Elementis : Annual Report and Accounts

Unique Chemistry,

Sustainable

Solutions

Annual Report and Accounts 2022

Making a difference through Innovation, Growth and Efficiency.

Elementis is a global specialty chemicals company. We deliver unique chemistry, sustainable solutions; our products make our customers' formulations look, feel and perform at their best.

Our purpose

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.

16		22
SUPPLY CHAIN		INNOVATION
Our response to ongoing challenges		Key pillar for growth

36		107
SUSTAINABILIT Y		WORKFORCE ENGAGEMENT
Improved outcomes		Programme of visits to the Company's operations

C O N T E N T S

S T R AT E G I C R E P O R T		Stakeholder engagement	72	C O R P O R AT E G OV E R N A N C E	F I N A N C I A L S TAT E M E N T S
Elementis today		Section 172(1) statement	74	Chair's introduction		Independent auditor's report	156
Our business at a glance	2	Finance report	76	to governance	96	Consolidated income statement	164
2022 highlights	3	Operating review	82	Board of Directors	98	Consolidated statement of
Purpose	4	Risk management	86	Executive Leadership team	100	comprehensive income	164
Chair's statement	6	Principal risks and uncertainties	90	The UK Corporate		Consolidated balance sheet	165
Chief Executive Officer's review	8	Viability and going concern statement	95	Governance Code	102	Consolidated statement of
Our investment case	12			Division of responsibilities	103	changes in equity	166
Our market environment	14			Board leadership and		Consolidated cash flow statement	167
Supply chain in action	16			Company purpose	104	Notes to the consolidated
Our business model	18			Stakeholder engagement	106	financial statements	168
Innovation at Elementis	22			Workforce engagement	107	Company balance sheet	215
Our strategy	24			Shareholder engagement	110	Company statement of changes
Key performance indicators	32			Board responsibilities	111	in equity	216
Sustainability	34			Composition, succession		Notes to the company financial
Materiality	39			and evaluation	113	statements of Elementis plc	217
Climate strategy	42			Nomination Committee report	115
Protecting the environment	57			Audit Committee report	119	S H A R E H O LD E R I N FO R M ATI O N
Supportive culture	61			Directors' Remuneration report	124	Alternative performance measures
Responsible business	68			Directors' report	152	and unaudited information	222
Non-financial information statement	71			Directors' responsibilities	155	Five year record	224
						Shareholder services	225
						Corporate information	226
						GRI index	227
						Glossary	230

CAUTIONARY STATEMENT

The Annual Report and Accounts for the financial year ended 31 December 2022, 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.

Elementis plc

Annual Report and Accounts 2022

1

Q

How is Elementis delivering

on your commitments,

nurturing your people and

living your purpose?

A

At Elementis, we collaborate with our customers to develop innovative and sustainable solutions, while caring for our people and protecting the environment.

Combining our leading positions in rheology, surface modification and formulation, access to unique natural materials and global footprint, we create high-value specialty additives that enhance the performance of our customers' products and make a positive change in the world.

We manufacture safely, responsibly and effectively; we provide opportunities for everyone at Elementis to connect to others; to grow their experience and to make a real impact.

Elementis plc

Annual Report and Accounts 2022

S T R A T E G I C R E P O R T

C O R P O R A T E G O V E R N A N C E

F I N A N C I A L S T A T E M E N T S

S H A R E H O L D E R I N F O R M A T I O N

2

Our business at a glance

Working with our customers across

the world to solve their product performance

and sustainability challenges

Who we are

Elementis is a specialty chemicals company with over 1,300 employees, operating at 17 manufacturing sites across the globe.†

Founded in 1844, we are listed on the London Stock Exchange and are a constituent of the FTSE 250 index.

PERSONAL CARE

OV E RV I E W

We are a leading global supplier of rheology◊ modifiers and anti-perspirant actives to personal care product manufacturers. Our products help make skin creams smooth, nail polish glow and anti-perspirants work.

What we do

We create specialty chemicals that deliver crucial end product attributes across a range of industries including cosmetics, coatings and long life plastics. Innovation is at the heart of what we do; our focus is on creating solutions that deliver performance improvements and enhanced sustainability credentials.

Sales	Adjusted operating
	profit
$212m	$53m

Read more on page 82

How we do it

Combining our leading positions in rheology◊, surface modification and formulation, access to unique natural materials and global footprint, we deliver Enhanced Performance Through Applied Innovation to our customers around the world.

COATINGS*

OV E RV I E W

We supply rheology◊ modifiers and other complementary specialty additives to manufacturers of industrial coatings and decorative paints. Our products help make industrial coatings last longer, decorative paints more stain resistant and sealants apply evenly.

• Figures are post Chromium sale, which took place on 31 January 2023.

• Learn more about rheology and our technical expertise on pages 22-23. * Effective 1 January 2023, the results of the Coatings and Talc
  segments will be reported under a new segment called Performance Specialties, which reflects a change in the internal organisation structure used for management, internal reporting purposes and the allocation of strategic resources.

Sales	Adjusted operating
	profit
$389m	$73m

Read more on page 83

TALC*

OV E RV I E W

We are the second largest global supplier of talc based additives to industrial end markets including long life plastics, technical ceramics and packaging manufacturers. Talc helps to make long life plastics stronger and lighter, gasoline particulate filters work and food packaging recyclable.

Sales	Adjusted operating
	profit
$136m	$nil

Read more on page 84

Elementis plc

Annual Report and Accounts 2022

3

Where we operate

Global	Locations	Continents
Segments	worldwide
2	23	3

*

K E Y

Continuing Operations

Discontinued Operations

* We have two sites in Taiwan 1km from each other.

2022 highlights

FINANCIALOPERATIONAL HIGHLIGHTS

Revenue							Adjusted operating	Adjusted operating		Total recordable
										profit							margin		incident rate (TRIR)
$736.4m*		$100.5m*	13.6%*				0.67
2020					$604.4m	2020						$71.2m	2020					11.8%	2020				0.68
2021							$709.4m	2021								$88.0m	2021						12.4%	2021						0.90
2022								$736.4m	2022									$100.5m	2022							13.6%	2022				0.67
Operating profit/(loss)		Profit/(loss) before tax	Net debt2	Lost time accidents (LTA)
$(41.8)m*		$(54.8)m*		$(366.8)m	3
2020				$(35.3)m	2020										$(74.1)m	2020						$(408.1)m	2020					3
2021							$11.9m	2021										$(7.5)m	2021						$(401.0)m	2021							4
2022				$(41.8)m	2022										$(54.8)m	2022						$(366.8)m	2022					3
Diluted (loss)/earnings per		Adjusted diluted earnings	Ordinary dividend	Environmental incidents
share							per share1							per share
(10.7)c*							10.9c*								0.0c	0
2020								(12.2)c	2020					5.4c	2020		0.0c
2021								(1.4)c	2021								8.3c	2021		0.0c
2022								(10.7)c	2022										10.9c	2022		0.0c

• Amounts are presented for continuing operations only and exclude discontinued Chromium operations.
  1 After adjusting items - see Note 5.
  2 Please see the Alternative Performance Measures section on page 222.

Elementis plc

Annual Report and Accounts 2022

S T R A T E G I C R E P O R T

C O R P O R A T E G O V E R N A N C E

F I N A N C I A L S T A T E M E N T S

S H A R E H O L D E R I N F O R M A T I O N