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Elementis plc
Annual Report and Accounts 2024
Strategic Report
2 Elementis at a glance
4 Chair’s statement
6 Our business model
7 Our competitive advantage
8 How we create value
9 Chief Executive
Officer’s review
12 Investment case
13 Market drivers providing
tailwinds
15 Strategy at a glance
16 Strategy in action
22 Key performance indicators
24 Stakeholder engagement
26 Section 172
28 Sustainability
29 Foreword
30 Materiality
31 Governance
32 Strategy
34 Environment
44 People
51 Responsible business
55 Non-financial
information statement
56 Finance report
62 Operating review
65 Risk management
70 Principal risks and uncertainties
75 Viability and going
concern statement
Corporate Governance
76 Chair’s introduction to
governance
77 Board of Directors
80 Division of responsibilities
81 Board in action
84 Workforce engagement
86 Purpose, culture and values
87 Board performance review
88 Nomination Committee report
92 Audit Committee report
97 Compliance statement
101 Directors’ Remuneration report
130 Directors’ report
133 Directors’ responsibilities
Financial Statements
134 Independent Auditor’s report
142 Consolidated
income statement
142 Consolidated statement of
comprehensive income
143 Consolidated balance sheet
144 Consolidated statement of
changes in equity
145 Consolidated cash
flow statement
146 Notes to the consolidated
financial statements
186 Company balance sheet
187 Company statement of
changes in equity
188 Notes to the company
financial statements of
Elementis plc
192 Alternative performance
measures and
unaudited information
194 Five-year record
Shareholder Information
195 Notes on ESG reporting
methodologies
196 Environmental data
199 Shareholder services
200 Corporate information
201 GRI index
203 SASB index
204 Glossary
In this report
Chair’s statement
Finance report
Operating review:
Personal Care
Read more on pages 4-5.
Read more on pages 28-54.
CEO’s review
Operating review:
Performance Specialties
Sustainability
Read more on pages 56-61.
Read more on page 62.
Read more on pages 9-11.
Read more on pages 63-64.
Powder coating additives, as shown on the front cover, are very important for the powder coatings industry, a key growth market for Elementis.
Elementis plc Annual Report and Accounts 2024
Cautionary statement The Annual Report and Accounts for the financial year ended
31 December 2024, as contained in this document (“Annual Report”), contains information
which viewers or readers might consider to be forward-looking statements relating to or
in respect of the financial condition, results, operations or businesses of Elementis plc.
Any such statements involve risk and uncertainty because they relate to future events and
circumstances. There are many factors that could cause actual results or developments to
differ materially from those expressed or implied by any such forward-looking statements.
Nothing in this Annual Report should be construed as a profit forecast.
Revenue
$738.3m
2023: $713.4m
Adjusted operating profit
$128.8m
2023: $103.9m
Adjusted
operating margin
17.4%
2023: 14.6%
Operating (loss)/profit
$(26.6)m
2023: $58.9m
(Loss)/profit before tax
$(49.6)m
2023: $39.7m
Diluted (loss)/earnings
per share
(8.1)c
2023: 4.7c
Adjusted diluted
earnings per share
13.3c
2023: 10.8c
Dividend per share
4.0c
2023: 2.1c
1 Refer to explanations and definitions, including alternative performance measures, on pages 22-23 and 192-193.
Total recordable
injury rate
0.18
2023: 0.33
Scope 1 and 2
GHG emissions
77kt CO
2
e
2023: 65kt CO
2
e
Women in
leadership
42.1%
2023: 37.3%
Non-financial highlights
Financial highlights
1
Elementis is a global specialty
chemicals company.
We offer performance-driven additives
that help create innovative formulations
for consumer and industrial applications.
At Elementis, we bring a distinctive
combination of expertise, innovation and
teamwork to every formulation challenge.
We create high-value specialty additives
that enhance the performance of our
customers’ products and make a positive
change in the world.
Our purpose
Unique chemistry, sustainable solutions
Read more about how our purpose guides our strategy, culture and values on
pages 3, 15-21, 44-50 and 86.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 1
A global footprint
Key
Office Laboratory Manufacturing
1 Pre-central costs.
2 We have two sites in Taiwan 1 km from each other.
Elementis at a glance
Our businesses
What we do
Our products don’t have everyday
names, but there is a little bit of
Elementis in many everyday items.
We create specialty chemicals
that deliver crucial end product
attributes across a range of
industries. Innovation is at the heart
of what we do. Our focus is on
creating solutions that deliver
performance improvements and
enhanced sustainability credentials.
c.1,200
employees
23
locations worldwide
FTSE 250
constituent
Two
focused businesses
Performance
Specialties
Performance Specialties comprises Coatings and Talc.
Coatings supplies rheology modifiers and complementary
specialty additives to manufacturers of industrial coatings,
decorative paints, additives for oil and gas drilling, stimulation
fluids and adhesives and sealants. Our products help make
industrial coatings last longer, decorative paints more stain
resistant and sealants apply more evenly.
We also supply talc to customers in a wide range of sectors,
including automotive, plastics, paper, paint and agriculture.
Revenue
$521m
% of Group adjusted
operating profit
1
58%
Adjusted operating
margin
17%
Personal Care
We are a leading supplier of rheology modifiers, with focus on
natural ingredients and antiperspirant actives. We offer a wide
range of products to customers across personal care, home care,
industrial cleaning, agriculture and pharma. Our products help
make skin creams smoother, antiperspirants work longer, home
care products more natural and plant protection products
more efficient.
Revenue
$217m
% of Group adjusted
operating profit
1
42%
Adjusted operating
margin
28%
Asia
22%
of Group
revenues
33%
of employees
7
locations
2
Europe
41%
of Group
revenues
41%
of employees
8
locations
2
Americas
37%
of Group
revenues
26%
of employees
8
locations
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 2
We are purpose led
Unique chemistry,
sustainable solutions.
Our culture
Our supportive culture is the
catalyst to successful delivery
of our strategy.
Our strategy
The right strategy is important
to deliver business growth.
Our approach to sustainability
We are committed to conducting
business with integrity and to fair
and ethical behaviour throughout
our organisation.
…enabling us to create
value for our stakeholders
Customers
Employees
Suppliers
Communities and
environment
Investors
Government, trade bodies
and regulators
Our values are core to
our high-performance culture
Our strategy ensures we
continue to deliver long-term,
sustainable growth…
Safety
Our commitment to safety is our
way of life.
Solutions
We make a difference through
our expertise, responsiveness
and focus on quality.
Ambition
We have a passion for excellence
and a drive to create value.
Respect
We do the right thing for all
our stakeholders.
Team
We work, grow and succeed together.
Innovation
We are a global leader in
performance-driven additives that
help create innovative solutions
for our customers. Leveraging our
capabilities in rheology, surface
chemistry and formulation, we
help our customers create better
products.
Growth
Our two businesses operate in
attractive markets with structural
growth opportunities, supported by
clear market and industry trends.
Efficiency
We constantly seek to be a
fit-for-purpose and more efficient
business, agile and growing, with
ourimpact on the environment and
the communities in which we operate
at the forefront of our minds.
Read more about how we engage with,
and create value for, our stakeholders on
pages 24-26.
Read more about our strategy on pages 15-21. Read more about our culture and values on
pages 44-50 and 86.
The foundation of Elementis
Sustainability flows through
every aspect of our organisation
It underpins our strategy, allowing us to unlock value, provide better outcomes for our stakeholders and
deliver on our purpose. Our sustainability strategy is based on a three-pillar framework.
Responsible business
PeopleEnvironment
Read more about our approach to sustainability and our sustainability strategy on pages 28-54.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 3
Elementis at a glance
Thanks to the commitment and
tenacity of our exceptional people,
Elementis delivered another
strong performance in 2024 and
made good progress against our
2023 Capital Market Day objectives.
Overview
I am pleased to report a strong business and
financial performance for 2024, reflecting our
commitment to our updated strategy and
associated targets, all achieved despite an
ongoing challenging global economic climate.
It has been an eventful year, in which we
successfully completed large organisational
efficiency improvement, initiated a strategic
review of the Talc business unit and announced
a Chief Executive Officer (“CEO”) succession.
Our innovation and customer initiatives position
the Group to further capitalise on the exciting
global growth opportunities which we see.
Balance sheet and shareholder returns
Elementis remains a highly cash-generative
business, as demonstrated by further
deleveraging over the year. Net debt reduced
to $157 million at year end, supported by higher
earnings. As a result, the net debt to EBITDA
ratio reduced to 1.0x (2023: 1.4x).
The Board, in light of the strength of the balance
sheet, is recommending a final dividend of
2.9 cents per share to shareholders at the
upcoming Annual General Meeting (“AGM”),
resulting in a full-year dividend of 4.0 cents
per share (2023: 2.1 cents). This is in line with
the dividend policy announced last year with
a payout ratio of around 30% of adjusted
earnings. The final dividend will be paid on
30 May 2025 in pounds sterling at an exchange
rate of £1.00:$1.2693 (equivalent to a sterling
amount of 2.28 pence per share) to
shareholders on the register at 2 May 2025.
We continue to focus on improving shareholder
returns, while maintaining balance sheet
flexibility and strength. We shall consider future
returns of excess capital to our shareholders,
as the opportunity arises, in line with the Group’s
capital allocation framework.
Our strategy
The three strategic pillars of Innovation, Growth
and Efficiency provide a strong foundation for
continued growth. At the 2023 Capital Markets
Day (“CMD”), we announced new ambitious
growth and efficiency programmes through
to 2026, which will accelerate top-line
performance while also enhancing operating
margins. I am pleased with the strong progress
made in the first year, getting closer to our
2026 financial targets. We expect these
initiatives to deliver further revenue and profit
growth in 2025.
This year has not been without some
disappointments and challenges. The regulatory
developments relating to Talc were a surprise to
the company and indeed to the European talc
industry at large. In 2024, we reported two
impairment charges within the business totalling
$126 million. The first one was triggered by an
underperformance due to a nationwide strike
in Finland in the first quarter, and the second
followed the recent recommendation by the Risk
Assessment Committee (“RAC”) of the
European Chemicals Agency (“ECHA”) to
reclassify talc as carcinogenic. Elementis
disagrees with the RAC’s opinion and, together
with EUROTALC, will seek to demonstrate that
the proposed classification for carcinogenicity
is not appropriate. The Talc strategic review,
announced in August 2024, is progressing and
we will provide further update in due course.
Our strategy is underpinned by ambitious
sustainability objectives, focused on creating
innovative specialty additives that enhance
the performance of our customers’ products
and make a positive change in the world.
Chair’s statement
John O’Higgins
Chair
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 4
This goes hand in hand with our goal of ensuring
Elementis continues to reduce its greenhouse
gas (“GHG”) emissions in line with our ambition
of Net Zero by 2050.
The journey to decarbonisation is not expected
to be linear. Despite this year’s increase in
absolute emissions, we continued to make
good progress on our broader sustainability
objectives, including switching our energy
and raw materials supplies from fossil fuels to
renewable sources and improving the safety and
sustainability profile of our products. This year,
we developed a science-based target (“SBT”)
for GHG emission reductions. I am pleased to
report, that our SBT was recently approved by
the Science Based Targets initiative (“SBTi”).
Our people and culture
I would like to thank all our employees for their
commitment and contribution to the delivery of
this year’s strong performance. It is particularly
pertinent as we complete the Fit for the Future
organisational restructuring, saying goodbye
to many of our colleagues over the year.
We also welcomed over 100 new colleagues
in our new Porto office this year. Their energy
and strive for excellence are a great fit with
our high-performance culture, focused on
understanding and supporting the needs
of our customers.
We place significant importance on ensuring
the safety and wellbeing of all employees, and
we performed strongly in this area, with two
recordable injuries and a significant reduction in
the total recordable incident rate (“TRIR”) in
2024. We have also made good progress
against our objective of creating a more diverse
and inclusive organisation, increasing the
proportion of senior female leaders across our
business to 42%. For additional diversity
disclosures, including for the Directors, see
pages 47-48 and 90-91 of this report.
Section 172(1)
statement
The Board of Directors confirms that
during the year ended 31 December
2024, it has acted to promote the
long-term success of Elementis for
the benefit of its shareholders, while
having due regard to the matters
set out in section 172(1) of the
Companies Act 2006, being:
(a) the likely consequences of any
decision in the long term;
(b) the interests of the Company’s
employees;
(c) the need to foster the Company’s
business relationships with suppliers,
customers and others;
(d) the impact of the Company’s
operations on the community and
the environment;
(e) the desirability of the Company
maintaining a reputation for high
standards of business conduct; and
(f) the need to act fairly between
members of the Company.
Details of the Board’s engagement with key
stakeholders and key decisions taken over
the year are included on pages 26-27.
Further details of the Board’s activities are
described in the Governance report on
pages 81-85.
The Board is committed to a high level of
employee engagement, welcoming opportunities
to meet with our colleagues in many of our
locations over the year. Employee engagement
is further encouraged and monitored via the
biannual employee survey process. This allows
us to regularly engage with our people and
provide relevant and timely support and training
throughout the year. You can read more about
the results of the Gallup employee survey on
pages 48-50.
Governance and Board
Early in the year, we welcomed Maria Ciliberti
and Heejae Chae to the Board as Non-Executive
Directors. Maria brings a strong and current
global operational experience in the chemical
industry and Heejae brings experience in both
his executive and non-executive roles.
In November 2024, we announced that
Paul Waterman will be leaving Elementis in
2025. Paul, who has served as CEO since 2016,
will not be seeking re-election at the next AGM.
On behalf of the Board, I would like to thank Paul
for his service and commitment to Elementis
during that tenure and for his significant
contribution and leadership in developing the
culture and values of the Group today. He leaves
the business in a strong position.
In March 2025, we announced the appointment
of Luc van Ravenstein as the new CEO of
Elementis, succeeding Paul Waterman. Since
joining Elementis in 2012, Luc has led the
Personal Care, Coatings and more recently the
Performance Specialties businesses. He was
instrumental to the Coatings transformation
programme in 2020, significantly improving the
quality and performance of this business. He will
assume the role of the CEO on 29 April 2025,
subject to confirmation by shareholders at the
2025 AGM.
On 1 January 2025, we welcomed Christopher
Mills to the Board as a Non-Executive Director.
Christopher is a CEO of Harwood Capital
Management, a shareholder of Elementis.
We look forward to benefitting from his track
record of generating value for all shareholders.
Shareholder engagement
In 2024, the Senior Independent Director (“SID”),
Trudy Schoolenberg, and I had many
opportunities to meet with our shareholders
and discuss a broad range of topics. This year,
the discussions focused on the updated
strategy and the Group financial targets, CEO
succession and investor activism. Shareholders
were also keen to discuss potential sale of the
Talc business, considering the recently
announced talc reclassification, as well as other
new initiatives to narrow the gap between the
share price and the Company’s intrinsic value.
The Board regularly receives feedback from
shareholders and considers it in its decision-
making. We believe that the progress on the
efficiency and growth programmes delivered this
year, alongside our disciplined capital allocation
approach, demonstrate our commitment to
improving shareholder returns over time.
Looking ahead
On behalf of the Board, I would like to thank
all our employees for their enthusiasm and
outstanding customer service, contributing to
this year’s strong performance. We are saying
goodbye to Paul, who has led this business over
the past nine years, and welcome Luc, as we
embark on an exciting new phase for Elementis.
I am confident that under Luc’s leadership,
Elementis will continue to grow and deliver
long-term sustainable value for all our
stakeholders.
John O’Higgins
Chair
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 5
Chair’s statement
Read more about Personal Care on pages 62 and 15-21.
Personal Care
Read more about Coatings and Talc on pages 63-64 and 15-21.
Performance Specialties
We operate globally via two focused businesses
Our business
model
Elementis is a
business-to-business
specialty chemicals
company, offering
performance-driven
additives for
consumer and
industrial applications.
Skin Care
We offer a broad selection of natural and naturally-derived ingredients,
facilitating the development of natural skin care products, while providing
exceptional texture, great sensory properties and long-lasting stability.
Our understanding of regional market demands and ongoing innovations
in natural rheology enables us to deliver sustainable solutions for
water-based systems and continue to expand our share of the global
skin care sector.
Colour Cosmetics
As the market leader in oil-based rheology modification, we offer a wide
range of solutions and technologies that help formulate make-up products
with vibrant colour and excellent sensory properties.
Antiperspirants
As a leader in antiperspirant actives, we cater to consumer needs with
effective and sustainable solutions. Our customers value our supply
resilience, driven by our global production footprint. We are the leading
industry innovators, responding to consumer trends for high-performance
actives that ensure long-lasting sweat and odour protection.
Key markets and our positioning
Colour cosmetic and skin care rheology leader; global antiperspirant
actives leader.
We also supply specialty ingredients to customers across home care and
institutional cleaning, agriculture and pharma industries.
Competitive advantage
Innovation and
formulation
leadership
Customised
rheology modifiers
Active ingredients
High-quality
hectorite resource
Global reach
Coatings
We supply rheology modifiers and other complementary specialty
additives to manufacturers of industrial coatings, decorative paints,
additives for oil and gas drilling and simulation fluids, adhesives and
sealants. Our products help make industrial coatings last longer,
decorative paints more stain resistant and sealants apply evenly.
Talc
We have a well-established mine-to-market model, supplying diversified
end markets. We use proprietary flotation technology, which produces
consistent talc purity and allows customisation. Our talc makes long-life
plastics stronger and lighter, gasoline particulate filters work, and food
packaging recyclable.
Key markets and our positioning
Architectural and industrial coatings; auto plastics; global rheology
additives leader; leader in high-end speciality talc.
We also supply specialty additives for adhesives, sealants and
construction applications.
Competitive advantage
Innovation and
formulation
leadership
Rheology modifiers
and additives
High-quality
hectorite resource
High-performance
talc
Our scientists are experts in rheology and
formulation solutions. They create innovative
solutions that help solve our customers’ toughest
formulation challenges.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 6
Our business model: What we do Our competitive advantage How we create value
Premium assets
We own the only high-grade
hectorite mine in the world.
Hectorite is a natural mineral
that delivers excellent rheology
in both water- and oil-based
systems, making it an attractive
alternative to synthetic materials.
It can be processed at lower
temperatures, leading to lower
costs and improved sustainability.
It also delivers important
attributes, such as excellent
texture and colour for Personal
Care and long-term stability for
Performance Specialties
applications.
We have four talc mines in
Finland and use proprietary
flotation technology, which
enables production of high-purity
talc. We supply talc products to
customers across a range of
end-applications, including
plastics, paint, paper and
technical ceramics.
>50 years
of estimated hectorite
resource life
Engaged and skilled
people, with
unparalleled expertise
in rheology and
formulation solutions
Our people are fundamental
to the continued success of
our business. We have a skilled
and engaged global workforce,
and we place great focus on
recognising and valuing their
contributions and the expertise
they share.
Formulation solutions
We are experts at formulation
solutions – the process of
optimising formulation ingredients
to achieve the desired
functionality and performance
of the final product.
Rheology
Rheology is essential to the
performance of a formulation –
it makes the ingredients work
together.
~100
scientists working in seven
laboratories across four
continents
Customer-centric,
with global reach
Our global footprint allows us to
build long-lasting relationships
with our clients and serve them
in their local markets, as well as
large clients across multiple
locations. Our manufacturing
footprint provides flexibility and
supply resilience.
We collaborate with our
customers
We work in partnership with our
customers, providing technical
support and collaboration to
develop innovative products,
tailored to their needs and goals.
We develop innovative
solutions
We are known innovators, with
significant technical expertise.
Leveraging our capabilities in
rheology, surface chemistry and
formulation, we focus on creating
solutions for our customers that
deliver product performance
improvements, efficiency gains
and enhanced sustainability
credentials.
17
manufacturing sites
around the world
Sustainable solutions
We have a high natural and
naturally-derived material
content in our product portfolio.
We work with suppliers and
customers to further increase
our use of biobased materials,
both as a direct replacement
of fossil-derived petrochemicals
and by creating new products.
Many of our products already
help our customers use less
energy and their operations emit
less GHG.
69%
of revenues from natural or
naturally-derived ingredients
Strong cash
generation
Strong cash generation enables
us to invest for long-term growth,
reduce financial leverage and
generate returns for stakeholders.
88%
average three-year operating
cash conversion
We combine
advantaged positions
in hectorite and talc,
with our distinctive
technologies, to
create value-added
customer solutions.
Our competitive advantage
Rheology ‘the science of flow’. It deals with
deformation and the flow of materials.
At Elementis, we have deep expertise
in providing tailored rheological
solutions for specific customer needs.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 7
Our business model: What we do Our competitive advantage How we create value
For communities and
environment
We behave responsibly and with
integrity in the communities in which
we operate, and focus on reducing
our environmental impact.
For investors
We seek to generate reliable returns
for our shareholders over time,
through sustained earnings growth
and shareholder distribution.
For government, trade
bodies and regulators
We are committed to continuing high
standards of business conduct in line
with regulatory, governmental and
legal expectations.
Our integrated business
model, combined
with our technology,
market-leading
formulation capabilities
and the continuous
improvement focus,
supports margin
enhancement and
drives returns.
We re-invest in our business to expand
our capabilities, so we can continue to
meet the requirements of our customers
and generate long-term sustainable
growth and stakeholder returns.
How we create value
Read more about how we engage with our
stakeholders on pages 24-25.
Read more about our business conduct on
pages 51-54.
4.0 cents
dividend per share
Read more about our investor engagement
on page 83.
77%
of our electricity certified as zero carbon
Read more about our sustainability and
community involvement on pages 28-43
and 49.
For customers
We work closely with our customers to
provide innovative solutions that help solve
their toughest formulations challenges and
create value-enhancing products.
For suppliers
We are committed to driving transparency
throughout our value chains and
partnering with suppliers who share
our commitments.
For our people
We promote a supportive culture where
our people feel safe, valued, and can
maximise their potential.
3.91
mean Gallup Q12 score (out of 5)
Read more about our people and culture on
pages 44-50.
22
products launched
Read more about our approach to
innovation on pages 16-17.
Read more about how we work with
suppliers and our approach to sustainable
sourcing on pages 24 and 53.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 8
Our business model: What we do Our competitive advantage How we create value
When I became CEO in 2016, Elementis
was a very different Company. Approximately
30% of revenues were from more cyclical,
commodity-oriented businesses such as
Chromium and Surfactants. At that time,
Personal Care contributed less than 10% to the
Group’s revenues, and our Coatings business
was a collection of regional market positions.
Elementis is now a focused specialty chemical
business, with a strong customer proposition
and attractive growth opportunities globally.
Today 80% of our revenues come from
high-quality, high-margin businesses with
compelling growth opportunities. We sold
low-margin, commodity-oriented businesses,
and focused our investment on new product
innovation and developing the capabilities
ofourpeople.Andwesignificantlyimproved
theefficiencyofouroperationsaswellasour
organisation. Importantly, over this time, we
have reduced risk by strengthening our safety
culture and materially improving our
sustainability performance.
In August 2024, we announced a strategic review
of our Talc business. Talc volumes across our key
European markets (automotive, paint and paper)
havereducedsignificantlysince2019,post
COVID-19.Today,customersdemandregional
supply resilience, hence limiting our opportunity
to expand beyond Europe. Equally, we consider
that Talc remains a high-quality business. The
strategic review is progressing, and a further
update will be provided in due course.
TheInnovation,GrowthandEfficiencystrategy
introducedinNovember2019isworkingwell,
as demonstrated by the strong results delivered
in 2024. But none of this would be possible
without the fantastic team of people who bring
their best to work every day, passionately
serving customers across the markets in which
we operate and helping them to solve their
toughest formulation challenges.
Chief Executive Officer’s review
Paul Waterman
ChiefExecutiveOfficer
I consider myself privileged to have led this
great team over the past nine years and feel
confidenttoleavetheGroupinanexcellent
financialposition,wellpositionedforcontinued
future success.
Performance
Elementisdeliveredstrongfinancialperformance
in 2024. Revenue grew by 3% to $738 million
(2023: $713 million), and we achieved record
adjustedoperatingprofitinbothPersonalCare
and Coatings. A great result amid a continued
environment of weak market demand faced by
our industry over the past few years.
Groupadjustedoperatingprofitincreased24%
to$129million(2023:$104million),andadjusted
operating margin improved by 280bps to 17.4%
(2023:14.6%).Growthinprofitwasdrivenby
self-help initiatives, including lower costs and
favourablepriceandmixbenefits,further
supported by higher volumes in the year. Statutory
operatinglossof$27million(2023:profitof
$59million)reflects$126millionofTalc
impairment (2023: nil).
Personal Care revenue increased 4% to
$217.4million(2023:$209.3million),driven
by improved volumes as well as price and mix
benefits.Revenueswerehigheracrossallregions,
withAsiaup18%,benefittingfromconsistent
continued investment in our capabilities in recent
years and innovative new product launches.
Wedeliveredarecordadjustedoperatingprofit
of $61.6 million (2023: $50.3 million), driven by
improved volumes, self-help actions that reduced
costs, and margin accretive route-to-market
changes.Thisresultedinasignificant
improvement of adjusted operating margin
to 28.3% (2023: 24.1%).
Note:Revenueandadjustedoperatingprofitgrowthrates
quoted on a reported basis.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 9
We made good progress on both goals in 2024.
We achieved $18 million of annual savings.
The Fit for the Future organisational restructuring
is largely completed, with a few remaining roles
exiting in Q1 2025. Our new research and
development (“R&D”) support centre in Porto
will be completed in 2025. In addition, we
deliveredmaterialefficienciesacrossour
global supply chain, further consolidating our
manufacturing footprint and improving our supply
and demand management processes, leveraging
digital tools. We are investing in AI-driven
automation, which alongside upgrades to our
dataprocesseswillleadtofurtherefficiency
savings in the coming years.
Across procurement, we focused on improving
our supply resilience by reducing the number
of raw materials that are single sourced and
adding90newvendorstodiversifyourcoverage.
In2025,wearelookingtoimplementefficiencies
via further reduction in single sourcing as well as
enhancingefficienciesthroughournewdigital
vendor management system.
Inthefirstyearofourthree-yeargrowth
programme, we delivered $26 million of above-
market revenue growth, against a flat demand
environment. Personal Care and Coatings
platforms delivered above-market revenue
growth of $6 million and $20 million respectively.
In the Colour Cosmetics market segment, we
saw growth across all regions, particularly in Asia,
driven by new and existing relationships with
local players and route-to-market optimisation.
We launched two new customised products
developedspecificallyforemergingmarkets.
Growth over the coming years is underpinned
by innovative products including a range of
patent-pending Bentone
®
Ultimate products,
withahigherefficacyinuseandafullynatural
activation mechanism.
In Skin Care, the strategy focuses on creating
products with natural ingredients to meet the
increasing demand for sustainable products.
1 STOTRE1definedas‘specifictargetorgantoxicity–repeatedexposure,category1’.Carcinogenicitycategory1B
definedas‘presumedtohavecarcinogenicpotentialforhumans’.
2 Due to the ongoing strategic review of Talc, we now exclude the Talc growth platform from the overall 2023 CMD
growth programme.
Performance Specialties revenues were 3%
higher than the prior year at $521 million
(2023:$504million)andadjustedoperatingprofit
increased 23% to $86 million (2023: $70 million),
driven by Coatings.
Coatings, which represents approximately half
of Elementis revenues, delivered strong
performance, with revenue up 5% to $386 million
(2023:$368million),benefittingfromimproved
volumesandpriceandmixbenefits.
Performance varied across the regions, with
revenues up 8% in both the Americas and Europe,
driven by industrial coatings. Asia revenues
reduced 1%, driven by China, where sales were
weaker in the second half. We saw strong growth
across many other key regions, including Japan,
Indonesia, Malaysia as well as India.
We continued to leverage new product launches,
and delivered $36 million of new business in
2024, driven by our focus on growth platforms.
Wedeliveredrecordadjustedoperatingprofitof
$78.4 million (2023: $56.1 million) and adjusted
operatingprofitmarginof20.3%(2023:15.3%),
reflecting the combination of ongoing self-help
actions, better mix and more normalised volumes.
Talc faced a challenging year, with lower
revenuesandprofit,reflectinganationwidestrike
inFinlandinthefirsthalf,whichclosedallports
and railways in the country for a month, and
continued weak demand across our European
markets, which represent over 80% of our
business. Revenue reduced 1% to $135 million
(2023: $136 million). The overall impact of the
FinnishstrikeonTalcoperatingprofitwas
around $3 million, due to lost sales and higher
costs in H1 2024. As a result, the adjusted
operatingprofitreducedto$8.0million
(2023: $14.0 million) and adjusted operating
margindeclinedto5.9%(2023:10.3%).
The impact of the nationwide strike, alongside
weak market demand, triggered a preparation
of a new business plan for the Talc business,
which resulted in an impairment of assets of
$66.1millioninthefirsthalf.
In September, the RA of the ECHA recommended
thattalcbeclassifiedasSTOTRE1and
Carc 1B
1
.AfinaldecisionbytheEuropean
Commission (“EC”) is expected in H2 2026,
creating ongoing uncertainty for the European
talc industry. As a result, there is a high degree
of uncertainty with regards to the future demand
andprofitabilityprofileoftheTalcbusiness,
which gave rise to a further impairment of
$59.9millioninthesecondhalfof2024.
Our balance sheet further strengthened over
the year, with net debt reducing to $157 million
(2023: $202 million) driven by higher earnings.
As a result, the net debt to EBITDA ratio
reduced to 1.0x (2023: 1.4x). The Board has
recommendedafinaldividendof2.9centsper
share (2023: 2.1 cents), resulting in a full-year
dividend of 4.0 cents per share. In recognition of
our strong balance sheet and the positive outlook
for the business, the Board will evaluate a range
of options for additional shareholder returns.
Innovation, Growth and Efficiency
strategy is delivering, we are on track
to achieve our 2026 financial targets
We made good progress implementing our
strategy, launching 22 new products, and
delivering $60 million of new business. We
delivered 15% of revenues from innovation sales
and currently hold a new business opportunities
pipeline of $327 million at the end of 2024.
At the November 2023 CMD, we communicated
thegrowthandefficiencyinitiativesthatwill
underpin our performance through 2026. Our
ambition is to deliver above-market revenue of
$75 million across six growth platforms
2
by 2026
and $30 million annual cost savings by 2025.
We launched two new products, including
Bentone Hydroluxe
TM
360, which together with
the existing products, will enable us to expand
ourshareinthenaturalrheologymodifiermarket
for skin care, worth over $200 million.
We have a global leading position in the
Antiperspirants sub segment, and the growth
herehasbeendrivenbyinnovativehigh-efficacy
products and the successful consolidation of
our production plants. We launched four new
products, including a lower carbon antiperspirant
active product, and are excited about the launch
of a new deodorant active, at the in-cosmetics
trade show in April.
Growth in Architectural Coatings was supported
by strong growth in Asia, where we added a
new non-ionic synthetic associated thickeners
(“NiSATs”) facility in China and expanded our
localised production. We have a big opportunity
to tap into the growing demand for high-end
paints in Asia, which is an attractive $300 million
ingredients market. Our recently launched
RHEOLATE
®
biobased NiSATs are targeting
this market.
Revenue across Industrial Coatings increased
9%despiteflatmarketdemand,improvingacross
all regions. Growth was driven by increasing
demand for our hectorite-based solutions. We
launched two new products in 2024 that continue
to support the transition from solvent-based to
water-based coating systems. Over the next
12 months, we will complete our testing phase to
refineourmarketexpansionstrategyforthe
powder coating industry, leveraging our hectorite
and organic thixotrope-based portfolio, and
helping us expand into this fast-growing market,
currently worth around $200 million.
We saw a strong growth in the Adhesives,
Sealants, and Construction Additives
market, which is a relatively new adjacency
that leverages our hectorite position and our
organic thixotrope technology. Revenue growth
was driven by success of our THIXATROL
®
range, up over 40%, and our hectorite-based
additives, which increased over 25%.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 10
Chief Executive Officer’s review
We now have a dedicated global sales and
technical team in place and are well-positioned
to gain momentum and accelerate penetration
in 2025.
Ongoing investment in innovation is a key driver
of growth and we take a multi-year approach
to launching distinctive products. In 2024 we
launched 22 new products, and as a result, our
revenues from innovation sales have continued
to grow to 15.3% of sales (2023: 14.3%).
Thecombinationofgrowthandefficiency
programmeshasunderpinnedfinancialdelivery
against our 2026 CMD objectives. Adjusted
operatingprofitmarginstoodat17.4%against
our19%+target.Thethree-yearaverage
operating cash conversion increased to 88%
(2023: 77%), with an annual cash conversion of
104%in2024.Thisgivesmealotofconfidence
thatwewillreachour90%+target.Finally,we
have a 2026 return on capital employed
(“ROCE”)targetof20%+.In2024,ourROCE
improvedto19%(2023:15%),excludingthe
impact of Talc impairment. Including the Talc
impairment, ROCE was 23%.
Safety
Safety is one of our fundamental values and is
key to the success of Elementis. We have an
ambition of becoming a zero-injury business,
and we made a good ongoing progress against
this objective, reducing the recordable injuries
by50%totwo,with90%ofoursitesremaining
injury free over the year.
We continued to drive further improvements,
training our people and maintaining our assets.
We rolled out a global health, safety and
environment (“HSE”) management framework,
aligned with the international standards for
health and safety at work, and published
life-critical global standards. We also developed
a process safety management dashboard to
track high-risk equipment and enhanced our
global HSE Week to include health and
environmental initiatives.
Sustainability
Sustainability is a key component of our strategy.
Our aim is to develop high-performance additives
that deliver positive, sustainable outcomes for the
environment and for society. We seek to design
products that use fewer resources and create
less pollution. We are committed to reducing our
impact on the environment, by reducing our global
greenhouse gas (“GHG”) emissions and helping
our customers on their sustainability journeys.
Our absolute Scope 1 and 2 GHG emissions
this year increased 18% to 77kt CO
2
e (2023:
65kt CO
2
e). This was mainly driven by increased
production at our India plant, which uses relatively
high-emission grid electricity, as well as a greater
mix of higher-energy intensity products. Despite
this, we made good progress on strengthening
our sustainability processes and implementing
tools and systems that will support our efforts to
achieve our ambition of becoming net zero by
2050. For example, we developed more detailed
ten-year GHG emission reduction plans, covering
every manufacturing site. We also reduced the
annualGHGemissionsatSotkamobyover90%,
and77%ofourpurchasedelectricitywascertified
zero carbon. Furthermore, we have developed
a SBT for overall GHG emissions reduction and
shared it with the SBTi initiative for validation.
Our target was approved by the SBTi in early
March 2025, and will be published in due course.
We are aware of the impact our products and
processes have on our customers. To help
them deliver and improve their sustainability
objectives, we continue to expand our use of
product lifecycle analysis across our product
portfolio.Inaddition,wefocusonfindingunique
solutions to emerging sustainability challenges.
For example, our new biobased NiSATs are
based on a waste stream of sugarcane
molasses and hence provide additional
sustainabilitybenefits,withoutcompromising
on performance, and our lower-carbon
antiperspirant active utilises upcycled aluminium
waste, resulting in a lower product carbon
footprint for both Elementis and our customers.
Today we have a high natural material content
inourproductportfolio,and69%ofGroup
revenues (2023: 68%) were generated from
natural or naturally-derived ingredients
(asdefinedbyISO16128).
We continue to improve our environmental,
social and governance disclosure processes
across Elementis. This year we implemented
a comprehensive due diligence system for all
clients and suppliers, enhancing our compliance
practices. We also published a new Human
Rights Policy Statement, reinforcing our
commitment to ethical business conduct.
I am pleased that our efforts are recognised,
having achieved a Gold rating from EcoVadis
for the fourth consecutive year. A Gold rating
puts Elementis in the top 5% of all companies
assessed by EcoVadis.
People, culture and values
The strong results we delivered this year
would not be possible without the hard work
and commitment of our people. We have seen
a lot of change over the past year, affecting
our global workforce. The Fit for the Future
organisational restructuring we announced in
2023triggeredover190redundancies,the
large majority of which were completed in 2024.
Decisionssuchasthesearedifficulttomake
butwilldeliveramorestreamlinedandefficient
organisation. All employees affected by this
change have demonstrated incredible loyalty
and resilience and I am grateful for their
contribution while at Elementis. We also
welcomed over 100 new people in our new
Porto,Portugal,office,bringingalotofenergy
and new ideas to our organisation. We continue
to monitor employee engagement throughout
the year, and I am pleased to see that, in spite
of all the change, our scores are improving.
In addition, gender diversity across the
organisation, including our leadership is
continuing to improve, with 42% of our senior
leadership being female.
Thank you
Any CEO’s goal is to leave the company they
lead in far better shape than when they arrived.
This was certainly my goal. As I prepare to hand
overtheleadershipofElementis,Iamconfident
the Company is well positioned to deliver further
performance improvement in the near term,
despite a market environment that will likely
remain challenging. Our strategy of ongoing new
product innovation, and our focus on the most
compelling growth opportunities and on
deliveringfurtherefficiencywillunderpinfuture
success.
I leave Elementis in good hands. Luc and I have
worked together for the past nine years. He has
great experience, deep knowledge and the
ambition to take the business to the next level.
He inherits a very talented and committed
management team and I’m certain together
they will make the most of the opportunities
that lie ahead.
Paul Waterman
ChiefExecutiveOfficer
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 11
Chief Executive Officer’s review
Differentiated
premium assets
Our California-based mine is the largest
high-quality hectorite mine in the world, with
substantial reserves of white-coloured hectorite.
Wealsoownsignificantdepositsofhigh-quality
talc in Finland. Our vertically integrated model
utilises our natural mineral resources, which,
combined with our technology and market-
leading formulation capabilities, creates
unique product sets and compelling
competitive advantages.
Two attractive,
resilient businesses
Our businesses are focused on market
segments with structural growth opportunities,
supported by industry trends.
Customer-centric and
innovation focus
A leading supplier of specialty chemicals,
we leverage our capabilities in rheology,
surface chemistry and formulation to solve
our customers’ formulation challenges.
Through our key account partnerships,
we develop customised solutions and provide
ongoing technical support, adding further
value to our customers.
Global reach
Our manufacturing and research and
development (“R&D”) capabilities in key regions
allow us to serve customers globally and provide
supply chain resilience.
Sustainable solutions
We combine our expertise in natural clay and
talc minerals with bio-derived molecules to create
more sustainable solutions for our customers.
We take pride in our extensive portfolio of
natural products and sustainable formulation
concepts, meeting consumer needs while
improving both our own and our customers’
environmental impact.
Strong cash generation
Our strong cash generation, alongside our
Innovation,GrowthandEfficiencypriorities,
support re-investment for long-term growth,
financialdeleveragingandsustainable
shareholder returns.
Investment case
Our shareholder
value proposition
is built on:
1 On adjusted basis, pre-central costs.
2 Three-year average.
Personal
Care:
42%
of Group
operating profit
1
Performance
Specialties:
58%
of Group
operating profit
1
Hectorite:
>50
years of estimated
resource life
15%
innovation
sales
>90%
operating cash
conversion target
2
30%
dividend
payout ratio
69%
revenue from
natural products
17
manufacturing
plants across
four continents
7
R&D centres
globally
Hectorite is a natural white clay mineral, with a
layered‘houseofcards’molecularstructure.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 12
Market drivers
providing
tailwinds
We identified three key global trends
affecting our customers and the
markets in which we operate.
We have positioned our strategy
to address the needs of our clients,
while maximising the growth
opportunities arising from those
megatrends.
Sustainability
Climate change, environmental degradation,
and increasing competition for resources require
new solutions to solve the complex planetary
and societal issues they cause. This includes the
transition to cleaner energy, and the creation of
a circular economy that can benefit everyone.
What this means for our industry
Consumers are becoming more sustainability
focused, demanding natural products that
have low negative impact on the environment,
communities and workers in the value chain
It is increasingly important that companies
can support claimed product benefits
with credible, science-based evidence
and standards
Increased desire for solutions that contribute
positively to the health and wellbeing of society
Demand for solutions that increase
production yields and contribute towards
the circular economy
Pressure to minimise social and
environmental impact of production
throughout supply chains
Our opportunities
Leverage our naturally-derived products
and high-quality hectorite clay resource to
help customers use less material, energy
and water
Innovatively designed products to help
minimise pollution in downstream applications
Decarbonise our own and our customers’
value chains
Growth in natural and naturally-derived
rheology modifiers as a replacement to
synthetic alternatives
Improved manufacturing processes and
supply chain management resulting in better
outcomes for all stakeholders
How we are responding
Innovation focused on specialty additives
that deliver improved product performance,
lower operational costs and enhanced
sustainability claims, e.g. low-temperature
organic thixotropes and powdered NiSATs
Identifying new applications for our natural
personal care ingredients, bringing
long-lasting and more efficacious benefits
from the whole formulation
Replacing virgin with waste aluminium
in antiperspirants, leading to improved
sustainability profile of the end product,
with no impact on its efficacy
Setting challenging environmental targets
that help us to innovate better solutions,
such as our SBTi commitment to reduce
GHG emissions
Investing in our capabilities to assess risk
and quantify impacts of our supply chain,
portfolio and products, to better prioritise
our most impactful actions
Continuing to improve product verification
against leading certification standards
such as COSMOS and Ecolabel to
highlight the credentials of our products
Demographics
The United Nations expects the world’s
population to increase to nearly 10 billion by
2050, driven by increased longevity, increasing
urbanisation and accelerating migration.
Most of this population growth will be in the
developing world. Economic development,
along with an expanding middle class, is fuelling
consumption and demand for higher-quality
products. In the West, older consumers, with
greater disposable income, are becoming more
health and sustainability focused, with increasing
interest in services and experiences.
What this means for our industry
Increasing demand for construction and
infrastructure-related solutions
Rise of new ‘giant brands’ in emerging
markets, demanding quality products and
faster speed to market
Rising demand for personal care products
such as colour cosmetics and skin creams
Increased demand for longer-lasting and
more technologically advanced products
Demand for products that make consumers’
lives easier and provide premium and
feel-good characteristics
Our opportunities
New geographic markets for consumer and
industrial products that require premium
performance additives
Our manufacturing and R&D capabilities
in key regions allow us to serve customers
globally and provide supply chain resilience
Our high-quality hectorite clay resource has
a chemical structure that can retain various
active ingredients, delivering a combination
of benefits for a wide range of personal
care products
Consumers are willing to pay a premium for
products that deliver superior performance
with additional benefits
REACH AZP-908 LC: High-efficacy
antiperspirant, with improved
sustainability profile
Our recently launched REACH AZP-908 LC
demonstrate our focus on creating innovative
products that deliver great performance with
additional sustainability benefits.
The new lower-carbon grade of antiperspirant
ingredients utilises upcycled aluminium waste
to partially replace virgin aluminium feedstock.
Aluminium from an industrial waste stream
(which would usually undergo an energy-
intensive recycling process) is taken into our
manufacturing process. We use it to make
high-performance antiperspirant ingredients
that comply with the high standards for
use on human skin while having lower
environmental impact.
Based on our cradle-to-gate lifecycle
analysis, the carbon footprint of this product
can be reduced by up to 30% compared to
the conventional grade, reducing GHG
emissions for us and our customers.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 13
Higher demand for additives that deliver
premium product performance
characteristics
Opportunities for natural or naturally-derived
ingredients (e.g. hectorite, talc or castor
wax based)
How we are responding
Expanded our capabilities in China and
India, allowing us to make local
formulations and develop new products
that comply with local regulations
Expanded resources in Asia in new and
existing regions, generating more insights
on local market needs and deepening
innovation dialogue
Leveraging our leading rheology position
and high-quality hectorite resource to
launch new natural rheology modifiers for
Personal Care
We recently launched our first natural film
former for sun care and plan to launch one
for colour cosmetics in 2025
Planning product launches that are
suitable for the ‘mass’ market and reduce
speed to market
Launching new product solutions with
better durability, workability and
aesthetics for the decorative and
construction markets
Technology/digital
Technology progress is advancing rapidly,
and technologies are becoming ever-more
interconnected. Computing power and
materials science are the key enablers to
drive technology changes, providing options
for process and product innovation and
increased personalisation.
Technology is also being used to drive
improvements to customer experiences: for
example, through providing richer data insights,
better monitoring of customer engagement and
automating non-value-adding processes.
The process of developing customised
solutions has become both virtual and digital,
with joint development teams working across
multiple locations.
What this means for our industry
Ability to move fast and adapt the right
technology provides competitive advantage
A growing use of simulation and software is
required to generate smarter insights early
on and to develop products faster, more
efficiently and in a more sustainable manner
Renewable energy applications require more
demanding materials to deliver performance
Digitalisation, with generation of big data
and its interpretation using AI, will impact
consumers’ behavioural changes through
better access to information, improve
decision-making processes, and change
the way the different players interact across
value chains
Multichannel approach to customer
engagement increases transparency across
the supply chain
Technological changes increase customer
need and willingness to reformulate, while
digital support to testing and trials can speed
up innovation projects
Virtual reality opens opportunities for remote
training and technical support
Our opportunities
Access to digitalised processes and
customer interface increases the speed,
flexibility and service level we can provide
to our customers
We can achieve safer and more efficient
production technologies via manufacturing
automation and digitalised supply chain
Increased market penetration among SMEs
is boosting creation of indie brands on a
global scale
Use of AI-driven tools to accelerate product
development and formulation solution
creation, enhance quality and predictive
maintenance processes
New technologies may open new value
pockets in fast-growing markets
Elementis tops SpecialChem’s
supplier rankings
Ranked #1 supplier for rheology modifier
additives and #2 most popular coatings
supplier on SpecialChem’s website –
the world’s largest global network of
engineers and technical professionals
in chemicals and materials.
Our clear focus on innovation, with
attractive new products that are meeting
the needs of our customers, are
increasingly resonating with a wider
audience, enabled through technology.
Source: SpecialChem.
How we are responding
Investing in testing AI use cases across
different business areas such as
innovation and technical support to
enhance formulation solution as a
winner differentiator
Enhancing our data governance
framework as a key enabler for AI adoption
We are developing digital data
management capability to scale new
products faster
Continue to explore innovative
technologies and testing our products’
suitability for new applications
Better use of customer data to analyse
search behaviours and product reviews,
generating insights on new trends in our
target markets. Ability to process data
quickly and accelerate innovation will lead
to better customer proposition
New product information management
system, one centralised repository for
our product information, offering a
user-friendly and intuitive interface for
Elementis’ employees, partners and
customers
Increased digital media outreach, online
customer education, sophisticated
formulation support and close
collaboration with distribution partners
Increased Product Stewardship and
Regulatory Affairs efforts and proactive
positioning of technologies as being
natural and safe
Continuing to improve our automation
capability, enhancing both productivity
and safety in our plants
#1
supplier for rheology
modifier additives
in 2024
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 14
Market drivers providing tailwinds
Strategy
at a glance
Elementis operates via two focused
businesses, well positioned in attractive
and structural growth segments.
Our strategy is built on the three pillars
of Innovation, Growth and Efficiency,
underpinned by sustainability objectives.
Innovation
We are a global leader in performance-
driven additives that help create innovative
solutions for our customers. Leveraging
our capabilities in rheology, surface
chemistry and formulation, we help our
customers create better products.
We respond to sustainability drivers (Climate,
Circularity, Nature and Health) in our markets and
use our expertise to find new ways to add value.
For example, innovating with a new natural skin
care ingredient, introducing a novel biobased
coating additive, developing an antiperspirant
using waste aluminium or enabling our customers
to use safer ingredients.
Launched 22 new products
69% of revenue from natural or naturally-
derived products (2023: 68%)
Total innovation sales increased to 15.3%
(2023: 14.3%)
Expanded alternative sourcing, improving
supply resilience
We contribute to our customers’ sustainability
goals. Some of our products can lower processing
energy requirements and improve transportation
efficiency. We also strive to make our own
operations more efficient and reduce their
environmental impact by increasing our use of
renewable energy, improving energy efficiency,
recycling water and reducing waste.
$18 million of annual cost savings
50% reduction in work-related injuries
Continuous improvement projects in the supply
chain, reducing cost and environmental impact
Developed an SBT for GHG emission
reductions for all three scopes and shared it
with the SBTi for validation
Launched ESG risk assessment tool enhancing
our responsible sourcing system
Growth
Our two businesses operate in attractive
markets with structural growth
opportunities, supported by clear
market and industry trends.
Efficiency
We constantly seek to be a
fit-for-purpose and more efficient
business, agile and growing, with our
impact on the environment and the
communities in which we operate
at the forefront of our minds.
Read more about our approach to
innovation on pages 16-17.
Read more about our growth strategy on
pages 18-20.
Read more about our approach to
efficiency on page 21.
$90m
above-market revenue growth by 2026
$26m
above-market revenue across six
1
growth platforms
Seven growth platforms across Personal Care
and Performance Specialties
Talc strategic reviewing progressing
>$25m above-market
revenue growth across six growth platforms
$30m
of savings by 2025
$18m
of annual cost savings
$12m
of additional savings
2023 CMD objectives
Sustainable approach
2024 update
2025 objectives
Link to KPIs
Refer to the Key performance indicators
section on pages 22-23 for further detail,
including how those link to our strategy.
1 Talc growth platform now excluded from the overall 2026 CMD growth target.
As innovation becomes established in the market,
we help our customers to maximise their positive
impacts. We add to the health and wellbeing
of society with natural personal care products,
coatings additives with low volatile organic
compounds (“VOC”), lowering the use of biocides
and contributing to the effectiveness of vehicle
pollution control systems.
$60 million of NBO created
$26 million of above-market revenue across
six growth platforms
NBO pipeline of $327 million
Expanded manufacturing capabilities at Taloja,
leading to increase of high-efficacy AP actives
products and growth in new business
2024 progress
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 15
Innovation
Priorities for 2025
Launch at least 15 new products
Increase new and proprietary products
to 16% of sales (2024: 15%)
Progress AI with focus on manufacturing
use cases, R&D and marketing
Link to risk
1
2
4
7
8
9
10
For detail about our principal risks and
uncertainties, see pages 70-74.
We are a global leader in performance-driven
additives and are focused on creating
solutions for our customers that deliver
product performance improvements,
efficiency gains and enhanced sustainability
credentials. We continued to leverage our
relationships and digital capabilities to drive
the launch of 22 new products in 2024.
Our innovation focus is clear. We want to
create solutions for the biggest challenges
that our customers face, which, in turn, are
reflected in our growth platform focus.
In Personal Care, consumers no longer just
want natural ingredients that deliver superior
performance. They are looking for more
sophisticated products, for example, with
additional skin care benefits. As we expand
our portfolio of hectorite-based products we
are well-positioned to benefit from this trend.
Our hectorite provides excellent rheology
modification properties, and in addition,
it can be used as an active ingredient for
oil absorption and mattifying benefits.
Similarly, the coatings industry wants
high-performance additives that offer
sustainability and new efficiency benefits.
Our CHARGUARD™ fire retardant synergists
are designed to enhance anti-drip and char
formation properties of non-halogenated
fire retardants. Being organoclay-based,
they provide a natural and safer alternative
to halogen-based fire retardants and
polyfluoroalkyl substances (“PFAS”) such as
polytetrafluoroethylene (“PTFE”) synergists,
reducing the environmental and health
impacts of these substances.
69%
natural or naturally-
derived revenue
Growth platform:
Skin care
BENTONE HYDROLUXE™ 360
The natural multi-tasker for oil
in water systems
In April 2024, at the in-cosmetics trade
show in Paris, the biggest show for personal
ingredients in the world, we launched
Bentone Hydroluxe
TM
360 – a 100%
naturally-derived all-in-one emulsifying wax.
It combines natural ingredients, such as
hectorite and xanthan gum, to provide
excellent suspension and formulations stability.
The hectorite clay provides a soft silky feel on
the skin and offers a natural emulsifying and
thickening solution, and also makes it easier
for our customers to get the right stability
and viscosity in their natural formulations.
As a result, it enables formulators to create
products with a variety of textures, from light
fluid serum, soft cream to rich velvet cream,
and supports industry trends of skin glow
skinification and sustainability.
We received great feedback from customers
and, since its launch, have sent out over
1,200 samples to customers worldwide.
Scan me!
Find out more
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 16
Strategy in action: Innovation Growth Efficiency
We identified sustainability as one of the
key drivers that is changing and creating
trends in the markets in which we operate.
At Elementis, innovation and sustainability
go hand in hand. All our new product
launches and pipeline projects must have
clear sustainability credentials. In 2024,
69% of our revenue was from natural or
naturally-derived chemistries, for example,
castor wax based organic thixotropes.
In addition, we are conscious of the need
for our products to contribute to the overall
wellbeing of society, whether it is through
biobased THIXATROL
®
technology or
utilisation of recycled aluminium in
antiperspirant actives.
In addition, through our established global
key account programme, we work closely
with our customers, offering our expertise
and innovation, and keeping them at the
forefront of their industries. Our scientists
are formulation experts in our core markets,
and our laboratories are equipped to facilitate
formulation of finished goods similar to our
customers’ products. We can test these
materials to mimic real-life conditions for
demonstration. This allows us to build strong
technical and commercial relationships with
major customers and cooperate in the
development of new formulations to enhance
their products and processes.
This drives volume and sales growth,
increases our share of these customers’
spend and opens up major new business
opportunities.
Our revenue from new and innovation
products continued to increase, reaching
15% compared with 14% in 2023, and
we want to increase this further. Our new
business pipeline stood at $327 million at
the end of 2024, with over 30 products in
the pipeline, of which approximately 15 are
scheduled to launch in 2025. This will
support our ambition to achieve an adjusted
operating profit margin target of 19%+.
Innovation sales
11.5%2020
13.5%2021
13.3%2022
14.3%2023
15.3%2024
15.3%
Growth platform:
Industrial Coatings
SUPREAD™ 3410
A low-foaming silicone
substrate wetting agent
As industrial coating manufacturers
navigate the transition from solvent-based
to water-based systems to meet stringent
VOC reduction regulations, the demand for
effective additives has never been more
pressing. Addressing this critical need, we
launched SUPREAD™ 3410, a low-foaming
silicone substrate wetting agent.
Traditional silicone wetting agents, while
effective in reducing surface tension and
promoting even coating spread, have
often been plagued by foaming issues.
SUPREAD™ 3410, designed with a unique
branch structure and precise hydrophilic
control, tackles these challenges head-on.
Its dynamic surface tension ensures efficient
droplet formation during spraying, while its
molecular structure prevents foam stability,
leading to excellent coating application.
Extensively tested across a range of
parameters, SUPREAD™ 3410 offers the
following benefits:
Excellent substrate wetting ability of
both porous and non-porous substrates,
resulting in flawless coating application
Low-foaming property allows smoother
and more consistent coating application
Effective reduction of static surface
tension, enhancing coating spread
and adhesion
Good compatibility with various coating
formulations and maintains efficacy over
the long term
Improved anti-blocking properties,
ensuring optimal surface finish
Contributes to VOC reduction efforts
and serves as a sustainable alternative
to PFAS-containing additives
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 17
Strategy in action: Innovation Growth Efficiency
Priorities for 2025
Deliver $25 million above-market revenue
growth across six growth platforms
Generate $35 million of NBO sales
Increase NBO pipeline by $60 million
Link to risk
1
2
3
4
5
6
7
8
9
For detail about our principal risks and
uncertainties, see pages 70-74.
NBO pipeline
$248m2020
$281m2021
$282m2022
$363m2023
$327m2024
In November 2023 CMD, we set out an
ambitious target, to deliver $90 million
above-market revenue growth by 2026,
across seven growth platforms. Due to the
ongoing Talc strategic review, we now exclude
Talc from our overall 2023 CMD growth
programme. Going forward, we will focus on
the six growth platforms across Personal Care
and Coatings, delivering $75 million of
above-market revenue by 2026.
Our Personal Care business operates across
three core market segments, in which we built
a strong competitive position: Skin Care,
Colour Cosmetics and Antiperspirants.
For further detail on Personal Care performance
and strategy, see page 62.
Colour Cosmetics growth platform
Colour Cosmetics revenues grew across all
regions, particularly in Asia. We saw strong
growth in China, driven by new and existing
relationships with the local players and
route-to-market optimisation. We continued
to leverage our expertise in rheology and
formulation solutions, combined with growing
demand for hectorite as a key ingredient.
In 2024, we launched two new customised
products targeting emerging markets. Growth
over the coming years is underpinned by
innovative products including a range of
patent-pending Bentone
®
Ultimate products,
with a higher efficacy in use and a fully natural
activation mechanism. We believe these
innovative products will further strengthen our
leading position in natural rheology and allow
us to offer solutions to our customers to meet
new requirements driven by market trends
such as skinification and individualisation.
Skin Care growth platform
Growth in the Skin Care market segment has
been supported by increasing demand from
consumers looking for more sustainable
products with natural ingredients. Our
hectorite-based additives are well positioned
to benefit from this trend, as they work equally
effectively in both water-based and oil-based
products. Our strategy in this segment
focuses on natural rheology, creating products
that offer attractive new functionalities.
For example, this year we launched Bentone™
Hydroclay 2101, a product customised for
a leading European sun care manufacturer,
and Bentone Hydroluxe™ 360, an all-in-one
hectorite-based solution. This is our first
product in a new Bentone Hydroluxe™ line.
In the next launch, we are looking at an
additional functionality of hectorite as a natural
co-emulsifier. Together with existing products,
this will enable us to expand our share in the
natural rheology modifier market for skin care,
worth over $200 million. In 2025, we also
plan to launch water-resistant film formers
for sun care.
Antiperspirants growth platform
Finally, the third growth platform,
Antiperspirants, a market segment where we
have a global leading position in AP actives.
The above-market revenue growth in 2024
was driven by increased demand for our
high-efficacy products, enabled by our strong
relationships with global key accounts and
the successful full production at the new
Taloja plant in India. In July, we closed one
of the three AP actives plants, consolidating
the existing footprint into two plants across
two key locations, which strengthens our
competitive position and supply resilience.
Growth
$26m
above-market revenue growth
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 18
Strategy in action: Innovation Growth Efficiency
In 2024, we launched four new high-efficacy
products, including a low-carbon AP actives
product. Our new lower-carbon grade of
antiperspirant ingredients utilises upcycled
aluminium waste to partially replace virgin
aluminium feedstock, leading to lower product
carbon footprint for us and our customers.
In 2025, at the in-cosmetics trade show in
Amsterdam, we are launching a long-awaited
alternative antiperspirant active with sweat-
reduction benefits.
Our strategy for Coatings focuses on three
differentiated, technology-led growth
platforms: Architectural Coatings, Industrial
Coatings, and Adhesives, Sealants and
Construction Additives.
For further detail on Coatings performance and
strategy, see pages 63-64.
Architectural Coatings growth platform
In Architectural Coatings, we have a big
opportunity to tap into the growing demand for
high-end paints in Asia, which is an attractive
$300 million ingredients market. In H1, we
expanded our manufacturing footprint in Asia,
which will allow us to expand our offering of
more sustainable paints to local customers.
In 2024, we launched four new products,
including two RHEOLATE
®
biobased NiSATs,
which provide additional sustainability
benefits, without compromising on
performance. We believe this, alongside our
manufacturing footprint across three key
regions, will support our ambition to grow at
twice the market by 2026 in this attractive
market segment.
Industrial Coatings growth platform
Industrial Coatings revenues increased 9%
against a flat global market. Revenue was
higher across all regions, driven by increasing
demand for our hectorite-based solutions.
We launched two new products, including
Nuosperse FX 7600W and SUPREAD™ 3410,
supporting the transition from solvent-based
to water-based coating systems. Over the next
12 months, we will complete our testing phase
to refine our market expansion strategy for the
powder coating industry, leveraging our
hectorite and organic thixotrope-based
portfolio, and helping us expand into this
fast-growing market currently worth around
$200 million. Powder coatings do not require
solvents, and the latest technology developments
are enabling lower curing temperatures.
This makes them suitable for heat-sensitive
materials such as wood coatings, creating
additional growth opportunities.
Adhesives, Sealants and Construction
Additives growth platform
Here we offer high-performance additives for
a range of applications. This is a market that
we are only starting to penetrate but where
our technologies bring both sustainability and
performance benefits. We are looking to
double our market share from 3% to 6% by
2026. In 2024, we saw revenues growing 15%
(from a small base), supported by the success
of our THIXATROL
®
range, which grew over
40% in the year, as well as hectorite-based
additives. Our thixatrols are natural, safer to
handle, and can reduce in-process energy
usage by up to 80%. We see strong demand
for hectorite-based additives, where hectorite
is seen as a more sustainable ingredient, but
also one that provides additional benefits.
One key area where we see rapid growth is in
hectorite for tile mortars. This is a $100 million
market, where we are replacing bentonite-
based products and significantly improving
end-product efficiency. Innovation is crucial
here, and we have six new products in the
pipeline launching over the next two years.
We have a strong track record of identifying
and developing new product applications.
In addition to seven new products across our
Coatings growth platforms, we launched five
products targeting other markets, including
new adjacencies. For example, we expanded
our plastic additives portfolio with
CHARGUARD™ fire retardant synergists,
designed to enhance anti-drip and char
formation properties of non-halogenated fire
retardants, potentially replacing certain types
of PFAS used in this application.
A major component of our growth strategy
is our key account management programme.
We have built strong technical and commercial
relationships with major customers and
cooperate in the development of new
formulations to enhance their products and
processes. This drives volume and revenue
growth and deepens our relationships with
major customers. This approach, combined
with our innovation focus, is helping us
explore new market segments and create
new growth opportunities.
Growth platform:
Architectural Coatings
RHEOLATE
®
BIO NiSAT:
polyurethane thickeners
with over 90% biobased
carbon content
As the demand for sustainable, safer and
high-performance paints continues to rise,
architectural coating manufacturers are
turning to biobased renewable ingredients.
To meet this growing need, we launched
two biobased NiSAT products, RHEOLATE
®
BIO 5010 and RHEOLATE
®
BIO 5075. Their
biobased carbon content is derived from
sugarcane molasses waste streams, classified
as waste and residue under ISCC PLUS
guidelines. As a result, these ingredients
do not compete with the food supply.
With over 90% certified biobased carbon
content, these innovative additives support
eco-label compliance while delivering the
high performance required for modern paint
formulations. Ideal for architectural coatings,
wood finishes, and interior and exterior wall
paints, they have been extensively tested to
ensure superior performance.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 19
Strategy in action: Innovation Growth Efficiency
Growth platform 2024 growth
1
Opportunity/ambitions 2026 CMD target
Colour
Cosmetics
Elementis: 7%
Market: 4%
Skinification, individualisation, speed to market
Enter $40m make-up film-former market
Expand Asia direct customer relationships
Add $10m above-
market revenue
Skin Care
Elementis: 17%
Market: 4%
Natural solutions to replace synthetic
(c.$0.5bn addressablemarket)
Enter $80m sun care film-former market, launching
newsuncarebiodegradable film former
Expand hectorite natural active applications
Grow at 2-3 times
market
Antiperspirants
Elementis: 2%
Market: -0.2%
High-efficacy antiperspirant actives
Enter $80m deodorant active segment
Manufacturing consolidation for lowest costs
Mid-single-digit
revenue growth and
margin expansion
$6m
above-market revenue
Architectural
Coatings
Elementis: 3%
Market: -0.4%
Penetrate Asian premium architectural market (>$300m market)
Global launch of biobased and powdered NiSAT range
Capture demand for sustainable ingredients
Grow at 2 times
market
Industrial
Coatings
Elementis: 9%
Market: 0%
Enter fast-growing powder coatings market ($200m market)
Leverage rheology leadership to grow share of wallet for
industrialdispersants and defoamers (c.$1bn market)
Launch hectorite and organic thixotropes line for
powder coatings
Portugal and China in-house application capabilities
Add $30m
incremental revenue
Adhesives,
Sealants and
Construction
Additives
Elementis: 15%
Market: 1%
Hectorite for tile mortars ($100m opportunity)
Access clear sealant market ($150m)
Build out global distribution network
Double market share
$20m
above-market revenue
Personal
Care
Performance
Specialties
Six growth platforms aligned
to industry trends
In November 2023 CMD, we set out
an ambitious growth target, to deliver
$90 million above-market revenue by
2026, across seven growth platforms.
Due to the ongoing Talc strategic review, we
now exclude Talc from the overall 2023 CMD
growth programme. Going forward, our strategy
will focus on the six growth platforms across
Personal Care and Coatings, delivering
$75 million of above-market revenue by 2026.
$26m
above-market revenue
growth in 2024
$75m
above-market revenue
growth over three
years to 2026
1 Market growth sources: Statista, Euromonitor, Orr & Boss, Markets and Markets, Elementis insight.
Personal Care
contribution
to $75m
growth target
Coatings
contribution
to $75m
growth target
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 20
Strategy in action: Innovation Growth Efficiency
Priorities for 2025
Deliver $12 million annual savings across
our two efficiency programmes
Improvement in working capital intensity
Progress with 2030 environmental
targets and decarbonisation towards
our SBT
Embed process safety management
practices
Link to risk
1
2
3
4
6
8
9
For detail about our principal risks and
uncertainties, see pages 70-74.
We continuously work towards improving our
organisation, driving efficiency gains, and
becoming a more resilient business. In light
of this, at our 2023 CMD, we announced an
ambitious efficiency programme targeting
$30 million of cost savings over two years.
In 2024, we delivered $18 million of in-year
cost savings and expect at least another
$12 million additional cost savings in 2025.
$10 million of the cost savings in 2024
was achieved through Fit for the Future
organisational restructuring, with the
remainder delivered across our supply chain
and procurement.
Fit for the Future restructuring is focused on
creating a simpler, more efficient corporate
structure, and the process is running ahead
of plan. We already eliminated the large
majority of the announced 190 roles, with the
process expected to complete in Q1 2025.
In 2024, we set up a new R&D and support
centre in Porto and hired over 100 new roles.
We also outsourced finance transactional
roles to India, strengthening our processes,
gaining access to digital tools and automation
opportunities. The team is fully embedded
and we expect additional efficiencies in 2025.
The second efficiency programme focuses
on supply chain optimisation and procurement
efficiencies, where we delivered $8 million of
cost savings in 2024.
In June 2024, we closed one of our AP actives
plants in New York, which was enabled by the
successful production ramp-up at our Taloja
plant in India. In our supply chain, we have
built capability in continuous improvement.
Examples of recent successes include the
scavenger project at Vuonos, which improved
overall yield of talc by circa 8%, or the
optimisation of spray dryer operation at
Newberry, which improved throughput by
circa 11%. We made good progress on supply
chain transformation, leveraging digital tools
to improve supply and demand management.
We are investing in AI-driven automation, which,
alongside upgrades to our data processes, will
lead to further efficiency savings in coming years.
Across procurement, we focused on
improving our supply resilience by reducing
the number of raw materials that are single
sourced and adding new vendors to diversify
our coverage. In 2025, we will continue to
drive benefits from better use of our new
digital vendor management system,
e-sourcing, and further reduction in, and
standardising of, our procurement processes.
Another key enabler of our efficiency is
our sustainability focus. Our products help
customers do more with fewer resources,
for example additives that help adhesives
instantly grip heavy ceramic tiles without
slipping, saving end-users materials, time
and money. Efficiency is also a foundational
requirement for sustainability improvements
in our own operations and supply chain.
This year, we made further progress in this
area, for example in our Sotkamo plant,
where we reduced overall Scope 1 and 2
GHG emissions by over 90%, replacing
liquefied petroleum gas (“LPG”) use with
electricity. 77% of our purchased electricity
in 2024 was certified zero carbon and we
look to increase this further in coming years.
Throughout our operations, our global
process excellence teams have identified
over 70 projects that are beneficial from both
an efficiency and environmental perspective.
Their implementation will drive delivery of
both our cost saving ambitions and our 2030
sustainability targets.
Efficiency
$18m
annual savings
Efficiency:
Case study
Talc scavenger project to
increase yield at Vuonos
To derive high-purity, high-consistency talc,
we use a flotation process which separates
non-talc minerals from talc. The waste
stream from the process, still contained
a meaningful amount of talc. In order to
improve efficiency and reduce waste,
we wanted to maximise the yield of talc
from the ore. To do this, we commissioned
an additional flotation ‘scavenger’ cell
to recycle the waste stream back into the
process to recover additional talc.
This new process improved overall yield
of talc from the ore by circa 8%, delivering
over $0.5 million of savings. Additional
savings were realised through reduced
energy usage per talc tonne, as well as
waste reduction.
The image above shows the former waste,
which is now used as the ‘feed’ into the
scavenger cell, recovering additional talc
ore ‘product’.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 21
Strategy in action: Innovation Growth Efficiency
Key performance indicators
Our key performance indicators (“KPIs”) enable us to monitor our strategic progress. The Board periodically reviews KPIs to ensure those are aligned with Elementis’ short-term and long-term objectives.
Financial KPIs
Adjusted diluted earnings
per share (“EPS”)
L
13.3c
Adjusted operating cash
conversion (“OCC”)
104%
Adjusted operating profit
$128.8m
Definition/calculation
Adjusted profit after tax attributable
to the ordinary equity holders of
the parent divided by the weighted
average number of shares in issue
during the year.
How we performed
Adjusted diluted EPS increased
by 23%, driven by higher
operating profit.
See pages 56-61 for more detail.
Definition/calculation
Net cash flow from adjusted EBITDA
plus changes in working capital,
provisions and share-based payments,
less net capital expenditure.
How we performed
Continued strong cash generation,
with good progress on our 2026
financial target.
See pages 56-61 for more detail.
Target
We target a three-year average OCC
of over 90%.
Average for 2022-2024 was 77%.
Definition/calculation
The profit derived from the continuing
operations of the business after
adjusting items.
How we performed
Adjusted operating profit increased
24%, driven by improved pricing and
product mix, further benefitting from
lower costs and higher volumes.
See pages 56-61 for more detail.
Adjusted profit before tax
(“PBT”)
B
$105.0m
Definition/calculation
PBT on total operations
(continuing and discontinued) after
adjusting items, excluding adjusting
items relating to tax.
How we performed
Growth in adjusted PBT reflects
higher operating profit.
See pages 56-61 for more detail.
B
Link to annual bonus
L
Link to long-term incentive plan (“LTIP”)
Note: Alternative performance measures are defined and reconciled on pages 192-193.
10.9c2022
10.8c2023
13.3
c2024
55%2022
106%2023
104
%2024
$
100.5m2022
$
103.9m2023
$128.8
m2024
$80.9m2022
$84.4m2023
$104.0
m2024
Adjusted operating
profit margin
17.4%
Definition/calculation
Calculated as adjusted operating
profit divided by revenues.
How we performed
Margin improvement of 280bps
reflects strong profit growth,
demonstrating good progress on
our 2026 target.
See pages 56-61 for more detail.
Target
2026 target of 19%+.
13.6%2022
14.6%2023
17.4
%2024
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 22
Financial KPIs
Average trade working
capital (“ATWC”) to
sales ratio
B
23.4%
Adjusted return on operating
capital employed (“ROCE”)
L
23%
Definition/calculation
The 12-month ATWC divided by total
revenue, expressed as a percentage.
Trade working capital comprises
inventories, trade receivables and
trade payables. It specifically
excludes prepayments, capital or
interest-related receivables or
payables, changes due to currency
movements and items classified as
other receivables and other payments.
How we performed
Reduction in working capital due to
improvement in inventories and trade
debtors, leading to lower ATWC to
sales ratio over the year.
See page 193 for more detail.
Definition/calculation
Adjusted operating profit divided
by operating capital employed,
expressed as a percentage.
Operating capital employed
comprises fixed assets (excluding
goodwill but including tax
recoverable), working capital and
operating provisions. Operating
provisions include self-insurance
and environmental provisions but
exclude retirement benefit obligations.
How we performed
Improvement driven by higher profit
and lower total operating capital
employed, due to Talc impairment.
Adjusted ROCE including goodwill
was 12.5% (2023: 9.4%).
See page 193 for more details.
Target
2026 target of over 20%. This is
equivalent to over 12% including
goodwill.
22.5%2022
25.1%2023
23.4
%2024
14%2022
15%2023
23%2024
Non-financial KPIs
Total recordable incident
rate (“TRIR”)
B
0.18
Scope 1 and 2 GHG
emissions (kt CO
2
e)
B
L
77kt CO
2
e
Women in leadership
B
42.1%
Definition/calculation
We use the US Occupational Safety
and Health Administration (“OSHA”)
definition for recordable injuries and
illnesses. TRIR is the total number
of recordable incidents multiplied
by 200,000 divided by total hours
worked by all employees during
the year.
How we performed
Continued reduction in TRIR
demonstrates our relentless focus on
safety, with improvement in training
and process safety management over
the year.
See pages 45-46 for more detail.
Definition/calculation
Total Scope 1 and 2 (market-based)
GHG emissions as defined by the
GHG Protocol.
How we performed
Higher GHG emissions reflect
changes in business demands,
including increased volumes of higher
energy intensity products.
See pages 34-43 for more detail.
Definition/calculation
Defined by the FTSE Women Leaders
Review as Executive Committee and
their direct reports. Ratio excludes
administrative and support roles.
How we performed
Our female representation in
leadership roles increased to 42.1%,
demonstrating our commitment
to improving gender diversity
and equality across the Group.
See pages 47-48 for more detail.
0.672022
0.332023
0.182024
652022
632023
772024
32.8%2022
37.3%2023
42.1%2024
B
Link to annual bonus
L
Link to LTIP
Note: Alternative performance measures are defined and reconciled on pages 192-193.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 23
Key performance indicators
Stakeholder
engagement
The Board has
considered the
interests of
stakeholders
throughout
the year.
Customers
Our customers rely on us to deliver
high-quality products with superior
performance, efficiency and
sustainability features. We deliver a
range of products to customers around
the world and, by providing expertise
and innovation, we keep our customers
at the forefront of their industries.
What matters to them
Customer service and performance
Supply reliability and quality
Responsible investment
Affordability and value
How we engage
Continuous customer dialogue helps inform our
innovation, which aligns with market trends
Provide technical support services to our
customers: an established global key account
programme enables us to focus on deepening
our customer relationships
Continuous feedback loop with key large customers
drives more sustainable, innovative products that
will meet their needs, strengthening partnerships
and collaborations
Participation and launching of new products
at conferences and trade shows, and active
participation in industry associations
Actions and outcomes
Launched 22 products
30 innovation projects in development
$60 million in new business delivered
$15 million spend on R&D and technical support
8 open innovation partnerships (Universities/
Research Institutes)
$108 million total innovation sales
Read more on pages 16-17.
Suppliers
A resilient and ethical supply chain is
critical to our business. We rely on our
suppliers to be able to meet the needs
of our customers so that we can meet
our growth opportunities and
portfolio potential.
What matters to them
Responsible supply chain
Sustainability
Collaboration
How we engage
Onboarding process provides two-way
communication to build relationships with
our suppliers
Direct engagement with suppliers by senior
management and regular contact with procurement
team to address any issues or potential issues
Corporate responsibility and ethics reporting
Actions and outcomes
Reduced single sourcing by 20% to reduce risk
and build resiliency
Delivered $4 million in year cost savings
Develop cross functional team with R&D to qualify
backup sources for critical raw materials
Read more on pages 13, 21 and 51-54.
Employees
Our employees are crucial to the
success of our business, and many of
our decisions have an impact on them.
Our employees want to feel valued
and empowered to make a difference.
A safe, ethical and sustainable workplace
with opportunities for real impact remains
central to our employee proposition.
What matters to them
Health, safety and wellbeing
Diverse and inclusive workplace
Fair pay and reward
Opportunities for learning and growth
How we engage
Initiatives around health, safety and wellbeing,
and our organisational culture
Promote diversity and inclusion, with a month
dedicated to the theme in October, and regional
activities facilitated by the employee resource group
Biannual engagement surveys to gather feedback
and develop action plans
Global and local townhall meetings
   Regular leadership briefings and intranet updates 
for the Fit for the Future programme
Performance reviews and career development
discussions
Unlimited access to LinkedIn Learning
   Global 24-hour, confidential employee assistance 
programme
Actions and outcomes
90% of sites with zero recordable injuries for >1 year
Engagement survey participation grew to 86%,
with the grand mean increasing to 3.91 out of 5
Onboarding, knowledge transfer and highly effective
teams training
Timely and effective communication, and
consultation with trade unions, works councils and
shop stewards where appropriate
Over 1,653 hours logged on LinkedIn Learning
Over 150 articles posted on the global intranet
accessible to all employees
Read more on pages 44-50.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 24
Communities and the
environment
Engagement helps us to understand our
impact on wider society and the ways in
which we can work together to make a
valuable difference.
What matters to them
Local employment
Economic contribution
Operational impact and disruption
Environmental considerations
How we engage
Environmental and social reporting on our website,
including corporate responsibility, modern slavery,
gender pay, water stewardship and carbon
emissions
Philanthropy and employee-matched funding for
charity policy
Local volunteering activities
Carbon Disclosure Project (“CDP”), UN Global
Compact (“UN GC”) communication on progress
Local biodiversity initiatives such as recycling
rainwater for banana plantations in Brazil
Actions and outcomes
Set long-term targets to improve environmental
impacts
Investment in operations and product innovation
to improve environmental impacts
Gold rating for EcoVadis
Annual disclosure to CDP
Read more on pages 28-43 and 49.
Investors
As owners of the Company, it is
important to engage actively and listen
and respond to investor feedback
throughout the year.
What matters to them
Successful delivery of our strategy and
financial targets
Transparent and regular updates
Capital generation and shareholder returns
Robust governance practices and responsible
corporate citizenship
How we engage
Interim and full-year results presentations,
investor roadshows, attendance at conferences,
site visits and ad hoc meetings with existing and
potential investors
The AGM is an important event, attended by all
Directors, where all shareholders can access the
meeting and ask questions
Governance roadshow with the Chair and meetings
with the SID and Committee Chairs as required
Actions and outcomes
Maintained a comprehensive programme of
communication throughout the year, with regular
market updates
c.100 investor meetings with over 70 institutions.
Hybrid AGM, with all resolutions passed
Chair attended 21 meetings with ten investors
over the year, with the feedback collected shared
with the Board
Investor feedback is collated and shared with the
Board on a regular basis
Read more on page 83.
Government, trade bodies
and regulators
Engagement with governments and
local regulatory authorities helps
to ensure we understand changing
regulatory requirements and can
maintain a constructive dialogue
to meet these requirements.
What matters to them
Governance and compliance
Trust and transparency
Environmental impact
Sustainable procurement
How we engage
Direct engagement with regulatory authorities,
including permit compliance, reporting breaches,
annual technical submissions and regulatory
guidance
Establishing and maintaining key contact
relationships with the Company’s main regulators
Active engagement with industry bodies
Actions and outcomes
Through our membership of the International
Minerals Association (“IMA”) Europe (the umbrella
organisation which includes EuroTalc), we support
and contribute to IMA Europe’s position for
engaging with government bodies about upcoming
regulations, including, for example, sector-specific 
sustainability disclosure rules
In relation to our talc mines in Finland, we have
launched a programme of engagement activities
with regional and national regulatory bodies to
ensure meaningful engagement
Read more on pages 51-54.
As industries seek substitutes for traditional
halogenated flame retardants due to their known
environmental and health hazards, organoclays
are stepping into the spotlight as the sustainable
synergist alternative. Derived from natural clay
minerals, our new CHARGUARD™ organoclays offer
a safer alternative to PTFE based synergists.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 25
Stakeholder engagement
Key decisions
in the year
The Board receives information on stakeholder
engagement matters through regular reports
and presentations from senior management
throughout the year. All Board papers for principal
Board decisions include a specific section on 
s.172(1) and stakeholder interests. In addition to
s.172(1) duties, there are also other factors that are
taken into account or may be considered relevant
in the context of decision-making: for example,
pension scheme members or engagement with
regulatory authorities, as well as an overarching
governance framework which includes Group
policies and the Code of Conduct. Directors bring
additional value by sharing knowledge or insight
gained from other previous or current roles.
The Board visited several of our sites during
2024 (New Jersey and New Martinsville, US
and Porto, Portugal). These visits provided
opportunities for our employees to engage with
the Directors during their tours of the sites, to
give the Board management overview
presentations and to participate in social events
with the Board. In addition, the Directors
engaged directly with our investors (see pages
82-83 for more detail) and participated in a
wider programme of engagement with our
employees.
Christine Soden, our Designated Non-Executive
Director (“DNED”) for Workforce Engagement,
ensures that the views and concerns of the
workforce are brought to the Board, understood
and taken into account. Further information on
our approach to workforce engagement can be
found on pages 84-85.
Strategic review of
Talc business
Following the sale of the Chromium business,
the Board judged that it was the right time to
consider the position of Talc in the portfolio
alongside other strategic options for the
business. This was in the context of the
structural evolution in talc markets which had
occurred following the Group’s acquisition
of the Talc business in 2018. In early 2024,
the Board asked management to undertake
a deep-dive analysis of risks, issues and
opportunities in relation to the Group’s
Talc business.
S.172(1) considerations
The impact of a decision to evaluate a
potential divestment of the Talc business on
the retained Group operations in the longer
term, as well as on stakeholders of the Talc
business, were the business to be divested
Whether the interests of the Talc business’s
employees, customers and suppliers would
be best served as part of the Group or
under a new owner
   The changed profile of Elementis’ 
environmental impacts if the Talc business
were to be sold
Investor sentiment in relation to the
Talc business
The Board’s role
The Board considered reports from
management and advisers which noted the
overall market outlook for the Talc business,
and took into account potential regulatory
developments as well as the capital intensity of
talc mining operations. The Board considered
the synergies which had been delivered as a
result of an earlier combination of the Talc
business with the Coatings business within the
Group and the extent of further synergies that
might be available, as well as potential future
growth opportunities.
The Board considered carefully the appropriate
timing to initiate a strategic review of the Talc
business, in light of the importance of the
successful delivery of the Fit for the Future
programme and its call on key resources within
the Group. The Board carefully evaluated input
from its financial advisers regarding a potential 
valuation of the Talc business in the event of a
sale process. Taking all aspects into account,
the Board approved the announcement of a
strategic review of the Talc business in
August 2024.
Key stakeholders identified
Employees
Customers
Suppliers
Government and regulators
Communities and the environment
Investors
Section 172
To enable them to fulfil their 
duties when making decisions,
it is essential that our Directors
understand what matters to,
and the impact on, our
stakeholders and, equally,
that it is not always possible
to provide positive outcomes
for all stakeholders when
considering the long-term
success of the Company.
Details of our stakeholder
groups and how the business
and the Board have engaged
with them during the year are
set out on pages 24-25.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 26
The Board’s role
The Board considered the negative
consideration payable to the buyer and
weighed this against the value to the retained
Group and its shareholders of securing a
full exit from the Group’s legacy chromium
manufacturing activities, following the
divestment of the US-based chromium
manufacturing business in 2023. The Board
evaluated the buyer’s proposed future use of
the site and concluded that the buyer would
be a positive custodian of the site. The Board
further concluded that there would be no
adverse impact to employees at the site,
who would transfer to the buyer on the same,
or improved, terms and conditions of
employment as under the Group’s employment.
Key stakeholders identified
Employees
Government and regulators
Communities and the environment
Investors
Divestment of
Eaglescliffe, UK site
The Group ceased chromium manufacturing
operations in the UK in 2009 and, since that
date, the Eaglescliffe site has been managed
with a small staff necessary to ensure that the
Group complies with its ongoing obligations to
the UK Environment Agency under its operating
permits. In March 2024, the Group concluded
a sale agreement with the Flacks Group, having
received expressions of interest from several
other parties. In consideration of a negative
purchase price of £11.5 million, split into two
tranches, the first (£6.5 million) payable on 
completion, and the second (£5 million) on
the first anniversary of completion, the Group 
agreed with the buyer that all past, present and
future environmental liabilities would transfer
to the buyer. The sale is expected to complete
during 2025 when the Environment Agency
consents to the transfer of all operating permits
to the buyer.
S.172(1) considerations
The divestment of the Eaglescliffe site is
consistent with the divestment of the active
Chromium operating business in 2023, and
achieves a ‘clean break’ exit for the Group
from the Eaglescliffe site and any associated
environmental liabilities
The buyer indicated that all employees at the
site would be retained on the same, or better,
terms and conditions
The Group understands that the buyer
intends to develop the site into a green
energy-generation centre with solar panels
and wind turbines (subject to consents).
Therefore, the buyer’s intended use of the site
is not expected to have any adverse impact
on the local community or the environment
Middletown plant closure
In March 2024, the company announced
the closure of one of our AP actives plants
in Middletown, US, consolidating our
manufacturing footprint. The Middletown
plant closed in June 2024.
S.172(1) considerations
The impact on our employees and community
Ensuring a smooth transition of equipment
and knowledge to an existing site
The Board’s role
The Board considered the company’s supply
chain and noted that, through the closure of the
Middletown, US, plant, the company would
continue to be able to serve customers globally
with the necessary supply chain resilience,
through its remaining AP actives plants located
in Huguenot, US and Taloja, India, at a balanced
cost. The Board evaluated the expected cost
savings that would flow from the consolidation
of its AP actives manufacturing footprint and
the company’s ability to relocate and install
equipment from the Middletown plant to its
other AP actives plants.
Key stakeholders identified
Employees
Customers
Suppliers
Government and regulators
Communities and the environment
Investors
Middletown plant closure enabled
by successful ramp-up at Taloja
Our Taloja plant in India in was completed
in 2022, and we continued to test and
qualify our products with major customers
throughout 2023. 2024 was Taloja’s first 
successful year operating at full production.
We demonstrated consistent high quality
and quantity of products through the year.
Taloja is now considered a reliable plant
by our key customers, which led to
a significant increase in our high-efficacy 
AP actives and the new business delivery
across the Antiperspirants growth platform.
The full ramp-up also enabled us to action
the AP actives plant consolidation. In June
2024, we closed one of the US plants,
leaving us with two AP actives plants across
two key locations, in the Americas and Asia.
Successful Taloja production has
strengthened our competitive position, not
only via cost efficiencies, but also improving 
our supply resilience, an important factor for
our key global customers.
Read more on page 62.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 27
Section 172
Our purpose – unique chemistry,
sustainable solutions – is our guide as
we strive to use our expertise to shape
positive outcomes in the world.
Sustainability
Towards our purpose
In this section
29 Foreword
30 Materiality
31 Governance
32 Strategy
34 Environment
44 People
51 Responsible business
Reporting approach
We have reported with reference to the
Global Reporting Initiative Standards
(“GRI”) for the period 1 January 2024 to
31 December 2024, and to Sustainability
Accounting Standards Board (“SASB”)
chemicals sector standards. How we
identify ESG topics of material importance
is described on page 195.
GRI index: pages 201-202
SASB index: page 203
CSRD readiness
We are assessing how our current Group
structure could result in being within the
scope of the EU’s Corporate Sustainability
Reporting Directive (“CSRD”), subject to
final implementation details and relevant
nation state regulations.
During 2024, we refreshed our double
materiality assessment and commenced
an assurance readiness assessment
for key non-financial KPIs. In 2025,
we will complete our scoping assessment.
Accordingly, we will determine which
European Sustainability Reporting
Standards (“ESRS”) disclosures we would
be required to make and review the
processes supporting those disclosures
against assurance requirements.
We place sustainability at the foundation
of our strategy, ensuring we measure
and improve our impacts, mitigate risks
and take opportunities. Our product
innovations help us to create better
additives with sustainability and
performance features that our customers
can exploit in their own products.
Examples include naturally-derived
rheology additives for paints and cosmetics;
use of waste aluminium in antiperspirant
actives; hectorite clay-based adhesive
additives that minimise lost time and
material use in construction activities;
low-carbon-footprint talc additives for
plastic lightweighting components in
automotive applications. In this way,
we contribute to a lower-emission,
more circular, healthier society.
We are committed to conducting our
business safely, responsibly and in
compliance with all applicable laws.
We require our business partners to
operate similarly. Our corporate values
and global Code of Conduct guide our
actions and decisions. We respect
internationally recognised human rights
– our Board of Directors approves our
annual Modern Slavery transparency
statement, available on our website. We
support the United Nations Sustainability
Development Goals (“UN SDG”) and are
a signatory to the United Nations Global
Compact (“UNGC”) – our annual
communication on progress is available
on their website.
TRIR vs 2023
-45%
Revenue share from
products that are natural
or naturally-derived
1
69%
Absolute GHG
emissions (combined
Scopes 1 and 2
market-based) vs 2019
-51%
Women in senior
leadership positions
vs 2023
+5%
2030 environmental
targets met in 2024
1/4
Purchased electricity
from renewable or
low-carbon sources
2
77%
1 ISO 16128 definition.
2023: 68%.
2 2023: 77%.
2024 sustainability highlights
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 28
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Sustainability represents a
significant opportunity for Elementis.
We have a continuing focus on taking
these opportunities, and enhancing
our tools and processes to help us
measure our impacts, understand
risks and opportunities, and
communicate outcomes.
With the support of colleagues across the globe,
we have expanded and strengthened our
strategic programme. 2024 saw positive results
across our safety KPI’s, reflecting the hard work
and dedication of our operations and HSE teams
in delivering our TogetherSAFE programme.
Elementis is increasingly diverse and reflective
of wider society. Gender diversity in senior
leadership positions saw a particularly large
improvement this year.
Our environmental impacts were higher than
last year, despite delivery of beneficial projects.
This is a reflection of increased volumes of
products with a higher environmental footprint
relative to other parts of our portfolio.
Nevertheless, reducing our environmental
impacts – especially by prioritising actions
related to strategically important products –
will reduce the sensitivity of our environmental
KPIs to demand variations.
To ensure we can prioritise and measure with a
multi-year visibility, this year, we developed more
detailed ten-year GHG emission reduction plans
covering every manufacturing site and value chain
hotspots. Each individual project identified remains
subject to our usual disciplined assessment of
cost/benefit, with the ten-year plans allowing
us to implement good projects faster/more
widely, or to delay/cancel unattractive projects.
Executing on these ten-year plans is crucial
to delivering on our newly-validated SBT,
more of details of which will be communicated
later in the year.
The carbon and environmental footprint of our
products directly contribute to the footprints
of our customers’ own products. To help
customers deliver and communicate their own
sustainability opportunities, we continue to
expand our use of product life cycle analysis
(“LCA”). LCA calculations connect our
environmental improvement projects and
product design innovations directly to our
customers’ sustainable value creation.
Working closely with our supply partners
is crucial to identify potential opportunities.
We must also ensure that delivering on our
opportunities does not increase risks elsewhere
in the supply chain. We have improved our
capability to systematically gather and manage
information on supply chain risk by expanding
our relationship with EcoVadis, a leading
sustainability intelligence platform for global
supply chains.
The sustainability journey for Elementis is
a long-term change project with many
dependencies. Changes in market demand
and product mix can drive large swings in our
year-on-year environmental footprint – as we
have seen in 2024 – that can more than offset
the environmental benefits we have delivered
in other parts of the business. Nevertheless,
our strategic programme ensures we have the
tools to create lasting change and sustainable
value for the company and our stakeholders.
Phil Blakeman
Global Director Sustainability
Foreword
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 29
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Our material topics and matrix
Environment
1
GHG emissions
2
Ecological impacts
3
Water management
4
Customer sustainability solutions
5
Energy management
6
Waste and hazardous material management
7
Air emissions
8
Product design and lifecycle management
People
9
Labour practices
10
Community relations
11
Employee health, safety and wellbeing
12
Employee diversity, inclusion and
engagement
Responsible business
13
Business ethics
14
Management of regulatory aspects
15
Product quality and safety
16
Responsible supply chain management
17
Competitive behaviour
18
Data security
19
Efficient and resilient supply of raw material
20
Critical incident risk management
21
Physical impact of climate change
UN SDG supported
Materiality
We aim for our strategic priorities
to maximise beneficial impacts
and minimise negative impacts
to society and the environment.
To do this, our priorities must
reflect the full reality of the world
in which we operate.
Early in 2022, we conducted a materiality
assessment to help us identify the sustainability
issues that matter most to our stakeholders
(such as customers, investors, regulators and
our employees). Full details of the process
we followed are in our Annual Report 2022.
CSRD readiness
In 2024, we refreshed our materiality
assessment, taking guidance from the
requirements of the European Sustainability
Reporting Standards (“ESRS”). We
identified the impact material and financially
material sustainability matters that will
determine our 2025 sustainability
disclosures. The Executive Leadership
Team (“ELT”) were actively involved in the
process, and the outcome was reviewed by
our Audit Committee and Board. During
2025 we will complete a material topic gap
analysis against the ESRS.
Medium
Stakeholder
importance
High
Medium HighBusiness impact
Targeted activities Best practice/risk management
Communicate actions/plans widely
Listen sensitively
Opportunities to generate wide-ranging value/benefits with
proactive, innovative action plans and frequent dialogue
1
4
5
8
3
2
6
7
11
12
10
9
21
17
20
16
15
18
14
19
13
UN SDG supported UN SDG supported
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 30
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Elementis plc has complied with the requirements
ofUK Listing Rule 6.6.6R(8) by including climate-
related financial disclosures consistent with the
Task Force on climate-related Financial Disclosures
(“TCFD”) recommendations and recommended
disclosures. The climate-related financial disclosures
made by Elementis plc comply with the requirements
of the Companies Act 2006 as amended by the
Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022.
Governance
Oversight of our material topics, sustainability
strategy, risks and opportunities, and progress
against targets is at Board level. Our Board has
a diverse set of skills and experience, helping
to embed sustainability and climate-related
considerations into our strategy in a balanced
way. At Board level, the standing CEO’s report
highlights progress in sustainability (including
against our climate strategy and related risks
and opportunities), with further detailed
management updates provided on a biannual
basis. This year, these included approval of our
proposed SBT, improvements to sustainability
risk and opportunity assessment methods for
our product portfolio and supplier base, and
progress on calculating product carbon footprint
and LCA. The governance of sustainability and
climate risks and opportunities is integrated into
our overall risk management framework, with
the Audit Committee having oversight of our
sustainability and climate risk processes and
disclosure recommendations through internal
audit reports and management-prepared
materials.
Our CEO has ultimate accountability for our
strategic response to sustainability, including
climate-related risks and opportunities.
The CEO and ELT approve the sustainability
programme and provide senior-level support
to the Sustainability Director and Environmental
Sustainability Council (“ESC”) to embed
sustainability and climate action across the
business via project and business teams.
Progress towards our 2030 environmental
targets, is part of the performance objectives
of both the CEO and Chief Financial Officer
(“CFO”). The ELT members are responsible
for delivering aspects of our sustainability and
climate strategy and managing related risks and
opportunities. The Sustainability Director is
responsible for driving our overall sustainability
strategy, providing the Board and ELT with
formal updates biannually, and chairs the ESC.
The ESC meets monthly, oversees progress
and identifies further necessary actions on
sustainability and climate-related topics.
Sustainability and climate governance
Board
Climate-related
working groups
Remuneration
Committee
Audit
Committee
Executive Leadership
Team
Environmental
Sustainability Council
Internal Audit
Risk and Control
Management
Our strategy is
underpinned by
ambitious sustainability
objectives.”
John O’Higgins
Chair
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 31
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Innovation
We focus our capabilities on
finding unique solutions to emerging
sustainability challenges. For example,
our organoclay-based gels improve the
water resistance of consumer sunscreens,
increasing their effectiveness and
ensuring they stay longer on the skin.
Growth
Many of our products are well established
in end-use applications that already
improve sustainability outcomes, and we
aim to increase our participation in these
applications further. Examples are the
development of antiperspirant actives with
a lower carbon footprint and our additives
for paints with low VOC.
Efficiency
Our products help customers do more
with fewer resources, such as additives
that help adhesives instantly grip heavy
ceramic tiles without slipping, saving
end-users materials, time and money.
Efficiency is also a foundational
requirement for sustainable improvement
in our own operations and supply chain.
Strategy
Our strategy of Innovation,
Growth and Efficiency
captures the opportunities
that come from making
sustainability improvements.
To respond to the sustainability drivers in the markets we serve, we focus on a three-pillar framework: environment, people and
responsible business.
Environment
Reducing GHG emissions
Driver: Climate change
Our focus is on lowering GHG emissions
throughout the value chain.
In March 2025, our proposed SBT was
validated by the SBTi.
We work to increase our resilience to
various risks climate change brings.
Example: Our site in Sotkamo, Finland,
has electrified their last significant
fossil-fuel process, resulting in a 99%
reduction in combined Scope 1 and 2
(market-based) emissions since 2019.
We expanded our use of product LCA and
product carbon footprints to better take
opportunities at customers with our
sustainable innovations.
Becoming more natural
Driver: Resource efficiency and lowering
environmental impacts
We work to increase our use of natural,
renewable and recycled raw materials.
Nature supplies many of our raw materials,
so we focus on reducing our environmental
impacts.
We aim for a more circular and efficient
use of resources in our own operations,
for customers and for end-users.
Example: Our biobased defoamers replace
fossil-derived chemicals and offer better
performance.
We introduced aluminium metal from factory
wastes in our antiperspirant actives,
replacing virgin metal.
Improving product safety
Driver: Products that have lower
health risks
We work to find ways to lower the
hazards associated with the use of our
products, including substitution with
lower-risk materials.
We can also help our customers formulate
new products with less risk for end-users.
Example: We have developed SUPREAD
TM
3410, a new wetting agent for water-based
coatings that minimses troublesome
foaming while helping formulators lower
VOCs and PFAS-containing additives.
Our natural hectorite clay can be used
to replace synthetic ingredients in
skin care products.
People
We are reliant on our greatest asset, our people. We have a particularly
strong focus on employee safety and engagement and ensuring a
diverse, inclusive culture.
Example: Continued focus on our TogetherSAFE employee safety
programme has brought steady improvements in our total recordable
injuries rate.
We continue to improve our senior leader gender diversity.
Responsible business
We conduct ourselves with integrity, giving transparency to
stakeholders, sourcing responsibly, and engaging our value chains
to better address our material topics.
Example: Continuously improving our screening systems for
customers and suppliers to better manage risks.
Improving our cyber security processes to better secure our
data systems.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 32
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Our 2030
environmental targets
We met one of four 2030 environmental
targets (GHG intensity) in 2024 (2023: two).
Our environmental performance in 2024 was
impacted by increased production volumes
and an unfavourable product mix, with relatively
higher volumes of products that utilise more
resources during manufacturing (such as fuel
for high temperature drying).
Science-based target (SBT)
In December 2024, our Board approved a SBT
proposal covering the reduction of our Scope 1
and Scope 2 (market) GHG emissions and
reductions from our most significant Scope 3
emission categories. Our proposal was validated
by the Science Based Target initiative (“SBTi”)
in March 2025. We will communicate our SBT
in more detail later in 2025.
Climate
C
Water
C
Gold
Medium risk Constituent member
Third-party ESG ratings
We believe that transparency on risks, actions
and data is crucial to demonstrating sustainability
improvements and we support various external
rating agencies in their assessment of our
performance. Our CDP disclosure is available
on our website. In 2024, we again achieved
EcoVadis Gold, putting us in the top 5% of
companies rated by EcoVadis. Our ratings from
Sustainalytics, MSCI and FTSE4Good were
unchanged from 2023.
1 All targets are reductions per tonne of
production with a 2019 baseline.
Scan the QR code above
for more information.
Progress against our 2030 environmental intensity targets
GHG intensity (tCO
2
e/t)
2030
target
2019
baseline
0.0 0.05
0.20 0.26
2024
2023
0.16
2030
target
2019
baseline
2.0 2.5
3.38 3.75
2024
2023
3.15
2030
target
2019
baseline
0.0 0.5
1.52 1.90
2024
2023
2.02
2030
target
2019
baseline
0.02 0.025
0.032 0.035
2024
2023
0.037
Water withdrawal intensity (m
3
/t) Waste generated intensity (t/t)
Energy from fuels intensity (GJ/t)
0.044
2024 performance
0.18
2024 performance
3.59
2024 performance
2.23
2024 performance
25%
combined Scope 1
and 2 (market-based)
emissions
20%
energy from fuels
10%
water withdrawn
10%
waste sent to
third parties
2030 targets
1
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 33
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Environment
Lowering negative impacts on the
environment is a critical part of a sustainable
society. At Elementis, we are committed to
playing our part to ensure a sustainable future
for people and the planet.
We aim to minimise the impact we have on the environment in
our operations and our entire value chain.
We aim to achieve this by minimising GHG emissions, reducing
pollution of air, water and soil, and ensuring resources are used
as efficiently as possible. We also seek to mitigate risks and take
opportunities arising from climate change and concerns around
pollution and resource consumption. We expect our suppliers to
have the same approach, and we work with them to find ways to
deliver better products for our customers.
Hectorite clay at our mine in California, USA.
Third-party verification
We commissioned TÜV SÜD, an experienced
and independent verification body, to
verify our 2023 data for Scope 1, Scope 2
location and market based, Scope 3, energy
consumption, water withdrawal and waste
generation. GHG emissions were verified
regarding compliance with the ISO14064-
1:2018 standard using a reasonable level
of verification. TÜV SÜD’s full verification
statement is available on our website.
2024 Environment highlights
Combined Scope 1 and 2
market-based emission
(kt CO
2
e)
77
(2019 baseline: 158)
Water withdrawn
(million m
3
)
1.57
(2019 baseline: 2.25)
Purchased electricity from
renewable or low carbon
sources (%)
77
(2019 baseline: 0)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 34
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Scope 1 reduction
98% of our Scope 1 emissions are associated
with production facilities. Each facility has
developed a high-level 10-year plan identifying
individual projects that could be executed
to partially or fully decarbonise a specific
process or equipment. These projects include
energy-efficiency improvements, such as heat
recirculation, electrification of fuel-burning
equipment and processes, and limited use of
renewable fuels (such as hydrogen and biofuel).
We have already successfully electrified a large
fossil-fuel-based process at our site in Sotkamo,
Finland (see box, page 36).
Scope 2 reduction
We plan to maximise certified zero-emission
electricity purchases. This is especially
important given that we think electrification
of fossil-fuel-based processes is our largest
opportunity for Scope 1 reductions. Electricity
markets in China and Taiwan are currently the
most challenging for us to access high-quality
zero-emission electricity. We are investigating
power purchase agreement options for our
India facility.
Scope 3 reduction
Our plans to reduce Scope 3 emissions include
increasing the use of scrap and recycled
materials (especially aluminium metal we use to
make our antiperspirants), increasing our use of
bioderived chemicals instead of petrochemicals,
further optimising our transport networks, and
minimising/repurposing our waste. We also plan
to increase our engagement with key suppliers
to collaborate on ways to reduce emissions from
specific supply chains. This includes utilising
supplier-specific product carbon footprint data
for the goods and services we purchase. We are
also dependent on the general decarbonisation
of certain industry sectors.
Climate
Climate change drives our actions to reduce
emissions from our operations and supply
chains, and to improve the environmental
footprint of our products with innovative designs.
We also work to make our value chains more
resilient and agile to minimise disruption from
the uncertain localised effects of climate
change. Our ambition is to reach Net Zero
by 2050 at the latest.
Governance
The Board oversees our climate-related strategy
and reviews progress against our climate targets
with quarterly written updates. We do see
a medium-term path for us to reduce Scope 1, 2
and 3 emissions in line with the Paris climate
agreement. In December 2024, our Board
approved submission of our SBT proposal
to the SBTi for their validation.
The Audit Committee has oversight of our
climate-related risks and opportunities process
and disclosure recommendations through
management-prepared materials.
Our CEO has ultimate accountability for our
strategic response to climate-related risks
and opportunities. For more detail about our
approach to climate and sustainability
governance, see page 31.
Climate transition strategy
Our priority is to minimise emissions as much as
possible, before using sequestration offsets for
remaining hard-to-abate emissions. Our SBT
proposal covered the reduction of our Scope 1
and Scope 2 (market) GHG emissions and
reductions from our most significant Scope 3
emission categories. It was validated by SBTi in
March 2025. We will communicate more details
about our SBT later in the year.
An illustrative representation of our potential Scope 1 and 2 pathway based on our 10-year site
decarbonisation plans is shown in the figure below:
% reduction in Scope 1 + Scope 2 (market based) emissions
-59%
Baseline Zero-emission
electricity
Fuel efficiency Electrification Renewable fuels 10 year
% reduction
Our hectorite mine is located in the Mojave desert.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 35
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We annually review our material climate risks
with internal functional leaders, informed by the
different climate scenarios. This allows us to
identify new or obsolete risks. It also allows us
to create a comprehensive picture of potential
climate-related risks and opportunities in each
scenario, and the dynamics over three time
horizons: short term (2025-2027, our three-year
business plan period); medium term (2028-2035,
covering our SBT time-frame); long term
(beyond 2035, reaching our 2050 Net Zero
ambition). With the functional leaders, we also
assess the impact of these nine risks over these
time horizons in each of the three climate
scenarios using our enterprise risk scoring
framework. In previous years we also estimated
likelihood, but believe this judgement is of little
added value when using defined scenarios.
Our emission reduction plans are also
dependent on production volumes and mix.
Volume sensitivity can be minimised by focusing
on solutions which create large reductions in
emissions. Mix effects can be minimised by
focusing efforts on the products and value
chains in our business strategy that have the
highest volumes and growth.
Beyond our SBT and heading towards Net Zero
emissions, we recognise that to decarbonise
more of our own high-temperature processes –
and those at our suppliers – our transition is
increasingly dependent on commercialisation
of new technologies, such as heat batteries,
renewable fuels and carbon sequestration.
These must also be coupled with robust
emission attribute certificate schemes. We
would need such technologies and schemes
to be in place in order to meet the emissions
reductions required for a science-based
Net Zero target under the SBTi framework.
Because these technologies and certificates
are not yet mature, we take a pragmatic
position, where our SBT drives our medium-
term actions to lower emissions in line with the
Paris agreement, while allowing time for new
technologies outside our control to develop
further. We follow technology evolution via
various forums and industry networks.
We expect our Net Zero ambition to cover
Scope 1 and 2, and we leave open the possibility
of including Scope 3 as our approach and
global markets mature.
Climate scenarios
To help us with our climate planning,
we conducted an annual climate scenario
analysis. We use climate scenarios defined by
the Network for Greening the Financial Systems
(“NGFS”). NGFS is internationally recognised
for its work to advance climate science and
contributes to the Intergovernmental Panel on
Climate Change’s (“IPCC”) work. NGFS has
defined seven future scenarios that explore
possible economic and financial impacts of
climate change.
We selected three of these scenarios for
analysis – Net Zero 2050 (“NZ”), Delayed
Transition (“DT”) and Current Policies (“CP”).
NZ and CP represent very clear outer
boundaries of climate futures, allowing us to
clearly differentiate how we consider risks.
We expect DT to be a more likely description
of the future than NZ or CP. These scenarios
are summarised in the table below. We used
the November 2024 NGFS update in our
scenario analysis.
NGFS scenario descriptions
Characteristic Net Zero 2050 Delayed Transition Current Policies
Summary Limits global warming
to 1.5°C through
stringent climate
policies and
innovation, reaching
Net Zero CO
2
emissions around
2050.
Global annual
emissions do not
decrease until 2030.
Strong policies are
then needed to limit
warming to below 2°C.
Negative emissions
are limited.
Only currently
implemented policies
are preserved,
leading to higher
physical risks.
Policy ambition 1.4°C 1.6°C 3°C+
Policy reaction Immediate and smooth Delayed None
Technology change Fast Slow then fast Slow
Carbon sequestration Medium then high use Low then medium use Low use
Regional policy
variation
Medium High Low
28,991
fewer tonnes of CO
2
e
emissions (Scope 1+2
market-based) vs 2019
Site decarbonisation
At Sotkamo, Finland, we upgraded our
last major fossil fuel process so that it
can operate either on LPG or electricity –
the site has purchased low-carbon (nuclear)
electricity since 2021. In 2024, we have
been able to operate this process
predominantly on electricity, while
in 2023 LPG was predominantly used.
The site achieved a 99% reduction in
Scope 1 + 2 (market-based) emissions
in 2024, versus our 2019 baseline.
Sotkamo site
Scope 1 + Scope 2 decarbonisation
2019 2024
-99%
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 36
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Risk management
Our climate risk management approach is
incorporated into our enterprise risk management
framework (detailed on pages 65), and all nine
climate-related risks identified through the
climate scenario analysis (described above) are
included in our Group risk register. Some of these
climate risks (for example, extreme weather
events) also contribute to other principal risks.
The Audit Committee and Board have oversight
of our climate risk and internal controls through
management-prepared materials.
To ensure we do not over- or under-emphasise
climate-related risks in relation to other enterprise
risks, we use the same risk scoring framework
as for our enterprise risks. We annually reassess
our climate-related risk scores under each
scenario and timeframe with our functional
leaders. Risk mitigations are monitored by the
ELT and delivered by ESC-coordinated working
teams or directly by functional teams.
Metrics and targets
We have a range of established metrics and
environmental targets that we use to address
our climate-related risks and opportunities.
The table on page 40 shows which of these
metrics and targets are relevant for each of our
climate-related risks.
Progress against our climate and environmental
targets makes up part of the performance-
related remuneration of our CEO and CFO.
Material climate-related risks ( ) and opportunity areas (o) for our business
Carbon pricing
Customer demands o
Consumer trends o
Investor demands o
Raw material supply/prices
Access to renewable electricity
Energy prices o
Water scarcity
Extreme weather events
We initially assess climate risks through a global
perspective before bringing in sector-specific
or geographically local considerations as
necessary. Why they are important to us,
our risk assessment score and our strategy
to mitigate them are described in this section.
These impacts should not be considered as
forecasts – we use these calculations to
understand a range of potential futures and
use them to inform our strategy and tolerance
to different climate risks.
Overall, our short- and medium-term planning
includes actions to ensure we take climate-
related opportunities and manage risks,
including in:
Marketing, to allow early identification
of customer and consumer trends
and opportunities
Our innovation pipeline and supply chain
management to deliver new products
with both improved performance and
sustainability impacts
Operational activities, such as energy-
efficiency and decarbonisation projects
Based on this assessment, we believe our
strategy is fundamentally resilient to market
dynamics in different climate scenarios
(including a 1.5°C Net Zero scenario), and other
risks over the short, medium, and long term,
and provides a solid foundation to capitalise
on climate-related opportunities.
Risk type: Transition
Carbon pricing
Potential impacts
The carbon pricing risk is highest in the NZ
and DT scenarios, before dropping in the long
term. This reflects our underlying assumption
that we will pursue decarbonisation in line
with our SBT.
For each scenario, using the average carbon
pricing from the three models in NGFS and
multiplying it with our assumed emissions
gives us a theoretical cost of carbon.
Assuming we decarbonise in line with our
SBT, this gives a highest theoretical annual
cost of $19 million around 2030 under the
NZ scenario, and decreasing in later years
If we do not decarbonise at all and a global
carbon price is introduced, under the NZ
scenario the annual cost could potentially
reach $31 million by 2030 and $49 million
by 2040, demonstrating the importance
of decarbonisation to mitigate this risk.
Strategic mitigations
A validated SBT supports our continued
Scope 1 and 2 emission reductions
Continue energy-efficiency and
decarbonisation projects
Increase low-carbon electricity purchases
CAPEX investments include assessment
of sustainability impacts
Product pricing adjustments
Raw material supply/prices
Potential impacts
Key raw materials have lower availability or
higher prices due to climate-related disruptions
in the supply chain (for example, production
interruption or logistics challenges). This could
damage our ability to fulfil orders, potentially
lowering revenues or increasing our cost base.
Strategic mitigations
Qualification of multiple suppliers
Inventory management
Encourage climate resilience actions at
key suppliers
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
1 Impact scores are estimated using the same criteria as defined in our corporate risk process.
High impact Medium impact Low impact
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 37
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Customer demands
Potential impacts
As part of their own climate response and
to lower their own Scope 3 emissions, our
customers preferentially source products with
lower climate impacts than we offer, resulting
in lower revenues.
We are asked about our climate strategy
and product carbon footprint by customers
spanning all sectors and geographies that
we serve. Therefore, we see opportunities for
lower-impact products from both our current
portfolio and innovation pipeline, regardless
of the scenario.
Conversely, not meeting customer expectations,
even in the short-term for all scenarios, brings
a high risk of limiting our business.
Strategic mitigations
Climate and sustainability benefits described
in our product marketing
New product innovations
Our validated SBT and helps us reduce
GHG emissions across all emission Scopes
Increase coverage of product LCA
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Access to renewable electricity
Potential impacts
Access to renewable/low-carbon electricity is a
crucial lever for us to make progress on
our emission reduction plans in the near term.
If demand outstrips supply, we may find it too
costly to use renewable electricity, impacting our
competitiveness.
Strategic mitigations
Investigate renewable/low-carbon electricity
supplies with multi-year contracts
Assess opportunities to build additional
capacity exclusively for our use
Purchase a mix of renewable and nuclear
emission certificates to secure low-carbon
electricity at a balanced price
Consumer trends
Potential impacts
Consumers change buying habits to lower-
consumption or to lower-climate-impact
products than we offer, resulting in lower
revenues.
Technology or regulatory developments may
dramatically alter the consumer market for
certain end-use applications of our products.
We have potential medium- and long-term
exposure to reduced fossil fuel demand in the
NZ and DT scenarios. For example, demand
for our organoclay additives for fossil fuel
drilling applications could slow if extraction
drops over time, and demand for our talc
additives used in combustion engine pollution
control ceramics could drop as new vehicle
fleets become increasingly electrified. In 2024,
revenue from our products directly related to
fossil fuel demand comprised 7% of our
revenues (2023: 7%). The NZ scenario has
the largest potential impact on these
revenues, with a 60% drop in primary energy
demand from fossil fuels by 2040.
Strategic mitigations
Innovate to ensure we are well positioned
to address new market trends
Increase our high naturally-derived content
in products
Ensure sustainable practices through the
supply chain
Maintain our portfolio diversity
Monitor revenues that are directly dependent
on fossil fuel consumption
In the short term, our growth platforms target
$75 million above-market revenue growth and
do not include organoclay additives for drilling
applications. Thus, we consider that the
medium- and long-term market opportunities
we could access with our portfolio would
more than compensate for the market risks
we identified during a low-carbon transition
1 Impact scores are estimated using the same criteria as defined in our corporate risk process.
High impact Medium impact Low impact
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Risk type: Transition
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 38
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Risk type: Transition
Investor demands
Potential impacts
As part of their own climate response and
portfolio management, our investors place
capital in companies with better sustainability
and climate credentials, increasing our cost of
capital or potentially limiting our capability to
invest in the business. Conversely, if we are
better than other companies for climate and
sustainability, we may attract more investment
and a lower cost of capital.
Strategic mitigations
Clearly describe how our business strategy
supports climate mitigation and brings
commercial opportunities
Clear disclosure of our climate strategy,
metrics and progress
Progress on our SBT and strategies to
achieve our Net Zero ambition
Engage with third-party rating agencies to
ensure we are fairly assessed on ESG
Energy prices
Potential impacts
A high energy price causes significant increase
in operating costs, making us uncompetitive.
Energy prices increase in all scenarios, with gas
becoming relatively more expensive compared
with electricity in the long term (especially in DT
and NZ scenarios).
NGFS NZ scenario has the highest gas and
electricity prices. In this scenario, if by 2035
we electrify 50% of our natural gas consumption
and it is twice as energy efficient, operating
energy costs are 4% higher compared to
remaining with the same energy mix as in 2024.
If electrification is three times as efficient, energy
costs are 2% cheaper by 2035.
Strategic mitigations
Energy purchase strategy that balances spot,
hedged and contracted purchases
Management of energy supplier contracts
Increased electrification to minimise exposure
to gas and liquid fuels
Energy-efficiency projects
Risk type: Physical
Water scarcity
Potential impacts
Our sites are disrupted by lack of access to
clean fresh water for manufacturing product.
We assess each of our sites for physical risks,
in discussion with local site leaders. Our sites
in high water stress locations are already
designed with this risk in mind. Due to this
built-in resilience, there is low additional
impact (medium under the CP and DT scenarios
in the long term).
Strategic mitigations
Projects to minimise water withdrawal and
improve water and effluent management
Some sites have access to their own borehole
for water supplies
Extreme weather events
Potential impacts
Our sites are disrupted due to weather-related
factors, leading to delayed order fulfilment and
potentially lower revenues, while increasing our
cost base for repairs/prevention.
We assess each of our sites for extreme weather
risks in discussion with local site leaders. Risks
already exist due to specific locations and sites
are already designed with these risks in mind.
Due to this built-in resilience, there is low
additional impact (medium under the CP and DT
scenarios in the long term).
Strategic mitigations
Continuous assessment of maintenance and
investment in extreme weather adaptations
at sites
Supply chain and inventory management
to cover shorter-duration disruptions
1 Impact scores are estimated using the same criteria as defined in our corporate risk process.
High impact Medium impact Low impact
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Impact score
1
in horizon
Scenario Short Medium Long
CP
NZ
DT
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 39
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Climate-related targets and metrics
2030 intensity target Business metric
Climate-related risk
Scope 1 and 2 GHG
emissions
Energy
from fuels
Water
withdrawn
Waste sent to
third parties
Renewable & low
carbon electricity
Natural content
of products
New products
launched
Carbon pricing
Customer demands
Consumer trends
Investor demands
Raw material supply/prices
Access to renewable electricity
Energy prices
Water scarcity
Extreme weather events
Related emission scope 1, 2 1 3 3 2 3 3
Additional information
Page 196
Page 197
Page 198
Page 198 Page 197
Page 15 Page 15
GHG emissions
Our priority is to reduce absolute levels of
emissions – which is better for the planet and
all our stakeholders – and this is a focus of
our climate strategy to be Net Zero by 2050.
Our newly validated SBT helps keep our focus
on emission reductions over the medium term.
Our GHG emissions footprint is detailed on
pages 41 and 196-197.
Overall, our combined Scope 1 and Scope 2
(market-based) emissions increased by 18%
vs 2023. This year-on-year change was driven
by a) 5% higher overall production volume; b) a
product mix that contained relative greater
high-emission-intensity products; and c) more
antiperspirant production volume transferring
from the USA to India. These macro dynamics
more than offset gains made by from energy-
efficiency and decarbonisation.
We saw a 17% increase in Scope 1 emissions vs
2023, driven by increased use of natural gas
used for drying many of our products.
This more than offset emission improvements
we made, such as from replacing LPG with
electricity in Sotkamo, Finland, and
electrification of some propane-fuelled
fork-lift trucks.
There was no change in which sites purchased
zero-emission electricity in 2024. Renewable
and low-carbon (nuclear) electricity made up
77% of our total purchased electricity during
2024 (2023: 77%). We continue to assess
opportunities to increase our purchase of
low-carbon electricity.
Versus 2023, our Scope 2 (market-based)
emissions increased by 20% (location-based
increased by 10%), driven by a higher production
activity overall, including at our Taloja, India, site,
which uses relatively high-emission grid electricity.
Our target is to reduce our combined Scope 1
and Scope 2 (market-based) emissions per tonne
of production by 25% by 2030, from a 2019
baseline (2030 target: 0.20). Our intensity
increased to 0.18 tCO
2
e/tonne production
(2023: 0.16). Nevertheless, we met our
2030 GHG intensity target for the fourth year
in succession.
Our total 2024 Scope 3 emissions were
calculated to be 1% lower compared with 2023,
driven by lower emissions from Category 1
(purchased goods and services), and especially
of our single largest contributor, aluminium
ingots with 76,075 tonnes CO
2
e (2023: 94,387)
– our work to introduce waste aluminium can
help lower these emissions. Category 4
(upstream transport and distribution) increased
due to higher activity and more granular data
treatment for multi-modal journeys.
In preparation for our SBT submission, we
estimated Scope 3 Category 10 (use of sold
products) – this contributed 37,436 tonnes CO
2
e
to our footprint for 2024 (2023: 36,699). In prior
years, we had taken the World Business Council
for Sustainable Development (“WBCSD”)
guidance for chemicals companies that we
could exclude it from our footprint.
Methodologies for the other Scope 3 categories
were unchanged from 2023 – our methodology
document is available on the Sustainability
section of our website, and a summary can be
found on page 195.
Energy
We recognise that responsible usage of energy
(whatever the source) reduces demands on
resources and infrastructure and helps lower
our costs and emissions. Our 2030 target aims
to reduce our energy use from fuels per tonne
of production by 20%, from a 2019 baseline
(target: 1.52). In 2024, 92% of our energy from
fuels came from natural gas (2023: 84%).
In 2024, sites continued to improve energy
efficiency, for example:
Our site in Anji, China, enhanced their
filtration system to result in product with a
lower moisture content and thus lowering
energy needed for drying
We refurbished a steam boiler from our
closed Middletown, US, site for use in nearby
Huguenot, US. The refurbished boiler is
smaller capacity than the one in Huguenot,
and can be used when Huguenot production
demand for steam is lower, saving energy
Each of our US sites worked with EnergyStar
to conduct an energy ‘treasure hunt’ and
identify new opportunities for improvement
In total in 2024, we spent $309,000 of CAPEX
on energy-efficiency projects (2023: $386,000).
Our total energy usage was 14% higher in 2024
compared with 2023, primarily due to an
increase in production volumes and a product
mix that required higher manufacturing energy.
These effects were larger than the impact of
our energy-efficiency projects. Our energy
from fuels intensity increased by 11% for the
same reasons.
Examples of how we plan to improve energy
efficiency further in 2025 include an upgrade
to a heat exchanger on a large dryer flue in
Livingston, UK.
Additional detail on quantified energy data can
be found on pages 41 and 197.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 40
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
1ss
GHG emissions and energy
2024 GHG emissions by Scope
1
Scope 3 categories
A. Purchased goods and services 57%
B. Upstream transport and distribution 22%
C. Processing of sold products 6%
D. End of life treatments of sold products 5%
E. Remaining Scope 3 categories 10%
Total Scope 3 599,233 tonnes CO
2
e
Scope 3
89%
Scope 1 and 2 (GHG location-based)
000 tonnes CO
2
e
Scope 1 and 2 (GHG market-based)
000 tonnes CO
2
e
Energy use
GWh
Scope 1
7%
Scope 2
(market-based)
4%
Scope 1 Scope 2 Total
2019 122.9
2020 109.6
2021 102.5
2022 90.6
2023 86.5
2024 97.8
64.5
60.5
53.4
43.0
44.6
48.9
58.5
49.1
49.1
47.7
41.9
48.9
Scope 1 Scope 2 Total
2019 158.4
2020 143.4
2021 75.2
2022 67.1
2023 65.3
2024 76.9
100.0
94.3
26.2
19.4
23.4
28.0
58.5
49.1
49.1
47.7
41.9
48.9
Energy from fuels Purchased energy
2019
2020
2021
2022
2023
2024
280.1
252.7
252.2
221.2
197.1
221.8
318.3
264.6
266.2
259.5
233.3
270.7
Total
598.4
517.3
518.4
480.7
430.5
492.6
D
E
A
B
C
1 For more detailed information, please see pages 196 and 197.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 41
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Closed sites
We manage environmental risks at our site in
Eaglescliffe, UK, which was closed in 2009.
In 2024 we agreed a sale of the site –
see page 27 for more information.
In 2024, we closed our Middletown site in the
US. After production ceased at the end of June,
we worked to decommission the site, repurpose
assets when possible, and ensure the site is safe
– see page 27 for more information.
Waste
We recognise how valuable resources are and
we aim to use them as efficiently as possible to
support a more circular economy. We run our
processes to maximise yields from each batch
while maintaining quality, and to find ways to sell
any byproducts generated rather than disposing
of them as waste. Our target is to reduce the
waste (including hazardous waste) we send for
third-party treatment per tonne of production
by 10% by 2030, from a 2019 baseline (2030
target: 0.032). We have included the category
‘waste generated in operations’ in the Scope 3
part of our science-based target.
Our waste per tonne of production increased
by 18% in 2024. In 2024, 58% of our total waste
sent offsite for third-party treatments was
landfilled (2023: 50%), the majority of this being
waste from clay processing. 7% of waste was
incinerated and 4% was recycled, and 30%
reused. 8% of our waste was classified as
hazardous (2023: 8%).
Some activities we have undertaken to reduce
waste include working with the Scottish
Environment Protection Agency to reclassify
waste clay residues from Livingston, UK as
a product suitable for agricultural soil
enhancement.
Additional detail on quantified waste data can
be found on page 198.
Water
We see water as a precious natural resource,
and we continue to work to mitigate our water
use, risks and impacts. We use water as a
solvent in our processes, as a heat carrier
(steam) and as a coolant. Some of the products
we sell are dissolved or suspended in water.
We have introduced dry additives, for example
powder NiSATs, as an alternative product
design with less water consumption and less
water transportation.
Our target is to reduce water withdrawal per
tonne of production by 10% by 2030, from a
2019 baseline (2030 target: 3.38). Our Water
Stewardship Policy is available on our website.
We also consider climate-related water risks
at our sites. We publicly report our water
performance through CDP, achieving a
C rating in 2024 (2023: B).
Overall, our water withdrawal per tonne of
production increased by 14% compared with
2023, primarily due to increased volumes of
product that need higher water use in the
manufacturing process, relative to more
water-efficient products in our portfolio.
We have worked to increase efficiency of
water use across our manufacturing sites.
For example, our site in Amsterdam,
Netherlands, limited excess water addition in a
specific manufacturing process, lowering the
amount of water used and also saving energy in
the subsequent drying step.
We use the World Resources Institute (“WRI”)
Aqueduct tool to help us understand water risks.
Four sites (our manufacturing site and mine in
Newberry Springs, US, and manufacturing sites
in Songjiang and Anji, China) are classed in this
tool as having a high baseline water stress.
Our water withdrawal intensity in those areas
was 4.9 m
3
per tonne produced in 2024
(2023: 6.1 m
3
per tonne produced), primarily
due to improved water efficiencies at our sites
in China.
Our water discharge is significantly higher than
withdrawals, primarily due to groundwater and
rainwater management at our mines in Finland.
For the rest of our sites, discharge is generally
lower than withdrawal due to process water
being lost to evaporation as we dry our
products, and sometimes shipped as part
of a product.
Additional detail on quantified water data can
be found on page 198.
Pollution
We seek to minimise the impact of pollution from
our operations. To minimise pollution, we focus
on operating our manufacturing processes at
high efficiency and recycling process water
where possible. Our remaining emissions to
water and air are strictly controlled in line with
local regulations and our operating permits.
Internal measurement and external monitoring
are deployed to ensure compliance.
At most of our manufacturing plants,
contaminant loads in our wastewater are low
enough to only require zero or minimal on-site
treatment before being discharged to third
parties. At our mines in Finland, we discharge
water directly back into the environment,
so we conduct more substantial wastewater
treatment to reduce heavy metals that are
leached from the mined rock. Emissions to water
were 0.8 tonnes in 2024 (2023: undisclosed),
with the main contributor being organic carbon
(0.5 tonnes).
We control the emission to air of dust and
gaseous pollutants in compliance with our local
operating permits, using a variety of scrubber
and abatement technologies. Total air emissions
in 2024 were 135 tonnes (2023: 108 tonnes),
of which the largest contributor is non-methane
VOCs (70.4 tonnes).
The breakdown of water and air pollutants is
detailed on page 198.
Product LCA
Measuring the carbon and environmental
footprint of our products is important to
engage customers and communicate
impacts of our new product innovations.
We have continued to expand the portfolio
coverage of our product life cycle analyses.
We build our LCAs according to
ISO14040/14044 with output results using
the EF 3.1 Life Cycle Impact Assessment
(“LCIA”) method. Our LCAs now cover
strategically important additives made in
our Livingston, UK, facility that contain our
unique hectorite clay, and to a range of
our antiperspirant ingredients.
In addition to quantifying the carbon and
environmental footprint of a product, these
LCAs help us communicate improved
impacts of our product innovations to
customers. For example, the antiperspirant
LCA enables us to quantify the environmental
benefits of utilising waste aluminium as an
input material, supporting our collaborative
work with customers to introduce the product.
Our antiperspirants made with waste aluminium have a
lower cradle-to-gate carbon footprint.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 42
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Responsible mining
We operate mines in Finland and California,
US, that give us direct access to key mineral
resources incorporated into our products.
We work to protect the environment and
biodiversity, reducing or avoiding our impact
on sensitive species, habitats and ecosystems.
Our biodiversity statement is available on our
website. We engage openly and constructively
with local communities, seek continuous
improvements in our practices, and work to
minimise negative impacts of our operations.
Overburden, tailings and ore beneficiation
residues remain in tailing storage facilities on
our mine sites. Some of these materials are sold
as products, and there is further potential for
valorisation in the future.
Finland
We operate four active open cast mines for
high-purity talc minerals. Our talc mines are
members of the Finnish Network for Sustainable
Mining, which aims to advance responsible
mining practices, and we are committed to the
Finnish Towards Sustainable Mining Standard.
We continuously monitor environmental impacts
with our own laboratories or qualified third
parties, including the quality of groundwater
and surface water. We reuse the water from our
tailings storage facility in our ore processing,
minimising freshwater withdrawal and resulting
in a water recycling rate of over 95%. As we
mine, we pump out accumulating groundwater
and rainwater, treating it before discharge.
As we process the talc ore, we produce nickel
concentrate and magnesite sand as by-products,
which are utilised in on-site infrastructure or
sold externally. We also use rocks in road
construction on site.
The land area of these sites is 1,792 hectares
(no change from 2023). Our land management
and remediation plans include consideration of
landscape value when designing landfill areas.
There are no endangered species identified
in our mining areas in Finland. The impact of our
mining activities on biodiversity is monitored in
compliance with local operating permits
and regulations.
Our permits are susceptible to challenges from
environmental lobbyists and, where this occurs,
we work constructively with the permitting
authorities and follow legal due process to
defend our rights.
California, US
We operate one open cast mine in California
for hectorite clay mineral. The land area of this
site is 223 hectares (no physical change from
2023, but restated based on more accurate
information). By design and geological location,
no stormwater leaves the site. Occasionally,
rainwater in active mining areas is pumped to
other parts of the property to evaporate while
allowing mining to continue. Water from an
on-site owned well is used for dust control,
to remain in compliance with the reclamation
plan and regional California Air Quality
Management District requirements.
All mined material is segregated such that
further uses can be found for it in future
(e.g. in agriculture, highway construction or
landfill liners). We sell a small amount of rock as
storm erosion protection and clay for agriculture
amendments and residential pond liners.
Our mine is within the habitat range of the
Mojave Desert tortoise, which is on the
International Union for Conservation of Nature
(“IUCN”) red list as critically endangered.
We have an approved barrier fence surrounding
the site to prevent tortoises entering the site.
Should a tortoise be found inside the fence,
we work with a trained biologist to return the
animal safely to its natural habitat.
Biodiversity in Brazil
In addition to operating our mines
sensitively to minimise biodiversity
impacts, other sites play their part
in supporting nature. For example,
our site in Palmital, Brazil, is a total of
14.8 hectares. Of this, 1.15 hectares
is given over to native trees, as
required by local regulations.
An additional 9 hectares of our
site is leased out for use as a
banana plantation.
Our Talc mine and processing plant in Sotkamo, Finland. Our hectorite mine in California, USA.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 43
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
People
At Elementis, our people are the key
ingredients of our success.
As vital members of local teams and a dynamic, global and
inclusive company, employees play a pivotal role in bringing
our purpose to life – delivering unique chemistry and
sustainable solutions.
Our values define our culture and guide our journey. Everything starts with Safety;
it is a way of life, showcasing our unwavering commitment to our workforce’s wellbeing.
Our ambition is demonstrated in our passion for excellence and our drive to create
solutions that deliver value for our customers. Respect is woven into all interactions,
whether with colleagues, customers, communities or the environment. Teamwork is the
foundation of our success, creating an environment where collective efforts result in
exceptional achievements.
2024 People Highlights
Total recordable
injury rate vs 2023
-45%
(2023: 0.33 / 2024: 0.18)
Women in senior
leadership positions
42%
FTSE Women Leaders
Review ranking
28th
(2023: 49th)
Gallup engagement
mean score
3.91
(out of 5)
Employee survey
participation rate
86%
Hours spent in
LinkedIn Learning
1,653
Employees inspect equipment
at our Songjiang, China facility.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 44
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In April, we held our fourth annual Global Health,
Safety and Environmental Week, bringing all
our sites together to celebrate and nurture
our safety culture. This year, the week was
expanded to highlight all three pillars of HSE:
Health, Safety and Environment. Speakers
covered topics on safety leadership, mindfulness
and the impacts of climate change on health
and safety. To further enhance employee
engagement, train-the-trainer sessions were
held, and interactive games were specially
designed for the event.
Organisational roles, responsibilities and
mechanisms for communicating information and
managing data to support the measurement and
tracking of HSE incidents are operated under
our global HSE Leadership Council. The Council
meets monthly and comprises functional and
business segment representatives who
spearhead the HSE management system across
the organisation. All sites’ local management
systems are based on Plan, Do, Check, Act
principles to ensure sufficient control and drive
continuous performance improvement. Each
manufacturing site operates a Safety Committee
covering matters that impact employee health
and safety, performance, incidents and
concerns. All suggestions are tracked as
corrective and preventative actions.
To ensure compliance with our safe work
procedures and legislative requirements,
employees receive training tailored to their
specific job requirements and required level
of competence. Training is delivered both
in-person and virtually, with each site
maintaining a training plan. Safety-critical
training and competencies are clearly identified
and kept up to date.
Our corporate HSE team conducts regular
audits to assess adherence to national and local
regulations, completing four audits (five in 2023)
of our manufacturing sites.
Health and safety
Everything starts with Safety – it is the
foundation of how we work and a value we
live by every day. Our focus is on keeping
our employees safe, protecting people, and
operating responsibly. Accountability for
health and safety is held by our Chief Executive
Officer (“CEO”), supported by the Senior
Vice President Global Supply Chain and
Manufacturing, and the Global Director for
Health, Safety and Environment (“HSE”).
Our Board receives a detailed update on our
health and safety performance at each meeting
and the ELT receives monthly updates as part
of the Group’s overall performance assessment.
Our health and safety strategic plan reflects
how we turn strategy into action. Our objective
is to deliver excellence in HSE performance and
drive continuous improvement through ongoing
investment in our people, management systems
and facilities. A copy of our HSE Policy is
available on our website.
We operate a comprehensive management
system that supports our values and the
delivery of our health and safety programme,
TogetherSAFE. We continuously enhance
and refine key parts to ensure its ongoing
effectiveness. This year, we expanded our
development of a global HSE framework and
publication of HSE standards in line with the
International Organization for Standardization
(“ISO”) standards. We continued our safety
leadership certification programme for new
site management, certifying five new leaders
on performance, compliance and risk
management. Additionally, we awarded our
fourth annual CEO TogetherSAFE Award to
our Songjiang site for their ‘We are all Safety
Champions’ programme, which exemplifies the
TogetherSAFE principles and ensures everyone
at every level is helping to improve safety by
making it a regular part of daily discussions,
plans and tasks.
Health and safety performance
Our total recordable injury and illness rate was
0.18, compared with 0.33 in 2023. There were
two employee recordable injuries (2023: four)
and two lost time accidents (“LTAs”) (2023: four).
Data from the last three years indicates that
most employee recordable injuries resulted from
‘caught-between’ or contact accidents (40%),
slips, trips and falls on the same level (20%),
and sprains/strains (20%). Key improvement
opportunities identified from these incidents
are risk assessment of tasks before work
commences, overseeing work during
operations, safe lifting practices, early reporting
of symptoms, and adherence to procedures
and rules. No fatalities were reported in 2024
(2023: zero).
Process safety
Process safety management ensures that
systems and procedures are implemented to
prevent and control hazards associated with
toxic releases, fires, explosions, uncontrolled
reactions and energy releases that could lead
to catastrophic incidents.
In 2023, we formalised a process safety
management standard to guide our plants in
managing risk according to regulatory
requirements and best practices. As part of this,
we increased training in process safety events
(“PSE”), hazard analysis and defined
competency requirements. Additionally, a
process safety improvement plan for high-risk
processes was executed. Phase 2 of the plan
included the remainder of sites identified as
high hazard, prioritised based on overall risk
(severity and frequency). Key actions included
completion of associated process hazard
analysis (“PHA”), management of risks raised
in PHAs and identification of deficiencies in
the maintenance of safety-critical equipment.
Phase 2 will continue into 2025, with the goal
of achieving 100% PHA completion for medium
and low prioritised sites by 2025.
2024 health and safety
highlights
Total recordable injuries
72022
42023
22024
Total recordable injuries rate
0.672022
0.332023
0.182024
Total lost time injuries
22022
42023
22024
Contractor recordable injuries
42022
22023
22024
Total PSE Tier 1 and 2
22022
22023
22024
2022 data excludes divested sites.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 45
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A PSE is an unplanned incident or accident that
occurs during the operation of a chemical or
industrial plant where a hazardous material is
used or processed. Two Tier 1 and Tier 2 PSEs
occurred in 2024 (2023: two). Comprehensive
root cause analyses were conducted for both
incidents. The Tier 1 incident resulted in a fire
at one of our manufacturing facilities. There
were no injuries; however, there was damage
to equipment and facilities, leading to a loss of
production. Corrective and preventative actions
were identified and are currently being
implemented. The Tier 2 incident resulted in a
contained release of a chemical above threshold
quantities, with corrective actions including
overfill protection, advanced instrumentation
and automation, and operator training.
In 2024, we recorded zero Tier 2 environmental
incidents (2023: seven). Significant changes
requirements were implemented in 2024 as part
of a seven-step environmental improvement
plan, including enhanced design standards,
critical equipment maintenance, chemical
transfer checklists, process oversight and
high-level alarms.
Contractor safety
All new contractors receive HSE orientation prior
to commencement of work to understand their
on-site responsibilities and to ensure compliance
with our safe work procedures. Each site
conducts specific contractor orientation that
covers life-saving rules, safe work permits,
emergency procedures and incident reporting.
Contractors deemed as high risk are vetted by
reviewing the suitability of their programmes and
training, and their organisation for regulatory
violations. Contractor recordable injuries
remained the same at two in 2024 (2023: two).
Follow-up actions from these incidents included:
Elementis participation in weekly and monthly
safety meetings, improved job planning and
reviews of hours worked, increased oversight
of subcontractors, retraining on safe work
Employee wellbeing
and mindfulness
At Elementis, employee wellbeing is
essential not only for mental and emotional
health but also for supporting a strong
safety culture by encouraging employees
to stay present and focused on their tasks
and surroundings. We recognise that a
healthy and engaged workforce is vital
to sustainable success, particularly during
times of organisational change. In 2024,
we conducted a mindfulness and wellbeing
campaign to highlight the importance of
staying focused and mindful. Monthly
topics, materials and webinars were made
available on the intranet to all employees.
The campaign aimed to:
Promote stress reduction and
mindfulness to enhance mental and
emotional wellbeing
Address the risks posed by distractions,
emphasising the importance of
attentiveness to tasks and surroundings
Reinforce the need to balance adaptability
with safety standards to maintain both
physical and mental wellbeing
Encourage teamwork and collective
responsibility to create a safe and
supportive environment during
periods of change
permits and contractor orientation, and regular
meetings with third-party senior management
to track progress.
Focus for 2025
In 2025, we will continue the implementation
of global HSE standards and frameworks
across our operations and develop meaningful
KPIs to support the rollout. We will heighten
engagement by leveraging the success of
initiatives such as the TogetherSAFE CEO
Award, the Global HSE Week, and continue
our focus on environmental compliance.
Additionally, we will continue to sustain process
safety management (“PSM”) performance and
track compliance through the establishment
of a PSM network and global PSM dashboard.
To reduce associated injury risks, we will
continue efforts to improve risk assessments for
fire and explosion hazards, focus on chemical
transfer and handling tasks, and conduct regular
maintenance of critical equipment at all
manufacturing sites. We will support the training
and development of new HSE leaders and
continue to promote stop-work authority and
near-miss reporting.
In 2024, several of our sites
celebrated extended periods
of safe operation.
The following sites celebrated significant
milestones without an employee recordable
injury, showing strong employee engagement
in driving continuous improvements in
safety culture and taking responsibility
for their own and others’ safety:
90%
of sites with zero injuries
for >1 year
70%
of sites with zero injuries
for >3 years
Katwijk
13 years
Milwaukee
12 years
Newberry mine
9 years
Livingston
7 years
TogetherSAFE means considering
how every decision and action
affects others, first and always.
It is an extension of our value of
Safety, guiding our behaviours at
home and at work; it follows our
products into the marketplace
and helps protect our facilities,
environment and communities.”
Jacqueline Robertson
Director, Global HSE
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 46
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Employee headcount
by gender and region
Effective as of 31/12/2024
We are accredited by the UK Living Wage
Foundation in recognition of our pay
commitment to direct and third-party employees
at all UK locations.
We provide a variety of leave programmes to
support employees through life events, including
family leave to care for sick family members,
paternity and maternity leave, and bereavement
leave. Leave entitlements vary greatly across
countries, but the offerings are all in line with
or above market norms.
In addition, each country offers multiple forms
of personal and family support which aim to
enhance work-life balance and increase overall
wellbeing. These include child education and
childcare support, meal allowances or vouchers,
on-site canteens, transport assistance, and gifts
for holidays and life events.
Of our employee population, 7.5% are union
members and 20.4% are subject to collective
bargaining agreements (data excludes
Ludwigshafen, Germany, where we have no
right to this information).
Voluntary attrition increased to 9.3% (2023: 7.0%
excluding Chromium).
Metric 2024
Union membership 7.5%
Collective bargaining agreement 20.4%
Voluntary attrition 9.3%
Benefits and rewards
Our total rewards package extends beyond
competitive compensation and benefits.
It encompasses a safe and healthy work
environment, a commitment to work-life
balance, meaningful recognition, and continuous
learning and development. Guided by our global
principles, benefit programmes vary by country
as government mandates, cultural factors and
market norms shape local programme design
and employee expectations. These local
offerings are well aligned to and within the
scope of our global principles.
All countries provide some form of retirement
scheme, ranging from the employee-invested
401(k) plan in the US to wholly state-provided
and cash lump sums upon retirement. In
countries where state programmes are at a
basic level, the Company offers private plans in
addition to mandatory contributions.
Employees in all countries have access to a
government health plan, to which the Company
contributes, and/or a company-sponsored plan.
Employees in India, the US and Brazil are
provided with company-sponsored healthcare
plans as there is no national healthcare system
or the coverage is limited. In the UK and
Germany, the Company offers supplemental
health insurance in addition to mandatory
contributions to national programmes.
The offering of a supplemental plan in the UK
is above market norms, as private medical
schemes are becoming more popular but
are still not universally offered by employers.
Our new site in Portugal is set up on the same
basis, aligned to our global principles.
Americas
Male employees
252
Female employees
74
Total 326
Europe
1
Male employees
346
Female employees
156
Total 503
Asia
1
Male employees
309
Female employees
105
Total 415
1 One employee chose not to disclose.
Global
Male employees
907
Female employees
335
Total 1,244
Our people
In 2024, we continued to strengthen our
workplace by fostering collaboration, providing
meaningful growth opportunities and
recognising every contribution. Our employee
value proposition – Connect. Grow. Make an
Impact – reflects what matters most to our
people and guides how we create a positive
employee experience.
Our policies and practices
Our HR policies demonstrate how we put
our values in practice. They reinforce our
commitment to providing equal employment
opportunities, striving to ensure that the work
environment is free of harassment and bullying
and that everyone is treated with dignity and
respect. Our policies are available to all
employees via the company intranet and
local HR.
Although the Company has fewer than
250 employees in the UK and is therefore not
required to report under the UK gender pay gap
regulations, the Group conducts a global gender
pay review every two years. The most recent
review was presented to the Remuneration
Committee in December 2024 and continued
to show that, on average, female employees
are paid slightly more than male employees.
A further review will take place in 2026. At the
same time, we also undertake a global review
using our job architecture framework to ensure
gender pay equity across Elementis.
We are committed to providing fair, market-
competitive pay and benefits to attract, engage
and motivate employees at all levels. We aim to
pay fully competent individuals who consistently
meet performance expectations at competitive
market levels. We review benchmark salary
increase data on an annual basis and complete
a full survey every three years to ensure we
maintain this position.
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In 2024, we ascended from 49th to 28th place in
the FTSE Women Leaders Review. Additionally,
we are ranked 2nd within the Chemical sector.
Our DE&I Leadership Council, created in 2020,
is co-chaired by the CEO and Chief Human
Resources Officer and is represented by senior
leaders who have a passion for DE&I. During
2024, the Council reorganised its membership
with newly appointed Regional and Programme
(e.g. Women in Leadership) Champions.
This has shifted the focus to regionally relevant
strategies coupled with global initiatives.
This drives greater relevance locally and
accountability within the local organisation.
The Council continues to deliver against its
roadmap, with initiatives centred around
knowledge and culture, processes and policies,
and communications and reporting.
Our Culture of Inclusion Index, introduced in 2023,
has steadily increased across recent surveys and
currently stands at a 3.96 mean score out of 5.0
(2023: 3.86), reflecting the positive impact of our
DE&I efforts on our workplace culture.
Our ongoing gender diversity strategy continues
to result in a greater proportion of females in
senior positions, up to 42% in 2024 (from 37%
in 2023). We align with the FTSE Women Leaders
definition of senior positions: that is, our ELT
and direct reports excluding administrative roles.
Across the whole employee population, gender
diversity remained steady at 27% (2023: 27%).
Ethnic diversity in the US has increased since
last year to 29% (2023 and 2022: 26%) and
increased by 8 percentage points since 2020.
We continue to ensure diverse candidate pools
A diverse and inclusive environment
Elementis strives to create a culture where all
employees feel safe, respected, valued and
empowered to contribute their ideas and
perspectives. We recognise that the diversity
of our people and the inclusive nature of our
culture are intrinsic to better business decisions
and fundamental to the success of our strategy.
Throughout the year, the Board received
updates on Diversity, Equity and Inclusion
(“DE&I”) matters and has performed in line
with the Board Diversity Policy and objectives.
As of 5 March 2025, our Board composition
stood at 40% female, with two Directors from
ethnic minority backgrounds and one of the four
senior Board positions occupied by a female.
In January and February 2024, our Board
gender composition was 37.5% female, as our
Board succession process for Steve Good was
concluding. In March 2024, we were pleased to
appoint Maria Ciliberti and Heejae Chae to the
Board, and in April 2024, Steve Good stepped
down from the Board as a result of planned
Board succession and having served nine years
on the Board. The result of these changes was
that as of March 2024, our Board gender
composition was 40%, and as of April 2024,
this increased to 44% and remained at 44%
for the rest of 2024. By the end of October
2024, we reached our goal of >40% female
members of the combined Executive Team
and Director Reports
*
. This surpassed the
requirements of the Women FTSE Leaders
and the Parker review.
% female 2024 2023 2022 2021 2020
Senior leaders
1
42 37 35 31 30
Total employees 27 27 24 24 24
1 ELT and direct reports, excluding administrative personnel. Numbers do not include Ludwigshafen.
% ethnically diverse (US only) 2024 2023 2022 2021 2020
Total 29 26 26 22 21
and interviewing panels and have made progress
in our journey to voluntarily collect ethnic
diversity data. We expect our diverse talent to be
reflected within our Board and leadership teams.
Elementis is an equal opportunities employer
and welcomes applications for employment
from all backgrounds. We provide facilities,
equipment and training to support all
employees. Should an employee become
disabled during their employment, efforts
would be made to retain them in their current
role or to explore redeployment opportunities
in the Group. In 2024, we continued to ensure
our Facility Access Programme removed
physical barriers in our sites.
Employee-led initiatives foster DE&I
In 2024, our Women in Leadership group
conducted global and local initiatives to support
and empower women across the organisation.
Highlights included a Global Women’s Day
campaign with worldwide participation,
demonstrating the Group’s commitment to
fostering an inclusive and supportive culture,
and a Wellbeing Month featuring a motivational
speaker, local community events and digital
resources. The Group also strengthened its
local presence through increased engagement,
broadening its impact across locations. These
initiatives reinforced the Group’s role as a platform
for support, dialogue and meaningful connection.
Listening to our colleagues:
engagement survey
Elementis is committed to improving employee
engagement throughout the business. Our
engagement survey enables our people to
provide feedback on what they need to thrive
and succeed at work. We use this feedback,
along with external trend analysis, to make
data-driven decisions that improve employee
engagement and overall company performance.
Since 2023, we have been using Gallup,
the leading provider of insights into employee
engagement. Our engagement surveys are
86%
3.91
Our engagement surveys
are conducted biannually
participation rates in September
overall grand mean score
65%
our employees agree/strongly agree
that their team “has made progress
on the goals set during the action
planning sessions after the last
employee engagement survey”
* Using FTSE Women Leaders definition.
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Supporting our communities
Supporting our communities is an integral part of living our values and fostering positive change
where we live and work. We offer our employees paid time off to volunteer and encourage
team-based volunteering activities. A few examples of activities carried out in 2024 include:
As part of Global HSE Week, our Hsinchu
site organised a series of safety activities
to strengthen employees’ safety awareness
and behaviour. Linked to these, employees
organised a beach clean-up, collecting
plastic bottles for recycling to support
environmental preservation
Employees from our Anji site marked
International Children’s Day by volunteering
at Anji County Star Education School,
engaging children with disabilities in
interactive games that fostered confidence
and teamwork. Employees from multiple
departments participated, offering
encouragement and support through
activities that brought joy and strengthened
a sense of inclusion
On 20 December, employees from our
Milwaukee team volunteered with Habitat
for Humanity, successfully completing
flooring installation in two houses under
construction. The initiative not only
contributed to the community but also
fostered team spirit among participants
In August, administrative staff from
our Taiwan site volunteered at a
commencement ceremony for a care
home for disabled children in the Miaoli
County, providing essential support such
as wheelchair assistance, feeding and
personal care
counselling, legal and financial consultation,
and crisis intervention services to all our
employees and their families at no cost.
We are committed to accommodating flexible
work arrangements, including working from
home, flexible work schedules and part-time
work, as long as the role allows. We promote
meaningful and open conversations about what
works best to balance individual needs and
deliver against goals and business requirements.
In addition, we actively promote resilience and
mental health through initiatives such as intranet
articles and a monthly mindfulness series,
supporting daily wellbeing and fostering
conversations around work-life balance.
Continuous learning and
development
We encourage our people to develop their
expertise and expand their skills so that we can
all confidently create value in everything we do.
We embed learning and development in our
core processes via Performance Management
and Talent & Succession. These processes
ensure a fair and consistent approach to assess
individual learning and development needs,
setting clear goals and creating opportunities
for professional growth.
Through live (virtual and in-person) workshops
and via our online platform, we provide training
supporting our key priorities. All employees have
unlimited access to LinkedIn Learning, enabling
them to choose e-learning courses that suit their
personal learning needs. In 2024, employees
logged over 1,653 hours on LinkedIn Learning,
with 67% of employees actively using the platform.
We recognise the importance of developing
internal talent, as well as attracting talent from
outside the organisation, to provide our
employees with the skills they need to succeed
in the future.
conducted biannually, with surveys held on
a fixed schedule in March and September,
regardless of business circumstances.
In 2024, we achieved participation rates of 83%
in March and 86% in September, demonstrating
a strong culture of feedback. Overall, our grand
mean score in the 12 key areas (also known as
‘Gallup Q12’) increased by 0.05 compared with
2023, reaching 3.91 out of 5. While our ambition
remains to reach the 75th percentile of companies
by 2025, we recognise this goal requires
sustained commitment and focus. We are
currently at the 42nd percentile and we remain
dedicated to making meaningful progress,
confident that continuous collective efforts and
collaboration will drive sustainable improvements.
The survey results serve as a foundation for
managers to initiate meaningful discussions
with their teams. These discussions involve
recognising and celebrating successful
practices, as well as adapting strategies
to enhance engagement where necessary.
In the September 2024 survey, 65% of
participants agreed/strongly agreed with
“My team has made progress on the goals
set during our action planning sessions after
the last Employee Engagement Survey.”
We disseminate survey highlights globally,
fostering a culture of transparency and shared
understanding across the organisation.
To further support this culture, we regularly embed
engagement themes into key communications,
and we launched a Best Practice Series,
enabling managers to share successful
strategies and learn from one another.
Supporting the wellbeing
of our people
We continue to highlight the importance of
wellbeing and mental health, recognising their
vital role in fostering a supportive and productive
workplace and enhancing the overall quality of
life of our people. In 2024, we extended our
employee assistance programme to all the
countries where we have operations, offering
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Supporting leaders
through change
To support new employees and new teams
created through these changes, we have
invested in onboarding, knowledge transfer
and highly effective teams (“HET”) training
for newly formed teams. The HET programme
involved sessions with global leadership
teams from HR, Finance, IT, Manufacturing
and Supply Chain, with regional programmes
for Commercial and Operations in Asia.
This utilised Clifton Strengths, with the ELT
also undertaking a team assessment. We will
continue to review support for our people
managers, leaders and teams throughout
2025 leveraging the HET training and
Clifton Strengths.
Managing and supporting
performance
Our performance management process
at Elementis aligns individual and business
goals to drive organisational success.
We stimulate a culture of performance
and employee development, connecting
different HR processes to ensure a fair and
consistent approach.
The performance management process begins
with goal setting, where employees are asked
to set goals that contribute to the key priorities
of Elementis. We use the mid-year review to
assess progress, review actions and adjust
goals as needed. During the year-end review,
employees and managers evaluate their
performance and managers assign a
performance rating. The ratings are calibrated
across teams to ensure fairness. The final
performance rating is connected to a salary
increase and bonus. All employees who join
before October participate in the performance
management process for that year.
Fit for the Future
In 2023, Elementis announced a series of
proposed changes to the organisation and our
ways of working to make Elementis Fit for the
Future. These changes started in Q3 2023,
with the majority completed in 2024. The Fit for
the Future programme will conclude in 2025.
Changes included a simpler and more efficient
organisational structure based around our three
regions; the opening of an R&D unit and global
centre of excellence in Porto, Portugal; and
the outsourcing of several financial processes.
As a result of the proposed changes, around
200 roles were impacted globally and the
Cologne site, in Germany, closed.
The programme has delivered the expected
financial benefits, while improving overall
employee engagement and with no significant
impact on voluntary attrition. We now have a
new community of over 100 employees based
in Porto.
Both those leaving and joining played a huge
part in this success, demonstrating how living
our values every day continues to deliver our
business goals.
Engagement as a driver
of success
Elementis is committed to fostering a culture
of engagement, recognising its critical role in
improving employee satisfaction and wellbeing,
and driving innovation, productivity and overall
business success. Since 2023, we partner with
Gallup, the leading provider of insights into
employee engagement, to leverage their
expertise and ensure data-driven strategies,
informed by the input from our employees.
This year, we strengthened our focus on
engagement with initiatives designed to
empower managers and employees and inspire
positive change:
Best Practice Series: we launched a
new initiative to spotlight successful
engagement strategies across the
organisation. Managers with the highest
engagement scores and those who have
achieved significant improvements were
invited to share their insights through articles
and panel discussions. These initiatives
aimed to encourage collaboration among
managers and inspire new approaches to
enhancing engagement
Manager webinars: Gallup facilitated
sessions to equip managers with tools and
insights, including best practices and survey
results interpretation
Internal Communications: engagement is
embedded in major communication initiatives,
including townhalls and leadership updates.
Articles on our internal channels and tools on
the intranet provide resources and examples
to inspire teams and drive progress
In 2025, we will remain focused on improving
engagement, ensuring it is a collective effort
involving leaders, managers and employees.
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Responsible business
We are committed to ensuring that ‘Integrity is our
Specialty’ by conducting business fairly and ethically.
Our Code of Conduct and Ethics (“Code”) forms the
cornerstone of our ethics and compliance programme.
Our Code helps us communicate our commitment to responsible business and promotes a culture of
complying with the law and doing business ethically. It is available on our intranet and website in seven
languages. It provides the framework for:
Fostering a visible and accessible culture of ethics and compliance for all employees and third parties
doing business with Elementis
Providing training, information and guidance on key compliance areas
Guaranteeing that all concerns are addressed appropriately
Ensuring ethical and compliance matters are considered and weighted appropriately in all of Elementis’
business decisions
Our natural additives bring performance and
sustainability benefits to skincare products.
Human rights
Our approach to upholding human rights
is guided by international conventions and
standards, including the UN Universal
Declaration of Human Rights, the UN
Guiding Principles on Business and Human
Rights, and the International Labour
Organization’s Declaration on Fundamental
Principles and Rights at Work. We prohibit
the use of child and forced labour
throughout our supply chain. We are
committed to the principles of freedom
of association, equality of treatment and
non-discrimination.
2024 Responsible business highlights
Speak Up reports made
in the year
23
(2023: 17)
Revenue from natural and
naturally-derived products
(ISO16128)
69%
(2023: 68%)
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Of the third parties screened, high-risk entities
represented less than 2%, medium-risk 26%,
and low-risk 72%.
The primary risks identified were regulatory
compliance, geopolitical instability, financial
risks and jurisdiction-specific concerns.
To mitigate these risks, we implemented
several key strategies:
World-Check
®
One screening and adverse
media monitoring
Sanctions assurance letters and enhanced
contractual safeguards
Tailored compliance guidance for managing
supplier and distributor risks
These results highlight the robust capabilities
of our screening systems in mitigating potential
risks and upholding trust within our supply chain.
This progress reinforces our commitment to
maintaining accountability and transparency in
all regions.
Introducing the annual declaration of
conflicts of interest
In Q4 2024, we launched the annual declaration
of conflicts of interest process as a significant
step towards fostering transparency and ethical
decision-making. This initiative requires
employees and stakeholders to disclose
potential conflicts, ensuring alignment with
our organisational standards. By embedding
accountability at every level, this declaration
builds trust and reinforces our collective
commitment to upholding the highest standards
of integrity.
Advancing policy commitments
Key policy updates in 2024 included the
launch of our Human Rights Statement,
underscoring our dedication to promoting
ethical practices and protecting human rights
globally. These efforts reflect our leadership
in advancing sustainability and responsibility
in business practices.
We continue to communicate and integrate
longstanding policies like the Anti-Corruption
Policy and Business Partner Code of Conduct
through internal channels, training programmes
and onboarding processes. These policies are
also actively promoted by our virtual onboarding
team, which includes members from
Compliance, Sustainability, and regional
Procurement Heads, ensuring alignment with
third-party management practices and
organisational values.
Preparing for enhanced Code of Conduct
Significant updates to our Code of Conduct
were finalised in 2024. These revisions
emphasise collective bargaining rights and
expanded human rights commitments. These
updates set new benchmarks for employee
engagement and compliance with the topic.
Continued focus on trade sanctions
Trade sanctions continued to be a critical
area of focus, requiring careful management
to ensure adherence to global regulations.
Our ethical stance led us to continue cessation
of direct trade with Russia and Belarus in
response to the ongoing conflict in Ukraine.
We identified the UAE as a potential hub for
goods being routed to Russia under third-party
arrangements. To address this, we implemented
rigorous monitoring of customer requests from
this region, ensuring adherence to international
sanctions frameworks. We continued with our
regular training sessions for employees on the
latest trade sanctions regulations, enhancing
their awareness and understanding of the
evolving landscape. We also strengthened
our due diligence processes for high-risk
transactions and regions.
Ethics and Compliance
The Ethics and Compliance Council (“ECC”)
continued to hold quarterly meetings throughout
2024. The ECC comprises the Group General
Counsel & Chief Compliance Officer (Chair),
the Head of Compliance, the executive leaders
from each business segment and function,
and Internal Audit. The ECC reports to the CEO
after each meeting and to the Board twice a
year. Its purpose is to uphold and oversee an
ethics and compliance culture at Elementis and
to ensure the Code, and related Elementis
policies and standards, are effectively
communicated and implemented. During 2024,
matters considered by the ECC included:
Approval of plans for the second annual
Ethics & Compliance Week
Management of trade sanctions risk
Approval of the new Land Rights Policy
Review of in-person onboarding training for
new colleagues in Porto, Portugal
Approval of new conflicts of interest reporting
methodology
Updates to the Code of Conduct
Risk assessment
We continue to actively monitor our compliance
risks. This includes reviewing internal data from
the compliance programme as well as external
information on new laws, enforcement proceedings,
corruption risks and benchmark data.
Key topics in 2024
Strengthening third-party risk management
Third-party risk management remained a
cornerstone of our compliance strategy. In 2024,
we onboarded 398 third parties (with annual
spend in excess of $25,000) across Asia (54%),
Europe (22%) and the Americas (21%),
implementing rigorous due diligence processes
to ensure ethical and compliant partnerships.
Ethics & Compliance Week 2024
Our second annual Ethics & Compliance
Week, held in May 2024, focused on the
theme ‘Ethics Matters’. The event brought
together employees globally to explore key
ethics and compliance topics and celebrate
the integral role each individual plays in
upholding our values.
Throughout the week, a series of virtual
global events provided valuable insights into
key topics and reinforcing our commitment
to ethical practices:
Cartels & Competition in Asia Pacific:
Highlighted regulatory risks and
compliance strategies
Interactive Case Study on Anti-Bribery
and Corruption: Provided practical
scenarios for understanding complex
compliance issues
Speak Up and Psychological Safety:
Emphasised creating a safe environment
for raising concerns
Keynote – Inspire Greatness: Explored
how ethical leadership fosters
engagement and excellence
Ethics & Sustainability: Examined the
connection between sustainability and
our ethical commitments
Local champions played a pivotal role in
bringing the Ethics & Compliance Week
2024 to life. Activities included celebratory
events, interactive training sessions,
quizzes and team-building exercises, which
were tailored to engage participants and
reinforce key compliance messages. These
efforts ensured high levels of participation
and positive feedback from employees,
fostering a sense of community and shared
commitment to ethical practices.
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Our Speak Up culture
Speak Up was a core theme during Ethics &
Compliance Week 2024, where it became the
centrepiece of our efforts to foster a culture of
openness and trust. This initiative was bolstered
by multiple dedicated training sessions, with one
standout session becoming one of the most
attended events of the week. The high level of
participation underscored the critical role of
creating an inclusive and supportive
environment for raising concerns.
We value open and honest communication,
and encourage employees and third parties
to speak up about any concern as it arises,
to their manager, HR, other Elementis function
(such as HSE or Finance), or Legal &
Compliance. Where an individual does not
feel able to raise the matter with anyone at
Elementis, it can be raised confidentially and
anonymously (where local law permits) to a
reporting service hosted independently of
Elementis, IntegrityCounts, which is available
24 hours a day, 7 days a week, in multiple
languages. These Speak Up channels are
publicised in various ways, including in our
Code, on our intranet, on the training portal
and on posters at sites.
All reports are reviewed and appropriate action
taken, which may include investigation at the
direction of the Group General Counsel &
Chief Compliance Officer. We ensure that all
necessary steps are taken based on the
outcome of the investigation, following our
internal investigations procedures, including
provision of regular updates to the reporter.
We have a clear stance on non-retaliation and
are committed to protecting from retaliation
any employee who reports a violation in good
faith, even if the report is not substantiated in
an investigation.
In 2024, a total of 23 Speak Up cases were
reported, with 87% initiated by employees.
This increase reflects the work we have done
on improving our Speak Up culture, bringing
our Speak Up rate to the benchmark level for
a company of our size. No issues which were
material in the context of the Group were
reported to the helpline or via other means
during the year. Additionally, there were no
confirmed incidents of corruption or bribery,
underscoring the effectiveness of our compliance
programme in mitigating such risks.
Our training programme
In 2024, we delivered over 2,111 hours of
compliance training through LRN, our online
learning platform, reaching 1,023 unique
learners with 2,227 course completions.
Complementing this, we conducted several
in-person training sessions, focusing on
practical, real-world scenarios. These sessions
equipped employees with the necessary
knowledge and tools to identify and mitigate
risks effectively.
The training programmes covered diverse
curriculum risk areas, including anti-bribery
and corruption, anti-money laundering, market
conduct and organisational ethics. Most
employees in at-risk functions completed these
programmes, which featured highly tailored
content designed to address the specific risks
faced by these roles.
Learner participation spanned global regions,
demonstrating the broad reach of our
compliance training. This combination of virtual
and in-person training further strengthened our
compliance culture and actively engaged
employees across all levels.
In 2025, we will further expand our training
initiatives by conducting sessions specifically
tailored for plant workers to address operational
risks. These sessions aim to ensure full alignment
with Elementis’ compliance standards and
enhance safety practices across our sites.
Data privacy
We remain committed to ensuring the security
and confidentiality of our data. In line with our
commitment to strengthening governance and
compliance in the areas of cyber and data
protection, we established a new Cyber, Data
Protection and Information Governance Steering
Committee to oversee and enhance our
approach to cybersecurity, data protection and
information governance as a more integrated,
cross-functional oversight model.
In 2024, we launched a new Global IT Policy
and information security training. We remain
committed to the security of our network and
systems and continue to run regular simulated
phishing campaigns to raise employee awareness
of cyber security threats. In 2024, we partnered
with a new provider of targeted phishing
simulations and security awareness training and
expect to further increase the frequency of our
internal phishing campaigns throughout 2025.
We continue to encourage the timely, open and
transparent reporting of actual and potential
incidents concerning personal data and
information security, and have dealt with the
following reports during 2024:
Responsible sourcing
We operate a complex, international supply
chain of 500+ suppliers for our direct materials,
and thousands more for indirect procurement.
Our Business Partner Code of Conduct and
due diligence screening system illustrate how
we are committed to improving supply chain
transparency, improving how we assess and
manage sustainability risks in the supply chain,
and partnering with suppliers who share
our commitments.
We conducted site visits to numerous key
suppliers in 2024 to better understand their
operating environment and potential risk areas.
We continue to perform thorough paper and
online checks on our high-risk area and related
vendors, with a particular focus on organic tin
and silicon metal suppliers. We have assessed
12 critical vendors, including verifying the origin
of their raw materials to ensure they did not
come from high-risk areas. During these
assessments, we found no indications of child
or forced labour. Additionally, we reviewed
written information and documentation on each
supplier’s policies regarding human rights and
the non-use of child labour to ensure they align
with our standards.
To help us systematically integrate supplier
sustainability risk analysis into our business
systems, in 2024 we expanded our relationship
with EcoVadis to obtain sustainability profiles
based on country and industry-specific risks
across four themes: Environmental, Labor
and Human Rights, Ethics, and Sustainable
Procurement. As we integrate this information
into our business systems, we can better perform
analyses for impacts, risks and opportunities in
our supply chains. We also invited our suppliers
to undertake a sustainability assessment,
corroborated with documentation, on the platform,
which involves a questionnaire customised by
industry, size and country of operations. At the
end of 2024, 50 partners had a valid scorecard.
We support the use of certified sustainable palm
oil and derivatives. Our Livingston, UK, site
purchases palm oil derivatives for use in certain
products. The site is third-party-certified to the
Roundtable on Sustainable Palm Oil Mass
Balance Supply Chain Model.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 53
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Cause of report
Loss or theft
of data/device
4 Reports
Disclosed in error
3 Reports
Technical/
procedural failure
9 Reports
Cyber
12 Reports
Third party
4 Reports
(Cyber: 2, Technical/
procedural failure: 2)
Other
1 Report
Enabling halogen-free fire
retardant additives in plastics
We introduced CHARGUARD™, a range of
organoclay-based fire retardant synergists
for use by plastic compounding companies
supplying both consumer and industrial
applications.
Thermoplastic materials can contain
halogenated fire retardant additives and
per- and polyfluoroalkyl substances
(“PFAS”) synergists. With rising concerns
about the environmental and health impacts
of these chemicals, the demand for safer
alternatives has grown.
With favourable rheological properties
and a delaminated platelet structure, our
CHARGUARD™ fire retardant synergists
are designed to enhance anti-drip and char
formation properties of non-halogenated
fire retardants.
Product stewardship
We are committed to a safer future, minimising
product and chemical-related hazards to people
or the environment by design where possible,
and throughout product manufacture, use,
disposal and recycling. We are active members
of EUROTALC, which is the Association for
European Talc Producers and the European
Bentonite Association. These are both sections
of the IMA Europe.
Our global Product Stewardship organisation
monitors local and regional regulations for
impacts to our products and supply chain and
ensures our products are compliant with current
regulations. There are Product Stewardship
team members in Asia, Europe and North
America. A member of the ELT oversees the
Group and provides the consistency and
strategy needed to ensure harmonised
approaches to global customers while ensuring
local regulatory compliance. The Product
Stewardship organisation reports to the
R&D organisation.
Our Product Stewardship team is actively
involved with our Sales and Marketing, R&D,
and Supply Chain organisation. When a new
product is conceptualised, Product Stewardship
is engaged from the beginning to ensure the
materials, processes and sales are compliant
with appropriate regulations. If they are not,
we manage the registration process so that
the product can be safely sold and used as
intended. These registrations are regularly
reviewed against sales.
Increasing biobased
content of paints
We have launched a range of biobased
non-ionic associative thickeners as an
alternative to petrochemical-derived
versions.
These rheology additives have a high
naturally-derived content, with over 90%
biobased carbon. They are VOC-free,
and free from potentially aquatoxic
alkylphenol ethoxylates (“APEO”).
They give a good balance of leveling
and sag resistance in interior and exterior
decorative water-based paints.
We track Substances of Very High Concern
(“SVHC”), taking proactive action to eliminate
these substances whenever it is technically
feasible and when required by customers.
SVHC and other chemicals of concern are
brought to the attention of the Supply Chain
and Product Development teams so they can
either avoid them or minimise their impacts.
We use a software system to ensure that our
safety data sheets (“SDS”) and product labelling
comply with current regulations in the region
where the product is sold. Commercial SDS
for our products are available on our website
in English and in local languages and can be
downloaded in the country format as needed.
Elementis seeks to avoid animal testing
whenever possible. If we are required by
regulation to do so (for example, under
European Union (“EU”) Registration, Evaluation,
Authorisation and Restriction of Chemicals
(“REACH”) requirements), we engage third
parties to conduct the tests in the least impactful
way possible. Our Animal Testing Policy is
available on our website.
Tax transparency
On an annual basis, we develop and publish
our tax strategy. This statement is approved by
the Board and is available on the Company’s
website. We aim for proactive and transparent
relationships with relevant tax authorities to
facilitate meeting our statutory and legislative
obligations.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 54
Sustainability: Foreword Materiality Governance Strategy Environment People Responsible business
Sections 414CA and 414CB of the Companies Act 2006 require the Company to provide information to help stakeholders understand our position on
non-financial matters. The table below sets out where you can find this information.
Reporting
requirement
Policies and standards that govern
our approach
1
Where to read more in this Report
about our impact, including
the principal risks relating to
these matters Page
Anti-corruption
and anti-
bribery
― Code of Conduct
― Business Partner Code of Conduct
― Anti-corruption Policy
― Anti-trust Policy (global competition)
― Responsible business
― www.elementis.com
51-54
Employees ― Code of Conduct
― Business Partner Code of Conduct
― Health, Safety and Environmental
Policy
― Life saving rules
― Data protection and privacy policies
― Equality and diversity policies
― Whistleblowing policies
― People
― Data privacy
― Responsible business
― Workforce engagement
― Diversity Policy
and objectives
― Whistleblowing
― Directors’
Remuneration report
― www.elementis.com
44-50
53
51-54
84-85
90
96
101-129
Environmental
matters
― Code of Conduct
― Business Partner Code of Conduct
― Health, Safety and Environmental
Policy
― Net Zero transition plan
― Water Stewardship Statement
and Policy
― Biodiversity Statement
― Sustainability
― Materiality and strategy
― Strategy
― Climate
― Environment
― People
― Responsible business
― www.elementis.com
28-54
30
32-33
35-40
34-43
44-50
51-54
Reporting
requirement
Policies and standards that govern
our approach
1
Where to read more in this Report
about our impact, including
the principal risks relating to
these matters Page
Respect for
human rights
― Code of Conduct
― Business Partner Code of Conduct
― Equality and diversity policies
― Human Rights Policy Statement
― Data protection and privacy policies
― Purchasing Code of Practice
― Modern Slavery Statement
― People
― Data privacy
― Diversity Policy and
objectives
44-50
53
90
Social matters ― Code of Conduct
― Volunteering Policy
― While we do not have a specific
policy on social/community matters,
we engage directly with our
communities wherever we operate
― Stakeholder engagement
― Environment
― People
24-25
34-43
44-50
Stakeholders ― Section 172 ― Section 172 5, 26
Description
of the business
model
― Business model 6
Description of
principal risks
and impact
on business
activity
― Climate
― Risk management
― Principal risks and
uncertainties
― Audit Committee report
35-40
65-69
70 -74
92-96
Innovation ― Strategic progress
― Innovation
― www.elementis.com
15
16 -17
Non-financial
KPIs
― Non-financial KPIs
― Sustainability
― Materiality
― Strategy
― Climate
― Environment
23
28-54
30
32-33
35-40
34-43
1 The Company’s policies, statement and codes are available on the Company’s website, www.elementis.com
Further information
Reference to our policies, due diligence processes and information on how we are performing
in these areas is contained throughout the Strategic report. Information on key performance
indicators used to assess progress against targets used to manage climate-related risks and
opportunities can be found on page 23. Certain Group policies and internal standards and
guidelines are not published externally.
Non-financial information statement
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 55
Ralph Hewins
Chief Financial Officer
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Revenue
$m 2024 2023
Coatings 386.4 3 67.6
Talc 134.5 136.5
Performance Specialties 520.9 50 4 .1
Personal Care 217.4 209.3
Revenue 738.3 713.4
Operating profit
$m
2024 2023
Operating
(loss)/profit
Adjusting
items
Adjusted
operating
profit/(loss)
1
Operating
profit/(loss)
Adjusting
items
Adjusted
operating
profit/(loss)
1
Coatings 73.5 4.9 78.4 55.2 0.9 56.1
Talc (124.3) 132.3 8.0 8.6 5.4 14.0
Performance Specialties (50.8) 137.2 86.4 63.8 6.3 70.1
Personal Care 49.3 12.3 61.6 43.2 7.1 50.3
Central costs (25.1) 5.9 (19.2) (48 .1) 31.6 (16.5)
Operating (loss)/profit (26.6) 155.4 128.8 58.9 45.0 103.9
1 After adjusting items, see Note 5 for detail.
Group results
In 2024 revenue increased 3% on a reported (and constant currency) basis to $738.3 million
(2023: $713.4 million) with improved mix and pricing, as well as higher volumes across Coatings
and Personal Care.
Reported operating loss was $26.6 million (2023: profit of $58.9 million), primarily as a result of the
impairment of Talc assets. Adjusted operating profit increased 24% on a reported and constant
currency basis to $128.8 million (2023: $103.9 million), driven by self-help initiatives, including lower
costs and favourable price and mix benefits, further supported by higher volumes in the year.
Statutory loss after tax was $47.8 million (2023: profit of $28.2 million).
Finance report
Ralph Hewins
Chief Financial Officer
56
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Central costs
Central costs are those costs that are not identifiable as expenses of a particular business segment
and comprise expenditures of the Board of Directors and corporate head office. Adjusted central
costs increased to $19.2 million (2023: $16.5 million), largely driven by higher variable remuneration
due to improved performance.
Adjusting items
In addition to the statutory results, the Group uses alternative performance measures to provide
additional analysis of the performance of the business. The Board considers these non-GAAP
measures as an alternative way to measure the Group’s performance. Adjusting items in 2024
resulted in a charge of $154.6 million before tax (2023: $44.7 million). The key categories of adjusting
items are summarised below. For more information on adjusting items and the Group’s policy for
adjusting items, please see Note 5 and Note 1 to the financial statements respectively.
Credit/(charge) $m Coatings Talc
Performance
Specialties
Personal
Care
Central
costs Total
Business
transformation (0.5) (2.2) (2.7) (4.2) (4.1) (11.0)
Environmental
provisions – – – – (1.8) (1.8)
Impairment of
assets – (126.0) (126.0) – – (126.0)
Settlement of Brazil
customs matter (3.0) – (3.0) – – (3.0)
St Louis fire (1.3) – (1.3) – – (1.3)
Amortisation of
intangibles arising
on acquisitions (0.1) (4.1) (4.2) (8.1) – (12.3)
Total charge to
operating profit (4.9) (132.3) (137. 2) (12.3) (5.9) (155.4)
Unwind of discount
on restructuring
provision – – – – (0.4) (0.4)
Interest on EU state
aid receivable – – – – 1.2 1.2
Total (4.9) (132.3) (137. 2) (12.3) (5.1) (154.6)
Business transformation
Business transformation costs of $11.0 million (2023: $26.1 million) primarily included: charges of
$1.6 million recognised in respect of the closure of the Middletown plant, announced in March 2024;
charges of $0.2 million in relation to the sale of the Eaglescliffe site, announced in March 2024;
charges of $3.5 million in relation to the strategic review of the Talc business, announced in
August 2024; charges of $2.1 million in relation to the execution of the Group’s data transformation
programme; charges of $2.8 million (2023: $25.4 million) in relation to the Fit for the Future
organisation restructuring programme, announced in September 2023; and charges of $0.5 million
(2023: $0.7 million) in relation to the closure of the Charleston plant, announced in November 2020.
See Note 5 for further detail.
Environmental provisions
The Group’s environmental provision is calculated on a discounted cash flow basis and reflects the time
period over which spending is estimated to take place. A net charge of $1.8 million (2023: $6.2 million)
to the environmental provision reflects the impact of changes in discount rates of $2.2 million
(2023: $0.4 million), and additional remediation work identified of $4.0 million (2023: $6.6 million).
Impairment of assets
In the first half of 2024, Talc performance was adversely impacted by continued weak end-market
demand and strike action in Finland. Accordingly, a new business plan was prepared for the Talc
business which resulted in an impairment of assets of $66.1 million. In September 2024, the RAC
of ECHA made a recommendation that talc be classified as STOT RE1 and Carc 1B. A final decision
by the EC is expected in H2 2026, with implementation currently expected in Q3 2028, at the
earliest. As a result, there is a high degree of uncertainty with regards to the future demand and
profitability profile of the Talc business, which gave rise to a further impairment of $59.9 million
in the second half of 2024. See Note 5 for further detail.
Settlement of the Brazil customs matter
The Group agreed a settlement with the Brazilian tax authorities in relation to a customs matter,
of which $3.0 million (2023: nil) has been recognised as an adjusting item. See Note 5 for
further detail.
St Louis fire
In November 2024, a fire incident at our St Louis plant resulted in a cost of $1.3 million. Of this,
$0.7 million related to items of property, plant and equipment which were written off.
Amortisation of intangibles arising on acquisitions
Amortisation of $12.3 million (2023: $12.7 million) represents the charge in respect of the Group’s
acquired intangible assets.
Interest on EU state aid receivable
Finance income of $1.2 million (2023: $1.4 million) has been recognised in respect of interest
due to the Group.
57
Finance report
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Net finance cost
$m 2024 2023
Finance income 0.3 0.5
Finance cost of borrowings (20.3) (17.5)
Net finance cost of borrowings (20.0) (17. 0)
Net pension finance income 1.4 1.0
Discount unwind on provisions (2.4) (1.4)
Fair value movement on derivatives – 0.4
Interest on EU state aid receivable 1.2 1.4
Interest on lease liabilities (1.4) (1.3)
Net finance costs (21.2) (16.9)
Net finance costs increased to $21.2 million (2023: $16.9 million). Net finance costs comprise
interest payable on borrowings, calculated using the effective interest rate method, facility
arrangement fees, the unwinding of discounts on the Group’s environmental provisions, net pension
interest income/expense, fair value movement on derivatives, interest receivable on the EU state aid
receivable balance and interest charged on lease liabilities.
The increase in net finance costs is primarily due to the higher finance cost of borrowings as a result
of higher interest rates, partially offset by a lower net debt level during 2024.
Net pension finance income of $1.4 million (2023: $1.0 million) is a function of discount rates under
IAS 19, and the value of the schemes’ deficit or surplus positions.
The Group’s environmental provisions are calculated on a discounted basis, reflecting the time period
over which the spending is estimated to take place. The discount unwind on provisions of $2.4 million
in 2024 was greater than the prior year due to higher discount rates and the increased rehabilitation
provisions for Talc.
Interest receivable of $1.2 million (2023: $1.4 million) has been recognised in respect of interest due
to the Group.
Both finance income and the interest on lease liabilities were broadly consistent with the prior year.
Taxation
2024 2023
$m
Effective rate
% $m
Effective rate
%
Reported tax (credit)/charge (1.8) 3.6 11.5 29.0
Adjusting items tax credit (26.8) – (8.4) –
Adjusted tax charge 25.0 23.8 19.9 23.5
The Group incurred a tax charge of $25.0 million (2023: $19.9 million) on adjusted profit before tax,
resulting in an effective tax rate of 23.8% (2023: 23.5%). The Group’s adjusted effective tax rate in
2024 is broadly in line with the prior year.
Tax on adjusting items relates primarily to the impairment of assets, amortisation of intangible assets
and the Fit for the Future restructuring programme.
The medium-term expectation for the Group’s adjusted effective tax rate is around 26%.
Earnings per share
To aid comparability of the underlying performance of the Group, earnings/(loss) per share (“EPS”)
reported under IFRS is adjusted for items classified as adjusting.
2024 2023
(Loss)/profit after tax ($ million) (47.8) 28.2
Adjusting items net of tax ($ million) 127.8 36.3
Adjusted profit after tax ($ million) 80.0 64.5
Weighted average number of shares for the purpose of
basic EPS (million) 588.9 585.7
Effect of dilutive shares options (million) 11.9 11. 2
Weighted average number of shares for the purpose of
diluted EPS (million) 600.8 596.9
Basic EPS before adjusting items (cents) (8.1) 4.8
Diluted EPS before adjusting items (cents) (8.1) 4.7
Adjusted basic EPS (cents) 13.6 11.0
Adjusted diluted EPS (cents) 13.3 10.8
Adjusted diluted EPS increased 23% to 13.3 cents (2023: 10.8 cents), primarily due to a higher
adjusted profit after tax. Basic EPS before adjusting items decreased to a loss of 8.1 cents per share
(2023: earnings of 4.8 cents) primarily due to the impairment of assets, resulting in a statutory loss
after tax.
Note 7 provides disclosure of EPS calculations both including and excluding the effects of adjusting
items and the potential dilutive effects of outstanding and exercisable options.
58
Finance report
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Distributions to shareholders
The Board has considered the strength of the balance sheet and the near-term prospects for the
business and in line with the dividend policy, recommended a final dividend of 2.9 cents per share
(2023: 2.1 cents), which will be paid in pounds sterling, resulting in a full-year dividend of 4.0 cents
per share. A dividend of 2.28 pence per share has been determined by converting the 2.9 cents into
pounds sterling using the forward rate of £1.00:$1.2693, as determined on 27 of February 2025.
If approved at the AGM, the dividend will be paid on 30 May 2025 to shareholders included on the
share register on 2 May 2025.
Cash flow
As per the statutory cash flow statement, net cash inflow from operating activities increased to
$100.0 million (2023: $76.8 million), primarily as a result of higher operating cash flow before
movement in working capital of $138.4 million (2023: $132.6 million), a higher net working capital
inflow of $4.3 million (2023: inflow of $2.1 million) related to movements in inventories, debtors and
creditors, and the non-repeat of the 2023 net cash outflow used in operating activities from
discontinued operations of $12.5 million related to the Chromium business.
Net cash flow in relation to investing activities decreased to an outflow of $37.5 million (2023: inflow
of $101.1 million), primarily due to the gross cash proceeds from the sale of the Chromium business
of $139.2 million in 2023.
Net cash outflow in relation to financing activities decreased to $59.8 million (2023: $168.0 million),
primarily due to the repayment of borrowings following the sale of the Chromium business in 2023.
The adjusted cash flow, which excludes the effect of adjusting items from operating cash flow and is
therefore distinct from the statutory cash flow referenced above, is summarised below. A reconciliation
between statutory operating profit and EBITDA is shown in the alternative performance measures
(“APM”) section.
Adjusted cash flow
$m 2024 2023
EBITDA
1
167.6 145.8
Change in working capital 4.4 2.1
Capital expenditure (37.8) (38.2)
Adjusted operating cash flow 134.2 109.7
Pension payments (0.6) (3.3)
Interest (18.0) (17.8)
Tax (24.5) (27.3)
Adjusting items (33.3) (10.0)
Other
2
(2.0) (6.3)
Free cash flow 55.8 45.0
Issue of shares, net of share repurchases by ESOT 0.5 (1.0)
Dividends paid (18.8) –
Acquisitions and disposals – 139.2
Discontinued operations – (12.5)
Currency fluctuations 7.3 (5.9)
Movement in net debt 44.8 164.8
Net debt at start of year (202.0) (366.8)
Net debt at end of year (157.2) (202.0)
1 Earnings before interest, tax, adjusting items, depreciation and amortisation.
2 Other includes share-based payments, movement in provisions, movement in derivatives and payment of lease liabilities.
Adjusted operating cash flow increased to $134.2 million (2023: $109.7 million), primarily driven by
an improvement in adjusted EBITDA.
Free cash flow increased to $55.8 million (2023: $45.0 million), primarily driven by improved
operating cashflow, lower tax payments offset by higher cash adjusting items and a lower impact
from the movement in provisions, included in other.
Adjusting items increased to $33.3 million (2023: $10.0 million), including $18.0 million for the
organisational restructuring, $4.2 million for the environmental provisions and $3.5 million for the
ongoing strategic review of Talc. See the unaudited information section at the end of this report,
for further detail.
Net debt decreased to $157.2 million (2023: $202.0 million), a reduction of $44.8 million. Net debt
to adjusted EBITDA decreased to 1.0x in 2024 on a pre-IFRS 16 basis (2023: 1.4x).
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Finance report
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Balance sheet
$m
31 December
2024
31 December
2023
Intangible fixed assets 585.9 650.6
Tangible fixed assets 338.0 423.6
Working capital 137.4 147. 2
Net tax liabilities (68.3) (101.5)
Provisions and retirement benefit obligations (29.4) (48.8)
Financial assets and liabilities 3.9 11.3
Lease liabilities (34.7) (36.2)
Unamortised syndicate fees 3.7 3.1
Net debt (157. 2) (202.0)
Net assets held for sale (22.3) –
Total equity 757.0 847.3
Group equity decreased to $757.0 million (2023: $847.3 million), principally driven by lower fixed
assets and partially offset by lower net debt. Intangible fixed assets decreased by $64.7 million, due
to $47.1 million of impairment, $12.8 million of amortisation and $5.1 million of foreign exchange losses.
The reduction in tangible fixed assets of $85.6 million was driven by $78.9 million of impairment,
depreciation of $38.8 million and foreign exchange losses of $16.6 million, which were partially offset
by gross additions of $44.9 million and right-of-use asset capitalisation of $4.8 million.
Working capital, which comprises inventories, trade and other receivables, and trade and other payables,
decreased to $137.4 million (2023: $147.2 million). The decrease was driven by lower inventories and
receivables at the end of the year, partially offset by lower payables.
Net tax liabilities decreased to $68.3 million (2023: $101.5 million) primarily as a result of the
impairment, leading to a reduction in the associated deferred tax liability.
Adjusted ROCE (excluding goodwill) increased to 23% (2023: 15%), reflecting higher adjusted
operating profit and lower operating capital employed, partially offset by lower provisions (see the
APM section for more detail).
Foreign currency
The financial information is presented in US dollars. The main dollar exchange rates relevant to the
Group are set out below.
2024 2023
Year end Average Year end Average
Pounds sterling 0.80 0.78 0.78 0.81
Euro 0.97 0.92 0.91 0.93
Provisions
The Group records a provision in the balance sheet when it has a present obligation as a result
of past events, which is expected to result in an outflow of economic benefits in order to settle
the obligation and the amount can be reliably estimated. The Group calculates provisions on a
discounted basis. At the end of 2024, the Group held provisions of $48.4 million (2023: $81.9 million)
consisting of environmental provisions of $43.2 million (2023: $60.5 million), self-insurance provisions
of $0.2 million (2023: $0.5 million), restructuring provisions of $4.7 million (2023: $20.1 million) and
other provisions of $0.3 million (2023: $0.8 million).
The decrease in the environmental provisions was attributable to the classification of the Eaglescliffe
business as held for sale as of 30 June 2024 of $20.8 million. The decrease is also impacted by the
change in the discount rate applied to the provisions of $1.4 million, currency translation of $2.4 million
and utilisation of provisions of $1.9 million. These decreases were partially offset by additional
provisions of $7.5 million in relation to extra rehabilitation and closure costs in relation to the Group’s
Finnish talc mines, $0.2 million in relation to extra remediation work required for other environmental
provisions, and the unwind of discount in the year of $1.6 million.
The self-insurance provision represents the Group’s estimate of its liability arising from retained
liabilities under the Group’s insurance programme and remained flat during the period.
The restructuring provision reflects the adjustments to head count and other costs of restructuring,
where a need to do so has been identified by management. The provision decreased primarily as a
result of $16.3 million of provision utilised during 2024, partially offset by $0.1 million of additional
provisions, $0.4 million of unwind of discount on these provisions, and $0.4 million of currency
translation differences.
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Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Pensions and other post retirement benefits
$m 2024 2023
Net (surplus)/liability:
UK (23.0) (38.7)
US (1.2) –
Other 5.2 5.6
(19.0) (3 3.1)
UK plan
The largest of the Group’s retirement plans is the UK defined benefit pension scheme (“UK Scheme”),
which at the end of 2024 had a surplus, under IAS 19, of $23.0 million (2023: $38.7 million). The UK
Scheme is relatively mature, with approximately two thirds of its gross liabilities represented by
pensions in payment, and is closed to new members. The decrease in net surplus was largely driven
by losses on plan assets of $46.2 million (2023: returns of $9.7 million) which was offset by liability
adjustments, primarily due to lower discount rates and other actuarial adjustments of $30.9 million
(2023: losses of $0.3 million). Company contributions of $nil (2023: $1.8 million) reflect the funding
agreement reached with the UK trustees following the 2023 triennial valuation, which concluded
in 2024.
US plan
In the US, the Group reports two post retirement plans under IAS 19: a defined benefit pension
plan with a net surplus at the end of 2024 of $4.6 million (2023: $3.4 million), and a post retirement
medical plan with a liability of $3.4 million (2023: $3.4 million). The US pension plans are smaller than
the UK plan. In 2024, the overall deficit on the US plans increased by $1.2 million, as a result of the
returns on liability adjustments of $3.2 million 2023: losses of $1.3 million) and employer contributions
of $0.4 million, being offset by losses on plan assets of $2.2 million (2023: returns of $4.3 million).
Other plans
Other pension plans amounted to $5.2 million (2023: $5.6 million) and relate to pension
arrangements for a relatively small number of employees in Germany, certain UK legacy benefits
and one pension scheme acquired as part of the SummitReheis transaction in 2017.
Financial assets and liabilities
The Group uses cash flow hedges to manage exposure to interest rate and commodity price risks,
particularly those associated with US dollar and euro interest payments and aluminium and nickel
pricing. In 2024, interest rate and commodity price movements resulted in a net gain from the hedge
transactions of $4.4 million (2023: gain of $6.3 million) recycled to the income statement.
Net financial assets are represented by net derivative financial assets of $3.9 million (2023: $11.3 million),
which relate to the valuation of various risk management instruments.
Events after the balance sheet date
There were no significant events after the balance sheet date.
Ralph Hewins
Chief Financial Officer
5 March 2025
61
Finance report
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Financial performance
Personal Care revenue increased 4% on
both, reported and constant currency basis,
to $217.4 million (2023: $209.3 million), driven
by improved volumes and price/mix benefits.
Revenues were higher across all regions, with
Asia up 18%, benefitting from continued
investment in our capabilities in recent years.
Adjusted operating profit increased 22% on
a reported and constant currency basis, to
$61.6 million (2023: $50.3 million). Growth was
driven by improved volumes and self-help actions,
including cost savings and route-to-market
improvements. Self-help actions and innovative
new products drove a significant improvement
in adjusted operating margin to 28.3%
(2023: 24.1%).
Strategic progress
Personal Care operates in attractive growth
markets globally. It develops and delivers
high-value additives to its customers, based
on unique chemistry and formulation expertise.
Our medium-term Personal Care growth
strategy is focused on three core market
segments: Skin Care, Colour Cosmetics and
Antiperspirants. At our 2023 CMD, we announced
an ambition to deliver above-market revenue
growth across our growth platforms, over the
three years to 2026. Personal Care growth
platforms are expected to deliver around a third
of the $75 million growth target by 2026. In the
first year, we delivered $6 million of above-market
revenue growth, supported by all three platforms.
Colour Cosmetics revenue increased 7%
(market
1
growth of 4%), with revenues higher
across all regions, especially in Asia, where we
have significantly enhanced our sales and
marketing capabilities in recent years. We saw
strong growth in China, driven by new and
existing relationships with the local players.
Furthermore, the improved capabilities in this
region allowed us to optimise our route to
market, and we now serve more of our Chinese
customers on a direct basis.
In 2024, we launched two new customised
products targeting emerging markets. We
continue to leverage our expertise in rheology
and formulation solutions, combined with growing
demand for hectorite as a key ingredient.
We see good growth over the coming years,
supported by innovative products including a
range of patent-pending Bentone
®
Ultimate
products, with a higher efficacy in use and a fully
natural activation mechanism. We believe these
innovative products will further strengthen our
leading position in natural rheology.
The Skin Care growth platform saw revenues
up 17%, against the global market
1
growing 4%
on average. Recent growth in the Skin Care
segment has been supported by increasing
demand from consumers looking for more
sustainable products with natural ingredients.
Our hectorite-based additives are well positioned
to benefit from this trend, as they work equally
effectively in both water-based and oil-based
products. Our strategy in this segment focuses
on natural rheology, creating products that offer
attractive new functionalities. For example, this
year we launched Bentone Hydroclay™ 2101,
a product customised for a leading European
suncare manufacturer, and Bentone Hydroluxe™
360, an all-in-one hectorite based solution which
provides outstanding sensory, and texture
benefits enabling formulators to create products
with a variety of textures. This is our first product
in a new Bentone Hydroluxe™ line. In a future
launch, we are looking at an additional
functionality of hectorite as a natural co-emulsifier.
Together with existing products, this will enable
us to expand our share in the natural rheology
modifier market for skin care, worth over
$200 million. In 2025, we also plan to launch
water-resistant film formers for sun care.
The third growth platform is Antiperspirants,
a market segment where we have a global leading
position in AP actives. In this market, we see
trends for longer-lasting sweat protection, and
increasingly, growing demand for more natural
products and alternative antiperspirant actives.
As recognised innovation leaders in this field,
we are focusing on a range of new products that
address these market needs.
The above-market
2
revenue growth of 2% was
driven by increased demand for our high-efficacy
products, enabled by our strong relationships
with global key accounts and the successful full
production at the new Taloja plant in India. In July
2024, we closed one of the three AP actives
plants, consolidating the existing footprint into
two. We already saw benefits of this in lower
costs and margin improvement in H2, with the full
impact expected in 2025. Having two plants in
two key locations strengthens our competitive
position and supply resilience.
In 2024, we launched four new high-efficacy
products, including a lower-carbon antiperspirant
active. Our new lower-carbon grade of
antiperspirant ingredients utilises upcycled
aluminium waste to partially replace virgin
aluminium feedstock, leading to a lower product
carbon footprint for us and our customers.
In 2025, at the in-cosmetics trade show in
Amsterdam, we plan to launch a new deodorant
active that can provide sweat reduction benefits.
Innovation remains a key driver of growth in
Personal Care. We have introduced nine new
products in 2024: two which expand our technology
toolkit and seven highly customised products,
based on individual customer specifications.
This innovation approach is helping us gain
momentum with our customers and drive revenue
growth. Sales from new and innovation products
increased to 17% (2023: 11%). Those products
offer sustainability benefits to our customers,
either because of a higher efficacy or because
they are replacing a product of synthetic origin.
Skin Care, Antiperspirants and Colour Cosmetics
all represent material growth opportunities with
a record $89 million pipeline of new business
established. We will continue to focus on helping
our clients with their formulation challenges and
building strong partnerships with global key
accounts. Our new R&D facility in Porto is
expected to be fully operational in 2025 and will
further strengthen our customer proposition.
Stijn Dejonckheere
SVP Global Personal Care
Revenue
$217.4m
Adjusted operating profit
$61.6m
Personal Care
Operating review
Revenue by region
Asia 17%
Europe 37%
Americas 46%
1 Source: Statista.
2 Source: Euromonitor, Elementis insight.
62
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Coatings
Revenue
$386.4m
Adjusted operating profit
$78.4m
Revenue by region
Asia 27%
Europe 30%
Americas 43%
Financial performance
Overall revenue increased 5% on both reported
and constant currency basis to $386.4 million
(2023: $367.6 million), benefitting from higher
volumes and improved mix and price benefits.
Coatings also includes our specialised Energy
business, which accounts for circa 10% of total
Coatings sales.
Adjusted operating profit increased 40% on a
reported basis, up 41% on a constant currency
basis, to $78.4 million (2023: $56.1 million),
driven by self-help actions, as well as improved
volumes and mix benefits.
Self-help actions led to a significant
improvement in adjusted operating margin of
20.3% (2023: 15.3%), demonstrating the quality
and resilience of this business, amid a continued
weak demand environment.
Strategic progress
Our medium-term growth strategy for Coatings
is focused on three differentiated, technology-
led growth platforms: Architectural Coatings,
Industrial Coatings and Adhesives, Sealants
and Construction Additives.
At our 2023 CMD, we announced an ambition
to deliver above-market revenue growth across
our growth platforms, over the three years to
2026. Coatings growth platforms are expected
to deliver around two thirds of the $75 million
target by 2026. In the first year, we delivered
$20 million of above-market revenue growth,
supported by all three platforms.
The first of these, Architectural Coatings, is an
important market for Elementis. We have a big
opportunity to tap into the growing demand for
high-end paints in Asia, which is an attractive
$300 million ingredients market. To capture this
opportunity, we expanded our manufacturing
footprint in Asia, adding a new NiSAT facility in
Songjiang, China. The new facility is expected
to bring enhanced performance and
environmentally friendly benefits to the Chinese
architectural sector. In 2024, Architectural
Coatings saw 3% revenue growth, while the
market
3
reduced 0.4% globally. We saw
particularly strong growth in Asia, supported
by improved localised production as well as
innovative customised formulation solutions
for an Indian paint manufacturer.
We launched four new products, including two
RHEOLATE
®
biobased NiSATs, which are based
on a waste stream of sugarcane molasses, and
hence provide additional sustainability benefits,
without compromising on performance.
We believe that our innovative products,
alongside our manufacturing footprint across
three key regions, will support our ambition to
grow at twice the market by 2026, in this
attractive market segment.
The second growth platform is Industrial
Coatings, where we see growing demand
for more sustainable coatings and coating
additives, driven by regulations and market
trends. Here we focus on additives for
high-performance segments such as marine,
protective and automotive industries. Our
leadership position in rheology additives
supports our ability to provide full formulation
to our customers.
In 2024, Industrial Coatings revenues increased
9% against a flat global market
3
. Revenue was
higher across all regions, driven by increasing
demand for our hectorite-based solutions.
We launched two new products in 2024,
including NUOSPERSE
®
FX 7600W and
SUPREAD™ 3410, supporting the transition
from solvent-based to water-based coating
systems. Over the next 12 months, we will
complete our testing phase to refine our market
expansion strategy for the powder coating
industry, leveraging our hectorite and organic
thixotrope-based portfolio. Powder coatings do
not require solvents and the latest technology
developments are enabling lower curing
temperatures. This makes them suitable for
heat sensitive materials such as wood coatings,
creating additional growth opportunities.
Our third growth platform comprises Adhesives,
Sealants and Construction Additives, where we
offer high-performance additives for a range of
applications, for example, pressure-sensitive
adhesives, water-based construction sealants
and cement-based tile mortars. This is a market
that we are only starting to penetrate but where
our technologies bring both sustainability and
performance benefits. We are looking to double
our market share from 3% to 6% by 2026.
In 2024, we saw revenues growing 15%
(from a small base) versus global markets
4
being only marginally up. Our recent growth
has been supported by the success of our
THIXATROL
®
range, which grew over 40% in
the year, as well as hectorite-based additives.
Luc van Ravenstein
SVP Global Performance Specialties
Performance Specialties was created at
the beginning of 2023, by combining the Talc
and Coatings businesses. We will continue to
report Coatings’ and Talc’s performance
separately for transparency.
Revenue
$520.9m
Adjusted operating profit
$86.4m
Performance Specialties revenues increased 3%,
both on reported and constant currency basis,
to $520.9 million (2023: $504.1 million) and
adjusted operating profit increased 24% on a
constant currency basis, to $86.4 million
(2023: $70.1 million), driven by Coatings.
Performance
Specialties
3 Source: Orr & Boss
4 Source: Markets and Markets.
63
Operating review
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Our THIXATROL
®
ingredients are natural, safer
to handle, and provide the required rheology
profiles for the end product. Importantly, our
products can reduce in-process energy usage
by up to 80%. We see strong demand for
hectorite-based additives, where hectorite is
seen as a more sustainable ingredient, but also
one that provides additional benefits. One key
area where we see rapid growth is in hectorite
for tile mortars. This is a $100 million market,
where we are replacing bentonite-based
products and significantly improving end-product
efficiency. Innovation is crucial here, and we
have six new products in the pipeline, launching
over the next two years.
Innovation is a key driver of growth in
Coatings. We launched 12 new products in
2024, of which six were across the growth
platforms, and six targeting other markets
including new adjacencies. Here we expanded
our plastic additives portfolio with
CHARGUARD™ fire retardant synergists,
designed to enhance anti-drip and char
formation properties of non-halogenated
fire-retardants, potentially replacing certain
types of polyfluoroalkyl substances used in
this application.
Another major component of our growth
strategy is our key account management
programme. We have built strong technical and
commercial relationships with major customers
and cooperate in the development of new
formulations to enhance their products and
processes. This drives volume and revenue
growth and deepens our relationships with
major customers. This approach, combined
with our innovation focus, is helping us explore
new market segments and create new
growth opportunities.
Financial performance
Talc revenue reduced 1% on a reported
basis, down 2% on a constant currency basis,
to $134.5 million (2023: $136.5 million), with
lower volumes offsetting positive mix and price
benefit. Revenues were impacted by the Finnish
nationwide strike in H1 2024, and lower demand
across key European markets.
Talc
The overall impact of the Finnish strike on
Talc operating profit was around $3 million,
due to lost sales and higher costs, in H1 2024.
As a result, the adjusted operating profit
reduced to $8.0 million (2023: $14.0 million)
and adjusted operating margin declined to
5.9% (2023: 10.2%).
Strategic progress
In H2 2024 we put in place a dedicated
Talc sales, customer service and support
team to enable greater focus on improving
business performance. We have gained good
traction over the year, with stable trading and
have gained market share despite continued
weak market demand.
We continue to believe that Talc is a business
with strong fundamentals, and we are focusing
our strategy on higher-margin applications
that require talc of high and consistent quality.
Those include, for example, long-life plastics,
technical ceramics and barrier coatings.
In long-life plastics, our Finntalc K line boosts
plastic strength by up to 20%. In 2024, we
launched another product in this series, popular
for its highly lamellar ore. In technical ceramics,
the internal combustion engine particulate filters
require a highly engineered grade of talc to get
the right efficiency. We have demonstrated the
quality, purity and consistency needed in this
market and built a solid base. We gained good
traction with new customers this year and
continue to expand our customer base further
through tailored product developments and
high-quality service.
In August, we announced a strategic review
of the Talc business, to establish whether the
full potential of Talc can best be delivered as
part of Elementis, or via a divestment.
In September 2024, the RAC recommended
that talc be classified as carcinogenic.
This opinion has been adopted by the RAC
but not published and a final decision is
expected at the earliest in H2 2026.
Due to the ongoing strategic review of Talc,
we now exclude the Talc growth platform from
our overall 2023 CMD growth programme.
Operating review
Revenue
$134.5m
Adjusted operating profit
$8.0m
Revenue by region
Asia 14%
Europe 79%
Americas 7%
64
Our risk management framework
Risk management
CEO
The CEO is responsible
for implementing
Group policies,
risk management
performance,
identifying principal
risks and ensuring
that resources are
allocated for effective
risk management
and mitigation.
Audit Committee
The Audit Committee
supports the Board
andhasspecific
responsibility for
monitoringfinancial
reporting as well as the
internal and external
audit programmes,
one of the primary
purposes of which is
to provide assurance
onfinancial,operational
and compliance controls.
ELT individuals
and risk
champions
ELT members have
responsibility for
managing and
monitoring risks
relevant to their
business or function
on an ongoing basis,
and work with the
support of risk
champions to
further embed risk
management within
the organisation.
Top-down
Oversight,identification,
assessment and
mitigation of risks
ataGrouplevel
Bottom-up
Identification,assessment
and mitigation of risks
across operational
andfunctionalareas
Board
The Board has overall responsibility for risk management and sets the Group’s policies,
culture and tone on risk as well as provides oversight to management.
Operational and supporting functions
Data Protection Steering Committee, HSE Council, Manufacturing Council, Ethics
and Compliance Council, Environmental Sustainability Council, Diversity, Equity and
Inclusion Council, Investment Commitment Forum (Capital expenditure and allocation),
Product Stewardship & Regulatory Affairs, and Internal Audit.
The more clearly we understand risk, the better we become at
taking opportunities. Elementis monitors risk using a framework
that operates consistently throughout all of our divisions and
businesses, so that even with a devolved operating model,
we have a consistent approach. Managing risk is about putting
the business in the best position to make well-informed decisions
that move the Group forward. Risk management creates value
by enabling pursuit of our strategy, with a full and balanced
picture of the potential impacts.
Our framework for risk management
Elementis faces a number of risks, uncertainties and opportunities
in the ordinary course of its operations. The effective identification,
mitigation and ongoing management of these risks underpins the
delivery of the Group’s strategic objectives.
Elementis has an established risk management framework and
system of internal controls to support decision-making throughout
the financial year. Risk management systems are intended to
mitigate and reduce risk to the lowest possible level, as the
complete elimination of all risks is not possible. Risk management
processes can therefore provide only reasonable assurance
against material misstatement or loss.
The Board has overall responsibility for risk management and sets
the Group’s policies, culture and tone on risk as well as provides
oversight to management. A comprehensive risk management
framework is in place to identify, assess, mitigate and monitor
the risks faced.
The Company places the highest priority on preventing loss
of life, harm to people and the environment, legal and regulatory
breaches, and damage to reputation or brand. The Group has
in place policies, procedures and guidance in order to help the
ELT and employees manage risk in these areas.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 65
How we manage risk
For us, managing risk is about putting ourselves in the best position to make
well-informed decisions that move Elementis forward. Risk management
creates value by enabling us to act in pursuit of our strategy, with a full and
balanced picture of the potential impacts.
Risk heat map (gross impact)
Principal risks
1
Global economic conditions
and competitive market
pressures
2
Business interruption as a
result of supply chain failure
ofkey raw materials and/or
third-party service provision
3
Cyber security, IT networks,
data security and privacy
4
Regulatory compliance and
product stewardship
5
Business interruption as a
result of a major event or
anatural catastrophe
6
Major regulatory enforcement
action, litigation and/or
other claims arising from
products and/or historical
andongoingoperations
7
Intellectual property and
know-how/protection
8
Portfolio innovation and
technology
9
Health and safety
10
People, talent and succession
Change vs 2023
=
Same
+
Increasing
-
Decreasing
High
Medium
Low
Low Medium
1
2
4
3
5
6
7
8
9
10
High
Probability
=
=
=
=
=
=
+
+
-
Impact
The second line of defence is provided
by the oversight functions, which review
and monitor current and emerging risks
using a bottom-up and top-down
approach and provide relevant
frameworks, policies and processes
for managing those risks.
Our first line of defence is our
employees. They have a responsibility
to manage day-to-day risk in their
own areas, guided by Group policies,
procedures and control frameworks.
Local management, and ultimately the
ELT, ensure that risks are managed,
maintained, reviewed and actioned
according to these frameworks.
The third line of defence is assurance
over the effectiveness of mitigating
controls. This is provided by internal
and external assurance providers,
which are reviewed by management
and monitored and challenged by the
Audit Committee and the Board.
2 Second-line roles:
Oversight functions
1 First-line roles:
Business operations
3 Third-line roles:
Internal audit
=
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 66
Risk management
Risk culture
Every individual at Elementis has a responsibility
to manage risk, irrespective of function,
business or role. Risk awareness exists
throughout decision-making processes and
is embedded in systems, policies, procedures,
leadership and behaviours, and specific
standards such as the Code of Conduct.
All employees are responsible for complying
with related Group policies and guidance and
share responsibility for ensuring that the Group
conducts its business in a safe, lawful and ethical
manner. Managing risk is about process, but
also culture. It is not just an activity for
professionals and committees with risk in their
title; it involves the whole business. We look to
give colleagues autonomy, which means the
people closest to our customers and markets
can take their own decisions. Our divisions have
their own business strategies and are required
to identify and manage risks, and to put in place
controls and action plans.
Risk appetite and tolerance
Risk appetite at Elementis is understood as
being the amount of risk that the Board is
prepared to accept in return for reward. There
is a degree of variability in determining risk
appetite, which may be based on strategic
objectives, as well as guidance from management
or advisers with an understanding and analysis
of the nature of the risk. The strategic appetite
for risk is decided on a case-by-case basis at
Board level - for example, with respect to a
corporate transaction or significant capital
expenditure project – and delegated to the ELT
to implement as appropriate. The maximum
risk that can be taken before the Group
experiences financial distress is also decided
at Board level and mitigated, as far as possible,
by internal controls, business continuity plans,
insurance, financial instruments and contracts.
Our risk review processes
Our Risk Management Policy defines our
approach to risk management. The Board
maintains an annual forward planner to ensure
that appropriate time is allocated at scheduled
meetings to discuss, review and monitor business
and operational performance, strategic priorities,
governance, compliance and risk matters.
This approach enables the Board to engage
directly with each of the business units and
functional departmental leaders.
Each ELT member is responsible for identifying,
assessing and monitoring their respective
business and functional risks as well as
measuring the impact and likelihood of the
risk to the business. Each identified risk is
categorised as strategic, commercial,
operational, financial or compliance.
On an annual basis the ELT collectively reviews
the enterprise risk universe and the Board carries
out a review of the principal risks and uncertainties.
Key risk changes and uncertainties
in 2024
During 2024 the Board carried out two
comprehensive reviews of the Group’s principal
risks: being those which, if they were to
materialise, could have a significant impact
on the Group’s ability to meet its strategic
objectives over the medium term.
The risk heat map identifies the key risks,
pre-mitigation, that management consider
most impactful to the Group’s business model
and the delivery of its strategic objectives.
Movements on the risk heat map reflect
changes to the risk environment since
31 December 2023. The likelihood and
impact of certain risks has changed but our
work to mitigate them has kept pace.
Ships, boats, bridges and offshore structures are facing daily challenges like saltwater exposure, UV radiation,
and constant mechanical stress. Our additives are designed to meet these demanding performance criteria
in the marine coatings sector. Our low-temperature-activated organic thixotropic agents known as THIXATROL
®
contribute to the reduction of energy consumption in the production process and lower carbon emissions.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 67
Risk management
The key risk changes and uncertainties
in 2024 were:
Decreased health and safety risks
Our success in reducing health and safety risks
is in large part due to the implementation of
robust management systems, clear safety
culture programmes, robust risk management
processes, and a continued intense focus on
process safety. Our TRIR in 2024 was 45% lower
than in 2023
Increased cyber risks
Cyber risk is ever-present on all businesses’
radar and has increased since 2023. The digital
environment, and the risks that come with it, are
fluid and fast-moving. Cyber security remains a
substantial risk to Elementis. An updated set of
security objectives that align the overall industry
landscape was identified and defined during
2024, with information security prioritised as
a critical function. The Board reviewed a
comprehensive multi-year strategy in which
cyber security is a cornerstone. Continuous
process improvements and enhanced security
controls were implemented, and a ‘secure
by design’ approach is being rolled out.
Furthermore, a full migration to a ‘Zero Trust
Network Architecture’ is under way.
Management remains vigilant in identifying
potential cyber threats
Increased regulatory risks
Regulatory compliance risks increased in 2024
principally as a result of the recommendation
to classify talc as a possible carcinogen by the
ECHA RAC. Legal proceedings continued in
relation to the Group’s expansionary mining
permits in Finland. The Company continues to
enhance its ‘Responsible Mining’ programme
and, as part of this, to engage with local
stakeholders in Finland
People risk uncertainty
People, talent and succession risks remain
in line with 2023. The Fit for the Future
programme is nearing completion, but the Talc
strategic review and CEO succession process
add a degree of continued risk. Mitigations
have been put in place which include adequate
handover periods between departing employees
and new hires, detailed knowledge transfer
plans, retention incentives where appropriate,
and external resource to manage workload.
The Nomination Committee is responsible for
the CEO succession process. The Board
maintains close oversight over the Fit for the
Future programme and Talc strategic review
Economic pressures and cost reduction
Inflationary pressures continued to impact the
macroeconomic environment in which the
Group operates. During 2024, management
focused on cost-reduction initiatives to help
mitigate such pressures. In particular, the Group
continued its Fit for the Future programme,
which will deliver over $20 million of cost savings
by the end of 2025
There have been no material changes to the
risk profiles for the other principal risks, although
management continues to monitor and review
as appropriate.
Climate change
Climate-related risks and opportunities are
an important consideration for the Group.
Management’s response is a crucial part of
the Group’s business strategy, shaping both
how products are designed and how they
are brought to market. Climate change also
brings opportunities; for example, some of
the Group’s products can contribute to lower
energy and resource use. Elementis has
an ambition to reach Net Zero by 2050,
and during 2025 management will publish
an SBTi-validated science-based target for
GHG reductions, covering our operational
and value chain emissions.
The Group assesses climate-related risks using
the same impact criteria as for the rest of its
enterprise risks.
Management have used climate scenarios from
NGFS to help understand how climate risks
change in different futures and time horizons.
Climate change has been identified as a
contributing factor to many of our principal risks
and long-term uncertainties.
Internal control
The key elements of the Group’s internal control
framework are monitored throughout the year.
The Audit Committee has conducted a review
of the effectiveness of the Group’s risk
management and internal control systems on
behalf of the Board.
To support the Board’s annual assessment,
a report is prepared by the Global Head of Risk
and Controls on the Group’s principal risks and
internal controls. The report sets out the Group’s
risk management systems and key internal
controls, as well as the work conducted in
the year to assess and improve the risk and
control environment.
The internal control framework is intended
to effectively manage, rather than eliminate,
the risk of failure to achieve business objectives.
It can only provide reasonable, not absolute,
assurance against the risk of material
misstatement or financial loss.
In accordance with the Financial Reporting
Council’s (“FRC’s”) guidance on Risk
Management, Internal Control and Related
Financial and Business Reporting, the Board
confirms that there is an ongoing process for
identifying, evaluating and managing the
principal risks faced by the Group. This process
has been in place for the year under review
and up to the date of approval of the Annual
Report and Accounts. The process is regularly
reviewed by the Board and accords with the
relevant guidance.
Priorities for 2025
Successful execution of the Fit for the
Future programme
Assessment of the opportunities and risks
posed by AI
Continued horizon scanning for new and
emerging risks and detailed proposed plans
for mitigating such risks
Further enhancements to the risk
management framework, including more
systematic assessment of sustainability risks
in the Group’s supply chain, in line with
corporate governance best practice
Finalising the Group’s SBT for GHG emissions
reduction, thereby helping to minimise
exposure to climate change risks and
support climate change mitigation actions
Implementation of a partner risk assessment
programme for supplier selection
Fully embed a database to more effectively
manage and review the Group’s harmonised
tariff codes
Leverage our outsource provider to
streamline, automate and conform our
control processes globally
Continue to work constructively on the
challenges to the Group’s Finnish mining
permits, combined with wider stakeholder
engagement to underpin the Group’s
commitment to responsible mining
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 68
Risk management
Our emerging risks
Management continues to consider how the
Group could be affected by emerging risks over
the longer term and how strategic, market and
customer initiatives might manage risks and
seize new opportunities. It is often possible to
identify the potential impacts of emerging risks,
but it is more challenging to predict their
financial impact, likelihood and timeframe.
We define emerging risks as upcoming events
which present uncertainty.
Emerging risks and opportunities are identified
and documented through the existing risk
management framework using a variety of
horizon-scanning methods, such as monthly
performance calls with each business unit,
including deep dives on new business
opportunities, supply chain resiliency and
procurement matters, annual and five-year
financial plans and budgets, Board, ELT and
other internal governance forums, customer
and market insight, industry-specific data, and
materiality assessment with regard to ESG.
Emerging risk management ensures potential
risks are identified, with plans evaluated in case
they were to materialise. These emerging risks
may not be fully quantifiable but are closely
monitored. Our processes aim to identify new
and changing risks at an early stage and
analyse them thoroughly to determine the
potential exposure. We continually identify and
monitor emerging risks using our top-down
and bottom-up processes.
The table opposite provides examples of
emerging risks.
Risk Detail
Relevant
principal risk
Relevant
strategic objective
Time
horizon
Escalating global
geopolitical
tensions and
supply chain
disruption
Ongoing conflicts around the world could intensify and
spread, with possibilities for sanctions to discourage
further escalation and increase pressure on supply chains
Supply chain shortages and resource security pressures
increase commodity prices and could result in an
economic slowdown
State-sponsored cyber attacks target key sectors,
including the specialty chemical industry
1
2
5
Short-term and
medium-term
AI-driven
innovation
AI presents many opportunities, but needs to be
developed in an ethical way to mitigate against potential
data security and cyber attack risks and address growing
concerns across consumer groups. We expect further
legislation following the EU AI Act 2023, the first regulation
on artificial intelligence
AI-generated content becomes more prevalent with the
possibility of spreading misinformation
Increased processing power will automate basic activities
and support decision-making
3
Short-term and
medium-term
Evolving
legislation
Changing legislation to reduce the use of chemicals
deemed to be negatively impacting the environment,
nature or human health
Persistence of PFAS has become an area of concern and
our research is developing alternative solutions to this class
of materials
Tighter reporting requirements and greater public focus
on environmental performance
4
6
7
8
Medium-term
and long-term
Innovation Growth Efficiency
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 69
Risk management
Description of risks
The performance of the specific end-user markets
served is affected by macroeconomic conditions.
Adverse developments that may result in a downturn
in macroeconomic conditions, or in the industries in
which our customers operate, may include political
uncertainty, retaliatory tariffs or other disputes between
trading partners.
Suboptimal global economic conditions can affect
sales, raw material costs, foreign exchange rates,
capacity, utilisation and cash generation, which can
impact the financial health of the Group.
Increased competitive pressure in the marketplace can
result in significant pricing pressure and loss of market
share. The impact of non-delivery of operating plans
can lead to market expectations of Group earnings not
being met, and slower delivery of strategic priorities.
Links with climate change
The global response to climate change introduces
additional uncertainties in macroeconomic and market
trends which may have both positive and negative
impacts on the Group. Customers increasingly
collect climate-related information in preparation for
future sourcing decisions. The Group understands
its emissions footprint, including Scope 3, and aims
to reach Net Zero emissions by 2050. Management
are progressing the quantification of carbon and
environmental footprints at a product level to better
demonstrate impact and progress.
Controls and mitigating activities
Financial performance (monthly sales, profit and
cash flows, and position against key banking
covenants) is closely monitored with full-year
scenario planning of key risks, regular reforecasts
and prompt investigation of variances
Contingency and cost reduction plans can be
implemented in the event of an economic downturn
to reduce operating costs, including non-essential
capital expenditure items and discretionary spend
Interest, currency and commodity hedging actions
are taken as appropriate to mitigate the impact of
rising interest rates and inflation
Global key account management programme
to deepen existing relationships with our largest
customers and help to pre-empt end-market changes
Balanced geographic footprint and supply chain
andbroad differentiated product offering across
different sectors
Developments in year
Continued focus on cost reduction, capital
expenditure effectiveness, working capital and
discretionary spend
Price rises implemented to mitigate the impact of
raw material, logistics and energy cost increases
Emerging risks
Increase in commodity prices and imposition of
tariffs could result in an economic slowdown
Description of risks
The Group is dependent on raw materials from various
sources. In the event of a long-term supply disruption,
or market volatility, it may not be possible to secure
sufficient supplies of raw materials from alternative
sources on a timely basis, or in sufficient quantities or
qualities, or on commercially reasonable terms. The
lead time and effort needed to establish a relationship
with a new supplier could be lengthy and could result
in additional costs, diversion of resources and reduced
production yields.
Links with climate change
Climate change will increase the severity of extreme
weather events that may result in supply chain
disruption. Elementis manages its supply chain through
maintaining minimum stock levels and qualifying
multiple suppliers.
Controls and mitigating activities
Review of single-source materials; find and
qualifyalternatives
Market research to understand and monitor the
impact of short-term events
Recalibration of inventory stock levels and lead
times on a regular basis
Business continuity scenario planning overseen
bythe ELT
Proactively identify and mitigate risks across the
supply chain
Implement robust contingency plans to address
potential disruptions and maintain resilience
Increase flexibility in the Group’s manufacturing
network to supply products from different regions,
including new manufacturing locations
Developments in year
Continued leverage of strategic supplier
relationships to secure required raw material volume
Accelerated production qualification programme to
ensure the ability to redistribute production volume
across our global manufacturing network
Continued focus on qualification of new sources
ofsupply
Enhancement of the Group’s global supply chain
and procurement teams
Continued focus on the Group’s Global Supply
strategy to ensure a resilient global production
footprint, enabling Elementis to continue to produce
as new risks materialise in the years to come
Implementing strategic stock methodology and
process for supply chain disruptions, enhancing
data analytics capabilities, upgrading visualisation
tools, and improving our enterprise resource
planning to spot potential supply chain bottlenecks
early and take proactive measures to improve the
supply chain resiliency
Emerging risks
None noted.
Global economic conditions and competitive
market pressures
Business interruption as a result of supply chain failure
or key raw materials and/or third-party service provision
1 2
Link to strategic objective: Movement in year: Link to strategic objective: Movement in year:
= =
Principal risks and uncertainties
Innovation Growth Efficiency
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 70
Description of risks
The Group increasingly relies on IT systems for its
internal communications, controls, reporting, and
relationships with customers and suppliers.
A significant disruption could cause delays to key
operations and an inability to meet customers’
requirements, thereby resulting in increased operating
costs, legal liability and reputational damage.
Furthermore, ongoing developments in data protection
and information security legislation globally have
created a range of compliance obligations with
increased financial penalties for non-compliance.
Cyber security continues to be an increasingly
significant risk to the business, and there remains
ongoing work to review and strengthen the Group’s
security systems.
Links with climate change
Not applicable.
Controls and mitigating activities
Security controls, including policies and procedures,
staff awareness and training, and risk management
and compliance processes
Regular IT, cyber and data protection updates to
the Board
Business continuity and emergency response plans
for each manufacturing site
Regular internal audit reviews
Privacy and data protection platform
Developments in year
Dedicated Information Security Officer appointed
Continued phishing simulation exercises to raise
awareness and assess training needs
Revision and hardening of key controls on critical
communications infrastructure
Improved data protection through enhanced
accesscontrols
Conducted a comprehensive risk assessment and
evaluation of our current security posture
Identification of gaps and vulnerabilities
Planning for the upcoming regulatory compliance
requirements
Emerging risks
Global geopolitical instability, characterised by the
increasing emergence of actor-states, presents a
growing set of challenges
The increasing utilisation of artificial intelligence
for either automating attacks or forging content by
threat actors
Malicious actors are increasingly targeting third-party
vendors and suppliers as a means of infiltration,
elevating the threat of supply chain attacks to a
pre-eminent cyber security concern
Description of risks
Emerging and existing regulations in global markets
can lead to hurdles and additional costs in delivering
on strategic objectives. Non-compliance or suspected
non-compliance could lead to regulatory action.
Links with climate change
Management are preparing for full ISSB and
CSRDcompliance.
Controls and mitigating activities
The Global Product Stewardship & Regulatory
Affairs team oversees, manages and monitors
regulatory developments in current and new
markets and materials
SDS, labels and regulatory information are provided
for global customers specific to the requirements in
their jurisdiction
Active compliance and risk management
programmes are in place, including policies,
procedures and training
Regulatory compliance and product stewardship
risks updated and reviewed with the Board
Brazil, UK, Türkiye and South Korea REACH
planning and assessment of impact
Ingredient notifications in existing markets with new
requirements were completed
Ongoing support of manufacturing optimisation
change through regulatory activities
Membership of the European talc industry’s
representative body for regulatory and scientific
matters, Eurotalc, through which the Group is able
to contribute to advocacy in relation to the adverse
impacts that would result if the draft opinion of the
ECHA RAC were ultimately adopted
Developments in year
Legal proceedings continued in relation to the
Group’s expansionary mining permits in Finland.
The Finnish Supreme Court upheld the validity
of the Group’s mining permit for one of its mines,
and proceedings are ongoing in relation to the
environmental permit for the expansion, witha
decision expected between 2025 and 2026.
TheSupreme Court separately rejected an appeal
by the Group for the reinstatement of its permit to
expand operations at another of its Finnish mines.
The Company continues to enhance its Responsible
Mining programme and, as part of this, to engage
with local stakeholders in Finland
In September 2024, the ECHA RAC adopted an
opinion on the EU harmonised classification of talc,
and recommended a classification as “STOT RE 1,
H372 (lungs, inhalation)” and as a “presumed
carcinogen to humans of category 1B, H350
(maycause cancer)”. The full written opinion has
yet to be published and is not legally binding.
The opinion is expected to be considered by
the European Commission in 2026, before a
decision is made on whether or not to adopt the
RAC’s recommendation by way of an amendment
to EUregulation. The Group, together with
EUROTALC, disagrees with the opinion and asserts
that the available evidence shows that talc does not
meet the classification criteria for carcinogenicity
Emerging risks
Polymers will be included in the scope of the EU
REACH regulation from 2025, resulting in extra
physical chemical testing requirements
Cyclical silicone materials will be restricted in the EU
from 2026 for personal care and cosmetic products
Cyber security, IT networks,
data security and privacy
Regulatory compliance and
product stewardship
3 4
Link to strategic objective: Movement in year: Link to strategic objective: Movement in year:
Innovation Growth Efficiency
+ +
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 71
Principal risks and uncertainties
Description of risks
The ability of the Group to manage its operations
successfully and achieve performance in line with its
strategy, business plans and budgets depends on
the efficient and uninterrupted operation of planning
processes, operational delivery capabilities and the
internal control environment. Production facilities
maybe subject to planned and unplanned shutdowns,
turnarounds and outages, including for natural
catastrophes, weather, climate change or disruption
associated with transportation, utilities and distributors,
which could result in increased costs in securing
alternative facilities, and lead to significant delays in
increasing production or customer qualification.
A major event is categorised as an operational, HSE,
transport or workplace incident caused by system
failure and/or human error, or by fire, storm, flood
orpandemic.
Links with climate change
Climate change is likely to increase the severity of
extreme weather events which may result in operational
disruption. Elementis’ sites are designed and
maintained to withstand extreme weather. We review
weather disruptions, risks and local mitigations annually
with site management, and use the NGFS climate
impact explorer tool and WRI Aqueduct tool to explore
physical risks at our locations. The Group’s supply
chain management ensures minimum stock levels.
Controls and mitigating activities
Preventative maintenance, holding critical spares,
and process and other safety procedures to mitigate
the effects of a major incident
Property damage and business interruption
insurance coverage
Each site has developed a business continuity plan
that includes emergency response and business
recovery protocols, annual reviews, periodic
updates, training, and practising the plan via
periodic drills or table-top exercises
Management verify the emergency response and
crisis preparedness elements of business continuity
through the HSE compliance auditing process
Business continuity scenario planning overseen
byELT
HSE management programme includes corporate
compliance audits and insurance property surveys
HSE matters reviewed by ELT on a monthly basis
Developments in year
Internal audit review of certain manufacturing sites
Focus on operational reliability and process safety
management
Insurance property survey recommendations
adopted and tracked
Emerging risks
Ongoing conflicts around the world could intensify
and spread, with possibilities for sanctions to
discourage further escalation and increase pressure
on supply chains
Description of risks
The scale and complexity of the Group’s operations
means that it is subject to a wide range of international
regulation spanning all aspects of its business. The
regulatory sphere includes multiple corporate taxation
regimes, national and supra-national anti-corruption, fair
competition and data privacy laws, as well as applicable
environmental regulations and standards relating to the
Group’s past and present operations. Failure to comply
can lead to complex cross-border claims, litigation,
damages, fines, penalties and remediation orders. The
Group may be involved in legal proceedings and claims
within the ordinary course of business, including legacy
claims in relation to businesses that have been acquired
or disposed of bythe Group. Adverse results in legal
proceedings could result in reputational and financial
damage, loss of business, and diversion of management
time and resources.
Links with climate change
Not applicable.
Controls and mitigating activities
Cross-functional expertise including Legal,
Compliance, Finance, HSE, and Product
Stewardship & Regulatory Affairs, supported by
external consultants and advisers, actively monitor
emerging risks and ensure effective controls over
known risks
Products are routinely and rigorously tested to
thehighest standards
Continuous evolution of the global compliance
programme to identify, address, monitor and
mitigate compliance risks, including through
newprocesses, training and other activities
Insurance programme and risk transfer strategy
inplace to mitigate potential financial losses
Audit Committee and Board exercise oversight through
regular reports on all threatened and actual litigation
from the Group General Counsel & Company Secretary
Employees are subject to a range of policies and
procedures setting out required behaviours and
standards, and consequences for non-compliance
The Ethics and Compliance Council, chaired by
the Group General Counsel & Company Secretary,
meets regularly to monitor the Group’s compliance
culture and ensure that ethics and compliance
considerations are appropriately weighted in
business decisions
The Cyber, Data Protection and Information
Governance Steering Committee meets regularly
to oversee compliance with applicable data privacy
laws
Regulatory compliance and product stewardship
risks continue to be updated and reviewed with the
Board as new risks arise and new developments
are made on ongoing issues. Working groups are
inplace for a number of regulatory areas
Developments in year
Customer and Supplier Risk Screening Policy
launched in late 2023 fully embedded
The Group received a formal legal request
(asubpoena) to provide information regarding the
US class action litigation in relation to ‘hair relaxer’
products. Elementis initiated a review of historical
responsive materials and will cooperate in full with
the subpoena request as appropriate, although
theGroup is not a defendant in the class action
Emerging risks
Xylene is used as an industrial solvent in several
Performance Speciality products. Cumene is an
impurity in xylene. Cumene was included in the
EU Classification and Labelling Directive 1272/2008
under Amendment to Technical Progress number
18. It will require labelling in Europe. European
procurement is sourcing low cumene for European
products while Asia and the Americas are
monitoring the supply chain
Business interruption as a result of
a major event or a natural catastrophe
Major regulatory enforcement action, litigation
and/or other claims arising from products and/or
historical and ongoing operations
6
Innovation Growth Efficiency
5
Link to strategic objective: Movement in year:
Link to strategic objective: Movement in year:
=
=
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 72
Principal risks and uncertainties
Intellectual property and
know-how/protection
Innovation Growth Efficiency
=
7
Link to strategic objective: Movement in year:
Description of risks
Failure to adequately protect and preserve intellectual
property (“IP”) and proprietary know-how in both
existing and new markets could harm the Group’s
competitive position.
Links with climate change
Not applicable.
Controls and mitigating activities
Active management of the Group’s trademark
portfolio via an internal Trademark Committee
(“TMC”), attended by the Group’s external
trademark advisers and comprising the business
segment’s marketing directors, corporate
communications and legal teams. The TMC
meets regularly to take decisions in relation to
the registration of new trademarks and defensive
activity in relation to existing trademarks. The TMC
is supported by a global network of trademark
agents who represent the Group’s interests in all
relevant jurisdictions
The Group’s Science Director works closely with the
legal team and external patent attorneys to ensure
emerging inventions are appropriately protected
Employees are trained on the importance of
appropriate handling and disclosure of proprietary
and confidential information
The legal team reviews confidentiality agreements
entered into by the Group to assess the suitability
of the proposed purpose and the duration of the
confidentiality obligations. A central record of all
confidentiality agreements entered into globally
ismaintained by the Legal team
Patent and IP disclosures to keep distinction in new
launches and enforcement of proprietary advantage
have now become a standard practice
Contentious IP matters are reported to the
AuditCommittee and Board
The Group’s stage gate system incorporates IP
andfreedom to operate as requirements to launch
new products
Developments in year
Annual patent portfolio review undertaken to monitor
our portfolio and manage out obsolete patents
Conducting ‘freedom to operate’ earlier in the
innovation process to avoid false starts and avoid
potential patent issues with external parties
Emerging risks
New personnel onboarded in Portugal. Training
has been implemented to ensure the Group’s strict
guidelines are followed
8
Portfolio innovation
and technology
Link to strategic objective: Movement in year:
=
Description of risks
The ability of the Group to compete is highly dependent
on its ability to meet the changing needs of customers
and keep pace with technological innovations and
sustainability trends.
New or substitute products and technologies
developed by competitors could erode the Group’s
ability to compete and lead to declines in sales and
market share.
Links with climate change
Climate change and increased focus on sustainability
drives demand for products with lower climate
impactsand more efficient resource use. We are
increasing the range of products offered with a high
naturally-derived material content and are increasing
our use of waste aluminium in place of virgin aluminium
in antiperspirants. In addition, management are
assessing the Group’s product portfolio in a systematic
way to identify and prioritise further opportunities to
improve sustainability.
Controls and mitigating activities
The global R&D team aims to develop new products
and technologies to meetthe changing needs of
theGroup’s sophisticated customers
Collaborative relationships with customers and
industry formulators ensure efforts are aligned
withthe latest market trends
Use of an innovation tool to manage stage gate
process, with systematic prioritisation to deliver
high-value solutions for the market
The Group’s proprietary hectorite and talc assist in
consistent delivery of high-performance innovation
Leverage of existing portfolio technologies to enter
into new market adjacencies where our product
performance can deliver additional value
Developments in year
22 new products launched in 2024
Innovation roadmap with strategic partners
toleverage existing technologies
Supporting production facilities to ensure a second
source of key raw materials, and introducing new
technologies and new process improvements while
ensuring consistency and safety
Emerging risks
None noted.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 73
Principal risks and uncertainties
Innovation Growth Efficiency
Health and safety
9
Link to strategic objective: Movement in year:
–
10
People, talent and succession
Link to strategic objective: Movement in year:
Description of risks
The Group operates in highly competitive labour
markets and relies on the expertise and services
oftalented individuals and teams to succeed.
Loss of key people or disruption to teams without timely
action could result in disruption to business operations.
Links with climate change
Employees increasingly wish to contribute to
addressing climate change. The Group’s sustainability
strategy and commitment to reduce GHG emissions
in line with science supports the employee value
proposition.
Controls and mitigating activities
Performance management process for all
employees to set goals aligned to key priorities and
actions for personal and professional development
Career profile allowing employees to create their
personal profile and future aspirations
Succession planning to build a diverse leadership
pipeline. All senior leaders are reviewed twice a year
by the ELT, and the ELT are reviewed once ayear
by the Board
Measurement of employee engagement to create
actionable plans, with all employees surveyed twice
a year
People manager training and toolkits empowering
growth and impact
Unlimited access to LinkedIn Learning to allow
employees to expand their skills based on
their own learning needs, and access to the
Gallup Portal for all managers to build skills
onemployeeengagement
Flexible working in line with business needs and
local market practice
Extensive communication to employees globally,
regionally and locally
Retention packages for key employees
Developments in year
Updated intranet with enhanced search tools
andaccessibility
New mindfulness and wellbeing programme
introduced with regular global workshops
Diversity, Equity and Inclusion Council redesigned,
with regional leaders and local champions
supplementing global initiatives such as Women
inLeadership
Engagement survey in collaboration with Gallup
administered twice per year, with feedback provided
to all employees and a focus on action planning
specific to each team’s results
Performance management approach continues
to focus on balance of task-orientation and
engagement and development
Global and local people manager training sessions
continue to be conducted in local languages,
aligned with the specific needs of people managers
HET training using Clifton Strengths was developed
and implemented with leadership teams in multiple
functions
Continued enhancements to succession planning
in order to improve internal talent development
andprogression
Orderly transition to the new, post Fit for the Future,
organisation, with over 100 new hires onboarded in
Portugal, including newleaders in IT, R&D and HR
Emerging risks
Delays in opening of new office and laboratory
in Porto. This has been mitigated by the use of
temporary office and laboratory facilities to ensure
business continuity
Uncertainty created by Talc strategic review
Uncertainty created by CEO succession process
=
Description of risks
The inherent nature of manufacturing activities,
such as material handling, production, storage and
transport, has wide-ranging occupational safety and
process safety risks. Failure to recognise, evaluate
and mitigate health and safety risks would leave the
Group vulnerable to employee and contractor injuries,
lost production time, equipment damage, impact
to the community, potential regulatory compliance
challenges, and reputational damage.
Links with climate change
Not applicable.
Controls and mitigating activities
Safety leadership – HSE certification process
required for all site leaders, setting clear
expectations of their responsibility for ensuring
employee safety and providing them with leadership
training/tools
Focused global HSE strategy and roadmap aligned
with goals and incident trends, and establishment
ofmeaningful leading andlagging KPIs
Compliance and insurance audits, root cause
analyses, management of change, routine
inspections, risk assessments, training, contractor
management and work permits
Safety culture promotion – increased employee
engagement via an incentive programme
promotingsafety through Stop Work Authority,
near-miss reporting, hazard recognition, inspections
and riskassessment participation
Continued training on hazard recognition to improve
employee awareness and mitigation of hazards
Process safety management – Phase 2 process
improvement plans for all high-risk tasks
throughprocess hazard analyses and ensuring
equipment mechanical integrity through capital
investment, equipment assessments and suitable
preventative maintenance
Developments in year
Improved accountability and analytics in the
management of HSE and quality incidents,
actiontracking, audit management, and
regulatorycompliance
Increased use of innovation and technology for
incident reporting and trending in the prevention
ofincidents
Continued development of a global HSE framework
aligned to ISO standards and publication of
life-critical HSE standards. A total of six global
standards developed and implemented across
alllocations
Fourth annual Global Health, Safety and
Environmental (HSE) Week, including technical
speakers and local activities. The week was
expanded to highlight all three elements of HSE
– health, safety, environment – with the key aim
beingto increase awareness of the importance of
worker safety in the workplace and address climate
change impacts
Implementation of a new audit and inspection
management system to track and schedule audits,
assign responsibilities and track corrective actions
to completion
Implementation of a formalised process safety
management network including quarterly meetings
and integration of a global dashboard for increased
accountability
Embedding TogetherSAFE, our value for safety,
intoour work planning and business processes
and holding our fourth annual CEO TogetherSAFE
Award promoting team safety initiatives
Emerging risks
Increased number of fires. Incident learnings are
being implemented at a site level and a global fire
and explosion standard is being established within
the required safeguards
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 74
Principal risks and uncertainties
Viability and going concern statement
Going concern
The Directors are satisfied that it is appropriate for the Group and the Company to adopt the going
concern basis of accounting in preparing these Group and parent company financial statements and
that there are no material uncertainties impacting the ability of the Group and Company to continue
to operate over a period of at least 12 months from the date of approval of these financial statements.
To support this assessment the Directors produced three models, covering a future period of five years
from the date of these accounts, demonstrating the position of the Group regarding its two financial
covenants, net debt/EBITDA and interest cover, at each measurement period for the 12 months
following the date of signing of these accounts and annually thereafter. These models comprised:
A base case scenario, aligned to the latest Group annual operating plan for 2025, as well as the
Group’s five-year plan;
A possible downside scenario that assumes the global economic environment is severely
depressed over the assessment period; and
A reverse stress test, flexing sales to determine what circumstance would be required to breach
the financial covenants.
No breaches in the required covenant tests were reported during the year, and under both the base
case and severe but plausible downside scenarios, the Group is expected to remain within its
financial covenants throughout the going concern period. The conditions necessary for the reverse
stress scenario to be applicable were deemed to be remote.
The Directors also considered factors likely to affect future performance and development, the
Group’s financial position, the current excess liquidity position, the high level of cash conversion
and the principal risks and uncertainties facing the Group, including the Group’s exposure to credit,
liquidity and market risk and the mechanisms available for mitigating these risks.
The Group’s net debt position as at 31 December 2024 was $157 million. It has access to a
syndicated revolving credit facility of $250 million, which expires in June 2028, and long-term loan
facilities of $75 million and €142 million which have an expiry date of June 2026.
The Group had further borrowing facilities available to it, aside from the syndicated revolving credit
facility (“RCF”) and term loans, of over $6 million as at 31 December 2024.
In conclusion, after reviewing the base case scenario, the severe but plausible downside scenario
and considering the likelihood of the reverse stress test scenario occurring to be remote, as well as
having considered the uncertainty relating to the Group’s principal risks and the mitigating actions
available, the Directors have formed the judgement that at the time of approving these consolidated
financial statements, there are no material uncertainties that cast doubt on the Group’s going
concern status for next 12 months and that it is therefore appropriate to prepare the consolidated
accounts on the going concern basis.
Business viability assessment
The basis of the assessment included a detailed review of strategic and operating plans, underpinned
by five-year financial forecasts, including profit and loss and cash flows. Consideration was given to
capital expenditure, investment plans, returns to shareholders and other financial commitments, as
well as the Company’s debt-bearing capacity, its financial resources, borrowings and the availability
of finance. No review of business plans and financial forecasts would be complete without a robust
assessment of the risks and opportunities in such planning models and the assumptions used.
The review included consideration and discussion of the materials prepared and presented to the
Board by management and its advisers (where appropriate), as well as additional information
requested by the Board.
The Board’s programme of monitoring major risks is an important component of the business viability
assessment and the financial impact of the principal risks was modelled over the five-year period.
Business and segment growth scenarios, rate of return on investments, assumptions on global GDP
growth rates, relevant currency rates, and commodity prices in business plans and financial forecasts
were all considered, with stress testing on financial models where appropriate. Finally, a review of
litigation and tax reports, legal and compliance risks throughout the year and a formal year-end risk
review, ensures that the viability statement is made with a reasonable degree of confidence.
Principal risks
For each principal risk that is deemed to be both permanent and likely to have a high impact,
a severe but plausible scenario was considered. In making the business viability statement, the
Board reviewed and discussed the overall process undertaken by management and assessed the
outcome of the stress testing carried out using the Group’s five-year financial forecast as the base
case. The five-year financial forecast considers the Group’s cash flows, interest cover covenant,
net debt/EBITDA covenant, and other key financial ratios over the period. These metrics were
assessed against the Group risk register to determine the most impactful ones to stress test against.
Consideration was also given to the potential impact of the Group’s climate risk scenarios.
Business viability statement
In accordance with the UK Corporate Governance Code provision 31, the Directors have reviewed
the Group’s current position and carried out a robust assessment of the principal risks and
uncertainties that might threaten the business model, future performance, and solvency and liquidity
of the Group, including resilience to such threats, and consider that they have a reasonable
expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over a period of at least five years. A period of five years was chosen as being consistent with the
Group’s business and financial planning models, R&D plans, a number of key supply contracts and
requirements for external borrowing facilities. Regarding accessibility to financing, the term loans
have an expiry of June 2026 and the RCF has an expiry of June 2028; both of these are within the
five-year period and so will require renegotiation or replacement. Elementis has, to date, had a very
supportive banking syndicate and due to deleveraging there is now a materially lower requirement for
debt financing; as such, the Directors do not believe that there will be any issues in renegotiating
lending facilities when necessary.
Strategic report
The Strategic report was approved by the Board of Directors on 5 March 2025 and is signed on its
behalf by:
Paul Waterman
CEO
Ralph Hewins
CFO
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 75
Purpose, culture and values
Our purpose – unique chemistry, sustainable solutions – guides our strategy and priorities and
underpins our decision-making as a Board. The Company’s values of Safety, Solutions, Ambition,
Respect and Team underpin our culture, align with our purpose and drive our business success. During
2024, the Board took the decision to initiate a strategic review of the Company’s Talc business, to
establish whether the full potential of Talc could best be delivered as part of the Company, or via a
divestment. Despite the regulatory headwind of a proposal to reclassify talc that was announced by the
Risk Assessment Committee of the European Chemicals Agency in September 2024, the strategic
review is progressing in line with expectations and a further announcement will be made in due course.
The Company’s Fit for the Future programme was successfully advanced, with over 100 roles filled in
Porto, Portugal, and a temporary laboratory brought into use for our Porto R&D team, pending the
completion of our new office and laboratory space in that location. In addition, the offshoring of various
finance processes to India was successfully completed.
Board succession and diversity
Steve Good stepped down from the Board at the conclusion of the 2024 Annual General Meeting
(“AGM”) after reaching a tenure of nine years on the Board in October 2023. The Board was grateful
to Steve for his very significant contribution to the Board. The Board subsequently appointed
Clement Woon to succeed Steve Good as Chair of the Remuneration Committee. As the Company
will submit an updated Remuneration Policy at the 2025 AGM, Clement Woon has undertaken
engagement with shareholders to solicit their views on the proposed policy, in advance of that.
The succession planning for Steve Good’s replacement culminated, following a thorough recruitment
process, in the appointment of Maria Ciliberti to the Board in March 2024. Maria stood for election
for the first time at the 2024 AGM, and stands for re-election at the 2025 AGM.
As a result of the active dialogue which the Board maintains with the Company’s shareholders, the
Nomination Committee evaluated the candidacy of two further Non-Executive Directors during 2024,
Heejae Chae and Christopher Mills, both of whom have a significant track record of delivering value
for shareholders. As a result of this engagement and evaluation, Heejae Chae was appointed to the
Board on 25 March 2024 and Christopher Mills was appointed to the Board on 1 January 2025.
The Board looks forward to continuing to benefit from the skills and experience of its newest
Directors, complementing the existing skills and experience of the Board.
In November 2024, the Company announced that Paul Waterman had agreed with the Board that it
was the right time to transition the leadership of the Company to a new Chief Executive Officer (“CEO”),
following Paul’s nine years of service. Paul agreed to remain with the Company until no later than the
conclusion of the AGM in April 2025 and does not stand for re-election. During 2024, the Board
initiated a process to identify and appoint Paul’s successor and retained an independent search firm
to support the Nomination Committee in conducting a thorough search. Following this process, the
Board was pleased to approve the appointment of Luc van Ravenstein as the successor to Paul with
effect from 29 April 2025, and Luc stands for election for the first time at the 2025 AGM.
As at 31 December 2024, 44.4% of the Board were women (four women and five men). After the
conclusion of the 2025 AGM, the gender balance of the Board is expected to be 40% (4 women and
6 men). I am pleased to report that we therefore meet the Listing Rules targets (also referred to in the
FTSE Women Leaders Review) for (i) female representation on the Board to be at least 40%, (ii) there
to be at least one individual on the Board from a minority ethnic background, and (iii) for there to be
at least one woman in a senior Board role. We will continue to ensure that the benefits of diversity are
appropriately considered in the context of any future Board recruitment. Further information on Board
diversity is set out on pages 90-91.
Net Zero transition plan
In Q4 2024, the Board was proud to approve the formal submission of its science-based target
(“SBT”) to the Science Based Targets initiatives (“SBTi”) for validation in H1 2025. Once validated,
this target will help drive reduction in the Company’s greenhouse gas (“GHG”) emissions and help
us realise our long-term ambition of ‘Net Zero by 2050’ (at the latest). Our submission includes the
reduction of absolute GHG emissions of our Scope 1 and Scope 2 (market) and from our most
significant Scope 3 emissions categories, in line with SBTi rules.
In considering the Company’s SBT, the Board took into account the expectations of its stakeholders
with regard to management of the Company’s GHG footprint and its alignment with the UK’s
commitment to a GHG reduction pathway. Further information on our climate strategy can be found
on pages 35-41.
Board effectiveness
The Board participated in an externally facilitated performance evaluation this year, having last
undergone an externally facilitated evaluation in 2021. I am pleased to report that the evaluation
found that the Board demonstrated robustness and a sense of cohesion, seeking, and often finding,
unity, despite differences of opinion, which are naturally, and appropriately, encountered on occasion.
Further details of the process followed and its outcomes are set out on page 87.
Annual General Meeting
The AGM is an important event in the Company’s corporate calendar, providing an opportunity to
engage with shareholders.
This year, we will again be holding a hybrid AGM, with shareholders able to attend the meeting in person
to vote and ask questions in advance of the meeting via email: company.secretariat@elementis.com.
Instructions on how to register and join the webcast are set out in the Notice of Meeting, which is
available on the Company’s website.
John O’Higgins
Chair
Chair’s introduction to governance
John O’Higgins
Chair
Dear Shareholders,
On behalf of the Board, I am pleased
to introduce our Governance report
for the year ended 31 December 2024.
This report sets out our approach to
effective corporate governance and
outlines key areas of focus of the Board
and the activities it undertook during the
year, as we continue to drive long-term
value creation for our stakeholders.
I am grateful to my fellow Board
members for their continued support.”
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 76
Board of Directors
The right skills to
deliver our strategy
John O’Higgins
Chair
Paul Waterman
Chief Executive Officer
Ralph Hewins
Chief Financial Officer
Tenure John was appointed Non-Executive Chair and
Chair of the Nomination Committee on 1 September 2021.
John joined the Board as a Non-Executive Director on
4February 2020 and was appointed Senior Independent
Director on 29 April 2020 prior to his appointment as Chair.
Independent Yes
1
Experience and role John served as chief executive
of Spectris plc from January 2006 to September 2018,
leading the business through a period of significant
strategic transformation and development. Prior
to Spectris plc, John spent 14 years at Honeywell
International in a number of senior management roles,
including chairman of Honeywell Automation India and
president of Automation & Control for Asia-Pacific.
His early career was spent at Daimler Benz A.G. as a
research and development engineer.
Previous non-executive director roles include Exide
Technologies, a US-based supplier of battery technology
to automotive and industrial users (from 2010 to 2015).
John holds a master’s degree in Mechanical Engineering
from Purdue University (US) and an MBA from INSEAD.
External appointments
Non-executive director of Johnson Matthey plc,
chairof remuneration committee and a member
oftheaudit and nomination committees
Non-executive director of Oxford Nanopore
Technologies plc and a member of the audit, risk,
remuneration and nomination committees
Adviser to Envea Global, a market leader in
environmental air and emissions measurement
andmajority owned by The Carlyle Group
1 On appointment.
Tenure Paul was appointed Chief Executive Officer
(“CEO”) on 8 February 2016 and will step down from the
Board at the conclusion of the AGM on 29 April 2025.
Independent No
Experience and role Paul has a proven track record
in developing markets, products and opportunities for
creating value, business optimisation and transformation.
Paul’s global experience provides the skill set required
to deliver the Company’s strategy and provide
inspiringleadership.
Prior to joining Elementis, Paul was global CEO of the
BPLubricants business in 2013 after having overseen the
BP Australia/New Zealand downstream business. In 2010,
Paul was country president of BP Australia. Prior to this
he was CEO of BP’s global aviation, industrial, marine and
energy lubricants businesses (2009 to 2010) and CEO
of BP Lubricants Americas (2007 to 2009). He joined BP
after it acquired Burmah-Castrol in 2000, having joined
the latter in 1994 after roles at Reckitt Benckiser and
KraftFoods.
Paul holds a BSc in Packaging Engineering from
MichiganState University and an MBA in Finance
and International Business from New York University,
SternSchool of Business.
External appointments
None
Tenure Ralph was appointed CFO-Designate and
Executive Director on 12 September 2016 and became
the Elementis Group Chief Financial Officer (“CFO”)
on1November 2016.
Independent No
Experience and role Ralph is an accomplished CFO
who has a strong track record in finance, strategy
development and implementation, and mergers and
acquisitions (“M&A”) which enables him to provide
effective financial leadership to underpin the delivery
ofthe Company’s strategy.
Ralph had a 30-year career with BP, where he held a
number of significant leadership positions, including roles
in financial management, sales and marketing, corporate
development, M&A, strategy and planning. In 2010,
Ralphwas CFO of BP Lubricants and served on the board
of Castrol India Limited from 2010 until 2016.
Ralph holds an MA in Modern History and Economics
from the University of Oxford and an MBA from INSEAD.
External appointments
None
Committee Chair
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
N R
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 77
Trudy Schoolenberg
Senior Independent Director
Tenure Trudy was appointed Non-Executive Director on
15 March 2022 and become Senior Independent Director
on 26 April 2022.
Independent Yes
Experience and role Trudy has over 30 years’
experience of working in the chemicals, engineering
and high-performance product sectors. Having built her
executive career with global organisations such as Shell,
Wartsila and Akzo Nobel, she brings a strong international
perspective and a proven track record for driving
sustainability through innovation. In addition, Trudy has
strong operational knowledge, gained during her time at
Shell as production manager at the Pernis refinery in the
Netherlands, the largest refinery in Europe and one of the
largest in the world.
Trudy currently serves as a non-executive director and
chair of Accsys Technologies plc (AIM-listed sustainable
building materials business), a supervisory board member
of SPIE SA (a listed technical services business) and asa
non-executive director and senior independent director
of TI Fluid Systems plc (a listed global manufacturerof
automotive systems). Trudy previously served as a board
member of The Netherlands Petroleum StockpilingAgency
(COVA) (2011-2021), non-executive director and senior
independent director at Spirax-Sarco Engineeringplc
(2012-2021), non-executive director and seniorindependent
director of Low and Bonar plc (2013-2020) and as a
supervisory board member of Avantium N.V. (2020-2022).
Trudy has a PhD in Technical Physics from the Delft
University of Technology (the Netherlands) and holds
amaster’s degree in Industrial Engineering.
External appointments
Non-executive director and chair of Accsys
Technologies plc
Senior independent director of TI Fluid Systems plc
Independent director of SPIE SA
Committee Chair
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
Maria Ciliberti
Independent Non-Executive Director
Tenure Heejae was appointed a Non-Executive Director
on 25 March 2024.
Independent Yes
Experience and role Heejae served as chief executive
of Scapa Group plc, a global supplier of products for
healthcare and industrial markets, for 12 years, until
its sale in 2021. Prior to joining Scapa Group plc, he
held roles as group chief executive of Volex Group plc,
and was the group general manager, radio frequency
worldwide, for Amphenol Corporation. Heejae spent
the early part of his career in finance at The Blackstone
Group and Donaldson Lufkin and Jenrette, before moving
intoindustry.
Heejae holds a Bachelor of Arts in Economics and
Bachelor of Science in Engineering from Columbia
University, and an MBA from Harvard University.
External appointments
Non-executive director of IP Group plc and chair of the
IP Group remuneration committee
Executive chairman of Sys Group plc
Dorothee Deuring
Independent Non-Executive Director
Tenure Dorothee was appointed a Non-Executive
Director on 1 March 2017.
Independent Yes
Experience and role Dorothee provides the Board
withvaluable insight into the wider European chemicals
and industrial sectors as well as sector-specific
acquisitionexpertise.
Dorothee manages her own corporate advisory
consultancy serving a number of European clients in the
pharma/biotech sector. She is active in various industry
bodies. Her previous executive roles include managing
director and head of Corporate Advisory Group (Europe)
at UBS in Zurich, head of M&A chemicals and healthcare
at a private investment bank in Germany, and a senior
executive in the corporate finance department at the
Roche Group. Dorothee served as non-executive director
of the supervisory board of Bilfinger SE and member
of the audit committee (May 2016-May 2021) and
PolyPeptide Group AG (2023-2024).
Dorothee holds a master’s degree in Chemistry from
theUniversité Louis Pasteur, Strasbourg, and an MBA
from INSEAD.
External appointments
Non-executive director of Temenos AG
Management board member of Cornucopia SICAV-SIF
Supervisory board member of OMV AG
NA RNA R
Heejae Chae
Independent Non-Executive Director
N R
Tenure Maria was appointed a Non-Executive Director
on11 March 2024.
Independent Yes
Experience and role Maria’s professional experience
spans over 35 years in the petrochemical industry
and includes roles in manufacturing, research
and development (“R&D”), commercial and
business management. She worked at The Dow
Chemical Company, Columbia Gas of Ohio and
ContainerCorporation of America in the USA. Shealso
spent over a decade in global leadership roles inEurope,
with Celanese, General Electric Plastics (now owned
bySABIC) and Borealis, where her last role was
commercial vice president for Borealis’ Global Specialty
Solutions Business.
Since 2022, Maria has held the role of president for the
USA and Canada business of Royal Vopak, a global,
independent infrastructure provider. Maria sits on the
board of Vopak’s USA and Canadian joint ventures, which
include Vopak Industrial Infrastructure Americas, Vopak
Exolum Houston, Vopak Energy Storage Texas, Ridley
Island Propane Export Terminal and Ridley Island Energy
Export Facility.
Maria holds a Bachelor of Science degree in Chemical
Engineering and a Master of Business Administration –
both from The Ohio State University.
External appointments
None
NA
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 78
Board of Directors
Anna Lawrence
Group General Counsel & Company Secretary
Tenure Anna joined Elementis in March 2021.
Experience and role Anna has responsibility for all
legal and compliance matters across the Group and is
the Group Company Secretary. Anna also serves as
theGroup’s Chief Compliance Officer and chairs the
Ethics and Compliance Council. She has extensive
international experience gained through holding senior
legal positions in companies across diverse sectors,
including Rolls-Royce plc, Johnson Matthey plc and
Kingfisher plc. She qualified as a solicitor at Allen &
OveryLLP.
Anna holds a BA in Modern Languages from the
University of Oxford, a Postgraduate Diploma in Law
andLegal Practice from BPP Law School, and is
anAssociate of the Chartered Governance Institute.
1 January 2025
Appointment of Christopher Mills,
non-independent Non-Executive
Director
Christopher is currently the Chief
Executive Officer and Investment
Manager of North Atlantic Smaller
Companies Investment Trust plc,
a UK listed investment trust, and a
non-executive director of Assetco plc,
MJ Gleeson plc, The PRS REIT plc,
Oryx International Growth Fund Limited
and various other organisations.
Appointment of Luc van Ravenstein,
incoming Chief Executive Officer
In March 2025, the Company announced
that Luc van Ravenstein would succeed
Paul Waterman as CEO and join the
Board with effect from 29 April 2025,
subject to confirmation by shareholders
at the 2025 AGM. Luc joined Elementis
in 2012. He led the Company’s largest
business segment, Performance
Specialties, for seven years and led the
Personal Care segment for the six years
before that. Luc has an MSc degree in
Chemistry and Chemical Engineering and
a Professional Doctorate in Engineering
from Eindhoven University of Technology.
Committee Chair
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
Clement Woon
Independent Non-Executive Director
Tenure Clement was appointed a Non-Executive Director
on 1 December 2022 and became Chair of the
Remuneration Committee on 30 April 2024.
Independent Yes
Experience and role Clement brings broad managerial
experience in globally operating technology and
consumer-related industries. He has a strong track record
of renewing traditional industries and revitalising growth
through strategic interventions and in-depth experience
and knowledge of markets within the Asia Pacific region.
Clement was Group CEO of Saurer Intelligent Technology
Co Ltd, a €1 billion textile machinery and components
business listed on the Shanghai Stock Exchange, between
August 2016 and March 2020. Clement continued to
serve on the board of Saurer as non-executive director
until August 2021. Between March 2021 and January
2023, Clement served as chairman of PFI Foods
Industries Pte Ltd. Between April 2014 and July 2016,
Clement was adviser and co-CEO of Jinsheng Industry
Co. Ltd, an industrial company in China with diverse
interests including biotech, automotive and textiles.
Clement also previously held various senior positions at
companies based in Switzerland and Singapore, including
division CEO of Leica Geosystems AG, president and
CEO of SATS Ltd, and CEO Textile Division of OC
Oerlikon AG.
Clement holds an MSc in Industrial Engineering and
a BEng in Electrical Engineering from the National
University of Singapore, as well as an MBA in Technology
Management from Nanyang Technological University,
Singapore.
External appointments
Non-executive director of Morgan Advanced
Materialsplc
NA R
Christine Soden
Independent Non-Executive Director
Tenure Christine was appointed a Non-Executive
Director on 1 November 2020 and is the Designated
Non-Executive Director for workforce engagement
andChair of the Audit Committee.
Independent Yes
Experience and role Christine brings significant
experience of innovation and the commercialisation
oftechnology to the Board. Christine is an experienced
CFO with a strong track record of leading a range of
private and public companies rooted in innovation,
withaparticular focus on biotechnology, life sciences
andpharmaceutical products.
Christine was CFO and company secretary of Acacia
Pharma Group plc, a public quoted provider of
pharmaceutical products designed to improve the
outcomes and recovery for surgical patients (2015-2020).
Prior to Acacia Pharma Group plc, Christine served
as CFO and then non-executive director of AIM-listed
Electrical Geodesics, Inc., which was acquired by Philips
NV in 2017. Other CFO and finance leadership roles
include Optos plc, BTG plc (former FTSE250 constituent),
Oxagen Limited and Celltech Chiroscience Group plc.
Christine started her life sciences career as financial
controller of Medeva plc.
Christine has previously served as chair of the audit
committee at e-therapeutics plc, an AIM-listed technology
based drug discovery platform (2017-2020), and at
Provalis plc, a quoted healthcare business (2000-2005).
She was also non-executive director of Futurenova Limited,
a provider of antimicrobial cases for iPads and iPhones
from 2017 to 2021, and non-executive director of Cell and
Gene Therapy Catapult (October 2020-July 2024).
Christine is a chartered accountant and holds a degree
inMathematics from the University of Durham.
External appointments
Non-executive director of Arecor Therapeutics plc
NA R
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 79
Board of Directors
Division of responsibilities
Governance framework
Board of Directors
The Board is responsible for ensuring long-term sustainability and the delivery of long-term value and success for our shareholders. It also provides effective challenge and support to the Executive Leadership Team (“ELT”)
inrelation to strategy, while ensuring the Group maintains effective risk management and internal controls systems.
Audit Committee
Overseeing financial reporting and the Group’s
financial systems
Providing oversight and governance of internal
controls and risk management
Monitoring the independence and effectiveness
ofthe external auditors
Maintaining an appropriate relationship with our
internal and external auditors
Nomination Committee
Responsibility for the structure, size and
compositionof the Board, ensuring the Board and
Committees have the correct balance of skills,
knowledge and experience
Ensuring and overseeing succession planning
and responsibility for the annual review of Board
effectiveness
Identifying and nominating suitable candidates
forappointment to the Board
Promoting diversity
Remuneration Committee
Setting the Remuneration Policy and determining
thereview structure for the Chair, Executive
Directors and ELT, to align their remuneration with
the long-term interests of the Company
Approving bonus plan, long-term incentive plan
targets and share awards
Disclosure Committee
Advising the Board regarding, and to ensure
thatElementis makes, accurate and timely
disclosure of price-sensitive information that
isrequired to be disclosed to meet its legal and
regulatory obligations
For further information,
please see pages 92-96.
For further information,
please see pages 88-91.
For further information,
please see pages 101-129.
Board Committees
The Board is supported in its activities by Board Committees that have specific delegated responsibilities, as set out in separate terms of reference, which are available on the website: www.elementis.com
Shareholders
CEO
The CEO is responsible for the day-to-day running of the business and overseeing its performance, development and strategy.
ELT
The ELT is led by the CEO and meets quarterly to review various reports from all areas of the business as well as the external operating environment and associated risks and opportunities.
Relevant matters are reported to the Board by the CEO or the CFO.
Diversity, Equality
and Inclusion Council
Ethics and
Compliance Council
Health, Safety and
Environmental Council
Sustainability
Council
Cyber, Data Protection and Information
Governance Steering Committee
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 80
Board in action
Board meetings
The Board has a formal annual programme
of activities which is supplemented by
ad hoc meetings and conference calls,
when appropriate.
At each of its formal meetings, the Board
receives standing reports on business
performance, operations (including HSE
performance), sustainability, research and
development, IT, investor engagement,
governance, and legal and compliance.
During 2024, the Board considered a number
of topics:
   2023-2028 financial shape
Five-year strategy
Annual operating plan
Environmental, social and governance
(“ESG”) and Sustainability
Ethics and compliance
Global Manufacturing and Supply Chain
HSE and global process safety review
Research and Development
IT and cyber security
Legal matters (including litigation)
Risk
People-related topics, including: Fit for the
Future (organisational restructure); strategy;
diversity, equity and inclusion (“DE&I”);
people engagement; employee value
proposition; and succession
Performance Specialties
Personal Care
Procurement
The Elementis Group Pension Scheme
The Board regularly invites members of the ELT,
and their team members, to Board meetings to
report on their relevant business and functional
areas. The Non-Executive Directors make
themselves available for discussion with ELT
members and subject-matter experts in
advance of Board meetings where a particularly
strategic subject is tabled, to enable an in-depth
exploration of the subject matter in preparation
for the meeting.
All Board members, or the Non-Executive
Directors and the Chair, typically meet in person
the evening before Board meetings, to enable
less formal discussions.
Board changes
We welcomed Maria Ciliberti and Heejae Chae
to the Board in March 2024.
Steve Good stepped down from the Board at
the conclusion of the 2024 AGM after reaching
a tenure of nine years on the Board in October
2023.
In November 2024, it was announced that
Paul Waterman would be stepping down as
CEO no later than the conclusion of the AGM in
April 2025. Following a thorough search process
led by the Nomination Committee, the Board
was pleased to announce in March 2025 that
Luc van Ravenstein would assume the role of
CEO and would join the Board as an Executive
Director on 29 April 2025, standing for election
for the first time at the 2025 AGM.
In January 2025, Christopher Mills was
appointed to the Board as non-independent
Non-Executive Director and will stand for
election for the first time at the upcoming AGM.
Further information can be found on page 79.
Board meeting attendance
The attendance of the Directors at the Board meetings in the year ended 31 December 2024 is
as follows:
Member Member since Eligible meetings (max 8) Attendance
John O’Higgins February 2020 8 8
Heejae Chae
1
March 2024 6 5
Maria Ciliberti
2
March 2024 6 5
Dorothee Deuring March 2017 8 8
Steve Good
3
October 2014 3 3
Trudy Schoolenberg March 2022 8 8
Christine Soden November 2020 8 8
Clement Woon December 2022 8 8
1  Heejae Chae joined the Board in March 2024, after the first quarterly meeting had been held. Heejae was also unable to 
attend one meeting.
2  Maria Ciliberti joined the Board in March 2024 after the first quarterly meeting had already been held. Maria was also 
unable to attend one meeting due to illness.
3 Steve Good retired from the Board at the conclusion of the AGM on 30 April 2024.
Scheduled meetings during the year
2025 scheduled Board meetings
The allocation of agenda time for the eight
scheduled meetings was categorised into:
business and financial performance; strategy; 
and governance, risk and compliance.
Business & financial performance
Strategy
Governance, risk & compliance
28.6%
29%
44.2%
51%
27.2%
20%
2024
2023
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 81
Dividend reinstatement
The Board considered the strength
of the balance sheet, availability
of distributable reserves and
the near-term prospects forthe 
business, and recommended
the reinstatement of the ordinary
dividend tobe paid in May 2024.
Divestment of Eaglescliffe
(UK) site
The Board approved the divestment
of the Eaglescliffe (UK) site to the
Flacks Group.
Annual General Meeting
The Company held a hybrid
AGM on 30April 2024, which 
shareholders were invited to attend
in person or via a webcasting
facility, with a telephone line
available for shareholders to ask
questions. The proceedings of
the AGM are available on request.
All resolutions were approved by
shareholders on a poll.
Shareholders were able to submit
questions ahead of the AGM;
however, no questions were
submitted prior to or at the meeting.
A recording of the AGM can be
found on our website.
Response to open letters
from shareholder
Open letters to the Board were
published by a shareholder with a
0.6% shareholding which detailed
various requests, including initiating
a strategic review of the Talc
business, CEO succession and
proceeding with the cost-saving
programme, Fit for the Future.
InNovember, the shareholder 
publicly acknowledged that the
Group had implemented each
ofthese steps.
Appointment of
Non-Executive Directors
Maria Ciliberti and Heejae Chae
were welcomed to the Board.
Governance roadshow
The Chair conducted a governance
roadshow during March and
April, meeting with the top
shareholders. Discussions focused
on the updated strategy and Group
targets, succession planning and
shareholder activism. Shareholders
were also interested to discuss a
potential sale of the Talc business.
The Chair used this opportunityto 
gain feedback on capital allocation
preferences and other governance-
related matters, which was
subsequently shared with the Board.
Site visits to Portugal and US
With its people as its core asset,
theBoard travels regularly to ensure 
that it has in-person engagement
with the workforce on all levels and
maintains a good understanding of
the Group’s operations.
Site visits to New Jersey (US)
and New Martinsville (US), and
the new Support andTechnology 
Hub in Porto (Portugal) during
2024 enabled to the Board to gain
insights from discussions with
the local management teams and
colleagues about the opportunities
and challenges they face, in
management presentations as well
as less formal networking events.
Key
activities
in 2024
January February March April May June
February April April/June
March/April June/October
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 82
Board in action
Strategic review of the
Talc business
In August, the Board announced
that a review of the Talc business
would be undertaken to establish
whether the full potential of Talc
could best be delivered as part
ofElementis, or via a divestment.
Further information can be found
onpage 26.
July–December
External Board evaluation
EquityCulture Ltd were engaged
to conduct the triennial external
evaluation. Following a review of
Board papers, a series of in-depth
individual interviews with each
Board member, and observation
of a Board meeting, EquityCulture
presented their report for the
Board’s consideration. Following
a discussion, certain areas of
focus for Board and Committee
operations were agreed.
Further information regarding
the evaluation can be found
onpage 87.
September
CEO succession
On 18 November 2024, the
Group announced that Paul
Waterman would step down from
the Board as CEO no later than
theconclusion of the 2025 AGM. 
The Nomination Committee
appointed Korn Ferry to advise on
a role specification, and to compile 
a long list of suitable candidates
meeting the requirements, from
which the Nomination Committee
selected ashort list of candidates 
to undergoa formal interview and 
evaluation process.
Further information can be found
onpage 90.
The Chair and the SID engaged
with shareholders to discuss CEO
succession planning, progress
on the Talc strategic review and
potential new initiatives to narrow
the gap between the share price
and the Company’s intrinsic value.
Feedback from the meetings was
shared with the Board.
November
Key
activities
in 2025
January/April
In January 2025, Christopher Mills
was appointed to the Board as
non-independent Non-Executive
Director and will stand for election
for the first time at the AGM on 
29 April 2025. The Chair of the
Remuneration Committee reached
out to the top 15 shareholders,
sharing the summary of the
proposed revisions to the Director’s
Remuneration Policy, ahead of
itstabling for approval at the 
2025AGM. 
Shareholders who engaged were
supportive of the policy, particularly
tightening of malus and clawback
and the changes in application
related to introducing return
on operating capital employed
(“ROCE”) and Sustainability into the
long-term incentive plan (“LTIP”).
Other members of the Board are
available to meet with shareholders
as appropriate.
Investor meetings
In 2024, over 100 meetings were held with investors,
ofwhich 21 were with the Chair.
The Board values the importance of an active
engagement programme and we are continuously
looking to improve our engagements to build and
develop open and trusted relationships with our
shareholders.
The Investor Relations function has primary
responsibility for managing day-to-day communications
with institutional shareholders and supports the Chair,
Senior Independent Director (“SID”), CEO and CFO in
conducting a comprehensive shareholder engagement
programme during each financial year.
The CEO and CFO are the Company’s principal
spokespeople. Throughout the year, they engaged
extensively with existing and prospective investors
during individual and group meetings, as well as
conferences and fireside discussions.
The Board receives an investor relations report at each
of its meetings outlining recent dialogue with investors
and feedback received, and updates from our corporate
brokers JPMorgan and DB Numis. Analysts’ reports 
arealso made available to the Board.
In 2024,
100+
meetings were held
with investors
July August September October November December January February
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 83
Board in action
Workforce engagement
Engaged activities throughout the year
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Board meeting
Board site visit
DNED engagement
with employees
Employee survey
Speak Up survey
Global townhall
June
US
New Jersey
The Board meeting was held at the New Jersey
offices. After the meeting, the Board engaged 
with employees from a range of functions over
dinner in the evening.
New Martinsville
The Board visited our New Martinsville plant,
where rheology modifiers such as NiSATs, as 
well as dispersants, are processed for the
Performance Specialties business segment.
Members of the management team gave
presentations on the plant’s activities, followed
by a tour of the manufacturing site and
laboratory, which included presentations by
colleagues on specific activities undertaken 
at the site. The Board had the opportunity to
engage with employees during a lunch meeting.
October
Portugal
Porto
The Board visited the location of our new Porto
office and laboratory to review the plans, layout 
and location. They also visited the interim
laboratory, where our team of scientists
provided an overview of activities, including the
successful transfer of knowledge from Cologne
and demonstrations of our chemistry in action.
The Board had an opportunity for Q&A with
employees during a lunch meeting.
As part of its visit, the Board held a dinner with
management. Each Board Director hosted their
own table, which was an opportunity to meet
with employees from various roles.
Board visits
The Non-Executive Directors typically visit
at least two of the Company’s manufacturing
sites each year, to gain insights into the
Group’s activities and to meet and engage
with colleagues across the business.
This enables the Directors to maximise
their contribution to Board discussions
and their understanding of stakeholders.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 84
All year
Engaged activities throughout
the year
In line with the requirements of the UK
Corporate Governance Code, the Board
considered the mechanisms for ensuring
that the views and concerns of the workforce
are taken into account and agreed that a
specific Board accountability for workforce 
engagement would be formalised by appointing
a Board member to serve as the Designated
Non-Executive Director for workforce
engagement (“DNED”).
Christine Soden currently serves as the DNED,
having assumed the role on appointment as a
Board member on 1 November 2020.
DNED engagement
While visiting the various sites during the year,
Christine Soden, as DNED, held a number of
focus groups, which gave her an opportunity
to meet with a selection of employees and
encourage them to share their views and raise
any issues or concerns.
Christine then ensures that employees’
questions and concerns are heard during
Board discussions, that appropriate steps are
taken to evaluate the impact of proposals and
developments on the workforce, and that the
Board considers what steps should be taken
to mitigate any adverse impact.
Non-Executive Director for
workforce engagement
Values and
culture
Communications
Processes
Remuneration
and benefits
Examples of
workforce
engagement
themes
Local/global
ways of
working
Focus group held at Porto.
Learnings and responses
During the year, Christine held focus groups
with employees in New Martinsville, USA,
Porto, Portugal and Sao Paolo/Palmital
Brazil. Common themes included safety;
employee engagement; systems, process
and data standardisation; employee benefits 
and communication.
Specific learnings were:
Our Safety culture continues to improve
in line with our values
The employee engagement survey
is enabling more local discussions
and actions
Our systems, processes and data
management could be improved
The level of HR support and visibility could
be improved at more remote locations
We could use our spot bonus programme
more effectively
Site improvement activities need to
be prioritised
Many of these learnings are being
addressed through our ongoing initiatives
e.g. safety programme, Gallup engagement
survey; improving our intranet; the global
data transformation project and others
through local initiatives such as: providing
more regular on-site HR presence in the
US especially around activities such as
open-enrolment; exploring flexible benefits 
in Portugal to give employees more freedom
of choice and updating our employee
handbooks in US and Brazil.
The Board recognises the importance
of engaging with our employees, and
receiving feedback and insight from
all levels within the Company.”
Christine Soden
Virtual focus group held with Sao Paolo/Palmital
employees.
Themes identified from the focus group sessions 
during the year included:
Employee engagement
Process standardisation
  Flexible benefits
Safety
Fit for the Future transition
Improving communication
Level of HR support at more remote locations
Use of spot bonuses
Site improvements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 85
Workforce engagement
Purpose, culture and values
Our purpose
Our purpose is unique chemistry,
sustainable solutions.
We are collaborative industrial innovators,
developing long-term partnerships with our
customers, innovating at pace to keep them
at the forefront of their markets. Combining
our access to unique natural resources with
our unmatched rheology and technological
expertise, we responsibly transform raw
materials into advantaged ingredients that
provide crucial end product benefits. This
enables our customers to solve their product
performance and sustainability challenges.
Our culture
The Board is satisfied that the Company’s
culture continues to be aligned with its purpose,
values and strategy:
Strategy is discussed regularly and includes
the three-year plan and annual operating
plan, and is formally agreed as part of the
Board’s annual programme
The Company’s values underpin the
behaviours expected to cultivate an open
and inclusive culture
Further information on Elementis culture can be
found on pages 44-50.
How the Board monitors culture
Our values
Our values are core to our high-performance
culture and are reflected in everything that
we do.
Further information regarding our values can
be found on page 3.
Safety
Our way of life
Ambition
Passion for excellence
Respect
We do the right thing
Team
The power of collaboration
Employee engagement survey insight
HSE performance
Reports on progress on diversity,
equity and inclusion
Employee retention, promotion
and attrition data
Internal Audit reports and findings
Whistleblowing reports
Cultural indicators
Promoting integrity and accountability
Valuing diversity
Being responsive to the view of stakeholders
Culture aligned to purpose and values
Culture aligned to strategy
Ethics and compliance programme
Solutions
Creating value for our customers
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 86
Board performance review
Each year, the Board undertakes a rigorous review of its performance and that of its Committees
and individual Directors. The results of the review enable the Board to reflect on the continuing
effectiveness of its activities and quality of its decisions, and to identify any areas for further focus
in the coming year.
At least every three years, an externally facilitated review of Board performance is carried out.
2022 2023 2024 2025
Internal evaluation Internal evaluation External evaluation Internal evaluation
Following a tender process, EquityCulture Ltd was appointed to undertake the external board
performance review for 2024, by way of an approach which would take into account the specific
needs and evolution of the Board. EquityCulture has no other connection with the Company or any
of the Directors.
As part of the external Board performance review, EquityCulture assessed Board and Committee
papers for the preceding 12 months and attended a Board meeting to observe the Board in action.
EquityCulture also held individual meetings with each Board member to gather their thoughts and
feedback, as well as with the Chief Human Resources Officer (“CHRO”) and the Group General
Counsel & Company Secretary.
Performance review findings
and recommendations
The individual interviews were in depth, with a
majority lasting over 75 minutes. The responses
were largely positive in relation to the continued
effective operation of the Board and its
Committees. The Board’s relationship was seen
to be unified, positive, open, collaborative and
constructively challenging. The Board was felt
to have received robust and comprehensive
reporting from management in relation to key
areas such as strategic priorities, talent and
succession, sustainability and financial resilience,
and the quality of the Board packs was
commended. It was noted that the Chair was
seen to manage Board meetings well, ensuring
that all views were heard and that meetings and
conclusions were balanced. It was suggested
that, in view of the number of new Non-Executive
Director appointments to the Board during 2024,
further time for the Non-Executive Directors to
convene as a group would be beneficial.
The agreed focus areas for 2025 included:
The provision by Non-Executive Directors
of feedback to management after each Board
meeting, with constructive suggestions on
what had worked well and where reporting
could be improved going forward
Carving out further time for Non-Executive
Director discussions
Taking detailed Board packs as read and
further focusing Board meeting time on deep
discussion of key strategic points
Reviewing whether certain topics, such as
risk, could benefit from added input from
external specialist presenters to bolster
internal reporting
Process for the year
2024
January July September October December
EquityCulture attended a
Boardmeeting toobserve
Individual meetings held
byEquityCulture with
Boardmembers
September
Appointment of the chosen
external Boardevaluator
following thorough
tenderprocess
January
The Group General Counsel &
Company Secretary and Board
Chair agreed the timetable
and process for the external
performance review, including
appropriate questions to be
posed to Directors during
their individual meetings with
EquityCulture, to ensure that
the Chair would be supported in
delivering an effective approach
July
The findings of the performance
review were discussed with
the Chair and Group General
Counsel & Company Secretary
The report was presented to the
Board. The Board discussed the
findings and agreed on the focus
areas for the forthcoming year
DecemberOctober
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 87
Nomination Committee report
John O’Higgins
Chair, Nomination Committee
Highlight areas of focus
Ongoing Board succession planning
Appointment of two new independent Non-Executive
Directors and one non-independent Non-Executive
Director
Engagement with external search consultants to
conduct a search for a new CEO
CEO succession
Oversight of Group’s Diversity Policy
External Board effectiveness review
Role of the Committee
The Committee is responsible for the structure and
composition of the Board and ensuring that the Board
and Committees have an appropriate balance of skills,
knowledge and experience to support the strategy of
the Company now and in the future.
Key responsibilities
Regularly reviewing the structure and composition
of the Board
Ensuring the right leadership, balance of skills and
experience to deliver the Company’s strategy and
enable the Board to fulfil its obligations effectively
Succession planning for the Board and ELT
Leading on the annual performance evaluation of the
Board and its Committees
Identifying and nominating to the Board for approval,
candidates to fill Board vacancies as and when they arise
Identifying and managing any potential conflicts of interests
The Committee’s terms of reference, which are reviewed
and approved annually, are available at www.elementis.com
Attendance at Nomination Committee meetings
Member Member since
Eligible meetings
(max 8
1
) Attendance
John O’Higgins
2
February 2020 6 6
Heejae Chae
3
March 2024 4 3
Maria Ciliberti
4
March 2024 6 5
Dorothee Deuring March 2017 8 8
Steve Good
5
October 2014 1 1
Trudy Schoolenberg March 2022 8 8
Christine Soden November 2020 8 8
Clement Woon December 2022 8 8
The CEO and CFO were invited to attend where appropriate.
1 Three meetings were scheduled, and five were ad hoc.
2 John O’Higgins was unable to attend two meetings due to a conflict of interest.
3 Heejae Chae joined the Board on 25 March 2024, after the first quarterly meeting had been held. Heejae was unable to
attend two meetings due to a conflict of interest. Heejae was also unable to attend one meeting due to a scheduling conflict.
4 Maria Ciliberti joined the Board on 11 March 2024 after the first quarterly meeting had already been held.
Maria was also unable to attend one meeting due to illness.
5 Steve Good retired from the Board at the conclusion of the AGM on 30 April 2024.
Dear Shareholders,
As Chair of the Nomination Committee
(the ‘Committee’), I am pleased to
present the Nomination Committee report
covering the work of the Committee
during 2024. This report should be read
in conjunction with the separate section
on compliance under the UK Corporate
Governance Code on page 97.”
Our gender identity and ethnicity data in accordance with Listing Rule 9.8.6R(10) is set out on
pages 90-91 as at 31 December 2024. To compile this data, at year end, Board and ELT members
were asked to complete a diversity disclosure to confirm which of the categories they identify with.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 88
Programme of business
Annual review of Directors’ independence and conflicts in accordance with the Committee’s terms
of reference
Reviewing structure, size, diversity and composition of the Board
Succession planning for the Board and ELT, and oversight of senior management succession plans
Ensuring that at least annually the Non-Executive Directors meet without the Executive Directors
present
Annual evaluation of the Board Chair, led by the SID
Approval of the Nomination Committee report for inclusion in the Annual Report
Board effectiveness process
Annually, the Board is responsible for conducting an evaluation of the performance of the Board and
its Committees. The Committee oversees the effectiveness of the process, which for 2024 consisted
of an external evaluation led by consultants. Following the evaluation, the Board is satisfied of the
continued effective operation of the Board and its Committees. Further information regarding the
process can be found on page 87.
Directors’ conflicts
The Committee has oversight of Directors’ potential conflicts of interest and, during the year, in
accordance with policy, considered and approved the following additional external appointments:
Dorothee Deuring as non-executive director of OMV AG and as non-executive director of
Cornucopia SICAV-SIF
Board composition and skills
A matrix is maintained which serves as a record of Directors’ experience, attributes and expertise.
The Committee reviews this matrix annually to ensure that the Board has an appropriate composition
and range of skills, experience and diversity to prevent any dominance, either individually or
collectively, over the Board’s decision-making processes.
Composition of the Board
Chair
Independent Non-Executive Directors¹
Executive Directors
11.10%
66.7%
22.2%
1 Senior Independent Director is female.
Board expertise and experience matrix
JOH PW RH HC MC DD TS CS CW
Manufacturing/industrial processing
Specialty chemicals
International business & markets
Pension trustee
M&A/capital-raising
Financial/accounting/risk expertise
(recent/relevant)
Sales/marketing/customer
Strategy/business development
Research/technology/innovation/
product development
Risk management
HR/people
Sustainability/climate
Digital/e-commerce/cyber
Re-appointments to the Board and succession planning
During the year, there was no requirement for the re-appointment of a Director for a second or third
term. The Committee regularly reviews the schedule of non-executive tenure and the next formal
review will take place in 2025. Recommendations for annual re-appointment are supported by
considerations regarding the Directors’ independence, experience and contribution which they bring
to the Board and its Committees. These matters will be subsequently confirmed following the Board
performance review process during 2025 and a review of conflicts and independence. In line with
best practice, the continuing Board roles remain subject to annual re-election by shareholders.
As reported in the 2023 Annual Report, the search process for a new Non-Executive Director, which
was initiated in 2023, culminated in the appointment of Maria Ciliberti on 11 March 2024.
The Board maintains active dialogue with the Company’s shareholders. As a result of engagement
with shareholders during 2024, the Committee evaluated the candidacy of two further Non-Executive
Directors, Heejae Chae and Christopher Mills, both of whom have a significant track record of
delivering value for shareholders. Heejae Chae was appointed to the Board on 25 March 2024 and
Christopher Mills was appointed to the Board on 1 January 2025. Christopher Mills is not considered
by the Board to be independent, in view of his role as founder and CEO of Harwood Capital
Management Limited and close relationships with several other shareholders. As at the date of the
announcement of Christopher Mills’ appointment on 24 December 2024, funds managed by
Harwood Capital and its affiliates owned 22,500,000 shares in the Company.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 89
Nomination Committee report
In November 2024, the Company announced that Paul Waterman had agreed with the Board that
it was the right time to transition the leadership of the Company to a new Chief Executive Officer,
following Paul’s nine years of service. Paul agreed to remain with the Company until no later than the
conclusion of the AGM in April 2025, to facilitate an orderly handover to his successor, and to remain
available as required for any transition or other support until the end of July 2025. During 2024, the
Committee initiated a process to identify and appoint Paul’s successor and conducted a thorough
search, supported by an independent executive search firm, which included consideration of a range
of candidates, including external to the Company. At the culmination of this process, the Committee
recommended to the Board that Luc van Ravenstein be appointed as Paul’s successor. The Company
was pleased to announce Luc’s appointment as Paul’s successor with effect from 29 April 2025, and
Luc stands for election for the first time at the 2025 AGM. Luc joined Elementis in 2012. He has led
the Company’s largest business segment, Performance Specialties, for seven years and led the
Personal Care segment for the six years before that.
Re-election of Directors
The Board has concluded, following the appraisal process, that each of the Directors standing for
(re-)election continued to make an effective contribution to the Board and committed sufficient time
to the Board and Committee meetings and any other duties. With the exception of Paul Waterman,
who will step down from the Board no later than the conclusion of the AGM in April 2025, having
served as CEO for nine years, all Directors will stand for (re-)election at the 2025 AGM, and an
explanation of how they contribute to the success of the Company can be found in the Notice
of Meeting.
Dorothee Deuring will have served on the Board for eight years in March 2025. Dorothee will seek
re-election with the intention of serving until 2026. The Nomination Committee has concluded that
Dorothee continues to exhibit independence of character and judgement, and that the Board
benefits from her extensive knowledge of the business and the constructive challenge she brings
to Board discussions.
Length of tenure
6-9 years 1
3-6 years 2
Less than 3 years 4
14.3%
28.6%
57.1%
Diversity Policy
The Board has adopted a Diversity Policy, which is available on the Company’s website. The Board
acknowledges the importance of diversity in its broadest sense in the boardroom as a key element
of Board effectiveness. Diversity includes perspective, experience (including working internationally),
background (including nationality), cognitive and personal strengths and other personal attributes,
as well as diversity of gender, social background and ethnicity. We consider overall Board balance
when appointing new Board members.
Progress on our diversity objectives
Our external advisers are selected on their commitment and ability to deliver diverse long lists
in the recruitment processes
The composition of the Board is reviewed on an annual basis, with an assessment of skills,
expertise, backgrounds and experience prior to Directors joining the Board and on an ongoing
basis using a diversity matrix
The proportion of female Directors on the Board as at 31 December 2024 was 44.4% (four women
and five men). After the conclusion of the 2025 AGM, the gender balance of the Board is expected
to be 40% women and 60% men). The Board is aware of the target specified in recent updates to
the Listing Rules for female representation on boards of at least 40% and will ensure that the
benefits of diversity continue to be considered in the context of any future Board recruitment. The
Board currently meets (a) the Listing Rules for female representation on the Board of at least 40%
and (b) the targets referred to in the new Listing Rules for there to be at least one woman in a
senior Board role (the role of Senior Independent Director being held by Dr Trudy Schoolenberg)
and at least one member of the Board from a minority ethnic background (there being two
members of the Board from minority ethnic backgrounds, following the appointment of Clement
Woon to the Board in December 2022 and the appointment of Heejae Chae to the Board in March
2024)
Oversight of gender and ethnic diversity profile across the Group, including promotion of talent
into management roles (see pages 47-48 for progress on female leadership)
The Parker Review target has set a percentage goal for senior management positions that will
be occupied by ethnic minority individuals, to be achieved by December 2027. During the year,
we started a process to identify how best to approach this in order to set a meaningful target
which will take into account our global presence
Oversight of executive and senior management succession
Continuing to monitor regulatory developments and best practice in respect of diversity
Gender representation among Board and executive management
Number of
Board
members
Percentage
of Board
Number of
senior
positions on
Board
1
Number in
executive
management
Percentage
of executive
management
Male 5 55.6% 3 8 88.9%
Female 4 44.4% 1 1 11.1%
Not specified/prefer
not to say
– – – – –
1 CEO, CFO, SID, Chair.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 90
Nomination Committee report
Nationality of the Board
American 3 33.34%
Austrian 1 11.11%
British 2 22.22%
Dutch 1 11.11%
Irish 1 11.11%
Singaporean 1 11.11%
Ethnicity representation among Board and executive management
Number of
Board
members
Percentage of
Board
Number of
senior
positions on
Board
1
Number in
executive
management
Percentage of
executive
management
White British or other
white (including
minority white groups)
5 55.6% 4 8 88.9%
Mixed/multiple
ethnic groups
0 0% 0 0 0%
Asian/Asian British 2 22.2% 0 0 0%
Black/African/
Caribbean/
Black British
0 0% 0 1 11.1%
Other ethnic group,
including Arab
0 0% 0 0 0%
Not specified/prefer
not to say
2 22.2% – – –
1 CEO, CFO, SID, Chair.
Priorities for the year ahead
Review of Board and senior management succession plans
Review of Board Diversity Policy and objectives
Review of management progress towards achieving diversity objectives
Review of the 2024 external Board performance review outcomes and action plan, and planning
for our 2025 internal Board performance review
John O’Higgins
Chair, Nomination Committee
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 91
Nomination Committee report
Audit Committee report
Christine Soden
Chair, Audit Committee
Highlight areas of focus
Recommended approval of the 2023 Annual
Report and Accounts and 2024 Half Year
Interim Statements to the Board
Approval of audit plans (external and internal)
for 2024
Review of going concern and viability statement
Presentation of adjusting items
Goodwill and indefinite life intangible assets
impairment review
Role of the Committee
To assist the Board by establishing, reviewing and monitoring the Group’s
financial reporting, internal controls framework and risk management, internal
audit programmes and changes in regulatory requirements.
Composition of the Committee and meetings attendance
In accordance with the Code, the Board has confirmed that all members
of the Committee are independent Non-Executive Directors and have
been appointed to the Committee based on their individual financial and
commercial experience.
The Board is satisfied that Christine Soden, as Chair of the Committee, has
recent and relevant financial experience to chair this Committee through her
previous executive roles as CFO at Acacia Pharma Group plc (2015-2020) and
CFO of Electrical Geodesics, Inc. Christine is a chartered accountant (FCA).
The Committee, as a whole, has financial and commercial competence
relevant to the sector in which the Group operates. Further information on the
skills, expertise and experience of Committee members can be found on
page 89.
The Chair of the Board, CEO, CFO and Group Financial Controller & Head
of Tax, and representatives from the external auditors (Deloitte) and internal
auditors (PwC), have a standing invitation to attend Committee meetings.
All Board members have access to Committee papers.
Key responsibilities
Monitoring the integrity of the Group’s financial statements, financial
reporting and related statements
Ensuring the appropriateness of accounting policies, any changes to these,
and any significant estimates and judgements made
Reviewing the effectiveness of internal control, compliance and risk
management systems (including whistleblowing arrangements)
Overseeing all aspects of the relationship with the internal and external
auditors; approving the policy on non-audit services; making
recommendations to the Board for their dismissal or changes; and
supervising any tender process
The Committee’s terms of reference, which are reviewed and approved
annually, are available at www.elementis.com
Attendance at Audit Committee meetings
Member Member since
Eligible meetings
(max 3) Attendance
Christine Soden (Chair) November 2020 3 3
Heejae Chae
1
March 2024 0 0
Maria Ciliberti
2
March 2024 2 2
Dorothee Deuring March 2017 3 3
Trudy Schoolenberg March 2022 3 3
Clement Woon December 2022 3 3
1
Heejae Chae joined the Board on 25 March 2024, after the first quarterly meeting had been held. Following a
review of Committee members in July 2024, Heejae Chae stepped down from the Audit Committee.
2 Maria Ciliberti joined the Board on 11 March 2024, after the first quarterly meeting had been held.
Dear Shareholders,
As Chair of the Audit Committee
(the ‘Committee’), I am pleased to
present the Audit Committee report
covering the work of the Committee
during 2024. This report should be
read in conjunction with the separate
section on compliance under the
UK Corporate Governance Code
on page 97.”
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 92
Activities during the year
The Committee’s focus in 2024 has been on:
Meetings with both the internal and external auditors to review their key findings
Reviewing the internal control systems and considering the output of internal audit reviews and
management’s action plans
Reviewing the integrity, consistency and key accounting judgements, particularly in respect of
impairment, made by management in both the Company’s full and half-year results
Advising the Board on whether the Annual Report and Accounts preparation process is fair,
balanced and understandable, and provides the information necessary to shareholders to assess
the Group’s position and performance, business model and strategy
Reviewing the going concern and viability statements and the supporting assumptions and
assessments in the Company’s half-year report and Annual Report and Accounts
Ensuring compliance with applicable accounting standards, monitoring developments in
accounting regulations which affect the Group, and reviewing appropriateness of accounting
policies and practices currently in place
Reviewing effectiveness of the internal and external auditors, their independence and objectivity
and terms and scope of engagement, and recommending their re-appointment
Overseeing matters relating to tax including the impact of tax rates on the financial statements,
the position on EU state aid and approval of the Company’s tax strategy
Litigation and compliance reports for both the full and half-year
Considering the material legal risks impacting the Company and the associated provisioning for
both the full and half year
Receiving updates on the Code of Conduct and Ethics and the associated training and
whistleblowing reports
Technical updates on the Annual Report and Accounts key developments, 2024 year-end report
environment, corporate governance matters and future developments
Reviewing the Group’s risk management activities undertaken by each business area, and at
Group level to identify and assess the Group’s principal and key operational risks
Monitoring and assessing the Group’s insurance arrangements
Reviewing climate risks and opportunities
Reviewing management preparedness plans, materiality update and expected disclosure
approach for EU CSRD; authorised our financial auditors Deloitte to conduct a readiness review of
current practices related to the Corporate Sustainability Reporting Directive (“CSRD”) to identify
improvement areas
Monitoring proposed audit and corporate governance reforms, including Provision 29, and the
Group’s preparedness for these
Committee effectiveness
The Committee’s performance and effectiveness was reviewed in the year as part of the Board and
Committee effectiveness review conducted by the Group General Counsel & Company Secretary
on behalf of the Chair of the Board. Further details can be found on page 87.
External auditors
Deloitte has served as external auditors for eight years. The Committee engaged with Deloitte to
ensure this key area of oversight was appropriately maintained. The Committee periodically meets
privately, without management present, with the lead audit partner and senior members of the audit
team in order to help promote and encourage honest and open feedback from both parties.
Audit of the 2024 Annual Report and Accounts
Deloitte reviewed with the Committee its audit strategy and plan for the 2024 audit, highlighting those
areas which it considered significant risks and thus would receive special focus. Deloitte views
significant audit risks as those areas where there is a higher risk of material misstatement and
therefore which require extra focus.
The Committee and Deloitte discussed and agreed on the audit placing extra focus on risks associated
with revenue recognition, impairment, and management override of controls. The Committee
considered the audit plan presented by Deloitte, including assessing whether the materiality level
and proposed resources to undertake the audit were consistent with the scope. The Committee
considered whether it required Deloitte to look at any specific areas but concluded that the proposed
audit plan already adequately covered the key judgemental areas.
On completion of the audit, Deloitte prepared a detailed report of its audit findings, which was
reviewed and discussed by the Committee. The Committee noted that Deloitte had, in particular,
robustly challenged management’s assumptions regarding the impairment of the Talc cash
generating unit and the adequacy of the environment and rehabilitation provisions.
A similar process was undertaken for the half-year results.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 93
Audit Committee report
Audit effectiveness
As part of its oversight of the external auditor, the Committee annually assesses the performance and
effectiveness of the external auditors, and the audit process more broadly. This assessment includes
consideration and evaluation of the quality of the audit, how the auditor handled key accounting
judgements and how effectively the auditor responded to the Committee’s questions.
The Committee’s evaluation of the audit quality includes the following key areas:
Constructive challenge of management’s key judgements;
Quality and consistency of the senior audit team;
Deloitte’s quality assurance procedures;
Compliance with relevant legislative and professional standards;
Competence and objectivity of key judgemental audit areas such as provisions and other estimates;
Type of data analytic tools used in the audit; and
The auditor’s Audit Quality Inspection reports published by the Financial Reporting Council (“FRC”)
In addition to the above considerations the Committee also considers the results of management’s
survey of internal stakeholders who had had the most interaction with the auditors during the audit
process. The data is collated into a score card which is used to help assess the strengths and any
weaknesses of the external auditors.
Management and the external auditors will address any areas of weakness in their regular review
meetings and the lead audit partner from Deloitte will update the Committee on how areas of
weakness are being addressed.
Taking into account the above, the Committee is content that Deloitte continue to provide a good
quality audit and have maintained their independence. It is intended that a resolution to re-appoint
Deloitte as the external auditors is proposed at the 2025 AGM.
Audit independence and objectivity
The Committee considers the external auditors’ objectivity and independence at least twice a year.
It takes into account the information and assurances provided by the auditor confirming that all its
partners and staff involved with the audit are independent of any links to Elementis. The Committee
also monitors changes in legislation related to auditor independence and objectivity to assist the
Company to remain compliant.
Deloitte has confirmed that all its partners and staff complied with their ethics and independence
policies and procedures, which are fully consistent with the FRC’s Ethical Standard, including that
none of its employees working on the Company’s audit hold any shares in Elementis plc.
Deloitte is required to provide written disclosure at the planning stage of the audit in the form of an
independence confirmation letter. Their letter discloses matters relating to its independence and
objectivity, including any relationships that may reasonably be thought to have an impact on its
independence and the integrity and objectivity of the audit engagement partner and the audit staff.
The audit engagement partner must change every five years and other senior audit staff rotate at
regular intervals.
The Committee develops and recommends to the Board the Company’s policy on non-audit
services and associated fees that are paid to Deloitte. In accordance with the FRC’s Revised Ethical
Standard, an auditor is only permitted to provide certain non-audit services to public interest entities
(e.g. Elementis plc) that are closely linked to the audit itself or that are required by law or regulation,
as such services could impede their independence. Permitted non-audit services fees paid to the
statutory auditor are subject to a fee cap of no more than 70% of the average annual statutory
audit fee for the three consecutive financial periods preceding the financial period in which the cap
applies. The 70% non-audit services fee cap has been applied to the Group for the year ended
31 December 2024. The average of audit fees is $2.3 million (calculated as the average of the audit
fees for the three preceding financial years (2023:$2.4m; 2022: $2.4m; 2021: $2.2m).
Non-audit services fees during the year were $0.1 million, (2023: $0.0m 2022: $0.0m; 2021: $0.0m),
so significantly below the cap of $1.6m (70% of $2.3m). In 2024, fees for non-audit services
represent 0% of the average audit fees on which the cap is based.
The Committee is of the view that Deloitte was objective and independent throughout the 2024
audit process.
Auditor rotation and tendering, and Competition and Markets Authority order
– statement of compliance
The Committee carried out an audit tender process in 2015, resulting in the appointment of Deloitte
as external auditors in April 2016. Deloitte’s re-appointment in 2024 was approved by shareholders
at the Company’s AGM in April 2024.
Under the Companies Act 2006, the lead audit partner must be mandatorily replaced after five years
to ensure auditor independence. The external auditors, as a whole, can only be appointed for a
maximum term of ten years before a competitive tender is required to be undertaken.
The year ended 31 December 2024 is the fourth year for the lead audit partner, Lee Welham,
who was appointed in January 2022.
Following this rotation of the lead external audit partner at the end of FY2021, the Committee will
undertake a full tender in 2025 for the Group’s external audit services as per the indicative tendering
timeline below.
The Committee confirms that the Company is compliant with the provisions of the Statutory Audit
Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014, for the year ended 31 December 2024.
External audit – indicative tendering timeline
2016: Deloitte appointed as external auditors
2021: Mandatory appointment of new audit partner
2025: Full competitive tender to be undertaken
2026: Re-appointment of, or appointment of new, external auditors
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 94
Audit Committee report
Non-audit services
The Group has an agreed policy with regard to the provision of audit and non-audit services by the
external auditors, which has operated throughout 2024 and is available on the Company’s website.
Under the policy, the CFO may approve individual engagements where the fee is up to 15% of
the Group’s audit fee for the year, provided that the non-audit fees in the year do not exceed 50%
of that Group audit fee. Decisions above these thresholds must be referred to the Committee
for determination.
2024 2023
Audit fees ($m) 2.1 2.1
Assurance-related services ($m) 0.3 0.3
Non-audit fees ($m) 0.1 –
Ratio of non-audit fees to audit fees (%) 4.76% 0%
Total fees ($m) 2.5 2.4
Key judgements
Key judgements How the Committee has addressed these matters
Adjusting
items
The presentation and consistency of costs and income within adjusting items is a
key determinant in the assessment of the quality of the Group’s adjusted earnings
Adjusting items was a particularly important area of judgement during the current
year due to continuation of the Fit for the Future restructuring programme. The
restructuring gives rise to an IAS 37 provision, with the expense of $12.1 million
being included as an adjusting item as part of the business transformation costs.
The Committee carefully reviewed the appropriateness of the classification of the
costs as adjusting items, as well as the accuracy of the costs.
Revenue
recognition
The main area of judgement continues to be in relation to recognition of revenue
from shipments by sea. The Committee satisfied itself that the Group had
appropriately recognised revenues in accordance with their contractual obligations
during the period, paying particular attention to period end cut-off.
Impairment in
relation to the
Talc CGU
Critical accounting estimates arise in determining the value in use and fair value less
costs to sell for the Talc cash generating unit (‘CGU’). The Committee has reviewed
the robustness of the impairment modelling, challenged the appropriateness of the
key assumptions used, and the discount rate being applied. The Committee also
considered the impact of the continuing market challenges being faced by the
business on the achievement of the business plan, along with impact of, and data
available from, the ongoing strategic review.
After considering all of these items, and also the impairment of $66.1m made to the
Talc CGU at 30 June 2024, the Committee concluded that a further impairment of
$59.9 million was necessary at 31 December 2024.
The Committee discussed and challenged management’s assessment of the key judgements set out
above and was satisfied that all judgements and estimations had been appropriately made and the
financial statement disclosures were appropriate.
Internal controls, risk and risk management
The Committee’s role is to review the effectiveness of the internal control, compliance and risk
management systems, which it carries out in support of the Board’s formal review of significant risks
and material controls, as summarised in the Risk management report on pages 65-69.
The Committee also has oversight of associated readiness activity and implementation timelines,
and allocates appropriate resources to continue the development of our framework of controls in line
with guidance.
PwC provides an outsourced internal audit function. The Committee considers that the value of
internal audit is enhanced by having a third party perform this function, to support the independent
challenge of management and give greater access to expertise and resources than an internal
function could provide.
The internal audit plan is based on a review of the Group’s key risks which are considered high risk,
or have not been subject to a recent audit. The 2024 internal audit plan was discussed and agreed
between management and PwC ahead of it being considered and subsequently approved by the
Committee. Management review the schedule with PwC on a quarterly basis and adapt the schedule
during the year to incorporate any new or increased risks. The outcomes of these reports are
provided to the Committee, alongside any management actions.
Following an evaluation of the services provided by PwC in respect of the internal audit, the
Committee confirms that both the process for determining the internal audit programme, and the
programme itself, are appropriate and effective.
Management are committed to address all control findings identified by both the internal and
external auditors. The Group has continued to remediate control deficiencies as they are identified.
The Group also continues to invest in its finance, operational and IT capabilities, and management
are committed to maintaining a strong control environment. Set out below is a summary of the key
features of the Group’s internal controls and risk management system.
Control environment
The Group has policies and procedures that set out the responsibilities of business and site
management, including authority levels, reporting disciplines, and responsibility for risk management
and internal controls. In addition, annual compliance statements on internal controls are certified by
each operating segment.
Risk identification and review
A formal risk review process exists at Board and ELT levels for the identification, evaluation,
mitigation and ongoing monitoring of risks, including emerging risks. Further details can be found
on pages 70-74.
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Audit Committee report
Internal audit programme
An internal audit programme is proposed by PwC in consultation with the CFO and approved by
the Committee each year, setting out a programme of audits over the course of the next 12 months.
The programme covers the monitoring of the effectiveness of internal controls and the design of
processes to test the effectiveness of controls. As well as conducting audits of operating facilities,
sales offices and tolling sites on a two- to three-year rotational basis, the internal audit programme
includes reviews of Group functions and processes.
During 2024, the following audits were undertaken:
CSRD readiness
Cyber security
Fraud materiality assessment
Livingston site (UK)
Ludwigshafen site (Germany)
New Martinsville site (US)
Internal auditor effectiveness
To support the Committee in evaluating the effectiveness of the internal audit programme,
a questionnaire-based evaluation is completed by employees who have had the most interaction
with PwC during the year. A scorecard is reviewed by the Committee to assess the strengths and
weaknesses of the internal auditors. The effectiveness of the internal audit function was considered
and confirmed by the Committee.
Controls assurance
The controls assurance framework at Elementis is as follows:
Board leadership supported by an open and transparent culture of ‘no surprises’, good
governance and compliance. This means knowing and understanding the businesses and quality
interactions between the Board and the ELT (including a regular programme of presentations and
reports to the Board, as well as operational site visits)
Internal and external audit programmes, and regular litigation and compliance reviews with the
Group General Counsel & Company Secretary
A programme of compliance audits, regulatory inspections, environmental reviews and property
surveys by external specialists
The Company’s Code of Conduct and Ethics, on which all employees receive training, and which
summarises the Company’s key policies, including anti-bribery and corruption, whistleblowing
arrangements and anti-retaliation. In 2023, we launched our ‘Business Partner Expectations
Document’, which sets out our key requirements of third parties that we do business with, as well
as our third-party compliance risk screening tool
Whistleblowing
If an individual is not comfortable speaking up to their line manager, to HR or to the Compliance team
regarding potential breaches of law, Company policy or values (including those related to accounting,
auditing, risk, internal control and related matters), they have access to an independently hosted,
anonymous (if preferred) whistleblowing facility (IntegrityCounts), available 24 hours a day, 365 days
of the year. Details of how to access this service are referenced in the Code of Conduct and Ethics,
and actively advertised at all Elementis locations. Information is also available online. The Committee
has oversight of reports of this nature, which are investigated by the Group General Counsel &
Company Secretary with the involvement of other senior colleagues as required. During 2024,
there were 23 reports. As a result of the Committee’s review, it was satisfied that all had been
duly investigated and appropriate actions identified by management.
Fair, balanced and understandable
The Committee adopted a similar approach as in previous years to ensure that the Annual Report
is fair, balanced and understandable. The process was as follows:
An internal Annual Report team was set up to manage the process. The team consisted of
members drawn from the Group Finance, Company Secretariat, Investor Relations, Sustainability
and Communication teams. The team was responsible for regularly reviewing work and ensuring
balanced reporting with appropriate links between key messages and sections of the Annual Report
The Committee Chair held meetings with the audit partner, and the Committee held meetings with
the external auditors without management being present
The Committee received updates from management on the Annual Report progress and audit
throughout the process as well as from the Company’s brokers and other advisers
The Committee, Chair and Executive Directors reviewed the Annual Report in its final stages
Following this process, the Committee and then the Board were able to confirm that the Annual Report,
taken as a whole, is fair, balanced and understandable, and provides the necessary information for
shareholders to assess the Group’s position, performance, business model and strategy.
Christine Soden
Chair, Audit Committee
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Audit Committee report
Compliance statement
How the Board operates
The Board held eight scheduled meetings during the year, and additional Board meetings were also
held to discuss emerging matters, including Board appointments and CEO succession, and the
progress of the strategic review of the Talc business.
For each Board and Committee meeting, meeting papers are provided in advance through a secure
portal. Board papers include standing items, such as financial performance and investor relations
updates, and special business such as strategic, operational or governance matters, which are
prepared by Executive Directors, senior management, the Group General Counsel & Company
Secretary and/or external advisers. The Board regularly invites ELT members and their team
members to attend Board meetings and receives presentations and updates from their relevant
business and functional areas.
Other key information, such as analyst/investor reports, Company policies and governance
guidelines, is available through the secure portal.
Matters reserved for the Board
To ensure there is a clear division of responsibilities between the Board and the running of
the Company business, the Board has a formal schedule of matters reserved for its decision.
This is reviewed on a periodic basis and is available on our website: www.elementis.com
Group financial report
Risk management and internal controls
Corporate governance
Group strategy
Acquisitions and disposals
Talent and succession
Culture and values
Sustainability
Health and safety
Engagement with key stakeholders
Financial and trading statements
Board allocation of agenda time
Agendas for each Board meeting are prepared by the Group General Counsel & Company Secretary
as a rolling programme over a 12-month period, but are reviewed regularly and updated where
appropriate. The agenda for each Board meeting is agreed with the Chair, CEO and CFO.
Shareholder communications
The Chair is responsible for effective communication with shareholders. The CEO and CFO are the
Company’s principal contacts for investors, analysts, press and other interested stakeholders.
There is a dedicated investor relations programme for current and potential investors, which is
managed by the Head of Investor Relations, who reports to the CFO. Further information regarding
shareholder services can be found on page 199.
The UK Corporate Governance Code
For the year ended 31 December 2024, Elementis plc was subject to the UK Corporate
Governance Code 2018 (the ‘Code’). The Code sets standards of good practice in relation to
all areas of corporate governance in the UK. In this Annual Report, we report on how we applied
the main principles of the Code and complied with its relevant provisions.
We consider ourselves to be fully compliant throughout the year ended 31 December 2024 and
from that date up to the date of approval of this Annual Report, save in relation to Listing Rule
LR9.8.6R(9) due to having had 37.5% female Directors on the Board in January and February 2024,
during a period when the Board succession process was in flight. From March 2024 this rose to
40% and from April 2024 (until 31 December 2024) to 44% and was 40% at the date of approval
of this Annual Report.
Elementis has complied with all other relevant provisions throughout the year ended
31 December 2024 and from that date up to the date of approval of this Annual Report.
The Code is currently available at www.frc.org.uk
1. Board leadership and company purpose
A. Board of Directors 77
B. Purpose, values, strategy and culture 86
C. Resource and control framework 65
D. Stakeholder engagement 24
E. Workforce policies and practices 44
2. Division of responsibilities
F. Leadership of Board by Chair 98
G. Board composition and responsibilities 98
H. Role of the Non-Executive Directors 98
I. Board policies, processes, information, time and resources 99
3. Composition, succession and evaluation
J. Board appointments and succession 89
K. Board skills, experience and knowledge 89
L. Annual Board and Committee evaluation 87
4. Audit, risk and internal controls
M. Financial reporting, external auditor and internal audit 93
N. Fair, balanced and understandable assessment 96
O. Internal financial controls and risk management 95
5. Remuneration
P. Linking remuneration with purpose and strategy 105
Q. Remuneration Policy review 110
R. Remuneration performance outcomes 119
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 97
Roles and responsibilities of the Directors
The Board members have clearly defined roles and responsibilities, as set out in the table below. They also have a range of skills, knowledge and experience that is relevant to the successful operation of the
Board (see the biographies on pages 77-79 and Board composition and skills matrix on page 89).
Non-Executive Directors
Chair
John O’Higgins
Leads the Board and is responsible for its overall effectiveness
Sets the agendas in consultation with the CEO, CFO and Group
General Counsel & Company Secretary
Promotes open, honest and constructive debate, challenges during
meetings and guides the CEO and CFO in delivery of the strategy
Ensures the Board conforms with the highest standards of
corporate governance
Chairs the Nomination Committee and ensures the Board has
an appropriate balance of skills, diversity and experience
Ensures effective succession planning is in place and leads the
annual Board effectiveness review
Engages with shareholders and other stakeholders, and ensures
that their views are understood and considered appropriately in
Board decision-making
Senior Independent
Director
Trudy Schoolenberg
Acts as a sounding board to the Chair, providing support and
advice where necessary
Is the point of contact for shareholders and other stakeholders
to discuss matters of concern
Leads the Board’s appraisal of the Chair’s performance with the
Non-Executive Directors
Independent
Non-Executive
Directors
Heejae Chae,
Maria Ciliberti,
Dorothee Deuring,
John O’Higgins,
Trudy Schoolenberg,
Christine Soden,
Clement Woon
Provide independent oversight objectivity to the Board’s
deliberations
Use their broad range of experience and expertise to challenge
management and aid decision-making
Serve on various Committees and play a leading role in the
effectiveness of those Committees
Non-Independent
Non-Executive
Director
Christopher Mills
Supports the Board in completing existing initiatives and
potentially new initiatives to help contribute to long-term
shareholder value creation
Serves on the Nomination Committee
Executive Directors
Chief Executive
Officer
Paul Waterman
Day-to-day management of the business
Execution of strategy and operational performance
Provides regular updates to the Board on all significant matters
relating to the Group
Ensures the Company has a strong team of high-calibre executives
Puts in place management succession and development plans
Chief Financial
Officer
Ralph Hewins
Supports the CEO in the delivery of the Company’s strategy and
financial performance
Leads the Group Finance function and is responsible for financial
reporting, investor relations, IT, risk, insurance and tax matters
Plays a key role in external stakeholder relationships, including
investment community, lenders and pension trustees
Group General Counsel & Company Secretary
Anna Lawrence Supports the Chair in ensuring the Board operates efficiently
and effectively
Provides the Board with advice on governance developments
Facilitates the Directors’ induction programmes and assists with
ongoing training and development
Assists the Chair with the Board effectiveness review process
Designated Non-Executive Director for workforce engagement
Christine Soden Represents the Board when engaging and communicating with
employees and provides communication on any outcomes
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 98
Compliance statement
Independence of the Non-Executive Directors
Seven of the Non-Executive Directors are considered independent in character and judgement.
The Chair was considered independent on appointment and the Board confirms that he remains
effective. The independence of Non-Executive Directors is reviewed annually by the Nomination
Committee, with the continuing independence of Dorothee Deuring being subject to a particularly
rigorous review, in view of her longer service, as described further on page 90.
Christopher Mills is not considered by the Board to be independent, in view of his role as founder and
CEO of Harwood Capital Management Limited and close relationships with several other shareholders.
As at the date of the announcement of Christopher Mills’ appointment on 24 December 2024, funds
managed by Harwood Capital and its affiliates owned 22,500,000 shares in the Company.
The biographies of the Directors can be found on pages 77-79 and details of the membership of each
Board Committee can be found on pages 88, 92 and 101 respectively.
Time commitment
Following the Board performance review process, as detailed on page 87, the Board has considered
the individual Directors’ attendance, contribution and external appointments, and is satisfied that
each of the Directors is able to allocate sufficient time to the Group to discharge their responsibilities
effectively. Information on Directors’ external appointments can be found on pages 77-79. The Directors’
commitments register is maintained by the Group General Counsel & Company Secretary and is
regularly reviewed by the Nomination Committee. All Directors are expected to commit sufficient time
to the Board, and the Company, as is necessary to carry out their duties as a Director.
Additional appointments
If a Non-Executive Director wishes to take on an additional external appointment, they are required
to seek permission from the Board. The Board will take into consideration the time commitment
required by the Non-Executive Director in their role as a Board Director, Committee Chair or
Committee member before any permission is given.
Executive Directors are not permitted to take on more than one non-executive directorship of a
FTSE 100 company or other significant appointment. No such external appointments are currently
held by any of the Executive Directors.
In April 2024, Dorothee Deuring notified the Board of her wish to take on an additional appointment
as supervisory board member of OMV AG. The Board considered Dorothee’s external commitments
and additional time required for the new proposed role and concluded that Dorothee would still have
sufficient time to perform her role with the Company. The Board also considered whether the new
appointment would be a conflict of interest and concluded that it would not.
Conflicts of interest
Elementis plc has a Conflicts of Interest Policy in place for all Group companies. Our Board and
its Committees consider potential conflicts at the outset of every meeting and the Board formally
reviews the authorisation of any potential conflicts of interest throughout the year, with any conflicts
being recorded in the Conflicts of Interest Register.
The Conflicts of Interest Register sets out any actual or potential conflict of interest situations which
a Director has disclosed to the Board in line with their statutory duties and the practical steps that are
to be taken to avoid conflict situations. When reviewing conflict authorisations, the Board considers
any other appointments held by the Director as well as the findings of the Board effectiveness
evaluation. Directors are required to seek Board approval for any actual or potential conflicts of
interest. Ralph Hewins is in receipt of a conflict authorisation from the Company in respect of him
acting as a trustee of the Elementis Group Pension Scheme. Further details can be found in the
Directors’ report on page 130.
Directors’ insurance and indemnities
The Company maintains directors’ and officers’ liability insurance, in the event of legal action brought
against its Directors.
The Company has also granted indemnities to each of the Directors. These indemnities are
uncapped in amount, in relation to certain losses and liabilities which they may incur to third parties
in the course of acting as a Director of the Company. Neither the indemnity nor insurance provides
coverage in the event that a Director is proved to have acted fraudulently or dishonestly.
Board training and independent advice
All Directors have access to the advice and services of the Group General Counsel & Company
Secretary and may take independent professional advice, as appropriate, at the expense of the
Company.
Directors are given the opportunity throughout the year to undertake training and attend seminars,
as necessary, to keep their skills and knowledge up to date. In addition, technical briefings are
regularly included in Board and Committee papers.
The Group General Counsel & Company Secretary supports the Chair in ensuring that the
Board and its Committees operate within the governance framework and that communication
and information flows within the Board and its Committees, and between management and
Non-Executive Directors, remain effective.
Information flows
The Chair and the Group General Counsel & Company Secretary ensure that the Directors receive
clear and timely information on all relevant matters. Board papers are circulated in a timely manner
in advance of the meetings to ensure that there is adequate time for them to be read and to facilitate
robust and informed discussion.
A fully encrypted electronic Board portal is used to distribute Board and Committee papers and
to provide efficient distribution of business updates and other resources to the Board.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 99
Compliance statement
Board induction
The Chair, with support from the Group General Counsel & Company Secretary, is responsible for preparing and coordinating an appropriate induction programme, which is to be tailored to the needs
of each newly appointed Non-Executive Director. Newly appointed Directors will be provided with a thorough briefing on their fiduciary duties and continuing obligations from the Group General Counsel
& Company Secretary, supported by external legal advisers, if required.
Board induction programme
Induction – general topics The role of the Director
Board and Committees
Board meetings
Rules, regulations and guidance
Board procedures
Current issues
Nature of the Company, its business and its markets
The Company’s main relationships
Induction – Board Committees (as appropriate) Role and remit of the Committee
Link between the Committee’s policy and the Company’s strategic objectives
The annual meeting schedule for the Committee
The main business conducted by the Committee
The legal requirements relevant to the Committee’s operations
Market practice and current trends relevant to the Committee
Current issues
Views of investors on matters considered by the Committee and potential areas of focus
Any technical training on key matters
Induction – external advisers Meetings with:
External auditors
Internal audit function
Remuneration consultants
Brokers
Lawyers
Induction – senior management meetings Meetings with:
All ELT members
VP IT, Data and Digital
Group Financial Controller & Head of Tax
Head of Investor Relations
Global Director Sustainability
Induction – site visits Key Elementis operating and corporate sites globally
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 100
Compliance statement
Directors’ Remuneration report
Annual statement of the Chair of the Remuneration Committee
Clement Woon
Chair, Remuneration Committee
Index page
101 Annual statement of the Chair of the
Remuneration Committee
105 Remuneration at a glance
Directors’ Remuneration Policy
109 Policy report
110 Policy table
113 Share ownership guidelines
116 Recruitment Policy
116 Service contracts
116 Paymentforlossofoffice
117 Treatment of incentive plans
117 Non-Executive Directors’ terms of
appointment
117 Shareholder engagement
Annual Report on Remuneration
118 Remuneration payable to Directors for 2024
119 Annual bonus for performance in 2024
121 Directors’ share-based awards
123 Directors’ scheme interests
124 Directors’ share interests
124 Directors’retirementbenefits
125 PaymentstopastDirectorsforlossofoffice
126 Total shareholder return
127 CEO to all-employee pay ratio
127 Relative importance of spend on pay
128 Percentage change in remuneration of
theDirectors
129 Statement of shareholder voting
129 Other information about the Committee’s
membership and operation
129 Terms of reference
129 Activities during the year
Attendance at Remuneration Committee meetings
Member Member since
Eligible meetings
(max 5) Attendance
Clement Woon (Chair) December 2022 5 5
Maria Ciliberti
1
March 2024 2 2
Heejae Chae
2
March 2024 4 3
Dorothee Deuring March 2017 5 5
John O’Higgins February 2020 5 5
Christine Soden November 2020 5 5
Trudy Schoolenberg March 2022 5 5
Steve Good
3
October 2014 1 1
1 Maria Ciliberti was appointed as a Non-Executive Director on 11 March 2024. Following a review of Committee
members in July 2024, Maria stepped down from the Committee.
2 Heejae Chae was appointed as a Non-Executive Director on 25 March 2024. Heejae was unable to attend one
meeting due to a scheduling conflict.
3 Steve Good was Chair of the Committee until he retired from the Board at the conclusion of the AGM on
30 April 2024.
Dear Shareholders,
I am pleased to present the Directors’
Remuneration report for the year ended
31 December 2024. I took over as
Chair of the Remuneration Committee
(the ‘Committee’) from Steve Good
following the conclusion of the AGM
on 30 April 2024, having served as a
member of the Committee since my
appointment to the Board in December
2022. On behalf of the Board, I wish to
thank Steve for the work he undertook
while Chair of the Committee.
The Directors’ Remuneration report
The Directors’ Remuneration report is set out in the following parts:
1. This Annual Statement from the Chair of the Remuneration Committee summarising how our
Remuneration Policy has been implemented and the key decisions taken by the Committee;
2. An At a glance section providing an overview of how we implemented the Remuneration Policy
during the year under review;
3. The Remuneration Policy for which shareholder approval is being sought in a binding vote at the
AGM to be held on 29 April 2025; and
4. The Annual Report on Remuneration, which provides full detail on how we paid Directors
during 2024 and how we propose to implement the policy in 2025.
The Remuneration Policy and the Annual Report on Remuneration will be presented to shareholders
for approval at the AGM on 29 April 2025 and I look forward to your vote in support of the resolutions.
This report should be read in conjunction with
the separate section on compliance under the
UK Corporate Governance Code on page 97.”
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 101
Remuneration Policy
As a global specialty chemicals company, Elementis offers performance-driven additives that help
create innovative formulations for consumer and industrial applications. We have market-leading
positions in high-performance ingredients in the Performance Specialties and Personal Care
markets. We have a global footprint, with sites in Europe, Asia and the Americas, and a talented
leadership team located across the world. Our strategy is to deliver long-term sustainable
shareholdervaluethroughinnovation-ledgrowthandtheexecutionofefficiencysavings.
We continue to deliver solid progress against this strategy, improving both our margin and leverage.
Our Remuneration Policy has been purposefully designed to support our strategy detailed above.
Our overall policy is set with reference to UK benchmarks, with flexibility retained to take account
of the location from which executives are recruited when determining remuneration quantum.
Overall, quantum is set in the context of the size and complexity of the Company. Our pay model is
UK-centricandincludesbasesalary,pensionandbenefits,annualbonus,andaperformanceshare
plan (the same policy cascades below Executive Director level but includes restricted stock as well
as performance shares in recognition of local market practice in the geographic locations in which
we operate).
Remuneration is weighted towards long-term variable-pay, which supports the long-term nature
of the investment decisions we make. Our performance metrics are fully aligned with strategy as
set out above.
With the 2025 AGM marking the third anniversary of the introduction of the 2022 Remuneration
Policy, we are required to seek shareholder approval for a new Remuneration Policy at the 2025
AGM. As a result, we undertook a review of the existing Remuneration Policy during the year, which
reconfirmedthatthecurrentRemunerationPolicycontinuestosupportourstrategyandreward
objectives at the same time as being aligned with standard market and best practice for FTSE 250
companies. In reaching this decision, the Committee noted the circa 97% support it received for
the current Remuneration Policy at the 2022 AGM.
As a result of the above, the only change that we are making to the Remuneration Policy is to
broaden the trigger events material to clawback and malus (i.e. enabling the recovery or reduction
of previously earned or awarded remuneration in certain circumstances) in line with the good
practice envisaged by the 2024 UK Corporate Governance Code. Details of this change are set out
on page 107.
Remuneration in 2024
As detailed in the Strategic report, we delivered strong performance in 2024 despite the continued
challenging demand environment.
WedeliveredonourInnovation,GrowthandEfficiencystrategy,launching22newproducts,
executing on self-help actions, including accessing new business opportunities (“NBOs”) and
delivering $18 million of annual cost savings in 2024. The Fit for the Future restructuring programme
progressed as expected, with role restructurings on track, the transfer of transactional services to an
outsource provider completed and the set up of our new Porto team.
Theoutputsoftheactionswehavetakenincludedyear-on-yeargrowthinprofitbeforetax(“PBT”)
of24%andamuch-improvedoperatingmarginof17.4%,takingussignificantlyclosertoour2026
target of 19%+ operating margin and demonstrating the progress we are making as a high-quality,
high-value specialty chemicals business. Our performance in relation to average trade working
capital to sales ratio, one of our bonus metrics, was solid, albeit towards the lower end of the range
of targets set for the 2024 annual bonus. This was all achieved while delivering our safety targets,
continuing to progress our sustainability and DE&I agenda and undertaking a strategic review of
our Talc business.
Annual bonus
As a result of the above, following the Committee undertaking a formal assessment of performance
against the targets, bonuses were payable at 77.9% of maximum for the Executive Directors.
AcrossElementis,circa96%ofemployeesareexpectedtoreceiveabonus,withawardstobepaid
uptocirca97%ofmaximumdependinguponindividualperformanceandspecificbonusplantargets.
The Committee was comfortable with the bonus earned in the context of the performance delivered,
and the bonuses awarded across the Company, and so did not consider it necessary to use
discretion in relation to the bonus outturn.
Further details of the targets set for 2024, and the actual performance achieved are disclosed on
page106.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 102
Directors’ Remuneration report
Long-term incentive plan (“LTIP”)
LTIP awards granted in the year: The 2024 LTIP awards were granted on 8 April 2024 based on
normalawardlevelsof200%ofsalaryfortheChiefExecutiveOfficerand175%ofsalaryforthe
ChiefFinancialOfficer.
The metrics were equally weighted on earnings per share (“EPS”), total shareholder return (“TSR”),
adjustedoperatingprofitmargin(“OPM”)andaverageoperatingcashconversion(“AOCC”).
The vesting of the award is also subject to a return on capital employed (“ROCE”) underpin which
requires the Committee to consider whether the return generated is in line with the Board’s
expectations and, if not, to reduce the vesting to a more appropriate level. In addition, the Committee
will retain discretion to reduce the number of shares on vesting should it be considered appropriate
to do so (e.g. if there was perceived windfall gain).
Fulldetailsofthetargetsandtheawardsaresetoutonpage106.Totheextenttheseawardsvestat
the end of the three-year performance period, shares will be required to be held for a further two years.
LTIP awards vesting based on performance to 31 December 2024: The 2022 LTIP awards
were granted subject to challenging EPS, relative TSR and AOCC targets, which were subject to
a general ROCE underpin. Based on the performance over the three-year period, the 2022 LTIP
awards will vest at 48.7% of the maximum. This is as a result of delivering 53% growth in EPS,
aTSRof50.9%,andanAOCCof88.2%.TheROCEunderpinwassatisfiedwithROCEincreasing
significantlyoverthethree-yearperformanceperiodinchallengingmarketconditions.
The EPS targets were restated (in line with the restatement to the 2021 LTIP targets) following the
divestment of the Chromium business during the performance period. The restatement ensured the
targets were no more or less challenging than when originally set (i.e. Chromium was excluded from
the base and end targets, so the condition was tested on a consistent basis).
In determining vesting, the Committee also considered the potential for windfall gains and concluded
thatthevalueonvestingofthe2022awardsdidnotbenefitfromwindfallgains.Inreachingthis
conclusion, the Committee determined that the share price was a fair reflection of the underlying
financialperformanceoftheCompanythroughtheperformanceperiodandalsonotedthatthe
share price used as the basis of determining awards in 2022 was at a similar level to the share price
prevailing at the time of determining the 2021 awards. Accordingly, the Committee did not use any
discretioninconnectionwiththe2022award.Furtherdetailsareincludedonpage106.
The Committee believes that the overall incentive outturns and approach to target-setting (as detailed
above) were appropriate based on the Company’s performance over the whole performance period
and demonstrate that the Committee has, and will continue to, set performance targets which it
considers to be meaningful and appropriately stretching. As a result, the Committee is comfortable
that its general approach to remuneration and the overall policy framework are working as intended.
In reaching this conclusion, the Committee did consider the quantum of remuneration earned at both
executive level and across the Company (including considering pay ratios) and determined that our
overall Remuneration Policy and outcomes were appropriate and proportionate. As detailed in the
sections above, the Committee did not use discretion during the year.
Remuneration in 2025
As detailed above, the clawback and malus provisions are being updated as part of the
Remuneration Policy review. With regard to the application of Policy for 2025, the one change that
wearetomakeversus2024istorefinetheperformancemetricsthatwillapplytoour2025LTIP.
Summary details are set out below, with the revisions being made to provide a sharper focus on value
creationandcapitalefficiencyoverthenextthree-yearperiod.
Salary review: The Executive Directors’ base salary increases were 3.5% for the CEO and 3.8%
for the CFO for 2025. These increases were below the workforce salary increase budgets for each
location, which were 4.0% in the US and 4.3% in the UK, in recognition of current market conditions
and a modest weighting of salary budgets towards the wider workforce.
2025 annual bonus: There will be no change to the quantum of the Executive Director bonus
opportunity and as such the CEO will have the opportunity to earn up to 150% of salary and the
CFO up to 125% of salary.
With regard to the current CEO, as announced on 18 November 2024, the Company is in the
process of effecting a leadership succession plan and, as a result, the bonus payable to the
current CEO will be pro-rata for the period of his active employment during 2025. Further details
of remuneration arrangements in respect of Paul Waterman’s cessation of employment are set out
in the information provided on the Company’s website in accordance with Section 430(2B) of the
CompaniesAct2006andlaterinthisDirectors’RemunerationReport.
Asinprioryears,thebonuswillbebased70%againstachallengingrangeoffinancialtargets
(50%onadjustedGroupprofitbeforetaxand20%onaveragetradeworkingcapital(“AWC”)to
salesratioontotaloperations),withtheremaining30%basedonnon-financialstrategicobjectives
whicharespecificandmeasurableobjectivesthatarerelatedtotheCompany’sstrategicpriorities.
Thenon-financialtargetsfor2025willagainbefocusedonsustainabilityandstrategictargets.
ReflectingthecontinuedGroup-widefocus,halfofthenon-financialtargetswillrelatetosustainability,
withthebalanceofthenon-financialtargetsrelatingtoInnovation,Growth,andEfficiency,whichaim
to support strengthening of our operating margin over the next three years.
Summary details of our approach to target-setting are detailed on page 107 and full details of the
financialtargetrangesandourperformanceagainstthemwillbedisclosedonaretrospectivebasis
in next year’s report. The Committee has discretion to modify the overall amount of bonus payable
to ensure it is appropriate. 50% of any bonus earned is normally deferred in shares for two years.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 103
Directors’ Remuneration report
2025 LTIP awards: SubjecttofinalCommitteereviewpriortogrant,awardsareexpectedtobe
granted at 175% of salary to the CFO. In light of the CEO succession process noted above, the
current CEO will not be eligible for an LTIP award in 2025, albeit flexibility is retained to grant an
award to an incoming CEO in line with the Remuneration Policy. The awards will be subject to an
overriding Committee discretion to reduce the awards at vesting should there be a perceived
disconnectbetweenunderlyingfinancialperformance,totalshareholderreturnandreward.
Withregardtotheperformancemetricstoapplytothe2025awards,thesehavebeenrefinedversus
those used for the 2024 awards. ROCE (excluding goodwill) and greenhouse gas emissions (“GHG”)
are being introduced as primary LTIP metrics in place of three-year AOCC and OPM. This is to align
withourfocusonvaluecreationandcapitalefficiencyoverthenextthree-yearperiodandin
recognition that average working capital to sales is being retained in the annual bonus as a measure
ofoperationalefficiency.GHGreductionisincludedwithalowerweighting,at10%,versusthe30%
applicabletoeachofthefinancialmeasures.Thespecifictargetsaredetailedbelow.Therefined
metric choices fully align to our medium-term to long-term strategy of delivering sustainable growth
andshareholdervaluecreationaswelookbeyondtheFY2026targetssetaspartofourNovember
2023 Capital Markets Day (“CMD”).
The EPS targets will be set based on the level of EPS achieved in 2027, with vesting to take place
from a threshold performance level of 15.5 cents, which results in 0% vesting, increasing on a
straight-line basis to full vesting at 19 cents or greater. External expectations for our future
performance were considered, in additional to internal plans, as part of the target-setting process
Thethree-yearaverageROCEtargetswillbesetwithathresholdperformancelevelof26%which
will result in 0% vesting, increasing on a straight-line basis to target vesting (50%) at 28%,
increasing on a straight-line basis to full vesting at 29% or greater. External expectations for our
future performance were considered, in addition to internal plans, as part of the target-setting
process. The introduction of ROCE as a primary performance measure replaces operating cash
conversion and the ROCE underpin that applied in prior years
TSR will continue to be assessed against the constituents of the FTSE All-Share Index (excluding
investment trusts). This is considered an appropriate peer group given that Elementis is towards
themiddleofthegroupintermsofcurrentmarketcapitalisationandthereisinsufficientUKlisted
sector-specificcompaniesagainstwhichourrelativeperformancecanbebenchmarked.
Threshold vesting starts at 25% for median performance, increasing on a straight-line basis,
with 100% vesting for achieving at least upper-quartile performance
GHG reduction targets relating to Scope 1 and 2 emissions will operate with vesting to take
place from a threshold performance level which will require an absolute emissions reduction of
9,075t CO
2
e and result in 0% vesting, increasing on a straight line to full vesting for an absolute
emissions reduction of 18,150t CO
2
e or greater. The absolute annual reduction target has
been set to be in line with our SBTi validated SBT pathway of 5.9% absolute annual reduction
in Scope 1 plus Scope 2 (market-based) GHG emissions from a 2024 baseline. Vesting based
on the performance conditions will be subject to a general Committee discretion to over-ride the
formula-based outcome if it is not considered to be reflective of the overall performance of the
Company across the period
Context of Directors’ pay within the Company
Christine Soden is the Designated Non-Executive Director (“DNED”) for workforce engagement.
During the year Christine held focus groups with employees in New Martinsville, USA; Porto,
Portugal; and Sao Paolo/Palmital, Brazil, each of which included discussion around compensation.
Following these discussions, we’ve reinforced pay education via intranet communication material,
accessibletoall.WeareexploringflexiblebenefitsinPortugaltogiveemployeesmorefreedomof
choiceandhaveensuredmoreon-siteHRandBenefitssupporttoUSemployeesforopenenrolment.
The Group is not required to provide disclosure of the CEO to all-employee pay ratio given the
Group has fewer than 250 employees in the UK. However, given the external focus on pay ratios,
the Committee has included full pay ratio disclosure on page 127 and is comfortable that the ratio
is in line with the Company’s pay policies and in line with current FTSE market practice.
The Group is also not required to report under the gender pay gap regulations. Despite this, the
Group reviews gender pay on a biennial basis. The last gender pay review was completed towards
the end of 2024, concluding that the approach to pay was fair and equitable, with any anomalies
adjusted accordingly. The CEO pay ratio and gender pay gaps are considered when there is a full
review of the Executive Director and wider Remuneration Policy.
Concluding remarks
The Committee believes that the policy and our approach to implementation are in the best interests
of the Company, and we hope that you will support the actions the Committee has taken by voting
in favour of the Remuneration Policy and Directors’ Remuneration Report at the 2025 AGM. If you
have any feedback, please feel free to contact me via the Group General Counsel & Company
Secretary at company.secretariat@elementis.com
Clement Woon
Chair, Remuneration Committee
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 104
Directors’ Remuneration report
Implementation of Remuneration Policy in 2024
ThesectionbelowsummariseshowthePolicywasimplementedinthefinancialyearended31December2024.Furtherdetailsareprovidedonpages116to125.
Key policy features Performance assessment How we implemented in 2024
Salary
Increases normally guided by the general increase for the local
workforce and/or broader workforce as a whole
Not applicable
Paul
Waterman
Ralph
Hewins
2024 salary $1,034,834 £413,599
The salaries of the CEO and CFO were increased by 4.0%.
The increases were below the 4.5% budgeted average increases
awarded to the US and UK salaried workforce. These changes
were effective from 1 January 2024.
Pension/benefits/all-employee share schemes
Pension: CEO and CFO pension contributions were reduced
to a maximum of 21% from 1 December 2022, to align with the
typical UK workforce pension funding rate of 21% of salary
Benefits:Directorsreceivemarket-competitivebenefitsand
may participate in all-employee share schemes
Not applicable
Paul
Waterman
Ralph
Hewins
Pension $213,611 £86,856
2024 LTIP How our measures link to strategy
Performance metrics
Strategic priorities
Innovation Growth Efficiency
Bonus Financial: (70%)
Adjusted Group PBT
AWC to sales ratio
Non-financial: (30%)
Sustainability targets
Innovation,GrowthandEfficiency
LTIP EPS (25%)
Relative TSR versus FTSE All-Share (25%)
Cash conversion (25%)
OPM (25%)
2024 at a glance
Annual bonus
Adjusted Group PBT:
50% weighting
Adjusted AWC to sales ratio:
20% weighting
Non-financial objectives
(aligned with strategic implementation,
safety, environment, and people):
15% weighting – Sustainability targets
15% weighting – Strategic targets
2024 LTIP
EPS:
25% weighting
Relative TSR:
25% weighting
Cash conversion:
25% weighting
OPM:
25% weighting
ROCE underpin
Our 2024 measures
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 105
Directors’ Remuneration report
Key policy features Performance assessment How we implemented in 2024
Annual bonus
Performance-related scheme which delivers value for
achievement against annual targets
Committee may adjust outturn where formulaic assessment
is inconsistent with Company’s overall performance
50% of bonus earned deferred into shares for two years
Recovery and withholding provisions apply
Paul Waterman Ralph Hewins
Opportunity 150% of salary 125% of salary
PBT $105.0m vs target of $90.0m
Payout (50% of bonus) 100% of PBT maximum
AWC to sales ratio 23.4% vs target of 22%
Payout (20% of bonus) 15% of AWC maximum
Non-financial See page 121
Payout (30% of bonus) 83% of
Non-financial
maximum
83% of
Non-financial
maximum
Total 77.9% of
maximum
77.9% of
maximum
Further information can be found on pages 119-120.
As detailed in the Annual Statement on page 101, 2024 was a year
of continued progress against our Innovation, Growth and
Efficiencystrategy.
We delivered 24% growth in PBT to $105.0 million, which was
above our internal planning; however, the AWC ratio of 23.4% was
at the lower end of the performance range.
Long-term incentive plan
Performancemeasuresbasedonfinancialand/orrelative
TSR metrics and measured over three years
Committee may adjust outturn where formulaic assessment
is inconsistent with Company’s overall performance
Holding period applies for two years following vesting
Recovery and withholding provisions apply
ROCE underpin
2022 Award
EPS
growth
Average cash
conversion
TSR vs
FTSE All Share
Weighting 33.3% 33.3% 33.3%
Threshold target 10.9 cents 85% Median
Maximum target 14.7 cents 95% Upper quartile
Actual 13.3 cents 88.2% 58th
percentile
Vesting 21.1%/33.3% 10.7%/33.3% 17%/33.3%
Further information can be found on pages 125-127.
The relative TSR, EPS and AOCC over the performance period
were above the threshold target. Overall, this has resulted in 48.7%
of the award vesting. With regard to the ROCE underpin, the
Committee considered the vesting result appropriate having had
regardtotheROCEincreasingduringtheperiodby62%, with this
achievedindifficulteconomicconditions.
The Committee considered the potential for any windfall gains on
vesting, but noting that the awards were granted from a share price
of £1.19, which was consistent with the share price used as the
basis to determine the 2021 award (£1.255) and the prevailing
share price in February 2020 prior to the onset of the COVID-19
pandemic and the market-wide fall in share prices, concluded
there was no windfall gain. Shares are subject to the two-year
holding period. Further details are set out on page 119.
Share ownership guidelines
Build up and maintain a shareholding equal to 200% of salary
The guideline also applies for two years post cessation
of employment
Paul Waterman Ralph Hewins
Guideline 200% of salary 200% of salary
Level Achieved 287%
of salary
1
On track 191%
of salary
1
1 For the purposes of the guideline, an estimate has been made in relation to the
after-tax number of shares in relation to vested/unexercised share awards.
Both the CEO and CFO increased their holdings during the year.
Further information can be found on page 124.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 106
Directors’ Remuneration report
Implementation of Remuneration Policy for 2025
As a UK listed business, our primary reference points for both quantum and remuneration structure for our Executive Directors are UK benchmarks. However, we retain flexibility to take account of the
location from which executives are recruited when determining remuneration quantum with overall quantum set in the context of the size and complexity of the Company. With our current CEO being a
US citizen, based in the US, splitting his time between the UK and the US, his remuneration quantum is set to be aligned with UK market practice in terms of structure. However, recognising that remuneration
quantum is above UK levels in US businesses of a similar size and complexity, his total remuneration package is positioned towards the upper quartile versus UK FTSE 250 benchmarks. For completeness,
this market positioning is considered appropriate on the basis that, versus US companies of a comparable size and complexity, his remuneration quantum falls between the lower quartile and median.
As announced on 18 November 2024, the Board agreed with our current CEO that he will step down no later than our AGM in 2025; it is the current intention that, as we work towards appointing a successor,
the terms of any appointment will be proportionate to role and the size and complexity of the business.
ThesectionbelowsummariseshowtheCommitteeintendstoimplementthePolicyfortheforthcomingfinancialyearending31December2024.
Key policy features 2025 implementation
Salary
Level based on the scope and responsibilities of the role
Increases normally guided by the general increase for the local
workforce and/or broader workforce as a whole
The Committee reviewed salaries and decided to award Paul Waterman and Ralph Hewins each a salary increase, as shown in
the table below, which is lower than the 4.0% budgeted for the US and 4.3% budgeted for the UK salaried workforce
Paul Waterman Ralph Hewins
Salary as at 1 January 2024 $1,034,834 £413,599
Salary as at 1 January 2025 $1,071,055 £429,317
2025 increase 3.5% 3.8%
Pension/benefits/all-employee share schemes
Pension:theCEOparticipatesinUS-specificarrangementsand
receives a salary supplement, and the CFO receives a salary supplement
Any new Director appointment will have pension set at 8% of salary
in line with that offered to new joiners across the wider workforce
Benefits:Directorsreceivemarket-competitivebenefitsandmay
participate in all-employee share schemes
Implementation in line with the Policy
Pension rates for incumbent Directors for 2024 are aligned with the typical UK individual pension funding rates (see page 124 for
further detail)
Annual bonus
Policy maximum of 150% of salary for CEO and 125% of salary for CFO
Performance-related scheme which delivers value for achievement
against annual targets
Committee may adjust outturn where formulaic assessment is
inconsistent with the Company’s overall performance
50% of bonus earned deferred into shares for two years
Recovery and withholding provisions apply
Link to KPIs
Adjusted Group PBT
AWC to sales ratio
Individual objectives linked to sustainability and strategic priorities
Paul Waterman Ralph Hewins
Opportunity 150% of salary 125% of salary
Performance metrics
Adjusted Group PBT: 50%
AWC to sales ratio: 20%
Non-financialstrategicpriorities:30%,ofwhich15%basedonappropriatelystructuredsustainabilityprioritieswiththeremaining
15%setonInnovation,GrowthandEfficiencytargets
The targets are fully aligned with the Company’s current strategy and have been set to be challenging in the context of the
Company’s performance expectations for the year ahead
The Committee considers that the bonus targets are commercially sensitive and therefore plans to disclose them only on a
retrospective basis in next year’s Directors’ Remuneration report
The range of targets around budgeted performance levels to apply in 2025 have been calibrated to take into account the current
external environment and internal planning
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 107
Directors’ Remuneration report
Key policy features 2025 implementation
Long-term incentive plan
Policy maximum is 250% of salary
Awards vest to the extent performance conditions are achieved
Performancemeasuresbasedonfinancialand/orrelative
TSR metrics and measured over three years
Committee may adjust outturn where formulaic assessment is
inconsistent with the Company’s overall performance and/or
there is a perceived windfall gain
Holding period applies for two years following vesting
Recovery and withholding provisions apply
Link to KPIs
EPS
Relative TSR
ROCE
GHG reduction (reduction in emissions from Scope 1 and
Scope 2 (market-based) emissions)
The choice of targets relates to measuring the Company’s
successindeliveringprofitablegrowthandsustainable
shareholder returns
Paul Waterman Ralph Hewins
LTIP award 200% of salary 175% of salary
Performance metrics
Weighting Threshold
Threshold
vesting Target
Target
vesting Maximum
Maximum
vesting
2027 EPS 30% 15.5 cents
per share
0%
– –
19 cents
per share
100%
2025 to 2027 ROCE 30% 26% 0% 28% 50% 29% 100%
Relative TSR vs FTSE
All-Share Index
30% Median 25%
– –
Upper
quartile
100%
Scope 1 and 2 GHG
emissions intensity reduction*
10% 67,8 33tCO
2
e 25%
– –
58,758tCO
2
e 100%
* Straight-line vesting takes place between performance points.
The range of EPS targets has been set to be demanding based on a combination of internal planning, external market expectations for
ourfutureperformanceandbuildonourCMDcommitmentsmadeinNovember2023forend2026.Note(i)thatvestingtakesplace
from 0% (as opposed to the market norm of 25%), and (ii) in line with institutional investor expectations, the range straddles consensus
growth expectations
The range of ROCE targets has been set to be demanding based on a combination of internal planning and external market
expectationsforourfutureperformance.TheybuildonourCMDcommitmentsmadeinNovember2023forend2026
GHG reduction – introduced in 2025 to align with our adoption of science-based targets. The targets have been structured as absolute
emissions reduction to align to the Science Based Target initiative
ThetermsoftheaboveawardswillbesubjecttoafinalreviewpriortograntandtheawardswillbesubjecttoanoverridingCommittee
discretion to reduce the awards at vesting should there be a perceived windfall gain
Chair and NED fees
To attract individuals with the relevant skills, knowledge and
experience that the Board considers necessary in order to
maintain an optimal mix that ensures the effectiveness of the
Board as a whole in carrying out its duties and responsibilities
Fees will increase by 3.8% for the upcoming year, which is lower than the UK workforce, where the budgeted increase is 4.3%.
2025 2024
2025
increase
Basic fees
Chair £224,442 £216,225 3.8%
Non-Executive Director £60,762 £58,538 3.8%
Additional fees
Senior Independent Director £10,558 £10,172 3.8%
Chair of Audit or Remuneration Committee £10,558 £10,172 3.8%
Workforce engagement NED £5,281 £5,087 3.8%
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Directors’ Remuneration report
Remuneration Policy report
The Company’s current Remuneration Policy was approved by shareholders at the AGM on
26April2022(thefullRemunerationPolicyissetoutinthe2021AnnualReportandAccounts).
As a result, we undertook a review of the existing Remuneration Policy during the year, which
reconfirmedthatthecurrentRemunerationPolicycontinuestosupportourstrategyand
reward objectives at the same time as being well aligned with market and best practice for
FTSE 250 companies.
Summary of proposed changes to the 2025 Remuneration Policy
With the current Remuneration Policy being considered to work effectively, and well aligned with
market and best practice, the only material change being made to the Policy is an update to the
trigger events included in our clawback and/or malus provisions (i.e. recovery and/or withholding)
in the annual bonus and long-term incentive plans. These changes are being made as a result of
the updates included in the 2024 UK Corporate Governance Code. Our current provisions enable
clawback or malus to be applied where the following circumstances become known within three
years of any payments being made:
Performanceoutcomesweredeterminedbasedonmis-statedfinancialinformation
Performance outcomes being incorrectly calculated
Gross misconduct
In addition to the above, the following additional trigger events will be included in the revised
Remuneration Policy from 2025:
Actions within the performance period that lead to corporate failure
Activitieswithintheperformanceperiodthatresultinamaterialfinancialdownturn
A material failure of risk management within the relevant performance period
The occurrence of an event in the performance period that caused a serious health and safety event
Following an individual being deemed a ‘good leaver’ within an incentive plan by reason of
retirement with the agreement of the Remuneration Committee, their taking on subsequent
employment in a paid executive role
Each of the above factors is being included in the 2025 Remuneration Policy as well as in the relevant
incentive plan documents.
Retaining a three-year period during which the above provisions can be operated was considered
appropriatenotingthatthisisstandardmarketpracticeoutsideoffinancialservicescompaniesand
theclearandtransparentnatureofreportingprofitabilityandothermeasuresoffinancial
performance at Elementis.
Outside of the above, the Committee has included the ability to review the level of annual bonus that
is deferred into shares once the Company’s share ownership guidelines have been met. Any such
decision would be taken having had regard to emerging market practice in this area following the
additional flexibility afforded to companies in this regard in the Investment Association Principles of
Remuneration2024.Otherchangesarelimitedtominormodificationstowordingtobetterreflect
amendments to share plan rules and the practical operation of the policy.
Determining the Remuneration Policy
The Committee determines the Remuneration Policy taking into account all relevant factors.
The Committee receives input from management and external advisers with respect to the design
of the Policy and considers the context of the relevant stakeholders when considering their input.
The Committee determines the Policy applicable to the Executive Directors and the Chair. The Policy
for Non-Executive Directors is agreed by the Board, excluding the Non-Executive Directors. This also
applies with respect to the implementation of the Policy so that no individuals are involved
in decisions as to their own remuneration. The Committee concluded that the Policy continues to
support the long-term strategy of the Company and as such only minor changes were required.
The Policy is aligned with the six factors listed in Provision 40 of the 2018 UK Corporate Governance
Code against which was applicable during the year under review:
Clarity – the Policy is set out as transparently as possible and the workforce engagement Director
retains oversight of employee communication and education. We proactively consult our
shareholders on any proposed changes to remuneration policy
Simplicity – the Remuneration Policy is structured as simply as possible; however, a degree of
complexity is required to align pay and performance. Performance metrics are chosen to focus
onthekeyoperational,financialandstrategicperformanceobjectivesofthebusiness
Risk – the Remuneration Policy has been shaped to discourage inappropriate risk-taking,
including long-term performance measurement, deferral and shareholding guidelines which
extend into post-employment. The Committee retains discretion to override formulaic outcomes
Predictability – elements of the Policy are subject to caps and dilution limits. Examples of how
remuneration varies depending on performance is set out in the scenario charts
Proportionality–thereisasensiblebalancebetweenfixedpayandvariablepay,andincentive
pay is weighted to sustainable long-term performance
Alignment to culture – the Policy is weighted towards performance-related pay, which supports
aperformance-basedculture,andthenon-financialtargetsencourageinnovationand
optimisation, which are also central to the Elementis culture and aligned to Company values
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 109
Directors’ Remuneration report
Policy table
The information in the table below sets out the Remuneration Policy for Directors.
Basic salary
Purpose and link to
Company’s strategy
Targeted at a level to attract and retain world-class executives who are essential to drive the business forward and deliver the Company’s strategic goals.
How it operates
in practice
Annual salary increases that are broadly in line with the local workforce (in percentage of salary terms), subject to Committee approval.
Increases beyond the average of those granted to the local workforce (in percentage of salary terms) may be awarded in certain circumstances, such as where there is a
materialchangeinresponsibilityorexperienceoftheindividual,torecogniseexceptionalperformanceoverasustainedperiodorasignificantincreaseinthecomplexity,
size or value of the Company.
Where new joiners or recent promotions have been placed on a below-market rate of pay initially, a series of increases above those granted to the local workforce
(in percentage of salary terms) may be given over the following few years subject to individual performance and development in the role.
Salaries are normally reviewed annually, either with effect from 1 January or 1 April (the common review date across the Company).
Maximum
potential value
There is no prescribed maximum for salary increases. The Committee will be guided by the general increase for the local workforce and/or broader workforce as a whole,
as well as the circumstances listed above.
Benefits
Purpose and link to
Company’s strategy
Toaidretentionandtoremaincompetitiveinthemarketplace.Healthcarebenefitsinordertominimisebusinessdisruption.
Executive Directors may also participate along with other employees in the Group’s HMRC-approved Save As You Earn (“SAYE”) or other equivalent savings-based share
schemes to share in the success of the Group.
How it operates
in practice
Lifeassurance,privatemedicalhealthinsuranceandotherinsuredbenefitsareprovided.
Provision of either a company car (for business and personal purposes) or a car allowance.
Payments in connection with an international assignment and payments in connection with a relocation, which would typically be paid for a transitionary period only, tailored
to the location of each executive.
Thebenefitsmayincludeprovisionoftaxadvicewhere,attheCompany’srequest,theinternationallocation(orbalanceoftimespentindifferentlocations)ischanged.
Participation in all-employee/savings-based share option schemes as above.
Inaddition,benefitsintheUS,whereitisstandard,includecoverfordentalcosts,accidentaldeathanddisablement,long-termdisabilityandclubmembership.
Maximum
potential value
SAYE/savings-based schemes are subject to individual limits. These are $2,000 per month in the US and up to the HMRC prescribed limit (£500 per month) in the UK.
Otherbenefits:theCommitteewilldeterminerangeandthelevelofbenefitsasitconsidersappropriate,takingintoconsiderationlocalmarketpractice.
Pension
Purpose and link to
Company’s strategy
To aid retention and remain competitive in the marketplace.
Toprovideappropriateretirementbenefitscommensuratewithlocalmarketpractice,seniorityoftheroleandtenurewiththeCompany.
How it operates
in practice
Executive Directors are eligible to participate in a Company-sponsored pension scheme, a statutory pension arrangement, receive cash in lieu of a Company pension or a
combination of these.
Maximum
potential value
For incumbent Executive Directors, pensions are set to be aligned with the rate of pension provision most commonly provided to a typical UK employee, calculated at 21%
of salary.
Any new Director appointment will have pension set to be aligned with the average of the appropriate wider workforce rate (currently 8% of salary).
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Directors’ Remuneration report
Annual bonus scheme
Purpose and link to
Company’s strategy
ToincentivisetheseniormanagementteamtoexceedtheannualoperatingplanapprovedbytheBoardatthestartofeachfinancialyear.
Toensurethatasignificantproportionofanexecutive’stotalremunerationisbasedoncorporate/businessfinancialperformancethatislinkedtotheCompany’sannual
operating plan.
Through the part deferral of bonuses into deferred shares, this enables incentive pay to help executives build and maintain meaningful shareholdings and thereby provides
a long-term focus.
How it operates
in practice
An annual bonus is based on performance target set against selected performance measures which are linked to the Company’s key performance indicators, or the
achievement of strategic and/or operational objectives.
Bonus payments are paid following the approval of full-year results. Payments are based on salaries at the time of payment.
Bonus deferral element: up to 50% of any cash bonus payable is normally awarded in shares and deferred for two years. Dividends accrue on deferred shares (which are
normally structured as nil cost options or conditional share awards) that vest during the vesting period. Deferred shares are forfeitable for gross misconduct (dismissal for cause).
The Committee reserves the right to review the level of deferral in the event the Company’s share ownership guidelines have been met.
The Committee may seek recovery and/or withholding of bonuses paid that are later found to have been based on performance that (i) was mis-stated or (ii) was incorrectly
calculated, (iii) included gross misconduct, (iv) resulted in the Company suffering serious reputational damage, (v) resulted in corporate failure, (vi) resulted in a material
financialdownturn,(vii)includedamaterialfailureofriskmanagement,(viii)includedtheoccurrenceofaneventthatcausedaserioushealthandsafetyevent,or(ix)where
an individual was treated as a ‘good leaver’ within a Company incentive plan by reason of retirement but subsequently became employed in a paid executive role.
The recovery and withholding provisions will apply for a period of three years following payment of any bonus.
Detailed provisions are incorporated into the rules of the various schemes which govern the terms of a bonus payment and/or the making of any deferred share or conditional award.
Maximum
potential value
CEO: 150% of basic salary.
CFO: 125% of basic salary.
A higher annual bonus limit of 200% of basic salary may apply for new recruits.
Framework used to
assess performance
Performancemeasureswillbemainlyfinancialmeasures.TheCommitteereservestherighttoselectothernon-financialtargets(includingthebasisoftheirmeasurement)
as appropriate considering the Company’s strategic objectives for the year ahead.
Thefinancialelementofthebonusmayinclude(butisnotlimitedto)theCompany’skeyperformanceindicators,whichinclude:
Profitbeforetaxorothermeasuresofprofitability
Group average trade working capital to sales ratio expressed as a percentage or other cash flow indicators
Foranyprofit-relatedmetric,targetswillbesetatthreshold,planandstretchlevelsandtheamountpayableforthresholdperformanceis0%forfinancialtargetsrising
onagraduatedbasisthroughto100%,becomingpayableatthestretchperformancelevel.Withregardtonon-financialtargets,itisnotalwayspracticabletosettargets
onaslidingscaleandsotargetsmaybesetbasedontheachievementofspecificmilestonesand/oronagraduatedscale.
The Committee will consider the bonus outcome each year based on the Company’s performance against the measures set at the start of the year. If it considers the
quantum to be inconsistent with the Company’s overall performance during the year, it can override the result of the performance test. For the avoidance of doubt, this can
be to zero and bonuses may not exceed the maximum levels detailed above. Any use of such discretion would be detailed in the Annual Report on Remuneration.
The Committee keeps performance metrics under review on an annual basis to ensure they continue to remain appropriate and has the discretion to introduce new metrics
or remove existing ones and amend their relative weightings. As a result, the performance metrics and weightings may vary in line with the Company’s evolving strategy
duringthelifeofthePolicy.Theprofit-relatedelementofannualbonusshallnotbelessthan50%oftheoverallbonusopportunity.
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Directors’ Remuneration report
Long-term incentives
Purpose and link to
Company’s strategy
The LTIP is the sole long-term incentive mechanism for Executive Directors and is intended to align the interests of the executives and shareholders in growing the value
of the Group over the long term.
When granting awards under the LTIP, the Committee generally takes into consideration the need to motivate and retain the Executive Directors and other participants.
How it operates
in practice
Awards are normally structured as either nil cost options or conditional share awards which are eligible to be granted annually. Options may be exercisable three years from,
and within ten years of, the date of award. Share awards normally vest on the third anniversary of the date of award.
A post vesting holding period of two years will normally apply to annual awards.
Recovery and withholding provisions similar to those described in respect of annual bonus payments but relating to the vesting of LTIP awards will apply to awards.
Dividends may accrue on shares that vest during the vesting period (and during the post vesting holding period where awards are structured as nil cost options) and may be
paid in cash or shares.
Maximum
potential value
The maximum award limit is set at 250% of basic salary.
Current practice is as follows:
CEO: 200% of basic salary
CFO: 175% of basic salary
Framework used to
assess performance
Awardsaresubjecttoachievementoffinancial(e.g.EPSandROCE)and/orrelativeTSRperformanceconditions,measuredoveraminimumofthreefinancialyears
beginningwiththefinancialyearinwhichtheawardismade.TheCommitteealsoretainsflexibilitytointroducestrategicand/orESGtargetsasaperformancemeasurefor
a minority of an award.
The threshold vesting level may be up to 25% of maximum, increasing to 100% vesting on a graduated basis for achieving stretch targets.
In relation to strategic and/or ESG targets, the structure of the target will vary based on the nature of the target set (i.e. it will not always be practicable to set strategic targets
usingagraduatedscaleandsovestingmaytakeplaceinfullifspecificcriteriaaremetinfull).
The metrics and their weighting and targets within the LTIP will be reviewed each year.
The Committee will consider the LTIP vesting outcomes for awards based on applying the performance conditions and, if it considers the level of vesting to be inconsistent
withtheCompany’soverallperformanceduringtheperformanceperiod(includingitsunderlyingfinancialperformanceand/orwiderstakeholderexperience),itcanoverride
the result of the performance test. For the avoidance of doubt, this can be to zero. Any use of such discretion would be detailed in the Annual Report on Remuneration.
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Directors’ Remuneration report
Share ownership guidelines
Purpose and link to
Company’s strategy
To align an executive’s interests with those of shareholders and to encourage executives to participate and share in the long-term success of the Group.
How it operates
in practice
Executive Directors are expected to build up a shareholding in the Company that is equal in value to 200% of their basic annual salaries. The guideline will also apply for
two years post cessation of employment such that Executive Directors are expected to hold shares equal to the value of the lower of the actual shareholding at cessation of
employment and the current guideline (200% of salary). The post-cessation guideline only applies to shares vesting under incentive plans from 2022.
Shares vesting from share awards, or transferred pursuant to an exercise of any option, granted under any share incentive or employee share-saving scheme may not be sold
(other than to meet a tax liability) until the above shareholding level has been met. In exceptional circumstances the Committee may allow the Director to sell some, or all, shares
receivedfromashareincentiveschemeeveniftheindividualhasnotmettheshareownershipguidelines,providedtheyaresatisfiedthatshareholderinterestsareadequatelyaligned.
The Committee monitors compliance with these guidelines and can make changes to them from time to time.
Non-Executive Chair and Directors’ fees
Purpose and link to
Company’s strategy
To attract individuals with the relevant skills, knowledge and experience that the Board considers necessary in order to maintain an optimal mix that ensures the effectiveness
of the Board as a whole in carrying out its duties and responsibilities.
How it operates
in practice
Non-Executive Directors’ fees are determined by the Chair and the Executive Directors, having considered the expected time commitment and responsibilities of the role.
In the case of the Chair, the fee level is determined by the Committee. As well as taking into consideration the above factors, the Committee sets the fee at an appropriate
levelnecessarytoattractarole-holderqualifiedtoeffectivelyleadtheboardofacompanyofasimilarsizeandprestigeasElementis.
In the case of other Non-Executive Directors, fees normally comprise a base fee, plus an additional fee for chairing any of the Board’s key committees.
Other fees may be payable for the role of representing employee views of the Board (i.e. the Designated Non-Executive Director) and providing an international travel
allowance for Non-Executives based outside of Europe.
Fees are payable in cash and Non-Executive Directors are not eligible to participate in any pension, bonus or share incentive schemes.
All Non-Executive Directors are reimbursed for travel and related business expenses reasonably incurred in performing their duties so that they are fully recompensed on
a pre-tax basis for undertaking Company business.
No individual is allowed to vote on his/her own remuneration.
Maximum
potential value
Fees will be reviewed annually with changes normally taking effect from 1 January or 1 April which is the common review date across the Company..
It is the Company’s policy (other than where there is a step change in the time commitment required of the Non-Executive Directors) that fees paid to the Chair and other
Non-Executive Directors are increased annually in line with the average increase awarded to the UK salaried workforce.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 113
Directors’ Remuneration report
Link between policy, strategy and structure
The Remuneration Policy is principally designed to attract, motivate and retain the Executive Directors
and other members of the Executive Leadership Team (senior management team) to execute the
Company’s corporate and business strategies in order to deliver the annual operating plan and
sustainableyear-on-yearprofitablegrowth,aswellastogenerateandpreservevalueforshareholders
over the longer term, without encouraging excessive levels of risk-taking. The principles and values
that underpin the remuneration strategy are applied on a consistent basis for all Group employees.
TheremunerationstructureforExecutiveDirectorsismadeupoftwoelements:fixedremuneration
(consistingofbasicsalary,benefitsincluding,forexample,non-contributoryhealthinsuranceandlife
assurance, and pension provision), and variable remuneration (annual bonus scheme and long-term
share incentives).
It is Company policy to reward all employees fairly, responsibly and by reference to local market
practices,byprovidinganappropriatebalancebetweenfixedandvariableremuneration.
Choice of performance measures and approach to target-setting
The performance metrics that are used for annual bonus and long-term incentive plans are drawn
fromasuiteofCompanyKPIsmonitoredbytheBoardthatarecloselylinkedtothefinancialKPIs
on pages 22-23.
Intheannualbonusscheme,thefinancialmeasurestobeusedin2025areadjustedGroupPBTand
AWC to sales ratio. Adjusted Group PBT is a clear measure of the Company’s trading performance,
andAWCtosalesratioencouragesthemostefficientuseofworkingcapitalandishowearnings
are converted into cash. These metrics are aligned with the Company’s objectives and strategy.
Inaddition,non-financialcriteriaalsoformpartofthetargetssetinthebonusschemeandtheseare
basedonCompany-specificsustainabilityobjectives(e.g.healthandsafety,DE&Iandenvironment)
and/orstrategicbusinessobjectives(e.g.relatingtoInnovation,GrowthandEfficiencytargets).
With regard to long-term performance targets for 2025, EPS is used since it is aligned with the
Company’sstrategyofdeliveringprofitablegrowthandcreatinglong-termshareholderreturns.
ROCE is also used to align with long-term value creation. Use of relative TSR also further aligns
shareholders and executives. GHG reduction targets are used to align with our commitment to
operating sustainably.
Targetsforfinancialmetricsaresetrelativetointernalplanningexpectationsafterhavingregardto
general economic conditions, external market data, current and past performance of the business,
and any organic or acquisitive growth plans.
Where appropriate, targets are set based on sliding scales. Only modest rewards are available
for delivering performance at threshold levels or above, with maximum rewards requiring
outperformance of our challenging plans approved at the start of each year.
The Committee keeps the choice of metrics and targets under review for both the annual and
long-term incentive plans each year to ensure they are appropriate in light of the Company’s current
circumstances. The Committee retains discretion to revise the choice of metric and weightings within
the incentives as detailed above. Should the Committee make material changes to the application of
the Remuneration Policy from year to year, the Committee would give consideration to an appropriate
form of dialogue with the Company’s major shareholders.
Differences in Executive Remuneration Policy compared with other employees
The Committee is informed of pay structures across the wider Group when setting the Remuneration
Policy for Executive Directors. The Committee considers the general basic salary increase for the
broader Group and, in particular, the employees based in the US, the UK and Europe, when
determining salary increases for the Executive Directors.
The same principles and values behind the design of remuneration for the Executive Directors apply
toothermembersoftheELTandemployeesthroughouttherestoftheGroup,withmodificationsto
reflect local market practice and the level of seniority and ability to influence Group performance.
Overall, the Remuneration Policy for Executive Directors is more heavily weighted towards variable
pay than for other employees. This ensures that there is a clear link between the value created for
shareholders and the remuneration received by the Executive Directors, given it is the Executive
Directors who are considered to have the greatest potential to influence shareholder value creation.
ThelevelofvariablepayvariesbylevelofemployeewithintheGroupandisinformedbythespecific
responsibilities of each role and local market practice as appropriate.
In 2018, the Board introduced the ability to grant restricted shares into a new LTIP at that time.
The majority of the ELT are based in the US, where it is common market practice to grant restricted
shares. It is considered that the ability to grant restricted shares in tandem with performance-related
share awards enables the Company to compete for the best talent. Where restricted shares are used,
the award levels are generally lower than if performance shares were granted, since restricted share
awards are more valuable to a recipient given there is no performance requirement attached to the
vesting of the award. Restricted shares will not be granted to Executive Directors.
How the views of employees are taken into account
The Board has established a DNED for workforce engagement as a direct response to the UK
Corporate Governance Code, enabling the workforce voice in Board matters. The role of the
workforce engagement Director is to review and monitor employee insight informed by engagement
activities and employee engagement surveys. Global reward principles are communicated regularly
through the Company with additional detail on determination of pay, irrespective of position. Market
comparisons are undertaken periodically versus appropriate local market data (e.g. FTSE 250
comparatives). These are used to inform decisions on remuneration quantum. The DNED engaged with
the workforce on these principles during 2024, and feedback was sought during focus groups held.
For more information on engaging with the workforce, please refer to pages 84-85.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 114
Directors’ Remuneration report
Committee discretion with regard to incentive plans
The Committee will operate the annual bonus plan, deferred share bonus plan (“DSBP”), LTIP and
all-employee plans according to their respective rules and in accordance with the Financial Conduct
Authority’s Listing Rules (‘Listing Rules’) and HMRC rules where relevant. The Committee retains
discretion, consistent with market practice, in a number of regards to the operation and
administration of these plans. These include the following (plan limits and performance targets
restricted to the descriptions detailed in the preceding policy table):
Who participates in the plans
The timing of grant of award and/or payment
The size of an award and/or payment
The determination of vesting
Dealing with a change of control (e.g. the timing of testing performance targets) or restructuring
Determination of a good/bad leaver for incentive plan purposes based on the rules of each plan
and the appropriate treatment chosen
Adjustments required in certain circumstances (e.g. rights issues, corporate restructuring and
special dividends)
The annual review of performance conditions, including metrics and weightings, for the annual
bonus plan and LTIP
The Committee also retains the ability to adjust the targets and/or set different measures and
alter weightings for the annual bonus plan and to adjust targets for the LTIP if events occur
(e.g. material divestment of a Group business) which cause it to determine that the conditions
are no longer appropriate and the amendment is required so that the conditions achieve their
originalpurposeandarenotmateriallylessdifficulttosatisfy.TheCommitteehasdiscretionto
override incentive pay outcomes in the event that payouts are not considered reflective of overall
Company performance having applied the performance conditions for the annual bonus and LTIP
CEO and CFO rewards scenario analysis
The bar charts below illustrate the potential pay opportunities for Executive Directors under three
different scenarios for 2025. The CEO’s remuneration has been converted into pounds sterling using
theaverageexchangeratefor2024($1.2806:£1.00).
Fixed:comprisesfixedpay,beingthevalueofsalary,benefitsandpension(basedon2024
Company contributions)
On target: the amount receivable assumes performance in which 50% of annual bonus is payable
and 50% of LTIP awards vest
Maximum: the maximum amount receivable should all stretch targets be met and vesting under
both the annual bonus scheme and LTIP is 100%
Maximum with share price growth: in addition, we have provided an illustration of the maximum
outcome assuming 50% share price appreciation for the purpose of the LTIP value
The LTIPs also relate to awards to be made in 2025 rather than any awards vesting in 2024.
Minimum
£1,096k
On target
£2,510k
Maximum
£3,924k
Maximum (with
share price growth)
£4,732k
41%
51%
100%
44%
28%
23%
32%24%
31%
26%
CEO
(£’000)
Total
Fixed pay
LTIP value with 50% share price growth
Annual bonus LTIP Total
Minimum
£529k
On target
£1,150k
Maximum
£1,770k
Maximum (with
share price growth)
£2,132k
41%
51%
100%
46%
30%
25%
31%23%
29%
24%
CFO
(£’000)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 115
Directors’ Remuneration report
Recruitment Policy
For Executive Director recruitment and/or promotion situations, the Committee will follow the
policy outlined below:
Element Policy
Basic salary
Basic salary levels will be set in accordance with the Company’s Remuneration Policy,
taking into account the experience and calibre of the individual (e.g. typically around
market rates prevalent in companies of comparable size and complexity) or salary
levels may be set below this level (e.g. if the individual was promoted to the Board).
Where it is appropriate to offer a below-market rate of pay initially, a series of increases
to the desired salary positioning may be given over the following few years subject to
individual performance and development in the role.
Benefits
NewDirectorsmaybeentitledtobenefitssuchaslifeassurance,privatemedical
health insurance, cover for dental costs, accidental death and disablement, long-term
disability and provision of either a company car (for business and personal purposes)
oracarallowance,clubmembershiporanyotherappropriatebenefitasthe
Committee reasonably determines.
Where necessary, the Committee may approve the payment of reasonable relocation
expenses to facilitate recruitment for a maximum period of 12 months.
Pension
Any new Executive Directors will have their pension level set to be aligned with the
appropriate wider workforce rate (currently 8% of salary).
Annual bonus
The annual bonus would operate as outlined for current Executive Directors but,
where necessary to aid recruitment, the maximum bonus opportunity is 200% of basic
salary for the life of this policy. Bonus will be pro-rated for the proportion of the year
served. Depending on the timing and responsibilities of the appointment, it may be
necessary to set different performance measures and targets initially.
Long-term
incentive
Awards under the LTIP will be granted in line with the policy outlined for the current
Executive Directors on an annual basis but, where necessary to aid recruitment, the
maximum award is 250% of basic salary for the life of this policy.
An award may be made shortly after an appointment (subject to the Company not
being in a prohibited period). For an internal hire, existing awards would continue over
their original vesting period and remain subject to their terms as at the date of grant.
In addition, if the grant of awards for that individual precedes his or her appointment as
aBoardDirectorforthatfinancialyear,theCommittee’spolicywouldincludeflexibility
to top up awards for that year (subject to the overall individual salary limit) based on
the Executive Director’s new salary.
Buyout awards
Inthecaseofanexternalhire,ifitisnecessarytobuyoutincentivepayorbenefit
arrangements which would be forfeited on leaving the previous employer, this would
be provided for, taking into account the form (cash or shares), timing and expected
value (i.e. likelihood of meeting any existing performance criteria) of the remuneration
being forfeited.
Replacement share awards may be granted using the Company’s LTIP (up to the
individual limit) or outside of the LTIP if necessary and as permitted under the
Listing Rules.
Interim
appointments
Where a Director is appointed on an interim basis (e.g. to cover a role until a
permanent successor is appointed), the Company may pay additional remuneration
to an individual in line with the policy for the role.
Outside Board appointments
The Company’s policy is to support executives should they wish to take on an external board
appointment, provided that there is no conflict of interest and the role does not interfere with the
executive’s commitment or duties. If an executive does take on an external appointment, they may
retain any fees paid and will be restricted generally to only one such external appointment.
Service contracts
Executive Directors’ service contracts contain a termination notice period not exceeding 12 months.
Name Date of contract
1
Notice period
Paul Waterman, CEO
2
6November2015 12 months
Ralph Hewins, CFO 27June2016 12 months
1 The date of the service contract is not the same as the date of appointment, which for Paul Waterman was
8February2016andRalphHewins12September2016.
2 As announced on 18 November 2024, as part of an agreed leadership transition, Paul Waterman will step down from
the Board no later than the Company’s AGM on 29 April 2025 and cease employment no later than 31 July 2025.
Copies of the Executive Directors’ service contracts are available for inspection at the Company’s
registeredofficeduringnormalbusinesshoursandwillbeavailableforinspectionattheAGM.
Policy on payment for loss of office
Termination payments
ThemaximumamountpayableunderboththeCEO’sandCFO’scontractisbasicsalary,benefits
and pension for 12 months while each serves his notice period. For the Executive Directors, the
terms covering termination were agreed at the date their contracts were made and both are required
tomitigatetheirlossintheeventoflossofofficebymakingeffortstosecureanewposition.
The Company may pay compensation in lieu of the notice period of basic salary only, to be paid in
monthly instalments (pro-rated for the actual notice period). This would apply if the Company
terminates his/her contract for any reason other than for cause, or if he/she serves notice to terminate
his/her contract in 12 months’ time.
Payments in lieu of notice to both the CEO and CFO may be reduced or ceased if either secures a
new position. In both cases, the payments will only be ceased if the salary in a new position is equal
to or more than the salary on termination; if not, the monthly payments will be reduced by the gross
salary earned by the CEO or CFO in his/her new position each month.
The above summary only addresses contractual rights to payments in lieu of notice, or during the
relevantDirector’snoticeperiod,andmaynotreflectanysettlement,compromisesumsorbenefits
(e.g. assistance with legal fees and outplacement services) which are separately agreed at the point
of termination having taken appropriate legal advice.
Further details of remuneration arrangements in respect of Paul Waterman’s departure, as
announced on 18 November 2024, are set out in the information provided on the Company’s website
inaccordancewithSection430(2B)oftheCompaniesAct2006.
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Directors’ Remuneration report
Treatment of incentive plans
Annual bonus plan
If an Executive Director resigns and serves his/her notice period, the Committee retains discretion to
make a pro-rata payment based on performance. The same applies in certain circumstances such as
if the individual’s employment is terminated on the grounds of ill health or disability. No bonus is
payable for termination for cause.
In line with the Company’s policy, rules of the annual bonus scheme incorporate a requirement to
defer half of the amount of bonus vesting for two years in the form of share awards under the DSBP.
In certain ‘good leaver’ circumstances (e.g. ill health, death), the Committee, acting fairly and
reasonably, may waive deferral.
Deferred share bonus plan
If an Executive Director’s employment is terminated before a deferred share award vests (after
twoyears),deferredawardsearnedinconnectionwithfinancialyearsending31December2024
would vest in full on the date of leaving unless termination is for cause, in which case the awards
wouldlapse.Fordeferredawardsearnedinconnectionwithfinancialyearscommencingfrom
1 January 2025, which will be granted under a new DSBP as a result of the expiry of the previous
plan, the default position will be for deferred share bonus awards will continue to vest on their normal
vesting date unless termination is for cause (or for any other reason as determined by the Committee),
in which case the awards would lapse.
LTIP
As with the annual bonus plan, the Company’s LTIP also includes a number of discretions in
connectionwithanExecutiveDirectorleavingemployment.Otherthanincertaindefined‘good
leaver’ circumstances, awards lapse on cessation of employment. Where an individual ceases
employmentforoneofthedefined‘goodleaver’events(i.e.illhealth,disability,redundancywithin
the meaning of UK legislation or its overseas equivalent, transfer out of the Group/sale of business
or retirement with employer’s consent and, in the case of the new LTIP, any other reason at the
discretion of the Committee), the award will remain eligible to vest on its normal vesting date
(unless the Committee uses its discretion to vest the award on the date of cessation of employment),
in all cases subject to a pro-rata reduction to reflect the portion of the vesting period that has
elapsed (unless the Committee determines otherwise) and the application of the performance
condition. In the event of a death of an Executive Director, the default is for the award to vest at
the date of death unless the Committee determines otherwise, in which case it will vest at the
normal vesting date with pro-rating and performance conditions applied as described in other
‘good leaver’ circumstances.
Similar provisions apply in the event of a change of control, with performance measured up to
the date of the relevant event, and a pro-rata reduction applying unless the Committee
determines otherwise.
It is the Committee’s policy to exercise these discretions in a way that would be in the best interests
of the Company and depending on the individual circumstances of each case.
Payments agreed prior to the effective date of this policy
Any agreements entered in good faith prior to the commencement of the 2022 Remuneration Policy
will remain eligible to operate on their original terms.
Non-Executive Directors’ terms of appointment
Non-Executive Directors are appointed for a three-year term, subject to annual re-election by
shareholders. For Non-Executive Directors who have served for nine years or more, they may be
appointed for a further year at a time. Each letter of appointment currently provides that the Director’s
appointment can be terminated by the Company on six months’ notice on any grounds without claim
for compensation. Following the 2018 AGM, the letters of appointment of the Non-Executive
Directors were amended to 30 days’ notice by either party, which is the application of the new
Remuneration Policy where a limit of up to three months is permitted. All other terms will remain the
same. The Chair’s letter of appointment will remain with a six months’ notice period.
Non-Executive Directors are not eligible to participate in any pension, bonus or share incentive
schemes. No individual is allowed to vote on his/her own remuneration.
The table below provides further details of the letters of appointment that the Non-Executive
Directors held with the Company during 2024.
Name Date of appointment Date of last re-appointment Date of expiry
Non-Executive Director
Dorothee Deuring 1 March 2017 1 March 2023 1March2026
1
Steve Good
3
20 October 2014 21 October 2023 29 April 2024
2
John O’Higgins 4 February 2020 4 February 2023 4February2026
1
Trudy Schoolenberg 15 March 2022 15 March 2025 15 March 2028
Christine Soden 1 November 2020 1 November 2023 1November2026
2
Clement Woon 1 December 2022 n/a 1 December 2025
Maria Ciliberti 11 March 2024 n/a 11 March 2027
Heejae Chae 25 March 2024 n/a 25 March 2027
1 Dorothee Deuring and John O’Higgins’ re-appointments were approved by the Nomination Committee on
6December2022.
2 Steve Good and Christine Soden’s re-appointments were approved by the Nomination Committee on
29 September 2023.
3 Steve Good retired from the Board at the conclusion of the AGM on 30 April 2024.
Shareholder engagement
The views of shareholders are important to the Committee. Regular dialogue and engagement
with the Company’s shareholders is undertaken. For example, the Committee wrote to its major
shareholders and the leading advisory bodies in 2025 with the proposed changes to the Policy
and its operation going forward.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 117
Directors’ Remuneration report
Annual report on remuneration (‘report’)
ThisreportdetailshowtheCompany’spoliciesandpracticesonDirectors’remunerationwereappliedinrespectofthefinancialyearended31December2024andhowtheywillbeappliedinthe2025financialyear.
Remuneration payable to Directors for 2024 (audited)
Although the Company reports its results in US dollars, the remainder of this report on remuneration is presented in pounds sterling because the majority of the Directors are UK-based and paid in pounds sterling.
A breakdown of the Directors’ remuneration for the year ended 31 December 2024 is set out in the table below.
Fixed Performance-related
£’000 Year Salary/fees Benefits
2
Pension Totalfixed Bonus LTIP Other
3
Total variable Total
Executive Directors
Paul Waterman
1
, CEO 2024 808 120 167 1,095 978 966 0 1,944 3,039
2023 804 106 162 1,072 928 710 42 1,680 2,752
Ralph Hewins, CFO 2024 414 29 87 530 418 436 18 872 1,418
2023 398 28 84 510 383 339 18 740 1,250
Non-Executive Directors
John O’Higgins, Chair 2024 216 – – 216 – – – – 216
2023 208 – – 208 – – – – 208
Dorothee Deuring
4
2024 59 – – 59 – – – – 59
2023 56 – – 56 – – – – 56
Trudy Schoolenberg
5
2024 69 – – 69 – – – – 69
2023 65 – – 65 – – – – 65
Christine Soden
6
2024 74 – – 74 – – – – 74
2023 71 – – 71 – – – – 71
Clement Woon
7
2024 65 – – 65 – – – – 65
2023 56 – – 56 – – – – 56
Maria Ciliberti
8
2024 47 – – 47 – – – – 47
2023 – – – – – – – – –
Heejae Chae
9
2024 45 – – 45 – – – – 45
2023 – – – – – – – – –
Former Directors
Steve Good
10
2024 23 – – 23 – – – – –
2023 66 – – 66 – – – – 66
Total 2024 1,820 149 254 2,223 1,396 1,402 18 2,816 5,039
Total 2023 1,724 134 246 2,10 4 1,311 1,049 60 2,420 4,524
1 PaulWatermanisbasedintheUSandpaidinUSdollars.Hereceivedanannualsalaryof$1,034,835(2023:$995,033).Hispensioncomprisesasalarysupplementandemployercontributionstodefinedcontributionretirementschemes.
Theforeignexchangerateappliedisthe2024averagerateof$1.2806:£1.00(2023:$1.2373:£1.00).
2 TaxablebenefitsforPaulWatermanconsistofacarallowance(£21,300),privatehealthcare(£29,808),dental,lifeassurance,accidentaldeathanddisablementcoverandlong-termdisabilityinsurance(£46,391),andtaxadvice(£23,427).
ThetaxadvicebenefitallowsappropriatetaxfilingstobemadeinboththeUKandUSasaresultofCompanybusinesstravelrequirementsduring2023/24,whichexceededthenormalbusinessexpectationsagreedonappointmentandgaverise
totheneedfordualfilings.TaxablebenefitsforRalphHewinsconsistofacarallowance(£18,000),privatehealthcareandlifeassurance.
3 As required by remuneration reporting regulations, the valuation of Paul Waterman’s US savings-related share option scheme (SRSOS) award and Ralph Hewin’s SAYE grant are based on the face value of shares at grant (September 2022), less
the exercise price. There are no performance measures for either the SRSOS or SAYE.
4 Dorothee Deuring’s salary was incorrect in the 2023 ARA and has been corrected above.
5 Trudy Schoolenberg is the SID.
6 ChristineSodenistheDNEDforworkforceengagement.SheisalsoChairoftheAuditCommittee.
7 Clement Woon became Chair of the Remuneration Committee on 30 April 2024 following Steve Good retiring from the Board at the conclusion of the 2024 AGM.
8 Maria Ciliberti was appointed to the Board on 11 March 2024.
9 Heejae Chae was appointed to the Board on 25 March 2024.
10 Steve Good retired from the Board at the conclusion of the AGM on 30 April 2024, stepping down as Chair of the Remuneration Committee on that date.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 118
Directors’ Remuneration report
Determination of annual bonus outcome for performance in 2024 (audited)
This section shows the performance targets set in respect of the 2024 annual bonus scheme and the level of performance achieved.
FulldetailsofthebonusassessmentfortheExecutiveDirectorsissetoutbelow.ThebonustargetsweresetpriortothestartofthefinancialyearbasedonthecontinuingoperationsoftheCompany.
The range of targets were set to be similarly challenging to those set in prior years having had regard to both internal planning and prevailing market conditions. The total bonuses payable based on the
performance achieved are 77.9% of maximum for the CEO and CFO. The Committee was comfortable with the bonus earned in the context of the performance delivered and did not consider it necessary
to use discretion in relation to the bonus out-turn. Accordingly, and in line with the Policy, 50% of the bonus payable will be deferred over shares which will be released to the Director after two years and
which are forfeitable for gross misconduct.
Relative weighting
of performance
conditions
2024 bonus plan targets Percentage of maximum bonus earned Percentage of salary earned
Full-year bonus Threshold Plan Stretch Actual result
Percentage of
maximum
Paul Waterman
CEO
Ralph Hewins
CFO
Paul Waterman
CEO
Ralph Hewins
CFO
Maximum
PBT ($m) 50% 84.5 90.0 99.0 105.0 100% 100% 100% 75% 62.5%
AWC to sales (%) 20% 24 22 20 23.4 15% 15% 15% 4.5% 3.75%
Non-financial 30% n/a n/a n/a 24.9/30 83% 83% 83% 37.3 5% 31.125%
Total full-year 100% 77.9 % 77.9 % 116.85% 97.375%
In relation to the targets, 0% is payable at the threshold performance levels, 50% at plan and 100% at the stretch performance level.
SetoutbelowisasummaryoftheCommittee’sassessmentofthechallenging2024non-financialtargets.Theobjectiveswerecategorisedintotwocategories:(1)sustainabilitypriorities(15%weighting)and
(2)Innovation,GrowthandEfficiency(15%weighting).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 119
Directors’ Remuneration report
2024 bonus assessment for CEO and CFO: Non-financial targets
Measure Performance indicator Achievements
Summary
scoring
Sustainability objectives
Safety, compliance, and risk management
Focus on maintaining and strengthening responsible
workplace practices through plant-based safety engagement
Recordableinjuries:threshold8;target6;
stretch 4
Plant safety engagement: threshold 75%
engagement minimum 2 activities/employee
per quarter; maximum 75% engagement
4 activities/employee per quarter
Recordable injuries which related to 100% achievement of this objective: 2
Safety engagement: Weighted average engagement above 75% with a weighted average
numberofactivities/employeeperquarterof3.87.Thisequatedto96.7%outof100%
for this objective
Targets exceeded for each objective
4.9% / 5%
Diversity, Equity and Inclusion
Continue to build organisational capability through actions that
increase employee engagement and create a more diverse,
equitable and inclusive organisation
Gender diversity: new-hire diversity; Porto site
hiring diversity
ELT and direct reports on track for at least 40%
of each gender by 2025
Gallup Q12 and Culture of Inclusion index
Newhirediversity:40%female,42%ofUSrace/ethnicallydiverse,Portosite60%female
ELTandDirectReports42%female(FTSEWomenleadersdefinition)
GallupQ12:3.86-3.91andGallupCultureofinclusion:3.86-3.96
Targets exceeded for each objective
5% / 5%
Environmental
Continue to demonstrate clear progress towards achieving our
2030goalsthroughimplementationofkeyenergy-efficiency
and environmental projects, and continue to put actions in
place to minimise environmental Tier 2 and 3 incidents. Prepare
for regulatory and best practice driven changes (e.g. corporate
disclosure, Net Zero transition plan, setting an SBT)
Overall GHG emissions
2030 target progress
SBT plan, sub-plans fully articulated
Sustainability fully integrated into portfolio and
innovation management
Responsible sourcing approach in place
Absolute GHG emissions increased vs 2023
2030 targets behind 2023
SBT plan and sub plans completed
Good progress integrating sustainability into portfolio and innovation management which
includedSotkamositeelectrificationbeingcompletedandnaturally-derivedproducts
revenueincreasingfrom68to69%
Ecovadis gold maintained and risk service live
Threeofthefivetargetsachieved
3% / 5%
Strategic objectives
Growth
Deliver 2024 components of $90m growth platform promise,
settingup2025and2026forsuccess
Above-marketsalesof$6minPersonalCare
and$16minPerformanceSpecialtiesin2024
15newproductswithsustainabilitybenefits
Innovation revenue increasing to 15%
Pipeline of new products for 2025
NBO revenue delivered in 2024 plus growth
in pipeline
$6minPCand$20minPS
22newproductsofwhich15havesustainabilitybenefits
Innovation revenue to 15.3%
15 new products planned for 2025
$60mNBOrevenuepluspipelineincreasedfrom$320mto$327m
All targets achieved in full or exceeded
5% / 5%
Efficiency
Deliver2024componentsofCMDtargetedefficiencysavings,
setting up for full delivery in 2025
Deliver Fit for the Future – $7m
Supply Chain $3m and Procurement $2m
Fit for the Future programme, Supply Chain and
Procurement initiatives on track for full delivery
in 2025
CompleteTalojacustomerfulfilmenttransition
F4TF achieved $10m saving
Supply achieved $4m and Procurement $4m
All programmes on track for 2025 delivery
Taloja transition complete
All target achieved in full or exceeded
5% / 5%
Talc future path
Set out and implement path for the future whilst delivering
2024operatingprofit
Strategic options evaluated
2024 Financial performance: OP delivery;
margins; cost optimisation and synergies
The strategic review of Talc is progressing with options evaluated amid the ongoing
regulatory uncertainty
OP targets missed with reduced margins. Ceased to pursue cost optimisation and synergies
TargetsonstrategicreviewinlinewithBoardtimetable,withfinancialtargetsnotmet
2% / 5%
Key to summary scoring
Achieved in full or predominantly achieved
Partially achieved Not achieved
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 120
Directors’ Remuneration report
Directors’ share-based awards
Determination of 2022 LTIP awards (audited)
Under the 2022 award, the performance is assessed against EPS growth, relative TSR and cash conversion performance metrics, as summarised below.
The EPS growth and relative TSR and AOCC targets were partially met. Overall this has resulted in 48.7% of the award vesting. The Committee considers this to be in line with underlying performance.
In determining vesting, the Committee considered:
ROCE(excludinggoodwill)overtheperformanceperiod,whichincreasedfrom13%to23.3%inchallengingmarketconditions,and,assuch,theCommitteeconfirmedtheformulaicoutcome
The potential for windfall gains, which, given the share price used to determine the number of shares included in awards in April 2022 was £1.190 (which was consistent with the share price used as the
basis to determine the 2021 award (£1.2550)) and the prevailing share price in February 2020 prior to the onset of the COVID-19 pandemic, were not considered to have arisen
Performance metric Weighting Threshold target Threshold payout Maximum target Elementis achievement Payout
EPS
1
33.3% 10.9 cents per
share
0% 14.7 cents per
share
13.3 cents per
share
63.2%
Three-year operating cash conversion 33.3% 85% 0% 95% 88.2% 32%
Relative TSR vs FTSE All-Share Index 33.3% Median 25% Upper quartile 58th 50.9%
1 As disclosed in the 2022 Directors’ Remuneration Report, the targets were restated to exclude earnings from Chromium in connection with the sale of the business. The range of targets were reduced to reflect the forecast earnings expected from
Chromium at the time the targets were set so as to ensure that the restated target was no more or less challenging than when they were originally set. Accordingly, the threshold target was adjusted from 13 cents per share to 10.9 cents per share
and the maximum from 17.5 cents per share to 14.7 cents per share.
Based on this performance assessment, the table below illustrates the value receivable under the 2022 awards. Any shares vesting will be subject to a two-year holding period.
Award holder
Number of
awards granted
Payout
(% of maximum)
Number of shares
due to vest
Value from
share price increase
1
Value of dividend
equivalents
2,3
Total value vesting
3
Paul Waterman 1,236,244 48.7% 602,051 £117 £15 £966
Ralph Hewins 559,656 48.7% 272,552 £53 £6 £436
1 There was share price appreciation from the date of grant (£1.190) to the three-month average share price to 31 December 2024 (£1.385).
2 Value of dividend equivalents estimated based on dividends until 31 December 2024.
3 Value of shares based on a three-month average share price of £1.385 to 31 December 2024. This value will be restated next year based on the actual share price on the date of vesting.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 121
Directors’ Remuneration report
Annual LTIP awards granted in the year (audited)
On 8 April 2024, LTIP awards were granted in line with the Remuneration Policy. The CEO was granted an award over shares to the value of 200% of salary and 175% of salary for the CFO. Share awards will
ordinarily vest after three years, with any shares vesting (other than those sold to meet associated tax liabilities) subject to a two-year holding requirement.
Details of the main terms of the 2024 LTIP awards are summarised in the table below. In addition, the Committee retains the discretion to reduce the number of shares on vesting should it be considered
appropriate to do so (e.g. in the event that there was perceived windfall gain).
Award holder Type of share award Grant date Number of awards
Face value of award
at grant (£000s)
1
Paul Waterman Nil cost (restricted stock unit) 08.04.2024 1,107,011 £1,638,376
Ralph Hewins Nil cost option 08.04.2024 489,054 £723,800
The awards are subject to EPS, TSR, AOCC and OPM performance conditions
2,3
(equallyweighted),eachmeasuredoverthethreeyearsto31December2026asshowninthetablebelow.
Performance metric Weighting Threshold target Threshold payout Target Target payout Stretch target Stretch payout
End of the
performance
period
EPS 25%
2026EPSof
14 cents per share 0%
2026EPSof
17 cents per share 50%
2026EPSof
18.5 cents per share 100% 31.12.2026
Cash conversion 25% 80% 0% n/a n/a 100% 100% 31.12.2026
OPM 25% 18% 0% n/a n/a 20% 100% 31.12.2026
Relative TSR vs FTSE All-Share Index 25% Median 25% Upper quartile 100% 31.12.2026
1 The share price used to determine the number of awards granted was £1.48, based on the share price on the day prior to grant (5 April 2024).
2 The vesting of the award is also subject to a ROCE underpin which requires the Company to consider whether the return generated is in line with the Board’s expectations and, if not, to reduce the vesting to a more appropriate level.
The Committee also retains discretion to reduce the number of shares on vesting should it be considered appropriate, including in the event of a perceived windfall gain.
3 Therationalefortheamendmenttothechoiceofperformancemetricsandtherangeoffinancialtargetssetwasdetailedinlastyear’sDirectors’RemunerationReport.
Sourcing shares for our share plans
Employee share plans comply with the Investment Association’s guidelines on dilution, which provide that overall issuance of shares under all plans should not exceed an amount equivalent to 10% of the
Company’s issued share capital over any ten-year period. We also operate an executive share plan dilution limit of 5% of the Company’s issued share capital over a ten-year period. Based on the number
of awards that remain outstanding as at the year end, the Company’s headroom for all plans is 4.11% and for discretionary plans is 3.45% of issued share capital.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 122
Directors’ Remuneration report
Directors’ scheme interests (audited)
The interests of the persons who were Directors during the year in the issued shares of the Company were:
Scheme interests
Vested but
unexercised
share optionsExecutive Directors Interest type Grant date Option price (p) 01.01.24
1
Granted during
2024
Exercised during
2024
Lapsed during
2024 31.12. 24
Paul Waterman LTIP
1
06.04.2021 – 1,079,362 – 590,411 488,951 – –
DSBP
2
05.03.2022 – 490,383 – 490,383 – – –
LTIP
1
04.04.2022 – 1,236,244 – – – 1,236,244 –
SRSOS
5
20.09.2022 92.31 45,584 – 39,093 6,491 – –
DSBP
2
08.03.2023 – 374,376 – – – 374,376 –
LTIP
1
03.04.2023 – 1,350,978 – – – 1,350,978 –
DSBP
2
08.03.2024 – – 323,899 – – 323,899 –
LTIP
1
08.04.2024 – – 1,107,011 – – 1,107,011 –
Total scheme interests 4,576,927 1,430,910 1,119,887 495,442 4,392,508 Nil
Ralph Hewins DSBP
2
07.03.2017 – 7,14 0 – – – 7,140 7,140
RA
3
07.03.2017 – 92,262 – – – 92,262 92,262
RA
4
07.03.2017 – 17,4 58 – – – 17,4 58 17,458
DSBP
2
05.03.2018 – 73,123 – – – 73,123 73,123
DSBP
2
06.03.2019 – 48,865 – – – 48,865 48,865
DSBP
2
05.03.2020 – 76,266 – – – 76,266 76,266
LTIP
1
06.04.2021 – 515,214 – 281,822 233,392 – –
DSBP
2
05.03.2022 – 213 ,105 – – – 213,105 –
LTIP
1
04.04.2022 – 559,656 – – – 559,656 –
SAYE
6
20.09.2022 88.00 20,454 – – – 20,454 –
DSBP
2
08.03.2023 – 147,833 – – – 147,833 –
LTIP
1
03.04.2023 – 584,349 – – – 584,349 –
DSBP
2
08.03.2024 – – 138,015 – – 138,015 –
LTIP
1
08.04.2024 – – 489,054 – – 489,054 –
Total scheme interests 2,355,725 627,069 281,822 233,392 2,467,580 315,114
1 LTIP awards are subject to performance conditions. The same relative TSR performance conditions apply in respect of all awards. The EPS target for the 2021 awards is based on FY23 EPS of between 8.4 cents and 10.9 cents, for the 2022
awards is based on FY24 EPS of between 10.9 cents and 14.7 cents, for the 2023 awards is based on FY25 EPS of between 13 cents and 17 cents. The operating cash conversion performance conditions for the 2022 and 2023 awards is based
on three-year targets between 85% and 95% for 2022, and 80% and 100% for 2023. These awards ordinarily vest on the third anniversary of the grant date. Full detail of the vesting conditions for the 2024 awards are set out on page 103.
2 Conditional share award under the DSBP. Structured as restricted stock units for Paul Waterman and nil cost options for Ralph Hewins. The 2020 DBSP vested on 5 March 2022. Paul Waterman’s tax liability crystallised on vesting, which he
self-funded and he therefore retained the 188,130 shares. Ralph Hewins’ 2020 DSBP award has vested but has not yet been exercised. For DSBP awards granted in March 2020, the share price at date of grant was 98.95 pence. The face value
ofawardsatgrantwere£186,155and£75,466forPaulWatermanandRalphHewinsrespectively.BothExecutiveDirectorsrecommendedandtheCommitteeagreedthatnobonusbepayableinrespectof2020,thereforenoDSBPawardswere
granted in 2021. For DSBP awards granted in March 2022, the share price at date of grant was 103.8 pence with the face value of awards at grant of £509,018 and £221,204 for Paul Waterman and Ralph Hewins respectively. For DSBP awards
grantedinMarch2023,thesharepriceatdateofgrantwas126.1pencewiththefacevalueofawardsatgrantof£472,088and£186,418respectively.ForDSBPawardsgrantedinMarch2024,thesharepriceatdateofgrant(8April2024)was
£1.386pencewiththefacevalueofawardsatgrantof£448,924and£191,289forPaulWatermanandRalphHewinsrespectively.
3 Replacement awards structured as nil cost options made under standalone arrangements that borrow terms from the LTIP as amended. In line with the remuneration forfeited on leaving his former employer, the 2017 award did not have
performance conditions, but shares were required to be held for two years.
4 Replacement awards structured as nil cost options made under standalone arrangements that borrow terms from the DSBP as amended.
5 Options held under the Elementis plc US savings-related share option scheme 2018. This is a savings-based share option scheme that is not subject to performance conditions. A 2022 grant was made on 20 September 2022 with an option price
of 92.31 pence per share.
6 OptionsheldundertheUKSAYEscheme.Thisisasavings-basedshareoptionschemethatisnotsubjecttoperformanceconditions.A2022grantwasmadeon20September2022withanoptionpriceof88.00pencepershare.Furtherdetails
onthisschemeisshowninNote26totheconsolidatedfinancialstatementsonpage181.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 123
Directors’ Remuneration report
Directors’ share interests (audited)
The interests of the Directors (including any connected persons) during the year in the issued shares
of the Company were:
01.01.24
Acquired
during 2024
Disposed
during 2024 31.12.24
Shareholding
level met as at
31.12. 24
Executive Directors
Paul Waterman 1,268,481 679,482 350,000 1,597,9 63 Yes
1
Ralph Hewins 143,770 145,320 – 289,090 No
1
Non-Executive
Directors
Dorothee Deuring 26,250 – – 26,250 n/a
Steve Good
2
82,500 – – 82,500 n/a
John O’Higgins 125,600 – – 125,600 n/a
Trudy Schoolenberg 30,000 – – 30,000 n/a
Christine Soden 30,000 – – 30,000 n/a
Clement Woon 30,000 20,000 – 50,000 n/a
Maria Ciliberti
3
n/a 10,000 – 10,000 n/a
Heejae Chae
4
n/a 34,000 – 34,000 n/a
1 As per the Policy, Executive Directors are expected to build up a shareholding that is equal in value to 200% of their
basic annual salaries. Share awards vesting over time will contribute to meeting the shareholder requirement.
2 Steve Good retired from the Board at the conclusion of the AGM on 30 April 2024 and his shareholding at the end
of 2024 is as at that date.
3 Maria Ciliberti was appointed to the Board on 11 March 2024.
4 Heejae Chae was appointed to the Board on 25 March 2024.
Themarketpriceofordinarysharesat31December2024was£1.452pence(2023:£1.276pence)
andtherangeduring2024was£1.156penceto£1.662pence(2023:£0.9775penceto
£1.296pence).
As at 31 December 2024, the trustee of the Company’s Employee Share Ownership Trust (“ESOT”)
held968,021shares(2023:1,458,404).AsExecutiveDirectorsandaspotentialbeneficiariesunder
the ESOT, Paul Waterman and Ralph Hewins are deemed to have an interest in any shares that
become held in the ESOT.
As at 5 March 2025, no person who was then a Director had any interest in any derivative or other
financialinstrumentrelatingtotheCompany’ssharesand,sofarastheCompanyisaware,noneof
their connected persons had such an interest. There was no other change, so far as the Company is
aware, in the relevant interests of other Directors or their connected persons.
Other than their service contracts, letters of appointment and letters of indemnity with the Company,
noneoftheDirectorshadaninterestinanycontractofsignificanceinrelationtothebusinessofthe
Companyoritssubsidiariesatanytimeduringthefinancialyear.
Directors’ retirement benefits (audited)
ThetablebelowshowsthebreakdownoftheretirementbenefitsoftheExecutiveDirectors,
comprisingemployercontributionstodefinedcontributionplansandsalarysupplementspaid
in cash.
Paul Waterman received a salary supplement and participated in US contractual retirement schemes.
Further detail can be found in the Policy. The amount shown in the table below represents employer
matching contributions, and both this and the salary supplement are included in the Directors’
emoluments table shown on page 122.
RalphHewinsreceivedasalarysupplementinlieuofanyotherretirementbenefit.Theamount
received is shown in the table below and in the Directors’ emoluments table.
Definedcontributionplans Salary supplement
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Paul Waterman 42 37 125 125
Ralph Hewins n/a n/a 87 84
Note: The pensions received were consistent with the Company’s Remuneration Policy at up to a total of 21% of salary
andforPaulWatermanincludedcontributionstohisUSpensionarrangements(whichincludedatax-qualified401(k)plan
andanon-qualifiedplan).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 124
Directors’ Remuneration report
Payments to past Directors or payments for loss of office (audited)
As announced on 18 November 2024, Paul Waterman will step down from his role as Chief Executive
Officernolaterthan29April2025.HewillremainemployedbytheGroupinordertoensurean
orderly handover to his successor, until his employment ends on 31 July 2025. Remuneration
arrangements in respect of his departure, having taken legal advice in connection with his
US contract, reflect his contractual entitlements, the Directors’ Remuneration Policy approved
byshareholdersattheAGMon26April2022andtherulesoftherelevantplans.Thepaymentstobe
madeinconnectionwithhislossofofficeareassetoutbelow:
Salary and benefits
These will continue to be provided in line with the terms of his service agreement through to
31 July 2025, after which Mr Waterman will cease to be employed by the Group. He will receive a
payment in lieu of any accrued but unused annual leave as of 31 July 2025. From 1 August 2025
through to 18 November 2025 he will receive continued payment of his base salary in lieu of
serving the remainder of his 12-month notice period. These payments are subject to mitigation.
Annual bonus
Mr Waterman will remain eligible to participate in the Elementis Group Annual Bonus Plan:
(a)forthefinancialyearending31December2024,subjecttoachievementofperformance
measures. The payment of any bonus earned will be made by way of (a) cash lump sum to the
value of 50% of the bonus entitlement in March 2025, and (b) deferred shares to the value of 50%
of the bonus entitlement, which will vest on 31 July 2025. The deferred shares (net of any tax due)
will need to be retained in connection with the two-year post cessation of employment
shareholding policy (see below); and
(b)forthefinancialyearending31December2025,pro-ratedto31July2025,subjectto
achievement of performance measures. Payment will be made by way of (a) cash lump sum to the
value of 50% of the bonus entitlement, and (b) deferred shares to the value of 50% of the bonus
entitlement, which will vest in March 2028.
Any bonuses paid will remain subject to malus and clawback as well as the wider terms of the plan.
Long-term incentive plan awards
The Remuneration Committee determined Mr Waterman to be a good leaver under the rules of the
Elementis LTIP as a result of his cessation of employment being by way of mutual agreement in
connection with the Board’s leadership succession plans. Outside of his 2022 LTIP award, the details
of which are set out above in connection with his continued employment through the vesting period,
his2023and2024LTIPawardswillremaineligibletovestontheirnormalvestingdatesin2026and
2027 respectively, subject to pro-rata reduction to reflect the period from grant to the cessation of his
employment on 31 July 2025 relative to three years and the application of performance conditions.
After pro-ration to 31 July 2025, Paul Waterman has 1,048,704 shares eligible to vest under the 2023
LTIP award and 484,254 shares eligible to vest under the 2024 LTIP award. In accordance with the
rules of the LTIP, any vested shares will remain subject to the terms of the plan, which include a
two-year holding period from vesting and malus and clawback provisions.
Other payments
Paul Waterman will receive a capped contribution of up to £20,000 (excluding VAT) towards legal
advisory fees incurred in connection with his departure; and up to £50,000 (excluding VAT) towards
thepreparationoftaxfilingsforeachyearinwhichhereceivesemploymentincomefromtheGroup
that is taxable in the UK and career transition advisory support. The contribution towards tax support
isconsistentwithhisinemploymentbenefitandprovidedinlieuofthisbenefitforthebalanceofhis
notice period.
Post-cessation share ownership guidelines
In accordance with the post-cessation shareholding policy introduced in 2022, no shares derived
from incentive plans from 2022 onwards may be sold (other than to pay any tax arising on vesting)
within two years of cessation of employment unless the shares retained, after tax, from those awards
exceed the number of shares calculated to be of value equivalent to 200% of salary as at 31 July 2025
divided by the closing share price on 31 July 2025. LTIP shares are subject to a two-year holding
period under the Remuneration Policy.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 125
Directors’ Remuneration report
Total shareholder return performance and change in CEO’s pay
The graph below illustrates the Company’s total shareholder return for the ten years ended 31 December 2024, relative to the FTSE 250 Index, along with a table illustrating the change in CEO pay over the
corresponding period. The table also details the payouts for the annual bonus scheme and LTIP.
As the Company’s shares are denominated and listed in pence, the graph below looks at the total return to 31 December 2024 of £100 invested in Elementis on 31 December 2015 compared with that of the
total return of £100 invested in the FTSE 250 Index. This index was selected for the purpose of providing a relative comparison of performance because the Company is a member of it.
0
50
100
150
200
TSR performance since 2014 (rebased to 100)
£
Elementis plc FTSE 250 Index (excl. Investment Trusts)
2014
2015 2016
2017 2018 2019 2020 2021 2022 2023
2024
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CEO pay (total remuneration – £’000s) 763 1,553
1
2,539 1,229 1,114 1,007 1,946 2,214 2,752 3,039
Annual bonus payout (% of maximum) 0% 27.5% 93.0% 35.0% 17. 3% 0% 93% 75% 74% 77.9%
LTIP vesting (% of maximum) 0% 91.2%
2
91.4%
3
0% 0% 0% 0% 11.1% 54.7% 48.7%
1 IncludesremunerationforPaulWatermanandDavidDutrofortheperiodinwhicheachwasCEOduring2016.
2 Relates to Paul Waterman’s buy-out awards which vested in March 2017.
3 Relates to Paul Waterman’s buy-out awards vesting in March 2018.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 126
Directors’ Remuneration report
CEO to all-employee pay ratio
Whilst Elementis is not required to publish a CEO to all-employee pay ratio given it has fewer than 250 UK employees, voluntary disclosure of the pay ratio is included below. In line with the relevant legislation,
the analysis has been completed using Option A (i.e. actual total remuneration earned has been used as the basis for comparison). The reference date for the analysis was 31 December 2024.
Whilstthisisonlybaseduponcirca80UKemployees,thereisamixoffactory-basedemployees(circa75%)andcorporateheadofficeemployees.OptionAwasusedasitwasdeemedthemostaccurate
andprevalentamongrecentFTSE250disclosures.The2024ratioisequivalenttothe2023figureduetothecontinuedhigherratioofvariablepaywithintheCEO’soverallcompensationasaresultofthe
vesting of the 2022 LTIP award. Circa 10% of UK employees are eligible for LTIP. The ratio is consistent with the pay, reward and progression policies for the Company’s UK employees taken as a whole.
The pay ratio illustrates the greater leverage in Director packages versus the wider workforce in that in years where Elementis performs strongly against its performance targets, the ratio is generally higher.
CEO pay ratio 2019 2020 2021 2022 2023 2024
Method A A A A A A
CEOsinglefigure £1,114 £1,007 £1,946 £2,214 £2,752 £3,039
Upper quartile 15 14 23 24 31 37
Median 21 19 34 40 52 52
Lower quartile 25 23 42 49 67 66
Thesalaryandtotalpayfortheindividualsidentifiedatthelowerquartile,medianandupperquartilepositionsin2024aresetoutbelow:
2024 Salary Total pay
Upper quartile individual 74,48 4 81,188
Median individual 52,836 58,038
Lower quartile individual 44,324 4 6,13 8
Relative importance of spend on pay
ThetablebelowshowsthetotalremunerationpaidacrosstheGrouptogetherwiththetotaldividendspaidinrespectof2024andtheprecedingfinancialyear.
£m 2024 2023 Change
Remuneration paid to all employees
1
84.8 89.2 -5%
Total dividends paid in the year 14.7 0 14.7%
1 SeeNote8totheconsolidatedfinancialstatements.Theamountsfor2024and2023havebeenconvertedfromdollarsintopoundssterlingusingtheaverageUSD/GBPexchangeratesforthoseyears.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 127
Directors’ Remuneration report
Percentage change in the remuneration of the Directors (unaudited)
The table below shows the change in the Directors’ pay and the corresponding change of these elements across all UK employees within the Group from 2023 to 2024.
Average percentage change 2020-21 Average percentage change 2021-22 Average percentage change 2022-23 Average percentage change 2023-24
Salary
Taxable
benefits
Annual
bonus Salary
Taxable
benefits
Annual
bonus Salary
Taxable
benefits
Annual
bonus Salary
Taxable
benefits
Annual
bonus
CEO
1,2,3,4
2% 26% 100% 3% -4% -17% 3.2% 24.7% 2.7% 4% 17. 8% 11. 8%
CFO
1,2
2% 4% 100% 3% 4% -16% 4.5% 0% 2.7% 4% 13.2% 9.1%
John O’Higgins
5
131% – – 86% – – 4.5% – – 4% 3.6% –
Dorothee Deuring 2% – – 3% – – 10.5% – – 4% – –
Trudy Schoolenberg
6
– – – – – – 31.9% – – 4% – –
Christine Soden
7
512% – – 14% – – 9.3% – – 4% – –
Clement Woon
8
– – – – – – 4.5% – – 16.1% – –
Maria Ciliberti
9
– – – – – – – – – – – –
Heejae Chae
10
– – – – – – – – – – – –
Employees
3
11.1% – – 1.8% – -12% 0.4% – -20.7% 4% – 25.5%
Former Directors
Andrew Duff
5
-31% – – – – – – – – – – –
Anne Hyland
11
2% – – -67% – – – – – – – –
Steve Good
12
7% – – 3% – – -0.2% – – -0.2% – –
1 All percentages are based on converting relevant local currencies into pounds sterling using the average rates for the respective year.
2 The Executive Directors recommended and the Committee agreed that no bonuses should be payable in relation to 2020 performance.
3 The2019-20year-on-yearchangeintheCEO’sbenefitsaredrivenbyincreasedprivatemedicalinsurancesubscriptionasaresultofachangeincoverage,whilechangesinemployeesalary,benefitsandbonusaredrivenbychangestothe
employee population and movements in exchange rates.
4 TheactualbenefitscostforFY2022wereeffectivelyunderstatedinFY2022byapproximately£15,000duetothetimingofthemedicalpayments.Thishasbeencorrectedfor2023andaccountsforthemajorityofthe26%increase.Foreign
exchange rates and changes in costs due to age and salary also impact 2023.
5 Andrew Duff stepped down as Chair on 1 September 2021, with John O’Higgins assuming the role.
6 TrudySchoolenbergwasappointedNEDon15March2022andassumedtheroleofSIDinApril2022.
7 Christine Soden joined the Board as NED and DNED for workforce engagement on 1 November 2020.
8 Clement Woon was appointed NED on 1 December 2022.
9 Maria Ciliberti was appointed NED on 11 March 2024.
10 Heejae Chae was appointed NED on 25 March 2024.
11 Anne Hyland retired from the Board in April 2022.
12 Steve Good retired from the Board on 30 April 2024 at the conclusion of the 2024 AGM.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 128
Directors’ Remuneration report
Statement of shareholding voting
The resolutions to approve the 2022 Directors’ Remuneration Policy and the 2023 Directors’
Remuneration report were passed by a poll at the Company’s 2022 and 2023 AGM respectively.
Set out in the table below are the votes cast by proxy in respect of these resolutions.
Votes for % for Votes against % against Votes withheld
1
2023 Directors’ Remuneration
report (2024 AGM)
437,00 4,311 97.75 10,043,358 2.25 37,468 ,967
2022 Directors’ Remuneration
Policy (2022 AGM)
46 0,112,8 04 96.99 14,282,696 3.01 42,939
1 Voteswithheldarenotincludedinthefinalfiguresastheyarenotrecognisedasavoteinlaw.
Other information about the Committee’s membership and operation
Committee composition
The Chair and members of the Committee are shown on pages 77 to 79, together with their
biographical information. Five meetings were held during 2024 and the attendance of Committee
members is shown on page 101.
The Chair, CEO and other Non-Executive Directors who are not members of the Committee have a
standing invite to attend, and the CFO and CHRO also attend meetings by invitation, as appropriate.
The Executive Directors are not present when their own remuneration arrangements are discussed
or, if they are, they do not participate in the decision-making process.
External adviser
Korn Ferry was appointed as external independent adviser to the Committee in 2017 following a
competitive tender process. During 2024, Korn Ferry provided advice to the Committee in relation
to emerging market practice and benchmarking. Through a separate advisory team to the
remuneration advisory team, Korn Ferry provided other human capital related services to the
NominationCommittee.TheCommitteeisthereforesatisfiedthattheadvicereceivedwasobjective
and independent. Korn Ferry is a member of the Remuneration Consultants Group and abides by
the voluntary code of conduct of that body, which is designed to ensure objective and independent
advice is given to remuneration committees. More information regarding the role of Korn Ferry
in advising the Nomination Committee can be found on page 83. Fees paid to Korn Ferry for
remuneration advisory services in 2024 were £81,000 (excluding VAT) and were charged on
a time and materials basis.
Terms of reference
A full description of the Committee’s terms of reference is available on the Company’s website
at www.elementis.com
Activities during the year
The Committee operated in line with its terms of reference during the year, setting the pay for
the Executive Directors and wider senior leadership team, having oversight of pay across the
organisation and setting the Board Chair’s fee. The Committee considered the following at its
meetings during 2024:
Committee
meeting dates Agenda items
February 2024
2021 LTIP performance outcomes
2023 Executive Director bonus awards
2024 LTIP targets/performance conditions and delegated authority to grant
the 2024 awards
ELT salary review and bonus payments
CEO pay ratio calculations
ApprovaloffinaldraftofDirectors’Remunerationreport
July 2024
Market update and Remuneration Policy review discussion proposals
Employee share schemes
October 2024
Application of Remuneration Policy in 2025
Update on 2024 performance against annual bonus targets and 2022 LTIP
November 2024
CEO succession
December 2024
Institutional investor and proxy agency update
Update on workforce pay reviews
2025 salary reviews for Paul Waterman and Ralph Hewins
Chair’s fee review
Letter to shareholders regarding 2025 Remuneration Policy
Gender pay gap review
Globalbenefitsreview
Committee terms of reference
Outsideoftheabovemeetingdates,theCommitteeconsideredandconfirmedoperationalmatters
in appropriate forums (e.g. the Executive Directors’ annual bonus targets, granting of the 2024 LTIP
awards, and CEO leaving arrangements).
Evaluation, training and development
On an annual basis, the Committee’s effectiveness is reviewed as part of the evaluation of the Board.
Following the evaluation last year, there were no major issues to report. During 2024, Committee
members were updated on the latest developments on executive remuneration and all members
receivedbriefingsfromtheGroupGeneralCounsel&CompanySecretaryandtheCommittee’s
remuneration advisers throughout the year, to keep them updated on topical matters and
developments relating to executive remuneration.
Auditable sections of the Directors’ Remuneration Report
The sections of the Annual Report on Remuneration that are required to be audited by law are as
follows:RemunerationpayabletoDirectorsfor2024andDirectors’retirementbenefits;andtables
headed Annual LTIP awards granted in the year, Directors’ scheme interests, Directors’ share
interestsandDirectors’retirementbenefits.
Approved by the Board on 5 March 2025
Clement Woon
Chair, Remuneration Committee
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 129
Directors’ Remuneration report
Directors’ report
The Directors present their report together with the Annual Report and Accounts, along with the
audited consolidated financial statements of the Company, and the Group, for the year ended
31 December 2024.
The Directors’ report is set out on pages 130 to 132, together with the information required to be
disclosed (referred to below), which is incorporated by reference. The Company, in accordance with
Section 414(C)(11) of the Companies Act 2006, has chosen to set out certain information required to
be included in the Directors’ report in the Strategic report. Such information is identified in the table
below. The Governance report is set out on pages 76 to 133. Information from the consolidated
financial statements referred to in this Directors’ report is incorporated by reference.
Disclosure of information under Listing Rule 9.8.4
35 Carbon emissions, energy consumption and energy efficiency
80 Corporate governance framework
118 Directors’ remuneration
124 Directors’ share interests
99 Directors’ training and development
48 Employee equality, diversity and inclusion
48 Employee engagement
34 Environmental matters
65 Financial instruments and financial risk management
15 Innovation, Growth and Efficiency strategy
103 Long-term incentive schemes
77 Membership of the Board
28 Modern Slavery Statement
55 Non-financial and sustainability information
70 Principal risks
56 Results and dividend
5 Section 172(1) statement
24 Stakeholder engagement
133 Statement of Directors’ responsibilities
28 Sustainability
75 Viability and going concern
The Company has chosen, in accordance with section 414C(11) of the Companies Act 2006,
and as noted in this Directors’ report, to include certain matters in its Strategic report that would
otherwise be required to be disclosed in this Directors’ report. The Strategic report can be found
on pages 1 to 75 and includes an indication of future likely developments in the Company, details
of important events and the Company’s business model and strategic progress.
Directors
Directors and their interests
The biographical details of the Directors of the Company who held office during the year, and up to
the date of the signing of the financial statements, are set out on pages 77 to 79.
Appointment and replacement of Directors
The Articles of Association (the ‘Articles’) give the Directors power to appoint and replace Directors.
Under the terms of reference of the Nomination Committee, appointments are recommended by the
Nomination Committee for approval by the Board. In line with the UK Corporate Governance Code,
the Articles also require all Directors to retire and submit themselves for election at each AGM except
for any Director appointed by the Board after the notice of the AGM has been given. The service
contracts of the Executive Directors and letters of appointment of the Non-Executive Directors are
available for inspection at the Company’s registered office.
Amendment of the Articles
Amendments to the Articles may be made by way of special resolution, in accordance with the
Companies Act 2006. The most recent amendments to the Articles were approved at the AGM held
on 30 April 2019.
Directors’ powers
The business of the Company is managed by the Board, which may exercise all the powers of the
Company, subject to the Articles, the Companies Act 2006 and any special resolution of the
Company. The exercise of certain powers, including in relation to the issuing or buying back of
shares, requires authority from the Company’s shareholders. The Articles may only be amended
by special resolution of the Company at a general meeting of its shareholders.
Directors’ conflicts of interest
Ralph Hewins is in receipt of a conflict authorisation from the Company in respect of him acting as a
trustee of the Elementis Group Pension Scheme. The conflict authorisation enables Ralph Hewins to
continue to act as a trustee, notwithstanding that this role could give rise to a situation in which there
is a conflict of interest. The Board considers that it is appropriate for the trustees of the UK pension
scheme to benefit from the financial expertise of the CFO and that his contribution at trustees’
meetings demonstrates the Board’s commitment to supporting the UK pension scheme. The Board’s
conflict authorisation is subject to annual review and, under the terms of the conflict authorisation,
reciprocal provisions have been put in place with a view to safeguarding information that is
confidential to the Group, as well as to the trustees. Were a conflict of interest to arise, Ralph Hewins
is required to excuse himself from reading the relevant papers and absent himself from participating
in relevant discussions. Procedures are in place to ensure compliance with the Companies Act 2006.
These procedures have been complied with during the year. Details of any new conflicts or potential
conflict matters are submitted to the Board for consideration and, where appropriate, are approved.
Authorised conflicts and potential conflict matters are reviewed on an annual basis and more
frequently where required.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 130
Directors’ insurance and indemnities
In addition to the indemnities granted by the Company to Directors in respect of the liabilities incurred
as a result of their office (which are qualifying third-party indemnity provisions under the Companies
Act 2006), a directors’ and officers’ liability insurance policy is maintained throughout the year. Neither
the indemnity nor the insurance provides cover in the event that a Director is proven to have acted
dishonestly or fraudulently. Similar arrangements also exist for Directors of Group subsidiary entities.
Directors’ share interests
The Directors’ interests in the ordinary shares and options of the Company can be found within the
Directors’ Remuneration report on pages 123 to 124.
Shares
Share capital
As at 31 December 2024, the Company’s issued share capital was 590,950,723 ordinary shares,
with a nominal value of 5 pence each. Each issued share carries a voting right of one vote per share.
All of the Company’s issued shares are fully paid up and rank equally in all respects. The rights
attached to the shares, in addition to those conferred on their holders by law, are set out in the
Company’s Articles. From time to time, the ESOT holds shares in the Company for the purposes of
various share incentive plans and the rights attached to them are exercised by independent trustees,
who may take into account any recommendation by the Company. As at 31 December 2024, the
ESOT held 968,021 shares in the Company (2023: 1,458,404). A dividend waiver is in place in
respect of all shares that may become held by the ESOT. Further details of the authorised and issued
share capital during the financial year are provided in Note 17 to the accounts on page 168.
Voting rights
In a general meeting of Elementis plc, the provisions of the Companies Act 2006 apply in relation
to voting rights, subject to the provisions of the Articles and to any special rights or restrictions as to
voting attached to any class of shares in Elementis plc (of which there are none). Shareholders are
entitled to attend and vote at any general meeting of the Company and a poll will be held on every
resolution. Every member present in person or by proxy has, upon a poll, one vote for every share
held. In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and,
for this purpose, seniority shall be determined by the order in which the names stand in the Register
of Members in respect of the joint holding. Full details of the deadlines for exercising voting rights in
respect of the resolutions to be considered at the AGM to be held on 29 April 2025 will be set out
in the Notice of Annual General Meeting.
Authority to purchase own shares
The Company did not purchase any of its ordinary shares (2023: nil) during the year. All of the
Company’s 5 pence ordinary shares held in treasury were issued in satisfaction of awards under
the Company’s share-based incentive plans during the year and no shares were held in treasury
at 31 December 2024 (2023: nil).
A special resolution will be proposed at the forthcoming AGM to renew the Company’s authority
to purchase its own shares in the market up to a limit of 20% of its issued ordinary share capital.
The maximum and minimum prices will be stated in the resolution at the date of the AGM.
The Directors believe that it is advantageous for the Company to have this flexibility to make market
purchases of its own shares. The Directors may consider holding repurchased shares pursuant to
the authority conferred by this resolution as treasury shares. This will give the Company the ability
to reissue treasury shares quickly and cost-effectively, and will provide the Company with additional
flexibility in the management of its capital base. Any issues of treasury shares for the purposes of
the Company’s employee share schemes will be made within the 20% anti-dilution limit set by
The Investment Association. The Directors will only exercise this authority if they are satisfied that
a purchase would result in an increase in expected earnings per share and would be in the interests
of shareholders generally.
Employee share schemes
The Company operates a number of employee share plans, details of which are set out in Note 26 to
the consolidated financial statements and on page 123 of the Directors’ Remuneration report.
Substantial shareholders
In accordance with the Disclosure Guidance and Transparency Rules (“DTR”), as at 31 December 2024,
the interests in voting rights over the issued share capital of the Company had been notified.
Information provided to the Company pursuant to the DTR is published on a regulatory information
service and on the Company’s website.
Ordinary shares
% of issued
share capital
Franklin Templeton 58,466,789 9.89
Fidelity International 44,567,564 7.5 4
Columbia Threadneedle 43,010,595 7. 28
BlackRock 42,461,967 7.19
Vanguard Group 30,914,363 5.23
Soros Fund Management 22,861,503 3.87
Dimensional Fund Advisors 22,205,215 3.76
Between 31 December 2024 and 12 February 2025 (being the latest available register date),
the Company has been notified of the following changes:
Columbia Threadneedle Investments increased their shareholding to 45,866,136 or 7.76%
BlackRock increased their shareholding to 44,522,166 or 7.53%
Employees
Employment policies and equal opportunities
Group policies seek to create a workplace that has an open atmosphere of trust, honesty and
respect. Harassment or discrimination of any kind based on race, colour, religion, gender, age,
national origin, citizenship, mental or physical disabilities, sexual orientation, veteran status, or any
other similarly protected status is not tolerated. This principle applies to all aspects of employment,
including recruitment and selection, training, development, promotion and retirement. Employees
are free to join a trade union and participate in collective bargaining arrangements. It is also a
Group policy to reasonably accommodate applicants and employees who have a disability,
where practicable, and to provide training, career development and promotion, as appropriate.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 131
Directors’ report
It is Group policy not to discriminate on the basis of any unlawful criteria and its practices include
prohibition on the use of child or forced labour. Elementis plc supports the wider fundamental human
rights of its employees worldwide, as well as those of our customers and suppliers, and further details
are set out in the People and Responsible business sections on pages 44 to 54.
Employee communications and involvement
The Company is committed to employee involvement throughout the business. Employees are kept
informed of the performance and strategy of the Group via email. Videoconference calls are held by
the CEO to employees worldwide and these serve as an informal forum for employees to ask topical
questions about the Group. Further information can be found on page 24.
Engagement with other stakeholders
Details of engagement with other stakeholders and information on how the Directors have had regard
to their interests in the context of principal decisions taken by the Board during the year are set out
on pages 24 to 25.
R&D activities
Innovation is a core strategic priority. Our innovation expertise and capability is focused on delivering
products that address our customers’ needs. As at 31 December 2024, over 100 employees were
engaged in global R&D activities. For further information on our approach to innovation, please refer
to pages 16 to 17. During the year ended 31 December 2024, costs relating to R&D activities were
$15 million (2023: $16 million).
Additional information
Going concern and viability statement
The Directors consider that the Group and the Company have adequate resources to remain in
operation for the foreseeable future and have therefore continued to adopt the going concern basis
in preparing the financial statements. The UK Corporate Governance Code requires the Directors to
assess and report on the prospects of the Group over a longer period. The full viability statement and
associated explanations are set out on page 75.
Audit information
Each Director of the Company on 5 March 2025, the date this Directors’ report was approved,
confirms that so far as they are aware, there is no relevant audit information of which the Company’s
auditors, Deloitte LLP, are unaware and that they have taken all the steps that they ought to have
taken as a Director to make themselves aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
Auditors
Following recommendation by the Audit Committee, resolutions to re-appoint Deloitte LLP as
auditors and to authorise the Audit Committee to fix their remuneration will be proposed at the
forthcoming AGM. The remuneration of the auditors for the year ended 31 December 2025 is fully
disclosed in Note 7 to the financial statements on page 160.
Annual General Meeting
The 2025 AGM will be held at 10.00am on Tuesday 29 April 2025 at the offices of A&O Shearman LLP,
One Bishops Square, London, E1 6AD. Details of the resolutions to be proposed at the AGM are set
out in the Notice of AGM, which has been sent to shareholders and is available on the Elementis
corporate website: www.elementis.com.
Significant agreements – change of control
There are a number of significant agreements which the Company is party to that take effect, alter
or terminate in the event of change of control of the Company. The Company is a guarantor under the
Group’s $75 million and €142 million long-term loans, and $250 million revolving credit facility (“RCF”)
and, in the event of a change of control, any lender among the facility syndicate, of which there are
eight with commitments ranging from $41 million to $90 million, may withdraw from the facility and
that lender’s participation in any loans drawn down are required to be repaid.
The rules of the Company’s various share incentive schemes set out the consequences of a change
of control of the Company on the rights of the participants under those schemes. Under the rules of
the respective schemes, participants would generally be able to exercise their options on a change
of control, provided that the relevant performance conditions have been satisfied and, where
relevant, options are not exchanged for new options granted by an acquiring company.
In the event of a takeover or other change of control (usually excluding an internal reorganisation),
outstanding awards under the Group’s incentive plans vest and become exercisable (including DSBP
cash awards and LTIP awards), to the extent any performance conditions (if applicable) have been
met, and subject to time pro-rating (if applicable) unless determined otherwise by the Board in its
discretion, in accordance with the rules of the plans. In certain circumstances, the Board may decide
(with the agreement of the acquiring company) that awards will instead be cancelled in exchange for
equivalent awards over shares in the acquiring company.
Political donations
The Group made no political donations during the year (2023: $nil).
Branches
As a global Group, Elementis’ interests and activities are held or operated through subsidiaries,
branches, joint arrangements or associates which are established in, and subject to the laws and
regulations of, many different jurisdictions.
Other information
Information about the Group’s financial risk management and exposure to financial market risks are
set out in Note 23 to the financial statements on pages 174 to 176.
Events after the balance sheet date
There were no significant events after the balance sheet date.
By order of the Board:
Anna Lawrence
Group General Counsel & Company Secretary
5 March 2025
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 132
Directors’ report
Statement of Directors’ responsibilities in respect of the Annual Report and
financial statements
Company law requires the Directors to prepare financial statements for each financial year. Under
that law, the Directors are required to prepare the Group financial statements in accordance with
UK-adopted international accounting standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards (“IFRSs”) as adopted by the
UK. The financial statements also comply with the IFRSs as issued by the International Accounting
Standards Board (“IASB”).
The Directors have also chosen to prepare the parent company financial statements in accordance
with United Kingdom Generally Accepted Practice (United Kingdom Accounting Standards and
applicable law) including Financial Reporting Standard 101 Reduced Disclosure Framework –
Disclosure exemptions from EU-adopted IFRS for qualifying entities (“FRS 101”).
Under company law, the Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and Company and of the profit or
loss for that period.
In preparing the parent company financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently
make judgements and accounting estimates that are reasonable and prudent
state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements
prepare the financial statements on the going concern basis unless it is appropriate to presume
that the Company will not continue in business
In preparing the Group financial statements, International Accounting Standard 1 requires that
the Directors:
properly select and apply accounting policies
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information
provide additional disclosures when compliance with the specific requirements in IFRSs are
insufficient to enable users to understand the impact of particular transactions, other events and
conditions on the entity’s financial position and financial performance
make an assessment of the Company’s ability to continue as a going concern
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the financial statements comply
with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic
report, Directors’ report, Directors’ Remuneration report and Corporate governance statement which
comply with that law and regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Directors’ responsibility statement
Each of the Directors, who are appointed at the date of approval of this report, confirm that, to the
best of their knowledge:
the financial statements, which have been prepared in accordance with the relevant financial
reporting framework, give a true and fair view of the assets, liabilities, financial position and profit
or loss of the Company and the undertakings included in the consolidation taken as a whole
the Strategic report includes a fair review of the development and performance of the business
and the position of the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face
the Annual Report and financial statements, taken as a whole, are fair, balanced and
understandable, and provide the information necessary for shareholders to assess the Company’s
position, performance, business model and strategy
This responsibility statement was approved by the Board of Directors on 5 March 2025 and is signed
on its behalf by:
Paul Waterman
CEO
Ralph Hewins
CFO
Directors’ responsibilities
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 133
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Independent Auditor’s report to the members of Elementis plc
Report on the audit of the financial statements
1. Opinion
In our opinion:
the financial statements of Elementis plc (the ‘parent company’) and its subsidiaries (the ‘group’)
give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31 December 2024 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with United
Kingdom adopted international accounting standards and IFRS Accounting Standards as
issued by the International Accounting Standards Board (IASB);
the parent company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice, including Financial Reporting
Standard 101 “Reduced Disclosure Framework”; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements which comprise:
the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and parent company balance sheets;
the consolidated and parent company statements of changes in equity;
the consolidated cash flow statement;
the consolidated financial statement related notes 1 to 32; and
the parent company financial statement related notes 1 to 11.
The financial reporting framework that has been applied in the preparation of the group financial
statements is applicable law, United Kingdom adopted international accounting standards and
IFRS Accounting Standards as issued by the IASB. The financial reporting framework that has
been applied in the preparation of the parent company financial statements is applicable law and
United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the auditor’s
responsibilities for the audit of the financial statements section of our report.
We are independent of the group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services provided to the group and parent company for the year are disclosed in note 7
to the financial statements. We confirm that we have not provided any non-audit services prohibited
by the FRC’s Ethical Standard to the group or the parent company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
3. Summary of our audit approach
Key audit
matters
The key audit matters that we identified in the current year were:
Valuation of the Talc Cash Generating Unit; and
Revenue recognition.
Within this report, key audit matters are identified as follows:
!
Newly identified
Increased level of risk
Similar level of risk
Materiality The materiality that we used for the group financial statements was $4.0 million
(2023: $3.7 million) which was determined on the basis of adjusted profit before tax
(“adjusted PBT”) without adjustment for amortisation of purchased intangibles
arising on acquisition. See section 6.1 for more details.
Scoping The four main components which were subject to audit procedures collectively
contribute 84% of the group’s revenue and 93% of the group’s adjusted profit before
tax and 89% of the group’s net assets.
Significant
changes in
our approach
In the previous year we identified a key audit matter relating to Adjusting Items-
transformation costs. As the majority of restructuring plans were completed during
the course of 2024, this is no longer identified as a key audit matter.
We have identified a new key audit matter in the current year in relation to the
valuation of the Talc cash generating unit (“CGU”). This is in response to the
announcement of a strategic review of the Talc business, regulatory developments
around the classification of Talc as a carcinogen in the second half of 2024 and
recognition of an impairment within the year.
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4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue
to adopt the going concern basis of accounting, included:
evaluating the group’s financing facilities including the nature of facilities, repayment terms and
covenants. Further information is set out on page 75 of the annual report;
recalculating and assessing of the amount of forecast headroom on the loan covenants to
testing dates;
evaluating the reverse stress test prepared by management and performing a sensitivity analysis
to consider specific scenarios, including a reduction in revenue and associated profits;
challenging management on the assumptions used in the cash flow model used to prepare the
going concern forecast. This includes testing of clerical accuracy of the model, assessment of the
historical accuracy of forecasts prepared by management and reviewing the balance sheet for
items which could potentially result in a cash outflow;
evaluating management’s going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s and
parent company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Independent Auditor’s report to the members of Elementis plc
5.1. Valuation of the Talc Cash Generating Unit
!
Key audit matter
description
A strategic review of the Talc business was announced in August 2024
in light of a challenging first half of the year. Additionally, the European
Chemical Agency (ECHA) unexpectedly recommended that talc should
be classified as a Class 1b carcinogen, which could have an impact on the
business if ratified by the European Union. This has led management to
determine a further impairment against the CGU of $59.9m allocated across
fixed assets and intangible assets in proportion to their carrying values.
This was in addition to the impairment of $66.1m recorded in the first half
of 2024.
In a change from the prior year, and in accordance with IAS 36 “Impairment
of Assets”, impairment testing for the Talc CGU has been on the fair value
less costs to sell approach in 2024 as this has resulted in higher recoverable
amount than the value in use approach.
Impairment of the Talc CGU has been identified as a key audit matter as a
result of the quantitative significance of the balance, and the application of
management judgement and estimation in performing the impairment
reviews, specifically with respect to:
The selection of the appropriate methodology (fair value less cost to sell
or value in use) in determining recoverable amount.
Consideration of the impact of the ECHA recommendation regarding Talc
as a carcinogen on future cash flows.
Determination of baseline cash flows including recovery rate against
recent actual performance.
Determination of observable market data including EBIT multiples used
in assessment of the fair value less cost to dispose.
Determination of the appropriate discount rate and forecast revenue
growth rates used in the model.
Quantification of disposal costs.
Note 1 to the Consolidated financial statements sets out the Group’s
accounting policy for testing of impairment as well as disclosure in relation
to the key source of estimation uncertainty. The basis for the impairment
reviews is outlined in Note 1 to the Consolidated financial statements,
including details of the discount rates and growth rates used. This area of
judgement areas is also referred to within the Audit Committee report on
page 95.
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Independent Auditor’s report to the members of Elementis plc
How the scope of our
audit responded to
the key audit matter
Our procedures included:
obtaining an understanding of the relevant controls relating to the
impairment review process;
review of a paper prepared by management, which included the key
inputs and outputs from the impairment models;
assessment of trading assumptions, including macroeconomic factors,
applied in the models and in particular those that were key, such as
revenue growth and operating profit margin and the ECHA carcinogen
recommendation, through independent research;
evaluation of historical forecasting accuracy by comparing prior year
plans to actual results achieved;
with the involvement of our valuations specialist, assessing the
appropriateness of the discount rate used utilising their knowledge and
expertise, as well as considering EBIT multiples in the wider industry and
other observable market data to determine fair value;
evaluating the reasonableness of cost of disposal;
assessing the risk adjustments that were applied to the models, in
particular regarding the risk weighting to each possible scenario;
assessing the integrity of management’s impairment model through
testing of the mechanical accuracy and evaluating the application of the
input assumptions;
performing a sensitivity analysis on the assumptions used within the
model; and
assessing the appropriateness of the disclosures, in the financial
statements in respect of the impairment review performed and the
impact, together with sensitivities that could cause a future impairment.
Key observations From the work performed above we are satisfied that the fair vales less
costs to sell approach used in the impairment review for the Talc CGU
is appropriate. This was on the basis that the key assumptions, applied,
when taken in aggregate, are within our acceptable range.
5.2. Revenue recognition
Key audit matter
description
The group recognised revenue of $738.3m (2023: $713.4m) from all
operations.
Given the disaggregated nature of the group, the range of products,
customers and markets spanning across numerous countries and sectors,
understanding the revenue recognition process and the control environment
underpinned our central risk assessment and the basis for our planned audit
procedures.
Due to the large number of revenue transactions recognised across multiple
businesses, this is an area which requires a significant allocation of resources
and effort in the audit. At the year end, manual adjustments are made by
management for goods which have been despatched but where, under
the terms of sale, the control of the goods has yet to pass to the customer;
this is done because the group’s systems record revenue on despatch.
The accounting policy is described in Note 1 where this is also included as
a critical accounting judgement. See Note 2 to the financial statements for
further details for revenue recognised. This area of judgement areas is also
referred to within the Audit Committee report on page 95.
How the scope of our
audit responded to
the key audit matter
Our procedures included:
obtained an understanding of the relevant controls over significant
revenue streams;
with the support of our analytics specialists, built a bespoke analytical
model to trace revenue recognised from sales orders to cash
movements, identifying outliers in the revenue population for further
investigation;
tested the integrity of the data utilised in the analytics, as well as the
transactions recorded, through agreeing a sample to supporting
documentation; and
tested manual adjustments to revenue including using analytics to test the
revenue cut off adjustment.
Key observations From the procedures performed above, we consider that revenue has been
appropriately recognised in the year.
5.1. Valuation of the Talc Cash Generating Unit
!
continued
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Independent Auditor’s report to the members of Elementis plc
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it
probable that the economic decisions of a reasonably knowledgeable person would be changed
or influenced. We use materiality both in planning the scope of our audit work and in evaluating the
results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:
Group financial statements Parent company financial statements
Materiality $4.0 million (2023: $3.7 million) $2.0 million (2023: $1.8 million)
Basis for determining
materiality
The materiality that we used for
the group financial statements was
$4.0 million (2023: $3.7 million)
which equates to 4.3% (2023: 5%)
of adjusted profit before tax without
adjustment for amortisation of
purchased intangibles arising on
acquisition. Refer to Note 5 for
further details.
A factor of 3% of net assets
(2023: 3%) was used capped
at 50% (2023: 50%) of
group materiality.
Rationale for the
benchmark applied
We have considered the users of the
financial statements when selecting
the appropriate benchmarks.
Earnings based metrics are of
interest to the analyst and investor-
based communities. Adjusted profit
before tax is a suitable measurement
for profit orientated entities.
We have used net assets in
determining materiality as it
reflects the nature of the parent
company as a holding company
and its contribution to the
group performance.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in
aggregate, uncorrected and undetected misstatements exceed the materiality for the financial
statements as a whole.
Group financial statements Parent company financial statements
Performance
materiality
70% (2023: 70%) of group
materiality
70% (2023: 70%) of parent company
materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered our past experience
of the group and our risk assessment, including our assessment of the
group’s overall control environment and expectation of reoccurring
misstatements.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in
excess of $200,000 (2023: $184,000), as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure
matters that we identified when assessing the overall presentation of the financial statements.
Materiality
Group Materiality $4.0m
Adjusted PBT
including amortisation
on purchased
intangibles $92.7m
Audit Committee reporting threshold $0.2m
Component performance materiality range
$1.4m to $1.8m
Adjusted PBT including amortisation
on purchased intangibles
Group materiality
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Independent Auditor’s report to the members of Elementis plc
7. An overview of the scope of our audit
7.1. Identification and scoping of components
For 2024 our scoping of our group audit focuses on a risk-based approach by developing an
appropriate audit plan for each significant account. We performed testing on specified account
balances which have been determined at a group level. The majority of specified account balances
fall within scope of four (FY23: four) main components:
the Talc operation in Netherlands and Finland;
the Specialty products operations in the US;
the Specialty products operations in the UK; and
the Specialty products operations in India.
All of these locations were subject to audit procedures either as audits of entire financial information
or audits of specified accounts balances.
Our audit work on the four components was executed at levels of performance materiality applicable
to each individual entity which were lower than Group performance materiality and ranged from
$1.4 million to $1.8 million (2023: $1.2 million to $1.5 million).
The four main components subject to audit procedures outlined above represent the principal
business units within the Group’s operating divisions and account for 84% (2023: 83%) of the
Group’s revenue and 93% (2023: 90%) of the Group’s profit before tax and 89% of the Group’s
Net Assets (2023: 80%)
At the parent entity level we also tested the consolidation process and carried out analytical
procedures to confirm our conclusion that there were no significant risks of material misstatement
in the aggregated financial information of the remaining components not subject to audit or audit of
specified account balances. The parent company is located in the UK and is audited directly by the
group audit team.
7.2. Our consideration of the control environment
Our controls approach was principally designed to inform our risk assessment, to allow us to
obtain an understanding of relevant controls in order to address the risks of material misstatement.
This included controls relating to revenue recognition, goodwill and intangible impairment and
head office controls relating to central balances and processes such as post-employment benefit
obligations, consolidation and financial reporting, and the Group’s planning and budgeting process.
We also included relevant entity level controls.
The group operates a range of IT systems which underpin the financial reporting process. These vary
by business and/or geography. We obtained an understanding of the general IT controls associated
with those financially relevant systems. We did not seek to place reliance on controls for the purpose
of our audit. The general IT control deficiencies identified in the prior year, specific to the Talc
operations, primarily related to user access and segregation of duties have now been remediated.
Any findings or observations identified through understanding the controls have been reported to
the Audit Committee, together with recommendations for improvement. Where control deficiencies
were identified during the course of the audit, we reconsidered our risk assessment and the nature,
timing and extend of our audit procedures.
7.3. Our consideration of climate-related risks
Climate change and the transition to a low carbon economy (“climate change”) were considered in
our audit where they have the potential to directly or indirectly impact key judgements and estimates
within the financial statements. The group continues to develop its assessment of the potential
impacts of climate change, as explained in the Chief Executive Officer’s review within the strategic
report on page 11. Management has disclosed their climate risk considerations in note 1, primarily in
relation to the key judgements and estimates in the assessment of the carrying value of non-current
assets and environmental provisions. Management has concluded there to be no material impact
arising from climate change on the judgements and estimates made in the financial statements as
noted in Note 1. The key judgements and estimates included in the financial statements incorporate
actions and strategies, to the extent they have been approved and can be reliably estimated in
accordance with the Group’s accounting policies. With the involvement of our ESG specialists,
we assessed this disclosure by performing inquiries with management and independent industry
research, and we did not identify any climate related material risks of misstatement. We also
considered whether information included in the climate related disclosures in the Annual Report
were materially consistent with our understanding of the business and the financial statements.
Revenue
Audit of the entire
financial information
Specified audit procedures
Review at group level
84%
0%
16%
Profit before tax
Audit of the entire
financial information
Specified audit procedures
Review at group level
92%
1%
7%
Net assets
Audit of the entire
financial information
Specified audit procedures
Review at group level
86%
3%
11%
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Independent Auditor’s report to the members of Elementis plc
7.4. Working with other auditors
The group audit was conducted by the UK group audit team supported by component teams in
Finland and India. The component auditors tested specified account balances under the direction
and supervision of the group audit team.
The planned programme which we designed as part of our involvement in the component auditors’
work was delivered over the course of the group audit. The extent of our involvement which
commenced from the planning phase included:
Setting the scope of the component auditors’ work and assessment of the component auditors’
independence.
Designing the audit procedures for all higher and significant risks areas to be addressed by the
component auditors and issuing group audit instructions detailing the nature and form of the
reporting required by the group engagement team.
Holding frequent calls and meetings (including in person meetings) with the component audit
teams led by the group engagement partner.
Providing direction on enquiries made by the component auditors through online and telephone
conversations.
Reviewing of each component auditor’s engagement file by a senior member of the group
audit team.
Attending local component audit close meetings virtually or in-person.
Partner led component visits to Finland at both the planning and year-end stage of the audit.
8. Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements, or our knowledge obtained in
the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the
parent company’s ability to continue as a going concern, disclosing as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no realistic alternative but
to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
139
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Independent Auditor’s report to the members of Elementis plc
11. Extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance including the
design of the group’s remuneration policies, key drivers for directors’ remuneration, bonus levels
and performance targets;
the group’s own assessment of the risks that irregularities may occur either as a result of fraud or
error, that was approved by the Board on 4th December 2024;
results of our enquiries of management, internal audit, the directors and the audit committee about
their own identification and assessment of the risks of irregularities, including those that are
specific to the group’s sector;
any matters we identified having obtained and reviewed the group’s documentation of their
policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of
any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud; and
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team, including component audit teams,
and relevant internal specialists, including tax, valuations, pensions, financial instruments, climate,
IT and environmental specialists regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within
the organisation for fraud and identified the greatest potential for fraud in the following area: valuation
of the Talc Cash Generating Unit. In common with all audits under ISAs (UK), we are also required to
perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the group operates in,
focusing on provisions of those laws and regulations that had a direct effect on the determination
of material amounts and disclosures in the financial statements. The key laws and regulations we
considered in this context included the UK Companies Act, UK Listing Rules, pensions legislation
and tax legislation in the sector it operates in.
In addition, we considered provisions of other laws and regulations that do not have a direct effect
on the financial statements but compliance with which may be fundamental to the group’s ability
to operate or to avoid a material penalty which included environmental legislation.
11.2. Audit response to risks identified
As a result of performing the above, we identified the valuation of the Talc Cash Generating Unit as
a key audit matter related to the potential risk of fraud. The key audit matters section of our report
explains the matter in more detail and also describes the specific procedures we performed in
response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect
on the financial statements;
enquiring of management, the audit committee and in-house legal counsel concerning actual and
potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance, reviewing internal audit reports
and reviewing correspondence with HMRC and environmental regulators; and
in addressing the risk of fraud through management override of controls, testing the appropriateness
of journal entries and other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members including internal specialists and component audit teams and remained
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified any material misstatements
in the strategic report or the directors’ report.
140
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Independent Auditor’s report to the members of Elementis plc
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement relating to the group’s
compliance with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
the directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on page 75;
the directors’ explanation as to its assessment of the group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 75;
the directors’ statement on fair, balanced and understandable set out on page 133;
the board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 65;
the section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 65; and
the section describing the work of the audit committee set out on page 92.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records
and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures
of directors’ remuneration have not been made or the part of the directors’ remuneration report to be
audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the audit committee, we were appointed by the Board on
27 April 2016 to audit the financial statements for the year ending 31 December 2016 and
subsequent financial periods. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is nine years, covering the years ending 31 December 2016
to 31 December 2024.
15.2. Consistency of the audit report with the additional report to the audit committee
Our audit opinion is consistent with the additional report to the audit committee we are required to
provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency
Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements form part of the Electronic Format
Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with
DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic
Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Lee Welham (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Cambridge, United Kingdom
5th March 2025
141
Consolidated income statement
For the year ended 31 December 2024
2024 2023
Note$m$m
Revenue
2
738 .3
71 3 . 4
Cost of sales
(4 0 0 . 3)
(4 2 9 .1)
Gross profit
338.0
28 4.3
Distribution costs
(12 7 . 9)
(10 8 . 7)
Administrative expenses
(23 6 .7)
(11 6 . 7)
Operating (loss)/profit
2
(2 6 .6)
5 8.9
Other expenses
1
25
(1. 8)
(2 .3)
Finance income
3
2 .9
4.4
Finance costs
4
(2 4 .1)
(2 1. 3)
(Loss)/profit before income tax
(49.6)
3 9 .7
Tax
6
1. 8
(11 . 5)
(Loss)/profit from continuing operations
7
(4 7. 8)
28 .2
(Loss)/profit from discontinued operations
32
–
(1 .7)
(Loss)/profit for the year
(4 7. 8)
26.5
Attributable to:
Equity holders of the parent
(4 7. 8)
26.5
Earnings per share
From continuing operations
Basic (loss)/earnings (cents)
9
(8 .1)
4. 8
Diluted (loss)/earnings (cents)
9
(8 .1)
4 .7
From continuing and discontinued operations
Basic (loss)/earnings (cents)
9
(8 .1)
4. 5
Diluted (loss)/earnings (cents)
9
(8 .1)
4.4
1 Other expenses comprise administration expenses for the Group’s pension schemes.
Consolidated statement of
comprehensive income
For the year ended 31 December 2024
2024 2023
Note$m$m
(Loss)/profit for the year
(4 7. 8)
26. 5
Other comprehensive income:
Items that will not be reclassified subsequently to profit
and loss:
Remeasurement of retirement benefit obligations
25
(14 . 3)
12. 3
Deferred tax associated with retirement benefit
obligations
3.5
(2. 8)
Items relating to discontinued operations, net of tax
32
–
–
Items that may be reclassified subsequently to profit
and loss:
Exchange differences on translation of foreign
operations
22
(23 .9)
(5 .1)
Effective portion of change in fair value of net
investment hedge
22
6.5
14 . 8
Tax associated with change in fair value of net
investment hedge
–
(0 .1)
Effective portion of changes in fair value of cash flow
hedges
22
2.3
12 .7
Fair value of cash flow hedges transferred to income
statement
22
(4 . 4)
(6 .3)
Tax associated with changes in cash flow hedges
(0 . 4)
(0 .6)
Recycling of deferred foreign exchange losses on
disposal
–
9. 3
Exchange differences on translation of share options
reserves
0 .1
0. 2
Other comprehensive (loss)/income
(30 .6)
3 4.4
Total comprehensive (loss)/income for the year
(7 8. 4)
60. 9
Attributable to:
Equity holders of the parent
(78 . 4)
6 0.9
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 142
Consolidated balance sheet
As at 31 December 2024
2024 2023
31 December 31 December
Note$m $m
Non-current assets
Goodwill and other intangible assets
10
585.9
650. 6
Property, plant and equipment
11
338.0
423 .6
Tax recoverable
–
20.0
Derivative financial assets
21
1. 8
6.0
Deferred tax assets
16
7. 4
19. 6
Net retirement benefit surplus
25
2 7. 6
4 2 .1
Total non-current assets
960. 7
1, 16 1. 9
Current assets
Inventories
12
15 2 . 5
16 3 . 3
Trade and other receivables
13
93 .3
1 01. 8
Derivative financial assets
21
3.6
7. 4
Tax recoverable
21. 0
–
Current tax assets
11 . 2
11 . 2
Cash and cash equivalents
20
59.9
65.8
Total current assets
341 . 5
3 49. 5
Assets classified as held for sale
32
6. 2
–
Total assets
1 ,308.4
1, 51 1. 4
2024 2023
31 December 31 December
Note$m $m
Current liabilities
Trade and other payables
14
(10 8 . 4)
(11 7. 9)
Derivative financial liabilities
21
(1. 5)
–
Current tax liabilities
(9. 8)
(13 . 6)
Lease liabilities
24
(5.9)
(5 . 9)
Provisions
15
(6. 3)
(2 1. 5)
Total current liabilities
(131. 9)
(1 5 8 . 9)
Non-current liabilities
Loans and borrowings
19
(2 19. 2)
(2 6 4.7)
Retirement benefit obligations
25
(8 .6)
(9 .0)
Deferred tax liabilities
16
(9 8 .1)
(13 8 . 7)
Lease liabilities
24
(28.8)
(3 0. 3)
Provisions
15
(4 2 .1)
(6 0 .4)
Derivative financial liabilities
21
–
(2 .1)
Total non-current liabilities
(39 6. 8)
(50 5 . 2)
Liabilities classified as held for sale
32
(2 2 .7)
–
Total liabilities
(5 51. 4)
(6 6 4 .1)
Net assets
7 5 7. 0
8 47. 3
Equity
Share capital
17
52 .7
52.5
Share premium
239.7
2 39. 2
Other reserves
18
51. 5
7 0 .1
Retained earnings
4 1 3 .1
4 85.5
Total equity attributable to holders of the parent
7 5 7. 0
8 4 7. 3
Total equity
7 5 7. 0
8 47. 3
The financial statements on pages 142 to 185 were approved by the Board on 5 March 2025 and
signed on its behalf by:
Paul Waterman Ralph Hewins
CEO CFO
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 143
Consolidated statement of changes in equity
For the year ended 31 December 2024
2024
2023
Share Share Translation Hedging Other Retained Total Share Share Translation Hedging Other Retained Total
capital premium reserve reserve reserves earnings equity capital premium reserve reserve reserves earnings equity
Note$m$m$m$m$m$m$m$m$m$m$m$m$m$m
Balance at 1 January
52. 5
239.2
(10 3 . 4)
5.9
1 6 7. 6
485. 5
8 4 7. 3
52.3
2 3 8 .7
(12 2 . 4)
(1. 0)
165.5
450. 8
78 3. 9
Comprehensive income:
(Loss)/profit for the year
–
–
–
–
–
(4 7. 8)
(4 7. 8)
–
–
–
–
–
26.5
26.5
Other comprehensive income:
Exchange differences
22
–
–
(1 7. 4)
–
0 .1
–
(1 7. 3)
–
–
9 .7
–
0. 2
–
9. 9
Effective portion of changes in
fair value of cash flow hedges
22
–
–
–
2.3
–
–
2.3
–
–
–
12 .7
–
–
12 .7
Fair value of cash flow hedges
transferred to the income
statement
22
–
–
–
(4 . 4)
–
–
(4 . 4)
–
–
–
(6 .3)
–
–
(6 .3)
Tax associated with changes in
cash flow hedges
–
–
–
–
–
(0. 4)
(0. 4)
–
–
–
–
–
(0. 6)
(0.6)
Tax associated with change in
fair value of net investment hedge
–
–
–
–
–
–
–
–
–
–
–
–
(0 .1)
(0 .1)
Remeasurements of retirement
benefit obligations
25
–
–
–
–
–
(14 . 3)
(14 . 3)
–
–
–
–
–
12 . 3
12 . 3
Deferred tax associated with
retirement benefit obligations
–
–
–
–
–
3.5
3.5
–
–
–
–
–
(2. 8)
(2. 8)
Recycling of deferred foreign
exchange losses on disposal
–
–
–
–
–
–
–
–
–
9.3
–
–
–
9.3
Transfer
–
–
–
–
(5 .3)
5. 3
–
–
–
–
–
(2. 3)
2.3
–
Total other comprehensive
(loss)/income
–
–
(17. 4)
(2 .1)
(5 .2)
(5 .9)
(3 0.6)
–
–
19. 0
6.4
(2 .1)
11 .1
34.4
Total comprehensive (loss)/income
–
–
(17. 4)
(2 .1)
(5 .2)
(53 .7)
(7 8. 4)
–
–
19 .0
6.4
(2 .1)
3 7. 6
60.9
Transactions with owners:
Issue of shares by the Company
0. 2
0.5
–
–
–
–
0.7
0. 2
0. 5
–
–
–
–
0.7
Purchase of shares by Employee
Share Options Trust (“ESOT”)
–
–
–
–
–
–
–
–
–
–
–
–
(1. 6)
(1. 6)
Dividends paid
–
–
–
–
–
(18.8)
(18.8)
–
–
–
–
–
–
–
Deferred tax on share-based
payments recognised within equity
–
–
–
–
–
0 .1
0 .1
–
–
–
–
–
(1. 3)
(1. 3)
Share-based payments
26
–
–
–
–
5.7
–
5.7
–
–
–
–
4. 2
–
4. 2
Fair value of cash flow hedges
transferred to net assets
22
–
–
–
0.4
–
–
0. 4
–
–
–
0.5
–
–
0.5
Total transactions with owners
0.2
0.5
–
0. 4
5.7
(1 8 .7)
(11 . 9)
0. 2
0.5
–
0.5
4.2
(2. 9)
2. 5
Balance at 31 December
52 .7
239.7
(12 0 . 8)
4.2
168. 1
41 3 .1
7 5 7. 0
52.5
239. 2
(10 3 .4)
5.9
1 6 7. 6
485.5
8 4 7. 3
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 144
Consolidated cash flow statement
For the year ended 31 December 2024
2024 2023
Note$m$m
Operating activities:
(Loss)/profit from continuing operations
(4 7. 8)
28. 2
Adjustments for:
Other expenses
1. 8
2.3
Finance income
(2 .9)
(4 . 4)
Finance costs
2 4 .1
21. 3
Tax (credit)/charge
(1. 8)
11 . 5
Depreciation and amortisation
52 .7
5 5 .7
Impairment of assets
12 6 . 0
–
(Decrease)/increase in provisions and financial liabilities
(19 . 2)
16.7
Pension payments net of current service cost
25
(0.6)
(3 .1)
Share-based payments expense
26
6 .1
4.4
Operating cash flow before movement in working capital
13 8 . 4
13 2 . 6
Decrease in inventories
4 .9
2 2.5
Decrease/(increase) in trade and other receivables
4 .1
(0. 3)
Decrease in trade and other payables
(4 .7)
(2 0 .1)
Cash generated by operations
14 2 .7
13 4. 7
Income taxes paid
(2 4 .5)
(2 7. 3)
Interest paid
(18 . 2)
(18 .1)
Net cash flow used in operating activities from
discontinued operations
32
–
(1 2 . 5)
Net cash flow from operating activities
10 0 . 0
76 . 8
2024 2023
Note$m$m
Investing activities:
Interest received
0. 3
0.4
Purchase of property plant and equipment
11
(37.4)
(3 8 .1)
Disposal of business
32
–
13 9. 2
Acquisition of intangible assets
10
(0. 4)
(0 .1)
Net cash flow used in investing activities from
discontinued operations
32
–
(0 .3)
Net cash flow used in investing activities
(3 7. 5)
1 0 1 .1
Financing activities:
Issue of shares by the Company, net of repurchases
of shares by ESOT
0.5
(1. 0)
Repayment of term loans
19
(2 5. 0)
(5 0. 0)
Net movement on other loans and borrowings
28
(9. 8)
(1 10.5)
Dividends paid
(18.8)
–
Payment of interest on lease liabilities
24
(1 . 4)
(1. 3)
Payment of gross lease liabilities
24
(5. 3)
(5 . 2)
Net cash flow used in financing activities from
discontinued operations
32
–
–
Net cash flow used in financing activities
(59 .8)
(1 6 8 . 0)
Net increase in cash and cash equivalents
2 .7
9.9
Cash and cash equivalents at 1 January
65.8
5 4.9
Foreign exchange on cash and cash equivalents
(2 .7)
1. 0
Less: cash and cash equivalents classified as held
for sale
32
(5 .9)
–
Cash and cash equivalents at 31 December
20
5 9.9
65.8
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 145
Notes to the consolidated financial statements
For the year ended 31 December 2024
1. Accounting policies
Elementis plc is a public company limited by shares incorporated and domiciled in England and
is the parent company of the Group. The address of its registered office is The Bindery, 5th Floor,
51-53 Hatton Garden, London, EC1N 8HN. The Group financial statements have been prepared
and approved by the Directors in accordance with UK adopted international accounting standards.
The Company has elected to prepare its parent company financial statements in accordance with
FRS 101. These are presented on pages 186 to 191.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted international
accounting standards in conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards (“IFRS”) as adopted by the UK. These financial
statements also comply with IFRS as issued by the International Accounting Standards
Board (“IASB”).
The financial statements have been prepared on the historical cost basis, except that derivative
financial instruments are stated at their fair value. The preparation of financial statements requires
the application of estimates and judgements that affect the reported amounts of assets and liabilities,
revenues and costs, and related disclosures at the balance sheet date.
The financial statements have been prepared on a going concern basis. The rationale for adopting
this basis is discussed in the Directors’ report on page 132.
Reporting currency
As a consequence of the majority of the Group’s sales and earnings originating in US dollars or
US dollar-linked currencies, the Group has chosen the US dollar as its presentational currency.
This aligns the Group’s external reporting with the profile of the Group, as well as with internal
management reporting. The functional currency of the parent is pounds sterling.
Critical accounting judgements and key sources of estimation uncertainty
When applying the Group’s accounting policies, management must make a number of key
judgements on the application of applicable accounting standards and estimates and assumptions
concerning the carrying amounts of assets and liabilities that are not readily apparent from other
sources. These estimates and judgements are based on factors considered to be relevant, including
historical experience, which may differ significantly from the actual outcome. The key assumptions
concerning the future and other key sources of estimation uncertainty that have a significant risk of
causing a material adjustment to the amounts recognised in the financial statements within the next
year are discussed below. The development of the estimates and disclosures related to each of these
matters has been discussed by the Audit Committee.
Critical accounting judgements
The following is the sole critical judgement, as opposed to those involving estimations, which are
dealt with separately below, that the Directors have made in the process of applying the Group’s
accounting policies that has significant effect on the amounts for the year ended 31 December 2024
recognised in the financial statements. Where relevant and practicable, sensitivity analyses are
disclosed in the relevant notes to demonstrate the impact of changes in estimates or assumptions used.
Revenue recognition
Judgement is exercised over how to determine the timing of revenue recognition for orders where the
agreed terms are delivery to the destination point. The Group has compiled shipping days based on
the destination country which are used to inform the timing of revenue recognition. In compiling these
shipping days, management have used past experience and carrier standard shipping days to inform
their decision-making.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting period that may have a significant risk of causing a material misstatement to the carrying
amounts of assets and liabilities within the next financial year, are discussed below.
A. Environmental provisions
Provisions for environmental restoration are recognised where: the Group has a present legal or
constructive obligation as a result of past events; it is probable that an outflow of resources will be
required to settle the obligation; and the amount can be estimated reliably.
Environmental provisions are measured at the present value of the expenditures expected to be
required to settle the obligation using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the obligation. Due to the long time
horizons over which costs are anticipated, small changes in recurring annual cash outflows can have
a significant cumulative impact on the total provision required. At 31 December 2024, the carrying
value of environmental provisions was $43.2m. Further details of these provisions and a sensitivity
assessment are given in Note 15.
B. Valuation of a defined benefit pension obligation
The key estimates made in relation to defined benefit pensions relate to the discount rate used to
determine the present value of future benefit, the rate of inflation applied to plan assets, mortality
rates and rates of salary growth. At 31 December 2024 the UK scheme, the largest of the Group’s
retirement plans, had a surplus of $23.0m, the US pension scheme had a surplus of $4.6m, while
the US post-retirement medical benefit (“PRMB”) scheme and other schemes were in a net deficit
position of $8.6m in aggregate. Further details of pensions and a sensitivity analysis, which has a
material impact on the defined benefit obligations, are given in Note 25.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 146
1. Accounting policies continued
C. Impairment testing of Talc Cash Generating Unit (“CGU”)
During the year, the Group performed assessments as to whether the intangible and tangible fixed
assets of the Talc CGU were impaired.
In the first half of 2024, the performance of the Talc business was adversely impacted by weak end
market demand and strike action in Finland. These factors, along with the preparation of a new
business plan for the Talc business, resulted in a reduction in the near term forecasted profitability.
At 30 June 2024, a recoverable amount, based on a value in use model, was determined using a
pre-tax discount rate of 10.8%. The value is use model is dependent on estimates of future cash
flows, long-term growth rates and the pre-tax discount rate to be applied to the future cash flows.
The carrying amount of the Talc business was higher than the recoverable amount, which gave rise
to an impairment of $66.1m, of which $25.0m was recorded against intangible assets and $41.1m
was recorded against property, plant and equipment. An increase in the pre-tax discount rate of
0.5% would result in an additional impairment charge of $13.9m.
In September 2024, the Risk Assessment Committee (“RAC”) of the European Chemicals Agency
(“ECHA”) made a recommendation that talc be classified as STOT RE1 (specific target organ toxicity
– repeated exposure, category 1) and Carc 1B (carcinogenicity category 1B defined as presumed to
have carcinogenic potential for humans). A final decision by the European Commission has been
postponed and is now expected in the second half of 2026 with the implementation currently
expected in the third quarter of 2028, at the earliest. As a result, there is a high degree of uncertainty
with regards to the future demand and profitability profile of the Talc business. At 31 December 2024,
a recoverable amount, based on a fair value less cost of disposal model, was determined using inputs
based on market evidence (Level 2), using EBIT multiples as the basis for the valuation. The carrying
amount of the Talc business was higher than the recoverable amount, which gave rise to a further
impairment charge of $59.9m, of which $22.1m was recorded against intangible assets and $37.8m
was recorded against property, plant and equipment. A decrease in the EBIT multiples applied by
10% would result in an additional impairment charge of $13.5m.
Climate-related risks
The financial statements have been prepared with consideration of risks resulting from climate
change, our ambition to reach Net Zero by 2050, and in accordance with our Task Force for
Climate-related Financial Disclosures (“TCFD”) disclosures.
In conjunction with our Net Zero ambition and TCFD, a review has been performed in the following
areas that are deemed most at risk of being impacted by climate change:
A. Five-year forecasting model
To support the carrying value of assets, impairment of goodwill testing, going concern, and the
viability statement, management prepare a five-year forecasting model. The five-year forecasting
model includes actions already taken by management to work towards achieving the Group’s
Net Zero ambition. Specifically, for the impairment of goodwill and the carrying value of the CGUs,
management considered the risks associated with: carbon pricing; customer, consumer and investor
demands; raw material supply/prices; access to renewable electricity; energy prices; water scarcity;
and extreme weather events. Based on that consideration, management have not made any
adjustments to the five-year forecasting model.
B. Useful economic lives of property, plant and equipment, right-of-use assets and intangible assets
Management have reviewed the useful economic life of the Group’s non-current assets with respect
to the physical risk resulting from extreme weather events and our Net Zero ambition and have
concluded that the current economic useful lives are in line with all current and foreseeable plans.
C. Environmental provisions
Management have considered the Group’s legal, regulatory and social obligations in determining the
estimate of costs associated with the closure and remediation of our sites. A provision has been
recognised where a reliable estimate of the costs required for mining closure is available (see Note 15).
Where a reliable estimate is not available, a contingent liability has been disclosed (see Note 30).
After detailed consideration of the aforementioned climate risks, management are comfortable that
no adjustments are required to the carrying value of non-current assets and liabilities for the year
ended 31 December 2024.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiaries for the year.
Subsidiaries are all entities (including structured entities) over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date on which that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities
incurred to the former owners of the acquiree, and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair value at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised
amounts of the acquiree’s identifiable net assets.
Acquisition costs are accounted for as an expense in the period incurred.
Intragroup balances and any unrealised gains and losses or income and expenses arising from
intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
A full list of the Group’s subsidiaries is shown in Note 6 of the parent company financial statements.
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 147
Notes to the consolidated financial statements
1. Accounting policies continued
Foreign currency
A. Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences
arising on translation are recognised in the income statement. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated at exchange rates ruling
at the dates the fair value was determined.
B. Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising
on consolidation, are translated at exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated at the average rates of exchange ruling for the relevant
period. Exchange differences arising since 1 January 2004 on translation are taken to the translation
reserve. They are recognised in the income statement upon disposal of the foreign operation. The
Group may hedge a portion of the translation of its overseas net assets through US dollar and euro
borrowings. From 1 January 2005, the Group has elected to apply net investment hedge accounting
for these transactions where possible. Where hedging is applied, the effective portion of the gain or
loss on an instrument used to hedge a net investment is recognised in equity. Any ineffective portion
of the hedge is recognised in the income statement.
Intangible assets
A. Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred, non-controlling interest recognised and previously
held interest measured at fair value is less than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the difference is recognised directly in the
income statement.
B. Research and development
Expenditure on pure research is recognised in the income statement as an expense as incurred.
Under IAS 38, expenditure on development where research findings are applied to a plan or design
for the production of new or substantially improved products and processes is capitalised if the
product or process will give rise to future economic benefits and where the cost of the capitalised
asset can be measured reliably. Expenditure capitalised is stated as the cost of materials, direct
labour and an appropriate proportion of overheads less accumulated amortisation. The length of
development lifecycles, broad nature of much of the research undertaken and uncertainty until a late
stage as to the ultimate commercial viability of a potential product can mean that the measurement
criteria of IAS 38 regarding the probability of future economic benefits and the reliability of allocating
costs may not be met, in which case expenditure is expensed as incurred.
C. Customer relationships, brands and other intangible assets
Customer relationships, brands and other intangible assets are stated at cost or when arising
in a business combination, estimated fair value, less accumulated amortisation.
D. Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful
lives of intangible assets through the administrative expenses line item, unless such lives are
indefinite. Goodwill is systematically tested for impairment each year. Other intangible assets,
comprising customer lists, customer relationships, manufacturing processes and procedures,
trademarks, non-compete clauses and patents are amortised over their estimated useful lives,
which range from 4 to 23 years.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses. Freehold land is not depreciated. Leasehold property is depreciated over the
period of the lease. Freehold buildings, plant and machinery, fixtures, fittings and equipment are
depreciated over their estimated useful lives on a straight-line basis. Depreciation methods, useful
lives and residual values are assessed at the reporting date. No depreciation is charged on assets
under construction until the asset is available for use.
Depreciation is charged on a straight-line basis over the estimated useful economic lives of the
assets as follows:
Buildings
10–50 years
Plant and machinery
2–20 years
Fixtures, fittings and equipment
2–20 years
Right-of-use assets
Shorter of the useful economic life of the asset and the lease term
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within it will flow to the
Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant
and equipment are recognised in the income statement as incurred.
Management regularly considers whether there are any indicators of impairment to carrying values of
property, plant and equipment. Impairment reviews are based on risk-adjusted discounted cash flow
projections. Significant judgement is applied to the assumptions underlying these projections, which
include estimated discount rates, growth rates, future selling prices and direct costs. Changes to
these assumptions could have a material impact on the financial position of the Group and on the
result for the year.
Impairment of non-current non-financial assets
The carrying amount of non-current assets other than deferred tax is compared with the asset’s
recoverable amount at each balance sheet date where there is an indication of impairment.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet
available for use, the recoverable amount is estimated at each balance sheet date.
Annually the Group carries out impairment tests of its goodwill and other indefinite life intangible
assets, which requires an estimate to be made of the value in use of its CGUs. These value in use
calculations are dependent on estimates of future cash flows and long-term growth rates of the
CGUs. Further details of these estimates are given in Note 10.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 148
Notes to the consolidated financial statements
1. Accounting policies continued
An impairment loss is recognised whenever the carrying amount of an asset or its CGU exceeds its
recoverable amount. Impairment losses are recognised in the income statement. Impairment losses
recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to CGUs and then to reduce the carrying amount of the other assets in the unit on a
pro-rata basis. A CGU is the smallest identifiable group of assets that generates cash inflows that
are largely independent of the cash inflows from other assets or groups of assets.
The recoverable amount is the greater of their fair value less costs to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset(s). For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for the CGU to which the asset belongs.
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the
estimated selling price, less estimated costs of completion and selling expenses. Cost, which is
based on a weighted average, includes expenditure incurred in acquiring stock and bringing it to
its existing location and condition. In the case of manufactured inventories and work in progress,
cost includes an appropriate share of overheads attributable to manufacture, based on normal
operating capacity.
Trade and other receivables
Trade receivables and other receivables are due for payment within one year and are thus classified
as current. They are non-interest-bearing and are stated at their nominal amount, which is the original
invoiced amount, less allowance for expected future credit losses. Estimates of future expected credit
losses are informed by historical experience and management’s expectations of future economic
factors; further information on expected credit loss impairment is given in the impairment of financial
assets accounting policy. Individual trade receivables are written off when management deem them
to be no longer collectable.
Impairment of financial assets – expected credit losses
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit
risk characteristics and the days past due. The expected loss rates are based on payment profiles
and the corresponding historical credit losses experienced. The historical loss rates are adjusted to
reflect current and forward-looking information in relation to macroeconomic factors that could affect
the ability of customers to settle receivables.
The Group usually considers a trade receivable in default when contractual payments are 120 days
past due. In certain cases, the Group may also consider a trade receivable to be in default when
internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Group.
A trade receivable is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Trade and other payables
Trade payables are non-interest-bearing borrowings and are initially measured at fair value and
subsequently carried at amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of
three months or less. Bank overdrafts that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
Borrowings
Borrowings are initially measured at cost, which is equal to the fair value at inception, and are
subsequently measured at amortised cost using the effective interest rate method. Any difference
between the proceeds, after net of transaction costs, and the settlement or redemption of borrowings
is recognised over the terms of the borrowings using the effective interest rate method.
Pension and other post-retirement benefits
In respect of the Group’s defined benefit schemes, the Group’s net obligation in respect of defined
benefit pension plans is calculated by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods, that benefit is discounted to
determine its present value, and the fair value of any plan assets is deducted. The liability discount
rate is the yield at the balance sheet date on AA credit-rated bonds that have maturity dates
approximating to the terms of the Group’s obligations. Pension and post-retirement liabilities are
calculated by qualified actuaries using the projected unit credit method.
Following the introduction of the revised IAS 19, Employee Benefits’ standard, the net interest on the
defined benefit liability consists of the interest cost on the defined benefit obligation and the interest
income on plan assets, both calculated by reference to the discount rate used to measure the
defined benefit obligation at the start of the period.
The Group recognises actuarial gains and losses in the period in which they occur through the
statement of comprehensive income. The Group also operates a small number of defined
contribution schemes and the contributions payable during the year are recognised as incurred.
Due to the size of the Group’s pension scheme assets and liabilities, relatively small changes in the
assumptions can have a significant impact on the expense recorded in the income statement and
on the pension liability recorded in the balance sheet.
Leases
A lease liability is recognised when the Group obtains control of the right-of-use asset that is the
subject of the lease. The lease liability is subsequently measured using the effective interest method,
with interest charged to finance costs. Right-of-use assets are generally depreciated over the shorter
of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain
to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s
useful life.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 149
Notes to the consolidated financial statements
1. Accounting policies continued
At inception, the Group evaluates whether it is reasonably certain that any option to extend a
lease term will be exercised or likewise whether any option to terminate the lease will be exercised.
The Group continues to evaluate the likelihood of exercising such options throughout the initial lease
term. When the Group is committed to extending or terminating the lease, having considered the
alternative options available, and where appropriate lessor consent to the extension or termination
has been obtained, the Group will consider the option to be reasonably certain to be exercised.
When an option is reasonably certain to be exercised, the right-of-use asset and lease liabilities
recognised are adjusted to reflect the extended or curtailed lease term.
Leases, which at inception have a term of less than 12 months or relate to low-value assets, are not
recognised on the balance sheet. Payments made under such leases are recognised as an expense
in the income statement on a straight-line basis over the period of the lease.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of economic benefits will be
required to settle the obligation and a reliable estimate can be made. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability.
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan and the restructuring has either commenced or has been announced publicly.
In accordance with the Group’s environmental policy and applicable legal requirements, a provision
for site restoration in respect of contaminated land is recognised when the land is contaminated.
Provisions for environmental issues are judgemental by their nature, particularly when considering
the size and timing of remediation spending, and are more difficult to estimate when they relate to
sites no longer directly controlled by the Group.
Self-insurance provisions relate to personal injury and other claims from former employees or third
parties and represent the aggregate of outstanding claims plus a projection of losses incurred but not
yet reported which together make up the full liability recognised as a provision. Insurance recoveries
are recognised as a separate reimbursement asset.
Derivative financial instruments
The Group uses derivative financial instruments, such as forward currency contracts, interest rate
swaps and commodity swap contracts, to hedge its foreign currency risks, interest rate risks and
commodity price risks, respectively. The Group does not hold or issue derivative financial instruments
for speculative trading purposes. However, derivatives that do not qualify for hedge accounting are
accounted for as trading instruments. Due to the requirement to assess the effectiveness of hedging
instruments, changes in market conditions can result in the recognition of unrealised gains or losses
on hedging instruments in the income statement.
Derivative financial instruments are recognised initially at fair value and are shown within derivative
financial assets if they are in an asset position or within derivative financial liabilities if they are in a
liability position. The gain or loss on remeasurement to fair value is recognised immediately in the
income statement. However, where derivatives qualify for hedge accounting, recognition of any
resultant gain or loss depends on the nature of the item being hedged.
A. Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows
of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any
gain or loss on the derivative financial instrument is recognised directly in the hedging reserve.
Any ineffective portion of the hedge is recognised immediately in the income statement.
Amounts previously recognised in other comprehensive income and accumulated in equity are
reclassified to profit and loss in the periods when the hedged item is recognised in profit or loss,
in the same line of the income statement as the recognised hedged item. However, when the forecast
transaction that is hedged results in the recognition of a non-financial asset, the gains or losses
previously accumulated in equity are transferred from equity and included in the initial measurement
of the cost of the non-financial asset.
B. Fair value hedges
Where a derivative financial instrument is designated as a hedge of the variability in a fair value of a
recognised asset or liability or an unrecognised firm commitment, all changes in the fair value of the
derivative are recognised immediately in the income statement.
The carrying value of the hedged item is adjusted by the change in fair value that is attributable to
the risk being hedged, even if it is normally carried at amortised cost, and any gains or losses on
remeasurement are recognised immediately in the income statement, even if those gains would
normally be recognised directly in reserves.
C. Hedges of a net investment in a foreign operation
The Group designates the foreign exchange gain or loss on a proportion of the Group’s euro and
US dollar denominated borrowings as a hedge of the Group’s net investment in foreign operations.
As such the foreign exchange gain or loss on those borrowings is recognised in other comprehensive
income and accumulated in equity until such time as the operations are disposed of, at which point
the corresponding amounts are recycled to profit or loss.
Share capital
Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity. When share capital recognised as equity is repurchased, the
amount of the consideration paid, including directly attributable costs, is recognised as a deduction
from equity. Shares repurchased by the Company are classified as treasury shares and are
presented as a deduction from total equity.
Own shares held by ESOT
Transactions of the Group-sponsored ESOT are included in the consolidated financial statements.
In particular, the ESOT’s purchases of shares in the Company are charged directly to equity.
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 150
Notes to the consolidated financial statements
1. Accounting policies continued
Non-current assets held for sale and discontinued operations
A non-current asset, or a group of assets containing a non-current asset (a disposal group), is
classified as held for sale if its carrying amount will be recovered principally through sale rather than
through continuing use, it is available for immediate sale and sale within one year is highly probable.
On initial classification as held for sale, non-current assets and disposal groups are measured at the
lower of previous carrying amount and fair value less costs to sell with any adjustments taken to profit
or loss. The same applies to gains and losses on subsequent remeasurement.
A discontinued operation is a component of the Group’s business that represents a separate major
line of business or geographic area of operations or is a subsidiary acquired exclusively with a view to
resale, that has been disposed of, has been abandoned, or that meets the criteria to be classified as
held for sale.
Revenue
Revenue is recognised upon transfer of promised goods to customers (the performance obligation)
in an amount that reflects the consideration the Company expects to receive in exchange for those
goods. This may occur, depending on the individual customer relationship, when the product has
been transferred to a freight carrier, when the customer has received the product or, for consignment
stock held at customers’ premises, when usage reports for the relevant period have been compiled.
All revenue is from contracts with customers and pertains to the sale of specialty chemicals products.
Selling prices are agreed in advance and hence are directly observable.
The Group’s payment terms offered to customers are within a certain number of days of receipt of
invoice and standard contracts do not include a significant financing component. The Group does
not expect to have any contracts where the period between the transfer of the promised goods to the
customer and payment by the customer exceeds one year. As a consequence, the Group does not
adjust any of the transaction prices for the time value of money.
Provisions for returns, trade discounts and rebates are recognised as a reduction in revenue at the
later of when revenue is recognised for the transfer of the related goods and the entity pays or
promises to pay the consideration. The promise to pay rebates is contractually agreed in advance
and thus the point of transferring the goods to the customer is deemed to be the later of the two
circumstances. Rebates and discounts are estimated using historical data and experiences with
the customers. Returns from customers are negligible.
Operating profit
Operating profit includes net profits realised on the sale of tangible fixed assets, current and
long-term assets and liabilities, but excludes gains and losses on the disposal of businesses.
Other expenses
Other expenses are administration costs incurred and paid by the Group’s pension schemes,
which relate primarily to former employees of legacy businesses.
Finance income and finance costs
Finance income comprises interest income on funds invested and changes in the fair value of
financial instruments at fair value taken to the income statement. Interest income is recognised
as it accrues, using the effective interest method.
Finance costs comprise interest expense on borrowings, lease liabilities, unwinding of the discount
on provisions, dividends on preference shares classified as debt, foreign currency gains/losses
and changes in the value of financial instruments at fair value taken to the income statement.
All borrowing costs are recognised in the income statement using the effective interest method.
Taxation
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates to items recognised directly
in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantively enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits
will be available against which the asset can be utilised. Deferred tax is provided on temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The following temporary differences are not provided
for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination; and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement
of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at
the balance sheet date. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
The Group is required to estimate the income tax in each of the jurisdictions in which it operates.
This requires an estimation of current tax liability together with an assessment of the temporary
differences which arise as a consequence of different accounting and tax treatments. The Group
operates in a number of countries in the world and is subject to many tax jurisdictions and rules.
As a consequence the Group is subject to tax audits, which by their nature are often complex and
can require several years to conclude. Management’s judgement is required to determine the
total provision for income tax. Amounts are accrued based on management’s interpretation of
country-specific tax law and likelihood of settlement. However, the actual tax liabilities could differ
from the position and in such events an adjustment would be required in the subsequent period
which could have a material impact. Tax benefits are not recognised unless it is probable that the
tax positions are sustainable. Once considered to be probable, management reviews each material
tax benefit to assess whether a provision should be taken against full recognition of the benefit on
the basis of potential settlement through negotiation. This evaluation requires judgements to be made
including the forecast of future taxable income.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 151
Notes to the consolidated financial statements
1. Accounting policies continued
Share-based payments
The fair value of equity-settled share options, cash-settled shadow options and LTIP awards granted
to employees is recognised as an expense with a corresponding increase in equity. The fair value
is measured at grant date and spread over the period during which the employees become
unconditionally entitled to the options/awards. The fair value of the options/awards granted is
measured using a binomial model, taking into account the terms and conditions upon which the
options/awards were granted. The amount recognised as an employee expense is adjusted to reflect
the actual number of share options/awards that vest except where forfeiture is only due to share
prices not achieving the threshold for vesting.
Short-term employee benefits
Short-term employee benefits, such as salaries, paid absences, and other benefits including any
related payroll taxes are accounted for on an accrual basis over the period which employees
have provided services. Bonuses are recognised to the extent that the Group has a present
obligation to its employees that can be measured reliably and are accounted for in accordance
with the requirements of IAS 19, ‘Employee benefits’. All expenses relating to employee benefits
(other than pension costs) are recognised in the income statement within wages and salaries,
or social security costs.
Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the
normal retirement date. Termination benefits for voluntary redundancies are recognised if the Group
has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted,
and the number of acceptances can be estimated reliably.
Government grants
Government grants are recognised at fair value when there is reasonable assurance that the
conditions associated with the grants have been complied with and the grants will be received.
Grants compensating for expenses incurred are recognised as a deduction of the related expenses
in the consolidated income statement on a systematic basis in the same periods in which the
expenses are incurred.
Alternative performance measures
In the analysis of the Group’s operating results, earnings per share and cash flows, information
is presented to provide readers with additional performance indicators that are prepared on a
non-statutory basis. This presentation is regularly reviewed by management to identify items that
are unusual and other items relevant to an understanding of the Group’s performance and long-term
trends with reference to their materiality and nature. This additional information is not uniformly
defined by all companies and may not be comparable with similarly titled measures and disclosures
by other organisations. The non-statutory disclosures should not be viewed in isolation or as an
alternative to the equivalent statutory measure. Information for separate presentation is considered
as follows:
Material costs or reversals arising from a significant restructuring of the Group’s operations are
presented separately
Disposal of entities or investments in associates or joint ventures or impairment of related assets
are presented separately
Other matters arising due to the Group’s acquisition, such as adjustments to contingent
consideration, payment of retention bonuses, acquisition costs and fair value adjustments for
acquired assets made in accordance with IFRS 13 are separately disclosed in aggregate
If a change in an accounting estimate for provisions, including environmental provisions, results
in a material gain or loss, that is presented separately
Other items the Directors may deem to be unusual as a result of their size and/or nature
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 152
Notes to the consolidated financial statements
1. Accounting policies continued
Adoption of new and revised standards
In the current year, the Group has applied a number of amendments to IFRSs issued by the IASB
that are mandatorily effective for accounting periods that began on or after 1 January 2024.
Their adoption has not had any material impact on the disclosures or on the amounts reported
in these financial statements:
UK Endorsement
International Accounting Standards (IAS/IFRSs) and Interpretations (IFRICs):
status
Effective date
Amendments to IAS 1: Classification of Liabilities as Current
Endorsed
1 January
or Non-current 2024
Amendments to IFRS 16 Leases: Lease Liability in a Sale
Endorsed
1 January
and Leaseback 2024
Amendments to IAS 1: Non-Current Liabilities with Covenants
Endorsed
1 January
2024
Amendment to IAS 7 and IFRS 7: Supplier finance
Endorsed
1 January
2024
New and revised IFRSs in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following
new and revised international accounting standards (“IAS”/“IFRSs”) and interpretations (“IFRICs”)
that have been issued but are not effective for periods starting on 1 January 2024 but will be effective
for later periods:
Effective for
annual reporting
International Accounting Standards (IAS/IFRSs) and Interpretations (IFRICs) UK Endorsement periods beginning
not yet endorsed for use in the EU or UK: status on or after
IFRS S1: General requirements for disclosure of Not yet 1 January
sustainability-related financial information endorsed 2024
IFRS S2: Climate-related disclosures
Not yet
1 January
endorsed 2024
Amendments to IAS 21: Lack of Exchangeability
Endorsed
1 January
2025
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Not yet 1 January
Instruments: Disclosures: Amendments to the Classification and
Measurement of Financial Instruments
endorsed 2026
Annual Improvements to IFRS Accounting Standards – Not yet 1 January
Amendments to: endorsed 2026
IFRS 1 First-time Adoption of International Financial Reporting
Standards
IFRS 7 Financial Instruments: Disclosures and it’s
accompanying Guidance on implementing IFRS 7
IFRS 9 Financial Instruments
IFRS 10 Consolidated Financial Statements
IAS 7 Statement of Cash flows
IFRS 18 Presentation and Disclosure in Financial Statements
Not yet
1 January
endorsed 2027
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Not yet
1 January
endorsed 2027
Amendments to IFRS 10 Consolidated Financial Statements and Not yet To be
IAS 28 Investments in Associates and Joint Ventures: Sale or endorsed determined
Contribution of Assets between an Investor and its Associate
or Joint Venture
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 153
Notes to the consolidated financial statements
2. Operating segments
Business segments
The Group has determined its operating segments on the basis of those used for management, internal reporting purposes and the allocation of strategic resources. The key measure used for review of the
performance of the operating segments is adjusted operating profit. In accordance with the provisions of IFRS 8, the Group’s chief operating decision-maker is the Board of Directors.
The two reportable segments, Performance Specialties and Personal Care, each have distinct product groupings and separate management structures. Segment results, assets and liabilities include items
directly attributable to a segment and those that may be reasonably allocated from corporate activities. Presentation of the segmental results is on a basis consistent with those used for reporting Group
results. The principal activities of the reportable segments are as follows:
Performance Specialties
Which consists of:
Coatings: Production of rheological modifiers and additives for decorative and industrial coatings
Talc: Production and supply of talc for use in plastics, coatings, technical ceramics and the paper sectors
Personal Care
Production of rheological modifiers and compounded products, including active ingredients for AP antiperspirants, for supply to personal care manufacturers.
Segmental analysis for the year ended 31 December
2024
2023
Performance Performance
Specialties Personal Segment Central Specialties Personal Segment
Coatings Talc totals Care totals costs Total Coatings Talc totals Care totals Central Total
$m $m $m $m $m $m $m $m $m $m $m $m costs $m $m
Revenue from external customers
386.4
134.5
520.9
217. 4
738.3
–
738.3
367.6
136.5
5 04.1
209.3
713.4
–
713.4
Adjusted operating profit/(loss)
78.4
8.0
86.4
61.6
148.0
(19.2)
128.8
56.1
14.0
70.1
50.3
120.4
(16.5)
103.9
Adjusting items (see Note 5)
(4.9)
(132.3)
(137.2)
(12.3)
(149.5)
(5.9)
(155.4)
(0.9)
(5.4)
(6.3)
(7.1)
(13.4)
(31.6)
(45.0)
Operating(loss)/profit
73.5
(124.3)
(50.8)
49.3
(1.5)
(25.1)
(26.6)
55.2
8.6
63.8
43.2
107.0
(48.1)
58.9
Other expenses
(1.8)
(2.3)
Finance income
2.9
4.4
Finance expense
(24 .1)
(21.3)
Tax
1.8
(11.5)
Loss from discontinued operations
–
(1.7)
(Loss)/profit for the year
(47.8)
26.5
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 154
Notes to the consolidated financial statements
2. Operating segments continued
2024
2023
Personal Care Segment Central Personal Care, Segment Central
and Coatings
1
Talc totals costs Total
and Coatings
1
Talc totals costs Total
$m $m $m $m $m $m $m $m $m $m
Fixed assets
742.5
163.0
905.5
18.5
924.0
763.0
295.4
1,058.4
15.8
1,074.2
Inventories
126.7
25.7
152.4
0.1
152.5
135.8
27.4
163.2
0.1
163.3
Trade and other receivables
70.4
16.5
87.2
6.3
93.2
7 7.4
19.8
97.2
4.6
101.8
Other tax recoverable
–
–
–
21.0
21.0
–
–
–
20.0
20.0
Derivatives
–
–
–
5.4
5.4
–
–
–
13.4
13.4
Tax assets
–
–
–
18.6
18.6
–
–
–
30.8
30.8
Retirement benefit surplus
–
–
–
27.6
27.6
–
–
–
42.1
42.1
Cash and cash equivalents
–
–
–
59.9
59.9
–
–
–
65.8
65.8
Segment assets
939.6
205.2
1,14
4.8
157.4
1,302.2
976.2
342.6
1,318.8
192.6
1,511.4
Assets classified as held for sale
6.2
–
Total assets
1,308.4
1,511.4
Trade and other payables
(89.1)
(20.5)
(109.6)
1.2
(108.4)
(74.1)
(22.5)
(96.6)
(21.3)
(117.9)
Operating provisions
(2.9)
(39.9)
(42.8)
(5.6)
(48.4)
(32.3)
(36.6)
(68.9)
(13.0)
(81.9)
Lease liabilities
(21.7)
(7. 3)
(29.0)
(5.7)
(34.7)
(23.9)
(9.4)
(33.3)
(2.9)
(36.2)
Bank overdrafts and loans
–
–
–
(219.2)
(219.2)
–
–
–
(264.7)
(264.7)
Current tax liabilities
–
–
–
(9.8)
(9.8)
–
–
–
(13.6)
(13.6)
Retirement benefit obligations
–
–
–
(8.6)
(8.6)
–
–
–
(9.0)
(9.0)
Deferred tax liabilities
–
–
–
(98.1)
(98.1)
–
–
–
(138.7)
(138.7)
Financial liabilities
–
–
–
(1.5)
(1.5)
–
–
–
(2.1)
(2.1)
Segment liabilities
(113.7)
(67.7)
(181.4)
(347.3)
(528.7)
(130.3)
(68.5)
(198.8)
(465.3)
(6 6 4.1)
Liabilities classified as held for sale
(22.7)
–
Total liabilities
(551.4)
(6 6 4.1)
Net assets
825.9
137.5
963.4
(189.9)
757.0
845.9
274.1
1,120.0
(272.7)
847.3
Capital additions
16.0
28.4
44.4
6.1
50.5
13.6
51.6
65.2
6.5
71.7
Depreciation and amortisation
(28.3)
(20.3)
(48.6)
(3.0)
(51.6)
(27.8)
(24.5)
(52.3)
(2.6)
(54.9)
1 Due to the shared nature of the production facilities for the Personal Care segment and the Coatings business, a split of assets and liabilities by segment is not available and the cost to determine such a split would be prohibitive, therefore the
assets and liabilities are shown in aggregate for these segments.
Analysis by geography
2024
2023
North United Rest of Rest of North United Rest of Rest of
America Kingdom Europe the World Total America Kingdom Europe the World Total
$m $m $m $m $m $m $m $m $m $m
Revenue from external customers
207.1
27.2
263.0
241.0
738.3
231.8
24.8
263.4
193.4
713.4
Fixed assets
638.2
29.7
186.3
69.8
924.0
652.5
30.6
316.7
74.4
1,074.2
Capital additions
8.4
1.5
35.3
5.3
50.5
10.0
4.9
51.6
5.2
71.7
Depreciation and amortisation
(21.9)
(1.8)
(23.4)
(4.5)
(51.6)
(22.9)
(1.6)
(26.4)
(4.0)
(54.9)
Revenue is based on the location of the customer. The Group’s largest customer accounts for 8.2% (2023: 8.5%) of revenue ($60.6m) (2023: $60.3m).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 155
Notes to the consolidated financial statements
3. Finance income
2024 2023
$m $m
Interest on bank deposits
0.3
0.5
Pension and other post-retirement liabilities
1.4
1.0
Fair value movement on derivatives
–
1.5
Interest on EU state aid receivable
1.2
1.4
Total finance income
2.9
4.4
4. Finance costs
2024 2023
$m $m
Interest on bank loans
20.3
17.5
Unwind of discount on provisions
2.4
1.4
Interest on lease liabilities
1.4
1.3
Fair value movement on derivatives
–
1.1
Total finance costs
24.1
21.3
5. Adjusting items
2024 2023
$m $m
Business transformation
11.0
26.1
Environmental provisions
Increase in provisions due to additional remediation work
identified
4.0
6.6
Decrease in provisions due to change in discount rate
(2.2)
(0.4)
Impairment of assets
126.0
–
Settlement of Brazil customs matter
3.0
–
Saint Louis fire
1.3
–
Amortisation of intangibles arising on acquisition
12.3
12.7
155.4
45.0
Unrealised mark to market of derivative financial instruments
–
1.1
Unwind of discount on restructuring provision
0.4
–
Interest on EU state aid receivable
(1.2)
(1.4)
Tax credit in relation to adjusting items
(26.8)
(8.4)
127.8
36.3
A number of items have been recorded under ‘adjusting items’ by virtue of their size and/or one-time
nature, in line with our accounting policy in Note 1, in order to provide additional useful analysis of
the Group’s results. The Group considers the adjusted results to be an important measure used to
monitor how the segments are performing as they achieve consistency and comparability between
reporting periods. The net impact of these items on the Group profit before tax for the year is a debit
of $154.6m (2023: $44.7m). The items fall into a number of categories, as summarised below:
Business transformation – In March 2024, the Group announced the closure of its Middletown
plant. Costs of $1.6m associated with the closure of the site were classified as an adjusting item,
including charges of $0.7m relating to the restructuring provision and $0.9m of other costs. The plant
was fully closed by 31 December 2024.
In March 2024, the Group announced the sale of the Eaglescliffe site. Costs of $0.2m associated
with disposal activities were classified as an adjusting item. The transaction is conditional on
regulatory approval.
In August 2024, the Group announced a strategic review of the Talc business, to establish whether
the full potential of the Talc business can best be delivered as part of the Group, or via a divestment.
Costs of $3.5m have been incurred and recognised as an adjusting item in relation to the strategic
review. The review is expected to be completed in 2025.
In the year, the Group commenced a data transformation programme to develop a new internal data
analytics platform, to deliver a unified, global view of our data, leveraging advance analytical
technology, and primed for future integration with GenAI. Costs of $2.1m were recognised in 2024
as an adjusting item, and the new platform is expected to be fully implemented in 2026.
In September 2023, the Fit for the Future strategic review restructuring programme was announced,
for which costs of $2.8m were recognised in 2024 (2023: $25.4m), reflecting $3.4m of additional
costs and a credit of $0.6m in relation to the revaluation of the restructuring provision. In addition, a
charge of $0.4m has been recognised within finance costs in relation to the unwind of discount for
the provision. Total estimated costs for the programme are $29.7m, of which $23.7m has been incurred
since 2023. The programme is expected to be completed in 2025.
In November 2020, the closure of the Charleston plant was announced. Costs of $0.5m (2023: $0.7m)
associated with the closure of the site are classified as an adjusting item and the site is planned to be
disposed of in the future. Since November 2020, $23.9m has been incurred in relation to the closure
of the site.
Environmental provisions – The Group’s environmental provision is calculated on a discounted
cash flow basis, reflecting the time period over which spending is estimated to take place. The
movement in the provision relates to changes in discount rates which have resulted in a reduction
of $2.2m to the liability (2023: $0.4m), and extra remediation work identified in the year which has
resulted in a $4.0m increase to the liability (2023: $6.6m). As these costs relate to non-operational
facilities, they are classified as adjusting items.
Impairment of assets – In the first half of 2024, Talc performance was adversely impacted by
continued weak end market demand and strike action in Finland. Accordingly, a new business plan
was prepared for the Talc business which resulted in an impairment of assets of $66.1m.
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 156
Notes to the consolidated financial statements
5. Adjusting items continued
In September 2024, the RAC of ECHA made a recommendation that talc be classified as STOT RE1
and Carc 1B. A final decision by the European Commission is expected in the second half of 2026.
As a result, there is a high degree of uncertainty with regards to the future demand and profitability
profile of the Talc business, which gave rise to a further impairment of $59.9m, in the second half
of 2024.
Settlement of Brazil customs matter – In August 2022 the Brazilian tax authorities opened a tax
audit into the Group’s Brazilian entity. The audit was focused on the customs classification code used
since 2017 for one of the entity’s imported raw materials. In 2024, the Group agreed a settlement
with the Brazilian tax authorities in relation to this customs matter, of which $3.0m has been
recognised as an adjusting item.
St Louis fire – In November 2024, items of property, plant and equipment were damaged as a result
of a fire at the St Louis plant. Of the total costs of $1.3m, $0.7m relates to items of property, plant and
equipment which were written off.
Amortisation of intangibles arising on acquisition – Amortisation of $12.3m (2023: $12.7m)
represents the charge in respect of the Group’s acquired intangible assets. As in previous years,
these are included in adjusting items as they are a non-cash charge arising from historical
investment activities.
Unrealised mark to market of derivatives – The unrealised movements in the mark-to-market
valuation of financial instruments that are not in hedging relationships are treated as adjusting items
as they are unrealised non-cash fair value adjustments that will not affect the cash flows of the Group.
Interest on EU state aid receivable – Finance income of $1.2m (2023: $1.4m) has been
recognised in respect of interest due to the Group.
Tax on adjusting items – This is the net impact of tax relating to the adjusting items listed above.
To support comparability with the financial statements as presented in 2024, a reconciliation to the adjusted consolidated income statement is shown below.
2024
2023
Adjusting Adjusted Adjusting Adjusted
Profit and loss items profit and loss Profit and loss items profit and loss
$m $m $m $m $m $m
Revenue
738.3
–
738.3
713.4
–
713.4
Cost of sales
(400.3)
–
(400.3)
(42 9.1)
–
(429.1)
Gross profit
338.0
–
338.0
284.3
–
284.3
Distribution costs
(127.9)
–
(127.9)
(108.7)
–
(108.7)
Administrative expenses
(236.7)
155.4
(81.3)
(116.7)
45.0
(71.7)
Operating (loss)/profit
(26.6)
155.4
128.8
58.9
45.0
103.9
Other expenses
(1.8)
–
(1.8)
(2.3)
–
(2.3)
Finance income
2.9
(1.2)
1.7
4.4
(1.4)
3.0
Finance costs
(24.1)
0.4
(23.7)
(21.3)
1.1
(20.2)
(Loss)/profit before income tax
(49.6)
154.6
105.0
39.7
44.7
84.4
Tax
1.8
(26.8)
(25.0)
(11.5)
(8.4)
(19.9)
(Loss)/profit from continuing operations
(47.8)
127.8
80.0
28.2
36.3
64.5
Earnings per share
From continuing operations
Basic earnings (cents)
(8.1)
21.7
13.6
4.8
6.2
11.0
Diluted earnings (cents)
(8.1)
21.4
13.3
4.7
6 .1
10.8
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 157
Notes to the consolidated financial statements
5. Adjusting items continued
To support comparability with the financial statements as presented in 2024, a reconciliation from operating profit/(loss) to adjusted operating profit/(loss) by segment is shown below for each year.
2024
2023
Performance Performance
Specialties Personal Segment Central Specialties Personal Segment Central
Coatings Talc totals Care totals costs Total Coatings Talc totals Care totals costs Total
$m $m $m $m $m $m $m $m $m $m $m $m $m $m
Operating(loss)/profit
73.5
(124.3)
(50.8)
49.3
(1.5)
(25.1)
(26.6)
55.2
8.6
63.8
43.2
107.0
(4 8.1)
58.9
Adjusting items:
Business transformation
0.5
2.2
2.7
4.2
6.9
4.1
11.0
0.7
–
0.7
–
0.7
25.4
26.1
Increase in environmental provisions due
to additional remediation work identified
–
–
–
–
–
4.0
4.0
–
–
–
–
–
6.6
6.6
Decrease in environmental provisions
due to change in discount rate
–
–
–
–
–
(2.2)
(2.2)
–
–
–
–
–
(0.4)
(0.4)
Impairment of assets
–
126.0
126.0
–
126.0
–
126.0
–
–
–
–
–
–
–
Settlement of Brazil customs matter
3.0
–
3.0
–
3.0
–
3.0
–
–
–
–
–
–
–
St Louis fire
1.3
–
1.3
–
1.3
–
1.3
–
–
–
–
–
–
–
Amortisation of intangibles arising
on acquisition
0.1
4.1
4.2
8.1
12.3
–
12.3
0.2
5.4
5.6
7.1
12.7
–
12.7
Adjusted operating profit/(loss)
78.4
8.0
86.4
61.6
148.0
(19.2)
128.8
56.1
14.0
70.1
50.3
120.4
(16.5)
103.9
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 158
Notes to the consolidated financial statements
6. Income tax expense
2024 2023
$m $m
Current tax:
UK corporation tax
12.9
6.2
Overseas corporation tax
7.6
8.7
Adjustments in respect of prior years:
United Kingdom
0.7
(0.7)
Overseas
0.2
(3.0)
Total current tax
21.4
11.2
Deferred tax:
United Kingdom
6.0
(0.2)
Overseas
(28.8)
(1.6)
Adjustment in respect of prior years:
United Kingdom
–
–
Overseas
(0.4)
2.1
Total deferred tax
(23.2)
0.3
Income tax (credit)/expense for the year
(1.8)
11.5
Comprising:
Income tax (credit)/expense for the year
(1.8)
11.5
Adjusting items
1
:
Overseas taxation on adjusting items
(27.0)
(4.0)
UK taxation on adjusting items
0.2
(4.4)
Taxation on adjusting items
(26.8)
(8.4)
Income tax expense for the year after adjusting items
25.0
19.9
1 See Note 5 for details of adjusting items.
The tax charge on profits represents an effective rate of 3.6% (2023: 29.0%) and an effective tax rate
after adjusting items of 23.8% (2023: 23.5%).
The tax impact of the adjusting items outlined within Note 5 and within the consolidated income
statement relates to the following:
2024
2023
Gross Tax impact Gross Tax impact
$m $m $m $m
Business transformation
11.0
2.4
26.1
5.2
Environmental provisions
1.8
–
6.2
1.3
Impairment of assets
126.0
27.2
–
–
Settlement of Brazil customs
matter
3.0
–
–
–
Mark to market of derivative
financial instruments
–
–
1.1
0.2
Interest on EU state aid
receivable
(1.2)
(0.3)
(1.4)
(0.4)
Amortisation of intangibles
arising on acquisition
12.3
2.8
12.7
2.1
St Louis fire
1.3
0.3
Unwind of discount on
restructuring provision
0.4
0.1
–
–
Derecognition of deferred tax
asset regarding Eaglescliffe
–
(5.7)
–
–
Tax credit
154.6
26.8
44.7
8.4
The Group is international and has operations across a range of jurisdictions. Accordingly, tax
charges of the Group in future periods will be affected by the profitability of operations in different
jurisdictions and changes to tax rates and regulations in the jurisdictions within which the Group
has operations. The Group’s adjusted effective tax rate in 2024 is broadly in line with the prior year.
The medium-term expectation for the Group’s adjusted effective tax rate is around 26%.
On 20 December 2021 the OECD published its Global Anti-Base Erosion Model Rules (Pillar Two).
The report provided a model for a coordinated system of taxation that imposes a top-up tax on profits
arising in a jurisdiction whenever the effective tax rate, determined on a jurisdictional basis, is below the
minimum tax rate of 15%. The UK enacted legislation to enshrine this into domestic law in July 2023.
The Group is below the revenue threshold for the legislation to apply and therefore there is no impact
on the financial statements.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 159
Notes to the consolidated financial statements
6. Income tax expense continued
The total charge for the year can be reconciled to the accounting profit as follows:
2024
2023
$m
%
$m
%
(Loss)/profit before tax
(49.6)
39.7
Tax at 25.0% (2023: 23.5%)
(12.4)
25.0
9.4
23.5
Difference in overseas effective
tax rates
3.4
(6.8)
1.9
4.9
Income not taxable
(2.8)
5.6
–
–
Expenses not deductible for
tax purposes
3.2
(6.5)
7.1
17. 9
Adjustments in respect of
prior years
0.4
(0.8)
(1.5)
(3.7)
Tax rate changes
–
–
–
–
Tax associated with disposal
of discontinued operations
–
–
(12.8)
(32.2)
Movement in unrecognised
deferred tax
1
6.4
(12.9)
7.4
18.6
Total (credit)/charge and
effective tax rate for the year
(1.8)
3.6
11.5
29.0
1 The movement in unrecognised deferred tax relates to the derecognition of the deferred tax asset in respect of the
Eaglescliffe environmental provision ahead of the expected disposal of the Eaglescliffe site to Flacks Group.
7. (Loss)/profit from continuing operations
Loss from continuing operations of $47.8m (2023: profit of $28.2m) has been arrived at after
charging/(crediting):
2024 2023
$m $m
Employee costs (seeNote 8)
130.9
131.2
Net foreign exchange losses
0.2
(0.6)
Research and development costs
9.6
7. 8
Depreciation of property, plant and equipment
38.8
41.6
Amortisation of intangible assets
12.8
13.3
Total depreciation and amortisation expense
51.6
54.9
Impairment of assets
126.0
–
Loss on disposal of property, plant & equipment
0.9
0.8
Write-off of inventory
7.8
4.6
Cost of inventories recognised as expense
284.5
295.9
Fees payable to company’s auditors and its associates:
Audit of company
1.2
1.2
Audit of subsidiaries
0.9
0.9
Audit-related services – interim review
0.3
0.3
CSRD metric readiness services
0.1
–
8. Employees
Employee costs:
2024 2023
$m $m
Wages and salaries
108.6
110.4
Social security costs
9.0
9.0
Pension costs
7.2
7.4
Share-based payment costs
6.1
4.4
Total employee costs
130.9
131.2
Average number of FTE employees
1
:
2024 2023
Number Number
Personal Care and Coatings
1,178
1,031
Talc
259
228
Central
49
19
Total
1,486
1,278
1 Full-time equivalent includes contractors.
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 160
Notes to the consolidated financial statements
8. Employees continued
The aggregate amount of Directors’ remuneration (salary, bonus and benefits) is shown in the
Remuneration Report on page 118:
The aggregate amount of gains made by Directors on exercise of share options was $nil
(2023: $nil)
The remuneration of the highest paid Director was $3.9m (2023: $3.4m)
Payments have been made to a defined contribution pension scheme on behalf of 1 Director
(2023: 1 Director). For the highest-paid Director, pension contributions of $0.2m (2023: $0.2m)
were made
9. Earnings per share
The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders
of the parent is based on the following:
Earnings:
2024 2023
$m $m
Adjusted earnings
80.0
64.5
Adjusting items net of tax
(127.8)
(36.3)
(Loss)/earningsfor the purpose of basic earnings per share
(47.8)
28.2
(Loss)/earningsfrom discontinued operations
–
(1.7)
(Loss)/earningsfrom continuing and discontinued operations
(47.8)
26.5
Number of shares:
2024 2023
m m
Weighted average number of shares for the purpose of basic
earnings per share
588.9
585.7
Effect of dilutive share options
11.9
11. 2
Weighted average number of shares for the purpose of diluted
earnings per share
600.8
596.9
The dilutive (loss)/earnings per share calculation for 2024, does not include the impact of the 11.9m
dilutive share options, as the inclusion of these potential shares would have an anti-dilutive impact on
the diluted loss per share from continuing operations; it would decrease the diluted loss per share
from continuing operations.
Earnings per share:
2024 2023
cents cents
Earnings per share from continuing operations:
Basic (loss)/earnings
(8.1)
4.8
Diluted (loss)/earnings
(8.1)
4.7
Basic earnings after adjusting items
13.6
11.0
Diluted earnings after adjusting items
13.3
10.8
Earnings per share from discontinued operations:
Basic (loss)/earnings from discontinued operations
–
(0.3)
Diluted (loss)/earnings from discontinued operations
–
(0.3)
Earnings per share from continuing and
discontinued operations:
Basic (loss)/earnings from continuing and discontinued operations
(8.1)
4.5
Diluted (loss)/earnings from continuing and discontinued operations
(8.1)
4.4
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 161
Notes to the consolidated financial statements
10. Goodwill and other intangible assets
Other intangible
Goodwill Brand Customer lists assets Total
$m $m $m $m $m
Cost:
At 1 January 2023
699.4
25.3
163.2
98.9
986.8
Exchange differences
12.8
0.1
1.8
2.5
17. 2
Additions
–
–
–
0.1
0.1
At 31 December 2023
712.2
25.4
165.0
101.5
1,004.1
Exchange differences
(5.7)
(1.1)
(3.3)
(4.1)
(14.2)
Additions
–
–
–
0.3
0.3
At 31 December 2024
706.5
24.3
161.7
97.7
990.2
Amortisation and impairment:
At 1 January 2023
218.5
2.5
46.5
5 9.1
326.6
Exchange differences
11.4
–
1.5
0.7
13.6
Charge for the year
–
–
8.6
4.7
13.3
Impairment
–
–
–
–
–
At 31 December 2023
229.9
2.5
56.6
64.5
353.5
Exchange differences
(3.6)
(0.1)
(2.2)
(3.2)
(9.1)
Charge for the year
–
–
8.2
4.6
12.8
Impairment
–
–
23.1
24.0
47.1
At 31 December 2024
226.3
2.4
85.7
89.9
404.3
Carrying amount:
At 31 December 2024
480.2
21.9
76.0
7.8
585.9
At 31 December 2023
482.3
22.9
108.4
37.0
650.6
At 1 January 2023
480.9
22.8
116.7
39.8
660.2
During 2024, cumulative impairment losses in the Talc business in relation to customer lists and other intangible assets of $23.1m and $24.0m were recognised. These impairment losses have been included
within administrative expenses in the consolidated income statement. See Key Sources of Estimation Uncertainty for further information.
Notes to the consolidated financial statements
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 162
Notes to the consolidated financial statements
10. Goodwill and other intangible assets continued
The brand intangibles represent the value ascribed to the trading name and reputation of the
Deuchem, Fancor, Watercryl, Hi-Mar and SummitReheis acquisitions. The Group, with the exception
of SummitReheis, considers these to have significant and ongoing value to the business that will be
maintained and it is therefore considered appropriate to assign these assets an indefinite useful life.
The brand relating to SummitReheis has been amortised over a period of three years, and is
fully amortised.
The carrying amount of brand intangibles with an indefinite useful life is $21.9m (2023: $22.9m).
Brand intangibles with an indefinite useful life are tested annually for impairment as part of the annual
goodwill impairment test and have been allocated to the Personal Care and Coatings CGUs.
The net book value of customer lists includes $76.0m (2023: $82.6m) in relation to the acquisition
of SummitReheis, which have remaining lives of between 2 and 17 years (2023: between 3 and
18 years), and $nil (2023: $25.9m) in relation to the acquisition of Mondo Minerals, which have
no remaining useful life (2023: 10 years).
Included within other intangible assets above are technology-related intangible assets of $0.7m
(2023: $28.3m) arising from the acquisition of Mondo Minerals, which have remaining useful lives
of 9 years (2023: 10 years), and know-how-related intangible assets of $2.6m (2023: $4.5m),
which have remaining useful lives of between 2 and 3 years (2023: 3 and 4 years).
The remaining intangible assets comprise the value ascribed to customer lists, patents and
non-compete clauses, which are being amortised over periods of 4 to 23 years.
Goodwill and brand intangibles with an indefinite useful life impairment testing
Goodwill and brand intangibles with an indefinite useful life are allocated to the Group’s CGUs
as follows:
2024 2023
$m $m
Personal Care
295.5
296.6
Coatings
206.5
208.6
At 31 December
502.0
505.2
The Group tests annually for impairment at 31 October, or more frequently, if there are events or
circumstances that indicate that the carrying amount may not be recoverable.
Basis of the recoverable amount
The recoverable amounts of the Group’s CGUs are determined from value in use calculations
which use cash flow projections based on financial budgets approved by the Directors covering
a five-year period.
Management’s judgement in estimating the cash flows of a CGU
The key assumptions for the value in use calculations are expected changes to sales volumes, selling
prices and direct costs during the forecast period, growth rates used to extrapolate beyond the
forecast period and the discount rates applied to the resulting cash flows. Changes in sales volumes,
selling prices and direct costs are based on past practices and expectations of future changes in the
market. A five-year forecasting model is used for all CGUs.
Growth rates
Cash flows for periods beyond the forecast period are extrapolated based on estimated long-term
growth rates. The rates do not exceed the average long-term growth rate for the relevant products
or markets.
Discount rates
Management estimate discount rates using pre-tax rates that reflect current market assessments
of the time value of money and the risks specific to the CGUs.
Personal Care
The recoverable amount of the CGU was calculated using forecast cash flows based on budgets
and plans for 2025 to 2029, a pre-tax discount rate of 12.0% (2023: 12.8%) and a long-term
growth rate of 3.0% (2023: 5.0%). The recoverable amount exceeded the carrying value of the CGU
by $361.7m (2023: $211.7m). The Directors do not consider that any reasonably possible changes to
the key assumptions would reduce the recoverable amount to its carrying value.
Coatings
The recoverable amount of the CGU was calculated using forecast cash flows based on budgets and
plans for 2024 to 2029, a pre-tax discount rate of 11.3% (2023: 12.4%) and a long-term growth rate
of 3.0% (2023: 3.0%). The recoverable amount exceeded the carrying value of the CGU by $701.1m
(2023: $402.1m). The Directors do not consider that any reasonably possible changes to the key
assumptions would reduce the recoverable amount to its carrying value.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 163
Notes to the consolidated financial statements
11. Property, plant and equipment
Right-of-use assets
Land and Plant and Fixtures, fittings Under Land and Plant and Fixtures, fittings
buildings machinery and equipment construction buildings machinery and equipment Total
$m $m $m $m $m $m $m $m
Cost:
At 1 January 2023
89.7
510.6
32.1
32.9
55.3
4.2
2.8
727.6
Additions
1.5
62.3
0.1
2.7
4.1
0.3
0.7
71.7
Exchange differences
1.8
13.3
0.1
0.2
0.5
0.1
0.2
16.2
Disposals
(0.8)
(6.4)
(0.3)
–
(5.5)
(2.3)
(1.9)
(17. 2)
Reclassifications
7.9
15.1
0.5
(23.5)
–
–
–
–
At 31 December 2023
100.1
594.9
32.5
12.3
54.4
2.3
1.8
798.3
Additions
1.8
19.1
–
24.0
3.9
0.9
–
49.7
Exchange differences
(2.5)
(26.8)
(0.5)
–
(1.2)
0.2
(0.3)
(31.1)
Disposals
(0.2)
(2.3)
(0.3)
–
(1.2)
(1.2)
(0.8)
(6.0)
Reclassifications
0.9
20.0
1.0
(21.9)
–
–
–
–
At 31 December 2024
100.1
604.9
32.7
14.4
55.9
2.2
0.7
810.9
Accumulated depreciation and impairment losses:
At 1 January 2023
40.5
246.0
23.3
–
26.2
3.0
2.2
341.2
Charge for the year
2.1
33.0
1.2
–
4.1
0.9
0.3
41.6
Exchange differences
1.2
6 .1
0.1
–
0.3
0.1
–
7. 8
Disposals
(0.8)
(6.1)
(0.2)
–
(4.9)
(2.3)
(1.6)
(15.9)
Impairment
–
–
–
–
–
–
–
–
Reclassifications
–
1.0
(1.0)
–
–
–
–
–
At 31 December 2023
43.0
280.0
23.4
–
25.7
1.7
0.9
374.7
Charge for the year
3.5
27.3
2.9
–
4.4
0.4
0.3
38.8
Exchange differences
(0.1)
(13.6)
(0.5)
–
(0.2)
–
(0.1)
(14.5)
Disposals
–
(1.6)
(0.3)
–
(1.2)
(1.2)
(0.7)
(5.0)
Impairment
0.8
78.1
–
–
–
–
–
78.9
Reclassifications
–
0.8
(0.8)
–
–
–
–
–
At 31 December 2024
47. 2
371.0
24.7
–
28.7
0.9
0.4
472.9
Net book value:
At 31 December 2024
52.9
233.9
8.0
14.4
27.2
1.3
0.3
338.0
At 31 December 2023
57.1
314.9
9.1
12.3
28.7
0.6
0.9
423.6
At 1 January 2023
49.2
264.6
8.8
32.9
2 9.1
1.2
0.6
386.4
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 164
Notes to the consolidated financial statements
11. Property, plant and equipment continued
During 2024, cumulative impairment losses in the Talc business in relation to plant and machinery
and land and buildings of $78.1m and $0.8m were recognised. These impairment losses have been
included in administrative expenses in the consolidated income statement. See Key Sources of
Estimation Uncertainty for further information.
Additions for the year included $7.5m (2023: $28.4m) related to the non-cash rehabilitation and
closure provisions (see Note 15).
Group capital expenditure contracted but not provided for in these financial statements amounted
to $nil (2023: $nil).
In 2024 and 2023, the Group reclassified items of property, plant and equipment from under
construction to their relevant categories upon the assets becoming available for use.
12. Inventories
2024 2023
$m $m
Raw materials and consumables
34.2
43.9
Work in progress
10.4
7. 2
Finished goods and goods purchased for resale
107.9
112.2
At 31 December
152.5
163.3
Inventories are disclosed net of provisions for obsolescence of $6.7m (2023: $6.1m).
13. Trade and other receivables
2024 2023
$m $m
Trade receivables
78.1
80.1
Other receivables
6.8
13.5
Prepayments
8.4
8.2
At 31 December
93.3
101.8
14. Trade and other payables
2024 2023
$m $m
Trade payables
52.3
60.5
Other payables
7.4
14.2
Accruals
48.7
43.2
At 31 December
108.4
117.9
The Group entered into supplier financing arrangements with US Bank. At the end of the period,
the net balance outstanding on the US Bank facility was $1.1m (2023: $0.8m).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 165
Notes to the consolidated financial statements
15. Provisions
Self-
Environmental insurance Restructuring Other Total
$m $m $m $m $m
At 1 January 2024
60.5
0.5
20.1
0.8
81.9
Increase/(decrease) in provisions
6.3
(0.3)
0.1
0.2
6.3
Unused amounts reversed
–
–
–
(0.6)
(0.6)
Unwinding of discount
1.6
–
0.4
–
2.0
Utilised during the year
(1.9)
–
(16.3)
–
(18.2)
Currency translation differences
(2.5)
–
0.4
(0.1)
(2.2)
Transferred to liabilities held
for sale
(20.8)
–
–
–
(20.8)
At 31 December 2024
43.2
0.2
4.7
0.3
48.4
Due within 1 year
1.1
0.2
4.7
0.3
6.3
Due after 1 year
42.1
–
–
–
42.1
Environmental provisions include restoration provisions relating to manufacturing and distribution
sites, including certain sites no longer owned by the Group, as well as rehabilitation and closure
provisions related to the mining activities of the Talc business.
Restoration provisions have been derived using a discounted cash flow methodology and reflect
the extent to which it is probable that expenditure will be incurred over the next 25 years. The level
of these provisions are based on management’s best estimate of the most likely outcome for each
individual exposure. These provisions are discounted using discount rates which reflect market
assessments and the risks specific to the liabilities. The discount rates used were 4.8% in the
US and 3.3% in Canada.
Rehabilitation and closure provisions have been derived using a discounted cash flow methodology
and reflect management’s best estimate of the current obligation for restoration and closure of
mining sites in Finland, excluding passive mines, in line with latest best practice guidelines and
Finnish mining regulatory guidelines. The provisions will not be utilised until the mines are closed.
The provisions are discounted using discount rates which reflect market assessments and the risks
specific to the liabilities. The discount rate used was 2.9%.
The following table shows the timeframes over which undiscounted costs in relation to all
environmental provisions are expected to be incurred:
1-10 years 11-20 years 20-25 years 25+ years Total
$m $m $m $m $m
Environmental provisions
24.1
21.4
8.2
13.4
67.1
Additional environmental provisions of $7.7m were recognised due to extra remediation and
rehabilitation work identified during the year, which was offset by a reduction of $1.4m due to
changes in the discount rates used. A credit of $1.2m is included within adjusting items, with $7.5m
included as an addition to property, plant and equipment (see Note 11). If the cost estimates on which
the provisions are based were to change by 10%, which is reasonably possible, the provisions
recognised would increase by approximately $4.1m.
Whilst a range of outcomes is possible, the Directors believe that the reasonably possible range for
the environmental provision is from $49.5m to $42.2m.
Self-insurance provisions relate to personal injury and other claims from former employees or third
parties and represent the aggregate of outstanding claims plus a projection of losses incurred but not
yet reported which together make up the full liability recognised as a provision. Insurance recoveries
are recognised as a separate reimbursement asset. The self-insurance provisions are expected to
be utilised within one year.
Restructuring provisions relate to costs of adjusting headcount and other costs of restructuring
where a need to do so has been identified by management. An overall increase in the restructuring
provisions of $0.1m was recognised during the year, including additional restructuring provisions
of $0.7m related to the Middletown plant closure, which was announced in 2024, and a decrease
of $0.6m related to the Fit for the Future programme, which was announced in 2023. These changes
in the restructuring provisions are included within adjusting items (see Note 5). The restructuring
provisions are based on management’s best estimate of the cash outflow required to settle the
obligation. If the cost estimates on which the additional restructuring provisions are based were
to change by 10%, which is reasonably possible, the provision recognised would increase by
approximately $nil.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 166
Notes to the consolidated financial statements
16. Deferred tax
Retirement Accelerated tax Amortisation of Other intangible Other temporary Unrelieved tax
benefit plans depreciation US goodwill assets differences losses Total
$m $m $m $m $m $m $m
At 1 January 2023
(6.1)
(34.3)
(63.0)
(27. 9)
15.2
9.6
(106.5)
Credit/(charge) to the income statement
(0.5)
(4.8)
0.2
2.0
0.8
(6.1)
(8.4)
Credit to other comprehensive income
(2.8)
–
–
–
(0.6)
–
(3.4)
Credit to retained earnings
–
–
–
–
(1.4)
–
(1.4)
Disposal
–
3.2
–
–
–
–
3.2
Currency translation differences
(0.3)
(3.7)
–
(0.7)
2.4
(0.3)
(2.6)
At 31 December 2023
(9.7)
(39.6)
(62.8)
(26.6)
16.4
3.2
(119.1)
Credit/(charge) to the income statement
0.2
18.7
0.3
15.2
(11.2)
–
23.2
Credit/(charge) to other comprehensive income
3.5
–
–
–
(0.6)
–
2.9
Credit to retained earnings
–
–
–
–
0.2
–
0.2
Disposal
–
–
–
–
–
–
–
Currency translation differences
0.2
1.4
–
1.1
(0.3)
(0.3)
2.1
At 31 December 2024
(5.8)
(19.5)
(62.5)
(10.3)
4.5
2.9
(90.7)
Deferred tax assets
–
–
–
–
4.5
2.9
7. 4
Deferred tax liabilities
(5.8)
(19.5)
(62.5)
(10.3)
–
–
(98.1)
Deferred tax assets have been recognised to the extent that it is considered more likely than not that there will be taxable profits from which the future reversal of the underlying timing differences can be
deducted. Where this is not the case, deferred tax assets have not been recognised. Future taxable profits have been modelled using the Group’s five year financial shape.
Deferred tax liabilities are reduced for any deferred tax assets which exist within a jurisdiction where consolidated tax returns are filed and where tax assets and liabilities may be netted.
At the balance sheet date, the aggregate amount of the temporary differences in relation to the investment in subsidiaries for which deferred tax liabilities have not been recognised was $31.8m (2023: $30.9m).
No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences and the Group considers that it is probable
that such differences will not reverse in the foreseeable future. As at the balance sheet date, the Group had an unrecognised deferred tax asset of $nil (gross $nil) (2023: $4.5m (gross $21.4m)) in relation
to restricted US interest deductions, an unrecognised deferred tax asset of $4.9m (gross $24.6m) (2023: $4.9m (gross $24.6m)) in relation to restricted Finnish interest deductions and an unrecognised
deferred tax asset of $9.3m (gross $28.2m) (2023: $11.1m (gross $33.7m)) in respect of German net operating losses.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 167
Notes to the consolidated financial statements
17. Share capital
2024 2023
$m $m
At 1 January
52.5
52.3
Issue of shares
0.2
0.2
At 31 December
52.7
52.5
At 31 December 2024, the Group held 968,021 (2023: 1,458,404) Elementis plc shares through the ESOT with a value of $1.7m (2023: $2.5m). These shares are held to settle share options and awards
granted to employees. Refer to Note 26 for further details.
18. Other reserves
Capital
redemption Translation Hedging Share options
reserve reserve reserve reserve Total
$m $m $m $m $m
At 1 January 2023
158.8
(122.4)
(1.0)
6.7
42.1
Share-based payments
–
–
–
4.2
4.2
Exchange differences
–
9.7
–
0.2
9.9
Fair value of cash flow hedges transferred to the income statement
–
–
(6.3)
–
(6.3)
Effective portion of changes in fair value of cash flow hedges
–
–
12.7
–
12.7
Fair value of cash flow hedges transferred to net assets
–
–
0.5
–
0.5
Recycle deferred foreign exchange losses on disposal
–
9.3
–
–
9.3
Transfer
–
–
–
(2.3)
(2.3)
At 31 December 2023
158.8
(103.4)
5.9
8.8
70.1
Share-based payments
–
–
–
5.7
5.7
Exchange differences
–
(17.4)
–
0.1
(17.3)
Fair value of cash flow hedges transferred to the income statement
–
–
(4.4)
–
(4.4)
Effective portion of changes in fair value of cash flow hedges
–
–
2.3
–
2.3
Fair value of cash flow hedges transferred to net assets
–
–
0.4
–
0.4
Recycle deferred foreign exchange losses on disposal
–
–
–
–
–
Transfer
–
–
–
(5.3)
(5.3)
At 31 December 2024
158.8
(120.8)
4.2
9.3
51.5
The Company can redeem shares by repaying the market value to the shareholder, whereupon the shares are cancelled. Redemption must be from distributable profits. The capital redemption reserve
represents the nominal value of the shares redeemed.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 168
Notes to the consolidated financial statements
18. Other reserves continued
The translation reserve comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations as well as from the translation of liabilities that hedge the
Company’s net investment in a foreign subsidiary.
The hedging reserve comprises the effective portion of the cumulative net change in the fair value
of cash flow hedging instruments related to hedged transactions that have not yet occurred.
The share options reserve comprises amounts accumulated in equity in respect of share options and
awards granted to employees. The transfers from the share options reserve to retained earnings is
as a result of the exercise and expiry of share options and awards during the year.
19. Borrowings
2024 2023
$m $m
Bank loans
222.9
267.8
Unamortised syndicate loan fees
(3.7)
(3.1)
Short-term borrowings
–
–
Carrying value of borrowings at 31 December
219.2
264.7
The borrowings are repayable as follows:
Within one year
–
–
Within two to four years
222.9
2 67. 8
In the fifth year
–
–
222.9
267.8
The weighted average interest rates paid were as follows:
2024 2023
% %
Bank loans
5.9
5.8
Group borrowings were denominated as follows:
2024 2023
$m $m
US dollar
75.0
110.0
Euro
147.9
157. 8
Total bank loans
222.9
267.8
The Group’s bank loans include term loans that mature in June 2026.
The US dollar borrowings comprised of a fully drawn $75.0m term loan (2023: $100.0m) and $nil
of RCF drawings (2023: $10.0m). The euro borrowings comprised a fully drawn €142.9m term loan
(2023: €142.9m) and €nil of RCF drawings (2023: €nil).
The RCF and term loans are governed by the Group’s bank syndicate facilities agreement, under
which certain Group entities act as guarantors. The guarantors to the facilities agreement are
required to constitute at least 75% of the Group’s total fixed assets plus current assets less current
liabilities and 75% of the Group’s profits before interest expense and tax.
Each guarantor irrevocably and unconditionally jointly and severally guarantees the punctual
performance under the Group’s bank syndicate facilities agreement. There are no fixed or floating
charges over assets.
20. Cash and cash equivalents
Cash and cash equivalents comprise the following:
2024 2023
$m $m
Cash at bank and on hand at 31 December
59.9
65.8
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 169
Notes to the consolidated financial statements
21. Financial instruments
2024
2023
Held at fair value
Held at amortised cost
Held at fair value
Held at amortised cost
Through Derivatives Through Derivatives
profit and used for Total book Total fair profit and used for Total book Total fair
loss hedging Assets Liabilities value value loss hedging Assets Liabilities value value
At 31 December:
Note
$m $m $m $m $m $m $m $m $m $m $m
$m
Current:
Trade and other receivables
13
–
–
84.9
–
84.9
84.9
–
–
93.6
–
93.6
93.6
Derivative financial assets
22
–
3.6
–
–
3.6
3.6
–
7.4
–
–
7.4
7.4
Cash and cash equivalents
20
–
–
59.9
–
59.9
59.9
–
–
65.8
–
65.8
65.8
Non-current:
Derivative financial assets
22
–
1.8
–
–
1.8
1.8
–
6.0
–
–
6.0
6.0
Financial assets
–
5.4
144.8
–
150.2
150.2
–
13.4
159.4
–
172.8
172.8
Current:
Bank overdrafts and loans
19
–
–
–
–
–
–
–
–
–
–
–
–
Trade and other payables
14
–
–
–
(108.4)
(108.4)
(108.4)
–
–
–
(117. 9)
(117. 9)
(117. 9)
Derivative financial liabilities
22
–
(1.5)
–
–
(1.5)
(1.5)
–
–
–
–
–
–
Lease liabilities
24
–
–
–
(5.9)
(5.9)
(5.9)
–
–
–
(5.9)
(5.9)
(5.9)
Non-current:
Loans and borrowings
1
19
–
–
–
(219.2)
(219.2)
(222.9)
–
–
–
(264.7)
(264.7)
(2 67. 8)
Lease liabilities
24
–
–
–
(28.8)
(28.8)
(28.8)
–
–
–
(30.3)
(30.3)
(30.3)
Derivative financial liabilities
22
–
–
–
–
–
–
–
(2.1)
–
–
(2.1)
(2.1)
Financial liabilities
–
(1.5)
–
(362.3)
(363.8)
(367.5)
–
(2.1)
–
(418.8)
(420.9)
(424.0)
Total
–
3.9
144.8
(362.3)
(213.6)
(217.3)
–
11.3
159.4
(418.8)
(248.1)
(251.2)
1 The total book value of loans and borrowings are shown net of facility fees of $3.7m (2023: $3.1m).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 170
Notes to the consolidated financial statements
21. Financial instruments continued
Fair values measurement and hierarchy
Basis for determining fair values
The Group measures fair values in respect of financial instruments in accordance with IFRS 13,
using the following fair value hierarchy that reflects the significance of the inputs used in making
the measurements:
Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly or indirectly.
Level 3: Valuation techniques using significant unobservable inputs. This category includes
contingent consideration.
The following summarises the significant methods and assumptions used in estimating the fair values
of financial instruments:
The Group assesses that the fair values of cash and cash equivalents, trade and other receivables,
trade and other payables, and the current portion of floating rate bank and other borrowings,
approximate to book values due to the short maturity periods of these financial instruments.
For trade and other receivables, allowances are made within their book value for credit risk.
Derivatives (Level 2)
Fair value is estimated by discounting the difference between the contractual forward price and
the current forward price for the residual maturity of the contract using a risk-free interest rate
(based on government bonds).
Loans and borrowings (Level 2)
Fair value is calculated based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date.
The following table shows amounts recognised in profit or loss in relation to financial assets and
liabilities within the scope of IFRS 9:
2024 2023
$m $m
Recognised in profit or loss
Revenue – fair value of cash flow hedges transferred from
equity to the income statement
6.2
0.4
Interest income on bank deposits held at amortised cost
0.3
0.5
Fair value movement on derivatives
–
1.5
Financial income
0.3
2.0
Interest on bank loans
(18.6)
(23.4)
Fair value of cash flow hedges transferred from equity to the
income statement
(1.8)
5.9
Fair value movement on derivatives
–
(1.1)
Interest on lease liabilities
(1.4)
(1.3)
Financial costs
(21.8)
(19.9)
The following table shows amounts recognised directly in equity in relation to financial assets and
liabilities within the scope of IFRS 9:
2024 2023
$m $m
Recognised directly in equity
Effective portion of changes in fair value of cash flow hedge
2.3
12.7
Fair value of cash flow hedges transferred to income statement
(4.4)
(6.3)
Fair value of cash flow hedges transferred to net assets
0.4
0.5
Effective portion of change in fair value of net investment hedge
6.5
14.8
Foreign currency translation differences for foreign operations
(23.9)
(5.1)
Recycle deferred foreign exchange losses on disposal of
subsidiary
–
9.3
Recognised in:
Hedging reserve
(1.7)
6.9
Translation reserve
(17.4)
19.0
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 171
Notes to the consolidated financial statements
22. Derivative financial instruments and hedging activities
2024
2023
Contract or underlying Contract or underlying
principal amount
Fair value
principal amount
Fair value
Assets Liabilities Assets Liabilities
At 31 December:
Liabilities
Assets
$m
$m
Liabilities
Assets
$m $m
Current:
Interest rate swaps – cash flow hedges
€142m
–
–
(1.4)
–
$100m
2.0
–
Interest rate swaps
–
$25m
0.2
–
–
$50m
0.6
–
Nickel swaps – cash flow hedges
270
–
MT
3.2
–
3
–
24MT
4.4
–
Aluminium swaps – cash flow hedges
8
2,000MT
00MT
0.1
(0.1)
2,460
–
MT
0.4
–
Aluminium swaps
–
2,460MT
0.1
–
–
–
–
–
Total
3.6
(1.5)
7.4
–
Non-current:
Interest rate swaps – cash flow hedges
–
–
–
–
€142m
–
–
(2.1)
Nickel swaps – cash flow hedges
13
–
3MT
1.8
–
576
–
MT
6.0
–
Total
5.4
(1.5)
13.4
(2.1)
Hedging activities
The Group is exposed to certain risks relating to its ongoing business operations. The primary risks
managed using derivative instruments are foreign currency risk, commodity price risk and interest
rate risk.
The Group’s risk management strategy is explained in Note 23.
Derivatives designated as hedging instruments
Commodity price risk
The Group enters into commodity swap contracts to reduce the volatility attributable to price
fluctuations of aluminium and nickel. To the extent they continue to meet the criteria for hedge
accounting, the commodity forward contracts are accounted for as cash flow hedges. The weighted
average strike price on outstanding aluminium hedges was $2,565.4 per metric ton (“MT”)
(2023: $2,266.6 per MT) and the weighted average strike price on outstanding nickel hedges
was $29,213.1 per MT (2023: $30,931.4 per MT).
There is an economic relationship between the hedged items and the hedging instruments as
the terms of the commodity swap contracts match the terms of the expected highly probable
forecast transactions (i.e. notional amount and expected payment date). During the year ended
31 December 2024, the group recognised a gain of $2.9m (2023: $0.6m) within revenue in the
consolidated income statement as a result of the sale of selected nickel hedges. For all other
commodity hedges, as all critical terms matched during the year, hedge ineffectiveness was
immaterial. The hedge ratio is 1:1.
Interest rate risk
The Group enters into interest rate swaps to swap a portion of the interest arising from the Group’s
bank borrowings from floating to fixed. Interest payments are highly probable, the hedged risk is the
change in the market interest rate. The hedged items are the interest rate cash flows on €142.0m
of EUR denominated debt. The interest rate swaps for the USD denominated debt matured in 2024.
The Group’s total borrowings are shown in Note 19 to the financial statements.
The principal terms (notional, reset date, tenor) of the hedged items and the hedged instruments
have been matched along with the contractual interest cash flows, therefore creating an exact offset
for these transactions resulting in a net fixed interest payable. The interest rate swaps and the
hedged items are matched (equal and opposite terms of interest rate, date and maturity); this results
in a designated hedge ratio of 1:1 or 100%.
Hedge ineffectiveness can arise from:
Changes in timing of the hedged item
A reduction in the amount of the hedged item considered to be highly probable
A change in the credit risk of Elementis or the counterparty to the derivative contract
Foreign currency basis spreads
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 172
Notes to the consolidated financial statements
22. Derivative financial instruments and hedging activities continued
The effect of cash flow hedges in the consolidated income statement and the consolidated statement
of other comprehensive income (“OCI”) is as follows:
Amount Amount Line item in the
Total hedging reclassified from reclassified from profit or loss
(loss)/gain OCI to profit OCI to the statement or
recognised in OCI or loss balance sheet balance sheet
$m $m $m $m
2024
Interest rate swaps – Finance
cash flow hedges
(2.2)
(1.8)
–
costs
Nickel forward contracts –
cash flow hedges
(0.9)
6.2
–
Revenue
Aluminium forward contracts
– cash flow hedges
0.8
–
(0.4)
Inventory
2023
Interest rate swaps –
cash flow hedges
2.2
5.9
–
Finance costs
Nickel forward contracts –
cash flow hedges
(15.0)
0.4
–
Revenue
Aluminium forward contracts
– cash flow hedges
0.1
–
(0.5)
Inventory
Amounts reclassified from other comprehensive income to profit or loss are due to the hedged item
affecting profit or loss in the period. There were no instances of non-occurrence of hedged cash
flows in either the current or comparative period.
Hedge of net investments in foreign operations
The Group seeks to denominate the currency of its borrowings in euros and US dollars in order to match
the currency of its cash flows, earnings and assets which are principally denominated in those currencies.
The euro and US dollar borrowings in Elementis Holdings Limited are designated as net investment
hedges, as the Company’s functional currency is pounds sterling. The Group does not undertake
derivative transactions to hedge the foreign currency translation exposures.
The Group analyses the euro and US dollar net assets by subsidiary, and the foreign currency
borrowings in the name of Elementis Holdings Limited are allocated against certain tranches of net
assets. The critical terms of the euro and US dollar borrowings and their corresponding hedged items
are therefore the same.
The Group performs a qualitative assessment of effectiveness and it is expected that the value of the
euro and US dollar borrowings in pounds sterling and the value of the corresponding hedged items
in pounds sterling will systematically move in the opposite direction in response to movements in the
underlying exchange rates.
The main source of ineffectiveness in these hedging relationships is the impact of a decline in the
carrying value of the hedged item compared with the euro and US dollar borrowings, with the result
that the value of the hedged item is less than the value of hedging instrument.
Foreign currency revaluation on the euro and US dollar borrowings in the name of Elementis Holdings
Limited are recorded in other comprehensive income and deferred in the foreign currency translation
reserve on the balance sheet as long as the hedge is effective. Any ineffectiveness is recognised in
the income statement for that year.
The impact of the hedged items on the statement of comprehensive income is as follows:
2024
Foreign
2023
Foreign
currency currency
translation translation
Year ended 31 December reserve $m reserve $m
Net investment in foreign subsidiaries
(23.9)
(5.1)
Impact of hedging on equity
Set out below is the reconciliation of each component of equity and the analysis of other
comprehensive income:
Foreign
currency
Cash flow translation
hedge reserve reserve
$m $m
At 1 January 2023
(1.0)
(122.4)
Effective portion of changes in fair value arising from:
Derivative cash flow hedging instruments
12.7
–
Amount reclassified to profit or loss
(6.3)
–
Amount reclassified to net assets
0.5
–
Recycling of deferred foreign exchange losses on disposal of subsidiary
–
9.3
Foreign currency revaluation of the net foreign operations
–
(5.1)
Foreign currency revaluation of borrowings
–
14.8
At 31 December 2023
5.9
(103.4)
Effective portion of changes in fair value arising from:
Derivative cash flow hedging instruments
2.3
–
Amount reclassified to profit or loss
(4.4)
–
Amount reclassified to net assets
0.4
–
Recycling of deferred foreign exchange losses on disposal of subsidiary
–
–
Foreign currency revaluation of the net foreign operations
–
(23.9)
Foreign currency revaluation of borrowings
–
6.5
At 31 December 2024
4.2
(120.8)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 173
Notes to the consolidated financial statements
23. Financial risk management
Risk management objectives
The Group has exposure to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s
risk management framework. The Group’s risk management policies are established to identify and
analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks
and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities.
The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework
in relation to the risks faced by the Group. The Group’s Audit Committee is assisted in its oversight
role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables
from customers.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. The demographics of the Group’s customer base, including the default risk of the industry
and country in which customers operate, has less influence on credit risk. No single customer
accounts for a significant proportion of the Group’s revenue.
Each new customer is analysed individually for creditworthiness before the Group’s standard
payment and delivery terms and conditions are offered. The Group’s review includes external ratings,
where available, and in some cases bank references. Purchase limits are established for each
customer, which represents the maximum open amount without requiring approval from the Board
of Directors. Customers that fail to meet the Group’s benchmark creditworthiness may transact with
the Group only on a prepayment basis.
The Group applies the IFRS 9 simplified approach in establishing an allowance for expected credit
losses (“ECLs”). The Group therefore does not track changes in credit risk but instead recognises a
loss allowance based on lifetime ECLs at each reporting date. A provision matrix is used to calculate
lifetime ECLs which takes into account the Group’s historical credit loss experience adjusted for
historical conditions that are not relevant to future cash flows and forward-looking factors specific
to the debtor and economic environment.
Investments
The Group limits its exposure to credit risk through a treasury policy that imposes graduated limits
on the amount of funds that can be deposited with counterparties by reference to the counterparties’
credit ratings, as defined by S&P Global Ratings or Moody’s. Management does not expect any
counterparty to fail to meet its obligations.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at the reporting date was:
Carrying amount
2024 2023
$m $m
Trade receivables
78.1
80.1
Cash and cash equivalents
59.9
65.8
At 31 December
138.0
145.9
The maximum exposure to credit risk for trade receivables at the reporting date by geographic
region was:
Carrying amount
2024 2023
$m $m
North America
21.9
26.0
Europe
30.7
32.4
Rest of the World
25.5
21.7
At 31 December
78.1
80.1
Expected credit losses
Set out below is the information about the credit risk exposure on the Group’s trade receivables using
a provision matrix:
2024
2023
Expected Expected Expected Expected
Gross credit loss credit loss Gross credit loss credit loss
$m rate $m $m rate $m
Not past due
66.6
0.0%
–
71.0
0.1%
–
Past due 0-30 days
9.6
0.4%
–
7.5
0.0%
–
Past due 31-120 days
1.0
18.7%
(0.3)
1.8
13.2%
(0.3)
Past due > 121 days
0.9
80.1%
(0.7)
0.7
97.1%
(0.6)
Total
78.1
(1.0)
81.0
(0.9)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 174
Notes to the consolidated financial statements
23. Financial risk management continued
The movement in the allowance for expected credit losses during the year was as follows:
2024 2023
$m $m
At 1 January
0.9
1.5
Additional/(released to income statement) – administrative
expenses
0.1
(0.6)
Amounts written off
–
–
At 31 December
1.0
0.9
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation. The Group’s funding
policy is to have committed borrowings in place to cover at least 125% of the maximum forecast
net borrowings for the next 12-month period.
The committed facilities at 31 December were as follows:
2024
2023
Total Undrawn Drawn Total Undrawn Drawn
committed committed committed committed committed committed
facilities facilities facilities facilities facilities facilities
$m $m $m $m $m $m
US dollar term loan
75.0
–
75.0
100.0
–
100.0
Euro term loan
147.9
–
147.9
157. 8
–
157.8
RCF
250.0
250.0
–
375.0
365.0
10.0
Lines of credit
16.3
12.0
4.2
22.9
22.9
–
Total
489.2
262.0
227.1
6 57.7
387.9
267. 8
of which expires after
more than 1 year
260.0
303.4
In addition, some suppliers have access to utilise the Group’s supplier finance programmes,
which are provided by Santander and US Bank. There is no cost to the Group for providing these
programmes as the cost is borne by the suppliers. These programmes allow suppliers to choose
whether they want to accelerate the payment of their invoices, by the financing banks, at a low
interest cost. The amounts outstanding to the banks are presented within trade and other payables,
and the cash flows are presented with cash flows from operating activities. At the end of the period,
the total facility with Santander was $14.5m (2023 $15.5m), with the net balance outstanding of
$nil (2023: $nil); and the total facility with US Bank was $3.5m (2023: $3.5m), with the net balance
outstanding of $1.1m (2023: $0.8m).
Exposure to liquidity risk
The maturity analyses for financial liabilities showing the anticipated remaining contractual
undiscounted cash flows, including future interest payments, at current-year exchange rates and
assuming floating interest rates remain at the latest fixing rates, are:
31 December 2024
Within 1 to 2 2 to 5 After 5
1 year years years years Total
$m $m $m $m $m
Non-derivative financial liabilities:
Bank overdrafts
–
–
–
–
–
Secured bank loan
11.9
228.2
–
–
240.1
Trade and other payables
108.4
–
–
–
108.4
Lease liabilities
5.9
4.9
11.9
18.2
40.9
Total
126.2
233.1
11.9
18.2
389.4
Derivative financial liabilities:
Interest rate swaps
1.9
–
–
–
1.9
Commodity swap contracts
(3.4)
(2.1)
–
–
(5.5)
Total
(1.5)
(2.1)
–
–
(3.6)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
rates, will affect the Group’s income or the value of its holdings of financial instruments. The objective
of market risk management is to manage and control market risk exposures within acceptable
parameters, whilst optimising the return on risk.
The Group uses derivatives in the ordinary course of business, and also incurs financial liabilities,
in order to manage market risks. All such transactions are carried out within the guidelines set by
the Board.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 175
Notes to the consolidated financial statements
23. Financial risk management continued
Market risk – currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated
in a foreign currency other than the respective functional currencies of Group entities, primarily the
US dollar and the euro. The Group hedges up to 100% of current and forecast trade receivables and
trade payables denominated in a foreign currency. The Group uses forward exchange contracts to
hedge its currency risk, with a maturity of less than one year from the reporting date.
Interest on borrowings is denominated in currencies that match the cash flows generated by the
underlying operations of the Group, primarily US dollar, but also euro and pounds sterling. This provides
an economic hedge in instances where hedging derivatives are not entered into. In respect of other
monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net
exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when
necessary to address short-term imbalances.
The Group’s net investment in overseas subsidiaries creates exposure to foreign exchange
fluctuations. The risk is hedged by US dollar and euro denominated drawdowns under the syndicated
facility designated as the hedged item in net investment hedge relationships. This mitigates the
currency risk arising from the retranslation of a subsidiary’s net assets into pounds sterling, the
functional currency of the ultimate parent Elementis plc.
Currency risk sensitivity analysis
The following table illustrates the effect on the income statement and items that are recognised
directly in equity that would result from a 10% strengthening of the US dollar against the following
currencies, before the effect of tax. The analysis covers only financial assets and liabilities held at the
balance sheet date and assumes that all other variables, in particular interest rates, remain constant.
2024
2023
Income Income
statement Equity statement Equity
$m $m $m $m
Gain from US dollar
strengthening 10%
against euro
0.4
0.4
0.4
0.9
Gain/(loss) from US dollar
strengthening 10%
against sterling
0.1
(8.2)
0.2
(12.0)
Market risk – interest rate
The Group’s policy is to borrow at both fixed and floating interest rates and to use interest rate swaps
to generate the required interest profile. These interest swaps are designated within cash flow
hedging relationships with the interest payments on the borrowings they are hedging. The risk being
hedged is the exposure of the Group to market rate volatility on a portion of the core Group debt.
The Group policy does not require that a specific proportion of the Group’s borrowings are at fixed
rates of interest.
Interest rate sensitivity analysis
A change of 100 basis points (“bps”) (1%) in interest rates would have impacted profit or loss by the
amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
2024
2023
100bps 100bps 100bps 100bps
increase decrease increase decrease
$m $m $m $m
Variable rate instruments –
gain/(loss)
0.2
(0.2)
0.7
(0.7)
Market risk – commodity price risk
The Group is exposed to movements in the prices of commodities it purchases and sells, such as
aluminium and nickel. The volatility in the prices of these commodities has led to the decision to enter
into commodity swap contracts. The swap contracts do not result in physical delivery, but are
designated as cash flow hedges to offset the effect of price changes.
Commodity price sensitivity analysis
In 2024 and 2023 the Group’s aluminium purchases were fully hedged and all aluminium swap
derivatives achieved hedge accounting; there was no impact on profit or loss and no sensitivity
is presented.
Other market price risk
Equity price risk arises from equity securities held within the Group’s defined benefit pension
obligations. In respect of the US schemes, management monitors the mix of debt and equity
securities in its investment portfolio based on market expectations. The primary goal of the Group’s
investment strategy is to maximise investment returns, without excessive risk-taking, in order to meet
partially the Group’s unfunded benefit obligations; management is assisted by external advisers in
this regard. In respect of the UK scheme, the investment strategy is set by the trustees and the Board
is kept informed.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 176
Notes to the consolidated financial statements
23. Financial risk management continued
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence, sustain future development of the business and maximise shareholder value. The capital
structure of the Group consists of debt (see Note 19), cash and cash equivalents (see Note 20) and
equity attributable to equity holders of the parent comprising capital, reserves and retained earnings
(see Statement of changes in equity).
The Group utilises a mix of debt funding sources including term loans and RCFs from the Group’s
syndicated borrowing facility with differing maturities to ensure continuity and provide flexibility.
The Group is subject to two financial covenants which apply to the Group’s syndicated borrowing
facilities. Following the refinancing on 29 May 2024, the Group is required to maintain a ratio of net
debt/EBITDA (post IFRS 16) of less than 3.50x and a minimum net interest cover of 3.0x (in relation
to earnings before net interest expense and tax). The post IFRS 16 net debt/EBITDA ratio stood at
1.1x at 31 December 2024 (2023: 1.6x) and the Directors anticipate the strong cash generation
of the Group will continue to drive a deleveraging profile going forward. Net interest cover at
31 December 2024 was 7.1x (2023: 6.2x).
The Board monitors the adjusted ROCE, both including and excluding goodwill, as defined on
page 193.
The dividend policy is set out in the Chair’s statement on page 4.
24. Leases
Group as lessee
The Group has lease contracts for various items of property, plant, machinery, vehicles and other
equipment used in its operations. Disclosures in relation to right-of-use assets are included within
Note 11 – Property, plant and equipment.
The Group also has certain leases with lease terms of 12 months or less and leases of low-value
assets to which the Group applies the ‘short-term lease’ and ‘lease of low-value assets’
recognition exemptions.
The weighted average incremental borrowing rate applied to lease liabilities is 5.8% (2023: 3.0%).
The following are the amounts recognised in profit or loss:
2024 2023
$m $m
Depreciation expense on right-of-use assets
5.3
5.3
Interest expense on lease liabilities
1.4
1.3
Expense related to short-term leases and low-value assets
0.3
0.3
Expense relating to variable lease payments not included
in lease liabilities
1.0
0.5
Set out below are the carrying amounts of lease liabilities and the movements during the period:
2024 2023
$m $m
At 1 January
36.2
36.3
Additions
4.8
5.1
Disposals
–
(0.6)
Interest expense
1.4
1.3
Payments
(6.7)
(6.5)
Foreign exchange movements
(1.0)
0.6
At 31 December
34.7
36.2
The maturity analysis of lease liabilities is as follows:
2024 2023
$m $m
Within one year
5.9
5.9
In the second to fifth years inclusive
16.7
17.5
After five years
12.1
12.8
At 31 December
34.7
36.2
At 31 December 2024 there were no leases that had not yet commenced to which the Group had
committed.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 177
Notes to the consolidated financial statements
25. Retirement benefit obligations
The Group has a number of contributory and non-contributory post-retirement benefit plans providing
retirement benefits for the majority of employees and Executive Directors. At 31 December 2024,
the main schemes in the UK and US were of the defined benefit type, the benefit being based on
number of years of service and either the employee’s final remuneration or the employee’s average
remuneration during a period of years before retirement. The assets of these schemes are held in
separate trustee-administered funds or are unfunded but provided for on the Group balance sheet.
The UK defined benefit scheme had a surplus under IAS 19 of $23.0m (2023: $38.7m). In addition,
the US defined benefit scheme also had a surplus under IAS 19 of $4.6m (2023: $3.4m). In accordance
with the requirements of IFRIC 14, management have concluded that the unconditional right to a
refund of any surplus under any winding up of the plan provides sufficient evidence that an asset
ceiling does not exist and as such the full surplus has been recognised.
In addition the Group operates an unfunded post-retirement medical benefit (“PRMB”) scheme in
the US. The entitlement to these benefits is usually based on the employee remaining in service until
retirement age and completion of a minimum service period.
Other employee benefit schemes included in the table overleaf relate to two unfunded pension
schemes, a long-term service award scheme in Germany and a special benefits programme for
a small number of former employees of the Eaglescliffe plant. The Group also acquired two further
unfunded pension schemes and two long-term service award schemes, all in Germany, as part of
the SummitReheis acquisition in 2017. These are included within this category.
The Group also operates a small number of defined contribution schemes, and the contributions
payable during the year are recognised as incurred. The pension charge for the defined contribution
pension schemes for the year is $6.5m (2023: $6.7m).
Employer contributions in 2024 were $nil (2023: $1.8m) to the UK scheme and $1.0m (2023: $1.4m)
to US schemes. Top-up contributions to the UK scheme in 2025 will be $nil based on the 2023
triennial valuation.
The Group is aware of a case involving Virgin Media and NTL Pension Trustee and the decision on
24 July 2024, upholding the High Court’s ruling in the Virgin Media v NTL Pension Trustees II court
case relating to section 37 and contracted-out defined benefit scheme amendments. The Trustees
to the scheme have considered the implications of this case for the UK scheme, and have concluded
that no additional liabilities are required as a result of this ruling. This is because the ruling does not
apply to the UK scheme, which was not contracted out over the relevant period.
Net defined benefit liability
The net liability was as follows:
UK US US
pension pension PRMB
scheme schemes scheme Other Total
$m $m $m $m $m
2024
Total market value of assets
414.0
88.5
–
–
502.5
Present value of scheme liabilities
(391.0)
(83.9)
(3.4)
(5.2)
(483.5)
Net asset/(liability) recognised in the
balance sheet
23.0
4.6
(3.4)
(5.2)
19.0
2023
Total market value of assets
483.6
93.8
–
–
577.4
Present value of scheme liabilities
(444.9)
(90.4)
(3.4)
(5.6)
(544.3)
Net asset/(liability) recognised in the
balance sheet
38.7
3.4
(3.4)
(5.6)
33.1
Plan assets
Plan assets for the schemes comprise:
UK US US
pension pension PRMB Other
scheme schemes scheme schemes Total
$m $m $m $m $m
Equities
60.0
4.8
–
–
64.8
Bonds
1
297.9
72.1
–
–
370.4
Cash/liquidity funds
56.1
11.6
–
–
67.3
At 31 December 2024
414.0
88.5
–
–
502.5
Equities
100.8
22.4
–
–
123.2
Bonds
1
339.4
58.6
–
–
398.0
Cash/liquidity funds
43.4
12.8
–
–
56.2
At 31 December 2023
483.6
93.8
–
–
57 7. 4
1 Including LDI repurchase agreement liabilities.
To reduce volatility risk, a liability-driven investment (“LDI”) strategy forms part of the Trustees’
management of the UK defined benefit scheme’s assets, including government bonds, corporate
bonds and derivatives. The bond assets category in the table above includes gross assets of
$298.3m (2023: $587.0m) and associated repurchase agreement liabilities of $nil (2023: $247.6m).
Repurchase agreements are entered into with counterparties to better offset the scheme’s exposure
to interest and inflation rates, whilst remaining invested in assets of a similar risk profile. Interest rate
and inflation rate derivatives are also employed to complement the use of fixed and index-linked
bonds in matching the profile of the scheme’s liabilities.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 178
Notes to the consolidated financial statements
25. Retirement benefit obligations continued
All equities, bonds and liquidity funds have quoted prices in active markets. Other assets include
insured annuities, an insurance fund and various swap products.
Within the UK pension scheme, the current asset allocation is approximately 57% in a liability
matching fund consisting of gilts (fixed interest and index linked), bonds, cash and swaps, 23% in a
buy and maintain fund, and 20% in an investment fund that includes various equity and equity-like
funds. The aim of the trustees is to manage the risk relative to the liabilities associated with the
scheme’s investments through a combination of diversification, inflation protection and hedging of
risk (currency, interest rate and inflation risk). The US scheme currently has approximately 5% of its
asset value invested in a range of equity funds designed to target higher returns and thus reduce the
pension deficit, with the balance invested in fixed-income bonds and cash. The strategy is that as the
deficit reduces, a greater proportion of investments will be made into liability matching funds.
Fair value of plan assets
Changes in the fair value of plan assets for the schemes are as follows:
UK US US
pension pension PRMB Other
scheme schemes scheme schemes Total
$m $m $m $m $m
At 1 January 2023
462.8
91.6
–
–
554.4
Expected return
23.3
4.4
–
–
27.7
Running costs
(1.9)
(0.4)
–
–
(2.3)
Actuarial gains
9.7
4.3
–
–
14.0
Contributions by employer
1.8
0.9
–
–
2.7
Benefits paid
(39.2)
(7.0)
–
–
(46.2)
Exchange differences
27.1
–
–
–
27.1
At 31 December 2023
483.6
93.8
–
–
577. 4
Expected return
20.7
4.3
–
–
25.0
Running costs
(1.4)
(0.4)
–
–
(1.8)
Actuarial losses
(46.2)
(2.2)
–
–
(48.4)
Contributions by employer
–
0.4
–
–
0.4
Benefits paid
(34.9)
(7.4)
–
–
(42.3)
Exchange differences
(7.8)
–
–
–
(7.8)
At 31 December 2024
414.0
88.5
–
–
502.5
Defined benefit obligation
Changes in the present value of the defined benefit obligation for the schemes are as follows:
UK US US
pension pension PRMB Other
scheme schemes scheme schemes Total
$m $m $m $m $m
At 1 January 2023
(436.4)
(91.6)
(3.5)
(5.4)
(536.9)
Service cost
(0.1)
(0.3)
–
(0.1)
(0.5)
Past service cost
–
–
–
–
–
Interest cost
(21.9)
(4.4)
(0.2)
(0.1)
(26.6)
Actuarial gains/(losses)
– demographic assumptions
12.2
–
–
0.1
12.3
– financial assumptions
(9.5)
(1.9)
(0.2)
(0.1)
(11.7)
– experience adjustments
(3.0)
0.8
–
–
(2.2)
Benefits paid
39.2
7.0
0.5
0.4
47.1
Exchange differences
(25.4)
–
–
(0.4)
(25.8)
At 31 December 2023
(444.9)
(90.4)
(3.4)
(5.6)
(544.3)
Service cost
(0.1)
(0.3)
–
(0.1)
(0.5)
Past service cost
–
–
–
–
–
Interest cost
(19.0)
(4.2)
(0.2)
(0.2)
(23.6)
Actuarial gains/(losses)
– demographic assumptions
8.5
–
–
–
8.5
– financial assumptions
26.8
4.1
(0.4)
–
30.5
– experience adjustments
(4.4)
(0.5)
–
–
(4.9)
Benefits paid
34.9
7.4
0.6
0.3
43.2
Exchange differences
7. 2
–
–
0.4
7.6
At 31 December 2024
(391.0)
(83.9)
(3.4)
(5.2)
(483.5)
Recognised in profit and loss
2024 2023
$m $m
Current service cost
(0.5)
(0.5)
Running costs
(1.8)
(2.3)
Net interest income
1.4
1.1
Total
(0.9)
(1.7)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 179
Notes to the consolidated financial statements
25. Retirement benefit obligations continued
Recognised in statement of other comprehensive income
2024 2023
$m $m
Return on plan assets excluding interest income
(48.4)
14.0
Actuarial gains arising from demographic assumptions
8.5
12.3
Actuarial gains/(losses) from financial assumptions
30.5
(11.7)
Actuarial losses arising from experience adjustment
(4.9)
(2.2)
Exchange differences
(0.2)
1.3
Total
(14.5)
13.7
Actuarial assumptions
A full actuarial valuation was carried out as at 30 September 2023 for the UK scheme and as at
31 December 2015 for the US schemes.
The principal assumptions used by the actuaries for the major schemes have been updated by the
actuaries at the balance sheet date and were as follows:
UK %
US %
2024
Rate of increase in salaries
4.3
3.0
Rate of increase in pensions in payment
3.1
N/A
Discount rate
5.4
5.4
Inflation
3.3
2.4
2023
Rate of increase in salaries
4.2
3.0
Rate of increase in pensions in payment
3.1
N/A
Discount rate
4.5
5.1
Inflation
3.2
2.4
The assumed life expectancies on retirement are:
UK
US
2024 2023 2024 2023
years years years years
Retiring at 31 December
Males
21
21
21
21
Females
23
24
23
22
Retiring in 20 years
Males
22
23
21
21
Females
25
25
23
23
The main assumptions for the PRMB scheme are a discount rate of 5.4% (2023: 4.8%) per annum
and a health care cost trend of 6.8% (2023: 6.9%) per annum for claims pre age 65, reducing to
4.0% per annum by 2033 (2023: 4.1%). Actuarial valuations of retirement benefit plans in other
jurisdictions have either not been updated for IAS 19 purposes or have been disclosed separately
because of the costs involved and the considerably smaller scheme sizes and numbers of
employees involved.
At 31 December 2024, the weighted average duration of the defined benefit obligations for the major
schemes was as follows:
UK: 9 years
US: 8 years
Sensitivity analysis
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set
out below:
Assumption
Change in assumption
Impact on UK scheme
Impact on US scheme
Discount rate
Increased/decreased
Decreased/ Decreased/
by 0.5% increased by 4% increased by 4%
Rate of inflation
Increased/decreased
Increased/ Increased/
by 0.5% decreased by 3% decreased by 0%
Rate of salary growth
Increased/decreased
Increased/ Increased/
by 0.5% decreased by 0% decreased by 0%
Rate of mortality
Increased by 1 year
Increased by 4%
Increased by 3%
The sensitivity analyses above have been determined based on a method that extrapolates the
impact on the defined benefit obligation as a result of reasonable changes in key assumptions
occurring at the end of the reporting period. These sensitivities have been calculated to show the
movement of the defined obligation following a change in a particular assumption in isolation,
assuming no other changes in market conditions.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 180
Notes to the consolidated financial statements
26. Share-based payments
The Group maintains a number of active share option and award plans and schemes for its
employees. These are as follows:
Savings-related options
Options are granted under the tax-advantaged Save As You Earn (“SAYE”) share option scheme in
the UK. The SAYE allows UK-based eligible employees to acquire options over the Company’s shares
at a discount of up to 20% of their market value at the date of grant. Options are normally exercisable
during the six-month period following either the third or fifth anniversary of the start of the relevant
savings contract. Savings contracts are subject to the statutory savings limit of £500 per month.
US-based employees can enter into a similar share-save scheme. Employees can enter into two-year
savings contracts saving up to a maximum of $2,000 per month, allowing eligible employees to
acquire options over the Company’s shares at a discount of up to 15% of their market value at the
date of grant.
Long-term incentive plan (“LTIP”) awards
The LTIP is a discretionary employee share scheme for Executive Directors and senior managers.
The vesting of the awards are subject to performance conditions over a three-year period at the
discretion of the Remuneration Committee. The performance conditions of the LTIP are detailed in
the Remuneration Report on pages 121 and 122. As approved at the 2018 AGM, restricted shares
(i.e. shares that vest based on time only) are awarded to participants below Board level. Shadow
LTIPs are in place for senior managers based in China and Malaysia.
Deferred share bonus plan (“DSBP”) awards
The DSBP operates exclusively for the Executive Directors. Under this scheme, 50% of any cash
bonus payable is awarded in shares and deferred for two years. There are no other performance
conditions other than continued employment.
Legacy schemes
Prior to the introduction of the LTIP for senior managers, certain employees participated in the
Executive Share Option Scheme (“ESOS”). The ESOS, except for outstanding awards which will run
their course, has been discontinued. The Company operated a shadow ESOS for a number of senior
managers, who were employed or based in China or Malaysia.
Share-based payment awards were valued (as shown in the table below) using the binomial option
pricing model. The weighted fair value per award granted and the weighted average assumptions
used in the calculations are as follows:
2024
2023
Fair value per option (pence)
133.5
104.2
Expected volatility (%)
31.0
38.0
Risk-free rate (%)
2.1
4.7
Expected dividend yield (%)
3.9
2.4
Expected volatility was determined by calculating the historical volatility of the Company’s share price
over the previous five years. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations.
The Group recognised total expenses of $6.1m for continuing operations (2023: $4.4m), with $6.1m
recognised for total operations (2023: $4.4m) related to share-based payment transactions during
the year.
At 31 December 2024, the following options/awards to subscribe for ordinary shares were outstanding:
Exercisable
At 1
At 31
January December
Year of Exercise 2024 Granted Exercised Expired 2024
grant
price (p)
1
From
To
’000 ’000 ’000 ’000 ’000
UK savings-related share option scheme
2021
117.0 0
01/11/24
01/05/25
19
–
(7)
(3)
9
2022
88.00
01/11/25
01/05/26
130
–
(1)
(21)
108
2022
88.00
01/11/27
01/15/28
–
–
–
–
–
2023
91.00
01/11/26
01/05/27
315
–
(1)
(22)
292
2023
91.00
01/11/28
01/05/29
49
–
–
–
49
2024
126.00
01/11/27
01/05/28
–
131
–
–
131
513
131
(9)
(46)
589
US savings-related share option scheme
2020
63.11
16/09/22
16/12/22
107
–
–
(107)
–
2022
92.31
15/09/24
15/12/24
594
–
(350)
(126)
118
2023
94.86
15/09/25
15/12/26
211
–
–
(16)
195
2024
140.25
15/09/26
15/12/27
–
233
–
–
233
912
233
(350)
(249)
546
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 181
Notes to the consolidated financial statements
Exercisable
At 1
At 31
January December
Year of Exercise 2024 Granted Exercised Expired 2024
grant
price (p)
1
From
To
’000 ’000 ’000 ’000 ’000
Executive share option schemes/awards
granted under the LTIP
7
2015
Nil
27/04/18
27/04/25
7
–
–
–
7
2016
218.17
04/04/19
04/04/26
21
–
–
–
21
2017
3
Nil
07/03/17
07/03/27
92
–
–
–
92
2017
5
Nil
07/03/19
07/03/27
7
–
–
–
7
2017
6
Nil
07/03/20
07/03/27
17
–
–
–
17
2017
2
264.66
03/04/20
03/04/27
31
–
–
–
31
2018
5
Nil
05/03/20
05/03/28
73
–
–
–
73
2019
5
Nil
06/03/21
06/03/29
49
–
–
–
49
2020
5
Nil
05/03/23
05/03/30
76
–
–
–
76
2020
4,7
Nil
07/04/23
07/04/30
7
–
–
–
7
2020
4,7
Nil
07/04/23
07/04/23
55
–
(24)
–
31
2020
4,7
Nil
03/08/23
03/08/23
33
–
(9)
–
24
2020
4,7
Nil
30/12/23
30/12/23
30
–
(21)
–
9
2021
7
Nil
06/04/24
06/04/31
2,548
–
(1,354)
(1,172)
22
2021
7
Nil
06/04/24
06/04/31
1,289
–
(1,196)
(36)
57
2021
Nil
06/04/24
16/08/31
20
–
–
(20)
–
2021
Nil
06/04/24
01/09/31
9
–
(9)
–
–
2021
Nil
06/04/24
13/09/31
18
–
(18)
–
–
2021
7
Nil
06/04/24
01/10/31
133
–
(101)
(6)
26
2021
Nil
06/04/24
13/12/31
70
–
(70)
–
–
2022
7
Nil
05/03/25
05/03/32
213
–
–
–
213
2022
5
Nil
05/03/25
05/03/32
490
–
(490)
–
–
2022
4,7
Nil
04/04/25
04/04/32
2,912
–
–
(77)
2,835
2022
4,7
Nil
04/04/25
04/04/25
1,106
–
–
(77)
1,029
2022
7
Nil
04/04/25
04/04/25
450
–
(5)
(1)
444
2022
7
Nil
04/04/25
04/04/25
120
–
–
(39)
81
2022
Nil
06/04/24
06/04/24
16
–
(16)
–
–
2022
Nil
04/04/25
04/04/25
12
–
–
–
12
2022
Nil
04/04/25
04/04/25
18
–
–
–
18
2023
5
Nil
08/03/26
08/03/33
374
–
–
–
374
2023
8
Nil
08/03/26
08/03/33
148
–
–
–
148
26. Share-based payments continued
Exercisable
At 1
At 31
January December
Year of Exercise 2024 Granted Exercised Expired 2024
grant
price (p)
1
From
To
’000 ’000 ’000 ’000
’000
2023
4,7
Nil
04/04/26
04/04/33
3,183
–
–
(99)
3,084
2023
4,7
Nil
04/04/26
04/04/26
1,248
–
–
(99)
1,149
2023
Nil
21/06/25
21/06/25
20
–
–
–
20
2023
Nil
24/07/25
24/07/25
14
–
–
–
14
2023
7
Nil
03/04/25
03/04/25
320
–
(5)
(27)
288
2024
8
Nil
08/03/27
08/03/34
–
138
–
–
138
2024
5
Nil
08/03/27
08/03/34
–
324
–
–
324
2024
4,7
Nil
08/04/27
08/04/34
–
2,568
–
(14)
2,554
2024
7
Nil
08/04/27
08/04/27
–
972
–
(14)
958
2024
Nil
08/04/26
08/04/26
–
27
–
–
27
2024
7
Nil
08/04/26
08/04/26
–
148
–
–
148
2024
7
Nil
07/10/27
07/10/27
–
155
–
–
155
15,229
4,332
(3,318)
(1,681)
14,562
1 Where necessary option prices were adjusted by a factor of 1.092715 to reflect the dilutive effects of the 2018
Rights Issue.
2 These options include cash-settled shadow executive options granted to a number of executives on the same basis
as the executive options (with the same performance conditions and exercise provisions). These shadow options
are included in the calculation of the total expenses recognised by the Group related to share-based payments.
The closing balance of the 2011, 2012 and 2017 options shown above include no shadow options.
3 Awards made as one-off agreements that borrow from the terms of the LTIP.
4 These options include cash-settled shadow LTIPs granted to a number of executives on the same basis as the LTIP
(with the same performance conditions and exercise provisions). These shadow LTIPs are included in the calculation
of the total expenses recognised by the Group related to share-based payments.
5 Conditional share award under the DSBP.
6 Awards made as one-off agreements under the DSBP (nil cost options).
7 The closing balance of 2020, 2021, 2022, 2023 and 2024 LTIPs shown above include approximately 71,032,
105,385, 282,174, 113,154 and 165,439 shadow LTIPs respectively.
8 Conditional share award under the DSBP (nil cost award, structured as restricted share units).
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 182
Notes to the consolidated financial statements
26. Share-based payments continued
The weighted average remaining contractual life of the above shares outstanding at 31 December 2024
was 5.6 years (2023: 5.6 years).
The weighted average exercise prices of options disclosed in the previous table were as follows:
2024 2023
Average Average
exercise price exercise price
(p) (p)
At 1 January
8.6
9.6
Granted
10.5
8.9
Exercised
10.4
12.3
Expired
12.3
10.0
At 31 December
8.6
8.6
Exercisable at 31 December
38.3
31.8
The weighted average share price at the date of exercise of share options exercised during the year
was 10.6 pence (2023: 12.3 pence).
The number of exercisable options outstanding as at 31 December 2024 was 667,924 (2023: 676,151).
27. Related-party transactions
The Company is a guarantor to the UK pension scheme under which it guarantees all current and
future obligations of UK subsidiaries currently participating in the pension scheme to make payments
to the scheme, up to a specified maximum amount. The maximum amount of the guarantee is that
which is needed (at the time the guarantee is called on) to bring the scheme’s funding level up to
105% of its liabilities, calculated in accordance with section 179 of the Pensions Act 2004. This is
also sometimes known as a Pension Protection Fund (“PPF”) guarantee, as having such a guarantee
in place reduces the annual PPF levy on the scheme.
The Group consists of the parent company, Elementis plc, being the ultimate parent company of
the Group, incorporated in the United Kingdom and its subsidiaries and associates. In accordance
with Section 409 of the Companies Act 2006, a full list of related undertakings, the country of
incorporation and the effective percentage of equity owned as at 31 December 2024 is disclosed
in Note 6 to the parent company financial statements.
The remuneration of key management personnel of the Group, which is defined as the Board of
Directors, is shown below:
2024 2023
$m $m
Salaries and short-term employee benefits
4.1
3.6
Post-employment benefits
0.3
0.3
Other long-term benefits
0.3
0.4
Share-based payments
1.8
1.3
Total
6.5
5.6
Full details of all elements of the remuneration of Directors is set out in the Directors’ Remuneration
report on pages 101 to 129.
28. Movement in net borrowings
2024 2023
$m $m
Change in net cash resulting from cash flows:
Increase/(decrease) in cash and cash equivalents
(3.2)
9.9
Decrease in borrowings repayable within one year
–
2.5
Decrease in borrowings repayable after one year
34.8
158.0
31.6
170.4
Currency translation differences
7.3
(5.6)
Decrease in net borrowings
38.9
164.8
Held for sale cash
5.9
–
Net borrowings at 1 January
(202.0)
(366.8)
Net borrowings at 31 December
(157.2)
(202.0)
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 183
Notes to the consolidated financial statements
28. Movement in net borrowings continued
Bank and Total Cash Net debt
other Lease financing and cash and lease
borrowings liabilities liabilities equivalents liabilities
$m $m $m $m $m
At 1 January 2023
(421.7)
(36.3)
(458.0)
54.9
(403.1)
Exchange rate adjustments
(6.6)
(0.7)
(7.3)
1.0
(6.3)
Cash flows from
financing activities
160.5
6.5
167.0
9.9
176.9
Other movements
–
(5.0)
(5.0)
–
(5.0)
At 31 December 2023
(267.8)
(35.5)
(303.3)
65.8
(237.5)
Exchange rate adjustments
10.1
0.8
10.9
(2.7)
8.2
Cash flows from
financing activities
34.8
6.7
41.5
2.7
44.2
Other movements
–
(6.4)
(6.4)
–
(6.4)
Transferred to held for sale
–
–
–
(5.9)
(5.9)
At 31 December 2024
(222.9)
(34.4)
(257.3)
59.9
(197.4)
Included in the net movement of other loans and borrowings of $9.6m (2023: $110.5m) are total
drawdowns of $86.6m (2023: $122.3m) and total repayments of $96.2m (2023: 232.8m).
29. Dividends
An interim dividend of 1.1 cents per share (2023: nil cents per share) was paid on 27 September 2024
and the Group is proposing a final dividend for the year of 2.9 cents per share (2023: 2. 1 cents
per share). The total dividend for the year is 4.0 cents per share (2023: 2.1 cents per share).
The amount payable for the final dividend, based on the anticipated number of qualifying ordinary
shares registered on the record date is $17.1m.
The payment of this dividend will not have any tax consequences for the Group.
30. Contingent liabilities
As is the case with other chemical companies, the Group occasionally receives notice of litigation
relating to regulatory and legal matters. A provision is recognised when the Group believes it has a
present legal or constructive obligation as a result of a past event, and it is probable that an outflow
of economic benefits will be required to settle the obligation. Where it is deemed that an obligation is
merely possible and that the probability of a material outflow is not remote, the Group would disclose
a contingent liability.
The Group has not received any notice of litigation relating to events arising prior to the balance sheet
date that is expected to lead to a material exposure.
During 2021, HM Revenue and Customs (“HMRC”) opened a tax audit into the 2019 tax returns of
certain UK Group entities, focused specifically on the tax-efficient financing structure set up in 2014.
The Group has been working constructively with HMRC and is hopeful of bringing these matters to a
conclusion during 2025. At this stage management have concluded that there is a possible obligation
but that any such obligation cannot be measured with sufficient reliability.
During 2022, the Group terminated a distribution agreement with one of its distributors. The distributor
has brought a claim for compensation as a result of the termination. This matter has now proceeded
to arbitration and management have concluded at this stage that the obligation cannot be measured
with sufficient reliability.
During Q4 2023, an environmental incident occurred at the Eaglescliffe site, which, following
investigation during H1 2024, is likely to require additional remediation work at the site and could
result in a fine from the relevant supervisory body. Under the terms of the sale and purchase
agreement with Flacks Group, signed in March 2024, Flacks Group are responsible for the cost
of any remediation and associated fine. As the transaction has not yet completed, Elementis have
disclosed the event. Management have concluded at this stage that the obligation cannot be
measured with sufficient reliability.
As part of ongoing submission of mining closure plans to the Finnish Safety and Chemicals Agency,
the Group has noted that further costs associated with activities for the closure and termination of
mining activities will be incurred. The Group has recognised a provision where a reliable estimate
of the costs required for mining closure is available. A reliable estimate of future costs is not available
for all sites as the work to determine these costs and the future mining closure plan is still in progress.
A contingent liability is therefore disclosed in respect of these costs.
31. Events after the balance sheet date
There were no significant events after the balance sheet date.
32. Business exits
2024 business exits
On 6 March 2024, the Group entered into an agreement to sell its former Chromium manufacturing
site at Eaglescliffe to Flacks Group for negative purchase consideration of £11.5m ($14.5m).
The completion of the transaction is conditional on regulatory approval. Whilst the transaction is
still awaiting regulatory approval, Elementis and the Flacks Group are committed to the sale and
therefore the site was classified as held for sale as of 30 June 2024.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 184
Notes to the consolidated financial statements
32. Business exits continued
Net assets classified as held for sale at 31 December 2024 were as follows:
2024
$m
Trade and other receivables
0.3
Cash and bank balances
5.9
Total assets
6.2
Trade and other payables
(0.7)
Provisions
(22.0)
Tax liabilities
–
Total liabilities
(22.7)
Net assets
(16.5)
2023 business exits
On 29 November 2022, the Group entered into a share purchase agreement to sell the Chromium
business to Yildirim Group for an enterprise value of $170m. At 30 November 2022, the completion
of the sale within the next 12 months was deemed to be highly probable and as such the Chromium
business met the criteria to be classified as a held for sale asset and a discontinued operation.
The sale completed on 31 January 2023, and Elementis received gross cash proceeds of $139.2m
($127.2m net of total disposal transaction costs).
The results of the discontinued operation, which have been included in the consolidated income
statement within ‘Profit from discontinued operations’, were as follows:
2023
$m
Revenue
14.4
Expenses
(14.2)
Calculated gain on sale of Chromium business
26.6
Disposal transaction costs
(6.4)
Recycling of deferred foreign exchange losses on sale of business
(9.3)
Profit before income tax
11.1
Tax
(12.8)
Loss from discontinued operations
(1.7)
Revenue includes $nil (2023: $nil) related to inter-segment sales.
A reconciliation of the reported operating profit/loss from discontinued operations to adjusted
operating profit/loss from discontinued operations is provided below:
2023
$m
Operating profit
11.1
Adjusting items:
Calculated gain on sale of Chromium business
(26.6)
Disposal transaction costs
6.4
Recycling of deferred foreign exchange losses on sale of business
9.3
Adjusted operating profit
0.2
Details of assets and liabilities at the date of disposal are provided in the following table:
2023
$m
Intangible assets
1.0
Property, plant and equipment
70.2
Inventories
69.1
Trade and other receivables
20.7
Total assets
161.0
Trade and other payables
(23.2)
Provisions
(19.7)
Pensions
(2.2)
Tax liabilities
(3.2)
Lease liabilities
(0.1)
Total liabilities
(48.4)
Net assets disposed
112.6
Gross cash proceeds
139.2
Calculated gain on sale of Chromium business
26.6
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 185
Notes to the consolidated financial statements
Company balance sheet
At 31 December 2024
Note
2024
£m
2023
£m
Non-current assets
Investments 6 790.5 786.0
Debtors 7 12.7 12.7
Total non-current assets 803.2 798.7
Debtors 7 – –
Creditors: amounts falling due within one year
Creditors 8 – –
Net current liabilities – –
Total assets less current liabilities 803.2 798.7
Creditors: amounts falling due after more than one year
Amounts due to subsidiary undertakings (203.5) (191.3)
Net assets 599.7 6 07.4
Capital and reserves
Called-up share capital 9 29.5 29.4
Share premium account 178.0 177.7
Capital redemption reserve 9 83.3 83.3
Other reserves 250.5 250.5
Share option reserve 9 33.4 28.9
Profit and loss account 25.0 37.6
Equity shareholders’ funds 599.7 6 07.4
The Company recognised a loss for the financial year ended 31 December 2024 of £2.5m (2023: £0.4m).
The financial statements of Elementis plc, registered number 3299608, on pages 186 to 191 were approved by the Board on 5 March 2025 and signed on its behalf by:
Paul Waterman Ralph Hewins
CEO CFO
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 186
Company statement of changes in equity
for the year ended 31 December 2024
2024 2023
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Other
reserves
£m
Share
options
reserve
£m
Retained
earnings
£m
Total
£m
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Other
reserves
£m
Share
options
reserve £m
Retained
earnings
£m
Total
£m
Balance at 1 January 29.4 177.7 83.3 250.5 28.9 37.6 607.4 29.2 17 7. 3 83.3 250.5 25.6 38.0 603.9
Comprehensive income
Loss for the year – – – – – (2.5) (2.5) – – – – – (0.4) (0.4)
Total other comprehensive loss – – – – – – – – – – – – – –
Total comprehensive loss – – – – – (2.5) (2.5) – – – – – (0.4) (0.4)
Transactions with owners
Issue of shares by the Company 0.1 0.3 – – – – 0.4 0.2 0.4 – – – – 0.6
Share-based payments – – – – 4.5 – 4.5 – – – – 3.3 – 3.3
Dividends received – – – – – 4.7 4.7 – – – – – – –
Dividends paid – – – – – (14.8) (14.8) – – – – – – –
Transfer – – – – – – – – – – – – – –
Total transactions with owners 0.1 0.3 – – 4.5 (10.1) (5.2) 0.2 0.4 – – 3.3 (0.4) 3.5
Balance at 31 December 29.5 178.0 83.3 250.5 33.4 25.0 599.7 29.4 17 7.7 83.3 250.5 28.9 37.6 607.4
The Company’s distributable reserves amount to £25.0m (2023: £37.6m) at the end of the period. The Company regularly reviews its distributable reserves and makes dividend recapitalisations as and when
necessary to ensure it can make all expected dividend payments. The Company has sufficient subsidiary reserves to enable such recapitalisations in 2025 and beyond.
For more information on the dividend declared and the dividend per share, please see Note 29 of the Group financial statements.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 187
Notes to the company financial statements of Elementis plc
for the year ended 31 December 2024
1. General information
Elementis plc is a public company limited by shares and is incorporated and domiciled in England.
The address of its registered office is The Bindery, 5th Floor, 51-53 Hatton Garden, London, EC1N 8HN.
The principal activity of the Company is to act as the ultimate holding company of the Elementis
Group of companies.
2. Basis of preparation
The Company’s financial statements have been prepared under the historical cost convention,
in compliance with applicable United Kingdom accounting standards, including Financial Reporting
Standard 101 – ‘Reduced Disclosure Framework – Disclosure exemptions from EU adopted IFRS
for qualifying entities’ (FRS 101), and with the Companies Act 2006. The Company has presented
its results under FRS 101.
As a qualifying entity whose results are consolidated in the Elementis plc consolidated financial
statements on pages 142 to 185, the Company has taken advantage of the exemption under FRS
101 from preparing a statement of cash flows and associated notes, the effects of new but not yet
effective IFRSs, disclosures in respect of transactions and the capital management of wholly owned
subsidiaries and key management personnel compensation disclosures.
As the consolidated financial statements include equivalent disclosures, the Company has also
taken the disclosure exemptions under FRS 101 in respect of certain requirements of IAS 1, IAS 7
statement of cash flows, IAS 8 accounting policies, IAS 24 related party disclosures, IAS 36
impairment of assets, group settled share-based payments under IFRS 2 share based payment,
IFRS 3 business combinations, IFRS 5 non-current assets held for sale and discontinued operations,
disclosures required by IFRS 7 financial instruments disclosures and by IFRS 13 fair value
measurement, IFRS 15 revenue from contracts with customers and IFRS 16 leases.
By virtue of section 408 of the Companies Act 2006, the Company is exempt from presenting an
income statement and disclosing employee numbers and staff costs.
As a consequence of the majority of the Company’s assets, liabilities and expenses originating in
pounds sterling, the Company has chosen pounds sterling as its reporting currency.
3. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated. The Company has adopted FRS 101 in these financial statements.
Foreign currencies
Transactions in foreign currencies are recorded at the rates of exchange ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the
contracted rate or the rate of exchange ruling at the balance sheet date and the gains and losses on
translation are included in the profit and loss account.
Investments
Investments in subsidiaries are included in the balance sheet at cost less accumulated impairment losses.
Potential indicators of impairment, including the market capitalisation of the group dropping below
the net assets of Elementis plc, have been considered. The recoverable amounts of cash-generating
units as determined for the impairment testing of goodwill also support the recoverable amounts of
the parent Company’s investments.
Dividends on shares presented within shareholders’ funds
Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent
that they are appropriately authorised and are no longer at the discretion of the Company.
Pensions and other post-retirement benefits
The Company participates in the Elementis Group defined benefit pension scheme. The assets of
the scheme are held separately from those of the Company. Details of the latest valuation carried out
in September 2023 can be found in Note 25 to the Group financial statements. Following the
introduction of the revised reporting standard, any surplus or deficit in the Elementis Group defined
benefit pension scheme is to be reported in the financial statements of Elementis UK Limited, which
employs the majority of active members of the scheme and is responsible for making deficit
contributions under the current funding plan.
Taxation
Deferred tax is provided on temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. There were
no significant judgements or estimates necessary in 2024.
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year.
Share-based payments
The fair value of share options granted to employees is recognised as an expense with a
corresponding increase in equity. Where the Company grants options over its own shares to the
employees of its subsidiaries, it recognises in its individual financial statements an increase in the
cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge
recognised in its subsidiaries’ financial statements, with the corresponding credit being recognised
directly in equity. The fair value is measured at the grant date and spread over the period during
which the employees become unconditionally entitled to the options. The fair value of the options
granted is measured using a binomial model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense is adjusted to reflect the
actual number of share options that vest except where forfeiture is only due to share prices not
achieving the threshold for vesting.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 188
3. Summary of significant accounting policies continued
Classification of financial instruments issued by the Company
Financial instruments issued by the Company are treated as equity only to the extent that they meet
the following two conditions:
a. They include no contractual obligations upon the Company to deliver cash or other financial
assets or to exchange financial assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Company.
b. Where the instrument will or may be settled in the Company’s own equity instruments, it is either
a non-derivative that includes no obligation to deliver a variable number of the Company’s own
equity instruments or is a derivative that will be settled by the Company’s exchanging a fixed
amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that the definition is not met, the proceeds of issue are classified as a financial liability.
Where the instrument so classified takes the legal form of the Company’s own shares, the amounts
presented in these financial statements for called-up share capital and share premium account
exclude amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part of interest payable and
similar charges. Finance payments associated with financial instruments that are classified as part
of shareholders’ funds are dealt with as appropriations in the reconciliation of movements in
shareholders’ funds.
4. Profit for the financial year attributable to shareholders
As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own
profit and loss account. A loss of £2.5m (2023: £0.4m loss) is dealt with in the financial statements
of the Company.
5. Directors’ remuneration
Details of Directors’ remuneration for the Company are included in the Directors’ Remuneration
report within the Elementis plc Annual Report and Accounts on pages 101 to 129.
6. Investments
Unlisted shares
at cost
£m
Unlisted loans
£m
Capital
contributions
£m
Total
£m
Cost at 1 January 2024 0.1 759.0 26.9 786.0
Additions – – 4.5 4.5
Net book value at
31 December 2024 0.1 759.0 31.4 790.5
Net book value at
31 December 2023 0.1 759.0 26.9 786.0
The investment in unlisted loans is with Elementis Holdings Limited, an indirect wholly owned
subsidiary. The investments in unlisted shares are in Elementis Group BV, Elementis Export Sales Inc,
and Elementis Overseas Investments Limited, all wholly owned subsidiaries. Capital contributions
relate to share-based payment awards made to employees of subsidiary companies.
The trading subsidiaries and associates of Elementis plc, all of which are wholly owned, excluding
Alembic Manufacturing Limited, in which the Group holds a 25% interest, are as follows:
Subsidiary undertakings
Country of incorporation
and operation
Alembic Manufacturing Limited Personal Care products United Kingdom
1
Deuchem Co., Limited Additives and resins Taiwan
2
Deuchem (Shanghai) Chemical
Co. Limited
Additives and resins People’s Republic of China
3
Elementis (Shanghai) New Material
Co. Limited
Additives and resins People’s Republic of China
3
Elementis Minerals BV Talc products Netherlands
5
Elementis Specialties (Anji) Limited Organoclays People’s Republic of China
6
Elementis Specialties do Brasil
Quimica Ltda
Coatings additives Brazil
7
Elementis Specialties Inc Rheological additives, colourants,
waxes, other specialty additives
United States of America
4
Elementis SRL Inc Personal Care products United States of America
4
Elementis UK Limited trading as:
Elementis Specialties
Rheological additives, colourants,
waxes, other specialty additives
United Kingdom
8
Elementis Pharma GmbH Personal Care products Germany
9
Mondo Minerals Deutschland
GmbH
Talc products Germany
10
Elementis Minerals Nickel Oy Talc products Finland
11
Mondo Trading (Beijing)
Company Limited
Talc products People’s Republic of China
12
1 Registered office: Unit 6 Wimbourne Buildings, Atlantic Way, Barry Docks, Barry, South Glamorgan CF63 3RA, UK.
2 Registered office: 92, Kuang-Fu North Road, Hsinchu Industrial Park, Hukou, Hsinchu Taiwan, ROC.
3 Registered office: 99 Lianyang Road, Songjiang Industrial Zone, Shanghai, China.
4 Registered office: 1209 Orange Street, Wilmington, Delaware, 19801, US.
5 Registered office: Kajuitweg 8, 1041 AR, Amsterdam, Netherlands.
6 Registered office: Huibutai, Majiadu Village, Dipu Town, Anji County, Huzhou City, Zhejiang Province, China.
7 Registered office: Rodovia Nelson Leopoldino, SP 375, Km 13,8, s/n, Bairro Rural, Palmital, São Paulo, Brazil.
8 Registered office: The Bindery, 5th Floor, 51-53 Hatton Garden, London EC1N 8HN, UK.
9 Registered office: Giulinistr. 2, 67065 Ludwigshafen, Germany.
10 Registered office: Friedrichsallee 14, 42117, Wuppertal, Germany.
11 Registered office: Talkkitie 7, 83500, Outokumpu, Finland.
12 Registered office: Nan Zhugan Hutong no.6, floor 9, 01-007, Dongcheng District, 100010, Beijing, China.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 189
Notes to the company financial statements of Elementis plc
6. Investments continued
Non-trading and dormant subsidiaries of Elementis plc, all of which are wholly owned within the
Group, are as follows:
Subsidiary undertakings
Country of incorporation and
operation
Agrichrome Limited Non-trading United Kingdom
1
Elementis America Shared Services Inc Dormant United States of America
2
Elementis Catalysts Inc Dormant United States of America
2
Elementis Chemicals Inc Dormant United States of America
2
Elementis Eaglescliffe Limited Non-Trading United Kingdom
1
Elementis Export Sales Inc Non-trading United States of America
2
Elementis Finance (Europe) Limited Non-trading United Kingdom
1
Elementis Finance (Germany) Limited Non-trading United Kingdom
1
Elementis Finance (Ireland) Limited Non-trading Ireland
3
Elementis Finance (Jersey) Limited Non-trading Jersey
4
Elementis Finance (US) Limited Non-trading United Kingdom
1
Elementis Germany GmbH Non-trading Germany
5
Elementis Germany Limited Dormant United Kingdom
1
Elementis Global LLC Non-trading United States of America
2
Elementis GmbH Non-trading Germany
5
Elementis Group (Finance) Limited Non-trading United Kingdom
1
Elementis Group BV Non-trading Netherlands
6
Elementis Group Limited Dormant United Kingdom
1
Elementis Holdings Limited Non-trading United Kingdom
1
Elementis London Limited* Dormant United Kingdom
1
Elementis Minerals Holding BV Non-trading Netherlands
6
Elementis Nederlands BV Non-trading Netherlands
6
Elementis NZ Limited Non-trading New Zealand
7
Elementis Overseas Investments Limited Non-trading United Kingdom
1
Elementis Pigments Inc Dormant United States of America
2
Elementis Portugal, Unipessoal Lda Non-trading Portugal
8
Elementis S.E.A. (Malaysia) Sdn Bhd Non-trading Malaysia
9
Elementis Securities Limited Non-trading United Kingdom
1
Elementis Services GmbH Non-trading Germany
5
Elementis Specialties (India) Private Limited Non-trading India
10
Elementis US Holdings Inc Non-trading United States of America
2
Subsidiary undertakings
Country of incorporation and
operation
Elementis US Limited Non-trading United Kingdom
1
H & C Lumber Inc Dormant United States of America
2
Harcros Chemicals Canada Inc Dormant Canada
11
Iron Oxides S.A. de CV Dormant Mexico
12
Mondo Minerals International BV Dormant Netherlands
6
Reheis Inc Non-trading United States of America
2
SRLH Holdings Inc Non-trading United States of America
2
SRL International Holdings LLC Non-trading United States of America
2
Talc Holding Finance Oy Non-trading Finland
13
Talc Holding Oy Non-trading Finland
13
WBS Carbons Acquisitions Corp Non-trading United States of America
2
1 Registered office: The Bindery, 5th Floor, 51-53 Hatton Garden, London EC1N 8HN, UK.
2 Registered office: 1209 Orange Street, Wilmington, Delaware, 19801, US.
3 Registered office: 8th Floor, Block E, Iveagh Court, Harcourt Road, Dublin 2, Ireland.
4 Registered office: 3rd Floor, 44 Esplanade, St Helier, Jersey, JE4 9WG.
5 Registered office: Stolberger Str.370, 50933, Köln, Germany.
6 Registered office: Kajuitweg 8, 1041 AR, Amsterdam, Netherlands.
7 Registered office: KPMG, PO Box 1584, 18 Viaduct Harbour Avenue, Maritime Square, Auckland, New Zealand.
8 Registered office: c/o Avenida da Boavista, Numbero 3265 – 2.8 Porto, 4100-137 Porto, Portugal.
9 Registered office: 10th Floor, Menara Hap Seng, No. 1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur, Malaysia.
10 Registered office: Unit-B, Ground Floor, Jaswanti Landmark, Mehra Industrial Estate, L.B.S. Marg, Vikhroli (W),
Mumbai 400079, India.
11 Registered office: C/o Stewart McKelvey Stirling Scales,44 Chipman Hill, Suite 1000 ON E2L 4S6, Canada.
12 Registered office: Calle San Ignacio N 105, 22106 Tijuana, Baja California Mexico.
13 Registered office: Kajaanintie 54, 88620, Korholanmaki, Finland.
Notes:
Other than Elementis Export Sales Inc, Elementis Group BV and Elementis Overseas
Investments Ltd, none of the undertakings is held directly by the Company. Equity capital is
in ordinary shares and voting rights equate to equity ownership
All undertakings listed above have accounting periods ending 31 December, with the exception
of Elementis Eaglescliffe Limited, for which the relevant date is 31 July
Undertakings operating in the United Kingdom are incorporated in England and Wales. In the
case of corporate undertakings not in the United Kingdom, their country of operation is also their
country of incorporation
All undertakings listed above have been included in the consolidated financial statements of the
Group for the year
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 190
Notes to the company financial statements of Elementis plc
7. Debtors
2024
£m
2023
£m
Debtors: Amount falling due after more than one year
Group relief receivable 12.7 12.7
Debtors: Amount falling due within one year
Group relief receivable – –
8. Creditors: Amount falling due within one year
2024
£m
2023
£m
Accruals – –
The intercompany payable balances represent long term interest free lending to other UK Group
companies.
9. Share capital and reserves
2024
Number
’000
2024
£m
2023
Number
’000
2023
£m
Called-up allotted and
fully paid:
Ordinary shares of
5 pence each
At 1 January 587,824 29.4 584,017 29.2
Issue of shares 3,126 0.1 3,807 0.2
At 31 December 590,950 29.5 587,824 29.4
During the year a total of 3,125,736 ordinary shares with an aggregate nominal value of £157,839
were allotted and issued in accordance with the Group’s share options and award plans and
schemes to various employees, as well as shares that were redeemed for cash at subscription prices
between 92 pence and 117 pence on the exercise of options under the Group’s share option
schemes. The total subscription monies received by the Company for these shares was £0.3m.
The Company can redeem shares by repaying the market value to the shareholder, whereupon the
shares are cancelled. Redemption must be from distributable profits. The capital redemption reserve
represents the nominal value of the shares redeemed.
The share options reserve comprises amounts accumulated in equity in respect of share options
and awards granted to employees.
Details of the share-based payments in the year are set out in Note 26 to the Elementis plc
consolidated financial statements.
10. Related-party transactions
The Company, which is the ultimate parent company of the Elementis Group, is a guarantor to the
Elementis Group defined benefit pension scheme under which it guarantees all current and future
obligations of UK subsidiaries currently participating in the pension scheme to make payments to the
scheme, up to a specified maximum amount. The maximum amount of the guarantee is that which is
needed (at the time the guarantee is called on) to bring the scheme’s funding level up to 105% of its
liabilities, calculated in accordance with section 179 of the Pensions Act 2004. This is also sometimes
known as a PPF guarantee, as having such a guarantee in place reduces the annual PPF levy on the
scheme. Details of the UK pension schemes in the year are set out in Note 25 to the Elementis plc
consolidated financial statements.
11. UK-registered subsidiaries exempt from audit
The following UK subsidiaries will take advantage of the audit exemption set out within section 479A
of the Companies Act 2006 for the year ended 31 December 2024. Unless otherwise stated,
the undertakings listed below are all 100% owned, either directly or indirectly, by Elementis plc.
The Company will guarantee the debts and liabilities of the UK subsidiaries listed below at the
balance sheet date in accordance with section 479C of the Companies Act 2006. The Company
has assessed the probability of loss under the guarantee as remote.
Name
Proportion of
shares held by
the Company (%)
Proportion of
shares held by
subsidiary (%)
Company
Number
Agrichrome Limited 100 – 2228826
Elementis Finance (Germany) Limited 100 – 5531634
Elementis Finance (US) Limited 100 – 9303101
Elementis Germany Limited 100 – 48664
Elementis Group (Finance) Limited 100 – 9303017
Elementis Group Limited 100 – 4048541
Elementis Overseas Investments Limited 100 – 8008981
Elementis Securities Limited 100 – 597303
Elementis US Limited 100 – 8005226
Elementis Finance (Europe) Limited 100 – 11717371
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 191
Notes to the company financial statements of Elementis plc
Alternative performance measures and unaudited information
Alternative performance measures
A reconciliation from reported profit for the year to adjusted earnings before interest, tax,
depreciation and amortisation (Adjusted EBITDA) is provided to support understanding of the
summarised cash flow included within the Finance Report on pages 56 to 61.
2024
$m
2023
$m
(Loss)/profit for the year (47.8) 26.5
Adjustments for:
Loss from discontinued operations – 1.7
Finance income (2.9) (4.4)
Finance costs and other expenses 25.9 23.5
Tax charge (1.8) 11.5
Depreciation and amortisation 51.1 54.7
Excluding intangibles arising on acquisition (12.3) (12.7)
Adjusting items before finance costs and depreciation 155.4 45.0
Adjusted EBITDA 167.6 145.8
There are also a number of key performance indicators (“KPIs”) on pages 22 to 23; the
reconciliations to these are given below.
Constant Currency
Constant currency is calculated by applying the prior year average local currency to USD translation
rates to translate revenue and adjusted operating profit. Constant currency rates are determined as
the reported rates excluding the impact of changes in the average translation exchange rates during
the period.
Adjusted operating cash flow
Adjusted operating cash flow is defined as the net cash flow from operating activities less net capital
expenditure but excluding income taxes paid or received, interest paid or received, movement in
provisions and financial liabilities, pension contributions net of current service cost, share-based
payment expense and adjusting items.
2024
$m
2023
$m
Net cash flow from operating activities 100.0 76.8
Less:
Net cash flow used in operating activities from discontinued
operations – 12.4
Capital expenditure (37.8) (38.2)
Add:
Income tax paid or received 24.5 27.3
Interest paid or received 18.2 18 .1
Decrease/(increase) in provisions and financial liabilities 19.2 (16.7)
Pension contributions net of current service cost 0.6 3.1
Share-based payments expense (6.1) (4.4)
Adjusting items – non-cash (17.7) 21.3
Adjusting items – cash 33.3 10.0
Adjusted operating cash flow 134.2 109.7
Adjusted operating cash conversion
Adjusted operating cash conversion is defined as adjusted operating cash flow divided by adjusted
operating profit.
2024
$m
2023
$m
Adjusted operating profit 128.8 103.9
Adjusted operating cash flow 134.2 109.7
Adjusted operating cash conversion 104% 106%
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 192
Free cash flow
Free cash flow is defined as adjusted operating cash flow (as defined above), less pension
contributions net of current service cost, net interest paid, income tax paid, cash flow relating to
adjusting items and other, which includes share-based payments, movement in provisions and
derivatives, and payment of lease liabilities.
Contribution margin
The Group’s contribution margin is defined as sales less all variable costs, divided by sales, and
expressed as a percentage.
2024
$m
2023
$m
Revenue 738.4 713.4
Variable costs (367.0) (361.2)
Non-variable costs (33.2) (67.9)
Cost of sales (400.2) (429.1)
Adjusted group profit before tax
Adjusted group profit before tax is defined as the adjusted profit for the year plus the tax on
adjusting items.
Adjusted return on operating capital employed
Adjusted return on capital employed (“ROCE”) is defined as adjusted operating profit from total
operations divided by operating capital employed, expressed as a percentage. Operating capital
employed comprises fixed assets (excluding goodwill but including tax recoverable), working capital
and operating provisions. Operating provisions include self-insurance and environmental provisions
but exclude retirement benefit obligations.
2024
$m
2023
$m
Adjusted operating profit 128.8 103.9
Fixed assets excluding goodwill 464.7 612.0
Working capital 137.4 147.2
Operating provisions (48.4) (81.9)
Operating capital employed 553.7 677.3
Adjusted return on capital employed % 23% 15%
Average trade working capital to sales ratio
The trade working capital to sales ratio is defined as the 12 month average trade working capital
divided by sales, expressed as a percentage. Trade working capital comprises inventories, trade
receivables (net of provisions) and trade payables. It specifically excludes repayments, capital or
interest related receivables or payables, changes due to currency movements and items classified
as other receivables and other payables.
Adjusted operating profit/operating margin
Adjusted operating profit is the profit derived from the normal operations of the business. Adjusted
operating margin is the ratio of adjusted operating profit to sales.
Net debt
Net debt is defined as borrowings less cash and cash equivalents, including any restricted or held for
sale cash and cash equivalents. Pre-IFRS 16 Net debt does not include lease liabilities.
Unaudited information
To support a full understanding of the performance of the Group, the information below provides the
calculations of net debt/EBITDA.
2024
$m
2023
$m
Revenue 738.3 713.4
Adjusted operating profit 128.8 103.9
Adjusted operating margin 17.4% 14.6%
Net Debt/EBITDA pre-IFRS 16
Adjusted EBITDA 167.6 146.2
IFRS 16 adjustment (6.7) (6.5)
Adjusted EBITDA pre-IFRS 16 160.9 139.7
Net Debt
1
157.2 202.0
Net Debt/EBITDA
2
pre-IFRS 16 1.0 1.4
Net Debt/EBITDA post-IFRS 16
Adjusted EBITDA 167.6 146.2
Net Debt
1
157.2 202.0
IFRS 16 lease liabilities 34.5 35.6
Net Debt including lease liabilities 191.7 2 37.6
Net Debt/EBITDA
2
post-IFRS 16 1.1 1.6
1 See Note 28. Net debt excludes lease liabilities.
2 Net Debt/EBITDA, where EBITDA is the adjusted EBITDA on continuing operations of the Group.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 193
Alternative performance measures and unaudited information
Five-year record
2024
$m
2023
$m
2022
$m
2021
$m
2020
$m
Turnover:
Continuing operations 738.3 713.4 736.4 709.4 612.4
Discontinued operations – 14.4 185.0 170.7 146.9
Total operations 738.3 727. 8 921.4 8 80.1 759.3
Adjusted operating profit:
Total operations 128.8 104.1 123.7 106.6 81.6
Discontinued operations – 0.2 23.2 18.6 10.4
Continuing operations 128.8 103.9 100.5 88.0 71.2
Adjusting items before interest (155.4) (45.0) (142.3) (76.1) (106.5)
Operating (loss)/profit (26.6) 58.9 (41.8) 11.9 (35.3)
Other expenses (1.8) (2.3) (1.3) (3.7) (1.2)
Net interest payable (21.2) (16.9) (11.7) (15.7) (37.6)
(Loss)/profit before tax (49.6) 39.7 (54.8) ( 7. 5) (74.1)
Tax 1.8 (11.5) (7.8) (0.4) 3.1
(Loss)/profit from continuing
operations (47.8) 28.2 (62.6) (7.9) (71.0)
(Loss)/profit from discontinued
operations – (1.7) 11.5 10.4 4.0
(Loss)/profit attributable to equity
holders of the parent (47.8) 26.5 (51.1) 2.5 (67.0)
2024
$m
2023
$m
2022
$m
2021
$m
2020
$m
Continuing operations:
Basic (loss)/earnings per ordinary
share (cents) (8.1) 4.8 (10.7) (1.4) (12.2)
Basic earnings per ordinary share
after adjusting items (cents) 13.6 11.0 11.1 8.4 5.5
Diluted (loss)/earnings per ordinary
share (cents) (8.0) 4.7 (10.7) (1.4) (12.2)
Diluted earnings per ordinary share
after adjusting items (cents) 13.3 10.8 10.9 7.3 5.4
Continuing and discontinued
operations:
Basic (loss)/earnings per ordinary
share (cents) (8.1) 4.5 (8.8) 0.4 (11.5)
Basic earnings per ordinary share
after adjusting items (cents) 13.6 11.0 14.2 10.7 6.6
Diluted (loss)/earnings per ordinary
share (cents) (8.1) 4.4 (8.8) 0.4 (11.3)
Diluted earnings per ordinary share
after adjusting items (cents) 13.3 10.8 13.9 10.6 6.5
Dividend per ordinary share (cents) 4.0 2.1 – – –
Interest cover
1
(times) 7.1 6.2 6.6 4.8 3.7
Equity attributable to holders of
the parent 797.7 8 47. 3 783.9 901.0 860.4
Net debt (157.2) (202.0) (366.8) (401.0) (4 08.1)
Weighted average number of
ordinary shares in issue during
the year (million) 588.9 585.7 582.6 581.0 5 80.1
Weighted average number of ordinary
and potential ordinary shares in issue
during the year (million) 600.8 596.9 592.3 588.8 593.7
1 Ratio of operating profit after adjusting items to interest on net borrowings.
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 194
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Notes on ESG reporting methodologies
Greenhouse gas
Scope 1 and 2 GHG emissions are calculated with reference to the GHG Protocol Corporate
Standard (2015 revision). We report in tonnes of CO
2
equivalent (CO
2
e) and include all gases in the
GHG Protocol. We do not include any purchased offsets in our GHG inventory.
We take an operational control approach to defining our GHG and energy organisational boundary.
This approach is consistent with our financial statements. This means our equity ownerships are excluded
from our combined Scope 1 and 2 footprint but are included in Scope 3 Category 15 (Investments).
Data from new facilities are included from the date we take control.
Scope 1: Includes emissions from combustion of fuels for energy, heat and vehicles, process
emissions from our chemical manufacturing, refrigerants and direct land use change at our mines.
Fuels and refrigerants use consumption invoices from suppliers. We use DEFRA emission factors for
Scope 1 fuels globally. Factors include the contribution from CH
4
and N
2
O. The GWP used for
specific refrigerants is per the GHG Protocol summary of IPCC AR6.
Biomass: CO
2
from biomass is reported outside of the Scopes. CH
4
and N
2
O emissions from biomass
are included in our Scope 1. We assume diesel fuels contain biomass, and use the appropriate DEFRA
factors to remove this CO
2
from our Scope 1 and include it in the biomass reporting number.
Scope 2: Our Scope 2 emissions include all emissions caused by creating the electricity and steam,
using invoices issued by our suppliers. We use IEA emissions factors for location-based Scope 2
emissions, except in the UK where we use DEFRA factors. Scope 2 (market-based) emissions include
power purchases associated with a Renewable Energy Certificate (REC) or Guarantee of Origin (GO).
Where a site does not have such a contract, we use residual mix factors from the Association of Issuing
Bodies (AIB) for European sites, and location-based factors for remaining sites.
Intensity: Expressed per tonne of production output as this is a common intensity metric for our industry
sector, and per million US dollars of revenue.
Scope 3: For Categories 1 (purchased raw materials and packaging), 2, 3, 4 (finished goods and
intersite shipments), 5, 6, and 9, we use primary activity data combined with suitable emission factors
sourced from various databases (such as Ecoinvent and others). For the other parts of Scope 3, we
make some assumptions to transform primary data further before applying suitable emission factors
from databases. Our intention is to increase the use of supplier-provided emissions data over time. For
further details about our Scope 3 calculation methodology, see the separate document on our website.
Climate risk assessment: Long term carbon and energy price assumptions that we use are averages
of the following NGFS model datasets: GCAM 6.0 NGFS, MESSAGEix-GLOBIOM 1.1-M-R12 and
REMIND-MAGPIE 3.2-4.6 for CP, DT and NZ scenarios. For energy cost trends, we combine NGFS
data with an assumed 1.5% per annum growth in our energy demand. For carbon costs, we combine
NGFS data with our combined Scope 1 & 2 CO
2
e emissions, either increasing at 1.5% per annum
(i.e. a scenario where we do not decarbonise further) and contrast with a scenario where our
combined Scope 1 & 2 CO
2
e emissions reduce in line with the IPCC 1.5C Net Zero pathway.
Water and waste
Water withdrawal data uses invoices from our water suppliers, or our own meter readings where we
abstract water directly from the environment. Waste data uses invoices from our waste handling
suppliers. Where invoices are not available, estimates from the local teams are used.
Approach to estimation
Where estimation is necessary and invoices exist from a prior data period, this prior period is used to
estimate the KPI, adjusting for major changes in the site situation (e.g. a change in office headcount).
Where there is no invoiced consumption data from a prior period (for example, waste from some of
our offices), the local team make a calculation based on known facts such as headcount and local
waste treatment statistics.
Baseline year
Our baseline year for Scope 1, Scope 2, energy, water and waste targets is 2019. Baseline data is
recalculated and restated if a major change occurs (such as when we divested our Chromium
business in 2022). We have not yet set a target or baseline year for Scope 3, but will do so as part of
our validated SBT (due in H1 2025). Prior year Scope 3 numbers are not currently recalculated due
to resource constraints, but will be when we set a target and baseline year.
Approach to restatements
On occasion, data from a previously reported period needs to be corrected, for example due to the
availability of updated data or methodological improvements. Where this occurs, we will restate prior
year data if the impact is greater than 5% of the previously reported total, and optionally at lower
impact levels if it helps within a specific context.
Safety metrics
We use the US Occupational Safety and Health Administration definition for a recordable injury:
A work-related accident or illness that results in one or more of: death; loss of consciousness; absence
of more than one day; medical treatment beyond first aid; restricted work or transfer to another job.
TRIR is the number of recordable cases multiplied by 200,000 divided by total hours worked by all
employees (including directly supervised contracted / temporary employees) over a calendar year.
An LTA is a work-related injury or illness that requires greater than three days away from work
(excluding the day of the incident).
A Tier 1 or Tier 2 PSE involves loss of primary containment with consequence. It is an unplanned or
uncontrolled release of any material from a process. Tier 1 has a higher magnitude of consequence
than Tier 2, as defined in the American Petroleum Institute Recommended Practice 754. A Tier 1 or
Tier 2 environmental incident is a release of materials at a level in breach of our permit limits that
requires notification to the authorities. Tier 1 has a higher magnitude of consequence, either in
impact or in remediation costs.
A contractor is defined as a third party contracted to undertake work on behalf of the Company or to
provide a specific service. A contractor recordable injury is a work-related accident that meets the
definition of a recordable injury and occurs to a contractor while working at an Elementis site. We exclude
contractors from the TRIR calculation, separately tracking the number of contractor recordable injuries.
195
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Environmental data
Global GHG metric
1
Scope 2 basis
% change
in year 2024 2023
2
2022 2021 2019 (baseline)
Scope 1 (tonne CO
2
e) 16.8 48,889 41,861 47,666 49,060 58,469
Scope 2 (tonne CO
2
e) Market 19.8 28,020 23,394 19,401 26,183 99,957
Location 9.6 48,897 44,623 42,956 53,447 64,457
Total Scope 1 and 2 (tonne CO
2
e) Market 17.9 76,908 65,255 67,067 75,243 158,426
Location 13.1 97,785 86,484 90,622 102,507 122,926
GHG intensity (total Scope 1 and 2 tonne CO
2
e/tonne production) Market 12.4 0.18 0.16 0.13 0.12 0.26
Location 7.8 0.22 0.21 0.18 0.17 0.20
GHG intensity (total Scope 1 and 2 tonne CO
2
e/$m revenue) Market 14.0 104 91 91 106 225
Location 9.4 133 121 123 145 175
Outside of scopes – GHG from biomass (tonne CO
2
e) -20.3 3,069 3,850 4,011 5,165 6,301
Scope 3 GHG emissions by category (tonne CO
2
e)
% change
in year 2024 2023
3
Purchased goods and services -12.3 338,743 386,217
Capital goods 38.4 21,231 15,338
Fuel and energy related 0.6 21,051 20,916
Upstream transportation 51.7 131,141 86,449
Waste generated 36.8 5,981 4,371
Business travel -39.6 2,789 4,621
Employee commuting 40.0 1050 750
Upstream leased assets 367.0 892 191
Total upstream Scope 3 emissions 0.8 522,878 518,853
Downstream transportation -59.3 6,620 16,257
Processing of sold products 2.0 37,436 36,699
Use of sold products Not calculated, not relevant – – –
Product end-of-life 0.8 31,949 31,698
Downstream leased assets -20.4 254 319
Franchises Not applicable – – –
Investments 1.1 96 95
Total downstream Scope 3 emissions -10.2 76,356 85,068
Total Scope 3 emissions -0.8 599,233 603,921
Total Scope 1, 2 (market based), 3 emissions 1.0 676,141 669,176
Total Scope 1, 2 (location based), 3 emissions 1.0 697,019 690,405
1 For more information on our calculation approach, see page 195 and our non-financial data reporting methodology document on our website.
2 Restated due to additional data and end of year reconciliation of late invoices.
3 Category 10 added to 2023 footprint. Contributions from hotel stays (category 6) and working from home (category 7) were removed from 2023 data as these are optional - they are also excluded from 2024 data.
196
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Global energy metric
% change
in year 2024 2023
1
2022 2021 2019 (baseline)
Total energy (GWh) 14.4 492.6 430.5 480.7 518.4 598.4
Energy from fuels (GWh) 16.0 270.7 233.3 259.5 266.2 318.3
Energy from fuels (GJ) 16.0 974,694 840,014 934,364 958,322 1,145,924
Purchased energy (GWh) 12.5 221.8 197.1 221.2 252.2 280.1
Purchased electricity certified renewable/low carbon (%) 0 77 77 77 72 0
Total energy intensity (GWh/tonne produced) 9.1 0.0011 0.0010 0.0009 0.0009 0.0010
Energy from fuels intensity (GJ from fuels/tonne produced) 10.7 2.23 2.02 1.82 1.57 1.90
UK only GHG and energy metrics
2024
% of global 2024 2023 2022 2021 2019 (baseline)
Scope 1 (tonne CO
2
e) 36.9 7,323 5,350 7,72 6 7,740 7,735
Scope 2 (tonne CO
2
e) Market -59.3 396 973 321 2,712 3,026
Location 22.7 1,879 1,532 1,737 2,062 2,031
Total Scope 1 and 2 (tonne CO
2
e) Market 22.1 7,719 6,323 8,047 10,452 10,761
Location 33.7 9,202 6,882 9,463 9,802 9,766
GHG intensity (total Scope 1 and 2 tonne CO
2
e/tonne production) Market -7.3 0.44 0.48 0.42 0.52 0.56
Location 1.6 0.53 0.52 0.50 0.49 0.51
Total energy (GWh)
2
34.2 49.1 36.6 51.3 51.4 50.4
Total energy intensity (GWh/tonne produced) 1.9 0.0028 0.0028 0.0027 0.0026 0.0026
Production volume (tonne)
% change
in year 2024 2023 2022 2021
2019
(baseline)
Global total 4.8 436,936 416,738 513,300 611,5 3 3 601,753
UK only 31.7 17,449 13,253 19,056 19,926 19,233
1 Restated due to additional data and end of year reconciliation of late invoices.
2 1 GWh = 1 million kilowatt hours (kWh). Total 2024 UK energy was 49,099,678 kWh.
197
Environmental data
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Water metric
% change
in year 2024 2023 2022 2021
2019
(baseline)
Total water withdrawal (m
3
) 19.6 1,568,215 1,310,825 1,573,678 1,700,117 2, 25 4,182
Total water withdrawal intensity (m
3
/tonne produced) 14.1 3.59 3.15 3.07 2.78 3.75
Water withdrawn from high water stress areas (m
3
)
1
10.4 207,609 188,033 205,248 308,809 223,422
Water withdrawn from high water stress areas intensity (m
3
/tonne produced) -19.0 4.93 6.10 4.1 5.2 6.4
1 Based on WRI Aqueduct tool.
Water metric (m
3
) All locations
Water-stressed
locations
Water withdrawal by source Ground 321,139 73,639
Surface 231,667 109,145
Third party 1,015,409 24,825
Total water withdrawn 1,568,215 207,609
Water discharge by destination Ground 0 0
Surface 1,397,728 102,729
Third party 905,374 7,620
Total water discharged 2,303,101 110,349
Total water consumed -734,886 97,260
Treatment method of waste (tonne) Hazardous waste
Non-hazardous
waste Total
Landfilled 386 10,745 11,132
Incinerated 1,214 213 1,427
Recycled 9 832 841
Reused 0 5,804 5,804
Total 1,610 17,594 19,204
Emission to water (tonne) 2024
Total organic Carbon (TOC) 0.463
Metals (Nickel, Arsenic, Zinc) 0.295
Nitrogen 0.068
Phosphorus 0.005
Total emissions to water 0.831
Emission to air (tonne) 2024 2023 2022
Sulfur oxides 0.3 0.5 24.0
Nitrogen oxides 31.4 19.5 29.6
Volatile organic compounds 70.4 65.6 48.8
Hazardous air pollutants 4.6 6.3 4.1
Carbon Monoxide 17.8 13.4 3.1
Particulate matter (PM
10
) 1.0 1.7 2.5
Dust 9.1 1.0 3.9
Ammonia 0.2 – –
Total emissions to air 134.8 108.1 116
Waste sent for third-party treatment
% change
in year 2024 2023 2022 2021
2019
(baseline)
Mass of hazardous waste (tonne) 26.2 1,610 1,276 750 293 –
Mass of non-hazardous waste (tonne) 23.3 17,594 14,269 16,728 18,842 –
Total waste (tonne) 23.5 19,204 15,545 17,478 19,135 21,297
Total waste intensity (tonne generated/tonne produced) 17.8 0.044 0.037 0.034 0.031 0.035
198
Environmental data
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Shareholder services
The Company’s Registrar is Equiniti Limited.
Equiniti provide a range of services to shareholders.
Extensive information including many answers to frequently asked questions can be found online.
Use the QR code to register for FREE at www.shareview.co.uk
Equiniti’s registered address is:
Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA.
Enquiries concerning shares or shareholdings, such as the loss of a share certificate, consolidation
of share certificates, amalgamation of holdings or dividend payments, should be addressed to the
Company’s registrars:
Equiniti Limited
Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
Telephone: +44 (0) 371 384 2379
Facsimile: 0371 384 2100 or + 44 190 369 8403
Website: www.shareview.co.uk
For deaf or speech-impaired customers, Equiniti welcome calls via Relay UK. Please see
www.relayuk.bt.com for more information.
In any correspondence with the registrars, please refer to Elementis plc and state clearly the registered
name and address of the shareholder. Please notify the registrars promptly of any change of address.
Website
Our website (www.elementis.com) provides the following information:
Company news and information
Details of our strategy
The Company’s approach to sustainability and innovation
A dedicated Investors section which contains up-to-date information for shareholders, including:
– Share price and index chart information
– Financial results
– History of dividend payment dates and amounts
– Access to current and historical shareholder documents such as the Annual Report and Accounts
Share dealing services
Equiniti provides a share dealing service that enables shares to be bought or sold by UK shareholders
by telephone or over the internet. For telephone share dealing, please call +44 (0) 345 603 7037
between 8.30am and 4.30pm (lines are open until 6.00pm for enquiries). For internet share dealing,
please visit: www.shareview.co.uk/dealing
Electronic communications
Shareholders can elect to receive shareholder documents electronically by registering with
Shareview at www.shareview.co.uk. This will save on printing and distribution costs, creating
environmental benefits. When you register, you will be sent an email notification to say when
shareholder documents are available on our website and you will be provided with a link to that
information. When registering, you will need your shareholder reference number, which can be
found on your share certificate or proxy form. Please contact Equiniti if you require any assistance
or further information.
Duplicate documents
If you have more than one account on the share register and receive duplicate documentation
from us as a result, please contact Equiniti to request that your accounts be combined.
Share fraud
Share or investment scams are often run from ‘boiler rooms’ where fraudsters cold call investors
offering them worthless, overpriced or even non-existent shares, or offer to buy their shares in a
company at a higher price than the market value. Shareholders are advised to be very wary of any
unsolicited advice, offers to buy shares at a discount, or offers of free reports about the company.
Even seasoned investors have been caught out by such fraudsters. The FCA has some helpful
information: www.fca.org.uk/scamsmart
Report a scam
If you are contacted by a cold caller, you should inform the Secretariat
(company.secretariat@elementis.com) and also the FCA by using its share fraud reporting form
at www.fca.org.uk/scams or by calling its Consumer Helpline on +44 (0) 800 111 6768.
If you have already paid money to a share fraudster, please contact Action Fraud on
+44 (0) 300 123 2040 or www.actionfraud.police.uk
199
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Corporate information
Financial calendar (provisional)
29 April 2025 Annual General Meeting
29 April 2025 Q1 Trading Update
31 July 2025 Interim Results 2025
October 2025 Q3 Trading Update
31 December 2025 Financial Year End
January 2026 Q4 Trading Update
The financial calendar is updated on a regular basis throughout the year. Please refer to our website
www.elementis.com for up-to-date details.
Annual General Meeting
The Annual General Meeting of Elementis plc will be held on 29 April 2025 at 10.00am at the offices
of A&O Shearman LLP, One Bishops Square, London, E1 6AD. Shareholders will also be able to
attend the meeting online.
The Notice of Meeting is included in a separate document.
Company Secretary
Anna Lawrence
Registered number
03299608
Registered office
The Bindery
5th Floor
51-53 Hatton Garden
London
EC1N 8HN
UK
Principal offices
Elementis plc
The Bindery
5th Floor
51-53 Hatton Garden
London
EC1N 8HN
UK
Tel: +44 208 148 5966
Elementis Global
469 Old Trenton Road
East Windsor
NJ 08512
US
Tel: +1 609 443 2000
Independent Auditors
Deloitte LLP
1 Little New Street
London
EC4A 3TR
Joint Corporate Broker
JP Morgan Cazenove
60 Victoria Embankment
London
EC4Y 0JP
Joint Corporate Broker
Deutsche Numis
45 Gresham Street
London
EC2V 7BF
Public Relations
Teneo
The Carter Building
11 Pilgrim Street
London
EC4V 6RN
Solicitors
A&O Shearman LLP
One Bishops Square
London
E1 6AD
Email
company.secretariat@elementis.com
Website
www.elementis.com
200
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
GRI index
Statement of use Elementis plc has reported the information cited in this GRI content index
for the period 1 January 2024 to 31 December 2024 with reference to the
GRI standards.
GRI used GRI 1: Foundation 2021
GRI standard Specific GRI Disclosure Pages
GRI 2: General
disclosures 2021
2-1 Organisational details 1-3
2-2 Entities included in the organisation’s
sustainability reporting
189-190, 195
2-3 Reporting period, frequency and contact point 200
2-4 Restatements of information 196, 197
2-5 External assurance 34, 134
2-6 Activities, value chain and other business relationships 6-8, 12-15,
62-64
2-7 Employees 47
2-8 Workers who are not employees Not disclosed
2-9 Governance structure and composition 76-79
2-10 Nomination and selection of the highest
governance body
88-91
2-11 Chair of the highest governance body 76-77
2-12 Role of the highest governance body in overseeing
the management of impacts
31
2-13 Delegation of responsibility for managing impacts 31
2-14 Role of the highest governance body in
sustainability reporting
31
2-15 Conflicts of interest 89, 99, 130
2-16 Communication of critical concerns 26 -27, 81
2-17 Collective knowledge of the highest governance body 89
2-18 Evaluation of the performance of the highest
governance body
87
2-19 Remuneration policies 101-129
2-20 Process to determine remuneration 119-121
2-21 Annual total compensation ratio 127
2-22 Statement on sustainable development strategy 5, 11
GRI standard Specific GRI Disclosure Pages
GRI 2: General
disclosures 2021
continued
2-23 Policy commitments 55
2-24 Embedding policy commitments 55
2-25 Processes to remediate negative impacts 53, 96
2-26 Mechanisms for seeking advice and raising concerns 53, 84-85
2-27 Compliance with laws and regulations 51-52, 92-96
2-28 Membership associations 54
2-29 Approach to stakeholder engagement 24-25
2-30 Collective bargaining agreements 47
GRI 3: Material
Topics 2021
3-1 Process to determine material topics 30
3-2 List of material topics 30
3-3 Management of material topics 28-54
GRI 201: Economic
performance 2016
201-2 Financial implications and other risks and
opportunities due to climate change
36-39, 138
201-3 Defined benefit plan obligations and other
retirement plans
47, 146
201-4 Financial assistance received from government 152
GRI 205:
Anti-corruption
2016
205-2 Communication and training about anti-corruption
policies and procedures
52
205-3 Confirmed incidents of corruption and actions taken 53
GRI 206:
Anti-competitive
Behaviour 2016
206-1 Legal actions for anti-competitive behaviour,
anti-trust, and monopoly practices
53
GRI 207: Tax 2019 207-1 Approach to tax 54, 159-160, 167
207-2 Tax governance, control, and risk management 151
207-3 Stakeholder engagement and management
of concerns related to tax
151
207-4 Country-by-country reporting 159
GRI 302: Energy
2016
302-1 Energy consumption within the organisation 40, 197
302-3 Energy intensity 40, 197
302-4 Reduction of energy consumption 40
GRI 303: Water and
Effluents 2018
303-3 Water withdrawal 42, 198
303-4 Water discharge 42, 198
303-5 Water consumption 42, 198
201
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
GRI standard Specific GRI Disclosure Pages
GRI 304:
Biodiversity 2016
304-4 IUCN Red List species and national conservation
list species with habitats in areas affected
by operations
43
GRI 305:
Emissions 2016
305-1 Direct (Scope 1) GHG emissions 40-41, 196
305-2 Energy indirect (Scope 2) GHG emissions 40-41, 196
305-3 Other indirect (Scope 3) GHG emissions 40-41, 196
305-4 GHG emissions intensity 40, 196
305-5 Reduction of GHG emissions 35-41, 196
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),
and other significant air emissions
42, 198
GRI 306: Waste
2020
306-3 Waste generated 42, 198
GRI 401:
Employment 2016
401-1 New employee hires and employee turnover 47
401-2 Benefits provided to full-time employees that are
not provided to temporary or part-time employees
47
401-3 Parental leave 47
GRI 403:
Occupational
Health and Safety
2018
403-1 Occupational health and safety management system 45-46
403-2 Hazard identification, risk assessment, and
incident investigation
45-46
403-4 Worker participation, consultation, and
communication on occupational health and safety
45-46
403-5 Worker training on occupational health and safety 45-46
403-6 Promotion of worker health 45-46
403-8 Workers covered by an occupational health and
safety management system
45-46
403-9 Work-related injuries 45-46
403-10 Work-related ill health 46
GRI 404: Training
and Education
2016
404-1 Average hours of training per year per employee 49, 53
404-2 Programme for upgrading employee skills and
transition assistance programme
49-50
404-3 Percentage of employees receiving regular
performance and career development reviews
50
GRI standard Specific GRI Disclosure Pages
GRI 405: Diversity
and Equal
Opportunity 2016
405-1 Diversity of governance bodies and employees 47-48, 90-91
405-2 Ratio of basic salary and remuneration of women
to men
47
GRI 406:
Non-discrimination
2016
406-1 Incidents of discrimination and corrective
actions taken
Not disclosed
GRI 417: Marketing
and Labeling 2016
417-1 Requirements for product and service information
and labelling
54
GRI 418: Customer
Privacy 2016
418-1 Substantiated complaints concerning breaches
of customer privacy and losses of customer data
53
202
GRI index
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
SASB index
Topic Accounting Metric SASB code Pages
Greenhouse Gas
Emissions
Gross global Scope 1 emissions,
percentage covered under
emissions-limiting regulations
RT- CH-110a.1 40-41, 196
Discussion of long-term and short-term
strategy or plan to manage Scope 1
emissions, emissions reduction targets,
and an analysis of performance against
those targets
RT- CH-110a.2 35-40
Air Quality Air emissions of the following pollutants:
(1) nitrogen oxides (excluding N
2
O),
(2) sulfur oxides, (3) volatile organic
compounds, and (4) hazardous
air pollutants
RT- CH-120a.1 42, 198
Energy Management (1) Total energy consumed,
(2) percentage grid electricity,
(3) percentage renewable, (4) total
self-generated energy
RT- CH-13 0 a.1 40-41, 197
Water Management (1) Total water withdrawn, (2) total water
consumed, percentage of each in
regions with high or extremely high
baseline water stress
RT- CH-14 0 a.1 42, 198
Number of incidents of non-compliance
associated with water quality permits,
standards, and regulations
RT-CH-140a.2 46
Description of water management risks
and discussion of strategies and
practices to mitigate those risks
RT-CH-140a.3 39, 42
Hazardous Waste
Management
Amount of hazardous waste generated,
percentage recycled
RT- CH-15 0a.1 42, 198
Community
Relations
Discussion of engagement processes
to manage risks and opportunities
associated with community interests
RT- CH-210a.1 25
Topic Accounting Metric SASB code Pages
Workforce Health
& Safety
(1) Total recordable incident rate and
(2) fatality rate for (a) direct employees
and (b) contract employees
RT- CH- 320a.1 45
Description of efforts to assess, monitor,
and reduce exposure of employees and
contract workers to long-term (chronic)
health risks
RT-CH-320a.2 45-46
Product Design for
Use-phase Efficiency
Revenue from products designed for
use-phase resource efficiency
RT- CH- 410a.1 62-64
Safety &
Environmental
Stewardship of
Chemicals
(1) Percentage of products that contain
Globally Harmonized System of
Classification and Labelling of
Chemicals, Category 1 and 2 Health and
Environmental Hazardous Substances,
(2) percentage of such products that
have undergone a hazard assessment
RT- CH- 410 b.1 Not disclosed
Discussion of strategy to (1) manage
chemicals of concern and (2) develop
alternatives with reduced human and/or
environmental impact
RT-CH-410b.2 54
Genetically Modified
Organisms
Percentage of products by revenue that
contain genetically modified organisms
RT- CH- 410 c.1 Not disclosed
Management of the
Legal & Regulatory
Environment
Discussion of corporate positions related
to government regulations and/or policy
proposals that address environmental
and social factors affecting the industry
RT-CH-530a.1 Not disclosed
Operational Safety,
Emergency
Preparedness
& Response
Process Safety Incidents Count, Process
Safety Total Incident Rate, and Process
Safety Incident Severity Rate
RT-CH-540a.1 45-46
Number of transport incidents RT-CH-540a.2 Not disclosed
Activity metric Production by reportable segment RT-CH-000.A 62-64, 197
203
Glossary
AGM Annual General Meeting
AI Artificial intelligence
AOCC Average operating cash conversion
APEO Alkylphenol ethoxylates
APM Alternative performance measures
ATWC Average trade working capital
AWC Average working capital
Board Board of Directors of Elementis plc
BPS Basis points
CAPEX Capital expenditure
CDP Carbon Disclosure Project
CEO Chief Executive Officer
CFO Chief Financial Officer
CFD Climate-related financial disclosures
CGU Cash-generating unit
CHRO Chief Human Resources Officer
CMD Capital Markets Day
CO
2
Carbon dioxide
CO
2
e Carbon dioxide equivalent
CP Current policies
CSRD Corporate Sustainability Reporting Directive
DE&I Diversity, equity and inclusion
DNED Designated Non-Executive Director
DSBP Deferred Share Bonus Plan
DT Delayed Transition
DTR Disclosure Guidance and Transparency Rules
EBITDA Earnings before interest, tax, depreciation and amortisation
EC European Commission
ECC Ethics and Compliance Council
ECHA European Chemicals Agency
ECL Expected credit loss
ELT Executive Leadership Team
EMEA Europe, Middle East and Africa
EPS Earnings per share
ESC Elementis Sustainability Council
ESG Environmental, social and governance
ESOS Executive Share Option Scheme
ESOT Employee Share Ownership Trust
ESRS European Sustainability Reporting Standards
EU European Union
FCA Financial Conduct Authority
FRC Financial Reporting Council
FRS Financial Reporting Standards
FRS 101 Financial Reporting Standards 101
FTE Full time equivalent
FTSE Financial Times Stock Exchange
GAAP Generally accepted accounting principles
GBP Great British Pound
GDP Gross domestic product
GHG Greenhouse gases
GJ Gigajoule
GRI Global Reporting Initiative
GWh Gigawatt-hour
HET Highly effective teams
HMRC HM Revenue and Customs
HR Human resources
HSE Health, safety and environment
IAS International Accounting Standards
IASB International Accounting Standards Board
IFRIC International Financial Reporting Standards Interpretations Committee
IFRS International Financial Reporting Standards
IMA Industrial Minerals Association
IP Intellectual Property
IPCC Intergovernmental Panel on Climate Change
ISO International Organisation for Standardisation
ISSB International Sustainability Standards Board
IT Information technology
IUCN International Union for Conservation of Nature
KPI Key performance indicator
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 204
LCA Life cycle analysis
LCIA Life Cycle Impact Assessment
LDI Liability-driven investment
LPG Liquefied petroleum gas
LTA Lost time accidents
LTIP Long-term incentive plan
M
3
Cubic metres
M&A Mergers and acquisitions
Mondo Mondo Minerals Holdings B.V. and its subsidiaries
MT Metric ton
MWh Megawatt per hour
NBO New business opportunities
NED Non-Executive Director
NGFS Network for Greening the Financial Systems
NiSATs Non-ionic synthetic associative thickeners
NOx Nitrogen oxides
NZ Net Zero 2050
OCC Operating cash conversions
OCI Other comprehensive income
OPM Operating profit margin
OSHA Occupational Safety and Health Administration
PBT Profit before tax
PFAS Polyfluoroalkyl Substances
PHA Process hazard analysis
PM Particulate matter
PPF Pension Protection Fund
PRMB Post-retirement medical benefit
PSE Process safety event
PSM Process safety management
PTFE Polytetrafluoroethylene
PwC PricewaterhouseCoopers LLP
RAC Risk Assessment Committee
R&D Research and development
RCF Revolving credit facility
REACH Registration, Evaluation, Authorisation and Restriction of Chemicals
ROCE Return on capital employed
s.172 Section 172 of the Companies Act 2006
SASB Sustainability Accounting Standards Board
SAYE Save As You Earn
SBT Science-based target
SBTi Science Based Targets initiative
SDS Safety data sheets
SID Senior Independent Director
SOx Sulfur oxides
SRSOS Savings-related share option scheme
SVHC Substances of very high concern
SVP Senior Vice President
TCFD Task Force on Climate-related Financial Disclosures
TMC Trademark Committee
TRIR Total recordable injury rate
TSR Total shareholder return
UAE United Arab Emirates
UK United Kingdom
UN United Nations
UN GC United Nations Global Compact
UN SDGs United Nations Sustainable Development Goals
US United States
USD United States dollar
VOC Volatile organic compound
WBCSD World Business Council for Sustainable Development
WRI World Resources Institute
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information 205
Glossary
Elementis plc Annual Report and Accounts 2024Strategic Report Corporate Governance Financial Statements Shareholder Information
Notes
206
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Elementis plc
The Bindery
5th Floor
51-53 Hatton Garden
London EC1N 8HN
www.elementis.com