Elementis plc (LON:ELM), a global speciality chemicals company, today issued a trading update for the three months ended 31 March 2019.
Reflecting broader macroeconomic trends, global market conditions remain challenging, particularly in Coatings. Elementis anticipates further progress in 2019, albeit slightly below expectations. Some improvement in the demand environment and further cost efficiencies in-train are expected to result in a stronger second half performance.
The Group remains focused on delivering its plans to integrate the Talc business, transform Coatings and grow Personal Care. This strategy, supported by self-help measures focused on cost efficiency and cash delivery will provide a robust financial platform to deliver future growth and shareholder value creation.
· Personal Care had a solid first quarter with strong growth in cosmetics offset by a weaker start in anti-perspirant active ingredients. Bentone HydroclayTM, our new hectorite-based ingredient focused on the skin care market, launched in the quarter and is building encouraging customer momentum.
· In Coatings, whilst price/mix improved, weak demand and some de-stocking, particularly in Asia, caused revenue to decline versus the strong prior year period. Early benefits of the transformation programme helped to partially mitigate the profit impact and the programme continues to progress at pace.
· Integration of the Talc business remains on track for completion by October 2019 with a focus on delivering $2m of identified cost synergies and new business opportunities. Against strong comparatives, the business saw robust performance across most of its industrial talc applications but weaker demand from paper and automotive markets.
· Energy had a steady start to the year with industry infrastructure constraints in North America anticipated to ease in H2.
· Chromium sales grew on the prior year period with improved pricing offsetting lower demand levels.
Commenting on the performance, CEO, Paul Waterman said,
“Whilst trading conditions in the first quarter of 2019 have proved challenging, Elementis remains focused on delivery, improving returns and deleveraging. This will be underpinned by the integration of the Talc business, delivery of self-help efficiency measures and an unrelenting focus on cash generation.”