Synthomer plc
Results for the year ended 31 December 2024
Robust progress driven by
self-help, with momentum building
|
Year ended 31
December
|
2024
|
2023
|
Change
|
Constant
currency1
|
|
|
£m
|
£m
|
%
|
%
|
|
Continuing
operations2
|
|
|
|
|
|
Revenue
|
1,986.8
|
1,940.6
|
+2.4%
|
+5.1%
|
|
Coatings
& Construction Solutions (CCS)
|
85.9
|
100.1
|
(14.2)%
|
(12.2)%
|
|
Adhesive
Solutions (AS)
|
47.9
|
31.2
|
+53.5%
|
+57.1%
|
|
Health
& Protection and Performance Materials (HPPM)
|
36.5
|
26.3
|
+38.8%
|
+40.3%
|
|
Corporate
|
(23.7)
|
(20.2)
|
|
|
|
EBITDA3
|
146.6
|
137.4
|
+6.7%
|
+9.2%
|
|
EBITDA
margin (%)
|
7.4%
|
7.1%
|
|
|
|
Underlying4 operating profit (EBIT)
|
50.4
|
33.4
|
+50.9%
|
+54.5%
|
|
Statutory
operating loss (EBIT)
|
(24.1)
|
(39.5)
|
|
|
|
Results from continuing and
discontinued operations2
|
|
|
|
|
|
Underlying4 loss before tax
|
(7.2)
|
(31.1)
|
|
|
|
Statutory
loss before tax
|
(87.3)
|
(53.7)
|
|
|
|
Underlying4 EPS5
(p)
|
(2.5)
|
(35.1)
|
|
|
|
Basic
EPS5 (p)
|
(44.4)
|
(78.5)
|
|
|
|
Free Cash
Flow6
|
(54.7)
|
85.7
|
|
|
|
Net
debt7
|
597.0
|
499.7
|
|
|
·
FY 2024 trading in line with
expectations, with robust revenue, EBITDA and underlying EPS
improvement
·
Overall volumes +8.4%,
despite mixed end-market demand trends
−
Activity levels and capacity utilisation improving, but still
significantly below pre-pandemic levels
− Revenue
+5.1% in constant currency after pass-through of lower raw material
prices vs 2023
·
+9.2% constant currency
EBITDA growth and margin progress, driven by self-help actions and
strategic delivery
− Gross
profit margin improved by 150bps, reflecting speciality strategy
benefits and higher capacity utilisation
−
Self-help benefits of c.£26m, partially offset by previously
disclosed wage inflation and bonus normalisation
− +54.5%
underlying EBIT in constant currency, with lower depreciation
reflecting site footprint reductions
−
Adhesive Solutions regained share in flat markets via
reliability and performance improvement programme
− Health
& Protection and Performance Materials progress led by
improving demand for nitrile latex for gloves
− Mixed
performance in Coatings & Construction Solutions, with coatings
share gains and stable consumer offset by poor construction
activity, delayed energy orders and a significant share of higher
operating costs
·
Stable financial position to
support delivery of strategy and earnings
recovery
− Net
debt increased as expected, reflecting non-recurring EC fine
settlement and deferred pension contributions, and reduction in use
of committed receivables financing facility at year end
− Free
Cash Flow5 broadly neutral excluding receivables
financing movement and pension contributions
− 4.6x
covenant net debt: EBITDA well within requirements; more than £470m
of undrawn committed liquidity
− €350m
bond refinancing completed in 2024, next major debt maturity in
2027
·
Strategic momentum building;
continuing to reallocate capital, people and time towards areas
of greatest returns
−
Compounds divestment completed in April; other non-core
divestment projects progressing
−
Manufacturing sites reduced to 31 (from 43 at start of new
strategy)
−
Zero-capital US partnership for nitrile latex
signed
− China
innovation centre opened, ISCC+ site certification supports
customers' growing sustainability agendas
·
Current trading and outlook
- further financial progress from self-help and strategic delivery
expected in 2025
− Current
trading in line with our expectations, which assumed a muted start
to the year compared with 2024
− £25-30m
in self-help and strategy benefits expected in 2025, with less
offsetting cost headwinds than 2024, give confidence of further
earnings progress, positive Free Cash Flow6 and
deleveraging in 2025
− Remain
ambitious to more than double Synthomer's recent earnings levels in
medium term, through ongoing self-help actions, end-market volume
recovery and strategic delivery
Commenting,
Synthomer CEO Michael Willome said:
"We are pleased to report robust financial and
strategic progress in 2024, with growth in profitability driven by
our self-help cost and reliability programmes and our strategic
repositioning continuing to build momentum. Although overall demand
in our end markets is recovering only slowly at this stage and the
global economy faces a high degree of macroeconomic and political
uncertainty, our strategic transformation continues to enhance our
ability to convert increasing volumes into substantially greater
profitability and returns. In the meantime, we have a stable
balance sheet and expect deleveraging from further self-help in the
current year. Our direction remains clear: further specialisation
is at the heart of our strategy, because speciality products with
differentiated benefits for end-users will be the greatest drivers
of improved returns for our business in the medium to long
term."
The Company
will host a meeting for analysts and investors at 9:00am GMT today
at the Royal Society of Chemistry, Burlington House, Piccadilly,
London W1J 0BA. The meeting will also be webcast via our website
at www.synthomer.com
or on
https://brrmedia.news/SYNT_FY_2024.
This will also be available for playback after the
event.
Further information:
|
Investors: Faisal Tabbah, Vice
President Investor Relations
|
Tel: +44 (0) 1279 775 306
|
|
Media: Nick Hasell, FTI
Consulting
|
Tel: +44 (0) 203 727 1340
|
Notes
1. Constant currency revenue and profit
measures retranslate current year results using the prior year's
average exchange rates.
2. Laminates, Films and Coated Fabrics, North
America Paper and Carpet and the Compounds business, which combined
contributed revenue of £9.8m and EBITDA of £2.6m in 2024 (2023:
£80.6m and £1.7m respectively), are classed as discontinued
operations throughout this announcement.
3. Operating profit before depreciation,
amortisation and Special Items.
4. Underlying performance excludes Special
Items unless otherwise stated.
5. 2024 EPS based on weighted average number of
consolidated shares in issue during the year of 163.5m (2023:
85.4m, reflecting the rights issue and share consolidation
undertaken in October 2023).
6.
Free Cash Flow is defined as the movement in net
debt before financing activities, foreign exchange and the cash
impact of Special Items, asset disposals and business
combinations.
7. Cash and cash equivalents together with
short and long-term borrowings.
Legal Entity Identifier (LEI):
213800EHT3TI1KPQQJ56. Classification as per DTR 6 Annex 1R:
1.2.
Synthomer plc is a leading supplier
of high-performance, highly specialised polymers and ingredients
that play vital roles in key sectors such as coatings,
construction, adhesives, and health and protection - growing
markets for customers who serve billions of end users worldwide.
Headquartered in London, UK and listed there since 1971, we employ
c.4,000 employees across our five innovation centres of excellence
and 31 manufacturing sites across Europe, North America, Middle
East and Asia. With more than 6,000 blue-chip customers and £2.0bn
in continuing revenue in 2024, our business is built around three
divisions, serving customers in attractive end markets where demand
is driven by global megatrends including urbanisation, demographic
change, climate change and sustainability, and shifting economic
power.
In Coatings & Construction
Solutions, our specialist polymers enhance the sustainability and
performance of a wide range of coatings and construction products.
We serve customers in applications including architectural and
masonry coatings, mortar modification, waterproofing and flooring,
fibre bonding, and energy solutions. In Adhesive Solutions our
products help our customers bond, modify and compatibilise surfaces
and components for applications including tapes and labels,
packaging, hygiene, tyres and plastic modification, improving
permeability, strength, elasticity, damping, dispersion and grip.
In Health & Protection and Performance Materials we are a
world-leading supplier of water-based polymers for medical gloves,
and a major European manufacturer of high-performance binders,
foams and other products serving customers in a range of end
markets.
Our purpose is creating innovative
and sustainable solutions for the benefit of customers and society.
Around 20% of our sales volumes are from new and patent protected
products. At our innovation centres of excellence in the UK, China,
Germany, Malaysia and Ohio, USA we collaborate closely with our
customers to develop new products and enhance existing ones
tailored to their needs, with an increasing range of sustainability
benefits. Our 2030 decarbonisation targets have been approved by
the Science Based Targets initiative as being in line with what the
latest climate science says is necessary to meet the goals of the
Paris Agreement, and since 2021 we have held the London Stock
Exchange Green Economy Mark, which recognises green technology
businesses making a significant contribution to a more sustainable,
low-carbon economy. Find us at www.synthomer.com
or search for Synthomer on LinkedIn.
CHIEF EXECUTIVE OFFICER'S REVIEW
We made robust financial progress in the year
and took important steps in our strategy of focusing on our most
differentiated, speciality products, despite the lack of any
meaningful recovery in some of our end markets.
Robust results that show the benefits of
specialisation
We continued to focus in 2024 on delivering our
multi-year self-help programmes, while further strategically
repositioning Synthomer to achieve our medium-term growth, margin
and returns ambitions. Our direction remains clear: further
specialisation is at the heart of our strategy, because speciality
products with differentiated benefits for end users will be the
greatest drivers of improved returns for our business in the medium
to long term.
The chemicals sector remains in a prolonged
period of suppressed demand, while geopolitical volatility is
having economic and structural effects on global markets and in
many parts of our industry. We need to be alert to the risks and
opportunities that this environment presents, and continue to make
our business even more agile and adaptable so that we can
anticipate and respond to the needs of our high-quality customers
in their attractive end markets. This year we made further progress
in focusing, simplifying and strengthening Synthomer while
delivering improved volumes, revenues, margins and underlying
earnings.
Profit growth and higher margins
Our 2024 revenue of £1,986.8m (2023: £1,940.6m)
and EBITDA of £146.6m for the continuing Group (2023: £137.4m) were
in line with expectations. They reflect volume growth and a strong
gross margin performance, underpinned by significant progress on
our multi-year cost-saving and reliability improvement programmes,
as well as the ongoing strategic re-allocation of our capital and
other resources towards the higher margin, more resilient
speciality solutions within our portfolio. As we have flagged since
the start of 2024, these actions were partially offset by some
increases in operating costs, mainly due to wage inflation and
normalisation of bonus accrual. Nonetheless, underlying operating
profit increased by 54.5% in constant currency to £50.4m (2023:
£33.4m).
The strongest divisional progress in 2024 was
achieved by the Adhesive Solutions (AS)
division, which delivered a step change in
financial results this year through our successful performance
improvement programme, with improved reliability allowing some
previously lost market share to be regained and greater cost
efficiency. The programme added a further £21m in benefits in the
year, and the scope and scale of further savings to be achieved in
2025 and 2026 continue to increase. Just as importantly, given this
strong progress, the AS team are now increasingly able to shift
their focus towards the division's considerable global growth
opportunities in 2025 and beyond.
The Health & Protection and Performance
Materials (HPPM) division also made significant
EBITDA progress, principally due to a substantial increase in
activity levels in the nitrile latex for gloves market, albeit at
unit margins that remain well below pre-pandemic levels. We were
also very pleased to begin a significant zero-capital partnership
for the US domestic medical gloves market. This market is evolving
rapidly, in part due to US government procurement policies under
both the current and previous US federal administrations, which are
designed to support the growth in onshore manufacturing of personal
protective equipment. In Q3 2024 we received the initial technology
licensing fee payment as the first stage of a multi-year
partnership leveraging our Health & Protection intellectual
property, technology and manufacturing expertise.
Mixed market conditions, with notably poor
levels of construction activity, and a substantial share of higher
operating costs limited the scope for our Coatings & Construction Solutions
(CCS) division to outperform in 2024. However,
our most speciality-focused division continued to enhance its
alignment of people, capital and strategy to support long-term
profitable growth in its markets, including by investing in the
innovation pipeline and to support further geographic growth.
Year-end net debt was £597.0m (2023: £499.7m),
principally reflecting a reduction in our utilisation of
receivables financing facilities, the EC fine settlement, and the
remainder of the previously agreed deferred contributions to the UK
pension scheme in the period.
Further progress on our specialisation
strategy
Getting closer to our customers and serving
their needs for specialised, high value-added products is central
to our future success.
In 2024, speciality products represented 55% of
revenues, and 60% of AS revenues, with the share expected to
increase in 2025. We have also continued to build our positions in
the USA and Asia, which now contribute more than half of revenues.
And while we continue to operate with the vast majority of our
production activity in-region to be close to our customers, we have
carried on our work of simplifying our business and focusing on
specialisation through divestments or closures. We have streamlined
our footprint from 43 sites in Q4 2022 to 31 at the start of 2025.
This includes the divestment in April 2024 of our non-core latex
compounding business, which comprised two manufacturing sites in
the Netherlands and one in Egypt. We continue to progress three
further non-core divestment processes. We also continue to monitor
potential opportunities in strategically attractive end markets for
the future, when our financial circumstances allow.
We remain focused on ruthlessly disciplined
capital allocation. Putting time and resources behind the parts of
the business that have the greatest returns potential is especially
important when demand is suppressed.
Innovation and sustainability - adding value for
customers
We see innovation and sustainability as integral
enablers for our strategy, important differentiators for our
customers, and key to value creation in the long term. Our
customers' sustainability ambitions demand innovative products with
demonstrable sustainability benefits - an area of growing strength
for us.
Driving the pace of
innovation
Customer-centric innovation gives us clear
competitive advantage, and this year we sustained our consistent
record of ensuring that new and protected products (NPP) make up at
least 20% of our sales volume over the long term.
We know that speed matters if we are to stay
ahead in innovation, and this year the Board established our
Innovation Taskforce to help drive the pace of change. This is an
area where digitalisation and the use of AI will be increasingly
important - and already this year we have used advanced data
analytics to help identify the precise compositions we need to
create new polymers for emulsions in CCS. We have also used digital
analytics tools to optimise manufacturing efficiency, for example
in a throughput optimisation project at our Le Havre site. At the
same time, we have strengthened our ability to meet the
accelerating need for innovative and sustainable products now that
our state-of-the-art laboratories are operational at our new China
Innovation Centre in Shanghai.
The responsiveness of our technical teams played
an important role in an overall nine-point improvement to 46 in our
annual Net Promoter Score (NPS) survey of our customers completed
in March 2024. Detailed survey data by business line is being used
by our teams to further improve our product offering and enhance
the experience of our customers globally.
Making progress on our
sustainability objectives
Innovation and sustainability often go hand in
hand for us, given customers' demand for products that help them
meet their targets and ambitions, and the expectations of consumers
and regulators. We continue to build our innovation pipeline to
support sustainable product development, with 38 new products
launched this year with defined sustainability benefits. At the
same time, we have made progress across the targets set out in our
sustainability roadmap, including the near-term greenhouse gas
(GHG) emissions reduction targets that were approved by the Science
Based Targets initiative (SBTi) last year. We achieved ISCC PLUS
certification at eight of our key sites in 2024, enabling us to
offer a mass balance approach for bio-based and circular raw
materials as part of our role at the centre of our value
chains.
Celebrating our people as part of our entrepreneurial
culture
Our people's commitment to delivering for
customers has played a key role in our strategic progress in 2024.
Across the business, we are strengthening our culture so that we
remain true to our values while focusing even more sharply on
profitable growth - and on the agile, entrepreneurial spirit that
will drive it.
I am very encouraged by the increased engagement
score and higher participation rate of 80% for our recent Your
Voice employee survey, compared with the last one conducted in
2021. Given the difficult environment of the past few years, our
engagement score of 7.0 is a good platform for us to build on. We
have further invested in our people and our talent pipeline this
year, with expanded graduate and global leadership programmes. This
ties into our Group-wide focus on excellence - our SynEx programme
focuses on both manufacturing and commercial excellence, with a
strong emphasis on improving our people's skills and ensuring they
can understand and deliver on customer needs as well as on
improving our processes.
Our work on diversity, equity and inclusion is
also moving forward. We continue to focus on gender diversity in
particular. While in 2024 women held 29% of senior management
roles, up from 9% in 2019, there is clearly still more to do
throughout the organisation, and our work in this area will
continue.
Staying focused on process
safety
Health and safety is one of our core values and
an indispensable part of our culture. For the second year in a row,
we achieved an historic low in our recordable injury case rate of
0.14. We are in the top quartile for our industry, a great
achievement from all our teams and a reflection of the fact that
the Synthomer safety mindset is being embraced by sites that have
joined the portfolio through the acquisitions of recent years. Work
to improve our safety culture never stops, however. This year we
continued our focus on process safety, which shows considerable
variation between divisions and reflects the mix of chemistries and
facilities we now have in our portfolio. We continue to have work
to do at our most recently acquired sites to accelerate their
improvement and we will continue these efforts in 2025.
Outlook
Trading since the start of 2025 has been in line
with our expectations, which assumed a muted start to the year
compared with the relatively strong first quarter in the prior
year.
We expect to deliver further earnings progress
in 2025, driven by £25-30m in expected benefits from delivering our
self-help and strategic plans, with less offsetting cost headwinds
expected than in 2024. We are assuming limited end-market demand
improvement at this stage. Our confidence is underpinned by the
strong 2024 exit margins in our speciality businesses, reflecting
progress made on our cost programmes and from reallocating our
resources towards our speciality products, coupled with the ongoing
volume improvement in Health & Protection.
We also expect to deliver positive Free Cash
Flow in 2025 and some deleveraging, even without a significant
improvement in market conditions.
In the medium term, we remain committed to our
ambition to more than double Synthomer's earnings, through a
combination of continued reliability and cost actions, end-market
volume recovery and strategic delivery.
Michael
Willome
Chief Executive Officer
11 March 2025
FINANCIAL REVIEW - CHIEF FINANCIAL OFFICER'S
INTRODUCTION
A year of steady delivery on our strategy has
strengthened the business for the future and returned robust
underlying earnings improvement in 2024, even as we continue to
remain highly focused on cost, capital discipline and debt
management while demand remains subdued.
Controlling the controllables and delivering on
strategy
While we are confident that global megatrends
will return our sector to growth, 2024 has continued the recent
trend of subdued demand in many end markets. We have used this time
to focus on two main priorities: ensuring that the business is run
as effectively and efficiently as possible in the present, while
continuing to reshape Synthomer as a speciality solutions platform
for attractive end markets in the medium term. We have made good
progress in both areas, and we end the year a stronger business
than we began it.
Improving cost competitiveness and
reliability
Work across the business continued to focus on
further improving cost competitiveness and reliability. This
included strengthening our supplier network for key raw materials,
and improving our end-to-end planning, procurement and logistics
processes. Overall, our performance improvement programme delivered
c.£26m in benefits in 2024.
As our procurement optimisation programme ramps up in 2025 and
other cost and strategic initiatives are implemented, alongside
lower offsetting bonus accrual and wage inflation, we are confident
in making further earnings progress in 2025.
Strategic progress and rigorous capital
allocation
Portfolio management and differentiated capital
allocation are important pillars of our strategy.
In April 2024, we completed the divestment of
our non-core Compounds business for a profit on disposal of £1.1m
before the recycling of translation reserves and cash proceeds of
£19.6m after costs. The divestment included three manufacturing
sites, further reducing our site footprint to 31, a reduction of
nearly 30% since 2022.
Our divestments and rationalisations all serve
the central aim of our strategy - to make Synthomer a more focused
speciality business. They also support our disciplined approach to
capital allocation, prioritising resources to the highest-returning
projects in growth markets and giving preference to speciality
rather than base businesses. A more streamlined portfolio with
fewer sites means our capital, people and time can be directed more
effectively to our highest-returning opportunities. In 2024 we
spent £83.2m in net capital expenditure, comparable to 2023, but
with fewer sites a greater proportion of that has been allocated to
enhancing speciality product capacity in attractive geographies,
rather than to important but low-returning SHE and maintenance
activities. Examples include our de-bottlenecking investment
in coatings capacity in the Middle East, and the full opening of
our China Innovation Centre in Shanghai.
Staying focused on net debt
We ended the year with net debt of £597.0m
compared to £499.7m at the end of 2023, reflecting a £23.2m
reduction in our utilisation of receivables financing facilities
(to £87.3m at 31 December 2024), pension payments of £19.8m
including the remainder of the previously agreed deferred
contributions to the UK pension scheme, as well as payment in H1 of
the £39.1m EC fine imposed in 2022 by the European Commission in
relation to Styrene Monomer purchasing. Free Cash Flow was
£(54.7)m, although much closer to neutral when adjusted for the
movement in receivables financing and deferred pension
contributions, but clearly lower than the very high level of EBITDA
to Free Cash Flow conversion in 2023.
At year-end, net debt: EBITDA under the covenant
leverage definition was 4.6x, well within our 5.75x covenant
requirement, although some way from our medium-term target of the
1-2x range. We continue to focus on all available opportunities to
reduce leverage. The non-recurrence of the exceptional outflows in
2024, and expected reductions in net working capital, are expected
to support positive Free Cash Flow and deleveraging in 2025, even
if end-market conditions do not significantly improve.
In April 2024, we successfully tendered for
€370m of our bonds due in 2025, reducing gross debt and extending
maturities by issuing €350m of bonds due in 2029. We expect to pay
the remaining €150m outstanding of 3.875% senior unsecured loan
notes maturing July 2025 from cash and short-term deposits.
The Group's undrawn committed liquidity at 31 December 2024
was in excess of £470m, comprising unrestricted cash and short-term
deposits of £225.8m, the undrawn RCF and other committed
facilities. Our next significant debt maturity is in
2027.
Targeting growth in the medium and long term
We remain fully focused on our medium-term
targets. Driven by the growth we expect as end-market demand
recovers, we anticipate mid-single-digit growth over the cycle on a
constant currency basis. We aim to bring our EBITDA margin above
15%, driven by specialisation, sustainable innovation and greater
differentiation, and supported by business excellence and further
simplified manufacturing operations and supply chains, in line with
our strategy. Over time, our goal is to drive return on invested
capital into the mid-teens.
Lily
Liu
Chief Financial Officer
11 March 2025
Group revenue, EBITDA and operating profit - continuing
operations
Revenue for the continuing Group of £1,986.8m
(2023: £1,940.6m) increased by 5.1% in constant currency. This
principally reflects an 8.4% increase in volume driven by a
recovery of some of the substantial volume declines experienced in
2023, partially offset by pass-through of lower raw material input
prices relative to the prior year.
EBITDA for the continuing Group increased by
9.2% in constant currency to £146.6m (2023: £137.4m), principally
benefiting from our self-help actions and strategic reorientation
to higher margin speciality businesses, partially offset by the
previously disclosed operating cost increases, mainly due to wage
inflation and normalisation of bonus accrual. Corporate costs
increased to £23.7m in the period (2023: £20.2m), reflecting wage
inflation, bonus accrual, timing of operating expenditures and
higher expenditure in relation to implementing our sustainability
objectives. Depreciation and amortisation was £96.2m (2023:
£104.0m), resulting in underlying operating profit for the
continuing Group of £50.4m (2023: £33.4m).
On a statutory basis, including the Special
Items excluded from underlying measures (see below), this resulted
in an operating loss for the continuing Group of £(24.1)m (2023:
£(39.5)m).
|
Full year ended 31 December
2024, £m
|
CCS
|
AS
|
HPPM
|
Corp.
|
Continuing
operations
|
Dis-continued
|
Total
Group
|
|
Revenue
|
790.5
|
588.4
|
607.9
|
-
|
1,986.8
|
9.8
|
1,996.6
|
|
EBITDA
|
85.9
|
47.9
|
36.5
|
(23.7)
|
146.6
|
2.6
|
149.2
|
|
EBITDA % of
revenue
|
10.9%
|
8.1%
|
6.0%
|
|
7.4%
|
|
7.5%
|
|
Operating profit -
underlying
|
60.6
|
15.0
|
8.4
|
(33.6)
|
50.4
|
2.4
|
52.8
|
|
Operating profit/(loss) -
statutory
|
32.5
|
(9.5)
|
(9.5)
|
(37.6)
|
(24.1)
|
(1.8)
|
(25.9)
|
|
Full year
ended 31 December 2023, £m
|
CCS
|
AS
|
HPPM
|
Corp.
|
Continuing
operations
|
Dis-continued
|
Total
Group
|
|
Revenue
|
820.2
|
581.7
|
538.7
|
-
|
1,940.6
|
80.6
|
2,021.2
|
|
EBITDA
|
100.1
|
31.2
|
26.3
|
(20.2)
|
137.4
|
1.7
|
139.1
|
|
EBITDA %
of revenue
|
12.2%
|
5.4%
|
4.9%
|
|
7.1%
|
|
6.8%
|
|
Operating
profit/(loss) - underlying
|
74.3
|
(7.5)
|
(6.0)
|
(27.4)
|
33.4
|
0.4
|
33.8
|
|
Operating
profit - statutory
|
42.1
|
(32.7)
|
(15.3)
|
(33.6)
|
(39.5)
|
57.2
|
17.7
|
Special Items - continuing operations
The following items of income and expense have
been reported as 'Special Items - continuing operations' and have
been excluded from EBITDA and other underlying metrics:
|
Full year ended 31
December
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
Amortisation of acquired intangibles
|
|
(45.1)
|
(49.3)
|
|
Restructuring and site closure costs (including share of
JV)
|
|
(15.4)
|
(14.7)
|
|
Impairment charge
|
|
(5.7)
|
(5.6)
|
|
Pension
past service cost
|
|
(4.4)
|
-
|
|
Sale of
business
|
|
(3.3)
|
(0.1)
|
|
Acquisition costs and related gains
|
|
(0.6)
|
(2.0)
|
|
Regulatory fine
|
|
-
|
(0.7)
|
|
Abortive
bond costs
|
|
-
|
(0.5)
|
|
Total impact on operating
profit - continuing operations
|
|
(74.5)
|
(72.9)
|
|
Loss on
extinguishment of financing facilities
|
|
(1.4)
|
(4.7)
|
|
Fair
value movement on unhedged interest rate derivatives
|
|
-
|
(1.8)
|
|
Total impact on loss before
taxation - continuing operations
|
|
(75.9)
|
(79.4)
|
|
Taxation
Special Items
|
|
7.5
|
(1.7)
|
|
Taxation
on Special Items
|
|
7.1
|
4.5
|
|
Total impact on loss for the
period - continuing operations
|
|
(61.3)
|
(76.6)
|
Amortisation of acquired intangibles reflects
the amortisation on the customer lists, patents, trademarks and
trade secrets that arose on historic acquisitions. The intangible
assets arising on the acquisition are amortised over a period of
8-20 years.
Restructuring and site closure costs in 2024
mainly comprised a £2.4m gain in relation to site rationalisation
activity and a release of a tax penalty provision in Malaysia, a
£5.5m charge in relation to the ongoing integration of the acquired
adhesive resins business, £7.3m in relation to the ongoing
functional and site rationalisation in the USA and Europe, as a
result of previous divestments and closures, and £3.7m of
restructuring costs associated with our operational site reviews to
align with our strategic initiatives.
In 2024, a £3.6m impairment charge was provided
for in relation to the mothballing of the nitrile latex plant in
Malaysia and a £2.1m impairment was recognised in relation to site
rationalisations in the USA.
The pension past service cost of £4.4m relates
to a one-off non-cash 'Barber window' equalisation and other
adjustments which arose following a legal review of scheme
documentation.
Sale of businesses costs of £3.3m in 2024 mainly
comprise costs incurred in relation to previous and potential
future divestments.
Acquisition costs and related gains of £0.6m in
2024 relate to the pension costs associated with the acquisition of
the adhesive resins business.
Taxation Special Items of £7.5m reflects the
release of a Malaysian uncertain tax provision which was
successfully concluded in the year. The Taxation on Special Items
for continuing operations in 2024 was £7.1m, mainly relating to
deferred tax arising on the amortisation of acquired intangibles
and restructuring and site closure costs.
Discontinued operations
On 30 April 2024, the Group completed the
divestment of its latex compounding operations ('the Compounds
business') to Matco Latex Services BV, resulting in a net cash
inflow of £19.6m. The profit on disposal before the recycling of
translation reserves was £1.1m. The Compounds business is reported
as a discontinued operation in these results. In accordance with
IFRS 5, discontinued revenues have been reduced by £5.7m,
representing the revenue earned to the date of sale by the
continuing operations from inter-company sales to the Compounds
business. Continuing revenues have been increased by the same
amount.
In the period, £4.2m of net losses were
recognised in relation to Special Items - discontinued operations
(2023: £39.4m gain), comprising the profit on disposal of £1.1m
noted above and £(4.4)m of translation losses recycled from
reserves on the disposal, as well as £0.2m of gains related to
other previous disposals offset by £(1.1)m of costs in relation to
the closure of the North America Paper & Carpet
business.
Finance costs
|
Full year ended 31 December
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
Interest
payable
|
|
(68.0)
|
(70.6)
|
|
Interest
receivable
|
|
12.1
|
10.2
|
|
Net
interest expense on defined benefit obligation
|
|
(1.7)
|
(2.7)
|
|
Interest
element of lease payments
|
|
(2.4)
|
(1.8)
|
|
Finance costs -
underlying
|
|
(60.0)
|
(64.9)
|
|
Fair
value movement on unhedged interest rate derivatives
|
|
-
|
(1.8)
|
|
Loss on
extinguishment of financing facilities
|
|
(1.4)
|
(4.7)
|
|
Finance costs -
statutory
|
|
(61.4)
|
(71.4)
|
Underlying finance costs decreased to £60.0m
(2023: £64.9m) and comprise interest on the Group's financing
facilities, interest rate swaps, amortisation of associated debt
costs and IAS 19 pension interest costs in respect of our defined
benefit pension schemes. The reduction in net interest payable
mainly reflects increased interest receivable following receipt of
the proceeds of the rights issue in October 2023 and resulting
lower gross debt, partially offset by increased bond interest as a
result of the bond refinancing (see below).
The Group recognised as Special Items a total of
£1.4m in finance costs relating to the write-off of previous issue
costs on extinguishment of financing facilities, as a result of the
bond refinancing.
Taxation
The Group's underlying tax credit for continuing
operations was £4.2m (2023: £3.5m credit), representing an
effective tax rate on the underlying loss before tax of 43.8%
(2023: 11.1%). The effective tax rate is driven by the geographical
mix of profits. The Group is within the scope of the OECD Pillar
Two model rules which came into effect from 1 January 2024.
Management has performed an assessment of the Group's potential
exposure to Pillar Two top-up tax for 2024 and based on that
assessment, transitional safe-harbour relief should apply to all
jurisdictions in which the Group operates and therefore the Group
does not expect an exposure to Pillar Two top-up tax. The Group
expects the effective tax rate to trend towards 25% over
time.
Non-controlling interest
The Group continues to hold 70% of Revertex
(Malaysia) Sdn Bhd and its subsidiaries. These entities form a
relatively minor part of the Group, so the impact on underlying
performance from non-controlling interests is not
significant.
Earnings per share
Earnings per share is calculated based on the
weighted average number of shares in issue during the year. The
weighted average number of shares for 2024 was 163.5m (2023: 85.4m
on a comparable basis), reflecting the 20 to 1 share consolidation
and the issuance of new shares at a discount under the rights issue
in October 2023. As at 11 March 2025, the Company had 163.5m shares
in issue.
Underlying earnings per share is (2.5) pence for
the year, a significant improvement from (35.1) pence in 2023 on a
comparable basis. The statutory earnings per share is (44.4) pence
(2023: (78.5) pence on a comparable basis).
Currency
The Group presents its consolidated financial
statements in sterling and conducts business in many currencies. As
a result, it is subject to foreign currency risk due to exchange
rate movements, which affect the Group's translation of the results
and underlying net assets of its operations. To manage this risk,
the Group uses foreign currency borrowings, forward contracts and
currency swaps to hedge non-sterling net assets, which are
predominantly denominated in euros, US dollars and Malaysian
ringgits.
In 2024, the Group experienced a translation
headwind of £3.3m on EBITDA, with average FX rates against our
three principal currencies of €1.18, $1.28 and MYR 5.84 to the
pound.
Given the global nature of our customer and
supplier base, the impact of transactional foreign exchange can be
very different from translational foreign exchange. We are able to
partially mitigate the transaction impact by matching supply and
administrative cost currencies with sales currencies. To reduce
volatility which might affect the Group's cash or income statement,
the Group hedges net currency transaction exposures at the point of
confirmed order, using forward foreign exchange contracts. The
Group's policy is, where practicable, to hedge all exposures on
monetary assets and liabilities.
Cash performance
The following table summarises the movement in
net debt and is in the format used by management:
|
Full year ended 31
December
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
Opening net
debt
|
|
(499.7)
|
(1,024.9)
|
|
Underlying operating profit (excluding joint
ventures)
|
|
51.2
|
32.4
|
|
Movement
in working capital
|
|
(24.9)
|
80.6
|
|
Depreciation of property, plant and equipment
|
|
84.3
|
96.5
|
|
Amortisation of other intangible assets
|
|
12.1
|
8.8
|
|
Net
capital expenditure
|
|
(83.2)
|
(84.0)
|
|
Operating Cash
Flow1
|
|
39.5
|
134.3
|
|
Net
interest paid
|
|
(54.6)
|
(54.3)
|
|
Tax
(paid)/received
|
|
(18.1)
|
9.3
|
|
Pension
funding
|
|
(19.8)
|
(7.3)
|
|
Adjustment for gain on sale of assets
|
|
(4.3)
|
-
|
|
Adjustment for share-based payments charge
|
|
1.6
|
1.8
|
|
Dividends
received from joint ventures
|
|
1.0
|
1.9
|
|
Free Cash
Flow
|
|
(54.7)
|
85.7
|
|
Cash
impact of settlement of interest rate derivative
contracts
|
|
-
|
12.1
|
|
Cash
impact of restructuring and site closure costs
|
|
(20.2)
|
(28.0)
|
|
Cash
impact of acquisition costs
|
|
(1.7)
|
(1.9)
|
|
Payment
of EC fine settlement amount
|
|
(39.1)
|
-
|
|
Proceeds
on sale of business
|
|
20.5
|
208.2
|
|
Purchase
of adhesive resins business
|
|
-
|
(18.4)
|
|
Rights
issue (costs)/proceeds
|
|
(4.7)
|
265.5
|
|
Repayment
of principal portion of lease liabilities
|
|
(12.1)
|
(12.4)
|
|
Dividends
paid
|
|
(0.5)
|
-
|
|
Foreign
exchange and other movements
|
|
15.2
|
14.4
|
|
Movement in net
debt
|
|
(97.3)
|
525.2
|
|
Closing net
debt
|
|
(597.0)
|
(499.7)
|
1
Operating Cash Flow is defined as Total Group
EBITDA plus/minus net working capital movement less capital
expenditure.
Underlying operating profit increased to £52.8m
reflecting the trading performance described above.
The net working capital outflow of £24.9m
principally reflects a reduction in receivables financing
utilisation of £23.2m (see below) and tactical increases in
inventory at year end.
In December 2022, the Group put in place
non-recourse receivables financing facilities for a maximum
committed amount of €200m. Factored receivables assigned under the
facilities were substantially lower than at the start and midpoint
of the financial year, amounting to £87.3m net at 31 December 2024
(30 June 2024: £128.0m net, 31 December 2023: £110.6m net). Under
the facilities, the risks and rewards of ownership are transferred
to the assignees. The duration of the committed facilities runs to
31 January 2027.
Depreciation reduced reflecting the capital
expenditure profile, while amortisation of other intangibles
increased due to the Pathway business transformation programme. Net
capital expenditure was £83.2m (2023: £84.0m), principally for
Pathway and recurring SHE and sustenance expenditure. The Group
continues to anticipate broadly similar levels of capital
expenditure to FY 2024 in FY 2025.
Net interest paid increased to £54.6m (2023:
£54.3m) reflecting increased and rephased bond interest costs,
offset by increased interest receipts from cash raised in the
October 2023 rights issue.
Net tax paid was £18.1m (2023: £9.3m received)
reflecting tax payments on account made in the year.
In the year, £19.8m in cash contributions were
made to the Group's pensions schemes, including c.£17.4m in
previously agreed deferred contributions to the UK pension scheme
which are not expected to recur.
The cash impact of Special Items including
restructuring and site closure costs and acquisition costs was an
outflow of £21.9m.
Proceeds on sale of business of £20.5m comprises
£19.6m from the sale of the Compounds business noted above, less
£3.3m Sale of business costs also previously described above, plus
£4.2m final receipt of deferred consideration from the disposal of
the Laminates, Films and Coated Fabrics business in February
2023.
Group debt is denominated in euros and dollars.
The euro weakened relative to sterling during the year, leading to
a foreign exchange gain in net debt.
Financing and liquidity
At 31 December 2024, net debt was £597.0m (31
December 2023: £499.7m). The increase principally reflects
settlement of the EC fine in January, the c.£23m reduction in
utilisation of receivables financing facilities, the remainder of
the previously agreed deferred contributions to the UK pension
scheme and the Free Cash Flow movements noted above, partially
offset by the divestment proceeds for the Compounds
business
In April 2024, we tendered for €370m of our
bonds due 2025, reducing gross debt and extending maturities by
issuing €350m of bonds due 2029.
As at 31 December 2024, committed borrowing
facilities principally comprised a €300m RCF maturing in July 2027,
the UK Export Finance (UKEF) facilities of €288m and $230m both
maturing October 2027, €350m of five-year 7.375% senior unsecured
loan notes maturing May 2029 and the remaining €150m outstanding of
3.875% senior unsecured loan notes maturing July 2025. At 31
December 2024, the RCF was undrawn and the UKEF facilities were
fully drawn.
The Group's undrawn committed liquidity at 31
December 2024 was in excess of £470m, comprising unrestricted cash
and short-term deposits of £225.8m, the RCF and other committed
facilities.
The RCF and the UKEF facilities are subject to
one leverage ratio covenant. For prudence, the Group agreed in
March 2024 to extend the period of temporary covenant relaxation to
ensure that appropriate headroom was maintained. Accordingly, the
net debt: EBITDA ratios required under the covenant have been set
at not more than 5.75x in December 2024, 5.0x in June 2025 and
4.75x in December 2025. Reducing leverage further towards our 1-2x
medium-term target range remains a key priority for the
Group.
The Group's net debt: EBITDA for the purposes of
the leverage ratio covenant increased from 4.2x at 31 December 2023
to 4.6x at 31 December 2024, principally due to the higher net debt
at the period end as described elsewhere.
The Group expects net financing costs of
c.£60-65m in 2025 as a result of interest rate movements, the
recent bond refinancing and other changes to the Group's financing
arrangements.
Balance sheet
Net assets of the Group decreased by 4.7% to
£1,107.7m at 31 December 2024, mainly reflecting the loss in the
period.
Provisions
The Group provisions balance decreased to £35.3m
compared with a balance of £41.5m as at 31 December 2023, mainly
reflecting cash utilisation of £7.3m in the period, most notably in
relation to restructuring and site rationalisation
activities.
Retirement benefit plans
The Group's principal funded defined benefit
pension schemes are in the UK and the USA and are both closed to
new entrants and future accrual. The Group also operates an
unfunded defined benefit scheme in Germany and various other
defined contribution overseas retirement benefit
arrangements.
The Group's net retirement obligation decreased
by £15.0m to £49.7m at 31 December 2024 (31 December 2023: £64.7m),
and reflects the market value of assets and the valuation of
liabilities in accordance with IAS 19, including an asset of £26.0m
for the UK scheme, which was affected by a £4.4m charge in relation
to one-off past service costs. The net retirement obligation
reduction comprised £19.8m of cash contributions, partially offset
by actuarial losses of £2.1m. During 2025 the Group anticipates
making c.£1.6m in contributions to the UK scheme.
DIVISIONAL REVIEW - CONTINUING OPERATIONS
Coatings & Construction Solutions
(CCS)
While mixed market conditions and a substantial
share of higher operating costs limited the scope for CCS to
outperform in 2024, our most speciality-focused division continued
to enhance its alignment of people, capital and strategy to support
long-term profitable growth.
|
Full year ended 31
December
|
2024
|
2023
|
Change
|
Constant
currency1
|
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
790.5
|
820.2
|
(3.6)%
|
(1.0)%
|
|
Volumes
(ktes)
|
513.1
|
501.2
|
+2.4%
|
|
|
EBITDA
|
85.9
|
100.1
|
(14.2)%
|
(12.2)%
|
|
EBITDA %
of revenue
|
10.9%
|
12.2%
|
|
|
|
Operating
profit - underlying
|
60.6
|
74.3
|
(18.4)%
|
(16.6)%
|
|
Operating
profit - statutory
|
32.5
|
42.1
|
(22.8)%
|
|
1 Underlying constant currency revenue and
profit retranslate current year results using the prior year's
average exchange rates.
Performance
Divisional revenue decreased by 1.0% in constant
currency to £790.5m (2023: £820.2m), with a 2.4% increase in volume
offset by lower pricing, reflecting pass-through of lower raw
material costs. The year-on-year volume growth was driven by market
share gains in coatings as we focus on organic growth
geographically, and an improvement in construction volumes, albeit
from very low levels. Consumer activity levels were flat while our
activities in energy end markets experienced a slower rate of
growth following a reprofiling of orders from certain key customers
in the second half.
The division was successful in improving gross
margins in all key end-market areas apart from construction,
reflecting our ongoing focus on enhancing the speciality nature of
our offering for customers. CCS generated £85.9m of EBITDA (2023:
£100.1m) in the year, equating to an EBITDA margin of 10.9% (2023:
12.2%). This reflected the limited volume growth, a significant
share of the higher operating costs described previously,
investment in our innovation pipeline and geographic range of
offerings, and the non-recurrence of some tactical initiatives from
2023.
CCS is typically the most seasonally weighted of
our divisions to the first half. In 2024 this was exacerbated by
the relatively slower growth in higher margin product areas during
the second half.
Strategy
Our priorities throughout 2024 have been
enhancing organic growth capability, disciplined investment in
innovation and enhancing our customer proposition, and continued
optimisation of our manufacturing base to align with our strategic
ambitions.
During the year we continued to leverage our
leading market positions in niche European markets into other
markets globally. Through a more end-market aligned approach, with
key account management and value selling, we are targeting
opportunities to grow our market share particularly in the USA and
Middle East.
During the year we reviewed and begun to
overhaul our approach to innovation with a view to becoming more
end-customer focused and faster to market with new products. We
have also begun to increase the proportion of our innovation work
that focuses on offering more sustainable products utilising
bio-based or circular raw materials, which is a point of increasing
differentiation in many of our markets.
All our growth plans are integrated with our
asset optimisation projects and other cost and capacity management
activities. For example, we have recently invested to improve the
manufacturing flexibility of a number of our major facilities in
the USA and Asia, giving us the ability to manufacture a number of
products in those regions that were previously only made in Europe.
We also successfully commissioned a small investment which enhances
our coatings capacity in the Middle East, and we are increasing our
focus on growing our customer base in China, capitalising on the
Group's new innovation centre in Shanghai.
We continue to identify and take action on
opportunities to optimise our production activities to improve
asset utilisation rates while reducing complexity and cost. Our
Fitchburg, Massachusetts facility successfully transferred products
to other sites and ceased production ahead of schedule during the
period, with the site subsequently sold after year end. In the year
we delivered a successful AI-enabled pilot project to enhance
throughput at one of our capacity-constrained sites, a significant
new capability for our excellence teams which we plan to utilise
more widely across the Group as a whole in the coming
years.
Adhesive Solutions (AS)
AS has achieved a step change in financial
results this year through our successful performance and
reliability improvement programme. We will continue to build on
this progress while increasing our focus on our considerable global
growth opportunities.
|
Full year ended 31
December
|
2024
|
2023
|
Change
|
Constant
currency1
|
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
588.4
|
581.7
|
+1.2%
|
+4.0%
|
|
Volumes
(ktes)
|
269.3
|
247.2
|
+9.0%
|
|
|
EBITDA
|
47.9
|
31.2
|
+53.5%
|
+57.1%
|
|
EBITDA %
of revenue
|
8.1%
|
5.4%
|
|
|
|
Operating
profit/(loss) - underlying
|
15.0
|
(7.5)
|
n/m
|
n/m
|
|
Operating
loss - statutory
|
(9.5)
|
(32.7)
|
(70.9)%
|
|
1 Underlying constant currency revenue and
profit retranslate current year results using the prior year's
average exchange rates.
Performance
Divisional revenue increased by 4.0% in constant
currency, to £588.4m (2023: £581.7m), outpacing a sluggish
underlying environment for adhesives end markets in 2024.
Divisional volumes increased by 9.0%, with speciality product areas
(c.60% of AS revenue) benefiting from a strong innovation and
opportunity pipeline while retaining robust pricing. Meanwhile,
many base product areas regained significant market share from
global competitors as a result of our improved cost
competitiveness. Across the division, some pass-through of lower
raw material costs partially offset the volume growth in revenue
terms.
Within the division, speciality products (such
as rosins, amorphous polyolefins (APOs), water-based emulsion and
polybutadiene polymers) performed well throughout the year,
particularly in gross margin terms, reflecting their greater
differentiation for customers. In our more base chemical products
(particularly hydrocarbon resins), cost savings offset ongoing
competitive pressure while margins benefited from operating
leverage to improved volumes. Across the division, market
conditions softened modestly in the second half, including for
automotive end markets. Geographically, volume improved in all
regions.
Divisional EBITDA increased by 57.1% in constant
currency to £47.9m (2023: £31.2m), with EBITDA margin increasing by
270bps to 8.1% (2023: 5.4%). This very encouraging performance was
achieved despite the absorption of the higher operating costs
described elsewhere, and reflects the return to growth and the
performance improvement programme that was put in place in mid-2023
by the new divisional management team. The programme delivered £21m
in benefits in 2024, slightly ahead of our expectations, with more
to follow in 2025 and beyond (see below).
Strategy
The AS division has made significant headway
this year through the dedicated performance improvement programme,
which has focused on systematically transforming the adhesive resin
business acquired in 2022. The programme has reduced costs and
improved end-to-end operations, from supplier network improvement
to production site efficiency and delivery logistics, enabling
substantially better service for customers. Having delivered £26m
in cumulative benefits in 2023 and 2024, the programme is now
expanding its objective from £25m originally to £35m+ in cumulative
benefits by the end of 2026.
While continued delivery on the performance side
remains a key objective in 2025, we are also increasingly focused
on the longer-term growth of the division. We see clear
opportunities to build on our leading positions in a range of
speciality adhesive applications in attractive end markets and our
multi-year relationships with many high-quality customers,
supported by a global production network and comprehensive
technology and service platform. During the year the depth and
nature of our technical dialogue and joint projects with many
customers has evolved considerably, particularly in relation to
innovation and sustainability. This includes replacing
solvent-based pressure-sensitive adhesives in speciality tapes and
developing new APO types for improved performance in packaging and
hygiene applications. Our efforts are supported by achieving
ISCC PLUS certification of our major manufacturing sites and
supporting decarbonisation projects. This means we are increasingly
well-placed to partner both up and down our value chains to make
them more sustainable.
Most of our investment for growth also aims to
build on the strengths of our speciality portfolio, such as our
investment to increase APO capacity at our Texas facility, which is
expected to come onstream in Q2 2025. Meanwhile, in accordance with
our differentiated steering strategy, in the base product areas we
continue to focus any investment on enhancing cost competitiveness
or reliability, such as our project to strengthen our supply chain
for hydrocarbon resin production in Europe which began to ship
during H2 2024 as planned.
Health & Protection and Performance Materials
(HPPM)
Heath & Protection activity levels increased
substantially through the year, albeit at unit margins that remain
below pre-pandemic levels, and we began a significant zero-capital
technology partnership for the US domestic glove market. Compounds
was divested in 2024 and our plans for other non-core businesses
continue to make headway.
|
Full year ended 31 December
(continuing)1
|
2024
|
2023
|
Change
|
Constant
currency2
|
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
607.9
|
538.7
|
+12.8%
|
+15.6%
|
|
Volumes
(ktes)
|
580.6
|
508.7
|
+14.1%
|
|
|
EBITDA
|
36.5
|
26.3
|
+38.8%
|
+40.3%
|
|
EBITDA %
of revenue
|
6.0%
|
4.9%
|
|
|
|
Operating
profit/(loss) - underlying
|
8.4
|
(6.0)
|
n/m
|
n/m
|
|
Operating
loss - statutory
|
(9.5)
|
(15.3)
|
(37.9)%
|
|
1 Laminates, Films and Coated Fabrics, North
America Paper and Carpet and Compounds have been reclassified as
discontinued operations.
2
Underlying constant currency revenue and profit
retranslate current year results using the prior year's average
exchange rates.
Continuing divisional performance
Divisional revenue increased by 15.6% in
constant currency to £607.9m (2023: £538.7m), underpinned by a
14.1% increase in volume.
Heath & Protection volumes improved by 24.4%
year-on-year as the post-pandemic imbalance between supply and
demand in the nitrile latex for gloves market reduced further,
driven mainly by continued underlying hygiene demand growth
globally. However, for context, volumes have only now recovered to
80% of 2019 levels. Unit margins remain low by historical standards
but have improved over the course of the year. In the period, we
received an initial technology licensing fee payment that is the
first stage of the multi-year capital-free technology partnership
which leverages our Health & Protection intellectual property,
technology and manufacturing expertise for the onshore US glove
market.
In our Performance Materials portfolio, volumes
increased by 6.9%, led by Speciality Vinyl Polymers and SBR for
Paper in Europe, while trading in Acrylate Monomers and SBR for
carpet and foam in Europe has been more challenging.
As predominantly base chemicals businesses, the
division is highly operationally leveraged to volumes and capacity
utilisation, and in aggregate achieved a significant improvement in
profitability at the gross profit level over the year, supplemented
by self-help cost reduction activities (including the mothballing
of our facility in Kluang, Malaysia which completed in H1 2024 as
planned). This was partially offset by the higher operating costs
described elsewhere - but despite this, divisional EBITDA increased
by 40.3% in constant currency to £36.5m (2023: £26.3m), with EBITDA
margin improving by 110bps to 6.0% (2023: 4.9%).
Strategy
Our differentiated steering approach to our core
Health & Protection business focuses primarily on enhancing
cost efficiency across our value chain while improving our overall
value proposition for customers through selective investment in
process and product innovation and sustainability. For example, in
early 2025 we established a pioneering value chain in partnership
with suppliers Neste and PCS to manufacture bio-based nitrile latex
for the glove industry, using responsibly sourced bio-based
feedstock.
We continue to enhance our market intelligence
and understanding of the end users of our products (often multiple
steps down the value chain) to identify high-growth potential
markets. This supported our decision during 2024 to redesignate our
Speciality Vinyl Polymers business as core following a review of
adjacent market opportunities.
We have also been carefully monitoring and
seeking to position ourselves for developments in latex glove end
markets, particularly in the USA. The implementation of new tariffs
from 1 January 2025, which has affected the competitors of many of
our customers, may create growth opportunities in the coming years.
We will continue to support our US partner with further technology
licensing and manufacturing expertise as they work to begin
construction of onshore US capacity for nitrile latex and glove
manufacture. We continue to actively explore other potential
partnership opportunities for this business with little or no
capital investment. The division's growth potential is also
expected to benefit from Synthomer's new China Innovation Centre in
Shanghai.
At the end of April 2024, we completed the
divestment of our Compounds business to Matco Latex Services BV,
reducing our manufacturing site footprint by three sites (two in
the Netherlands and one in Egypt), as described
elsewhere.
Three other non-core portfolio rationalisation
processes continue to progress, including the planned divestment of
SBR for paper, carpet and foam in Europe.
Safety
For the second consecutive year, we achieved an
historic low in our recordable injury case rate of 0.14. This is a
great achievement, one that requires continual focus and diligence
from all our teams. Our process safety event rate, at 0.21,
includes considerable variation between divisions and reflects the
mix of chemistries and facilities we now have in our portfolio. We
still have work to do at our most recently acquired sites to
accelerate their improvement.
Keeping our people and contractors safe is our
highest priority, and is enshrined in our core SHE value, which
states that 'we always have time to work safely'.
Improving our process safety performance remains
challenging, particularly at our newer sites. So we continue to
strengthen our site systems and focus on 'leading' indicators, such
as permit to work, while encouraging near-miss and weak-signal
reporting. In addition, we make full use of traditional measures,
such as incident reporting and learning from both internal and
external incidents.
Our new 'bowtie' barrier initiative has now
completed checks on 10% of our identified barriers as part of our
major accident hazard prevention programme. Our ongoing analysis
shows that while the appropriate barriers are in place, some could
be strengthened and we have shared important lessons with our other
sites.
We used this year's annual regional SHE
conferences to invite leaders to share their personal experiences
of responding to an incident at their site, including what it meant
for them and how they dealt with the necessary follow-up
improvements. And we introduced new process safety webinars as a
direct result of feedback from our 2023 conferences.
We have continued to roll out our competency
assurance process to ensure we have consistent health and safety
knowledge and skills across the business, and provided process
safety training at our newer sites and for new
employees.
While we still have work to do, our longer-term
SHE trends continue to demonstrate that the longer sites are part
of Synthomer and our SHE management system, the better their
performance, though this year's PSER does show a small increase
year-on-year. Our functional SHE experts will continue to support
our newer sites to help them accelerate their SHE improvement by
fully adopting strong systems and by learning from others across
the Company.
|
Full year ended 31
December
|
2024
|
2023
|
Change
|
|
RCR
per 100,000
hours for employees and contractors
|
|
|
Absolute
|
|
CCS
|
0.25
|
0.23
|
+0.02
|
|
AS
|
-
|
0.38
|
(0.38)
|
|
HPPM
|
0.09
|
0.03
|
+0.06
|
|
Continuing
Group
|
0.14
|
0.16
|
(0.02)
|
|
PSER per 100,000 hours for
employees and contractors
|
|
|
Absolute
|
|
CCS
|
0.15
|
0.13
|
+0.02
|
|
AS
|
0.69
|
0.63
|
+0.06
|
|
HPPM
|
0.09
|
0.08
|
+0.01
|
|
Continuing
Group
|
0.21
|
0.18
|
+0.03
|
Forward-looking statements
Certain statements included or incorporated by
reference within this document may constitute 'forward-looking
statements' with respect to the operations, performance and
financial condition of the Group. By their nature, forward-looking
statements involve uncertainty, since future events and
circumstances can cause results or developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this report and the Company is under no obligation
to update these forward-looking statements. No statement in this
document should be construed as a profit forecast.
Consolidated income statement
for the
year ended 31 December 2024
|
|
|
2024
|
2023
|
|
|
|
Underlying
performance
£m
|
Special
items
£m
|
IFRS
£m
|
Underlying performance
£m
|
Special
items
£m
|
IFRS
£m
|
|
Continuing operations
Revenue
|
|
1,986.8
|
-
|
1,986.8
|
1,940.6
|
-
|
1,940.6
|
|
Company and subsidiaries operating
profit before
Special Items
|
|
48.8
|
-
|
48.8
|
32.0
|
-
|
36.3
|
|
Amortisation of acquired intangibles
|
|
-
|
(45.1)
|
(45.1)
|
-
|
(49.3)
|
(49.3)
|
|
Restructuring and site closure costs
|
|
-
|
(15.1)
|
(15.1)
|
-
|
(14.7)
|
(14.7)
|
|
Acquisition costs and related losses
|
|
-
|
(0.6)
|
(0.6)
|
-
|
(2.0)
|
(2.0)
|
|
Sale of
business
|
|
-
|
(3.3)
|
(3.3)
|
-
|
(0.3)
|
(0.3)
|
|
Regulatory fine
|
|
-
|
-
|
-
|
-
|
(0.7)
|
(0.7)
|
|
Abortive
bond costs
|
|
-
|
-
|
-
|
-
|
(0.5)
|
(0.5)
|
|
Impairment charge
|
|
-
|
(5.7)
|
(5.7)
|
-
|
(5.6)
|
(5.6)
|
|
Pension
past service cost
|
|
-
|
(4.4)
|
(4.4)
|
-
|
-
|
-
|
|
Company
and subsidiaries operating profit/(loss)
|
|
48.8
|
(74.2)
|
(25.4)
|
32.0
|
(72.9)
|
(40.9)
|
|
Share of
joint ventures
|
|
1.6
|
(0.3)
|
1.3
|
1.4
|
-
|
1.4
|
|
Operating profit/(loss)
|
|
50.4
|
(74.5)
|
(24.1)
|
33.4
|
(72.9)
|
(39.5)
|
|
Interest
payable
|
|
(68.0)
|
-
|
(68.0)
|
(70.6)
|
-
|
(70.6)
|
|
Interest
receivable
|
|
12.1
|
-
|
12.1
|
10.2
|
-
|
10.2
|
|
Fair
value (loss)/gain on unhedged interest derivatives
|
|
-
|
-
|
-
|
-
|
(1.8)
|
(1.8)
|
|
Loss on
extinguishment of financing facilities
|
|
-
|
(1.4)
|
(1.4)
|
-
|
(4.7)
|
(4.7)
|
|
Net
interest expense on defined benefit obligations
|
|
(1.7)
|
-
|
(1.7)
|
(2.7)
|
-
|
(2.7)
|
|
Interest
element of lease payments
|
|
(2.4)
|
-
|
(2.4)
|
(1.8)
|
-
|
(1.8)
|
|
Finance costs
|
(60.0)
|
(1.4)
|
(61.4)
|
(64.9)
|
(6.5)
|
(71.4)
|
|
Loss before taxation
|
(9.6)
|
(75.9)
|
(85.5)
|
(31.5)
|
(79.4)
|
(110.9)
|
|
Taxation
|
|
4.2
|
14.6
|
18.8
|
3.5
|
2.8
|
6.3
|
|
(Loss)/profit for the year
from continuing operations
|
(5.4)
|
(61.3)
|
(66.7)
|
(28.0)
|
(76.6)
|
(104.6)
|
|
(Loss)/profit for the year from discontinuing operations
attributable to equity holders of the parent
|
|
1.6
|
(4.2)
|
(2.6)
|
(4.1)
|
39.6
|
35.5
|
|
(Loss)/profit for the
year
|
(3.8)
|
(65.5)
|
(69.3)
|
(29.6)
|
(37.2)
|
(66.8)
|
|
Profit/(loss) attributable to non-controlling interests
|
|
0.3
|
3.0
|
3.3
|
0.4
|
(0.2)
|
0.2
|
|
(Loss)/profit attributable to equity holders of the
parent
|
|
(4.1)
|
(68.5)
|
(72.6)
|
(30.0)
|
(37.0)
|
(67.0)
|
|
|
(3.8)
|
(65.5)
|
(69.3)
|
(29.6)
|
(37.2)
|
(66.8)
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
- Basic
from continuing operations
|
|
(3.5)p
|
(39.3)p
|
(42.8)p
|
(33.4)p
|
(89.4)p
|
(122.8)p
|
|
- Diluted
from continuing operations
|
|
(3.5)p
|
(39.3)p
|
(42.8)p
|
(33.4)p
|
(89.4)p
|
(122.8)p
|
|
-
Basic
|
|
(2.5)p
|
(41.9)p
|
(44.4)p
|
(35.1)p
|
(43.4)p
|
(78.5)p
|
|
-
Diluted
|
|
(2.5)p
|
(41.9)p
|
(44.4)p
|
(35.1)p
|
(43.4)p
|
(78.5)p
|
Consolidated statement of comprehensive
income
for the
year ended 31 December 2024
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
Equity holders of the
parent
£m
|
Non-controlling
interests
£m
|
Total
£m
|
Equity
holders
of the
parent
£m
|
Non-controlling
interests
£m
|
Total
£m
|
|
(Loss)/profit for the year
|
|
(72.6)
|
3.3
|
(69.3)
|
(67.0)
|
0.2
|
(66.8)
|
|
Actuarial
(Losses)/gains
|
|
(2.1)
|
-
|
(2.1)
|
2.9
|
-
|
2.9
|
|
Tax
relating to components of other comprehensive income
|
|
0.1
|
-
|
0.1
|
(1.0)
|
-
|
(1.0)
|
|
Total items that will not be
reclassified to profit or loss
|
|
(2.0)
|
-
|
(2.0)
|
1.9
|
-
|
1.9
|
|
Exchange
differences on translation of foreign operations
|
|
3.8
|
(0.8)
|
(3.0)
|
(58.3)
|
(0.8)
|
(59.1)
|
|
Exchange
differences recycled on sale of business
|
|
4.4
|
-
|
4.4
|
(0.5)
|
-
|
(0.5)
|
|
Fair
value (loss)/gain on hedged interest derivatives
|
|
(3.3)
|
-
|
(3.3)
|
(7.7)
|
-
|
(7.7)
|
|
Gains on
net investment hedges taken to equity
|
|
11.9
|
-
|
11.9
|
1.0
|
-
|
1.0
|
|
Total items that may be
reclassified subsequently to profit or loss
|
|
16.8
|
(0.8)
|
16.0
|
(65.5)
|
(0.8)
|
(66.3)
|
|
Total other comprehensive
(expense)/income for the year
|
|
14.8
|
(0.8)
|
14.0
|
(63.6)
|
(0.8)
|
(64.4)
|
|
Total comprehensive
(expense)/income for the year
|
|
(57.8)
|
2.5
|
(55.3)
|
(130.6)
|
(0.6)
|
(131.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Consolidated statement of changes in equity
for the
year ended 31 December 2024
|
|
|
Share
capital
£m
|
Share
premium
£m
|
Capital
redemption
reserve
£m
|
Hedging & translation
reserve
£m
|
Retained
earnings
£m
|
Total equity holdings of the
parent
£m
|
Non- controlling
interests
£m
|
Total
equity
£m
|
|
At 1
January 2024
|
|
1.6
|
925.9
|
0.9
|
10.4
|
209.8
|
1,148.6
|
13.4
|
1,162.0
|
|
Loss for
the year
|
|
-
|
-
|
-
|
-
|
(72.6)
|
(72.6)
|
3.3
|
(69.3)
|
|
Other
comprehensive income for the year
|
|
-
|
-
|
-
|
16.8
|
(2.0)
|
14.8
|
(0.8)
|
14.0
|
|
Total comprehensive income
for the year
|
|
-
|
-
|
-
|
16.8
|
(74.6)
|
(57.8)
|
2.5
|
(55.3)
|
|
Dividends
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.5)
|
(0.5)
|
|
Share-based payments
|
|
-
|
-
|
-
|
-
|
1.5
|
1.5
|
-
|
1.5
|
|
At 31 December
2024
|
1.6
|
925.9
|
0.9
|
27.2
|
136.7
|
1,092.3
|
15.4
|
1,107.7
|
|
|
|
Share
capital
£m
|
Share
premium
£m
|
Capital
redemption
reserve
£m
|
Hedging
& translation reserve
£m
|
Retained
earnings
£m
|
Total
equity holdings of the parent
£m
|
Non-
controlling interests
£m
|
Total
equity
£m
|
|
At 1
January 2023
|
|
46.7
|
620.0
|
0.9
|
75.9
|
273.5
|
1,017.0
|
14.0
|
1,031.0
|
|
(Loss)/profit for the year
|
|
-
|
-
|
-
|
-
|
(67.0)
|
(67.0)
|
0.2
|
(66.8)
|
|
Other
comprehensive (expense)/income for the year
|
|
-
|
-
|
-
|
(65.5)
|
1.9
|
(63.6)
|
(0.8)
|
(64.4)
|
|
Total
comprehensive (expense) for the year
|
|
-
|
-
|
-
|
(65.5)
|
(65.1)
|
(130.6)
|
(0.6)
|
(131.2)
|
|
Dividends
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Share
consolidation
|
|
(46.5)
|
46.5
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Issue of
shares
|
|
1.4
|
259.4
|
-
|
-
|
-
|
260.8
|
-
|
260.8
|
|
Share-based payments
|
|
-
|
-
|
-
|
-
|
1.4
|
1.4
|
-
|
1.4
|
|
At 31
December 2023
|
|
1.6
|
925.9
|
0.9
|
10.4
|
209.8
|
1,148.6
|
13.4
|
1,162.0
|
Consolidated balance sheet
as at 31
December 2024
|
|
|
2024
£m
|
2023
£m
|
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
455.1
|
465.7
|
|
Acquired
intangible assets
|
|
407.1
|
452.5
|
|
Other
intangible assets
|
|
70.6
|
71.1
|
|
Property,
plant and equipment
|
|
688.5
|
705.7
|
|
Deferred
tax assets
|
|
55.7
|
36.8
|
|
Defined
benefit asset
|
|
26.0
|
16.5
|
|
Investment in joint ventures
|
|
8.1
|
7.5
|
|
Total non-current
assets
|
1,711.1
|
1,755.8
|
|
Current assets
|
|
|
|
|
Inventories
|
|
348.2
|
344.1
|
|
Trade and
other receivables
|
|
227.2
|
213.0
|
|
Current
tax assets
|
|
15.6
|
8.8
|
|
Cash and
cash equivalents
|
|
225.8
|
371.3
|
|
Derivative financial instruments
|
|
2.8
|
12.2
|
|
Assets
classified as held for sale
|
|
6.5
|
1.5
|
|
Total current assets
|
826.1
|
950.9
|
|
Total assets
|
2,537.2
|
2,706.7
|
|
Current liabilities
|
|
|
|
|
Borrowings
|
|
(124.2)
|
(0.7)
|
|
Trade and
other payables
|
|
(391.6)
|
(431.3)
|
|
Lease
liabilities
|
|
(12.3)
|
(13.8)
|
|
Current
tax liabilities
|
|
(17.6)
|
(28.0)
|
|
Provisions for other liabilities and charges
|
|
(7.8)
|
(11.9)
|
|
Derivative financial instruments
|
|
(1.6)
|
(2.4)
|
|
Liabilities classified as held for sale
|
|
-
|
-
|
|
Total current liabilities
|
(555.1)
|
(488.1)
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
|
(698.6)
|
(870.3)
|
|
Trade and
other payables
|
|
(0.1)
|
(0.2)
|
|
Lease
liabilities
|
|
(43.6)
|
(41.5)
|
|
Deferred
tax liabilities
|
|
(28.9)
|
(33.8)
|
|
Retirement benefit obligations
|
|
(75.7)
|
(81.2)
|
|
Provisions for other liabilities and charges
|
|
(27.5)
|
(29.6)
|
|
Total non-current
liabilities
|
(874.4)
|
(1,056.6)
|
|
Total liabilities
|
(1,429.5)
|
(1,544.7)
|
|
Net assets
|
1,107.7
|
1,162.0
|
|
Equity
|
|
|
|
|
Share
capital
|
|
1.6
|
1.6
|
|
Share
premium
|
|
925.9
|
925.9
|
|
Capital
redemption reserve
|
|
0.9
|
0.9
|
|
Hedging
and translation reserve
|
|
27.2
|
10.4
|
|
Retained
earnings
|
|
136.7
|
209.8
|
|
Equity attributable to
equity owners of the parent
|
|
1,092.3
|
1,148.6
|
|
Non-controlling interests
|
|
15.4
|
13.4
|
|
Total equity
|
1,107.7
|
1,162.0
|
Consolidated cash flow statement
for the
year ended 31 December 2024
|
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Operating
|
|
|
|
|
|
|
Cash
generated from operations
|
|
|
39.2
|
|
195.0
|
|
-
Interest received
|
|
12.1
|
|
10.2
|
|
|
-
Interest paid
|
|
(64.3)
|
|
(62.7)
|
|
|
-
Interest element of lease payments
|
|
(2.4)
|
|
(1.8)
|
|
|
Net
interest paid
|
|
|
(54.6)
|
|
(54.3)
|
|
- UK
corporation tax received/(paid)
|
|
0.7
|
|
(2.9)
|
|
|
-
Overseas corporate tax (paid)/received
|
|
(18.8)
|
|
12.2
|
|
|
Total tax
(paid)/ received
|
(18.1)
|
9.3
|
|
Net cash (outflow)/inflow from operating activities
|
(33.5)
|
150.0
|
|
Investing
|
|
|
|
|
|
|
Dividends
received from joint ventures
|
|
|
1.0
|
|
1.9
|
|
Purchase
of property, plant and equipment and intangible assets
|
|
|
(90.6)
|
|
(84.0)
|
|
Proceeds
from sale of property, plant and equipment
|
|
|
7.4
|
|
-
|
|
Purchase
of business
|
|
|
-
|
|
(18.4)
|
|
Proceeds
from sale of business
|
|
|
20.5
|
|
208.2
|
|
Net cash
(outflow)/ inflow from investing activities
|
(61.7)
|
107.7
|
|
Financing
|
|
|
|
|
|
|
Dividends
paid
|
|
|
-
|
|
-
|
|
Dividends
paid to non-controlling interests
|
|
|
(0.5)
|
|
-
|
|
Proceeds
on issue of shares
|
|
|
(4.7)
|
|
265.5
|
|
Settlement of equity-settled share-based payments
|
|
|
(0.2)
|
|
(0.4)
|
|
Repayment
of principal portion of lease liabilities
|
|
|
(12.1)
|
|
(12.4)
|
|
Repayment
of borrowings
|
|
|
(327.9)
|
|
(892.0)
|
|
Proceeds
of borrowings
|
|
|
299.5
|
|
548.4
|
|
Net cash (outflow)/inflow
from financing activities
|
(45.9)
|
(90.9)
|
|
(Decrease)/ increase in
cash, cash equivalents and bank overdrafts during the
period
|
(141.1)
|
166.8
|
|
Cash and
cash equivalents and bank overdrafts at 1 January
|
|
|
370.6
|
|
209.2
|
|
Foreign
exchange (loss)/gain
|
|
|
(4.0)
|
|
(5.4)
|
|
Cash, cash equivalents and
bank overdrafts at 31 December
|
|
225.5
|
370.6
|
|
See note
8 for further details of cash flows from discontinued operations.
|
1. Special items
IFRS and Underlying
performance
The IFRS profit measures show the
performance of the Group as a whole and as such include all sources
of income and expense, including both one-off items and those that
do not relate to the Group's ongoing businesses. To provide
additional clarity on the ongoing trading performance of the
Group's businesses, management uses 'Underlying' performance as an
Alternative Performance Measure to plan for, control and assess the
performance of the segments. Underlying performance differs from
the IFRS measures as it excludes Special Items.
Special Items
Special Items are disclosed
separately in order to provide a clearer indication of the Group's
Underlying performance.
Special Items are either irregular -
and therefore including them in the assessment of a segment's
performance would lead to a distortion of trends - or are technical
adjustments which ensure the Group's financial statements are in
compliance with IFRS but do not reflect the operating performance
of a segment in the year, or both. An example of the latter is the
amortisation of acquired intangibles, which principally relates to
acquired customer relationships. The Group incurs costs, which are
recognised as an expense in the income statement, in maintaining
these customer relationships. The Group considers that the
exclusion of the amortisation charge on acquired intangibles
from Underlying
performance avoids the potential double counting of such costs and therefore excludes it as a Special Item from Underlying performance.
The following are consistently
disclosed separately as Special Items in order to provide a clearer
indication of the Group's Underlying performance:
· Restructuring and site closure costs
· Sale
of business or significant asset
· Acquisition costs
· Amortisation of acquired intangible assets
· Impairment of non-current assets
· Fair
value adjustments in respect of derivative financial instruments
where hedge accounting is not applied
· Items
of income and expense that are considered material, either by their
size and/or nature
· Tax
impact of above items
· Settlement of prior period tax issues
· Customisation, configuration and set up costs of significant
Software as a Service ("SaaS") arrangements.
Special Items comprise:
|
|
|
2024
£m
|
2023
£m
|
|
Amortisation of acquired intangibles
|
|
(45.1)
|
(49.3)
|
|
Restructuring and site closure costs
(including share of JV)
|
|
(15.4)
|
(14.7)
|
|
Impairment charge
|
|
(5.7)
|
(5.6)
|
|
Acquisition costs and related gains
|
|
(0.6)
|
(2.0)
|
|
Sale of
business
|
|
(3.3)
|
(0.1)
|
|
Regulatory fine
|
|
-
|
(0.7)
|
|
Abortive
bond costs
|
|
-
|
(0.5)
|
|
Pension
past service cost
|
|
(4.4)
|
-
|
|
Total impact on operating
loss
|
(74.5)
|
(72.9)
|
|
Finance costs
|
|
|
|
|
Fair
value loss on unhedged interest
derivatives
|
|
-
|
(1.8)
|
|
Loss on
extinguishment of financing facilities
|
|
(1.4)
|
(4.7)
|
|
Total impact on loss before
taxation
|
|
(75.9)
|
(79.4)
|
|
Taxation
Special items
|
|
7.5
|
(1.7)
|
|
Taxation
on Special items
|
|
7.1
|
4.5
|
|
Total impact on loss for the
year - continuing operations
|
(61.3)
|
(76.6)
|
|
Discontinued
Operations
|
|
|
|
|
Restructuring and site closure costs
|
|
(1.1)
|
(3.7)
|
|
Sale of
business
|
|
(3.1)
|
61.3
|
|
Impairment charge
|
|
-
|
(0.8)
|
|
Taxation
on Special Items
|
|
-
|
(17.4)
|
|
Total impact on
profit/(loss) for the year - discontinued
operations
|
(4.2)
|
39.4
|
|
Total impact on loss for the
year
|
(65.5)
|
(37.2)
|
Amortisation of acquired intangibles is the amortisation on
the customer lists, patents, trademarks and trade secrets arising
on past acquisitions. The fair value of the intangible assets
arising on past acquisitions are being amortised over periods
of 5-20 years mainly dependent on the
characteristics of the customer relationships.
1.
Special items (continued)
Within continuing operations,
Restructuring and site closure costs in
2023 comprised:
· A
£5.5m charge in relation to the ongoing integration of the acquired
Adhesive Resins business into the Adhesive Solutions
division
· £3.7m
of costs in relation to restructuring costs associated with our
operational site reviews to align with our strategic
initiatives
· £7.3m
of costs for ongoing functional and site rationalisation in the USA
and Europe, as a result of previous divestments and
closures
· A
£2.4m gain in relation to site rationalisation activity and a
release of an uncertain tax provision in Malaysia.
Within
discontinued operations, Restructuring and site closure costs of
£1.1m were incurred in relation to the closure of the US paper and
carpets business.
Restructuring and site closure costs in 2023 included charges
to integrate the adhesive resins business, site rationalisation
costs in the USA, Malaysia and Europe, and costs in relation to the
strategy change and alignment of the business into its new
divisions.
Within
continuing operations, a further £3.6m impairment charge was
provided in relation to plant capacity plan changes in Malaysia and
a £2.1m impairment recognised in relation to site rationalisations
in the USA. The impairment charge in 2023 related to the
mothballing of the NBR plant in Malaysia. The discontinued
operations impairment charge in 2023 related to lease impairments
in the discontinued US paper and carpets business.
Acquisition costs and related gains are for the acquisition
of the adhesive resins business and comprise £0.6m of costs,
related to obligations to the US pension schemes. Acquisition costs
in 2023 also related to this acquisition.
Sale of
business mainly related to the proceeds net of any costs, primarily
professional fees, incurred in conjunction with the sale of the
compounding business to Matco Latex Services BV along with costs
incurred in relation to prior and future divestments.
Other
costs include a £4.4m charge in relation to a one-off past service
cost due to a "Barber window" equalisation and other adjustments
which arose following a legal review of scheme
documentation.
In July
2018, the Group entered into swap arrangements to fix euro interest
rates on the full value of the then €440m committed unsecured
revolving credit facility. The fair value movement of the unhedged
interest rate derivatives in 2023 relates to the movement in the
mark-to-market of the swap in excess of the Group's
borrowings.
Taxation
Special Items in 2024 reflected the release of a Malaysian
uncertain tax provision which was successfully concluded in the
year. Tax Special Items in 2023 related to the disposal of the
Laminates, Films and Coated Fabrics business.
Taxation
on Special Items is mainly deferred tax credits arising on the
amortisation of acquired intangibles and restructuring and site
closure costs.
2. Segmental analysis
The Group's Executive Committee,
chaired by the Chief Executive Officer, examines the Group's
performance. At the start of 2024, certain foam products were
transferred from the CCS division into Performance Materials, and
tyre cord, elastomeric modifiers
and reinforcing resins products
transferred in the other direction. Other than the reclassification
of goodwill detailed in note 14, the net financial effect was not
significant.
The Group's reportable segments are
as follows:
Coatings & Construction Solutions
Our specialist polymers enhance the
sustainable performance of a wide range of coatings and
construction products. We work across architectural and masonry
coatings, mortar modification, waterproofing and flooring, fibre
bonding, and energy solutions.
Adhesive Solutions
Our adhesive solutions bond, modify
and compatibilise surfaces and components for products including
tapes and labels, packaging, hygiene, tyres and plastic
modification, helping improve permeability, strength, elasticity,
damping, dispersion and grip.
Health & Protection and Performance
Materials
We help enhance protection and
performance in a wide range of industries including medical glove
manufacture, speciality paper, food packaging, carpet and
artificial turf, gel foam elastomers, and vinyl-coated seating
fabrics.
The Group's Executive Committee is
the chief operating decision maker and primarily uses a measure of
earnings before interest, tax, depreciation and amortisation
(EBITDA) to assess the performance of the operating segments. No
information is provided to the Group's Executive Committee at the
segment level concerning interest income, interest expense, income
tax or other material non-cash items.
No single customer accounts for more
than 10% of the Group's revenue.
A segmental analysis of Underlying
performance and Special Items is shown below.
|
Continuing Operations
|
|
|
Discontinued Operations
|
|
2024
|
Coatings
& Construction Solutions
£m
|
Adhesive
Solutions
£m
|
Health
& Protection
and
Performance Materials
£m
|
Corporate
£m
|
Total
£m
|
Health
& Protection
and
Performance Materials
£m
|
Total
£m
|
|
Revenue
|
|
|
|
|
|
|
|
|
Total
revenue
|
790.5
|
588.4
|
611.4
|
-
|
1,990.3
|
9.8
|
2,000.1
|
|
Inter-segmental revenue
|
-
|
-
|
(3.5)
|
-
|
(3.5)
|
-
|
(3.5)
|
|
|
790.5
|
588.4
|
607.9
|
-
|
1,986.8
|
9.8
|
1,996.6
|
|
EBITDA
|
85.9
|
47.9
|
36.5
|
(23.7)
|
146.6
|
2.6
|
149.2
|
|
Depreciation and amortisation
|
(25.3)
|
(32.9)
|
(28.1)
|
(9.9)
|
(96.2)
|
(0.2)
|
(96.4)
|
|
Operating profit/(loss)
before Special Items
|
60.6
|
15.0
|
8.4
|
(33.6)
|
50.4
|
2.4
|
52.8
|
|
Special
Items
|
(28.1)
|
(24.5)
|
(17.9)
|
(4.0)
|
(74.5)
|
(4.2)
|
(78.7)
|
|
Operating profit/(loss)
|
32.5
|
(9.5)
|
(9.5)
|
(37.6)
|
(24.1)
|
(1.8)
|
(25.9)
|
|
Finance
costs
|
|
|
|
|
|
|
(61.4)
|
|
Loss
before taxation
|
(87.3)
|
|
|
|
|
|
|
|
|
|
|
| |
|
Continuing Operations
|
|
|
Discontinued Operations
|
|
2023
|
Coatings
& Construction Solutions
£m
|
Adhesive
Solutions
£m
|
Health
& Protection
and
Performance Materials
£m
|
Corporate
£m
|
Total
£m
|
Health
& Protection
and
Performance Materials
£m
|
Total
£m
|
|
Revenue
|
|
|
|
|
|
|
|
|
Total
revenue
|
820.2
|
581.7
|
549.3
|
-
|
1,951.2
|
80.6
|
2,031.8
|
|
Inter-segmental revenue
|
-
|
-
|
(10.6)
|
-
|
(10.6)
|
-
|
(10.6)
|
|
|
820.2
|
581.7
|
538.7
|
-
|
1,940.6
|
80.6
|
2,021.2
|
|
EBITDA
|
100.1
|
31.2
|
26.3
|
(20.2)
|
137.4
|
1.7
|
139.1
|
|
Depreciation and amortisation
|
(25.8)
|
(38.7)
|
(32.3)
|
(7.2)
|
(104.0)
|
(1.3)
|
(105.3)
|
|
Operating
profit/(loss) before Special Items
|
74.3
|
(7.5)
|
(6.0)
|
(27.4)
|
33.4
|
0.4
|
33.8
|
|
Special
Items
|
(32.2)
|
(25.2)
|
(9.3)
|
(6.2)
|
(72.9)
|
56.8
|
(16.1)
|
|
Operating
profit/(loss)
|
42.1
|
(32.7)
|
(15.3)
|
(33.6)
|
(39.5)
|
57.2
|
17.7
|
|
Finance
costs
|
|
|
|
|
|
|
(71.4)
|
|
Loss
before taxation
|
(53.7)
|
|
|
|
|
|
|
|
|
|
|
| |
3. Reconciliation of operating
profit/(loss) to cash generated from operations
|
|
2024
£m
|
2023
£m
|
|
Operating profit/(loss)
|
(25.9)
|
17.7
|
|
Less:
share of profits of joint ventures
|
(1.6)
|
(1.4)
|
|
Adjustments for:
|
(27.5)
|
16.3
|
|
-
Depreciation of property, plant and equipment
|
73.2
|
85.0
|
|
-
Depreciation of right of use assets
|
11.1
|
11.5
|
|
-
Amortisation of other intangibles
|
12.1
|
8.8
|
|
-
Share-based payments
|
1.6
|
1.8
|
|
- Gain on
sale of underlying assets
|
(4.3)
|
-
|
|
- Special
Items
|
78.7
|
16.1
|
|
Cash
impact of settlement of interest rate derivative contracts
|
-
|
12.1
|
|
Cash
impact of restructuring and site closure costs
|
(20.2)
|
(28.0)
|
|
Cash
impact of acquisition costs and related gains
|
(1.7)
|
(1.9)
|
|
Pension
funding in excess of service cost
|
(19.8)
|
(7.3)
|
|
Movement
in working capital
|
(24.9)
|
80.6
|
|
Payment
of EC settlement amount
|
(39.1)
|
-
|
|
Cash generated from
operations
|
39.2
|
195.0
|
|
Reconciliation of movement
in working capital
|
|
|
|
Decrease/(increase) in inventories
|
(15.5)
|
45.7
|
|
Decrease
in trade and other receivables
|
(23.4)
|
52.7
|
|
Decrease
in trade and other payables
|
14.0
|
(17.8)
|
|
Movement
in working capital
|
(24.9)
|
80.6
|
4. Dividends
In 2022,
the Board announced the suspension of dividends. The Board has
confirmed that dividends will remain suspended until the Group's
net debt is less than 3.0x its EBITDA.
5. Earnings per share
|
|
|
2024
|
2023
|
|
|
|
Underlying
performance
|
Special
Items
|
IFRS
|
Underlying performance
|
Special
Items
|
IFRS
|
|
Earnings
|
|
|
|
|
|
|
|
|
(Loss)/profit attributable to equity holders of the parent -
continuing operations
|
£m
|
(5.7)
|
(64.3)
|
(70.0)
|
(28.4)
|
(76.4)
|
(104.8)
|
|
(Loss)/profit attributable to equity holders of the
parent
|
£m
|
(4.1)
|
(68.5)
|
(72.6)
|
(30.0)
|
(37.0)
|
(67.0)
|
|
Number of shares
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares - basic
|
'000
|
|
|
163,473
|
|
|
85,382
|
|
Effect of
dilutive potential ordinary shares
|
'000
|
|
|
1,078
|
|
|
251
|
|
Weighted
average number of ordinary shares - diluted
|
'000
|
164,551
|
63,633
|
|
Earnings per share for
(loss)/profit from continuing operations
|
|
|
|
|
|
|
|
Basic
earnings per share
|
pence
|
(3.5)
|
(39.3)
|
(42.8)
|
(33.4)
|
(89.4)
|
(122.8)
|
|
Diluted
earnings per share
|
pence
|
(3.5)
|
(39.3)
|
(42.8)
|
(33.4)
|
(89.4)
|
(122.8)
|
|
Earnings per share for
(loss)/profit from discontinued operations
|
|
|
|
|
|
|
|
Basic
earnings per share
|
pence
|
1.0
|
(2.6)
|
(1.6)
|
(1.9)
|
46.2
|
44.3
|
|
Diluted
earnings per share
|
pence
|
1.0
|
(2.6)
|
(1.6)
|
(1.9)
|
46.2
|
44.3
|
|
Earnings per share for
(loss)/profit attributable to equity holders
of the parent
|
|
|
|
|
|
|
|
Basic
earnings per share
|
pence
|
(2.5)
|
(41.9)
|
(44.4)
|
(35.1)
|
(43.2)
|
(78.5)
|
|
Diluted
earnings per share
|
pence
|
(2.5)
|
(41.9)
|
(44.4)
|
(35.1)
|
(43.2)
|
(78.5)
|
6. Finance costs
|
|
2024
£m
|
2023
£m
|
|
Interest
payable on bank loans and overdrafts
|
68.0
|
70.6
|
|
Less:
interest receivable
|
(12.1)
|
(10.2)
|
|
Net
interest expense on defined benefit obligations
|
1.7
|
2.7
|
|
Interest
element of lease payments
|
2.4
|
1.8
|
|
Underlying finance
costs
|
60.0
|
64.9
|
|
Fair
value loss on unhedged interest derivatives
|
-
|
1.8
|
|
Loss on
extinguishment of financing facilities
|
1.4
|
4.7
|
|
Total finance costs from
continuing operations
|
61.4
|
71.4
|
|
Finance
costs from discontinued operations
|
-
|
-
|
|
Total finance costs
|
61.4
|
71.4
|
7. Analysis of net
debt
|
|
1 January
2024
£m
|
Cash flows
£m
|
Exchange and other
movements
£m
|
31
December
2024
£m
|
|
Bank
overdrafts
|
(0.7)
|
0.4
|
-
|
(0.3)
|
|
€520m
3.875% senior unsecured loan notes due
2025
|
-
|
-
|
(123.9)
|
(123.9)
|
|
Current
bank borrowings
|
-
|
-
|
-
|
-
|
|
Current Liabilities
|
(0.7)
|
0.4
|
(123.9)
|
(124.2)
|
|
Bank
loans
|
(421.9)
|
3.1
|
4.6
|
(414.2)
|
|
€520m
3.875% senior unsecured loan notes due
2025
|
(448.4)
|
318.8
|
129.6
|
-
|
|
€350m
7.375% senior unsecured loan notes due
2029
|
-
|
(293.5)
|
9.1
|
(284.4)
|
|
Non-current liabilities
|
(870.3)
|
28.4
|
143.3
|
(698.6)
|
|
Total borrowings
|
(871.0)
|
28.8
|
19.4
|
(822.8)
|
|
Cash and
cash equivalents
|
371.3
|
(141.5)
|
(4.0)
|
225.8
|
|
Net debt
|
(499.7)
|
(112.7)
|
15.4
|
(597.0)
|
Capitalised debt costs which have
been recognised as a reduction in borrowings in the financial
statements, amounted to £12.8m at 31 December 2024 (31 December
2023: £10.5m).
8.
Discontinued operations
On 30 April 2024, the Group sold its
Compounds business to Matco Latex Services BV with net cash
proceeds of £19.6m.
The Group also incurred a small
amount of costs in relation to other divestments and business
closures from the prior year.
All discontinued operations form part
of the Health & Protection and Performance Materials
division.
Financial information in respect of
the discontinued operation is set out below:
Financial performance and cash flow information
|
|
2024
|
2023
|
|
|
Compounds
£m
|
Laminates Films and Coated
Fabrics
£m
|
NA Paper
and Carpet
£m
|
Total
£m
|
Compounds
£m
|
Laminates Films and Coated Fabrics
£m
|
NA
Paper
and Carpet
£m
|
Total
£m
|
|
Revenue
|
9.8
|
-
|
-
|
9.8
|
30.3
|
28.0
|
22.3
|
80.6
|
|
Expenses
|
(7.2)
|
-
|
-
|
(7.2)
|
(25.6)
|
(25.5)
|
(27.8)
|
(78.9)
|
|
EBITDA
|
2.6
|
-
|
-
|
2.6
|
4.7
|
2.5
|
(5.5)
|
1.7
|
|
Depreciation and amortisation - Underlying performance
|
(0.2)
|
-
|
-
|
(0.2)
|
(0.4)
|
-
|
(0.9)
|
(1.3)
|
|
Operating profit -
Underlying performance
|
2.4
|
-
|
-
|
2.4
|
4.3
|
2.5
|
(6.4)
|
0.4
|
|
Special
Items
|
(3.3)
|
0.2
|
(1.1)
|
(4.2)
|
(0.2)
|
61.5
|
(4.5)
|
56.8
|
|
Operating profit/(loss) -
IFRS
|
(0.9)
|
0.2
|
(1.1)
|
(1.8)
|
4.1
|
64.0
|
(10.9)
|
57.2
|
|
Finance
costs
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Profit/(loss) before
taxation
|
(0.9)
|
0.2
|
(1.1)
|
(1.8)
|
4.1
|
64.0
|
(10.9)
|
57.2
|
|
Taxation
|
(0.8)
|
-
|
-
|
(0.8)
|
(1.8)
|
(17.6)
|
-
|
(19.4)
|
|
Profit/(loss) for the
year
|
(1.7)
|
0.2
|
(1.1)
|
(2.6)
|
2.3
|
46.4
|
(10.9)
|
37.8
|
|
Cash flows from discontinued
operations
|
|
|
|
|
|
|
|
|
|
Net cash
inflow from operating activities
|
(3.6)
|
-
|
(1.1)
|
(4.7)
|
7.5
|
(0.1)
|
(7.8)
|
(0.4)
|
|
Net cash
outflow from investing activities
|
17.5
|
(0.1)
|
-
|
17.4
|
(0.6)
|
208.2
|
-
|
207.6
|
The prior-year figures of the
consolidated income statement and the consolidated statement of
cashflows have been restated in accordance with IFRS 5 to report
the discontinued operations separately from continuing
operations.
8.
Discontinued operations (continued)
Assets and liabilities classified as held-for-sale
At 31 December 2023, the assets held
for sale related to land and buildings at the Calhoun site, and
within the Desa Badhuri legal entity. These were sold in the
year.
At 31
December 2024, the Fitchburg site is classified as held for sale as
well as a number of reactors and strippers. These assets are
detailed below:
|
|
|
2024
£m
|
2023
£m
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
|
-
|
-
|
|
|
Acquired
intangible assets
|
|
-
|
-
|
|
|
Other
intangible assets
|
|
-
|
-
|
|
|
Property,
plant and equipment
|
|
6.5
|
1.4
|
|
|
Deferred
tax assets
|
|
-
|
0.1
|
|
|
Total non-current
assets
|
6.5
|
1.5
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
-
|
-
|
|
|
Trade and
other receivables
|
|
-
|
-
|
|
|
Total current assets
|
-
|
-
|
|
|
Total assets
|
6.5
|
1.5
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and
other payables
|
|
-
|
-
|
|
|
Lease
liabilities
|
|
-
|
-
|
|
|
Current
tax liabilities
|
|
-
|
-
|
|
|
Total current liabilities
|
-
|
-
|
|
|
Non-current liabilities
|
|
|
|
|
|
Lease
liabilities
|
|
-
|
-
|
|
|
Deferred
tax liabilities
|
|
-
|
-
|
|
|
Retirement benefit obligations
|
|
-
|
-
|
|
|
Total non-current
liabilities
|
|
-
|
-
|
|
|
Total liabilities
|
|
-
|
-
|
|
|
Net
assets held for sale
|
6.5
|
1.5
|
|
9. Post balance sheet events
As part of the Group's previously
announced non-core portfolio rationalisation programme, there are
three formal divestment processes underway for non-core businesses
in Europe, currently incorporated within the Health &
Protection and Performance Materials division. Given progress made
since the year end, the Directors now consider it is more likely
than not that at least one of these processes will lead to a
divestment within the next 12 months.
