London-based specialty-chemicals company, Elementis, has announced its plans to deliver revenue growth above market expectations by 2026 while simultaneously reducing costs. The company aims to achieve $90 million of above-market revenue growth, primarily driven by a focus on its performance specialties and personal care businesses, in addition to capitalizing on key industry trends.
As part of its cost-saving initiatives, Elementis expects to achieve $30 million in annual savings by 2025. This will involve streamlining operations by moving certain roles to lower-cost locations and outsourcing other roles. As a result, up to 190 redundancies are anticipated.
Elementis has set several key targets for itself. It aims to achieve an adjusted operating margin of 19%, a three-year average operating cash conversion rate exceeding 90%, and a return on capital employed (excluding goodwill) surpassing 20% by 2026. The company believes that these targets can be achieved through a combination of growth strategies and efficiency programs tailored to the current market conditions. Additionally, if there is a modest recovery in the demand environment, the margin could potentially exceed the targeted level.
Chief Executive Paul Waterman expressed confidence in achieving these targets and highlighted that the company’s improved performance, strong cash generation, and ongoing leverage reduction will contribute to attractive and sustainable shareholder returns.
As of 0846 GMT, Elementis shares showed promising growth, increasing by 4.60 pence or 3.8% to reach 127.20 pence.
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