Elementis (LSE:ELM), the speciality chemicals business, reported first-half revenue of $318.2m for the six months to 30 June, up 4.7% on an organic constant currency basis from $290.8m a year earlier.
Adjusted operating profit rose 16.4% to $73.2m, pushing adjusted operating margin up 140 basis points to 23.0%, at the top of the chemicals group's medium-term target range. Statutory operating profit climbed 18.6% to $65.7m, while statutory profit from continuing operations rose to $43.7m from $34.3m.
Personal Care revenue grew 2.9% to $109.2m, helped by pricing gains in cosmetics, stronger volumes in AP Actives and a contribution from its Alchemy business, with adjusted operating margin reaching 38.1%, boosted by a 380 basis point benefit from the sale of its pharmaceutical manufacturing business. Coatings revenue grew 5.6% to $209m on higher volumes, new business and pricing across all regions, with margin improving to 20.7%.
Net debt fell to $163.8m from $185.4m at the end of December, taking net debt to EBITDA to 1.1 times. Elementis launched a new share buyback programme of around £25m, funded by proceeds from the pharmaceutical business disposal.
"One year into our new 'Elevate Elementis' strategy, I am excited to see real progress coming through in our financial results," said chief executive Luc van Ravenstein.
The company said it remains confident of delivering full-year performance in line with market expectations, while flagging continued vigilance over the potential impact of the Middle East crisis on demand, input costs and supply chains. Elementis will host a Product Innovation Day at its Porto lab in November.
News Intelligence what this means for the company
Elementis delivered 16% profit growth in H1 on 4.7% organic revenue expansion, with adjusted operating margin climbing 140 basis points to 23.0%—at the top of its medium-term target range. Both divisions expanded: Personal Care margin surged to 38.1% (boosted by a 380 basis point gain from the pharma disposal), while Coatings grew 5.6% with margin improving to 20.7%. The company reaffirmed full-year guidance, net debt fell to 1.1x EBITDA (close to its 1x target), and it deployed £25m of disposal proceeds into a buyback—signaling confidence in the post-pharma, pure-play specialty chemicals model.
The results validate the pharma exit strategy: margin expansion and debt reduction are tracking ahead of prior expectations, and both divisions are growing while pricing power holds. The 1.1x net debt multiple leaves room for further deleveraging or capital deployment, though geopolitical headwinds (Middle East crisis) remain a near-term demand and cost risk the company is monitoring.
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