following the classification of
the Chromium business as a discontinued operation, see Note 15 for
further details.
Condensed consolidated balance sheet
at 30 June 2023
2023 2022(1) 2022
30 June 30 June 31 December
$m $m $m
(unaudited) (unaudited) (audited)
---------------------------------------------------- ------------ ------------ -------------
Non-current assets
Goodwill and other intangible assets 655.1 785.2 660.2
Property, plant and equipment 385.3 452.6 386.4
Tax recoverable 18.4 17.7 17.5
Deferred tax assets 24.8 28.0 24.8
Net retirement benefit surplus 24.8 58.5 26.4
Derivative financial instruments 7.0 4.0 1.3
---------------------------------------------------- ------------ ------------ -------------
Total non-current assets 1,115.4 1,346.0 1,116.6
---------------------------------------------------- ------------ ------------ -------------
Current assets
Inventories 174.8 218.8 182.0
Trade and other receivables 121.2 152.0 94.9
Derivative financial instruments 6.9 7.0 10.7
Current tax asset - 7.1 7.0
Cash and cash equivalents 67.3 76.7 54.9
---------------------------------------------------- ------------ ------------ -------------
Total current assets 370.2 461.6 349.5
Assets classified as held for sale - - 160.9
---------------------------------------------------- ------------ ------------ -------------
Total assets 1,485.6 1,807.6 1,627.0
---------------------------------------------------- ------------ ------------ -------------
Current liabilities
Bank overdrafts and loans (1.0) (5.3) (2.7)
Trade and other payables (103.8) (168.6) (135.4)
Financial liabilities (0.6) (0.8) (3.3)
Current tax liabilities (17.6) (14.3) (20.2)
Lease liabilities (5.8) (6.8) (6.1)
Provisions (7.9) (7.9) (5.8)
---------------------------------------------------- ------------ ------------ -------------
Total current liabilities (136.7) (203.7) (173.5)
---------------------------------------------------- ------------ ------------ -------------
Non-current liabilities
Loans and borrowings (318.0) (463.2) (414.7)
Retirement benefit obligations (5.9) (15.7) (8.9)
Deferred tax liabilities (134.4) (146.7) (131.3)
Lease liabilities (30.6) (31.1) (30.2)
Provisions (21.3) (47.8) (23.9)
Financial liabilities - - (2.8)
---------------------------------------------------- ------------ ------------ -------------
Total non-current liabilities (510.2) (704.5) (611.8)
Liabilities classified as held for sale - - (57.8)
---------------------------------------------------- ------------ ------------ -------------
Total liabilities (646.9) (908.2) (843.1)
---------------------------------------------------- ------------ ------------ -------------
Net assets 838.7 899.4 783.9
---------------------------------------------------- ------------ ------------ -------------
Equity
Share capital 52.5 52.2 52.3
Share premium 238.7 243.0 238.7
Other reserves 68.0 58.5 42.1
Retained earnings 479.5 545.7 450.8
---------------------------------------------------- ------------ ------------ -------------
Equity attributable to equity holders of the parent 838.7 899.4 783.9
---------------------------------------------------- ------------ ------------ -------------
Total equity and reserves 838.7 899.4 783.9
---------------------------------------------------- ------------ ------------ -------------
(1) The classification of the Chromium business as held for sale
was at 30 November 2022, thus the at 30 June 2022 Balance Sheet has
not been represented to exclude the impact of the Chromium
business.
Condensed consolidated cash flow statement
for the six months ended 30 June 2023
2023 2022(1) 2022(1)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
(unaudited) (unaudited) (unaudited)
---------------------------------------------------------- ------------ ------------ ------------
Operating activities:
Profit/(loss) from continuing operations 25.7 17.8 (62.6)
Adjustments for:
Other expenses 0.6 0.6 1.3
Finance income (1.8) (7.8) (9.9)
Finance costs 10.2 11.3 21.6
Tax charge 9.2 5.4 7.8
Depreciation and amortisation 28.8 28.1 56.9
Decrease in provisions and financial liabilities (2.9) (2.0) (7.7)
Pension payments net of current service cost (0.9) 0.4 (0.7)
Share based payments expense 2.0 2.1 3.4
Impairment of goodwill - - 103.4
Impairment of property, plant and equipment - 23.0 23.0
---------------------------------------------------------- ------------ ------------ ------------
Operating cash flows before movements in working
capital 70.9 78.9 136.5
Decrease/(Increase) in inventories 9.6 (39.4) (57.5)
(Increase)/decrease in trade and other receivables (22.0) (17.8) 6.5
(Decrease)/increase in trade and other payables (33.8) 10.5 13.8
---------------------------------------------------------- ------------ ------------ ------------
Cash generated by operations 24.7 32.2 99.3
Income taxes paid (10.7) (11.0) (13.3)
Interest paid (11.2) (9.3) (14.6)
Net cash flow used in operating activities from
discontinued operations (11.9) 7.9 5.6
---------------------------------------------------------- ------------ ------------ ------------
Net cash used in operating activities (9.1) 19.8 77.0
---------------------------------------------------------- ------------ ------------ ------------
Investing activities:
Interest received 0.4 0.1 0.2
Cash received on settlement of derivative option 1.9 - -
Disposal of property, plant and equipment - 0.3 (0.4)
Purchase of property, plant and equipment (13.4) (15.3) (33.1)
Purchase of business - - -
Disposal of business 139.2 - -
Acquisition of intangible assets - (0.1) (0.2)
Net cash flow used in investing activities from
discontinued operations (0.3) (6.8) (13.4)
---------------------------------------------------------- ------------ ------------ ------------
Net cash flow from investing activities 127.8 (21.8) (46.9)
---------------------------------------------------------- ------------ ------------ ------------
Financing activities:
Issue of shares by the Company and the ESOT net
of issue costs - - 0.9
Net movement on existing debt (103.4) 0.6 (51.6)
Payment of lease liabilities (3.1) (3.7) (7.1)
Net cash flow from financing activities from discontinued
operations - (0.1) -
---------------------------------------------------------- ------------ ------------ ------------
Net cash used in financing activities (106.5) (3.2) (57.8)
---------------------------------------------------------- ------------ ------------ ------------
Net increase/( decrease) in cash and cash equivalents 12.2 (5.2) (27.7)
Cash and cash equivalents at beginning of period 54.9 84.6 84.6
Foreign exchange on cash and cash equivalents 0.2 (2.7) (2.0)
---------------------------------------------------------- ------------ ------------ ------------
Cash and cash equivalents at end of period 67.3 76.7 54.9
---------------------------------------------------------- ------------ ------------ ------------
(1) 2022 has been represented following the classification of
the Chromium business as a discontinued operation, see Note 15 for
further details.
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2023
Share Share Translation Hedging Other Retained Total
capital premium reserve reserve reserves earnings equity
$m $m $m $m $m $m $m
---------------------------------- -------- -------- ----------- -------- --------- --------- -------
At 1 January 2023 52.3 238.7 (122.4) (1.0) 165.5 450.8 783.9
Profit for the period - - - - - 27.5 27.5
Other comprehensive income:
Exchange differences - - 8.4 - 0.3 - 8.7
Movement in cash flow
hedges - - - 7.8 - - 7.8
Remeasurement of retirement
benefit obligations - - - - - (1.1) (1.1)
Deferred tax adjustment
on retirement benefit
obligations - - - - - 0.4 0.4
Recycling of deferred
foreign exchange on disposal - - 9.3 - - - 9.3
Transfer - - - - (1.9) 1.9 -
Transactions with owners:
Issue of shares by the
Company 0.2 - - - - - 0.2
Share based payments - - - - 2.0 - 2.0
At 30 June 2023 52.5 238.7 (104.7) 6.8 165.9 479.5 838.7
---------------------------------- -------- -------- ----------- -------- --------- --------- -------
Share Share Translation Hedging Other Retained Total
capital premium reserve reserve reserves earnings equity
$m $m $m $m $m $m $m
-------------------------------- -------- -------- ----------- -------- --------- --------- -------
At 1 January 2022 52.2 240.8 ( 67.7) (8.6) 167.0 517.3 901.0
Profit for the period - - - - - 20.8 20.8
Other comprehensive income:
Exchange differences - - (38.3) - (1.0) - (39.3)
Movement in cash flow
hedges - - - 7.7 - - 7.7
Remeasurement of retirement
benefit obligations - - - - - 9.8 9.8
Deferred tax adjustment
on retirement benefit
obligations - - - - - (2.2) (2.2)
Transactions with owners:
Issue of shares by the
Company - 2.2 - - (2.2) - -
Share based payments - - - - 2.1 - 2.1
Fair value of cash flow
hedges transferred to
net assets - - - (0.5) - - (0.5)
At 30 June 2022 52.2 243.0 (106.0) (1.4) 165.9 545.7 899.4
-------------------------------- -------- -------- ----------- -------- --------- --------- -------
Notes to the interim financial statements
for the six months ended 30 June 2023
1. General Information
Elementis plc (the 'Company') and its subsidiaries (together,
the 'Group') manufacture specialty chemicals. The Group has
operations in the US, UK, Brazil, Germany, Finland, The
Netherlands, China, Taiwan, Malaysia and India. The Company is a
limited liability company incorporated and domiciled in England, UK
and is listed on the London Stock Exchange.
2. Accounting policies
Basis of preparation
The annual financial statements of Elementis plc will be
prepared in accordance with United Kingdom adopted International
Financial Reporting Standards. This condensed set of financial
statements (also referred to as 'interim financial statements' in
this announcement) has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the United Kingdom.
As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, the condensed set of financial
statements has been prepared applying the same accounting policies
and presentation that were applied in the preparation of the
Company's published consolidated financial statements for the year
ended 31 December 2022 except for the adoption of new standards
effective as of 1 January 2023. The Group has not early adopted any
standard, interpretation or amendment that has been issued but is
not yet effective. Several amendments apply for the first time in
2023, but do not have an impact on the interim condensed
consolidated financial statements of the Group. Key judgements and
sources of estimation uncertainty remain unchanged from those as
set out in the Annual Report and Accounts at 31 December 2022.
The information for the year ended 31 December 2022 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor's
report on those accounts was not qualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
3. Going concern
Given the continuing uncertainties resulting from the
macro-economic environment in which the Group operates, the
directors have placed a particular focus on the appropriateness of
adopting the going concern basis in preparing the condensed
consolidated financial statements for the six months ended 30 June
2023.
The Group's going concern assessment covers the period of at
least 12 months from the date of authorisation of these
consolidated half year financial statements (the "going concern
period"), and takes into account its substantial liquidity,
committed expenditure, and likely ongoing levels of costs.
In preparing the assessment, alongside the most likely "base
case" forecast, the Board has considered both a "reverse stress
test case" which flexes sales and costs to determine what
circumstances would be required to breach banking covenants, and a
"plausible downside case". This assessment shows the Group has
sufficient liquidity to discharge its liabilities as they fall due
throughout the going concern period under the base case, assuming
continued access to our revolving credit facilities. Access to
these credit facilities is dependent on the Group operating within
its financial covenants.
Testing up to 30 June 2023 confirmed that the Group operated
within these covenants and under the base case the Group is
expected to remain within its financial covenants throughout the
going concern period and the conditions necessary for the reverse
stress scenario to be applicable were deemed remote.
The directors also considered factors likely to affect future
performance and development, the Group's financial position,
current excess liquidity position, high level of cash conversion
and the principal risks and uncertainties facing the Group,
including the Group's exposure to credit, liquidity and market risk
and the mechanisms for dealing with these risks.
In conclusion, after reviewing the base case and considering the
remote likelihood of the scenario in the reverse stress test case
occurring as well as having considered the uncertainty relating to
the macro-economic environment and the mitigating actions
available, the directors have formed the judgement that, at the
time of approving the consolidated financial statements, there are
no material uncertainties that cast doubt on the Group's going
concern status and that it is appropriate to prepare the
consolidated accounts on the going concern basis.
4. Segment reporting
Effective from 1 January 2023 the results of the Coatings and
Talc divisions were merged and are now reported under a new
operating division called Performance Specialties, which reflects a
change in the internal organisation structure used for management,
internal reporting purposes and the allocation of strategic
resources. We continue to report results for the Coatings and Talc
operating segments in line with IFRS 8. Our reporting segments are
therefore:
Performance Specialties which consists of:
-- Coatings - production of rheological modifiers and additives
for decorative and industrial coatings
-- Talc - production and supply of talc for use in plastics,
coatings, technical ceramics and paper sectors
Personal Care - production of rheological modifiers and
compounded products, including active ingredients for
anti-perspirant deodorants, for supply to Personal Care
manufacturers
2023 Six
months 2022 Six 2022 Year
ended 30 months ended ended 31
June 30 June December
------------------------ --------- ------------- ---------
Revenue
Coatings 181.0 209.3 389.1
Talc 71.0 72.5 135.8
------------------------ --------- ------------- ---------
Performance Specialties 252.0 281.8 524.9
Personal Care 111.8 105.6 211.5
Revenue 363.8 387.4 736.4
------------------------ --------- ------------- ---------
All revenues are external and relate to the sale of goods.
Revenue and operating profit in Coatings (Decorative Paints) and
Personal Care (AP Actives) are marginally impacted by seasonal
influences. Revenue and operating profit tend to be higher in the
first half of the year as our customers ramp up production ready to
meet end-customer demand in the summer months, when weather
conditions are favourable for painting and when anti-perspirants
are in greater demand.
Reported profit before tax for Performance Personal Segment Central
the six months Coatings Talc Specialties Care totals costs Total
ended 30 June 2023 $m $m $m $m $m $m $m
-------------------------------------------- -------- ----- ------------ -------- ------- ------- ------
Adjusted operating profit/(loss) 25.4 9.0 34.4 27.4 61.8 (9.3) 52.5
Adjusting Items
Business transformation (0.3) - (0.3) (0.1) (0.4) (0.8) (1.2)
Increase in environmental provisions
due to a change in cost of remediation
work identified - - - - - (1.2) (1.2)
Decrease in environmental provisions
due to change in discount rate - - - - - 0.8 0.8
Amortisation of intangibles
arising on acquisition (0.2) (2.7) (2.9) (4.2) (7.1) - (7.1)
Reported operating profit/(loss) 24.9 6.3 31.2 23.1 54.3 (10.5) 43.8
Other expenses (0.5)
Finance income 1.8
Finance costs(1) (10.2)
-------------------------------------------- -------- ----- ------------ -------- ------- ------- ------
Reported profit before income
tax 34.9
-------------------------------------------- -------- ----- ------------ -------- ------- ------- ------
(1) Finance costs of $10.2m includes the mark to market on
derivatives of $1.5m.
Reported profit before tax for Performance Personal Segment Central
the six months Coatings Talc Specialties Care totals costs Total
ended 30 June 2022 $m $m $m $m $m $m $m
-------------------------------------------- -------- ------ ------------ -------- ------- ------- ------
Adjusted operating profit/(loss) 42.2 2.7 44.9 24.0 68.9 (10.7) 58.2
Adjusting Items
Business transformation (0.6) (0.2) (0.8) - (0.8) - (0.8)
Increase in environmental provisions
due to a change in cost of remediation
work identified - - - - - (3.6) (3.6)
Decrease in environmental provisions
due to change in discount rate - - - - - 4.1 4.1
Write-off of plant and equipment - (23.0) (23.0) - (23.0) - (23.0)
Amortisation of intangibles
arising on acquisition (0.6) (2.8) (3.4) (4.2) (7.6) - (7.6)
Reported operating profit/(loss) 41.0 (23.3) 17.7 19.8 37.5 (10.2) 27.3
Other expenses (0.6)
Finance income(1) 7.8
Finance costs (11.3)
-------------------------------------------- -------- ------ ------------ -------- ------- ------- ------
Reported profit before income
tax 23.2
-------------------------------------------- -------- ------ ------------ -------- ------- ------- ------
Note: All prior year numbers are restated to reflect the
allocation of Chromium stranded costs to the remaining business
units.
(1) Finance income of $7.8m includes the mark to market on
derivatives of $7.7m.
5. Adjusting items and alternative performance measures
In addition to the statutory results, the Group uses alternative
performance measures, such as adjusted operating profit and
adjusted diluted earnings per share, to provide additional useful
analysis of the performance of the business. The Board considers
these non-GAAP measures as an alternative way to measure the
Group's performance. Adjusting items in the 6 months ended 30 June
2023 resulted in a charge of $10.2m before tax, a decrease of
$13.0m against the same period from last year. The key categories
of adjusting items are summarised below.
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
------------------------------------------------------- ----------- ----------- ------------
Reported operating profit/(loss) 43.8 27.3 (41.8)
Adjusting items:
Business transformation 1.2 0.8 4.8
Environmental provisions
Increase in provisions due to change in cost
of remediation work identified 1.2 3.6 3.4
Decrease in provisions due to change in discount
rate (0.8) (4.1) (7.2)
Write-off of plant and equipment - 23.0 23.0
Impairment of goodwill - - 103.4
Amortisation of acquired intangibles 7.1 7.6 14.9
Net adjusting items 8.7 30.9 142.3
------------------------------------------------------- ----------- ----------- ------------
Adjusted operating profit 52.5 58.2 100.5
Adjusting items:
Mark to market of derivative financial instruments 1.5 (7.7) (6.6)
------------------------------------------------------- ----------- ----------- ------------
Net adjusting items on profit before tax 10.2 23.2 135.7
------------------------------------------------------- ----------- ----------- ------------
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
--------------------------------- -------------- --------------- ------------
Adjusted operating profit/(loss)
Coatings 25.4 42.2 70.3
Talc 9.0 2.7 (0.4)
--------------------------------- -------------- --------------- ------------
Performance Specialties 34.4 44.9 69.9
Personal Care 27.4 24.0 49.0
Central costs (9.3) (10.7) (18.4)
--------------------------------- -------------- --------------- ------------
Adjusted operating profit 52.5 58.2 100.5
Other expenses (0.5) (0.6) (1.3)
Finance income(2,3) 1.8 0.1 3.3
Finance costs(1) (8.7) (11.3) (21.6)
--------------------------------- -------------- --------------- ------------
Adjusted profit before tax 45.1 46.4 80.9
--------------------------------- -------------- --------------- ------------
Note: All prior year numbers are restated to reflect the
allocation of Chromium stranded costs to the remaining business
units.
(1) Adjusted finance costs for the six months ended 30 June 2023
of $8.7m excludes the mark to market on derivatives of $1.5m.
(2) Adjusted finance income for the six months ended 30 June
2022 of $0.1m excludes the mark to market on derivatives of
$7.7m.
(3) Adjusted finance income for the year ended 31 December 2022
of $3.3m excludes the mark to market derivatives of $6.6m
Adjusting items in the period fall into the following
categories:
Business transformation
In November 2020 the closure of the Charleston plant was
announced. The costs incurred for the period to 30 June 2023
associated with the closure of the site are classified as an
adjusting item and the site is planned to be disposed of in the
future.
Environmental provision
The Group's environmental provision is calculated on a
discounted cash flow basis, reflecting the time period over which
spending is estimated to take place. The net movement on the
provision for the period to 30 June 2023 is $0.4m. This is
comprised of an income statement credit of $0.8m due to a change in
discount rates and extra remediation work identified in the period
to 30 June 2023 which has resulted in a $1.2m increase in the
liability. As the provision relates to non-operational facilities
these movements are classified as adjusting items.
Amortisation of intangibles arising on acquisition
Amortisation of $7.1m represents the charge in respect of the
Group's acquired intangible assets. As in previous periods, these
are included in adjusting items as they are a non-cash charge
arising from historical investment activities.
An explanation of other adjusting items relating to the full
year 2022 can be found within the 2022 Annual Report and
Accounts.
6. Finance income
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------- ----------- ----------- ------------
Interest on bank deposits 0.4 0.1 0.2
Pension and other post-retirement liabilities - - 0.6
Fair value movement on derivatives 1.4 7.7 9.1
---------------------------------------------- ----------- ----------- ------------
1.8 7.8 9.9
---------------------------------------------- ----------- ----------- ------------
7. Finance costs
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------- ----------- ----------- ------------
Interest on bank loans 7.5 10.6 19.5
Unwind of discount on provisions 0.5 0.3 0.7
Pension and other post-retirement liabilities - (0.3) -
Interest on lease liabilities 0.7 0.7 1.4
Fair value movement on derivatives 1.5 - -
---------------------------------------------- ----------- ----------- ------------
10.2 11.3 21.6
---------------------------------------------- ----------- ----------- ------------
8. Tax
The charge for tax on profits of $9.2m gives rise to an
effective tax rate of 26.3% (2022: $5.4m, or 23.3%) and is based on
the probable tax charge in those jurisdictions where profits arise.
Within this figure is a tax credit of $2.6m (2022: $5.0m) in
respect of adjusting items.
9. Earnings per share
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------------------- ----------- ----------- ------------
Earnings from continuing operations 25.7 17.8 (62.6)
Adjusting items net of tax from continuing operations 7.6 18.2 127.4
---------------------------------------------------------- ----------- ----------- ------------
Adjusted earnings from continuing operations 33.3 36.0 64.8
Earnings from discontinued operations 1.8 3.0 11.5
Earnings from continuing and discontinued operations 27.5 20.8 (51.1)
Number(m) Number(m) Number(m)
---------------------------------------------------------- ----------- ----------- ------------
Weighted average number of shares for the purposes
of basic
earnings per share 585.1 582.1 582.6
Effect of dilutive share options 10.6 5.3 9.7
---------------------------------------------------------- ----------- ----------- ------------
Weighted average number of shares for the purposes
of diluted
earnings per share 595.7 587.4 592.3
---------------------------------------------------------- ----------- ----------- ------------
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
cents cents cents
-------------------------------------------------------- ----------- ----------- ------------
Earnings per share from continuing operations
Basic 4.4 3.1 (10.7)
Diluted 4.3 3.0 (10.7)
Adjusted earnings per share from continuing operations
Basic 5.7 6.2 11.1
Diluted 5.6 6.1 10.9
Earnings per share from discontinued operations
Basic 0.3 0.5 2.0
Diluted 0.3 0.5 2.0
Earnings per share from continuing and discontinued
operations
Basic 4.7 3.6 (8.8)
Diluted 4.6 3.5 (8.8)
-------------------------------------------------------- ----------- ----------- ------------
10. Dividends
The following dividends were declared and paid by the Group:
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
--------------------------------- ----------- ----------- ------------
Dividends paid on ordinary shares - - -
--------------------------------- ----------- ----------- ------------
11. Pension
Valuations for IAS 19 purposes were conducted as of 30 June
2023. At this date the Group is reporting a surplus on its UK
scheme of $24.8m (2022: surplus of $58.5m), and a deficit on all
other schemes of $5.9m (2022: deficit of $15.6m). Additional
commentary is included in the Finance Report.
A triennial valuation for the UK scheme is expected in September
2023, which will reflect revised demographic assumptions, including
mortality base tables. The Group expects to incorporate revised
demographic assumptions in its forthcoming actuarial valuation. The
Group is at an early stage in quantifying the impact of revised
assumptions on the recognised surplus at 30 June 2023. Initial
high-level estimates suggest that the revised mortality assumptions
would increase the surplus by approximately $9.1m. The revised
mortality assumptions take into consideration the latest
plan-specific and wider UK population mortality experience. Further
disclosures will be made in the 2023 Annual Report and
Accounts.
12. Movement in net borrowings
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------------- ------------- --------------- ------------
Change in net borrowings resulting from cash flows:
Decrease in cash and cash equivalents 12.2 (5.2) (27.8)
Increase in bank overdrafts and loans (52.3) (5.6) (3.0)
Decrease in borrowings 155.7 5.0 54.6
---------------------------------------------------- ------------- --------------- ------------
115.6 (5.8) 23.8
Currency translation differences (4.3) 13.4 10.4
Decrease in net debt 111.3 7.6 34.2
Net debt at beginning of period (366.8) (401.0) (401.0)
---------------------------------------------------- ------------- --------------- ------------
Net debt at end of period (255.5) (393.4) (366.8)
---------------------------------------------------- ------------- --------------- ------------
13. Financial risk management
The Group has exposure to the following financial risks:
-- credit risk;
-- liquidity risk; and
-- market risk.
The Board of Directors has overall responsibility for the
establishment and oversight of the Group's risk management
framework. The Group's risk management policies are established to
identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and
adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the
Group's activities. The Group's Audit Committee, assisted by
Internal Audit, oversees how management monitors compliance with
the Group's risk management policies and procedures and reviews the
adequacy of the risk management framework in relation to the risks
faced by the Group. These interim financial statements do not
include all the financial risk management information and
disclosures that are required in the Annual report and accounts and
should be read in conjunction with the financial statements for the
year ended 31 December 2022. The Group's risk management policies
have not changed since the year end.
The Group measures fair values in respect of financial
instruments in accordance with IFRS 13, using the following fair
value hierarchy that reflects the significance of the inputs used
in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
-- Level 2: Valuation techniques based on observable inputs, either directly or indirectly.
-- Level 3: Valuation techniques using significant unobservable inputs.
Derivatives are held at fair value and are categorised within
Level 2. All other financial instruments are held at amortised
cost, which is assumed to approximate their fair values. All the
fair values of financial assets and liabilities carried at
amortised cost are considered to be Level 2 valuations which are
determined using directly or indirectly observable inputs other
than unadjusted quoted prices.
14. Contingent liabilities
As is the case with other chemical companies, the Group
occasionally receives notices of litigation relating to regulatory
and legal matters. A provision is recognised when the Group
believes it has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Where
it is deemed that an obligation is merely possible and that the
probability of a material outflow is not remote, the Group would
disclose a contingent liability.
In 2013 the UK Government (through HMRC) introduced the UK
Finance Company Exemption ('FCE') regime. Elementis entered into
the FCE regime during 2014. In October 2017 the European Commission
opened a State Aid investigation into the regime. In April 2019 the
European Commission concluded that the FCE regime constituted State
Aid in circumstances where Groups had accessed the regime using a
financing company with UK significant people functions; the
European Commission therefore instructed the UK Government to
collect any relevant State Aid amounts. The UK government and other
UK-based international companies, including Elementis, appealed to
the General Court of the European Union against the decision in
2019.
In Spring 2020 HMRC requested that affected Groups submit their
UK significant people function analysis. The deadline for
submission of these analyses was delayed due to the impact of
COVID-19 and Elementis submitted its analysis to HMRC in July 2020.
In December 2020 the UK government introduced legislation to
commence collection proceedings.
Elementis received a charging notice from HMRC on 5 February
2021 which assessed for the maximum exposure of $19m (excluding
interest). This was paid to HMRC on 5 March 2021. A charging notice
for associated interest of $1m was received on 24 June 2021 and
paid on 7 July 2021. Whilst Elementis lodged an appeal against the
charging notices that did not defer the payment of the tax
assessed.
The UK Government's appeal against the European Commission's
decision was heard by the General Court of the European Union
during October 2021 and on 8 June 2022 the General Court of the
European Union ruled against the UK Government. The UK Government
lodged a further appeal to the European Court of Justice during Q3
2022. As Elementis continues to consider that the appeal process
will ultimately be successful, at 30 June 2023 an asset has been
recorded within non-current assets in the expectation that the
charge will be repaid in due course. At this point in time we have
not recognised any interest on the EU state aid receivable.
In August 2022 the Brazilian tax authorities opened a tax audit
into the Group's Brazilian entity. The audit is focused on the
customs classification code used since 2017 for one of the entity's
imported raw materials. The potential exposure is c.$5m. Management
have obtained legal advice on the matter and, based on the advice
received, conclude that as at 30 June 2023 it is not probable that
an outflow of economic resources will be required to settle the
matter.
During 2022 the Group terminated a distribution agreement with
one of its longstanding distributors. In line with the terms of the
distribution agreement, the distributor is entitled to an amount of
compensation for such a termination. Whilst the maximum amount
payable would be $3.4m, management believe that the correct figure
is materially lower. Discussions remain ongoing between the two
parties and management have concluded that at this stage the
obligation cannot be measured with sufficient reliability.
During 2023 a legal case regarding historic asbestos exposure in
which the Group was a co-defendant returned a verdict in favour of
the plaintiff. Elementis was assigned 5% of the total damages
awarded, with the Group's share being c.$1.7m. The Group and the
other co-defendants intend to appeal the verdict and our external
legal counsel currently judge that such an appeal is more likely
than not to be successful. As such management have concluded that
as at 30 June 2023 it is not probable that an outflow of resources
will be required to settle the matter.
15. Disposal of Chromium business
On 31 January 2023, the sale of the Chromium business to
Yildirim Group was completed, with the business classified as a
discontinued operation. The Group received gross cash proceeds of
$139.2m ($127.2m net of total disposal transaction costs (1) ) from
the sale.
The results of the discontinued operation included within the
consolidated income statement are as follows:
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------- ----------- ----------- ------------
Revenue 14.4 90.9 185.0
Expenses (14.2) (84.2) (165.0)
Calculated gain on sale of Chromium business 25.9 - -
Disposal transaction costs(1) (6.4) (2.3) (5.6)
Recycling of deferred foreign exchange losses (9.3) - -
Profit before income tax 10.4 4.4 14.4
Income tax (8.6) (1.4) (2.9)
Profit from discontinued operations 1.8 3.0 11.5
---------------------------------------------- ----------- ----------- ------------
(1) Total disposal transaction costs of $12.0m includes $6.4m
incurred in the 6 months ended 30 June 2023 and $5.6m incurred in
the year ended 31 December 2022.
16. Events after balance sheet date
There were no further events after the balance sheet date.
17. Related party transactions
Management has performed a review for any related party
transactions and have concluded that position remains unchanged
from the year ended 31 December 2022 and is consistent with the
information disclosed on page 210 of the Company's 2022 Annual
report and accounts.
Principal risks and uncertainties
The Group has policies, processes and systems in place to help
identify, evaluate and manage risks throughout the organisation
that may have a material effect on its business operations and the
delivery of its strategic objectives, including its business model,
future performance, solvency, liquidity and / or reputation. The
Board continues to take a proactive approach to recognising and
mitigating risk with the aim of protecting its employees and
safeguarding the interests of the Group, its shareholders,
employees, customers, suppliers and all other stakeholders.
The principal risks and uncertainties facing the Group are set
out in the Annual Report and Accounts for the 12 months ended 31
December 2022 (pages 86 to 94). The Group has reviewed these risks
and concluded that they will remain relevant for the second half of
the financial year. The potential impact of these risks, together
with details of specific mitigating actions are set out in the 2022
Annual Report and Account.
All risks are subject to Executive oversight and assessment and
we continue to review the effectiveness and efficiency of existing
controls over those risks and to identify further actions where
appropriate in order to manage our exposure.
Alternative performance measures
A reconciliation from reported profit for the year to adjusted
earnings before interest, tax, depreciation and amortisation
(EBITDA) is provided to support understanding of the summarised
cash flow included within the finance report on pages 7 to 11.
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------- ----------- ----------- ------------
Profit/(loss) from continuing operations 25.7 17.8 (62.6)
Adjustments for:
Finance income after adjusting items (1.8) (0.1) (3.3)
Finance costs and other expenses after
adjusting items 9.2 11.9 22.9
Tax charge 9.2 5.4 7.8
Depreciation and amortisation 28.8 28.1 56.9
Excluding intangibles arising on acquisition (7.1) (7.6) (14.9)
Impact of adjusting items 10.0 22.7 135.0
---------------------------------------------- ----------- ----------- ------------
Adjusted EBITDA 74.0 78.2 141.8
---------------------------------------------- ----------- ----------- ------------
There are also a number of key performance indicators (KPIs)
used in this report. The reconciliations to these are given
below.
Adjusted operating cash flow
Adjusted operating cash flow is defined as the net cash flow
from operating activities less net capital expenditure but
excluding income tax paid or received, interest paid or received,
pension contributions net of current service cost and adjusting
items.
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------------- ----------- ----------- ------------
Net Cash flow from operating activities (9.1) 19.8 77.0
Less:
Net capital expenditure (13.8) (15.1) (46.5)
Add:
Net cash used in/(flow from) discontinued
operations 11.9 (7.9) (5.6)
Income tax paid 10.7 11.0 13.3
Interest paid 11.2 9.3 14.6
Pension contributions net of current service
cost 0.9 (0.4) 0.7
Adjusting items - non cash 0.2 (5.0) 7.6
Adjusting items - cash 0.9 1.1 5.2
---------------------------------------------- ----------- ----------- ------------
Adjusted operating cash flow 12.9 12.8 66.3
---------------------------------------------- ----------- ----------- ------------
Free cash flow
Free cash flow is defined as adjusted operating cash flow (as
defined above), less pension contributions net of current service
cost, net interest paid, income tax paid, cash flow relating to
adjusting items and other, including payment of lease
liabilities.
Adjusted operating cash conversion
Adjusted operating cash conversion is defined as adjusted
operating cash flow (as defined above) excluding payments for
provisions and share based payments, divided by adjusted operating
profit.
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
$m $m $m
---------------------------------------- ----------- ----------- ------------
Adjusted operating profit 52.5 58.2 100.5
---------------------------------------- ----------- ----------- ------------
Adjusted operating cash flow 12.9 12.8 66.3
Add/(deduct):
Provisions and share based payments 1.1 (0.9) (0.4)
---------------------------------------- ----------- ----------- ------------
14.0 11.9 65.9
---------------------------------------- ----------- ----------- ------------
Adjusted operating cash flow conversion 27% 20% 66%
---------------------------------------- ----------- ----------- ------------
Average trade working capital to sales ratio
The trade working capital to sale ratio is defined as the 12
month average trade working capital divided by sales, expressed as
a percentage. Trade working capital comprises inventories, trade
receivables (net of provisions) and trade payables. It specifically
excludes repayments, capital or interest related receivables or
payables, changes due to currency movements and items classified as
other receivables and other payables.
Adjusted operating profit/operating margin
Adjusted operating profit is the profit derived from the normal
operations of the business. Adjusted operating margin is the ratio
of adjusted operating profit to sales.
Unaudited information
To support a full understanding of the performance of the Group,
the information below provides the calculation of Net Debt /
EBITDA.
Pre-IFRS 16 Net Debt/EBITDA $m
----------------------------------------------------------- -----
Adjusted EBITDA for the last twelve months to 30 June 2023 137.6
IFRS 16 adjustment (6.6)
----------------------------------------------------------- -----
Adjusted EBITDA pre IFRS 16 131.0
Net Debt 255.5
----------------------------------------------------------- -----
Net Debt / EBITDA* 2.0
----------------------------------------------------------- -----
*Where EBITDA is the adjusted EBITDA on continuing operations of
the Group on a pre IFRS 16 basis.
Post-IFRS 16 Net Debt/EBITDA $m
----------------------------------------------------------- -----
Adjusted EBITDA for the last twelve months to 30 June 2023 137.6
Net Debt 255.5
IFRS 16 lease liabilities 36.5
----------------------------------------------------------- -----
Adjusted Net Debt post IFRS 16 292.0
Net Debt / EBITDA* 2.1
----------------------------------------------------------- -----
*Where EBITDA is the adjusted EBITDA on continuing operations of
the Group on a post IFRS 16 basis.
- ENDS -
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IR EANXKADLDEFA
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July 27, 2023 02:00 ET (06:00 GMT)
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