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Highlights

  • Berenberg analyst Sebastian Bray assigns a “Buy” rating to Elementis PLC with a target price of GBP 190.83 (AUD 4.12), indicating a 19.62% upside from current levels.

  • Elementis posted a 7% rise in adjusted operating profit to USD 65 million for H1 2025, with an improved operating margin of 21%.

  • Net debt reduced by 36% since year-end 2024 to USD 125 million, with a net debt-to-EBITDA ratio of 0.9x.

Elementis PLC (LSE:ELM) has received a “Buy” recommendation from investment bank Berenberg, with analyst Sebastian Bray setting a price target equivalent to GBP 190.83 (AUD 4.12), representing a potential upside of 19.62% from the current market price. The updated rating comes alongside the company’s announcement of its financial results for the first half of 2025.

Berenberg’s “Buy” rating places Elementis in favourable territory within the specialty chemicals sector.  

Financial Performance – First Half 2025

For the six months ended 30 June 2025, Elementis reported revenue of USD 308 million, down 1% on a constant currency basis due to softer market conditions. Adjusted operating profit rose 7% to USD 65 million on a constant currency basis, while statutory operating profit increased by 5% to USD 57 million. The adjusted operating margin improved to 21%, up from 20% in the previous year.

The company declared an interim dividend of 1.3 cents per share, an increase from 1.1 cents in 2024, in line with its dividend policy. A USD 50 million share buyback is progressing as planned, and net debt has been reduced by 36% since the end of 2024 to USD 125 million, bringing the net debt-to-EBITDA ratio down to 0.9x.

Operational Highlights

Within its business segments, Personal Care delivered a 2% sales increase on a constant currency basis, supported by growth in both Cosmetics and Active Pharmaceutical Actives, achieving record operating margins of 34%. Coatings sales declined 4% due to softer demand across all regions, but margins remained resilient at 18%.

The company remains on track to achieve USD 12 million in savings during 2025 as part of its two-year efficiency programme. The sale of the Talc business was completed during the period, resulting in a discontinued loss of USD 100 million. Elementis confirmed that it has met its Capital Markets Day 2026 targets for operating margin, cash conversion, and return on capital employed.

Market Outlook

Berenberg’s “Buy” recommendation reflects the bank’s outlook on Elementis’ operational execution and capital discipline, alongside potential benefits from market recovery in key segments.