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1. Company Snapshot

1.a. Company Description

Elementis plc operates as a specialty chemical company in the United Kingdom, North America, rest of Europe, and internationally.It operates through four segments: Personal Care, Coatings, Talc, and Chromium.The Personal Care segment produces and sells rheological modifiers and compounded products for antiperspirants/deodorants, bath and soap, color cosmetics, and hair and skin care products.


The Coatings segment produces and sells rheological modifiers and additives for industrial finishes, architectural coatings, construction, adhesives and sealants, inks, colorant dispersions, and specialty applications; and bentonite and hectorite clays, as well as polymer-based additives used in drilling, simulation, and cementing applications.The Talc segment produces and supplies talc for use in plastics, paints and coatings, food and pharmaceuticals, ceramics, polyester putties, paper, and pulp sectors.The Chromium segment produces chromium chemicals, such as chromic oxide, chromic acid, chrome sulfate, sodium dichromate, and sodium sulfate for use in pigments, cosmetics, refractories, chrome metal production, metal and plastic finishing, wood treatment, leather tanning, trivalent metal finishing, coatings, and metal passivation, as well as for making detergents, glasses, papers, and starches.


It also offers personal care products, waxes, additives and resins, organoclays, colourants, and other specialty additives.Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on ELM

Elementis plc's recent strength is driven by its solid operating performance, with the company's Chromium business segment experiencing a significant rebound. The company's cost savings initiatives and efforts to improve operational efficiency are also yielding results. Additionally, Elementis' strategic review of its portfolio, which may lead to divestments, is seen as a positive move to enhance shareholder value. Furthermore, the company's decision to initiate a share buyback program is a clear indication of its commitment to return capital to shareholders.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Form 8.3 - IQE Plc

Sep -09

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HSBC sees gradual unwinding of OPEC+ voluntary cuts over next year

Sep -09

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HSBC HOLDINGS PLC ANNOUNCES RESULTS OF ITS TENDER OFFERS FOR FOUR SERIES OF NOTES

Sep -09

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Form 8.3 - UNITE GROUP PLC

Sep -09

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National Express owner sees shares hit the skids after earnings fall

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.85%)

6. Segments

Coatings

Expected Growth: 3.5%

Elementis plc's Coatings segment growth is driven by increasing demand for sustainable and eco-friendly coatings, growth in the global construction industry, and rising adoption of advanced materials in industrial applications. Additionally, the company's strategic investments in R&D and expansion into emerging markets have contributed to the 3.5% growth rate.

Personal Care

Expected Growth: 4.5%

Elementis plc's Personal Care segment growth of 4.5% is driven by increasing demand for natural and organic ingredients, rising consumer preference for skincare and haircare products, and expansion into emerging markets. Additionally, the company's focus on innovation and sustainability, as well as strategic partnerships and acquisitions, contribute to its growth momentum.

Talc

Expected Growth: 3.8%

Elementis plc's Talc segment growth of 3.8% is driven by increasing demand from the cosmetics industry, particularly in Asia, and growing adoption in the pharmaceutical sector. Additionally, the company's strategic expansion into new markets and product lines, such as talc for plastics and coatings, contributes to the segment's growth.

7. Detailed Products

Rheology Modifiers

Elementis' rheology modifiers are used to control the flow and viscosity of coatings, inks, and other industrial applications.

Organic Coatings Additives

Elementis' organic coatings additives are used to improve the performance and appearance of coatings, inks, and other industrial applications.

Chromium-Based Corrosion Inhibitors

Elementis' chromium-based corrosion inhibitors are used to protect metal surfaces from corrosion in a variety of industrial applications.

Defoamers

Elementis' defoamers are used to control foam in a variety of industrial applications, including coatings, inks, and adhesives.

Talc-Based Products

Elementis' talc-based products are used as fillers and extenders in a variety of industrial applications, including plastics, coatings, and paper.

Bentonite Clays

Elementis' bentonite clays are used as thickeners, stabilizers, and suspending agents in a variety of industrial applications, including coatings, inks, and construction materials.

8. Elementis plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Elementis plc is medium due to the availability of alternative products in the specialty chemicals market.

Bargaining Power Of Customers

The bargaining power of customers for Elementis plc is low due to the company's strong relationships with its customers and the lack of buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Elementis plc is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some bargaining power.

Threat Of New Entrants

The threat of new entrants for Elementis plc is low due to the high barriers to entry in the specialty chemicals market, including high capital costs and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Elementis plc is high due to the competitive nature of the specialty chemicals market, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.21%
Debt Cost 9.45%
Equity Weight 73.79%
Equity Cost 13.67%
WACC 12.57%
Leverage 35.51%

11. Quality Control: Elementis plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Elkem

A-Score: 5.0/10

Value: 8.8

Growth: 2.6

Quality: 3.2

Yield: 5.6

Momentum: 7.5

Volatility: 2.7

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Victrex

A-Score: 4.7/10

Value: 6.1

Growth: 1.9

Quality: 6.4

Yield: 8.1

Momentum: 1.5

Volatility: 4.3

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Elementis

A-Score: 4.0/10

Value: 5.1

Growth: 1.7

Quality: 3.8

Yield: 1.2

Momentum: 6.5

Volatility: 5.7

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Essentra

A-Score: 3.5/10

Value: 4.0

Growth: 1.3

Quality: 3.6

Yield: 6.2

Momentum: 1.0

Volatility: 5.0

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Zotefoams

A-Score: 3.5/10

Value: 3.7

Growth: 5.4

Quality: 3.8

Yield: 3.1

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

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LANXESS

A-Score: 3.1/10

Value: 8.3

Growth: 1.4

Quality: 1.9

Yield: 2.5

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.67$

Current Price

1.67$

Potential

-0.00%

Expected Cash-Flows