Elementis half-year results 2026: margins rise as strategy gains traction

Elementis has delivered a solid set of half-year results, combining organic revenue growth with a considerably faster increase in profit.

For the six months ended 30 June 2026, revenue reached $318.2 million, while adjusted operating profit rose 16.4% to $73.2 million. The adjusted operating margin improved to 23.0%, already matching the lower end of the group's medium-term target of at least 23%.

The specialty chemicals company also reduced net debt, increased its interim dividend and launched a new share buyback funded by disposal proceeds.

That is the good news. The less comfortable part is cash conversion, where a substantial working capital outflow held back operating and free cash flow.

Investors can read the original company announcement or visit the Elementis PLC share page for further company coverage.

Elementis half-year results at a glance

Key figure	H1 2026	H1 2025	Change
Revenue	$318.2 million	$290.8 million	9.4%
Organic constant currency revenue growth	4.7%	Not disclosed	Not applicable
Adjusted operating profit	$73.2 million	$62.9 million	16.4%
Statutory operating profit	$65.7 million	$55.4 million	18.6%
Adjusted operating margin	23.0%	21.6%	140 basis points
Adjusted diluted EPS	8.5 cents	6.6 cents	28.8%
Free cash flow	$13.3 million	$15.4 million	Down 13.6%
Net debt	$163.8 million	$185.4 million at December 2025	Down $21.6 million
Interim dividend	1.5 cents	1.3 cents	15.4%

Organic constant currency growth strips out acquisitions and exchange-rate movements, giving investors a clearer view of underlying trading.

On that basis, revenue increased by 4.7%. Reported revenue grew more quickly at 9.4%, helped by currency movements and the contribution from the Alchemy Ingredients acquisition.

Profit growth was the standout feature

The main attraction in these results is the gap between revenue and profit growth.

Organic revenue rose by 4.7%, but adjusted operating profit increased by 16.4% on a reported basis and 9.8% organically. This pushed the adjusted operating margin up by 140 basis points to 23.0%.

Higher volumes, cost savings, Alchemy and favourable currency movements all contributed. Elementis also benefited from selling its pharmaceutical manufacturing operation, which was a lower-margin and more capital-intensive business.

Statutory operating profit moved in the same direction, rising 18.6% to $65.7 million. That supports the quality of the improvement, although Elementis still recorded $7.5 million of adjusting items at the operating level. These included business transformation, acquisition integration and cloud and data transformation costs.

Adjusted diluted earnings per share increased by 28.8% to 8.5 cents. Alongside stronger earnings, this reflected a lower average share count following the $50 million buyback completed in 2025.

Coatings led the operating improvement

Coatings was the stronger of Elementis's two divisions during the period.

Revenue rose 5.6% organically to $209.0 million, supported by higher volumes, new business and pricing across all regions. Asia and Europe performed well, while the Energy operation benefited from improvements at the St. Louis plant. North America remained weak.

Adjusted operating profit increased 23.8% to $43.2 million, with the margin climbing from 18.2% to 20.7%.

This is an encouraging combination. The division did not merely sell more products - it converted that growth into a much sharper improvement in profit.

Elementis also launched six Coatings products during the half, covering architectural coatings, construction, electric vehicle battery materials and fire-retardant systems. The financial contribution from these launches was not disclosed, so investors will need to watch whether innovation translates into sustained revenue and mix improvement.

Personal Care remains highly profitable

Personal Care revenue reached $109.2 million, representing organic growth of 2.9%.

Growth came from better pricing in Cosmetics, higher volumes in antiperspirant actives, Alchemy and currency benefits. Asia delivered mid-teen percentage growth, helped by Japan and Korea, while demand in the Americas was more subdued because of weakness during the first quarter.

Adjusted operating profit increased 10.9% to $41.6 million. On the re-presented continuing operations basis, the margin edged up from 37.8% to 38.1%.

Elementis highlighted skincare and suncare as important growth areas. Product launches containing its hectorite ingredients increased by 25%, helping skincare and suncare sales achieve double-digit growth.

Alchemy is also on track to deliver double-digit year-on-year revenue growth, although its exact revenue and profit contribution was not disclosed.

Elevate Elementis is showing measurable progress

The Elevate Elementis strategy has three priorities: sustainable growth, improved customer service and a simpler cost base.

There are signs of progress across each area.

On-Time, In-Full delivery, which measures whether customer orders arrive when promised and in the correct quantity, improved from 83% at the end of 2025 to 88% at June 2026. Capacity utilisation in the Energy business has improved by around 20% since the first half of 2025.

Elementis also delivered $0.5 million of net savings during the period. This consisted of $1.3 million of cost savings, partly offset by $0.8 million of additional research and development investment.

The group has now achieved $6.5 million of its $10 million net savings target and expects to deliver $4 million during 2026, completing the programme by year-end.

Disposal proceeds support debt reduction and buybacks

Elementis completed the sale of its pharmaceutical manufacturing business to Associated British Foods in June.

The transaction had an enterprise value of €34.3 million, equivalent to approximately $39.8 million. Net cash proceeds after transaction costs were around €31 million, or approximately $36 million, and Elementis recorded a $13.0 million book gain.

Following the disposal and $13.3 million of free cash flow, net debt fell from $185.4 million at the end of 2025 to $163.8 million. Net debt to adjusted EBITDA improved from 1.3 times to 1.1 times, bringing leverage close to management's target of around one times.

The company has allocated approximately £25 million, equivalent to around $35 million, to a new share buyback. Most repurchased shares are expected to be cancelled, with some held for employee share schemes.

The interim dividend increased by 15.4% to 1.5 cents per share. This converts to 1.1p per share and is due to be paid on 25 September 2026 to shareholders on the register on 14 August.

Cash conversion is the main weak point

The income statement was strong, but the cash flow statement was less impressive.

Adjusted operating cash flow fell from $41.3 million to $29.8 million, while operating cash conversion declined from 65.7% to 40.7%. Free cash flow slipped from $15.4 million to $13.3 million.

The main cause was a $44.4 million working capital outflow, compared with $27.4 million a year earlier. Debtors and inventories both increased, while the end of debtor factoring removed a financing benefit recorded in the comparative period.

Some of the working capital increase supported revenue growth and included raw-material purchases linked to inflation and the Middle East conflict. Even so, cash conversion will need to improve if Elementis is to achieve its medium-term target of more than 90% over three years.

What investors should watch next

Management remains confident of delivering full-year performance in line with market expectations. Company-compiled consensus points to 2026 adjusted operating profit of $132.5 million, within a range of $129.4 million to $136.5 million.

The first half therefore leaves Elementis in a credible position. Margins have reached the medium-term target level, leverage is close to one times EBITDA and both divisions are growing organically.

The key questions for the second half are whether margins remain above 23%, whether North American demand improves and whether working capital begins to unwind. Investors should also monitor the potential effects of the Middle East crisis on demand, input costs and supply chains.

For comparison with another UK-listed industrial company's interim update, see the Weir Group half-year results for 2026.