Elementis Raises 2026 Profit Outlook to $135 Million Despite Fourth-Quarter Seasonality
Key Facts
Elementis raised its 2026 adjusted operating profit outlook to a range of $133 million to $135 million, compared with previous guidance of $132.5 million, according to a trading update published by the company on October 28. Coverage of the update said the increase was "in line with market expectations," alongside continued commercial progress amid mixed market conditions. The new guidance puts the bottom of the range above the previous level, while the top reaches $135 million. The announcement follows half-year results that showed improvement in revenue and profit, providing the latest detailed financial basis before the third-quarter update. But the company expects fourth-quarter revenue to be lower than third-quarter revenue, in line with the group's usual seasonality.
In the first half of 2026, adjusted operating profit rose 16.4% to $73.2 million, and the adjusted operating margin increased to 23.0% from 21.6% in the same period a year earlier, according to Elementis' interim results. Chief Executive Luke van Ravenstein said revenue increased 5% on an organic, constant-currency basis and profit rose 16% as margins improved. He attributed the momentum to execution, innovation and entry into new markets. Coatings revenue was $209.0 million, up 5.6% on an organic, constant-currency basis, while personal care revenue was $109.2 million, a rise of 2.9%. Coatings therefore grew faster than personal care in the first half, according to the company's results for the two segments.
Elementis said efficiency initiatives delivered $1.3 million in savings in the first half, taking cumulative savings since the launch of its Elevate Elementis strategy to $7.3 million. The company said it spent an additional $0.8 million on research and development during the period, leaving net savings of $0.5 million after that investment. It said it was on track to achieve its target of $4 million in net savings during 2026. These figures show cost-cutting efforts alongside investment in research and development, rather than reliance on gross savings alone. The company also said revenue and profit in coatings and personal care tend to be higher in the first half, as customers increase production ahead of summer demand for coatings and antiperspirants.
On operational risks, Elementis said it was monitoring the potential effects of the Middle East crisis on global demand, input costs and supply disruptions. In its first-half results, the company reaffirmed its confidence in delivering full-year performance in line with expectations following the progress recorded during the period, while continuing to monitor those risks. Net debt also fell to $163.8 million on June 30, 2026, from $185.4 million on December 31, 2025, and net debt to EBITDA stood at 1.1 times. In June, the company launched a new share buyback program of about $35 million, using net proceeds from the sale of its pharmaceutical manufacturing business. These financial and operational developments provide the backdrop to the annual profit outlook it raised in October.
The market consensus average for 2026 adjusted operating profit was $132.5 million, within an estimated range of $129.4 million to $136.5 million, based on data collected by the company on July 29. That average matches the previous guidance of $132.5 million, while the new range of $133 million to $135 million is above it. This does not remove the divergence between the annual profit outlook and the seasonal revenue outlook for the fourth quarter: the company said revenue in that quarter would be lower than in the third quarter. The annual report schedules the fourth-quarter trading update for January 20, 2027. That update will follow the end of fiscal 2026, according to the company's published schedule.