Synthomer Reports H1 EBITDA Growth Amid Market Challenges, Advances Strategic Transformation

Steady Progress in Choppy Waters

Synthomer’s H1 2025 results reveal a business navigating stormy seas with impressive seamanship. While revenue dipped 9.8% to £925.2m amid global trade turbulence, the specialty chemicals firm squeezed out a 5.4% constant currency EBITDA increase to £77.8m. CEO Michael Willome’s “self-help” strategy-cost discipline and portfolio pruning-is proving its worth when macro winds turn foul.

The Earnings Engine: Margins Over Volume

Drill beneath the top-line decline and you’ll find robust margin expansion. Gross margins climbed 110bps versus H1 2024, extending a 400bps improvement over three years. How? Three key drivers:

• Pricing Power: Passed through tariff impacts via surcharges
• Cost Scalpel: £17m efficiency/reliability gains in H1
• Portfolio Shift: Relentless focus on higher-margin specialties

This trifecta lifted group EBITDA margin to 8.4% (from 7.3%) despite volumes sinking 7.1%. The standout? Adhesive Solutions-EBITDA surged 64.8% to £35.4m as their performance turnaround hit stride.

Division Deep Dive: A Tale of Three Businesses

Adhesive Solutions (AS): The Star Performer

AS isn’t just weathering the storm-it’s thriving. Margins exploded to 11.9% (from 7.1%) on £5m operational improvements. Their secret? Fixing the “end-to-end chain” from suppliers to logistics. The Henkel partnership for low-carbon adhesives exemplifies their innovation edge.

Health & Protection (HPPM): Mixed Fortunes

EBITDA jumped 21.5% to £16.6m, but beneath the surface: medical glove demand slumped 15.5% as customers burned through pre-tariff stockpiles. Offsetting this? Higher-margin reusable gloves and income from their US tech partnership. Clever portfolio tilting.

Coatings & Construction (CCS): The Drag

EBITDA sank 34.2% to £34.5m. Why? Energy solutions got clobbered by reduced oil/gas drilling. Silver lining? European construction showed green shoots. With new cost cuts accelerating, expect H2 improvement.